A Firm In Sync

One of the biggest challenges, Wetherby says, is when an employee is not a good cultural fit for the firm. “It’s like being in a small tent with a mosquito,” she says. “There’s this buzzing and you can’t identify it, and it’s causing you to be unsettled all the time. Until you open the tent and do something about it, it’s pretty miserable.”

Shareholder Chris Hauswirth, a wealth manager and the director of alternative investments, joined Wetherby Asset Management in 1998. The firm has a designated in-house research team of six and complements its internal research efforts through relationships with Portland, Ore.-based CTC Consulting, and with San Francisco-based Imprint Capital for impact investments, says Hauswirth.

In non-impact investments, Wetherby Asset Management uses a manager-of-managers approach. It actively works with 40 to 50 managers in some capacity and also tracks many more because it inherits positions from clients. The firm doesn’t necessarily have a bias toward active or passive managers, he says.

“We’re willing to invest with active managers if we can find a manager or an investment team that can exhibit that they do something exceptional,” he says. The firm might use a very talented active manager to complement a passively implemented core holding, such as large-cap equity.

It seeks managers who have been able to protect assets in difficult periods in the market and perform well over full market cycles. “The ‘protect first, grow second’ mentality is very much baked into our investment selection process,” he says.

One of the firm’s longtime holdings is the IVA International Fund. “They are very good stewards of capital,” says Hauswirth, and “they’re quite eclectic in their investment approach.” The fund may hold a company’s equity or debt in its portfolio, as well as gold and cash. “We wouldn’t want to give that flexibility to just any manager,” he says. Another investment is the FPA Crescent Fund.

The firm emphasizes long-term investing over short term and embraces the “price matters” bias, says Wetherby. “There are investors that feel like you get on the train and if it’s moving in the right direction, as long as you get off at the right spot you’re fine,” she says. But it’s not just your exit point that matters, your entry point matters, too, she adds.

The firm’s investment committee looks at the relative value of asset classes and applies those views and themes across clients’ customized portfolios. If the firm makes its case and a client still doesn’t want to be invested in a particular asset class, “They win, it’s their money,” she says. “Our job isn’t to overrule them, it’s really to serve them.” Part of this, she says, is having clients be comfortable with what they own.