Aoifinn Devitt: Don’t be afraid to take risks. I think that both in terms of my personal life, my professional life, as well as how I invest, I’m not afraid to take risks, but want to be mindful of the downside. There are certainly times that, as I’ve pointed out, where I didn’t know what I didn’t know, and you have to be comfortable with the idea that there will always be things that you don’t know, but that shouldn’t mean that you’re not afraid to take a risk.
Caroline Lovelace: I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by Caroline Lovelace, who is CIO and co-portfolio manager of Preserver Partners, and previously founded Rose Hill Park Alternative Asset Managers. Preserver is diverse-owned and Memphis-based. It runs a multi-strategy fund that invests through external managers. She’s had an extensive career in researching and investing in hedge funds and in promoting emerging private equity and hedge fund investment programs. Welcome, Caroline. Thanks for joining me today.
Aoifinn Devitt: Hello. Thank you. I’m pleased to be here with you.
Caroline Lovelace: Well, let’s start by talking about your background and career journey. Can you talk us through where you grew up and what you studied?
Aoifinn Devitt: Sure. I actually grew up in Pittsburgh, Pennsylvania, and my parents moved there after I was born outside New York City. So grew up in a really kind of a small environment. My stepfather was an educator. I actually spent a lot of time at the University of Pittsburgh hanging out with his graduate students, which was always kind of funny, but it really sort of engrossed me in the academics and the academic kind of culture. Of just studying and research and exploration, which was incredibly helpful to my further development. He was also on the school board, and my mother was a social worker who in the end actually became a program director for foundations. So one of her, her last programs has been adopted by several places across the country and still is very active in Pittsburgh. So I actually quote her as kind of, and I didn’t know it at the time, but she actually gave me my first lessons in how foundations work. She would talk about how she was getting funding, funding for her programs for the investment side, and I can remember thinking about how they didn’t interact. And at the time, it didn’t occur to me that that was even important as a kid, but later on I remember, wait a second, I remember that now as a kind of an interesting way to understand how some of the investors that we talked to and how they function. So went to public schools in Pittsburgh. Pittsburgh had a fantastic public school education programs, a lot of honors programs, and then ended up going to Harvard for my undergrad and studying economics. And that again was, I mean, I I think, mean, a lot of people know about Harvard and have their opinions. For me, it was the best place to really not just explore everything that an education had to offer. I thought I was interested in finance. I always loved numbers. I was a math camp geek growing up, so spent summers doing calculus and stuff like that. But when I got to Harvard, I wanted to study economics. What I realized is that I was grateful for the opportunity to not just do kind of your standard economics, but also I thought about, well, I was also interested in the world. My father actually worked for Pan Am. He was in the finance department. So I grew up with this concept of the world being a very small place, even coming from Pittsburgh. The idea that you could just, because of employee travel benefits, you could just jump on a plane was something that really formulated an idea for me about not just about me personally having been able to travel a great deal as a kid, but also made the world and different economies look very— that was something that I’d seen firsthand. So one thing I was really interested in was Asia. I studied Chinese in middle school, and I was an exchange student in Japan in high school. And so one of the things I wanted to explore, and Harvard gave me that opportunity, was to explore economics and economic history in Asia. So I was able to do that, tack that onto my studies in economics, which is great when you have a liberal arts education to be able to pick and choose. But I also got interested in the European Union, which is something that we weren’t really focused on in the US, obviously. But understanding that the precursor to the European Union and the European rate mechanism and all the different— and from the US, we always thought about it as becoming the United States of Europe because we sort of push our perspective onto sometimes other countries. That was something that fascinated me as well. So as I went through my education at Harvard, picked up on finance and wanted to, like a lot of my peers, go into investment banking, I thought, well, why do it in New York? I’d like to do it in London. I’d like to see some of this stuff up front. And I talked when I was doing interviews later, I had to realize that how naive I was. I mean, this is pre a lot of the internet where you could really research these things. And I’m glad that I didn’t because I, because actually it’s hard for your first job to go to London. It actually is, you have work permit issues and all sorts of stuff like that. And I just didn’t know it was hard. I just thought, well, it’s something I wanna do, so I’m gonna try and pursue it. Having the opportunity with my dad to fly to London and do interviews, I just said, okay, I’m gonna write to people. Alumni, whoever, and just see who will meet with me. And so I would go over to London and meet with people. And I was lucky enough to find an alumni at UBS, an American guy, Mike Lehman, who was willing to take me on. I mean, UBS at the time had just bought— UBS, the Swiss bank, had bought a broker called Phillips Drew. And so they were building out their investment banking Europe team in London. And they didn’t have an analyst program, which at the time should have scared me because as it turned out, I was the only analyst for a while. I mean, it was total upside-down pyramid structure, but it brought me over. I was able to get a short-term work visa independently, which they didn’t extend it. So there I was. And then after that, I mean, I just didn’t— I’m glad I didn’t know it was hard because I maybe wouldn’t have attempted it. And so maybe that’s one of the first lessons I learned is yes, Understand the risks and have a plan, but don’t be so deterred by the difficulties because you probably won’t try it. And I think the most important thing is you might fail a lot, but you should at least try it because sometimes it does work out. So I spent 3 years at UBS and that was really an amazing, amazing experience. Not only did I get the same in-depth experience that my peers did in New York in terms of investment banking, which is a fantastic way to just get knee-deep into finance. You work a lot of hours, but you learn a lot very quickly. You get a lot of exposure. Being the only analyst actually turned out to be a good thing. On the first day, Mike Lehman said to the whole team, “This is Caroline Levitt. She’s going to be joining the team, but you cannot dump on her.” And I was kind of, at the time, I was kind of shocked by the fact that he said it, but I was so grateful in the end because It meant that one, I could get involved in very attractive projects if I wanted to, but at the same time, he would manage the making sure that I wasn’t pulled into all sorts of grunt work, or I was so overwhelmed that I couldn’t function. And he also sat me right across from a guy who I became very close friends with. He actually taught me, sitting at my desk with me, my first DCF. And so he became my financial modeling guru. So I guess the next lesson was have a lot of support. I mean, just find your mentors and find people who not only are willing to support you, but specifically it’s about finding people who, one, their egos are in check, but all of us in finance have egos. The point was that for all of these people, they thought it reflected well on them if I did well. So they knew they were doing bigger and better things than, you know, an analyst on the team, but they knew that it would reflect well on them if I did well, and it was important to them that I did well. So I ended up getting promoted to associate after 2 years and had such a really fantastic experience. David Lern, who was, you know, sat across from me and taught me the DCF, as well as Colin West, who became my boss after Mike Lehman, who sort of brought me with him on his interesting projects. So people who are really supportive of me. I decided very early on though that I was going to go back to the US to go out to business school. So made the decision to come back to Wharton. The firm was really supportive of that, even though I already had a permanent job to stay at UBS in London. And Wharton in the end was the best place for me, one, to get back into the States. I found out that people sort of perceived me, even though I was an American citizen, as almost European in my work outlook. So it was really going to be my first job in the US and ended up at JPMorgan. And really I did that because I wanted to make sure that I was at a firm that had a really interesting and robust US exposure, but also had a lot of international work as well. So started in the investment banking group and then quickly moved on to the buy side. So any surprising turns? I mean, that was another surprising turn because I originally, I was kind of, I really liked investment banking. People thought I was nuts, but I was kind of, I really liked it. Maybe it’s because I had such a positive experience at UBS, but I really liked investment banking.
