NEW YORK (HedgeWorld.com)–The management team behind Nucleus family of funds at Midtown Research Group LLC is in the process of a friendly fission that will split the group into two new hedge fund shops–Alson Capital Partners and Copper Arch Capital.

Midtown Research founder Scott Sipprelle had been with Morgan Stanley for more than a dozen years and was head of its U.S. equity capital markets group when he left with research analyst Neil Barksy to start Midtown Research in 1998.

The group’s initial focus was on proprietary research, including analysis of a then burgeoning initial public offering market for institutional clients. The firm later established the advisory group MRG Capital LLC to exploit its own research in the form of U.S. and offshore long/short hedge fund portfolios for qualified investors.

Terms of the impending split were not revealed. But filings with the U.S. Securities and Exchange Commission in late 2001 indicated that Mr. Sipprelle owned 49.6% of MRG Capital LLC, while Mr. Barksy owned 40.5%.

MRG was adviser to the Nucleus Fund LP, Nucleus Fund II LP and Nucleus Offshore Fund Ltd., according to regulatory filings.

Mr. Barsky will be joining Alson Capital in a senior role along with Derek Webb, the controller of Midtown Capital Partners. Other senior staffers at Alson Capital will be Frank Byrd and Nicole Channing.

Copper Arch Capital Management’s team will include Mr. Sipprelle and Robert Polak as well as Mark Particio and Kian Ghazi.

After the split is finalized in October, both firms are expected to continue to trade long/short hedge fund strategies, along the same lines as those managed by Midtown Capital Partners. Officials declined to comment on how the two hedge fund shops might differ or what precipitated the division into two new companies.