Wally Obermeyer has a long history in the asset-management business. In 1994, he opened the Aspen, Colorado-based office of an independent trust and asset-management company with the agreement that he could purchase the firm’s Aspen assets if it was ever sold. When the company was acquired by Norwest (now Wells Fargo) in 1998, Obermeyer exercised the buyout option and started Obermeyer Asset Management with $55 million in assets. It was good timing, since many affluent families were making Aspen their home, increasing the demand for local money managers. “There was a growing need, and it fit well with my educational background and interests,” says Obermeyer, whose firm now manages approximately $825 million in assets spread among some 400 families and institutions. Here, he breaks down the company’s winning formula for happy clients and a robust bottom line.
1. Know Your Client
According to Obermeyer, success starts with knowing your client. The firm’s clients come from 33 states, and relationships range from $1 million (the investment minimum) to $30 million. Many clients have sold businesses and retired on those assets, which they want to invest in line with their goals. Different clients, however, have different goals. “We spend a lot of time with clients up front making sure we’re a good philosophical fit,” says Ali Phillips, senior vice president, investments and client advisory. “We want them to appreciate our long-term investment approach. Being of like minds allows us to manage the relationship successfully over time.”
2. Individualize Portfolios
Obermeyer Asset Management has a six-person investment committee that is responsible for investing and relationship management. It does some grouping, so the longer-term portion of one client’s portfolio might be similar to another client’s. That said, it makes individualized adjustments based on each client’s situation and goals. “Often a client will have a have a high concentration in his or her own company’s stock and may not need any additional exposure to that sector, in which case we would adjust the portfolio,” says Obermeyer.
3. Invest Carefully
“We think of people’s money as their stored labor, so we really want to be careful how we invest it,” says Obermeyer. To that end, the firm is constantly asking how it can invest as intelligently as possible. “To us, it makes sense to be selective,” says Obermeyer, who calls this targeted investing. “We don’t need to own every good investment; we want to own those investments we believe have a high likelihood of having a successful outcome. That involves staying away from investments that we think have an undue amount of risk. For example, we sold real-estate investment trusts, or REITs, back in the fall of 2005, which in hindsight was maybe 12 months too early, but better too early than too late. We also eliminated our exposure to financials in 2008. On the flip side, we try to be in those sectors that have better risk-return characteristics.”
4. Maintain Relationships
According to Phillips, it’s important to maintain client relationships. “We send clients monthly updates and hold quarterly conference calls, but communication is also about being available,” she says. “We’re clear in the beginning that we’re here to answer any questions clients have. The relationship develops organically that way.”
5. Emphasize Teamwork
According to Obermeyer, one of the firm’s greatest strengths is its highly qualified team. “We all have deep backgrounds in our fields, but those fields are different and complementary,” says Obermeyer, who points to a new employee, a Princeton-educated medical doctor with a master’s degree from Stanford Business School, as an example. “It adds a different—and we think valuable—perspective,” he says. Once hired, however, employees all focus their efforts on one goal. “We work to keep clients in mind as people rather than accounts,” he says. “The commitment to doing right by the client is the glue that keeps us all working in a coordinated manner.”
6. Stay Away from the Fray
Being based in Colorado has been an advantage to Obermeyer Asset Management, which has offices in Aspen and Denver. To start, says Obermeyer, it’s helpful to be away from the big money centers such as New York. “It’s harder to get caught up in investment hype, so we’re able to think more independently and rationally,” he says. Obermeyer also adds that the firm’s location has given it access to a unique demographic. “A number of interesting and connected people come here to vacation, and that has given us access to clients we wouldn’t have access to if we were located elsewhere,” he says.