Value Added: Taking Advantage Of Opportunities


One of my favorite experiences is jetting to Phoenix, Ariz., each January, where my wife, Polly, and I visit her parents and I attend the FBR Open, one of the wilder events on the PGA Tour and a corporate schmoozefest sponsored by Friedman, Billings, Ramsey Group, the Rosslyn investment bank.

It's a great place to make contacts, and I have met lots of interesting politicians and businesspeople there. Two years ago I met Teddy Downey, who at the time was one of FBR's research analysts and is the son of former congressman Tom Downey. Tom Downey represented Long Island for nearly two decades and is now a Washington lobbyist.

Teddy Downey, 26, recently left FBR and is now heading up Potomac Research for Washington entrepreneur David Bradley. Potomac Research is a new company aimed at acquiring intelligence on how federal activities will affect the private sector and then selling that information to investors such as big mutual funds, endowments and hedge funds. The model is similar to Bradley's predecessor companies, the Corporate Executive Board and the Advisory Board Co., both of which sell research to corporations through a subscription-based service.


Teddy Downey

I have written a few blogs lately about the scions of famous people. Entrepreneur/author Christopher Gergen, son of political journalist David Gergen, was the first. Fannie Mae CEO Dan Mudd, son of longtime CBS correspondent Roger Mudd, was the second.

Some people questioned whether the Gergens and Mudds and other achievers should be celebrated for being successful, since they grew up in prosperous families. I asked Teddy what he thought.

"It's helped in a lot of ways because of growing up in D.C. around big decision-makers like Nancy Pelosi, George Miller, Chris Dodd, Dick Durbin, Chuck Schumer. Just growing up and getting to be friends with them and their staff, meeting with them, has been a huge advantage understanding how the Hill works and getting information on specific situations that affect investors."

Lobbyists, many of whom are former lawmakers, "are at the center of all this information through their personal relationships. They are very plugged in. I know them through my dad, partly through social contacts. My family is extremely plugged in."

Downey has tons of friends from his days at St. Albans School in Northwest. He lives with a houseful of former high school friends over in Georgetown. A St. Albans' friend helped link him to Potomac Research.

"St. Albans has been good to me," he says.

Then Columbia University. Nice. But everything didn't come from dad.

"My dad is still very helpful to me, and he keeps me in mind. But hard work and really endless curiosity and a desire to learn separate me from others. It's not just sitting on your laurels. Part of it is taking advantage of the possibilities that are open to you."


After college, he worked on the Kerry-Edwards campaign as an advance man. He has also tried advertising and polling. He was hired by FBR three years ago as an analyst in its Washington Policy Research Group, alongside Andrew Parmentier and Kevin Book, both friends of mine, providing hedge funds and mutual funds with the same Washington intelligence that Potomac Research sells now. Teddy concentrated on financial services, health care, energy and what is known as "TMT" for tech-media-telecommunications policy.

"I got hired because of my ability to write and think clearly and being personable and well-liked, not only around Democrats but around Republicans and being able to go deep into issues that wind through Washington and affect companies on a large scale, like Internet gambling, asbestos, and mergers and acquisitions."

"One of the things that really is a big difference between Washington and Wall Street is the pace...People are used to working hard in the White House and on the Hill. But it's a whole other level of intensity and efficiency required when you are dealing with investors. You can't pontificate. You have to diligently dig for information and translate that effectively for investors."

Any home runs at FBR? He and Parmentier correctly predicted that big asbestos legislation would not pass Congress, which would have been a windfall for insurance companies. He also correctly called the failed acquisition of 3Com by Bain Capital and a Chinese Company, preventing some investors from taking a bath and helping others to short the stock.

I had to ask because I am a reporter: What is your best resource for finding stuff?

"A lot of the information-gathering is really done on Mondays and Fridays, when members aren't in session, and you can meet with the committee staff. They are able to go deepest on issues."

Downey said Potomac Research will concentrate heavily on federal agencies like the Federal Communications Commission and the Center for Medicare and Medicaid Services. They both have a big effect on everything from how much Medicare will reimburse health care providers to whether a communications merger will be approved.

He spent the last few weeks on a road show drumming up clients. It's a great time to start this company.

"With the 2008 elections, there is going to be a tidal wave of new regulations and a tremendous amount of change, whether it's [Barack] Obama or [John] McCain, in the key areas we are focused on, including financial services, health care, energy and telecom. The change and uncertainty in Washington creates risk and opportunities for investors," said Downey.

Downey said there is one Washington prediction that is fairly certain: he won't be invited to next year's FBR Open.

