Discretionary assets under management: $5.5 billion
Year firm was founded: 2002
Investment philosophy: Our investment philosophy is one of trying to protect capital. We do that through a thoroughly diversified portfolio approach to asset allocation and risk management.
Biggest obstacle to future growth: The nucleus of this firm came out of DLJ [Asset Management Group of New York] by way of
Credit Suisse [Asset Management LLC of New York]. Our initial surge of new business growth was from the clients we did business with back at DLJ. After you get beyond that initial surge of new business, it becomes progressively more difficult. I think the big challenge is going to be maintaining a reasonable growth trajectory so that we can do for our clients what we want to do for them.
Toughest part about getting to where you are today: We opened our doors in April 2002. It was a difficult time. The markets were running against us. It was a very dicey time to be doing what we were doing. It’s often the case that in times like that, you have your best opportunities.
Advice to young advisers: Don’t underestimate the costs [of building a practice], and raise ample capital to do the job right. Don’t make the big mistake of overpromising and underdelivering. If it’s necessary to start small and then build out, do that. Don’t start big and try to be all things to all people right out of the gate. Be sure of what it is you are good at and prove that you are, in fact, good at it — and then expand.
Best decision: My co-founding partner and I wrote a business plan before we got started. We made certain assumptions in that business plan. We made those assumptions literally within days of Sept. 11, 2001. It was an extremely uncertain period of time. In general, our assumptions proved to be correct. That was critical.
Biggest mistake: This is a people business. I pride myself in my ability to spot talent and recruit it and keep the people happy at what they are doing. Despite your best efforts, it doesn’t always work out. You never bat a thousand. We haven’t, either. Any time you are involved in a small firm and you make what proves to be a bad personnel decision, you have lost an opportunity and wasted a lot of time. And you don’t really have either to give away.
Advice to clients: We try to get clients to focus on the light at the end of the tunnel. Now, that tunnel may be longer than we would like, but once we get there — if we can just be patient and stay the course on the diversified investment strategy that we espouse — there are going to be many money-making opportunities in the future. We understand that it’s very hard to do this. But we think that it’s critically important to be patient, keep your eye on the long-term picture, and don’t be overly hung up on what’s happening on a day-to-day basis.
Advice to advisers for navigating the financial crisis: If they have been managing portfolios that are thoroughly diversified and spreading the risk among multiple asset classes, then the message shouldn’t change. For the firms that are more single-product or two-product-type focused, it’s a much more difficult thing to argue.
Typical client: Our clients are self-made people. Our average client relationship is $30 million. The relationships range in size from $10 million to $700 million.
Client concerns: Our whole concept is built on the idea of delivering to the clients a very high level of investment performance coupled with a very high level of personal service. If we deviate even a little bit from either of those things, that’s of concern to the clients.
Last book read: “The Grapes of Wrath” by John Steinbeck
