Rosemont Roundtable: Exploring the Business of Investment Management

In this episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart is joined by Barbara McKenna, president of Longfellow Investment Management in Boston, MA. Longfellow is a $17+ billion firm* primarily focused on short-term and fixed-income strategies, with an equity-oriented approach. McKenna's leadership over the past 18 years has brought significant growth to the firm, expanded its core competencies and offerings, broadened employee ownership - all while maintaining an exceptionally-low client turnover rate. In the episode, McKenna details Longfellow’s investment-centric culture, driven by client success and supported by a broad employee ownership structure.

In terms of the macroeconomic landscape, Longfellow emphasizes bottom-line security selection, considers macro events' influence rather than predicting them and identifies risks associated with them.

“I truly believe that, as an active manager, the greatest success comes when we are a viewed as a partner and a solution provider, and that of course, includes seeking to deliver consistent above average, risk-adjusted, relative or absolute returns, but it really means focusing on listening to the needs of clients, having the ability to customize solutions,” McKenna said.

Specifically, McKenna and Burkhart discuss:

• Longfellow’s focus on short-term and fixed income strategies with an equity owner’s mindset.
• The expansion of Longfellow’s offerings over the years, incorporating core plus strategies and absolute return offerings to meet client needs and capture a broader range of opportunities.
• How the firm prioritizes cultural and philosophical fit when selecting strategies and aims to be a role model for change as a woman-majority-owned firm.
• Key aspects of McKenna’s leadership philosophy, how to attract and retain employees, and the importance of diverse perspectives and collaboration in the workplace.
• How Longfellow maintains its investment-centric culture and emphasizes client success
• Longfellow’s approach to the macroeconomic landscape, including bottom-line security selection and understanding the influence of macro events.

The episode concludes with McKenna’s take on the current economic environment, Fed hikes, rates and market volatility. Overall, the episode offers valuable insights into the factors that have fueled Longfellow's success and its unwavering dedication to serving clients with integrity and expertise.

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

* Approximate AUM of Longfellow Investment Management at the time of recording.

In this episode of How They Did It, a sub series of Rosemont’s Global Investment Leaders podcast, host Brad Mook is joined by Lindsay Chamberlain, Managing Director at Axiom Investors. During their conversation, Chamberlain, who has been a part of Axiom for 10 out of the firm’s 25 years, discusses Axiom's business and investment philosophies, which have enabled the firm to expand its client partnerships and thoughtfully scale its business.

Chamberlain and Mook discuss: 

• How the firm's culture has been key to its success, aligning the interests of its employees with those of its clients.
• Axiom's commitment to collaboration, which has led to innovative ideas and thinking, while its focus on performance has played a significant role in its success.
• How offering a range of investment vehicles has helped attract different client types and build a diverse base of business.
• Axiom's rebranding from Axiom International Investors to Axiom Investors, which reflects the build-out of its strategies which all leverage its core, dynamic growth investment philosophy that is grounded in fact-based evidence.
• The importance of maintaining a strong culture to ensure the firm’s success and stability, and how adapting and responding to changes in the industry is key.

Chamberlain also touches on Axiom's client communication strategy and the importance of maintaining a performance-led culture without compromising on the firm's values. The episode concludes with Chamberlain sharing key lessons learned from her 10-year tenure at Axiom. 

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

On the latest episode of the Global Investment Leaders podcast, Chas Burkhart, Rosemont’s CEO, hosts Stefan Strein, Cleveland Clinic’s first chief investment officer, for a conversation about Cleveland Clinic's investment strategy and how it supports the organization's mission of “caring for life, researching for health and educating those who serve.” In his role as chief investment officer, Strein is responsible for the strategic direction and investment management of Cleveland Clinic’s $15 billion in investable financial assets. He also co-chairs Cleveland Clinic’s Retirement Committee, which oversees $11 billion in defined contribution assets invested for the organization’s 70,000 caregivers.

