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Omega invests in two basic classes, equities and macro. Equities are U.S., non-U.S., and special situations such as bankruptcies, reorganizations, and arbitrage. While Cooperman focuses on U.S. companies, he has hired others to do non-U.S. equities under his direction.

Omega refers to its macro investments as G-10. At Omega, G-10 includes fixed income, foreign exchange, and equities in the United States, Japan, Germany, United Kingdom, France, Italy, Australia, Switzerland, Canada, and Spain as well as other markets outside the traditional G-10 that meet Omega's investment criteria, which include an emphasis on liquidity. While macro has added significantly to Omega's returns in the past years, it has also increased their volatility. Omega has developed a clear risk management strategy that focuses on markets with perceived liquidity, which may allow a quick exit if necessary.

Before Omega makes an equity investment, the company is generally visited and a report is written. With a value bias, Cooperman likes to buy what he perceives as a $1 investment for 50 to 60 cents.

ACCOUNTABILITY

There are 41 people in the firm, of whom 15 are investment professionals. All the analysts are accountable for their positions; they are required to know their portfolio companies extremely well. Generally, each analyst will have six to ten companies in the portfolio at any one time. Typically, Cooperman gives new analysts a couple of years to prove their ability. If they are not making money in two to three years, they are asked to leave.

There are 17 partners in the firm. They are rewarded either by percentage of the firm's profit or based on their own profit and loss. The reward system is anchored around the performance of the recommendations. "If they're not a money maker, you're not doing them a favor by keeping them on board. That's the name of the game. You're not doing the investors a favor, either."

In hiring an analyst, Cooperman looks for a strong work ethic, analytic foundation, capability to easily write a several-page summary of their investment views, and a good nose for making money (i.e., knowing a good idea when they see it). In a typical year, an ana-