Hedge funds and the biz journalists who go to work for them

The news that Reuters business journalist Carrick Mollenkamp, who many consider to be a dogged and thorough reporter during his two decades in business reporting, had left journalism for a job at a hedge fund earlier this month took some people by surprise.

It should not have.

Hedge funds are advertising that they want to hire business journalists to come work for them on journalism job websites. They’re starting their own websites to provide content to other hedge funders. And they’re using the turmoil in the media industry to pick off some of the best people in business journalism to research companies, paying them much more than what they were making writing earnings stories and company trend pieces.

Why? Business reporters have the required skills to dig into a company and find out what’s going on.

Consider the case of Jim McNair, a former business journalist with the Cincinnati Enquirer and Miami Herald. He left the Enquirer in 2007 and went to work for a New York City hedge fund that he is contractually forbidden to identify. He is a researcher for them, working with a dozen analysts.

“The work is very similar to the front-end work of business journalism,” said McNair in an email to Talking Biz News. “I run companies and their top executives through the gauntlet of litigation checks, regulatory agency actions, FOIA requests, and trade press and blog coverage, then summarize findings for the financial analysts to digest. On occasion, I’ll suggest companies for possible investment positions, but I’m mainly on board to dig up publicly available information that could have a material impact on a company’s stock price.”

McNair works out of his home in Cincinnati. But he’s not alone. Talking Biz News found at least a dozen former business journalists working at hedge funds or investment companies in the past 24 hours.

Here are some examples:

1. Wall Street Journal editor and researcher Jim Oberman left the business newspaper in October to work for a job in research at a new hedge fund, Aravt Global LLC.
2. Steve Schurr is a former Financial Times reporter who is now an analyst with Brahman Capital. He previously worked for legendary hedge fund manager Jim Kynikos.
3. David Poppe is a former Miami Herald reporter who now manages the Sequoia Fund for Ruane, Cunniff & Goldfarb in New York.
4. Raphael Lewis, a former transportation beat reporter for the Boston Globe, joined North Run Capital hedge fund in Boston in 2007 and works there as a research analyst.
5. Mara Der Hovanesian, a former Businessweek reporter, works for Vontobel Asset Management as a senior research analyst, along with former Wall Street Journal reporter Robert Berner.

Of course, if the hedge fund job doesn’t work out, they can always return to business journalism. Cory Johnson of Bloomberg Television joined its West Coast show after running a hedge fund. Of course, before he ran a hedge fund, he was a reporter for TheStreet.com and CNBC.

And Ron Insana returned to CNBC after leaving the business news network in 2008 to run a hedge fund. His foray into investing failed.