DORCHESTER CAPITAL ADVISORS LLC

Established: 2002

Headquarters: 11111 Santa Monica Blvd., West Los Angeles

Principals: Michael Halpern and Mark Zucker

Assets: $1.05 billion

Michael Halpern and Mark Zucker head up one of L.A.’s largest hedge fund companies, with three “funds of funds” that invest in other hedge funds.

Their investment strategy is simple: choose hedge fund managers that “take the Warren Buffet approach to investing,” researching and understanding how companies operate before investing with them. They prefer hedge fund managers who mix long investments and short selling, but they tend to shun investments that carry heavy leverage.

The pair said that being in Los Angeles helped them to avoid some of the “groupthink” that goes on in New York “The distance enabled us to get some perspective and maintain some discipline,” Zucker said.

Nonetheless, through the first 10 months of 2008, according to Morningstar Inc., the three hedge funds posted returns in the double-digit negative territory. The losses, however, were less than the 37 percent drop in the Standard & Poor’s 500 over the same period.

Their partnership goes back a long way, stretching back to when both were undergrads at the Wharton School of the University of Pennsylvania. “Although we didn’t know it at the time, the Wharton School was an incubator for hedge funds,” said Zucker, who is now 47 like his partner.

Halpern and Zucker went their separate ways after Wharton, though their careers were on closely parallel tracks. They both joined big investment houses back East, then came to the L.A. area to join specialty shops. Then, in the early 1990s, Halpern founded Dorchester Partners L.P., which had a long/short investment strategy, while Zucker co-founded founded Libra Investments, which specialized in high-yield and distressed securities. Zucker went on to found a hedge fund company on his own: Anvil Investment Partners, which also focused on distressed securities.

As the 1990s stock market bubble was peaking out, both Halpern and Zucker closed out their hedge funds and returned money to their investors. Then the two Wharton graduates teamed up for good, launching their current fund of hedge funds in late 2001 and early 2002.

“We had been investing personally in the hedge funds for many years, so we decided to set up a vehicle for other people to participate in investments we made in other people’s hedge funds,” Zucker said.