Partner perspectives

MS: I'm Madeleine Sinclair, head of Private Wealth North America for Blue Owl Capital, and you're with Partner Perspectives. I'm joined by Jason Fertitta of Americana Partners. Jason, welcome.

JF: Thank you so much. It's great to be here.

MS: We're so delighted to have you. I want to jump right in on your background.

JF: Absolutely.

MS: You've been looking after UHNW individuals' wealth for quite some time, several years. What drew you to the space of wealth management?

JF: Yeah, I'm what they would definitely consider a nontraditional hire into the industry. I went into sales right out of school and I actually was in financial printing sales. At 28 years old, I basically went to New York and begged Lehman Brothers for a seat in their training program, and they hired me. That was 25 years ago.

MS: Wow. So, in that span of your career, the landscape of alternative investing has changed considerably. If you look at the past and where we are now, what do you think has been the biggest impact to individual investors?

JF: I think the biggest change in alternatives from the beginning of my career, when we started allocating capital to them both at Lehman and Morgan Stanley, is really just the concept of a closed-end fund with two 1-year extensions, the liquidity associated with those funds back in those days versus the evergreen vehicles that Blue Owl and other asset managers are bringing to market—giving clients the opportunity to earn regular income and quarterly liquidity—and they get to dictate the terms on when they want to come out.

MS: We talk about the benefits of Blue Owl strategies to portfolios. What do you see in the way of being able to contribute to the growth of a firm? The decision to allocate to alternatives, do you feel that has been a driver for Americana's growth?

JF: It's the biggest driver to our growth by far and away. The liquid stuff, the public securities, have just become more and more commoditized. It's really hard to differentiate yourself—everyone has the same information, everyone has access to a lot of the same managers. We do have some internal proprietary products that have done quite well in the public space, but it's certainly a lot easier to differentiate yourself with your alts offering. I also think it's the best account opener when it comes to opening up new relationships with new families. It’s a whole lot easier to approach a prospect with a really interesting idea from the alternative space versus saying let's talk about your large-cap portfolio and how maybe we could eke out an extra percent or two of return.

MS: Do you have advice for advisors that are maybe not yet convinced that they need to be putting alternatives to work in their client portfolios? Where should they start? How should they be thinking about managing due diligence?

JF: I think they should start with the evergreen products because it's a way to get quick exposure, and it's also a way to—subject to the sky falling and gates coming up—it's a way that you could change your mind if you were invested in one asset class and maybe wanted to move from say private credit to real estate. There are evergreen products in both, so I think that’s a great place to start. I also think it's a great place for clients who don’t have a lot of experience in investing in alternatives because they’re not making a 10- to 12-year decision.

MS: Finally, for your clients, Americana Partners is focused on total wealth—the picture of total wealth for clients. How does allocating to alternative investments help you stick to that North Star?

JF: Well, it's the fastest-growing part of our firm, so it's really easy to focus on for us. It's kind of that silver bullet to get a new client. You find an alternative that's particularly unique. Sometimes, with alternatives, there are allocation benefits. There’s a date that you have to get in by to commit to a certain closing, with public equities you don’t have that. You could have a client that is thinking about it for forever, but with alternatives, certain alternatives, there is a finite date you have to make a decision by. That helps people like us who are trying to build relationships with new clients. So, it certainly is our North Star. I think we're a little north of a billion in alts today, which is about 10% of our firm's assets under management. So now, we’ve got quite a bit invested, and we’re certainly focused on the administration of the alts because that’s another big component of it to make your client happy.

MS: Well, Jason, thank you so much for joining us today. We appreciate your insights.

JF: Absolutely, thank you for the partnership and thanks for having us out to the conference here.