By Dan Beyers  |  May 27, 2008; 6:40 PM ET  | Category:  Value Added
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Comments

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I'm a huge fan of David Bradley and anything he undertakes. Teddy sounds like another great member of the Bradley team. Best of luck to them.

Posted by: Bradley fan | May 27, 2008 7:21 PM

I think this is a great article about how this young man succeeded on his own merits. It seems like many people in this situation would be tempted to coast along but he really sounds like he's working as hard as he has to to make his business successful. Good luck to Teddy and to the latest Bradley venture.

Posted by: Dianne | May 27, 2008 7:50 PM

David Bradley has done it again, with a great idea and a solid headliner. Teddy seems to have already proven himself as a leader and has a bright future ahead.

Posted by: Rick | May 27, 2008 8:35 PM

This is surely not an easy path. Clearly diversified interests and a strong work ethic are driving him to this success. No doubt, this venture requires long hours of research and sound judgment. Connections may position Mr.Downey but it will be his own drive and values that carry him through.

Posted by: Garnett | May 27, 2008 8:49 PM

Fantastic article about a promising new company. Teddy seems really focused and driven. They've obviously thought this out and I'm excited to watch Potomac Research succeed.

Posted by: Morgan Oakes | May 27, 2008 9:43 PM

Everything David Bradley touches turns to gold and I have no doubt he and Teddy will score another home run with Potomac Research!

Posted by: Sam Quinn | May 27, 2008 9:45 PM

Downey seems refreshingly engaged in the fascinating goings-on of Washington politics and has managed to catapult his passion into an undertaking that resonates with business saavy. Kudos to Bradley for taking a chance on such a young man. I suspect he will be glad he snagged him now as his future is sure to impress!

Posted by: Danielle | May 27, 2008 9:46 PM

Hmm, an intelligent member of the Washington 20-something set who has a political upbringing and a job that necessitates he reach across the aisle and befriend members of both parties... is running for office in Downey's future?

Posted by: Jack York | May 27, 2008 9:55 PM

I've know Teddy from my Little League Days through my college years at Columiba University, and I am glad to see his business savvy recognized. He is incredibly gifted, quick thinking, and integrated into the DC world. I have no doubt he will succeed in this endeavor as he does in everything else he pursues.

Posted by: Peter | May 27, 2008 10:29 PM

I understand that Washington is all about power and whom you know and taking advantage of opportunity when it knocks... but I prefer stories about people who make it though the school of hard knocks, like car-wash owner David DuGoff.

Posted by: Polly Elmore | May 28, 2008 9:42 AM

i would not expect anything less from the humble kid. teddy has always had a knack for success and bringing people together. i look at this as just the beginning to a long storied career.

Posted by: Gayraud | May 28, 2008 10:15 AM

I've known Teddy for a while now and am so very glad his discipline and hard work has been recognized. DC is full of the sons and daughters of the well-connected but Teddy has always relied less on who he knows and more on his own skills and abilities. This is an honest article about an extremely talented young man, who, in a short time, will not have to be introduced as, "the son of former Congressman Tom Downey."

Posted by: Lauren | May 28, 2008 12:09 PM

This sounds like an innovative idea poised to take off. Can't wait to see where it goes. Best of luck to Davis Bradley and the newest members of his team.

Posted by: EKT | May 28, 2008 12:50 PM

A wonderful interview with an extremely talented young man.
I've known Teddy Downey for many years and have always been impressed by his drive, uncanny abilties and sweet demeanor.
All in all, a very formidable combination.
I am delighted but not at all surprised by his success.
Whatever path he takes, I am confident our future is in great hands.

Posted by: Dossie | May 28, 2008 1:13 PM

Way to go Teddy. You never cease to amaze me.

Posted by: Randy | May 28, 2008 1:31 PM

You've gotta hand it to Bradley. He's got chutzpah tapping a twenty-something to run the show...regardless of who his father is. This kid must be the real deal.

Posted by: Justin | May 28, 2008 2:29 PM

My hat's off to Mr. Bradley! It sounds like he is entering into groundbreaking territory again, this time with Mr. Downey at the helm. Teddy certainly has a bright future ahead of him based on his name and what he's accomplished thus far. It will be interesting to see how accurate the future predictions of Potomac Research are. If all goes well, this could be Bradley's next home run and Teddy's first!

Posted by: Brad | May 28, 2008 2:49 PM

I play on a rec. flag football team with Teddy and he always steps up in the clutch. Potomac research is lucky to have this natural leader join their team!