Drawing upon his 30-year investment career, which started in venture investing, Strein shares his insights on: 

• Cleveland Clinic’s move in 2015 to build an investment office internally with an initial focus on creating a foundation built on managing risk and measuring performance 
• The advantages of the Clinic as an investment office and how it leverages software for  data warehouses, visualization tools and artificial intelligence applications used in managing clinical operations around the world to manage the investment portfolios, 
• How healthcare investment portfolios are typically more conservative than the average endowment due to the need for stability and predictability in the industry
• The importance of contributing to the credit rating of a healthcare system, as the health system utilizes long term debt to fund the construction of its destination medical centers
• How the purposeful integration of investment partners and the investment team into the Clinic's mission through behind-the-scenes hospital tours, curated webinars on healthcare topics and connectivity to clinical and research thought leaders highlights the importance of collaboration and shared values in achieving success
•  How Cleveland Clinic aims to be early pioneers in emerging investment strategies and newly launched firms, but not necessarily the first dollar, to mitigate risk 

The podcast concludes by discussing key success metrics for the investment side of Cleveland Clinic. Strein states he measures the success of the investment office by “outperforming benchmarks, being a low-cost solution for an organization that operates in an industry with increasingly tight operating margins, and being the financial backbone of an incredibly innovative and entrepreneurial ecosystem.” By meeting these points, Strein believes it better enables Cleveland Clinic to “have the financial strength and certainty  it needs to be the most innovative and resourceful healthcare system in the world.”

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

In this episode of How They Did It, a subseries of Rosemont’s Global Investment Leaders podcast, host Brad Mook is joined by Scott Priebe, Managing Principal and Portfolio Manager at Geneva Capital Management. Based in Milwaukee, Wisconsin, Geneva is a majority employee-owned investment boutique managing roughly $5 billion in long-only US equity strategies and specializing in small- and mid-cap quality growth.

During their conversation, Priebe shared his unique perspective on investment firm ownership, which has been formed over a series of ownership transitions since Geneva’s founding in 1987. Seeking to grow and diversify the firm’s investment strategies and revenue drivers, in 2014 Priebe and his partners merged with London-based Henderson Group. Yet just two years later, the firm’s new parent organization merged with Denver-based Janus Capital Group, upending Geneva’s strategy for long-term, sustainable growth. It is from this juncture that Priebe shares his insights on why and how he and his partners pursued an MBO and the factors that made it successful, including:

• The catalyst that led Priebe and his partners to seek their independence from their parent organization and return to operating as an independent boutique 
• How Priebe and his partners approached the parent management team, with the goal of creating value for both firms and their clients
• The risks and rewards of betting on themselves, particularly amid the competitive headwinds faced by independent, long-only equity managers
• Navigating valuation, financing and the many logistics that are required when completing an MBO
• How Priebe and his partner structured the ownership of newly independent Geneva, offering employee ownership across functions to capitalize on the team’s entrepreneurial spirit 

To hear another episode about navigating the complexities of an MBO, be sure to listen to Mook’s recent conversation with Todd Vingers, CFA, who serves as president of the recently launched Leeward Investments. All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

In this episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart is joined by Maribeth Rahe, president and chief executive officer of Fort Washington Investment Advisors, Inc. As one of the largest investment advisors in Ohio with approximately $72 billion* in assets under management, the firm provides professional and comprehensive asset management services for institutions, corporations, insurance companies, mutual fund providers, foundations, endowments and high-net-worth individuals. 

During their conversation, Burkhart and Rahe discussed:

• How being a wholly owned subsidiary of Western & Southern Financial Group has benefited Fort Washington and how the background and values of the leadership of Western & Southern have created alignment between the two companies
• Rahe’s approach to inorganic growth and her creative ways of determining if a firm is a cultural fit with the potential for a long-term partnership
• The asset classes where Rahe is seeing increased demand in the short-term
• The trends in the industry that Rahe is watching, including the return to in-person work and its impact on mentorship and leadership development

At the conclusion of their conversation, Rahe provided her insights on the factors that have contributed to Fort Washington’s decades of stable and sustainable growth. “This year will be the 135th anniversary of our parent company Western & Southern Financial. We’ve grown sustainably over those years. We’re long-term investors, we believe in long time horizons, and we believe in career paths for our individuals,” Rahe shared. “We don’t follow the latest fad and we do what we think is right for the business.”