Caroline Lovelace: I liked it too. I actually liked it too. I don’t find it that unusual. I think a little bit comes from the kind of people that it attracts. I mean, clearly you were lucky enough to work with some extraordinary driven yet intellectually curious collaborative teams. And there’s just a high that comes from that.
Aoifinn Devitt: Yeah. And there’s a huge high that comes from that. And it just feeds the intellectual curiosity that I think, you know, you come to it from an academic background that feeds academic curiosity and research and that sort of thing. And then you see it in your workplace and it just feels really like home. But at the time, Morgan Capital, they were the buy side of private equity buy side of JPMorgan. Was growing and they needed someone to work in financial services that I had, and I had experience from UBS and early on at JPMorgan working with financial institutions, particularly insurance companies. I remember getting a classmate of mine in my JPMorgan class, also from Wharton, called me up and said, “There’s this Australian guy who is running Morgan Capital globally who specifically had an interest in diversity.” So he, in all of his searches around the bank to bring people into Morgan Capital, he specifically said, I want to make sure that there are candidates that are diverse. So women, people of color. And at the time, that’s the first time I’d even really thought about it. I mean, it’s true that in business school you try and use whatever in or whatever kind of perspective you can to get the interviews and all this sort of stuff. That’s just normal. But in terms of in the workplace, specifically looking for diverse candidates, that was the first time I’d seen that. And so he recruited a guy from my class, a Black guy. He then contacted— and then he also got someone else in Morgan Capital’s sort of fundraising side, also Black guy from my class. And then he reached out to me because they needed somebody on the FIG team. And I was actually initially hesitant. I said, I like my clients. I like the team in investment banking. And so he said, just come on. That’s ridiculous. “This is where everyone wants to be. Come down and just talk to the team.” And so I ended up talking to the team and I really loved the woman who I was going to be working for, a woman named Meryl Hartspan. And Meryl Hartspan at the time was probably the most successful managing director, the most successful portfolio manager in that sleeve in the bank worldwide. She was really a force to be reckoned with. And she had been the first person in Morgan Capital to also launch a separate capital fund. So as a third-party fund, not just investing off of JPMorgan’s balance sheet. So I kind of like them and I said— they look finally and at— my friend was kind of, “You’re ridiculous. You have to come down here. You have to come down here.” So I said, “Yeah.” I come down and I just loved everyone. The team was fantastic, incredibly collaborative, incredibly supportive. Everyone really, even from managing director down to analysts, spending late nights, analyzing, collaborating, helping each other. And I remember my friend coming by my desk and said, “I just want you to let me know when I can tell you I told you so.” Because yeah, it was kind of, yeah, okay, you told me so. It’s, yeah, this is actually, it’s great being on the buy side because as you know, on the buy side, there’s no, we call it investment banking, we used to call it the do button. So a client calls you up on Friday at 5 o’clock and says, “Oh, I’m glad I caught you because I just, can you just do something for me?” And they have no idea that you’ve just ruined your weekend. On the buy side, there’s no do button, but a lot of the work is the same, but you’re also invested. So you stick with the deals that you do. And some people like that, some people don’t. I really like that. I really like the idea that you don’t pass the deal on and whatever happens, happens. You have to run with it. And some of the deals that I was put on, existing deals I put on when I got to Morgan Capital, were really bad. I mean, they had gone just sideways. And so the most pleasant experiences, but you have to learn that early on with bad investments. Why did they go wrong? How can you fix them? How do you work with management teams in stressful situations? I mean, all those sort of things are really important, and those are things that I learned early on.
Caroline Lovelace: Now, some fantastic lessons there and some great words of wisdom being collected already. We are now going to take a short break to speak with the sponsor of this series about what it is that makes them unique. I sat down with Tom Raver of Alvine Capital. So Alvine Capital has a unique business model that you call reverse inquiry. Can you tell us what reverse inquiry means?
Speaker C: When we were marketing or softly marketing funds, we realized that some institutional investors felt that they were being pushed and every call was the same as the one they just had. And we felt that we had to have another approach to institutional investors. And so we tried to really go behind the scenes and ask them, what exactly are you looking for? If you had a dream scenario and you had an opening in your fund, what would you like to have and how would that fund look? And when we got investors to open up and explain to us what they wanted, we then took down all the information we needed and we went out into the market. It’s a pull sale rather than a push sale. You’re actually helping the investor finding something that’s better than they thought they were looking for in the first place.
Caroline Lovelace: In terms of your client base, so you work with a lot of Scandinavian and Northern European institutions. Is there anything on their mind today?
Speaker C: We opened an office in Stockholm last year. We have Nordic roots. We have obviously Nordic-speaking people in London as well. We’ve covered the region for many years. Yes, we know it very well. What are they looking for? What’s happening up in that part of the world is that they’re a leader in anything that’s ESG and impact. Some very large institutions have decided not to do anything at all unless it’s completely impact, completely green. Everyone is looking for good, well-performing private equity and private credit funds, and we’re fortunate that we’re working with both them of in both categories. At the moment, we have a very good selection there.
Caroline Lovelace: And now back to the show. Moving now to your— because now you work with, you know, still on the buy side, but equally there’s a kind of buy side, sell side. Aspect, given that you are helping diverse asset managers who have to sell themselves, I suppose. So can you talk about the work you do at Preserver Partners and in particular how that relates to emerging managers?
Aoifinn Devitt: Right. Well, Preserver Partners is interesting because it is an emerging manager, although it has a more than a decade-long track record, which actually is indicative. What I’ve learned earlier in my career, I did a, what I think is the most, the first comprehensive study of the diverse hedge fund manager space. I did that when I was working at a fund of funds called Provident Group and we teamed up with HFR. It was supposed to be, I just start from the beginning, no preconceptions. What is this? How many managers are there? What strategies and what characteristics? One of the things that really stuck out is that diverse managers tend to have longer track records but lower AUM. Preserver is one of those kind of managers. And so at less than $200 million, it’s small, but it has a long track record. So it actually has a really interesting investor base of smaller institutional investors that are more local. It’s based in Memphis, as well as some attention from some of the national consulting firms. So that’s really interesting. And a lot of times that I’ve been working with emerging managers, they’ve been very small, they’ve been either needing first dollar. And a lot of what I bring to the table, I think, in terms of advising them is how to start and specifically what kind of service providers you need. How do you make a plan first off? Because I think what happens for a lot of new managers, small ones as well as new ones that are trying to start, is they just wanna get started. I mean, most of them have been successful PMs and they just wanna get trading and they wanna get investing. And they also don’t have a lot of money. So what they ended up doing is going from really inexpensive and maybe not as well known, even though they may be highly qualified service providers. And what we’ve learned over time is institutional investors, particularly when you think about Madoff, one big thing with Madoff was a failure of service providers and a failure to diligence the service providers. So therefore, a big thing for a lot of external consultants and institutional investors is, We’re going to take that off the table. We just want well-known people that we know, and that doesn’t mean that they are going to be perfect, but it’s kind of— we used to call it, my dad used to call it the IBM problem. Now maybe it’s the Apple problem. Nobody ever gets fired for investing in IBM or Apple. You may not make money, but you don’t get fired for it. So that’s kind of what happened. So talking to emerging managers about how you create a plan and also start in a way that makes sense for your future growth. Because your track record will not just be judged by your investment, by your investment returns, but it’ll also be judged by how you set up your business. And that’s something that I think is new, is newer to when 20 years ago you could set up with a Bloomberg and a guy and a couple guys and that would be it.