Posted by: Phil | May 28, 2008 2:59 PM

Looks like Bradley just knocked another one out of the park. Grand slam!

Posted by: Khaled | May 28, 2008 3:01 PM

I play quite a bit of squash with Teddy and this definitly tops his left handed wrist flick.

Posted by: Anonymous | May 28, 2008 3:03 PM

buy buy buy

Posted by: rob | May 28, 2008 3:14 PM

I've always thought that Teddy was smart, dedicated, handsome, erudite, thoughtful, passionate, well-dressed, expertly-coiffed and quite a fine dancer.

This article causes me to reflect on many of Teddy's other fine qualities. For example: did you know that Teddy is a world-class archer? Also, he can tie a cherry-stem into a square knot using just his tongue! Recently I heard that he ran into a burning building to save a box full of cuddly kittens! KITTENS!

Certainly Teddy is the cat's meow (get it!)! I wish him all the best!

Posted by: Tomcat | May 28, 2008 3:18 PM

i am the author of the blog. omigod, it looks like teddy's entire flag football team is here!

Posted by: tom heath | May 28, 2008 3:24 PM

While we all are aware of Teddy's finer attributes, I think it is only fair that we point out some of his shortcomings like: he's overly passionate about what he thinks is right; extremely critical of himself; too open-mined and diverse in his thinking; extremely self-effacing; and most importantly unable to know when to draw the line and say "no".

Posted by: Felix | May 28, 2008 4:34 PM

Teddy Downey is a man with a balanced vision. He is well-educated and open to ideas from every side. This comes, not only from his politician father but also from his mother who has been an educator her whole professional life. I feel very positive about his sense of social justice and his commitment to the kind of research that we all need in order to make decisions for the future.

Posted by: Joan digby | May 28, 2008 7:12 PM

Whatever happens in November, it's reassuring to know that there are young, in-touch researchers such as Teddy Downey who have the education, personal experience, enthusiasm and committed sense of purpose to keep us accurately informed.

Posted by: B.Cristin | May 28, 2008 7:29 PM

Unlike apparently everyone else in Washington, I do not know Teddy Downey but his FBR background and the endorsement of the legend David Bradley speak well for him and for his pedigree, and it is clear from the early deluge of positive posts that he has a lot of friends. My concern is the business of Potomoc Research and it is the same concern I have about the arbitrage business - the trading of contacts and friends for information that may make investment decisions easier for the whales. While clearly legal, it still has the same scent of "insider" (with a small i) advice that leaves the rest of us small non-institutional independent investors at a distinct disadvantage. Fortunately, more fulsome security reporting requirements and the internet have helped narrow the gap, even if I can't have Chris Dodd or Chuck Schumer over for wine and cheese.

Posted by: Cooper | May 28, 2008 7:59 PM

When Teddy Downey does a pushup, he doesn't lift himself up, he pushes the earth down. Teddy Downey is the reason why Waldo is hiding. Teddy Downey always knows the EXACT location of Carmen Sandiego. Teddy Downey CAN touch MC Hammer. Teddy Downey can kill two stones with one bird.

Posted by: tomcat | May 28, 2008 8:16 PM

I'm getting a nice tan basking in the reflected glory here! I like to think the long hours I spent having Teddy become accustomed to defeat at table tennis have in some small but significant way contributed to his steely resolve to take this planet by the scruff!!

I'm delighted to see that the world at large is recognising the solid traits that have always been evident in this man that I'm proud to call a friend.

I just hope Teddy remembers to give me the tap on the shoulder when it's time for me to come join the team!!

"Just give me a chance coach; I know i can do it..."

Best wishes for a successful future from all your family in Ireland.

Posted by: Sean Devine | May 28, 2008 8:27 PM

As a small business owner, I enjoy this feature and the insights into how people make money in this town.

The 'legacy series' is interesting -- but you may want to raise the bar to feature individuals whose career or accomplishments would be noteworthy independent of their last names.

The CEO of Fannie Mae would qualify under this new, more rigorous standard.

Posted by: Joe Baga | May 28, 2008 9:40 PM

I have known Teddy his entire life. I am not surprised that he is such a successful young man. It doesn't matter if he is playing sports, riding a bike, or analyzing information, he does it with total commitment and dedication. He will be a great success because of who HE is. He has had great teachers along the way: his mom, his dad, and all his congressional aunts and uncles who were and still are very influential members of the Washington political and financial scene. Congratulations to Teddy and to David Bradley.