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

*Approximate AUM for Fort Washington Investment Advisors at the time of recording.

As we shared at the end of the year, the Global Investment Leaders podcast is expanding to include a new sub-series called How They Did It, hosted by Rosemont Managing Director Brad Mook. How They Did It will feature bi-monthly interviews with industry leaders about how they solved certain strategic challenges. Our goal is to tap the insights of our network of industry insiders to help others that may be facing similar challenges.

The first episode of the How They Did It sub-series discusses management buyouts, or MBOs, which are rarely successfully executed in the modern investment industry. In this episode, Mook interviews Todd Vingers, CFA, who serves as president of the recently launched Leeward Investments, a Boston-based institutionally-focused long-only equity manager featuring US small-, SMID-, and mid-cap value strategies. In their conversation, Mook asked Vingers about the context, motivation and mechanics behind Leeward’s MBO. While many would like to spin out or buy out their franchise, it is often harder than it looks and there is little in the way of guidance with how to proceed.

To help those who may be considering becoming independent of a parent organization, Vingers shared about his background at his prior firm, LMCG, where he spent 20 years establishing and building the value team. Mook and Vingers also discussed the many factors Vingers and his partners considered when forming Leeward, including:

• What led Vingers and his partners to seek independence, despite having a successful business and significant resources and infrastructure 
• How evolving into a 100% employee-owned entity opened up opportunities that were not available under the previous ownership structure 
• The extended timeline to reach a negotiated transaction with their parent organization and why they did not consider other alternatives
• The key issues coming out of the negotiation, from people to pricing to the structure of the deal
• The critical components of setting up Leeward to be an immediate success, including which functions remained in-house and which were outsourced
• The strategy Vingers and his team used to communicate the transition to clients, which led to 93% revenue retention

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

In this special year-end episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart is joined by Rosemont Managing Director Brad Mook for a conversation about the challenges and opportunities investment management firms are facing in today’s environment. From their unique vantage point of partnering with many firms over multiple market cycles, Burkhart and Mook discuss:

• Deal activity in the industry and how the market dynamics have changed for both wealth management and asset management deal-making
• Challenges management teams of investment businesses face in today’s uncertain, rising-rate environment, including managing expenses, acquiring and retaining talent, and ensuring alignment among team members
• Their advice for those considering starting their own firms from scratch or going independent, and alternate options such as merging with a well-established firm 
• How demand for ESG investments is shifting amid political and regulatory headwinds and the importance of authenticity for mission-driven investors
• A lightning round on the important issues in the industry today, including strategies for uncertain markets, the future of crypto, cybersecurity, and diversity and inclusion in the investment management industry

In addition to the year-end discussion, Burkhart and Mook also shared an exciting update for the Global Investment Leaders podcast in the year ahead: In 2023, Mook will be joining Burkhart as a podcast host, featuring a bi-monthly interview with industry leaders about how they solved common challenges faced by many of their peers. Mook’s How They Did It sub-series of the Global Investment Leaders podcast will feature industry insiders’ perspectives and is set to premiere in January. 

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

On this episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart is joined by Dave Fulton, Chairman and CEO of Clearstead, a Cleveland-based institutional and private client advisory firm that has been constructing globally diversified portfolios for individuals, families, foundations and endowments since 1987. Known for its in-depth investment research and personalized wealth management, the firm advises on approximately $32 billion in assets.*

Throughout their conversation, Fulton, who became Clearstead’s CEO in 2013, discussed the choices Clearstead faced around equity succession as the firm’s founder stepped down and new generations of talent sought to build the future of the firm in a scalable, sustainable way. Seeking an outside partner to provide not only capital but also guidance, Clearstead turned to Rosemont. Recounting the challenges they navigated together, Burkhart and Fulton discussed:

• The transformation from Hartland & Co., an institutional investment consultant, to Clearstead, a full-service wealth and institutional advisory firm
• The growth-supporting enhancements the firm made during the pandemic, from investing in the research and operations teams to developing the firm’s alternatives (private) investment platform to expanding opportunities for employee ownership
• Clearstead’s employee ownership culture and how, after Rosemont’s investment in 2017 followed by an investment by Flexpoint Ford in early 2022, employee ownership continues to be in high demand
• The success of the outsourced chief investment officer (OCIO) service offering of the business and the types of endowments and foundations Clearstead serves
• The key business pillars by which Clearstead operates, and the willingness to invest in people, processes and technologies 

When speaking about the firm’s continued success of its employee ownership culture and its trajectory for the future, Fulton shares, “You have to keep growing, and you have to have a way for people to keep buying in at below-market rates.”

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

*Approximate assets under advisement (AUA) of Clearstead as of 12/31/2021

This podcast should not be considered as an endorsement of Clearstead Advisors or Rosemont or the services that they provide. Neither Clearstead nor Rosemont were paid for the comments in this podcast. Rosemont had a minority equity ownership in Clearstead, which ended prior to this recording.

On this episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart was joined by Chris Mackay, Director of Client Service & Marketing at 1607 Capital Partners, a $4 billion* Richmond-based boutique asset management firm offering equity and fixed income closed-end fund portfolios. With a bottom-up, value-oriented approach, 1607 Capital Partners trades closed-end funds and other discounted assets based on a proprietary system developed and refined over 25+ years. 

Throughout their conversation, Burkhart and Mackay discuss:

• The definition of closed-end funds and how they have been a reliable source of excess returns in portfolios over time
• The genesis of the firm’s investment strategy and the compelling opportunity the firm’s founding partners saw in the closed-end fund niche
• The evolution of 1607’s investment process, which Mackay notes has benefited from meaningful advances while still focusing on the same core strategy
• The client base at 1607—which primarily includes institutional clients such as endowments, foundations and pensions—and the long-term relationships the firm maintains
• The company’s approach to attracting and retaining talent, including the purpose behind the firm’s employee ownership and why it intends to retain its independence to ensure long-term success

When it comes to the firm’s growth strategy, Mackay emphasizes the importance of growing thoughtfully, systematically and slowly to maintain the level of returns and client service for which the firm is known. Mackay explains that while the firm‘s technology has become increasingly sophisticated, the subject matter expertise of its investors is a differentiating factor that helps it take advantage of volatility to build portfolios of closed-end funds trading at discounts to their long-term averages.

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

*Approximate AUM of 1607 Capital Partners at time of recording 

In this episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart is joined by Rick Hough, CEO of Silvercrest Asset Management Group, a leading US wealth management firm with approximately $29 billion in assets under management.* Founded in 2002, Silvercrest provides traditional and alternative investment advisory and family office services to wealthy families, institutional investors and endowments. 

Prior to becoming CEO, Hough worked closely with Silvercrest Founder Moffett Cochran to build the business and execute the firm’s strategy, with roles as president and chief operating officer. Cochran’s goal from the beginning was to create a publicly traded company, and Hough has executed that vision capably throughout his tenure.  During their conversation, Hough and Burkhart discuss Silvercrest's evolution and defining characteristics, the benefits and challenges publicly traded investment firms face, and Hough’s thoughts on Silvercrest’s future. 

Listen to learn more about:

• Hough’s unique background in the nonprofit world and what led him to Silvercrest
• Silvercrest’s hybrid architecture and the investment engine driving returns for clients
• How Silvercrest delivers institutional quality investment skills, a conflict-free model and exemplary client service in an increasingly crowded and competitive landscape
• Why Silvercrest became – and remains – one of the few publicly traded wealth management firms
• Hough’s leadership orientation and how he spends his day as CEO at Silvercrest 

When it comes to Silvercrest’s near- and long-term aspirations, Hough balances innovation with remaining focused on protecting the generations of capital with which the firm is entrusted. “Being conservative with capital does not mean you're unable to innovate…and there are a number of ways you can innovate on behalf of clients.” Hough cites technology as an important focus that is improving and deepening client relationships. 

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.

*Silvercrest Asset Management Group’s AUM at time of recording