Caroline Lovelace: Great question though, because then this gets back to money. I mean, the definition of startup firm is not deep pocketed. Necessarily in the same way. And it might be natural that they can’t, especially with this great war for talent, they can’t hire the best CFO out there, and that there may be a need to outsource or, or maybe go to a lower-tier service provider. How do you sort of square that circle? But, you know, you need to show blue chip, but maybe it’s unaffordable.
Aoifinn Devitt: No, I think it’s true, but I think it’s generally true that the best name service providers are the most expensive, but it isn’t always. I think that there have been a number of institutional quality service providers who have decided that working with emerging managers, given that there is a war on their side for administrators and for law firms and so forth to find the next most— the next successful managers, they are willing to say, well, we’ll control costs in the near term, but be prepared to pay more if and when you get bit. And I think this has also been, particularly on the administrator side, been because of technology. A lot of the good administrators have invested heavily in technology. So it does mean that they are able to service smaller funds cheaper because of technology. And so I think that means that they’re willing to do that. So I think it is a question of going out and asking the question. I saw something, a trail on LinkedIn about, I guess, asking at a conference for a cheaper rate. And I was kind of, you just ask them. Yeah, I mean, that’s something that I hadn’t— I mean, even I hadn’t really thought about because it just feels like the price is what it is. I think so going out to some of the larger service providers and asking them, and sometimes with the larger service providers, they have regional offices as opposed to talking to the people in New York, and they’re more likely to give you a better deal. One of the things that I mean, I learned this early on at a fund of funds that when I worked with, we had Deloitte as our auditor. People are going to now kind of flood into Deloitte and ask this question. But so at Deloitte, we had Deloitte as the auditor, but because the fund was BVI domiciled, we had Deloitte BVI. Now Deloitte BVI is a lot cheaper than Deloitte New York, but the audit committee for all of the Caribbean is New York. So you’re actually getting the same audit committee as you would do, but it’s a lot cheaper because your, your team is in the BVI. I just, I mean, I think you just have to get kind of creative about how you access these service providers. And then lastly, I would say develop a lot of relationships. As soon as you are even thinking about launching a fund or as you continue to do your fund, take time to just build relationships. Don’t just talk to investors, talk to service providers as well, because there will be a service provider who you know who will find the way to kind of break— I mean, I know people who are more junior at certain service providers who are more senior now who I can call up and say, to say, look, can you talk to this emerging manager? I think they’re good, mean, I but they need a break. See what you can do for them, because they could be very selective about that. So that’s a long answer, but I think it’s really about asking the question, looking for specific service providers that are willing to work with emerging managers. So as I gave the example of Deloitte, we also worked with SS&C, not to plug them both, but to say both of them have invested in technology and look for structures that they can service emerging manager clients.
Caroline Lovelace: And then just in terms of, clearly you add a lot of value there in the role at Preserver. You also hold a series of director and chair roles, and what do you seek to bring to those roles?
Aoifinn Devitt: Yeah, I mean, I think that I was, I mean, it’s only recently, and I fault myself for this, that I’ve started to sit on the investment committees of, say, right now it’s a foundation. And I think one, you can bring just your broader experience, because what I found with these committees is that they tend to be staffed very broadly. So some people have finance experience, some people have specific asset class experience, some people bring to it really more the program kind of side or the philosophy of the institution. So that’s really interesting how all those things come together. So it’s an education for me, because when I talk to foundations as looking hopefully for an investment from them, I have a much better sense of what their constraints are, as well as what their considerations are. But I think what I try and do is just bring my asset class experience and then also being able to dig down into the portfolio of some of the managers that we look at and understand where the drivers are. We had a recent conversation about some of our emerging markets managers who had seemed to underperform. So we were listening to these conversations and I was thinking, wait a second, And they started talking about interest rate risk and obviously exchange rate. And I realized, wait a second, I remember sending and typing in a message to the consultant saying, so tell me what is the breakout in terms of their investment, investment cost if you strip out the FX. And it turns out this manager actually outperformed the US managers if you control for exchange rate risk. Now, exchange rate risk is obviously an important characteristic, but I think we were having the wrong conversation about this manager. We should have been having a conversation about whether or not we should be invested in emerging markets at all, as opposed to the qualifications of this manager. So that should have moved things in a different direction. So I think that that’s what I try and bring to the table.
Caroline Lovelace: Back then to the diversity question, because clearly you would’ve had experience of diversity throughout your career. You mentioned being the only analyst. I suppose that, that was interesting in terms of there’s maybe seniority, a lack of diversity there. What’s your experience of the industry been? And I think, how do you see that now at the founder level and in the emerging fund level? How inclusive do you see our investment industry as being?
