"Who is the best catering to hedge funds? To answer that question, Alpha turned to its sister publication, Institutional Investor, which for more than 34 years has surveyed money managers of all types...

1. ing priorities between hedge funds
and traditional money managers.
Many analysts who were runners-
up or unranked in //s All-America
poll rise to the top when only the
ballots cast by hedge funds are
counted. More than 230 hedge
fund firms, running assets of more
than $545 billion, voted in the
All-America team. Nearly one
third of the first teams in the
hedge fund voting, 22 out of 71,
differ from the overall 2005 All-
America team. Of the 312 posi-
tions in 69 categories where there
was sufficient hedge fund voting
to declare winners, 169, or 54 per-
cent, are occupied by analysts
other than those who won them
in the full All-America survey.
What do hedge funds want
from analysts? They're looking
for access to management, quick
responses to their questions and, More of hedge funds' No. 1 picks (left to right): Nikos Theodosopoulos, Mark Connelly,
increasingly, unique sources of Amanda Tepper, Robert Willens, Robert Ohmes, Ryan Renicker, Mark Edelstone, Matthew Fassler.
information such as surveys and
proprietary analysis of industry trends and company valua-
tions. "I'm not looking for stock picks," says Brayden The Leaders
Mathews, an analyst at Agnos Group, a technology-only
hedge fund based in Harrison, New York, with $400 million RANK TOTAL TEAM POSITIONS
Hedge fund Hedge fund
to $500 million in assets. "That's my job." 2005 2004 Firm 2005 ' 2004
Hedge funds value conferences, investor trips and man- 1 1 Lehman Brothers 46 40
agement meetings where company executives are willing 2 2 Morgan Stanley 30 32
to engage in open discussions. "What's not useful is a 30- 3 8 Bear, Stearns & Co. 28 25
minute presentation, of which 25 minutes is the manage- 4 4 Merrill Lynch 27 30
ment talking and only five minutes is open for questions," 5 6 Citigroup 22 28
says Mathews. "I can listen to those on my own." 5 7 Credit Suisse First Boston 22 26
Smaller hedge funds find Wall Street's help in meeting 5 4 UBS 22 30
company executives invaluable. "If you're not a very large 8 9 Bane of America Securities 21 20
8 3 Goldman, Sachs & Co. 21 31
institution, it's tough to get one-on-ones with manage-
10 10 J.P. Morgan Securities 20 19
ments," says Ron Miterko, head of U.S. equities at New
11 11 Deutsche Bank Securities 13 14
York-based hedge fund Craig Drill Capital, which has
11 12 Prudential Equity Group 13 11
less than $200 million in assets. 13 13 Sanford C. Bernstein & Co. 11 8
Hedge fund managers, with their relatively short-term 14 14 International Strategy & Investment Group 4 3
investment horizons, also value the sell side's take on mar- 15 15 Buckingham Research Group 2 2
ket sentiment. With a consensus of sell-side opinions and 15 — Wachovia Securities 2 0
a thoughtful Wall Street analyst's view of his clients' over- 17 19 CIBC World Markets 1
all opinion on a stock, a hedge fund manager can better 17 — Cross Research/Sole!! Securities 0
gauge a stock's direction over the near term. 17 19 Fulcrum Global Partners 1
The absolute-return crowd appreciates original research. 17 19 Raymond James & Associates 1
17 19 Legg Mason 1
Mathews praises Heather Bellini of UBS for being "calculat-
17 15 Piper Jaffray 2
ing" and "detailed," especially with regard to survey work.
17 — RBC Capital Markets 0
Bellini ranks first among hedge fund respondents in the
17 15" Stanford Washington Research Group 0
Software category, up from the second team in the All-
America survey and third in last year's hedge fund voting. * Ranking is for Schwab SoundView Capital Markets. Stanford Washington Research Group is the product of the
November 2004 acquisition of the Washington Research Group unit of Schwab SoundView Capital Markets by the
Although other software analysts publish surveys, Mathews Stanford Group.
says Bellini's chief information and chief financial officer
NOVEMBER/DECEMBER 2005 • INSTITUTIONAL INVESTOR'S ALPHA • 57