Posted by: Uncle M | May 29, 2008 10:47 AM

I have known Teddy his entire life. I am not surprised that he is such a successful young man. It doesn't matter if he is playing sports, riding a bike, or analyzing information, he does it with total commitment and dedication. He will be a great success because of who HE is. He has had great teachers along the way: his mom, his dad, and all his congressional aunts and uncles who were and still are very influential members of the Washington political and financial scene. Congratulations to Teddy and to David Bradley.

Posted by: Uncle M | May 29, 2008 10:47 AM

cooper. that's a very incisive observation that you brought up about the "whales" benefitting from the washington playbook that potomac research is selling. thank you for that. however, both you and i can avail ourselves of "the whales" by investing through mutual funds.sure fidelity, vanguard T.Rowe Price and others can afford Potomac Research, in which case we can be on even ground with the "insiders." i would not advocate buying individual stocks unless you are sitting by a lake somewhere with nothing to do but read annual reports. i would say you should be leaving the investing the big mutual fund companies and go play golf.

Posted by: tom heath | May 29, 2008 12:45 PM

one other thing cooper. I love that word "fulsome."

Posted by: tom heath | May 29, 2008 12:46 PM

he's a ten bagger baby!

Posted by: Gary | May 29, 2008 1:16 PM

Sounds like another story of a son of priviledge using his father's connections for opportunities. Nice to see the son hasn't waivered far from his father who used the connections gained as a public servant to slurp from the trough as a lobbyist. This article disturbs me; we should be celebrating people who make it on their own - not those who improperly benefit from "public Service".

Posted by: True Merit | May 29, 2008 1:32 PM

Here's a nice link regarding his exemplary father. http://query.nytimes.com/gst/fullpage.html?res=9E0CE3DD1031F932A05753C1A964958260

A nice excerpt from the article:
When Mr. Downey talks about his seniority on the House Ways and Means Committee, Mr. Lazio prefers to discuss Mr. Downey's Congressional junket to Barbados a few years ago, including a jet-ski excursion captured by hidden cameras on ABC's "Prime Time Live." Mr. Downey says simply that the trip was a mistake.
If Mr. Downey brings up his central role in securing extensions in unemployment insurance benefits, his challenger talks about overdrafts on 151 checks totaling $83,000 at the House bank at a time when Mr. Downey's wife held a patronage job as an auditor in the House office that ran the House bank.
"While Tom Downey was writing bad checks, his wife was serving as the only auditor of the House bank," one ad reads. Mr. Downey said that the auditor title was only a job title, that his wife's work with the Sergeant-at-Arms office had nothing to do with the bank.
If Mr. Downey talks about his efforts to find money to convert Long Island's military industry to peaceful purposes, Mr. Lazio contends that Mr. Downey has all but abandoned Long Island in favor of Washington, where his wife works and his children go to school.
Asked about the considerable political baggage he brought to the campaign this year, from the House bank to his trip to Barbados, Mr. Downey smiled wanly and said, "Well, I have been there a long time."

Posted by: S. McClellan | May 29, 2008 1:45 PM

Mr McClellan - you really stretched your investigative powers by kindly providing us with that insightful link, didn't you?

It's difficult not to discern a slight tinge of jealousy buried not too far beneath that piece of earnest journalism.

If that is the best you can do in terms of 'dirt' after about 30 years public service that really says it all.

Please forgive the rest of us whilst we wish a young man (whose only fault is that he sometimes laughs too loud) all the best for his future.

We also wish YOU all the best in getting rid of that chip on your shoulder.

Posted by: Sean Devine | May 29, 2008 8:14 PM

Being a Son of Privilege (a boy born into a wealthy or powerful family, to be raised without the hardships experienced by the poor or the working class) is not a great accomplishment. He has had doors opened to him because of his father. George W. Bush would not be where he is if not for his father, nor would over 4,000 young Americans (most who weren't Sons of Privilege) be dead due to a mistake of a war. We don't need to over-celebrate those whose accomplishments are spring boarded by their fathers - especially a father that usurped his stewardship of public service. It's not that great of an accomplishment.

Posted by: S. McClellan | May 30, 2008 3:26 PM

Well Scott,
Wow! It's such a very good thing you hung on to all the negative literature from the '92 campaign and speaking of cashing in at the porcine trough of DC connections and lack of personal integrity we must obviously defer to your superior knowledge and experience in all such matters. You have reset the honor/loyalty bar and we are quite confident that you have left not an angstrom for anyone else to crawl under.

Posted by: Dianne | May 31, 2008 3:37 PM

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