Aoifinn Devitt: Look, I mean, we have a diversity problem in asset management. That’s clear. There’s not enough diversity at the senior levels, particularly on the investment side. Obviously, we see more diversity on the service provider side or back office, middle office. Actually less middle office, but more back office as well as business development. I think that it’s interesting. We’ve had over the course of my career, when I’ve been looking at diversity, certain spikes where interest level picks up and then it falls back, interest level picks up and it falls back for specific reasons. I think that a lot of people have focused on George Floyd as kind of a reckoning and not just in asset management, but across our society about diversity and what it means. And I do think that that focus has been interesting and different from previous spikes of interest because it really has focused not just the large institutional investors like big state pension plans that have long, as you know, have focused on or had emerging manager or diversity programs in their investment goals and investment policy statements. But now because George Floyd really became sort of globally known, it forced corporate plans that hadn’t thought about before, but particularly foundations and endowments. So think about their investments. You know, I talked about how my mother really focused on the— you know, wasn’t even thinking about the investment side. The investment side was thinking about the program side. They just wanted each other to do what they were supposed to do and leave the other alone. But what I thought about more than a decade ago was that, why is there that disconnect? And I thought at some point, at the firm that I was at, Pine Street, a hedge fund seeding firm that I co-founded, that we should have an intern come in someday and just look at all the top foundations and figure out which ones have a policy or program goal that focuses on diversity, and then try and engage the investment committee, as well as the investment team, as well as the board in trying to promote diversity across the aisle or, you know, in the other office. That project never happened. We never got to that, but I think actually George Floyd forced— because it forced everyone to look at it, a lot of foundations and endowments are now looking at that as well. And I think that that is— and I’ve seen a lot of interest from foundations and endowments about increasing the diversity in their investment portfolios. So I think that’s important because foundations and endowments often can write smaller checks. I mean, one of the big issues with large institutional investors is that whether or not they like diversity or not, they can only write $100 million, $200 million or so checks, whereas with foundations and endowments can write smaller checks, and that can be a real engine of growth. On the asset side for smaller managers. And I’ve seen that at Preserver. I mean, we have $10 to $20 million checks for a number of small pension plans, but also foundations, endowments. And that has actually been a driver of the institutional growth of the firm. So I think that’s very important. And interesting though, as I looked into some of the data, the increasing interest in diversity, particularly for hedge funds, has started actually before George Floyd. It’s been about 4 or 5 years where there’s been consistent growth in terms of the amount of cumulative assets that are invested in diverse managers. So I do think that all the work that a lot of the academics have done, studies have been done by Cressidy by Knight and other organizations have really been chipping away at just the resonance of people to look at diverse managers and emerging managers in general. So I think that’s quite important. I mean, you’ve probably seen the news, In the last sort of the end of last year to early this year, were the first time that we think that a minority woman actually launched a fund with more than a billion dollars. I mean, that’s very interesting and that’s real progress. And interestingly enough, these are women who, if you get rid of their name and any sort of gender identifications, a lot of their background looks like a white guy who might have launched a fund 20 years ago. Because their pedigree is very similar. We can talk about how different that means their perspective is in terms of how they invest, but I think that certainly over the last 5 to 10 years, the slow progress of women and people of color at sort of more junior levels, as they start to move up, they’re starting to want to launch their own firms. So I think that’s really interesting. Hopefully that means that there’s sustained interest in the space that, I mean, Going from 0.8 to 1.6 of assets is still kind of paltry, but that’s a really big denominator. Those are real assets that are moving. And I guess I would make one more point is that it’s also interesting that there are now, I mean, I’ve even gotten just random inquiries on LinkedIn from international investors, from Europe, Canada, from even the Middle East, whoever really interested in diversity. I would say this is no disrespect to broadly to some investors outside the US, I’m not sure that they really care about diversity, but they care about profit. And one of the things that we’ve always tried to stress is that investing with diverse managers does not mean sacrificing return. It actually means that you’re just one, broadening the aperture so that you’re looking at all managers as opposed to just some. And we’ve also seen through the data, and it’s been consistent for 15 years, is that diverse managers as a whole outperform the broader indices. So you’re never going to invest in all the managers in the indices, but if you’re looking at the top quartile, then that means that you’re going to— you really are setting yourself up for potentially for outsized returns. So I think all of that makes me hopeful at this point in time for diverse managers.
Caroline Lovelace: That is very reassuring, as you hear, especially the fact that the focus on the E, the S, and the G is now expanding beyond the E in Europe. Just some very quick closing questions. Were there any key people who influenced you in your career and in what way? Any mentor or similar?
Aoifinn Devitt: Yeah, I mean, I spoke about some of them. Certainly at UBS, really, I can imagine that it really set this tone for me in terms of maybe my expectations about what a mentor should be like, but also how to work with a mentor. So, I mean, I spoke about, you know, Brian Watson at JPMorgan, who was the Australian guy who was the first to bring me into JPMorgan, and Merrill Hartzman, my first boss. Mike Lehman, who started me at UBS, but I would say also Howard Powers, who was my first boss at JPMorgan. I mean, I would say that one downside of being at UBS and at that downside pyramid, I got invited to a lot of meetings and I spent a lot of time in the room with clients and got to meet them, but as the most junior person in the room, I didn’t speak a lot. It wasn’t for me to talk. And so I’d never learned as an analyst and in my early career, to be the one sort of leading the conversation and really probing. And it really wasn’t so much until I got to Morgan Capital, and my second boss was a guy named Howard Powers. And at the time, I had no idea, and I’m glad that I was another clueless moment in my career, and that I was best that I didn’t know. He actually kind of hooked me up with kind of a— she was a consultant who was supposed to teach me, in the end, basically teach me to talk, basically, you know, how to engage and be more proactive and all that sort of stuff. And I credit him for saying, “Okay, I like you. I think you’re smart. I think you’re qualified, but I’m willing to spend some time to help you get the additional skills you need to move forward in your career.” And that was really key because then, I mean, then I said, “Okay, well, if I’m supposed to talk and ask questions, I can do that.” And one of the things I learned from Meryl Hartzband is she was one of the smartest investors I’d known, but she was not at all unwilling to look stupid in a way. There’d be this long conversation and she would just say, I don’t get it, I just don’t get it. And so I had to learn that, okay, basically I can say that and it’s actually really— even smart people don’t understand, so let’s have a conversation to get me there. I would say that those are the people in my career that were really influential in terms of helping me to get where I am today.
Caroline Lovelace: And you’ve already laced this with lots of words of wisdom from the do button and finding something that doesn’t involve the do button to areas where you’re glad you didn’t know things were hard because you may not have embarked on that adventure. But I’m wondering if you have any other kind of creed or motto or word of wisdom to leave us with.
Aoifinn Devitt: You know, I would say don’t be afraid to take risks. I think that both in terms of my personal life, my professional life, as well as how I invest, I’m not afraid to take risks, but want to be mindful of the downside. There are certainly times that, as I’ve pointed out, where I didn’t know what I didn’t know. And you have to be comfortable with the idea that there will always be things that you don’t know. But that shouldn’t mean that you’re not afraid to take a risk. It shouldn’t mean that you’re not willing to But, try. You know, have a plan B. There’s nothing wrong with having a plan B. Sometimes I think that people who are risk takers, like, there’s no plan B. That’s something I hear a lot. There’s no plan B. There always should be a plan B. Because even if you’re willing to take risks, you should be constantly evaluating whether or not that risk makes sense with new information that you have. Because there are times when if you don’t, then you’re just kind of continuing down a path that isn’t working. And it doesn’t mean that you can’t get to the same goal, but be willing to make changes. So to say, I made a mistake, this isn’t working, let’s try something different to get where I need to go. Or in the end, you make a decision that it’s just not going to work out. I think we learn as much from the failures as we do from our successes sometimes. So I would say that’s something that I would really stress that’s been important to me across the board.
Caroline Lovelace: Well, Caroline, you have had an exhilarating life, and I feel like almost a little breathless in listening to the various courses and twists and turns and surprises it took. But I think you make a really interesting point about knowing things are hard, but yet not letting— yet I suppose the struggle sometimes being hard, but being inherently stimulating, enjoyable, and ultimately what makes us who we are. And, uh, I think that’s the important balance I try to strike with these podcasts is not deterring people from taking those risks, but being realistic that even when they’re in the midst of that struggle, other people have done it too and got through to the other side. So I think you’ve captured that beautifully. So thank you for coming here. Thank you for sharing your insights with us.
Aoifinn Devitt: No, thank you. Thank you. I really appreciate the opportunity.
