Junior exec

"Junior exec" Continued...

Issue: "Ethiopia's new flower," May 31, 2008

As part of the program, Brandon and other students developed their own business plan. One fellow student wanted to open a skateboard shop. Inspired by the private equity and hedge fund boom, Brandon wanted to start a mini-hedge fund. "It blew me away," says Jay Ellis, a regional manager of Washington Mutual in Manhattan and instructor in the program.

With encouragement from Ellis and others, Brandon sought investors-mainly his uncles-and combined their contributions with his income from fixing neighbors' computers to create a meager fund with just over $5,000. The fund was legally structured as an investment club and operated under his parents' names, but he used some hedge fund techniques such as taking positions both long (betting a stock price will go up) and short (betting a certain company stock price will go down) in the market.

Brandon ran the small fund for eight months out of his book-filled bedroom in the small apartment where his family lives in an urban but gentrifying neighborhood in Brooklyn. Why does he call his company Mariner Investment Advisers? "We are navigating the market and the market is like a sea," he says. "There is sometimes a lot of turbulence." Despite the turbulence in 2007, his fund made positive 30 percent returns during the eight-month experience.

Brandon's room is full of neatly stacked papers and corporate reports. A series of clocks on his walls show time in Paris, Tokyo, Chicago, Moscow, and Hong Kong so he can keep track of when foreign markets open. His younger siblings, Christopher, 6, and sister Joralyssa, 10, sometimes use ticker symbols, referring to McDonald's as MCD. Brandon's baseball glove and bat are behind a stack of books. He said he likes playing catcher on his local team because, like trading stocks, it involves a lot of strategic thinking and split-second decisions such as what pitches to call and whether to throw a runner out who is leading off first.

With an unusual level of professionalism, Brandon trained and hired three neighborhood friends-all in their early teens-to serve as industry analysts for his investment fund, making them participate in early morning conference calls at least once a week before the markets open and weekly markets training at a coffee shop after chess practice. With those three young men off to college and high schools now, Brandon is recruiting new analysts for a re-launch of his fund (marinerinvestmentadvisors.com).

Brandon, as CEO, on several occasions last year attended investor and analyst meetings at fancy hotels for companies in which his small fund held positions. He and his father would go to the meetings, and Brandon would pose questions to executives such as Lakshmi Mittal, one of the wealthiest men in the world and majority owner of the world's largest steel company, Arcelor Mittal.

A reporter from The Wall Street Journal met Brandon at such an event and profiled him for the newspaper. After the story appeared, Montfort Academy in Katonah offered Brandon a scholarship. Dozens of readers got in touch with him and pledged to invest between $5,000 and $10,000 apiece for a total of between $250,000 and $500,000 when Brandon re-launches his fund.

"Taking their input is crucial to shaping strategies," he says. A large Manhattan law firm is handling the legal work for his fund pro bono (he only pays for filing fees), and several Wall Street banks have taken an interest in Brandon. He consults mentors at Bank of America and may have an internship at another bank this summer.

Brandon is preparing to re-launch a small hedge fund under his Mariner Investment Advisors brand this summer with a pledged investment pool of more than $250,000. It's the second iteration of the fund he initially launched last year. At the moment, besides his schooling and extracurricular activities, he's busy filing paperwork with lawyers, communicating with investors, and preparing to hire analysts to work for him. His mom will be a partner in the firm and Brandon will be CEO. He says he worries about that relationship a bit. "I'm CEO and in charge in that respect," he says. "She's my mom. She's in charge in that respect."

His mother does worry sometimes that Brandon is growing up too fast or getting into uncharted territories, but other advisers assure her that he will be fine. Some experts on gifted young people such as Sylvia Rimm, a Cleveland-based child psychologist, say that parents like Judith and Terence are doing the right thing to be supportive as their children take risks. She says they should be ready to be supportive whether the ventures turn out as successes or failures, particularly in a risky area such as professional investing.


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