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- Hunterbrook Media is a hedge fund that also does journalism. Or maybe a journalism startup that also runs a hedge fund.
- Will that work? A new story in The New Yorker wonders whether you can combine those things.
- One thing the story makes clear: Having well-connected parents is useful for startup founders.
Can a hedge fund also be an investigative-journalism outfit?
That's a provocative question, generated by the existence of Hunterbrook Media, the combination hedge fund/investigative-journalism outfit that launched this spring.
The idea in a nutshell: Hunterbrook's small team of investigative journalists look for stories about companies that could be attractive targets for a hedge fund to invest in or — more likely — bet against. Then the journalists tell Hunterbrook's hedge-fund arm about the stories they will publish about a company so the fund can short the company (or invest in it).
You can read more about that via The New Yorker's Clare Malone's excellent look at Hunterbrook, though it's way too soon to assess how any of this will work.
Read The New Yorker's story on Hunterbrook
Hunterbrook's first big published investigation was into the mortgage underwriter United Wholesale Mortgage. Before publication, Hunterbrook's fund went short on UWM and long on its rival Rocket Mortgage; a month later, UWM shares are up and Rocket is down slightly. ("We're just getting started, but early signs are that it's working," the company told my colleague Bradley Saacks last month.)
But Malone's piece also raises a different question: What kind of background do you need to raise $10 million for a media startup — and $100 million for a hedge fund — these days?
And that one does have an answer: It helps if you are very, very connected.
Malone never uses the epithet "nepo baby" to describe the Hunterbrook cofounders Sam Koppelman and Nathaniel Horwitz. But they are indeed people who have successful and well-connected parents: Koppelman's father is the screenwriter and TV showrunner Brian Koppelman; Horwitz's mother, Geraldine Brooks, is a much-lauded journalist and author, so was his father, Tony Horwitz, who died in 2019.
That family history, of course, doesn't automatically persuade people to give a couple of 20-something Harvard grads millions of dollars for their first foray into journalism. But it certainly helps them meet people that will eventually do that.
And Malone spells that part out quite clearly:
"Nathaniel and Sam have a pretty ridiculous network," Matthew Termine, one of the Hunterbrook reporters on the U.W.M. investigation, told me. E-mails that Koppelman wrote to the chair of Sony Entertainment about his application to Harvard appeared in the 2014 Sony Pictures leak, as did a note to the school on his behalf from Matt Damon. (Koppelman's father co-wrote "Rounders" and "Ocean's Thirteen.") For a time, he dated the "Euphoria" star Maude Apatow. Horwitz, for his part, once wrote about a series of conversations he had with the Theranos founder Elizabeth Holmes as her life and company crumbled.
Hunterbrook's advisers include Paul Steiger, the founder of ProPublica, and Daniel Okrent, the first public editor of the Times. Former Wall Street Journal editor-in-chief Matt Murray and the financial journalist Bethany McLean gave notes on the U.W.M. investigation before publication. Hunterbrook's hedge fund has raised a hundred million dollars, and the company received seed funding from, among others, the venture arm of Laurene Powell Jobs's Emerson Collective and the hedge-fund billionaire Marc Lasry, who, Brian Koppelman once told the Financial Times, helped the "Billions" showrunner develop an "understanding of the billionaire psyche."
So, again: None of Horwitz's or Koppelman's family histories and networks will make their company succeed. But it certainly didn't hurt them getting out of the gate.
Correction: May 6, 2024 — An earlier version of this story misstated Nathaniel Horwitz's experience in finance; he previously worked at RA Capital.