Caroline Lovelace: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
Aoifinn Devitt: Don’t be afraid to take risks. I think that both in terms of my personal life, my professional life, as well as how I invest, I’m not afraid to take risks, but want to be mindful of the downside. There are certainly times that, as I’ve pointed out, where I didn’t know what I didn’t know, and you have to be comfortable with the idea that there will always be things that you don’t know, but that shouldn’t mean that you’re not afraid to take a risk.
Caroline Lovelace: I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by Caroline Lovelace, who is CIO and co-portfolio manager of Preserver Partners, and previously founded Rose Hill Park Alternative Asset Managers. Preserver is diverse-owned and Memphis-based. It runs a multi-strategy fund that invests through external managers. She’s had an extensive career in researching and investing in hedge funds and in promoting emerging private equity and hedge fund investment programs. Welcome, Caroline. Thanks for joining me today.
Aoifinn Devitt: Hello. Thank you. I’m pleased to be here with you.
Caroline Lovelace: Well, let’s start by talking about your background and career journey. Can you talk us through where you grew up and what you studied?
Aoifinn Devitt: Sure. I actually grew up in Pittsburgh, Pennsylvania, and my parents moved there after I was born outside New York City. So grew up in a really kind of a small environment. My stepfather was an educator. I actually spent a lot of time at the University of Pittsburgh hanging out with his graduate students, which was always kind of funny, but it really sort of engrossed me in the academics and the academic kind of culture. Of just studying and research and exploration, which was incredibly helpful to my further development. He was also on the school board, and my mother was a social worker who in the end actually became a program director for foundations. So one of her, her last programs has been adopted by several places across the country and still is very active in Pittsburgh. So I actually quote her as kind of, and I didn’t know it at the time, but she actually gave me my first lessons in how foundations work. She would talk about how she was getting funding, funding for her programs for the investment side, and I can remember thinking about how they didn’t interact. And at the time, it didn’t occur to me that that was even important as a kid, but later on I remember, wait a second, I remember that now as a kind of an interesting way to understand how some of the investors that we talked to and how they function. So went to public schools in Pittsburgh. Pittsburgh had a fantastic public school education programs, a lot of honors programs, and then ended up going to Harvard for my undergrad and studying economics. And that again was, I mean, I I think, mean, a lot of people know about Harvard and have their opinions. For me, it was the best place to really not just explore everything that an education had to offer. I thought I was interested in finance. I always loved numbers. I was a math camp geek growing up, so spent summers doing calculus and stuff like that. But when I got to Harvard, I wanted to study economics. What I realized is that I was grateful for the opportunity to not just do kind of your standard economics, but also I thought about, well, I was also interested in the world. My father actually worked for Pan Am. He was in the finance department. So I grew up with this concept of the world being a very small place, even coming from Pittsburgh. The idea that you could just, because of employee travel benefits, you could just jump on a plane was something that really formulated an idea for me about not just about me personally having been able to travel a great deal as a kid, but also made the world and different economies look very— that was something that I’d seen firsthand. So one thing I was really interested in was Asia. I studied Chinese in middle school, and I was an exchange student in Japan in high school. And so one of the things I wanted to explore, and Harvard gave me that opportunity, was to explore economics and economic history in Asia. So I was able to do that, tack that onto my studies in economics, which is great when you have a liberal arts education to be able to pick and choose. But I also got interested in the European Union, which is something that we weren’t really focused on in the US, obviously. But understanding that the precursor to the European Union and the European rate mechanism and all the different— and from the US, we always thought about it as becoming the United States of Europe because we sort of push our perspective onto sometimes other countries. That was something that fascinated me as well. So as I went through my education at Harvard, picked up on finance and wanted to, like a lot of my peers, go into investment banking, I thought, well, why do it in New York? I’d like to do it in London. I’d like to see some of this stuff up front. And I talked when I was doing interviews later, I had to realize that how naive I was. I mean, this is pre a lot of the internet where you could really research these things. And I’m glad that I didn’t because I, because actually it’s hard for your first job to go to London. It actually is, you have work permit issues and all sorts of stuff like that. And I just didn’t know it was hard. I just thought, well, it’s something I wanna do, so I’m gonna try and pursue it. Having the opportunity with my dad to fly to London and do interviews, I just said, okay, I’m gonna write to people. Alumni, whoever, and just see who will meet with me. And so I would go over to London and meet with people. And I was lucky enough to find an alumni at UBS, an American guy, Mike Lehman, who was willing to take me on. I mean, UBS at the time had just bought— UBS, the Swiss bank, had bought a broker called Phillips Drew. And so they were building out their investment banking Europe team in London. And they didn’t have an analyst program, which at the time should have scared me because as it turned out, I was the only analyst for a while. I mean, it was total upside-down pyramid structure, but it brought me over. I was able to get a short-term work visa independently, which they didn’t extend it. So there I was. And then after that, I mean, I just didn’t— I’m glad I didn’t know it was hard because I maybe wouldn’t have attempted it. And so maybe that’s one of the first lessons I learned is yes, Understand the risks and have a plan, but don’t be so deterred by the difficulties because you probably won’t try it. And I think the most important thing is you might fail a lot, but you should at least try it because sometimes it does work out. So I spent 3 years at UBS and that was really an amazing, amazing experience. Not only did I get the same in-depth experience that my peers did in New York in terms of investment banking, which is a fantastic way to just get knee-deep into finance. You work a lot of hours, but you learn a lot very quickly. You get a lot of exposure. Being the only analyst actually turned out to be a good thing. On the first day, Mike Lehman said to the whole team, “This is Caroline Levitt. She’s going to be joining the team, but you cannot dump on her.” And I was kind of, at the time, I was kind of shocked by the fact that he said it, but I was so grateful in the end because It meant that one, I could get involved in very attractive projects if I wanted to, but at the same time, he would manage the making sure that I wasn’t pulled into all sorts of grunt work, or I was so overwhelmed that I couldn’t function. And he also sat me right across from a guy who I became very close friends with. He actually taught me, sitting at my desk with me, my first DCF. And so he became my financial modeling guru. So I guess the next lesson was have a lot of support. I mean, just find your mentors and find people who not only are willing to support you, but specifically it’s about finding people who, one, their egos are in check, but all of us in finance have egos. The point was that for all of these people, they thought it reflected well on them if I did well. So they knew they were doing bigger and better things than, you know, an analyst on the team, but they knew that it would reflect well on them if I did well, and it was important to them that I did well. So I ended up getting promoted to associate after 2 years and had such a really fantastic experience. David Lern, who was, you know, sat across from me and taught me the DCF, as well as Colin West, who became my boss after Mike Lehman, who sort of brought me with him on his interesting projects. So people who are really supportive of me. I decided very early on though that I was going to go back to the US to go out to business school. So made the decision to come back to Wharton. The firm was really supportive of that, even though I already had a permanent job to stay at UBS in London. And Wharton in the end was the best place for me, one, to get back into the States. I found out that people sort of perceived me, even though I was an American citizen, as almost European in my work outlook. So it was really going to be my first job in the US and ended up at JPMorgan. And really I did that because I wanted to make sure that I was at a firm that had a really interesting and robust US exposure, but also had a lot of international work as well. So started in the investment banking group and then quickly moved on to the buy side. So any surprising turns? I mean, that was another surprising turn because I originally, I was kind of, I really liked investment banking. People thought I was nuts, but I was kind of, I really liked it. Maybe it’s because I had such a positive experience at UBS, but I really liked investment banking.
