This proliferation of new products and strategies were the fruit of the quant revolution, whose seeds were sown in 1970s research papers. Suddenly there was a new way to approach alpha and models for risk management. It was a heady time to think about new ways of investing for real world problems. It became a big part of institutional investing.

“It’s evolved tremendously,” she says. “When I first got into the business, you could look at a basket of S&P 500 companies and trade that against the S&P 500 futures contract and actually have a real honest-to-God arbitrage, where you’d have two things that really were identical in a different form but were priced differently. This was the puzzle analyzer part of me. There were really nickels and dimes you could pick up that were lying around at that time.”

A New Opportunity
Barra spun off a chunk of its consulting business to Cooper, who used that as the basis of her new, freestanding firm, Athena Capital, in 1993. She went into business advising institutional investors on risk management, investment strategy and asset allocation. Eventually, private clients came calling.

“I ended up working with individual investors in the mid-’90s,” she says. “Many of them had just had a stockbroker before and they were used to getting stories on individual stocks.” The institutional strategies could be used to mitigate risk for private clients and also maximize alpha with things like tax-loss harvesting strategies.

Eventually, a friend asked her to start managing his personal assets directly.

This was the way the firm was evolving when Cooper launched a side business in 2000. She founded an investment technology company called Thinking Investments that aspired to bring these portfolio management concepts to retail investors.
“It was a venture-backed company,” she says. “In the summer of 2001 we won a mandate from Charles Schwab to be the backbone of their investment platform.” She put Athena on pause while she worked on it.

She was in San Francisco to seal the deal with Schwab on September 11, 2001. That morning, the World Trade Center in New York was attacked, and San Francisco went on alert, too. The meeting was canceled and when she got back in touch with Schwab and other possible buyers later, the reception for her software was suddenly very frosty. With the attacks and the bursting of the tech bubble, fintech innovation had become a dead issue for 2002. With no ink on the Schwab deal, a new round of Cooper’s venture funding dried up. (Schwab spokespeople said they couldn’t comment on or verify the story.)

She had to close the company down. Fifteen years later, she says, the technology has become known by its slang name, “robo-advisors.”

Faced with the failure of her tech venture, Cooper had to choose to keep it afloat or perhaps plunge into a new, more promising direction for Athena: to turn it into an asset manager and multifamily office in 2002. It started because a friend of hers with whom she owned an airplane sold off a chunk of assets in a company and asked her to manage it. “To take it any further, I needed to become a fiduciary,” she says. Impressed by the work of Katie Hall of Hall Capital, Cooper shifted to that multifamily model in 2002 and by the end of 2003, the firm had a billion in AUM, she says.

Many of this first handful of private clients came with an average of more than $100 million, people who were largely also professional money managers, working in private equity, real estate and investment banking. She had become acquainted with this first wave of clients through her close-knit consulting community and didn’t have to cold call. “We became the investor’s investor.
“If you had $100 million and not $5 billion,” she says, “the idea was that you could combine our assets with a few other families and get the services of one of these very large, professionally managed shops,” she says.

That concept (and the idea of “multifamily offices,”) has since evolved. Cooper says that the name today connotes concierge services—“dog walking,” in other words. Today she prefers the term “outsourced CIO.” But at the time, she was again in the right place. Based on her success with one client, others came knocking, interested in her approach.

The growth has been steady, she says. Her troubles with the tech venture, she said, taught her important lessons: one of the biggest being to always have cash on hand.

“The thing I learned from it is to never run out of cash,” she says. “So that meant we were able to weather the crisis in 2008 pretty well. So not only did we do risk management for our clients but risk management for the firm.” She did have to let a couple of people go and cut back salaries by 15% to get through that crisis, she says, but adds that the firm was positioned fairly defensively.

She now has 43 families as clients, 56 employees and some $6 billion in assets under management for families, foundations and endowments. Her typical clients have $50 million to $500 million.

She is still the majority owner of the firm but she is letting other partners in, and though her growth has been organic, she’s considering inorganic ways to get bigger.

Being a quant nerd is different now than it used to be—those nickel and dime arbitrage days are long over, she says. But she still applies her mathematical mind to very specific client needs.

For instance, she’s recently taken the quantitative rigor into new areas of asset allocation, including socially responsible investing. She and her colleagues published a paper in The Journal of Wealth Management called “Social Finance and the Postmodern Portfolio: Theory and Practice,” in which she and her co-authors discuss the idea that the efficient frontier of modern portfolio theory now exists in only two dimensions on an x/y axis and that it could conceivably add a third—social impact—and maximize reward in a field of non-financial impact factors. On this curve, companies could be considered based on whether they also have the highest sustainability rankings.

“I’m really proud of that paper,” she says. “It’s a real breakthrough. … It’s theory and practice. It tells you concretely how you apply it to a real portfolio.”

Cooper’s own spiritual journey has led her to found philanthropic organizations and speak about meditation. She’s been a chairman of the board for the Kripalu Center, a new age yoga retreat. She recently returned from a conference she sponsored on measuring compassion in education. Meditation became important to her after she adopted an 11-year-old daughter in 2009. Her daughter had been in nine different foster homes and had special needs, having had bouts with PTSD and trauma that made her education difficult.

“I got interested in taking my meditation practice and combining it with the [social and emotional learning] community as a way to help give all kids a chance to get an education,” she says. “Cause I saw that personally [that] a way out of poverty or difficult circumstances was through education. … What I didn’t know until I adopted [my daughter] is that kids might be bright, but because of circumstances beyond their control they might end up with behavior and reactions like hypervigilance that would keep them from getting an education.” Her daughter (her third child) is now in college. She has since spoken about compassion as a business practice.

She is also a founding board member of the Boston Youth Sanctuary, a therapeutic after-school program for kids who have had trauma to help them get the support they need for an education. “They have individual therapy, group therapy, art expressive therapy, yoga, mindfulness, physical activity, homework help, all those things.”

Cooper’s journey has seemed unlikely in a lot of ways, but she says that businesses must change to grow. “Today in terms of growth strategy, the other things you find out when you’ve been an entrepreneur for a long time is that businesses do change and evolve.
There are certain things that are interesting and important that are growth areas at one time that become your bread and butter. Then you find something new that’s a big growth area.”

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