The new investors: young entrepreneurs making big moves
March 30, 2012By Samantha Freda
As graduation nears, many college seniors find themselves worried about what they’ll be doing after they finish school. But Elliot Carol and Marcus Varsano, currently enrolled at UNCW, have taken the future into their own hands as they prepare to launch Lumina Investments, a hedge-fund managing company they have created with third partner Ryan Mahoney, who is a finance student at East Carolina University.
Their new venture will serve as the parent company to several new hedge funds, a type of investment fund that must follow special rules for accepting investors. Because they adhere to stricter regulations, hedge funds are typically granted increased trading abilities.
Lumina’s partners, all three in their early twenties, present themselves as a new generation of investors, utilizing a global macro strategy that allows them to focus on events that have multiple international consequences. Using this model, they will be investing directly and indirectly into markets currently impacted by political and economic occurrences.
“The world for the last ten years…has been defined by macro events,” Carol said. “Two wars, an economic melt-down, the Arab Spring, the birth of the China superpower—these events have shaped our day-to-day lives and our entire outlook on the investment world.”
Essentially, Lumina’s tactic is to use logic to discover financial opportunities in markets around the world. Principal managing partner Carol referred to Greece’s potential default on outstanding bonds as an example, citing the impact that it may have on European markets. Varsano, the head of investor relations, clarified further that if the European debt crisis were to be viewed as a disease, Lumina’s concept is to make money off of the symptoms.
“Focusing on the usual menu of economic indicators no longer provides a path to successful investing,” Carol said. “Right now, macro events are driving the market. We believe this is the new normal.”
Carol spoke of how his belief that success in this market is not a matter of age, but about doing your homework, understanding the risk, and implementing a strategy. Much of the students’ time is spent doing research in order to better understand world events and create an information network based on what they perceive to be driving indicators in the global market.
Carol and Varsano give much credit to their mentors at UNCW. “The Cameron School of Business and Entrepreneurship Center have supported Elliot's efforts in starting Lumina Investments by providing him with faculty advisors in the Finance Department including Dr. Bill Sackley as well as professional investment mentors,” Jonathan Rowe said, director of the Entrepreneurship Center.
Originally from Connecticut, Carol has been interested in finance since an early age. “I’ve been analyzing key economic indicators, business trends, world economies and the currency markets intensively since I was a young teenager,” Carol said. After completing an internship out of high school with Bloomberg in New York, Carol began his studies at UNCW. Mahoney, who is chief investment officer of Lumina, specializes in micro-finance, energy markets, and derivative structures. “We complement each other very well,” Carol said. “Ryan has two gifts [that he brings to the venture]: passion and obsession.”
Varsano, the third Lumina partner, is in charge of coordinating Lumina’s relationships. He aims to create a greater transparency between investors and the hedge fund manager. Dr. Matthew Wood, professor of Entrepreneurship at UNCW, met with Varsano. When asked about him, Wood said “I got the sense that the human need to sleep is the only keeping him from working 24 hours a day. As a former entrepreneur, I know that type of drive and passion can't be taught.”
Hoping to be fully launched by summer 2012, the partners of Lumina investments are eager to put their work into action, though they remain conscious of the protocol they must follow.
“We want to do this right and take the steps to establish credibility,” Carol said. “Lumina Investments has pulled out of the gate, we have created the infrastructure needed to compete…Now it is time to put our models to the test. We have a long way to go to reach our goals,” Carol said. Both innovative and conservative, these young men believe that their strategy will create long-term success.