Caroline Lovelace: I liked it too. I actually liked it too. I don’t find it that unusual. I think a little bit comes from the kind of people that it attracts. I mean, clearly you were lucky enough to work with some extraordinary driven yet intellectually curious collaborative teams. And there’s just a high that comes from that.
Aoifinn Devitt: Yeah. And there’s a huge high that comes from that. And it just feeds the intellectual curiosity that I think, you know, you come to it from an academic background that feeds academic curiosity and research and that sort of thing. And then you see it in your workplace and it just feels really like home. But at the time, Morgan Capital, they were the buy side of private equity buy side of JPMorgan. Was growing and they needed someone to work in financial services that I had, and I had experience from UBS and early on at JPMorgan working with financial institutions, particularly insurance companies. I remember getting a classmate of mine in my JPMorgan class, also from Wharton, called me up and said, “There’s this Australian guy who is running Morgan Capital globally who specifically had an interest in diversity.” So he, in all of his searches around the bank to bring people into Morgan Capital, he specifically said, I want to make sure that there are candidates that are diverse. So women, people of color. And at the time, that’s the first time I’d even really thought about it. I mean, it’s true that in business school you try and use whatever in or whatever kind of perspective you can to get the interviews and all this sort of stuff. That’s just normal. But in terms of in the workplace, specifically looking for diverse candidates, that was the first time I’d seen that. And so he recruited a guy from my class, a Black guy. He then contacted— and then he also got someone else in Morgan Capital’s sort of fundraising side, also Black guy from my class. And then he reached out to me because they needed somebody on the FIG team. And I was actually initially hesitant. I said, I like my clients. I like the team in investment banking. And so he said, just come on. That’s ridiculous. “This is where everyone wants to be. Come down and just talk to the team.” And so I ended up talking to the team and I really loved the woman who I was going to be working for, a woman named Meryl Hartspan. And Meryl Hartspan at the time was probably the most successful managing director, the most successful portfolio manager in that sleeve in the bank worldwide. She was really a force to be reckoned with. And she had been the first person in Morgan Capital to also launch a separate capital fund. So as a third-party fund, not just investing off of JPMorgan’s balance sheet. So I kind of like them and I said— they look finally and at— my friend was kind of, “You’re ridiculous. You have to come down here. You have to come down here.” So I said, “Yeah.” I come down and I just loved everyone. The team was fantastic, incredibly collaborative, incredibly supportive. Everyone really, even from managing director down to analysts, spending late nights, analyzing, collaborating, helping each other. And I remember my friend coming by my desk and said, “I just want you to let me know when I can tell you I told you so.” Because yeah, it was kind of, yeah, okay, you told me so. It’s, yeah, this is actually, it’s great being on the buy side because as you know, on the buy side, there’s no, we call it investment banking, we used to call it the do button. So a client calls you up on Friday at 5 o’clock and says, “Oh, I’m glad I caught you because I just, can you just do something for me?” And they have no idea that you’ve just ruined your weekend. On the buy side, there’s no do button, but a lot of the work is the same, but you’re also invested. So you stick with the deals that you do. And some people like that, some people don’t. I really like that. I really like the idea that you don’t pass the deal on and whatever happens, happens. You have to run with it. And some of the deals that I was put on, existing deals I put on when I got to Morgan Capital, were really bad. I mean, they had gone just sideways. And so the most pleasant experiences, but you have to learn that early on with bad investments. Why did they go wrong? How can you fix them? How do you work with management teams in stressful situations? I mean, all those sort of things are really important, and those are things that I learned early on.
Caroline Lovelace: Now, some fantastic lessons there and some great words of wisdom being collected already. We are now going to take a short break to speak with the sponsor of this series about what it is that makes them unique. I sat down with Tom Raver of Alvine Capital. So Alvine Capital has a unique business model that you call reverse inquiry. Can you tell us what reverse inquiry means?
Speaker C: When we were marketing or softly marketing funds, we realized that some institutional investors felt that they were being pushed and every call was the same as the one they just had. And we felt that we had to have another approach to institutional investors. And so we tried to really go behind the scenes and ask them, what exactly are you looking for? If you had a dream scenario and you had an opening in your fund, what would you like to have and how would that fund look? And when we got investors to open up and explain to us what they wanted, we then took down all the information we needed and we went out into the market. It’s a pull sale rather than a push sale. You’re actually helping the investor finding something that’s better than they thought they were looking for in the first place.
Caroline Lovelace: In terms of your client base, so you work with a lot of Scandinavian and Northern European institutions. Is there anything on their mind today?
Speaker C: We opened an office in Stockholm last year. We have Nordic roots. We have obviously Nordic-speaking people in London as well. We’ve covered the region for many years. Yes, we know it very well. What are they looking for? What’s happening up in that part of the world is that they’re a leader in anything that’s ESG and impact. Some very large institutions have decided not to do anything at all unless it’s completely impact, completely green. Everyone is looking for good, well-performing private equity and private credit funds, and we’re fortunate that we’re working with both them of in both categories. At the moment, we have a very good selection there.
Caroline Lovelace: And now back to the show. Moving now to your— because now you work with, you know, still on the buy side, but equally there’s a kind of buy side, sell side. Aspect, given that you are helping diverse asset managers who have to sell themselves, I suppose. So can you talk about the work you do at Preserver Partners and in particular how that relates to emerging managers?
Aoifinn Devitt: Right. Well, Preserver Partners is interesting because it is an emerging manager, although it has a more than a decade-long track record, which actually is indicative. What I’ve learned earlier in my career, I did a, what I think is the most, the first comprehensive study of the diverse hedge fund manager space. I did that when I was working at a fund of funds called Provident Group and we teamed up with HFR. It was supposed to be, I just start from the beginning, no preconceptions. What is this? How many managers are there? What strategies and what characteristics? One of the things that really stuck out is that diverse managers tend to have longer track records but lower AUM. Preserver is one of those kind of managers. And so at less than $200 million, it’s small, but it has a long track record. So it actually has a really interesting investor base of smaller institutional investors that are more local. It’s based in Memphis, as well as some attention from some of the national consulting firms. So that’s really interesting. And a lot of times that I’ve been working with emerging managers, they’ve been very small, they’ve been either needing first dollar. And a lot of what I bring to the table, I think, in terms of advising them is how to start and specifically what kind of service providers you need. How do you make a plan first off? Because I think what happens for a lot of new managers, small ones as well as new ones that are trying to start, is they just wanna get started. I mean, most of them have been successful PMs and they just wanna get trading and they wanna get investing. And they also don’t have a lot of money. So what they ended up doing is going from really inexpensive and maybe not as well known, even though they may be highly qualified service providers. And what we’ve learned over time is institutional investors, particularly when you think about Madoff, one big thing with Madoff was a failure of service providers and a failure to diligence the service providers. So therefore, a big thing for a lot of external consultants and institutional investors is, We’re going to take that off the table. We just want well-known people that we know, and that doesn’t mean that they are going to be perfect, but it’s kind of— we used to call it, my dad used to call it the IBM problem. Now maybe it’s the Apple problem. Nobody ever gets fired for investing in IBM or Apple. You may not make money, but you don’t get fired for it. So that’s kind of what happened. So talking to emerging managers about how you create a plan and also start in a way that makes sense for your future growth. Because your track record will not just be judged by your investment, by your investment returns, but it’ll also be judged by how you set up your business. And that’s something that I think is new, is newer to when 20 years ago you could set up with a Bloomberg and a guy and a couple guys and that would be it.
