Indraneel Das ’07
Tracking the Markets to Success
Indraneel Das ’07 first became enthralled with the markets in the late 1990s, when he used his IBM employee discount to buy what was then a super-fast 166 MhZ computer. Having recently completed a PhD in applied mathematics, he took a job at IBM, then at ExxonMobil and United Technologies, making key contributions to their R&D programs. “The underlying problem I solved at each firm was to maximize the value of the enterprise by optimizing the underlying strategic decisions the company was making,” he explains. On nights and weekends, though, he pored over the stock market. “I wanted to crack the code, figure out what made these stocks move,” says Das. “I started devising my own strategies, partly related to my PhD work on efficient frontiers, and I did well beating the S&P.” Das also ran a market-neutral long/short strategy with personal money, the gains from which would later go on to fund his business school education.
It wasn’t surprising to him that investment tradeoffs and business strategy optimization under multiple conflicting constraints drew on the same research he had done in graduate school. “My PhD work revolutionized the process of identifying tradeoffs across multiple objectives. One example is a tradeoff between risk and reward,” he explains. “A similar trade-off in modern corporate decision-making is between the net present value of a project and the initial capital required.”
After a few years, though, Das realized that innovators working for companies, as he was, “have little control over the larger organization.” He had long been thinking about turning his evening passion into a career in institutional investment, which would use his analytical acumen and get him closer to ‘the big picture’. So, in 2005 Das entered Columbia Business School, where courses on such topics as earnings quality and corporate finance rounded out his quantitative skills. “The in-depth discussion of the meaning of the numbers, why they are calculated the way they are, and case studies of how CFOs in the past have managed those numbers were invaluable,” he says. “The repeated a-ha! moments and class discussions — that’s how the knowledge becomes part of your DNA.”
After Columbia, he became an analyst at American Century’s international equities division in New York. Like many analysts, Das tracked his stock picks separately. After his picks outperformed his fund during a rather difficult period, he was named a portfolio manager for American Century’s International Opportunities Fund. For three years he co-managed the fund and outperformed its benchmark by more than 32 percentage-points cumulatively. But his vision was to translate the high excess return potential in small caps into absolute returns through a long-short investment strategy. After speaking to institutional figures that did not share Das’s innovative risk-taking, he knew he had to give it a try on his own. “I had to further explore this method of running a long-short fund focused on inflection points in the international small and mid-cap space where we constantly hedge for market declines.” Das ended up putting his money behind his theory, and thus was born Pearl Brook Capital Management. Twelve months after it launched in Fall 2014, the fund had risen by 9 percent, despite the HFRI equity hedge fund index dropping 2.5 percent and international small caps down almost 10 percent.
Even with two decades spent developing his stock-picking expertise, Das says the ability to run a hedge fund comes down to one essential ingredient: “conviction.” He adds, “I knew my process could pick out the best stocks from a wide and deep small cap universe — but as an entrepreneur you also need conviction to weather every storm.”
Jeff Coffey ’14
Gaining Entry to the C-Suite
As a project manager for Environmental Resources Management, Jeff Coffey ’14 operated in a reactive role: a manufacturing company would decide to expand operations, for example, and he would help them navigate regulatory agencies and secure environmental permits. It was a natural fit for Coffey, who holds a bachelor’s in chemical engineering from Penn State University.
But after a decade of responding to executives’ decisions, he says, “I wanted to be part of the decision that’s being made…. Was there a new market? Was the business growing? Shrinking?” He contemplated how he might draw closer to the source. “With my engineering degree and consulting experience, it seemed that the way to pivot was to get an MBA and earn business-related acumen and experience.”
Business school, he says, taught him the language to speak with decision makers. Now a management consultant at Blue Ridge Partners and based in Sonoma (he jokes that the Business School “got me to wine country”), he works with companies on a range of projects. Recently, he worked with a company to adjust its pricing to better reflect the value of its product; in another, he worked with a company’s sales force to increase its effectiveness. “Nearly every project I’ve been on, I’ve worked with someone in the C-suite,” he says.
When he encounters a seemingly intractable issue, he recalls Bruce Greenwald’s strategy class, in which “we learned that if you keep asking the right questions and make sure you are attacking the problem the right way, you will find the answer.” Making this transition, he says, “gave me exactly what I wanted, which was a window into the larger decision-making process and the ability to effect change.”