Wealth & Finance International 18 Seeking Value in a Passive World CS is an SEC registered advisor, with most of their assets in long-only strategies and also manages alternative strategies including long short hedge funds and an event driven hedge fund. The strategies are offered in a separate account and alternative investment vehicle format. Consistent across their various strategies, they perform bottom-up, fundamental research with the goal of preserving capital and generating profit consistently through all market environments. This approach has enabled them to produce a long-term track record of superior risk-ad- justed performance. A spokesperson from Levin Capital Strategies, LP reveals more about the firm’s client mix, strategies employed and the advantages they offer as a long-only and alternative investment manager. “We have a sophisticated client mix, and we manage assets for a wide mix of clients including US mutual funds, endowments, foundations, retirement plans and high-net-worth individuals (HNWI). In terms of the firm’s successes, I would say that we have a pretty good track record for stock selection for our clients whether that be on a 1,3, 5,10 or longer period. We have done a pretty good job in picking stocks, managing risk and outperforming the benchmarks for many of our strategies. “We operate as an integrated research team, with 11 analysts, some of who are portfolio managers and three traders with significant industry expe- rience. The average industry tenure of our research team is around 26 years. The group has worked together for some time and we believe that by having our analysts covering both long and short positions, makes them well rounded investment professionals. We don’t hire people out of business school, indeed many of the team here have grey hairs. “Jack Murphy, who is the portfolio manager of Large, All and Mid Cap Value long-only strategies, spends a lot of his time as an analyst looking at the industrial and consumer sectors. Each of our analysts is a sector specialist, and we typically have more than one analyst covering each investment idea. However, we only have single trigger pullers for each of the strategies we employ. There is no investment committee here, hence Jack and John are responsible for the portfolios they manage. We believe that this aspect of our work makes us nimble.” The spokesperson adds that they don’t focus on what is happening in the ‘rear-view mirror’ because their investment process looks for pre- dictive changes in companies to both their future earnings growth and product. As mentioned earlier, the firm’s investment team has over 26 years’ experience on average. The spokesperson tells us more about the integrated team of senior sector specialists. “The investment team has domain expertise in specific sectors, such as financials or industrials, and nearly 100% of our ideas are generated in- ternally by our research team. Our analysts’ responsibility is to generate investible stocks ideas, having said that, we do operate relatively sector neutral and we believe most of our value-added outperformance is based on stock selection, not on timing the market or sector allocation.” As the president of the firm, Glenn Aigen is almost responsible for everything apart from picking the stocks and trading them. He is involved with new business development and operations. In terms of what the clients say about what the firm does, Glenn underlines that the clients like their process, which is the predictive research they do which involves getting to know the investee companies. Added to that, clients know that the firm is a contrarian value manager who looks for catalysts in their positions, staying in their style box and are not shy to put forward interesting investment ideas and they know that we conduct bottom-up research and are stock pickers. Looking ahead, having heard some wonderful things about the compa- ny, there are certainly challenges for active management. Jack Murphy, Senior Portfolio Manager, said “We think that there are a lot of people out there who have got involved in the passive indexing game, that is people have no idea what they are buying within their funds such as passive ETF’s. When you have a time when there is any kind of disruption in the stock market, we think the people who bought those pools, will not realise just how much risk they took. While you may have saved on costs buying an ETF when you want to outperform the market for one brief period, but those small savings on fees are probably going to add up very quickly as losses in your portfolio. That is a challenge going ahead, yet it is also an opportunity.” “Finally, we believe that there should be room for active managers in everybody’s portfolio, who show the ability to outperform the applicable index over time and our investment process has remained relatively unchanged over time.” Company: Levin Capital Strategies, LP Name: Rebecca L. Reiss Business Development Manager Email:
[email protected] Web Address: www.levincap.com Address: 595 Madison Avenue - 17th floor New York, NY 10022 Telephone: +1 212 259 0826 Levin Capital Strategies L.P. (“LCS”) is a long-only and alternative investment manager with approximately $7 billion of AUM at the time of writing. The firm, which was founded by John A. Levin in 2005, is New York based and has 35 employees including 14 investment professionals with an average of 27 years in the industry. A spokesperson from the firm reveals more. L 1705WF15