A New Way to Support Investigative Journalism—a Hedge Fund

After raising $100 million, hedge fund Hunterbrook Capital now is making headlines, smiling at cease-and-desist orders and is on the verge of maybe making a ton of money for investors, that is if they don’t lose too many lawsuits.

Hunterbrook Capital is a unique hedge fund to say the least as it’s flexing a powerful and enterprising new muscular journalism trading model operating in conjunction with its associated newsroom, Hunterbrook Media.

Here’s how my Copilot explains it:

Hunterbrook Media conducts investigative journalism to uncover significant news stories.

1. Before these stories are published, Hunterbrook Capital has the opportunity to execute trades based on the insights gained from the investigative reports.

2. The hedge fund aims to generate profits from these trades, which in turn can support the operations of the newsroom.

3.This model represents an innovative approach to funding journalism, where the success of the hedge fund directly contributes to the financial sustainability of the newsroom.

Yes, it’s sure a novel blend of media and finance, aiming to benefit from the synergistic relationship between news reporting and trading.

In a recent interview on CNBC, one of Hunterbrook’s representatives said its hedge fund journalism had uncovered a mortgage company allegedly defrauding borrowers out of billions of dollars.The company fired back at Hunterbrook with a cease-and-desist order. 

While hedge funds typically are investment funds engaging in complex trading and risk management, this one goes extra miles in seeking to improve investment performance by going in an enterprising new direction, which if all goes well could have markedly fruitful results for investors, not to mention for journalists now doing the lucrative investigating.

First, we need to understand that hedge funds are not as heavily regulated as mutual funds and therefore often have more flexibility and can be more daring in their investment choices.  Aiming for those higher returns, hedge funds often involve higher risks more suitable for institutional or high-net-worth individual investors. 

Put simply, Hunterbrook Capital practices hedge fund journalism by executing trades guided by investigative reports from its associated newsroom, Hunterbrook Media.

This endeavor marks a novel method of financially supporting what I used to do at The Philadelphia Inquirer–plain old investigative journalism.  Yet today journalists are challenged by another problem, layoffs.  These are tougher economic times for news media than when I served the public with eye-opening reporting that once almost me arrested in that city of brotherly love as I was investigating the police there.

Hunterbrook Media intends to prioritize investigative and foreign reporting in neglected regions, financing its journalism through fees from the hedge fund, thus departing from conventional models dependent on advertising or subscriptions.

Sam Koppelman, publisher at Hunterbrook Media, asked why does good reporting have to be such a bad business.

The venture he co-founded with Nathaniel Horwitz is driven by a shared vision of harnessing the underappreciated assets of reporting and the expertise of journalists and open source Intelligence specialists.

The newsroom debuted with a report revealing that Hunterbrook Capital had engaged in trades informed by a story before its release, demonstrating the model’s capacity to benefit from thorough reporting and its investment in hedge fund journalism.

So, Hunterbrook is a hedge fund that’s also a newspaper during these challenging economic times for the news industry.  Hunterbrook has hit upon a differentiated media business model starting with a newsroom, Hunterbrook Media, publishing its investigative journalism.

Before each investigative piece is published, since there’s no advertising or subscription support, the newsroom would send it to Hunterbrook’s affiliated hedge fund, Hunterbrook Capital, which then could trade on the news. 

Then the hedge fund’s trading profits would go toward paying the journalists’ salaries.

Knowing well the challenges journalists face these days with the number of newspapers dwindling and difficulties of supporting payroll on just advertising and subscriptions, Tom Madden, the “Spin Man,” the title of one of his books, was impressed the other day when he saw a representative of Hunterbrook Media interviewed on CNBC.  Ironically Madden had a small role in the beginnings of CNBC, today the business news channel owned by the NBCUniversal Media Group, a subsidiary of Comcast ‘s NBCUniversal. This happened when Madden was the #2-ranked executive at NBC and the right hand to then CEO Fred Silverman years ago when the concept for CNBC was born. Today Madden is CEO of TransMedia Group, the international PR firm he founded in 1981 when he left NBC for even greener pastures in public relations.