June 26, 2018

Building the Network

From CityWire, Professional Buyer Issue

It might be a slow process, but taking the time to establish the right contacts has helped Geller Advisors’ Jonathan Barbato, Robert Wedeking and Priyanka Misra find managers who share their long-term perspectives.

What do a fishing aficionado, a voracious reader and a tennis player all have in common that can help them find hidden gems of managers before the competition?

The short answer – perhaps surprisingly given these seemingly solo pastimes – is an appreciation for networking. The long answer though, is much more complication, as the three core members of Geller Advisors’ nine-person manager research team explain.

These are Chief Investment Officer Robert Wedeking (who uses data science to hack sport-fishing), Head of Manager selection Jonathan Barbato (who ponders the world while reading) and Senior Investment Analyst Priyanka Misra (a former tennis player with a penchant for singing and gift for numbers).

Together, the trio oversees Geller Advisor’s $2.79 billion wealth management platform, which offers clients 61 strategies from 36 different external managers. Within that, 31 strategies are in mutual funds, ETFs and separately managed accounts, while the remaining 30 are in hedge funds, private equity funds and a couple of co-investment funds. The firm also has a further $2 billion in assets under advisement.

‘Philosophically, we are long-term investors and we believe that markets are mainly efficient, but there are areas where we can add alpha. Such as international, small caps and private markets. We tend to be patient but we are still opportunistic,’ Barbato says.


‘For idea generation, that can come from anywhere.’ Barbato explains. ‘It does not start at a database; our own network is really the first place we look.’

For Wedeking, his network and his focus on alternatives are the product of his 20-year tenure at global macro hedge fund Caxton Associates, where he served as the director of alternative investments and the portfolio manager for the Caxton Select, the firm’s multi-strategy fund of funds.

‘We try to be intellectually honest with how we identify our ideas. We never say that we will never use a database or that we never go to a conference…that’s not our thinking,’ Wedeking says.

‘We’ve got a lot of information coming into the firm every day. Some of that comes from my background working at a global macro fund for a long period of time, where we had lots of great information coming in all the time.’

One such network-driven find was a long/short event-driven financials fund, which the team heard about through Wedeking’s network. This enabled the team to invest when the fund had just $100 million in assets.

The fund manager had been running a strategy inside a larger hedge fund for many years. When they broke away to launch their own shop, Wedeking was alerted by a friend who suggested that he should look at the fund’s thesis, which aimed to capitalize on the trend of consolidation taking place among small banks.

‘We actually liked that they were small because they could focus on the small bank consolidation side. They have a three-pronged portfolio consisting of a long book, a short-only book and a merger arbitrage book,’ Wedeking says. ‘And that turned out to be an excellent investment.’

‘We looked at the current environment, and that also fits into the thesis. You have deregulation and the financial firms getting back on their feet after the crisis. Those are things that fit into the narrative,’ he adds, ‘And this is a manager that we probably wouldn’t have found because they weren’t in any other databases.’


For Barbato, the managers themselves are often a source of inspiration. He recalls being introduced to one of the venture capital managers that the firm now uses by another manager who was already on the roster.

‘I was impressed by this manager who invests in companies that stay private for longer. He structures transactions and loans to the founders and employees of privately held technology companies,’ Barbato says, ‘I think it’s a really unique strategy and the network that firm has is just phenomenal. It’s just amazing they type of access they have to companies; you can’t just start one of those right now.’

Meanwhile, Misra appreciates managers who have an identifiable edge and who can demonstrate dedication. She recalls being impressed by an emerging market equities manager who focused on Asia.

‘The manager is easily accessible and constantly provides us numerous insightful white papers and research pieces. The majority of the PMs are from Asia or have spent extensive time in the region, so they fully grasp the culture and the language and can easily relate to smaller business owners overseas,’ she says.

Having been in the business of manager selection for a long time, Wedeking explains that the team cannot avoid having its favorites. Even so, they always test a manager’s investment thesis to see whether it is a good fit for the current environment, a particular style of a certain client’s portfolio.

‘We really want to understand a manger’s philosophy on a number of subjects, such as how they make money, how their process has evolved. I’m a big believer that there is no such thing as being static in investing,’ Wedeking says. ‘You have to constantly evolve your strategies because the world is always changing. So systematic managers would say “I’ve not changed my system, I’ve just kept it the same.” That may not be of interest to us.’


Managers who lack passion for their work will not pass the team’s inspection either. ‘I would say that anyone who tries to walk through a pitch book page by page is not usually going to be a great meeting, in the sense that it’s not very engaging at all,’ Barbato says.

Wedeking agrees: ‘It really matters that managers live and breathe their portfolios. You see enough people for a time; you definitely get a feel for managers, who are doing that versus somebody who is index-hugging or something like that.’

Misra adds: ‘We look for passionate and humble managers who show true dedication and drive and are forthcoming about their mistakes. We want to get to know managers and how they think, so that we aren’t surprised by the way the strategy performs in a particular environment.’

She recalls a particularly insightful meeting with the former Co-CEO of a large asset manager who left to start his own firm in mid-2016.

‘When I met with him right after his launch, he was already expecting a few billion in assets. He was with his previous firm for more than 20 years and grew its assets from a few hundred million to more than $50 billion in less than 15 years,’ Misra says. ‘His approach is focused on forward-looking quality – where quality will be three to five years from now. He is very thoughtful when picking companies.’

‘Interestingly, the complexion of his portfolio completely changed when he branched out on his own, because the opportunity set had shifted to other regions and sections. [His] focus was on the Indian consumer sector, but then he shifted into Russian and Latin American banks,’ she says.


Given the nature of the firm’s clients and Wedeking’s background, it is unsurprising that Geller Advisors has a focus on private investments.

‘Pretty much what we are spending time on now is private funds, private equity secondaries, tech venture capital, pre-IPO healthcare and real estate secondaries. That’s what’s been hitting our radar right now,’ Barbato says. He explains that the majority of the opportunities to capture technological developments such as gene therapy and immuno-oncology is now on the private side.

The team has also leveraged its expertise in private investments to solve problems for its clients. After one such call for help, the team created feeder funds that allow clients to pool resources to get over the high minimums needed to invest in private equity secondaries.

‘What we did was create feeder vehicles inside Geller where we can let people in for lower minimums. That has worked out really well for our families,’ Wedeking says, ‘it requires a long-term horizon, be we had clients who needed that type of asset allocation. This has been a great solution for them. They have really embraced it, which is nice.’

Geller Advisors also boosted its network by joining Dynasty Financial Partners in November 2017, allowing the firm to access Dynasty’s technological platform and proprietary services such as Dynasty Desktop, which features financial planning, investment management, research and business management tools.

‘Working with Dynasty has really helped us on the technological front, in terms of the customized reporting that we are able to do for clients, where we can actually show them what’s driving portfolio returns and where their concentrations are. In the past, this was something we would have to do in Excel, and it took longer,’ Wedeking says, ‘This has really given us a lot of scale in terms of investment teams, especially on the portfolio management side.’

The partnership with Dynasty has not only helped the Geller team technologically, but also personally. It reunited Barbato with his old boss, Dynasty’s chief investment officer Scott Welch. The pair worked together at Fortigent back in the day; it seems there’s no stopping this network now.


This article was originally published in CityWire’s June 2018 Issue: “Professional Buyer”.


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