Left to right: Lisa Vioni, Keith Cardoza, Kelly Chesney, Anthony Novara, Brian Payne
By Holly Singer, HS Marketing, and Hedge Connection’s Director of Content
Beyond their rapid-fire questions and requests posed to the presenting managers during June 27th Deal Ring Chicago, each of the four Ringmasters (institutional investor allocator panelists) shared timely insights within the context of their professional responsibilities and asset allocation criteria. Additionally, these investors responded to specific questions from Hedge Connection’s CEO Lisa Vioni by offering advice to managers seeking to raise assets. Thought leadership was a common theme and criteria; however the allocators emphasized the importance of matching the manager’s topical expertise and content provided with the strategy.
Keith Cardoza, Chief Investment Officer, Brownson, Rehmus & Foxworth
Leading the firm’s asset allocation and manager selection efforts, Keith serves on the Impact Investing, Private Equity, Public Markets and Real Estate Committees. “I am seeking fund managers who are the best at what they do, balanced with whether it is relevant for our firm’s client base.” There is a vast difference between a manager’s familiarity, understanding and knowledge covering necessary subject matters. Brownson, Rehmus & Foxworth’s manager selection is preceded by due diligence reflecting each manager’s deep specific knowledge, highly supported by experience and relevant strategy performance record. We seek those who have actually done what they state as their strategy and investment objective. They must possess content expertise; familiarity and understanding do not suffice.
Advice to managers: “Consistency is critical. Message inconsistency from one partner to another is a red flag and unfortunately very common.” I am also looking for what a manager is not disclosing and expect managers to be prepared and proactive to offering disclosure.
Kelly Chesney, Co-Founder & COO, Pluscios Management
Kelly has twenty-five years of experience in capital markets and alternative asset investing. The co-founders of Pluscios have been building hedge fund portfolios since the mid 90’s and have always embraced and invested with emerging managers. “Our top-down market view and overall strategy outlook drives what we look for at a macro level while building customized portfolios.”
Advice to managers: “What I want emerging mangers to understand is that there are many factors that we consider, for example, if you are smaller and have more business risk you need to have a differentiated skill or something else so that we know we are getting paid to take whatever other risks your business presents.”
Anthony Novara, Research Director, DiMeo Schneider & Associates, L.L.C.
Leading the firm’s Hedge Fund research effort while chairing the Capital Markets Committee, Anthony emphasizes the goal of consistent overall investment advice across DiMeo Schneider’s clients including many endowments and foundations as well as taxable clients. “Our primary concern with smaller managers is going concern since hedge fund investors demand a lot operationally right from the beginning. We want to know who is backing the business and whether a small fund manager can really survive for several years prior to raising significant assets.” Furthermore, while interacting with managers, we strive to be responsive and transparent.
Advice to managers: “If we’re not working on a particular space right then, feel free to check in periodically, such as twice a year to touch base and see whether we’ll do work in the space in the near future. If not, we’re happy to provide a quick “no” on behalf of the firm in order to avoid wasting anyone’s time.”
Brian Payne, Portfolio Manager, Teacher’s Retirement System Illinois’ Diversifying Strategies Program
While managing hedge fund, alternative risk premia and risk parity strategies, our portfolio is built around liquid alternatives, macro, credit and equity exposures. Our formal manager selection process takes approx. 12-18 months as “we look for the best unconstrained managers across many strategies. I consider ‘trust’ as a huge factor while focused on building relationships.”
Advice to managers: “Success may seem difficult looking forward but is always achievable. It is all about where you allow you and your mind to go.”