Alpha - September 2007 - (Page 74)

Fortis Investments introduced them to Cadogan in 2006. Of all the firms with which Fortis could have partnered, U.S. CEO Braman says, Cadogan was the most bent on creating longterm value for clients and owners alike. “They were truly investment-oriented folks who thought deeply and long about how they structured portfolios,” he explains. “And really, it was their intellectual capability that attracted us.” Braman was also impressed by Cadogan’s judicious approach to growth. “They went from effectively one strategy to a number of strategies, but they always did it in a controlled fashion,” he says. “They always want to be in underlying hedge fund strategies that any one of the principals has had active firsthand involvement with.” Dirk Wieringa can vouch for Cadogan’s consistency. Wieringa is head of alternative investments for the Multi Asset Class Solutions division of Londonbased Credit Suisse Asset Management. His group, which manages more than $10 billion, first invested in Cadogan’s CAST fund in early 2004. “We had money with them when they were $600 million or so,” Wieringa says, “and it’s still the same shop, the same concept.” Leaf had never been interested in selling to a larger firm, mostly because he didn’t want Cadogan besieged by salespeople. But after ﬁelding many inquiries in the two years before Fortis came calling, he had grown more receptive to the idea. He was also keen to launch new funds of funds and saw that Fortis could provide Cadogan with cash and distribution. Equally important, Leaf and Wohanka found that they got along. “One interesting thing about Stuart is he has a very international perspective,” Wohanka says. “That helped a great deal in building the relationship between his company and ours.” There was never any question of Cadogan losing its autonomy. “We want to keep Cadogan exactly as it is,” Wohanka says. “This is one of the things I emphasized with Stuart right from the start.” By retaining a 30 percent equity stake in the combined business, the Cadogan principals have aligned their interests with those of their investors. Leaf reports to an eight-member board of directors split evenly between Cadogan and Fortis. So far, Wohanka has been true to his word. Although Leaf hopes to call on Fortis’s expertise, he says the firm hasn’t pushed Cadogan in any way that would hurt his clients. “There has been absolutely nothing so far that has been rammed down our throats,” Leaf says. “Not even on the accounting side, which astounded me.” Wieringa says that Credit Suisse has no worries about Cadogan becoming part of Fortis, provided it keeps managing money the way it has. “If we recognized that they were losing their edge because of [the acquisition], that would raise some ﬂags,” he says. WHEN WOHANKA ARRIVED at Fortis in 2001, his mandate was to revitalize the ﬁrm’s asset management operations, which had been cobbled together through a string of mergers. Outside its home base of Brussels, Fortis Investments had foreign subsidiaries in just ﬁve cities: Hong Kong, Luxembourg, Paris, Shanghai and Utrecht. Determined to create a truly global third-party asset manager, Wohanka decentralized the business by recasting it as a series of autonomous investment centers. Today 21 such centers — based everywhere from New York and Moscow to Jakarta — each manage a single asset class. Some centers have investment professionals spread across multiple cities, and several of them offer hedge funds. Wohanka comes by his global outlook naturally. He was born in Cochabamba, Bolivia, to a British mother and a Czech father. His father and grandfather, who owned machine-tool and agricultural-machinery plants in Europe, moved the business to South America after the communists took power in Czechoslovakia in 1948. As a young boy Wohanka went to boarding school in England, where he later earned a history degree at the University of Cambridge. He then studied modern economic history at Harvard University on a Kennedy Scholarship, which fosters transatlantic relations by bringing British graduates to the U.S. Wohanka joined Fortis from German bank WestLB, where he led the asset management division. Before that he was CEO of institutional and mutual funds for London’s Baring Asset Management and CEO of Paribas Asset Management. He also spent seven years at Paris-based Banque Paribas as head of new issues for its ﬁxed-income and equity products. In search of someone to run the North American branch of his business, Wohanka tapped Braman, a former Baring colleague. Before joining Fortis in 2003, Braman was CIO of Boston’s John Hancock Advisers. At Baring, the New York native had served as CIO after moving up through the ranks. Braman, 53, who started out as an equity analyst at what was then the Bank of Boston’s asset management unit, oversees Fortis Investments’ Boston and New York operations. The Boston office manages U.S., global and emerging-markets equities as well as structured credit. The New York unit does structured credit — including subprime — and funds of hedge funds through Cadogan. Cadogan will help Fortis expand its U.S. presence partly by offering more cross-selling opportunities. With three primary business lines in the U.S. — funds of hedge funds, long-only equity and long-only credit — Fortis is stepping up sales efforts between them. Braman’s salespeople are now promoting Cadogan, which in turn will start plugging Fortis’s equity offerings. “We’re also increasingly using Fortis Bank, which is a partner of ours in Photo by Tom Tavee for Alpha “It was Cadogan’s intellectual capability that attracted us,” says Fortis Investments U.S. CEO Will Braman. 74 • INSTITUTIONAL INVESTOR’S ALPHA • SEPTEMBER 2007

Table of Contents Feed for the Digital Edition of Alpha - September 2007

Contents Letter from the Editor Longs & Shorts Pension Corner: Keeping the Faith The Good Guys: Going Public Interview: Barry Bausano - A Delicate Balance Cover Story: Cruel, Cruel Summer Profile: Phil Cooper - Alternative Flight Plan Strategies: Marshall Wace - TOPS in Its Field Profile: Fortis Investments - Banking on Alternatives Research Center: Top Equity Trading Firms Alpha Bytes: Desktop Duel Unhedged: Commentary - The Taxman Cometh

Alpha - September 2007

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