From our St. to Wall St.

When we think of people who work on Wall Street we don’t usually think of someone with deep roots in Thunder Bay.

Keith McCullough’s CV is impressive; a kind of Wall Street Rock Star. He is currently the CEO of Hedgeye Risk Management (formerly known as Research Edge). Prior to founding the company, Keith built a 10-year background of managing money at The Carlyle Group’s hedge fund, Magnetar Capital, Falconhenge Partners, and Dawson-Herman Capital Management.

Keith got his start as an institutional equity sales analyst at Credit Suisse First Boston after earning his Bachelor of Arts in Economics from Yale University, where he captained the Yale Varsity Hockey Team to a Division I Ivy League Championship. Keith is also a Contributing Editor to Bloomberg Television, where he appears regularly, and his pre-market commentary morning strategy note dubbed the ‘Early Look’, appears on Forbes.com, every trading day. He has been called a ‘Research Renegade’ appearing on the front cover of Bloomberg Markets magazine. (No small feat indeed.)

If you spend some time on his company website hedgeye.com, you can view some of his TV clips and interviews offering insightful commentary on the markets.

When Keith speaks, his small town Thunder Bay ethic resonates – well spoken, pleasant and respectful – yet firm in his conviction that Wall Street is a conflicted place.

Not only is McCullough accomplished in his financial career but he recently released a bibliography called Diary of a Hedge Fund Manager. We asked Keith to talk about his book, his career and his fondness for Thunder Bay.

BW: What was your motivation for writing this book?
KM: I wanted to open up and tell the story of success that people can’t see. Most people can see academic, athletic, and financial accomplishments for what they are, and there is some romanticism in those achievements, but I wanted to tell my story from the perspective of perseverance. Life is a grind, you are always going to get knocked down; it’s what you do when you get back onto your feet; that defines you.

BV: Do you think Wall Street was to blame for the financial crisis?
KM: The motivation to write the book was to tell it like it is. The motivation to leave Wall Street and start my own firm on Yale’s campus was a motivation in principle – a motivation to prove that Wall Street’s proverbial Berlin Wall of opacity needs to come down – a motivation to prove that the guiding principles of Transparency, Accountability, and Trust need to replace a Wall Street system that’s broken. The Wall Street model is conflicted, compromised, and constrained, so there is plenty of blame to center around that power center of perceived wisdom – but blaming the financial crisis on Wall Street alone isn’t fair. The blame is all encompassing from Washington to Wall Street, where we saw a colossal failure in leadership to do the right thing when no one was looking.

BV: How did growing up in Thunder Bay prepare you for being a hedge fund manager?
KM: I grew up in Fort William playing hockey for the Thunder Bay Kings in the late 80’s early 90’s. I went to Westgate until I left home to play junior hockey in southern Ontario at the age of 16, so I was a bit of a nomad when it came to high school, always coming back mid semester and picking up classes that I was taking while I was living away from home during the hockey season. Growing up in Thunder Bay for me was always all about family and sports. All of my best friends were hockey players – some of them played football and baseball with me as well. My brother Ryan and I are very close – he is the drama teacher at St. Pat’s that just did an amazing job with Beauty and the Beast. My brother and I have many of the same friends, so every time I come home its pretty much like I never left. That’s Thunder Bay. Great friends last for life. Being a young hedge fund manager, to a degree, was a lot like being a successful young hockey player in Thunder Bay. Almost my entire career on Wall Street, I was one of the younger partners at firms –with that comes a tremendous amount of pressure to continue to perform. Some people ask me why the pressure never seemed to get to me – it had to be because I had a life training in being under pressure to score and/or win. Thunder Bay has a passion for the game of hockey that you can’t replicate in many other parts of the world. That culture of expecting to win is something I am very grateful to have learned.

BV:  How is your book being received?
KM:  The book had a great start out of the blocks and has since moved into a steady pace of sales. It’s not a New York Times bestseller yet, but it’s been really nice to have so many people from all over the world send me notes about how the book struck a chord with them. From hockey players to Wall Street professionals to college kids looking for some guidance. The most surprising thing has been how many different kinds of people have read it.

BV:  Do you come home to Thunder Bay often?
KM:  I built a house with my family out on Lakeshore drive, so my wife Laura and I spend a lot of time bringing our kids (Jack and Callie) home. When I left home 20 years ago, I promised my Mom to be home for Christmas as often as I can be and that time of the year is always very special for all of us to get together. I recently flew home to speak at the Thunder Bay Kings year end hockey banquet. My firm is a sponsor for the Kings organization and I like to try to give back whatever I can whenever the opportunity presents itself.