Mark Travis is the CEO and president of Intrepid Capital, a private wealth investment management firm headquartered in Jacksonville, Florida. Travis co-founded the firm in 1994 and has nearly four decades of experience in asset management. He currently oversees the Intrepid Capital Fund, the separately managed Intrepid Balanced portfolio, and the Intrepid Capital L.P. as the lead portfolio manager. In addition, he serves as co-lead portfolio manager for the firm’s Intrepid Income Fund and the Intrepid Income Portfolio.
Russ Alan Prince: Tell me about Intrepid Capital. How does the firm approach its unique blend of private client planning solutions and asset management?
Mark Travis: I formed Intrepid Capital in 1994 on the basis of two principles: to be a fiduciary and to co-invest with our customers. Our legacy is built upon our comfort with being uncomfortable.
Intrepid serves institutional investors and high-net-worth individuals who are looking to grow value in equity and fixed-income markets. Most of our private wealth clients seek either smooth, low-volatile outcomes as small-cap equity investors or shorter-duration, high-yield returns as debt investors. In order to ensure their success, we provide our clients with a broad range of choices rather than narrowly focusing on the capital markets.
We’ve shifted our business operations and split our management into two separate categories for the sake of better serving our clients. One is a private client business that utilizes Charles Schwab’s open architecture platform, and the other is our asset management and fund business.
We believe that executing sound strategies in a disciplined and consistent manner is the key to securing long-term success for our clients. Other firms might consider our investment strategy “against the grain,” as we buy early and sell early.
Our services for our private wealth clients are plan-centric and overseen by a portfolio manager. Many of these clients are ultra-high-net-worth and require additional structure within their asset allocations. In planning, we cover tax efficiency, liquidity and estate planning to promote financial longevity and legacy. By prioritizing absolute return over relative performance, we’re able to give our clients exactly what they need.
Prince: Given the current environment, how should clients approach the markets and think about building portfolios?
Travis: I believe the hardest part of asset management or financial services is formulating well-rounded risk profiles of our customers. When we do this, it allows us to custom fit a portfolio that best suits our clients’ individual needs with regard to income and risk tolerance. Although this process requires exhaustive inquiring and a tremendous amount of effort, it ultimately affords the best possible outcome for both our clients and Intrepid as a firm.
There’s a saying that you only need to get rich once, and I believe that holds true—that one tends to strike a chord with people as it’s basically saying, “Let’s not have to do this again. ”From my experience within the industry, I’ve found that most people buy high and sell low regardless of their ambitions. I feel constructing savvy portfolio arrangements at its core is all about identifying the specific needs of the individual or family it belongs to. At the end of the day, the key to portfolio longevity is ensuring that there is minimal risk involved in the planning process.
Although my expertise falls under the portfolio manager category, I truly think my role demands that I act as a risk manager. One of the ways I've been able to garner large private client sales is by directly approaching business owners and focusing the conversation on them. I’ve found that it’s difficult to gauge clients’ interest if you talk to them about capital markets alone. Instead, I delve into talking about the risks associated with their business as well as the value they've been able to create for their family.
As long as clients are navigating these risks, our job is not to add more pressure by inviting additional risks into the picture. Rather, we try to diversify and mitigate potential pitfalls within the large, concentrated position they have. If a client is considering selling a portion of their business, they often have their individual reasons, own thinking and approach in mind for their next step and planning. They might even have their own idea of the value and methodology in mind as a means of taking a stake in the business and participating in the upside. We have to have conversations on the comprehensive view and risks as well as the opportunities. Ultimately, we’re trying to secure the most ideal outcomes clients can get from the likes of an insurance agent, a real estate attorney, or a valuation firm.
Prince: Where are you seeing opportunities in today’s markets?
Travis: Currently, I’m seeing the most opportunity in publicly traded businesses that operate like private firms. I find that the best time to invest is during market panics, as a lot of public companies have become broadly mispriced, which in turn creates an opening for us to add them to our roster. Likewise, I think that high yields are very attractive at this juncture.
Luckily, the trailing number on the markets is back to somewhat normal levels compared to the past three years. I think if you’d asked people to invest their money during the depths of the pandemic around May or June 2020, they’d have thought you were crazy.
Our private clients are generally wary of taking on additional risks within their portfolio assets for the sake of creating more value. Most of our clients within this category are around 50 to 60 years old and have spent their entire lifetime accumulating their wealth. With that in mind, we tailor-fit every portfolio based on each client’s particular circumstances to mitigate risk as well as generate new income streams that ensure financial longevity.
It’s human nature to want to chase something that’s moving, but in my experience, I’ve found success in trusting that time is on our side and moving deliberately. There’s a perpetual risk of falling into the trap of buying high and selling low, but by staying true to the capabilities and needs of your particular portfolio, more often than not, you’ll do right by your investments.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He is a strategist for family offices and the ultra-wealthy.