Institutional Investor's Alpha Magazine - March 2008 - (Page 33) gic operating committee comprising Geiger, then head of investments; Sean Simon, head of global client development; and Singer, chief administrative officer. In January 2006, Ivy completed the transition when Singer and Sean Simon were promoted to co-presidents and Geiger was elevated to CIO. As vice chairmen, the elder Simon and Wohl took on an advisory and mentoring role, which meant working just a couple of days a week. Ivy is now part of Bank of New York Mellon Corp., which was created by the 2007 merger between Bank of New York and Mellon Financial Corp. Singer and Simon report to Ronald O’Hanley, president and CEO of BNY Mellon Asset Management, the bank’s investment management arm. “One of the things that was attractive in this merger was Ivy,” says O’Hanley, who ran Mellon’s asset management operation before the BoNY deal. Today, 86 percent of Ivy’s assets come from pension funds, insurance companies and other institutions; the rest is from high-net-worth individuals and families. Quirk believes that Ivy, because of its size and history, can right the ship. “It’s not like Ivy is the first asset management firm to have problems,” explains the investment management consultant. “They’ve put themselves in the camp of scale leaders in the fund-of-funds industry, and with good leadership they have all kinds of opportunities to make the appropriate adjustments to reestablish their growth path.” IN LATE 1995, WHEN SEAN SIMON, then an associate analyst in the equity research department at New York–based investment bank CS First Boston, told his father he was thinking of moving into sales, the elder Simon asked if he had ever considered working for Ivy. He suggested that Sean, who lived in Manhattan, take the train out to Long Island to discuss the possibility. “We met for breakfast every Saturday at 8:00 a.m. at a diner by the train station,” says the younger Simon. “By the eighth week my father knew I was serious.” Sean Simon joined Ivy in February 1996. The fi rm then had about $450 million in assets. He spent his first 18 months doing manager research under Wohl and Fred Sloan, then director of investments. In 1998, Simon, who has a BS in business administration from Boston University, switched to marketing and client development and led the firm’s push into the institutional marketplace. Singer’s path to Ivy also involved a restaurant, albeit a more upscale one than the station diner. Like Ivy’s founders, Singer began his career as an accountant, in his case a three-year stint at Coopers & Lybrand in New York. He made his foray into alternatives in 1995, when he joined investment management firm Weiss, Peck & Greer after getting a JD degree from Atlanta’s Emory University School of Law. At WPG, which offered both venture capital and hedge funds, Singer got involved in business development, including acquisitions, in addition to his more traditional legal duties as general counsel. He was a senior managing partner in 2004 when the elder Simon, whose attorney had met Singer while playing golf, called to ask if he would be interested in meeting for a drink at New York’s Four Seasons hotel. “To me Ivy was always the gold standard,” says Singer, who was hired by the firm in October 2004 as chief administrative officer. At the time, Ivy had about $14 billion in assets, but it was still operating out of a small office in Garden City, across the parking lot from a Nordstrom’s department store in the Roosevelt Field Mall. One of Singer’s first assignments was to oversee the firm’s June 2005 move to spacious new headquarters in Jericho, which Ivy’s bosses at the Bank of New York jokingly referred to as the Taj Mahal. A s Iv y grew, so did the breadth of its manager research. During its first two decades in — KEVIN QUIRK, PARTNER, business, Ivy invested mostly CASEY, QUIRK & ASSOCIATES in U.S. managers pursuing long-short equity, event-driven and relative-value strategies. Its analysts were all generalists. By 2004 the firm had more than 100 employees, giving it the critical mass to move to a specialist model. That year, Ivy divided its analysts among its three different specialties, later expanded to five with the addition of tactical trading and credit. The firm also hired Greg van Inwegen to head its new risk management and quantitative research group. Van Inwegen, who has a Ph.D. in finance from the Wharton School of the University of Pennsylvania, had been working as director of quantitative research at Rockville, Maryland–based Rydex Investments, where he was building a hedge-fundreplicating strategy product. Manager selection has always been one of Ivy’s strengths. Going back to the days when the investment team consisted of just Wohl, Ivy has done extensive research on managers to determine their ability to manage a business and generate good — and repeatable — riskadjusted returns. The process combines quantitative and qualitative analysis, as Ivy’s researchers try to assess both performance and character. As a result, Ivy is willing to put money with less proven managers that the firm believes can deliver the goods. Ivy was an early investor in several of today’s top managers, including New York–based Glenview Capital Management and King Street Capital Management, BlueBay Asset Management in London and Chicago’s Magnetar Capital. In many cases, the initial investment was made through Ivy Seedling Fund, which targets new, emerging managers. The best may graduate to the Ivy Rising Stars Fund, which specializes in hedge funds that typically have less than $500 million in assets. “Ivy has been a good partner,” says Larry Robbins, “In situations where you have a significant change in people, investors want to sit back and watch how things shake out.” MARCH 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 33
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