A Tough Time to Jump the Fence
For all you beleaguered toymakers, I have just the thing: a blockbuster action figure. Half correspondent, half fund manager—all absolute return—he's JournoHedge! (Batteries not included.) Remit all royalties to Ron Insana, veteran CNBC anchor turned hedge fund manager. I In March, 2006, after more than two decades in financial television, Insana, 46, decamped to launch his Insana Capital Partners, putting his first money to work a little more than a year later. "I went from being a professional observer to an active participant," he says, recovering from pneumonia and bundled in a faded yellow sweater in his no-frills New Jersey office—in CNBC's old building, no less.
The journalist-to-money-manager road is a lot less traveled, navigated successfully only by an elite handful, including Quadrangle's Steven Rattner and the ubiquitous Jim Cramer. But the juxtaposition of a fateful start date and the way he's leveraging his media Rolodex make Insana's foray particularly notable.
"Yeah, I know the drill," he says in his typically matter-of-fact way. "You want to ask about my timing: contrarian indicator, top of the market, right?" Anticipating my queries left and right, Insana goes off the record several times during our discussion. Interviewing someone so steeped in the tricks of the reporting trade is like rhetorical jujitsu. It brings to mind a time I appeared on his CNBC show some years back: As a CEO guest droned on about "our industry solutions generating normalized earnings on a going-forward basis" or some such, Insana turned to me and deadpanned a "please shoot me" look. "You just get tired of all the pat answers," he says, rolling his eyes.
On June 1, 2007, just weeks before the global credit markets seized up, bloodying hedge funds the world over, Insana started investing. A telltale sign of the peak, bloggers sniffed—to which Insana sniffs back: "It had nothing to do with market timing." Denying his move was emblematic of an anything-goes climate, he adds: "I had the experience and relationships to attempt something like this. I was, after all, doing due-diligence work for 22 years. If not now, I asked myself, then when?"
Insana Capital does offer a unique value proposition: The shop is, in effect, a "discount" gateway to cream-of-the-crop hedge funds, including SAC Capital Advisors and Renaissance Technologies, according to published reports. While these firms typically demand a $5 million to $25 million buy-in—if they are accepting new money at all—Insana's clients get his custom-diversified basket of that talent for a minimum investment of $500,000, plus a 1.5% annual fee. The funds "were generous and magnanimous enough to do business with me," he says. "It was clear that I was bringing them strategic, long-term money."
Notes legendary hedgie Julian Robertson, who met Insana 12 years ago: "The best managers don't have any trouble getting new money—they have all the money they need. But they will take it if they like the person, and Ron has a real chance." Robertson's exclusive funds were up an average of 55% last year; he says he will encourage managers of his new offerings to take Insana's capital.
Still, less than a year and $120 million into Insana's campaign, he is learning that raising any kind of cash now isn't easy, regardless of the marquee names in his fund portfolio. He has been traveling, dialing, and text-messaging like a madman, shuttling from Panama to Europe to the West Coast, Japan, and Australia. Dubai is on deck.
Tables turned, Insana the career interviewer has become the one being interviewed. Prospective clients want to know what his "alpha," or special managerial talent, is, particularly as his seven-man firm labors to get into providing investing advice to the high-net-worth set.
"I can't just sell access," he explains, especially in a market he compares to whack-a-mole. "Every day some new issue pops up," he says. "It's the most complex environment I've ever seen."
Insana straddles two cultures that are notoriously wary of each other. If he successfully marries them, he's owed more than his fee—a Nobel Peace Prize is more like it.