Caroline Lovelace: Great question though, because then this gets back to money. I mean, the definition of startup firm is not deep pocketed. Necessarily in the same way. And it might be natural that they can’t, especially with this great war for talent, they can’t hire the best CFO out there, and that there may be a need to outsource or, or maybe go to a lower-tier service provider. How do you sort of square that circle? But, you know, you need to show blue chip, but maybe it’s unaffordable.
Aoifinn Devitt: No, I think it’s true, but I think it’s generally true that the best name service providers are the most expensive, but it isn’t always. I think that there have been a number of institutional quality service providers who have decided that working with emerging managers, given that there is a war on their side for administrators and for law firms and so forth to find the next most— the next successful managers, they are willing to say, well, we’ll control costs in the near term, but be prepared to pay more if and when you get bit. And I think this has also been, particularly on the administrator side, been because of technology. A lot of the good administrators have invested heavily in technology. So it does mean that they are able to service smaller funds cheaper because of technology. And so I think that means that they’re willing to do that. So I think it is a question of going out and asking the question. I saw something, a trail on LinkedIn about, I guess, asking at a conference for a cheaper rate. And I was kind of, you just ask them. Yeah, I mean, that’s something that I hadn’t— I mean, even I hadn’t really thought about because it just feels like the price is what it is. I think so going out to some of the larger service providers and asking them, and sometimes with the larger service providers, they have regional offices as opposed to talking to the people in New York, and they’re more likely to give you a better deal. One of the things that I mean, I learned this early on at a fund of funds that when I worked with, we had Deloitte as our auditor. People are going to now kind of flood into Deloitte and ask this question. But so at Deloitte, we had Deloitte as the auditor, but because the fund was BVI domiciled, we had Deloitte BVI. Now Deloitte BVI is a lot cheaper than Deloitte New York, but the audit committee for all of the Caribbean is New York. So you’re actually getting the same audit committee as you would do, but it’s a lot cheaper because your, your team is in the BVI. I just, I mean, I think you just have to get kind of creative about how you access these service providers. And then lastly, I would say develop a lot of relationships. As soon as you are even thinking about launching a fund or as you continue to do your fund, take time to just build relationships. Don’t just talk to investors, talk to service providers as well, because there will be a service provider who you know who will find the way to kind of break— I mean, I know people who are more junior at certain service providers who are more senior now who I can call up and say, to say, look, can you talk to this emerging manager? I think they’re good, mean, I but they need a break. See what you can do for them, because they could be very selective about that. So that’s a long answer, but I think it’s really about asking the question, looking for specific service providers that are willing to work with emerging managers. So as I gave the example of Deloitte, we also worked with SS&C, not to plug them both, but to say both of them have invested in technology and look for structures that they can service emerging manager clients.
Caroline Lovelace: And then just in terms of, clearly you add a lot of value there in the role at Preserver. You also hold a series of director and chair roles, and what do you seek to bring to those roles?
Aoifinn Devitt: Yeah, I mean, I think that I was, I mean, it’s only recently, and I fault myself for this, that I’ve started to sit on the investment committees of, say, right now it’s a foundation. And I think one, you can bring just your broader experience, because what I found with these committees is that they tend to be staffed very broadly. So some people have finance experience, some people have specific asset class experience, some people bring to it really more the program kind of side or the philosophy of the institution. So that’s really interesting how all those things come together. So it’s an education for me, because when I talk to foundations as looking hopefully for an investment from them, I have a much better sense of what their constraints are, as well as what their considerations are. But I think what I try and do is just bring my asset class experience and then also being able to dig down into the portfolio of some of the managers that we look at and understand where the drivers are. We had a recent conversation about some of our emerging markets managers who had seemed to underperform. So we were listening to these conversations and I was thinking, wait a second, And they started talking about interest rate risk and obviously exchange rate. And I realized, wait a second, I remember sending and typing in a message to the consultant saying, so tell me what is the breakout in terms of their investment, investment cost if you strip out the FX. And it turns out this manager actually outperformed the US managers if you control for exchange rate risk. Now, exchange rate risk is obviously an important characteristic, but I think we were having the wrong conversation about this manager. We should have been having a conversation about whether or not we should be invested in emerging markets at all, as opposed to the qualifications of this manager. So that should have moved things in a different direction. So I think that that’s what I try and bring to the table.
Caroline Lovelace: Back then to the diversity question, because clearly you would’ve had experience of diversity throughout your career. You mentioned being the only analyst. I suppose that, that was interesting in terms of there’s maybe seniority, a lack of diversity there. What’s your experience of the industry been? And I think, how do you see that now at the founder level and in the emerging fund level? How inclusive do you see our investment industry as being?
