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Memoirs of a Minyan: The Abyss


The purpose of the journey is the journey itself.

For the first time, the reality of the situation hit home. I had three weeks to relocate and two of them were booked on vacation. I took my traders to dinner that night and over several rounds of drinks, assured them they would be taken care of. They were family but in a few short weeks, I needed a new home.

I hadn't a clue where that would be.

Blink and You're in Business

It didn't take long for word to spread. Wall Street is a small place when it comes to news. Our trading coverage -- from Goldman to Morgan to Bear Stearns to Lehman Brothers -- lined their pockets with commissions generated by Cramer Berkowitz. That number totaled between $70 million and $90 million per year during my tenure running the desk.

They weren't happy their gatekeeper was relinquishing the keys to the castle, particularly when the castle did business the right way. As I assured them that our desk would be in strong hands, I was less certain about my next move.

Minyanville launched, I was the only writer and the Ruby Peck Foundation proved costlier than I anticipated. I needed a home that allowed me to stay in the flow and make some dough. After 12 years of trading, I had peers who had a vested interest where I landed. I listened to a few offers, unsure of which direction to pursue.

A former colleague called and asked me to meet with him before I made any decision. He worked with a reputable money manager at a fund located on Park Avenue. As part of their business model, they operated a "hedge fund hotel," providing space, trading systems and human capital in exchange for order flow and trading commissions.

I walked to their offices and was impressed with the large marble lobby that housed some of the world's largest financial institutions. I made rounds, sat with the principal players and listened to possible collaborations. "You should think about starting your own fund," they said, "We'll set you up here and help with the process and paperwork."

It wasn't something I had seriously considered but I needed a home and they were friendly faces with a solid structure.

And they believed in me, which was not something I overlooked. Minyanville was costing more than $50,000 per month and I had other obligations. Further, the effort required and costs to start a not-for-profit foundation after Sept. 11 were substantial.

I needed a revenue generator, something that could utilize my skills and underwrite a symbiotic ecosystem. I had honed my skills at Morgan, sharpened them at Galleon and demonstrated them at Cramer Berkowitz, building one of the finest desks on Wall Street. As I listened to the potential hedge fund structures, my mind began to calculate the windfall.

A typical structure charges 1% of total assets as a management fee and 20% profits as a performance fee. But they floated something different, a structure with no management fee and 50% of the profits. It was a deal reserved for the best traders on the Street, a back-end loaded payday based purely on performance.

They offered to seed me and as I had full faith in my abilities, I plowed most of my money into the fund as well. Others followed and before I knew it, I moved my personal items and sports memorabilia to my new Park Avenue home.


Click here for the next chapter of memoirs, "War Games."

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