Aoifinn Devitt: Look, I mean, we have a diversity problem in asset management. That’s clear. There’s not enough diversity at the senior levels, particularly on the investment side. Obviously, we see more diversity on the service provider side or back office, middle office. Actually less middle office, but more back office as well as business development. I think that it’s interesting. We’ve had over the course of my career, when I’ve been looking at diversity, certain spikes where interest level picks up and then it falls back, interest level picks up and it falls back for specific reasons. I think that a lot of people have focused on George Floyd as kind of a reckoning and not just in asset management, but across our society about diversity and what it means. And I do think that that focus has been interesting and different from previous spikes of interest because it really has focused not just the large institutional investors like big state pension plans that have long, as you know, have focused on or had emerging manager or diversity programs in their investment goals and investment policy statements. But now because George Floyd really became sort of globally known, it forced corporate plans that hadn’t thought about before, but particularly foundations and endowments. So think about their investments. You know, I talked about how my mother really focused on the— you know, wasn’t even thinking about the investment side. The investment side was thinking about the program side. They just wanted each other to do what they were supposed to do and leave the other alone. But what I thought about more than a decade ago was that, why is there that disconnect? And I thought at some point, at the firm that I was at, Pine Street, a hedge fund seeding firm that I co-founded, that we should have an intern come in someday and just look at all the top foundations and figure out which ones have a policy or program goal that focuses on diversity, and then try and engage the investment committee, as well as the investment team, as well as the board in trying to promote diversity across the aisle or, you know, in the other office. That project never happened. We never got to that, but I think actually George Floyd forced— because it forced everyone to look at it, a lot of foundations and endowments are now looking at that as well. And I think that that is— and I’ve seen a lot of interest from foundations and endowments about increasing the diversity in their investment portfolios. So I think that’s important because foundations and endowments often can write smaller checks. I mean, one of the big issues with large institutional investors is that whether or not they like diversity or not, they can only write $100 million, $200 million or so checks, whereas with foundations and endowments can write smaller checks, and that can be a real engine of growth. On the asset side for smaller managers. And I’ve seen that at Preserver. I mean, we have $10 to $20 million checks for a number of small pension plans, but also foundations, endowments. And that has actually been a driver of the institutional growth of the firm. So I think that’s very important. And interesting though, as I looked into some of the data, the increasing interest in diversity, particularly for hedge funds, has started actually before George Floyd. It’s been about 4 or 5 years where there’s been consistent growth in terms of the amount of cumulative assets that are invested in diverse managers. So I do think that all the work that a lot of the academics have done, studies have been done by Cressidy by Knight and other organizations have really been chipping away at just the resonance of people to look at diverse managers and emerging managers in general. So I think that’s quite important. I mean, you’ve probably seen the news, In the last sort of the end of last year to early this year, were the first time that we think that a minority woman actually launched a fund with more than a billion dollars. I mean, that’s very interesting and that’s real progress. And interestingly enough, these are women who, if you get rid of their name and any sort of gender identifications, a lot of their background looks like a white guy who might have launched a fund 20 years ago. Because their pedigree is very similar. We can talk about how different that means their perspective is in terms of how they invest, but I think that certainly over the last 5 to 10 years, the slow progress of women and people of color at sort of more junior levels, as they start to move up, they’re starting to want to launch their own firms. So I think that’s really interesting. Hopefully that means that there’s sustained interest in the space that, I mean, Going from 0.8 to 1.6 of assets is still kind of paltry, but that’s a really big denominator. Those are real assets that are moving. And I guess I would make one more point is that it’s also interesting that there are now, I mean, I’ve even gotten just random inquiries on LinkedIn from international investors, from Europe, Canada, from even the Middle East, whoever really interested in diversity. I would say this is no disrespect to broadly to some investors outside the US, I’m not sure that they really care about diversity, but they care about profit. And one of the things that we’ve always tried to stress is that investing with diverse managers does not mean sacrificing return. It actually means that you’re just one, broadening the aperture so that you’re looking at all managers as opposed to just some. And we’ve also seen through the data, and it’s been consistent for 15 years, is that diverse managers as a whole outperform the broader indices. So you’re never going to invest in all the managers in the indices, but if you’re looking at the top quartile, then that means that you’re going to— you really are setting yourself up for potentially for outsized returns. So I think all of that makes me hopeful at this point in time for diverse managers.
Caroline Lovelace: That is very reassuring, as you hear, especially the fact that the focus on the E, the S, and the G is now expanding beyond the E in Europe. Just some very quick closing questions. Were there any key people who influenced you in your career and in what way? Any mentor or similar?
Aoifinn Devitt: Yeah, I mean, I spoke about some of them. Certainly at UBS, really, I can imagine that it really set this tone for me in terms of maybe my expectations about what a mentor should be like, but also how to work with a mentor. So, I mean, I spoke about, you know, Brian Watson at JPMorgan, who was the Australian guy who was the first to bring me into JPMorgan, and Merrill Hartzman, my first boss. Mike Lehman, who started me at UBS, but I would say also Howard Powers, who was my first boss at JPMorgan. I mean, I would say that one downside of being at UBS and at that downside pyramid, I got invited to a lot of meetings and I spent a lot of time in the room with clients and got to meet them, but as the most junior person in the room, I didn’t speak a lot. It wasn’t for me to talk. And so I’d never learned as an analyst and in my early career, to be the one sort of leading the conversation and really probing. And it really wasn’t so much until I got to Morgan Capital, and my second boss was a guy named Howard Powers. And at the time, I had no idea, and I’m glad that I was another clueless moment in my career, and that I was best that I didn’t know. He actually kind of hooked me up with kind of a— she was a consultant who was supposed to teach me, in the end, basically teach me to talk, basically, you know, how to engage and be more proactive and all that sort of stuff. And I credit him for saying, “Okay, I like you. I think you’re smart. I think you’re qualified, but I’m willing to spend some time to help you get the additional skills you need to move forward in your career.” And that was really key because then, I mean, then I said, “Okay, well, if I’m supposed to talk and ask questions, I can do that.” And one of the things I learned from Meryl Hartzband is she was one of the smartest investors I’d known, but she was not at all unwilling to look stupid in a way. There’d be this long conversation and she would just say, I don’t get it, I just don’t get it. And so I had to learn that, okay, basically I can say that and it’s actually really— even smart people don’t understand, so let’s have a conversation to get me there. I would say that those are the people in my career that were really influential in terms of helping me to get where I am today.
Caroline Lovelace: And you’ve already laced this with lots of words of wisdom from the do button and finding something that doesn’t involve the do button to areas where you’re glad you didn’t know things were hard because you may not have embarked on that adventure. But I’m wondering if you have any other kind of creed or motto or word of wisdom to leave us with.
Aoifinn Devitt: You know, I would say don’t be afraid to take risks. I think that both in terms of my personal life, my professional life, as well as how I invest, I’m not afraid to take risks, but want to be mindful of the downside. There are certainly times that, as I’ve pointed out, where I didn’t know what I didn’t know. And you have to be comfortable with the idea that there will always be things that you don’t know. But that shouldn’t mean that you’re not afraid to take a risk. It shouldn’t mean that you’re not willing to But, try. You know, have a plan B. There’s nothing wrong with having a plan B. Sometimes I think that people who are risk takers, like, there’s no plan B. That’s something I hear a lot. There’s no plan B. There always should be a plan B. Because even if you’re willing to take risks, you should be constantly evaluating whether or not that risk makes sense with new information that you have. Because there are times when if you don’t, then you’re just kind of continuing down a path that isn’t working. And it doesn’t mean that you can’t get to the same goal, but be willing to make changes. So to say, I made a mistake, this isn’t working, let’s try something different to get where I need to go. Or in the end, you make a decision that it’s just not going to work out. I think we learn as much from the failures as we do from our successes sometimes. So I would say that’s something that I would really stress that’s been important to me across the board.
Caroline Lovelace: Well, Caroline, you have had an exhilarating life, and I feel like almost a little breathless in listening to the various courses and twists and turns and surprises it took. But I think you make a really interesting point about knowing things are hard, but yet not letting— yet I suppose the struggle sometimes being hard, but being inherently stimulating, enjoyable, and ultimately what makes us who we are. And, uh, I think that’s the important balance I try to strike with these podcasts is not deterring people from taking those risks, but being realistic that even when they’re in the midst of that struggle, other people have done it too and got through to the other side. So I think you’ve captured that beautifully. So thank you for coming here. Thank you for sharing your insights with us.
Aoifinn Devitt: No, thank you. Thank you. I really appreciate the opportunity.
Caroline Lovelace: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
