Half-decent money management isn’t anything most of us couldn’t do from an Internet-capable laptop computer in our favorite Starbucks.
But, if you’ve got north of $5 million to invest, it’s time to put down the latte and pull out the big guns.
Problem is, “in Tulsa, there aren’t that many large money management firms” that could serve ultra-high net worth individuals, said Roger Bey, professor of finance, chair of finance & operations management and J. Bradley Oxley Chair of Business Administration at the University of Tulsa.
“I know people who use Lehman Brothers out of New York for all their stuff. They think that by being in New York, they have better access to more and better information than what we do here. In many cases, that’s correct.”
However, a few locals in financial services are proving that they not only hold a candle to what big city firms can provide, but they are actually becoming the No. 1 choice of local wealthy individuals and families who are looking for good returns with a side of hometown charm.
The Case for Tulsa
Beyond $15 million is where an account ceases to be “merely” that of a wealthy individual but belongs to a well-endowed family legacy. Most families keep their money managers in-house and under wraps, but one local money management firm has built its business model around serving wealthy families in Texas and Oklahoma.
Chuck Fuller and Brian Carney formed a partnership in 2004 with local investors Sherman Smith and John Brock upon leaving their jobs managing portfolios at Bank of Oklahoma. The result was Bridgewater Investment Management, now Bridgecreek Investment Management LLC, headquartered in Tulsa at 2431 E. 61st St., Ste. 315.
“They (Smith and Brock) were looking to create a firm that was unique to Oklahoma,” Fuller said. “They had to go to Dallas, New York, the West Coast to get so-called Wall Street-type money management. Having been in those firms and being with a bank, we thought it was time to create a firm that brought those best practices to Oklahoma and keep the money here locally.”
Fuller started his career in money management with Merrill Lynch Asset Management in Dallas while Carney made his start at JPMorgan Private Bank, also in the Big D. While at the Bank of Oklahoma, Fuller and Carney were members of the asset allocation and stock selection committees and managed more than $1 billion in assets.
The firm has been a great fit for Tulsa’s blue chip families, Fuller and Carney said, who “really needed it because of the explosion of oil and gas and industrial-type industries in general,” Carney said. “They want a manager who can sit across the table with you, go to lunch with you. But, they don’t want to sacrifice performance. Those oil and gas families wanted something more distinctive, something more focused on their families.”
Fuller and Carney took several clients from the bank to start a “reasonable” asset base, “and that just sort of took off,” Carney said. “Returns have been really strong,” and though specific numbers were not available for print, the rates of return have significantly outpaced the market.
Since the firm’s inception, Fuller and Carney have brought about 60 families to Bridgecreek, which totals $360 million in assets under management.
Before Bridgecreek Investment Management, Fuller and Carney said many Tulsa families couldn’t justify keeping their accounts with local firms when Dallas and New York came calling not only with tickets to the theatre and limo rides, but also with a slew of investment options tailored for the ultra-wealthy.
“I think what really disdained these families was the mutual fund model and the vanilla solutions that were here,” Carney said. “If you’ve got something that’s world class and you have north of $5 million to invest, you really don’t want to put it in some mutual fund. If you’ve got $5 million, you ought to be able to buy some stocks and bonds and have a diversified portfolio.”
“I think that gives you a competitive advantage when you go in against the Wall Street girms, and they’re looking sort of cookie cutter and everyone’s got the same portfolio, they’re going after the same people and they’re not specialized. They’re basically presenting the same investment strategy to every single person, whether it’s a $2 million person in Tulsa or a $5 million person in Miami, Florida,” Carney said.
Being the Word About Town
Bridgecreek Investment Management relies on its “legacy clients” from BOk and its referral network for its client base. Fuller estimated that up to one-third of the company business comes from current relationships while $250-$300 million is in new clients who were referred.
Trust departments of local banks work just as hard for referrals, since in the upper echelon of the money management business, profits come from knowing the right people.
“I think we’re probably as close to being a Swiss private bank as you’re going to find. You don’t see a lot of advertising for us,” said Mike Hall, vice president, trust management at American Bank and Trust, headquartered in One Warren Place at 6100 S. Yale Ave. “But, I get a lot of my trust accounts from our commercial lending department. They develop the commercial lending there, we work with the principle, and find innovative ways to help our clients.”
“The only thing that we can offer that’d be different from any other bank is our service. Everybody’s got the same platforms, and everybody’s got online banking.”
Even sluggers like the wealth management department at Bank of Oklahoma, with assets of $38.7 billion under supervision, have to find ways to gain a competitive edge over other regional institutions.
“In Tulsa, our clients have uncomplicated, in-person access to the individuals responsible for creating and implementing the solutions that help them achieve their goals,” said Barron D. Beal, executive vice president of wealth management for BOK Financial Corp. and Bank of Oklahoma. “A competitive offering, talented professionals and superior service position us very well against competitors that are not as committed to Tulsa as Bank of Oklahoma.”
Though Bridgecreek’s offices are close enough to Southern Hills Golf Course that they probably need to toss the occasional stray golf ball back over the fence, neither does “social golf.”
“We don’t feel like we’re a commodity,” Carney said. “We’ve never been big on marketing. In fact, you’ve probably never heard of us before – most people haven’t. We’re really discreet, and we try to protect our clients.
“How we communicate has been, I think, a big part of our success,” Carney said. “You can have great returns, but if you’re sort of the pocket caluculator person, which you see a lot of in portfolio management, but they can’t communicate what they’re doing, and that doesn’t make clients feel very comfortable. And, that doesn’t work in Oklahoma, and it certainly doesn’t work with high-net worth clients – they’ve seen enough of that in their personal businesses and careers.”
Without flashy marketing campaigns, networking skills really come in handy.
“You have to have a personal relationship to get the large accounts,” Hall said. “Anybody that is in the business here is pretty good. If you take one of our portfolios over to the Trust Company of Oklahoma, they’re going to recognize that. If you bring theirs over to me, I recognize theirs – same way with Bank of Oklahoma and Harvie Roe’s group (The AmeriTrust Cos., 4111 S. Darlington Ave., Ste. 450). We’re all very similar in our approach. But, it’s the contacts we have and the people we know,” Hall said.
It’s almost beyond whom you know, Hall said.
“It’s got to be people you have worked with. I get referrals from attorneys and accountants who I’ve worked with on projects. Then you’re introduced to the client, but not just, ‘Hello, this is Mike Hall.’ That’s their attorney introducing someone that they trust. We all, in a way, rely upon each other’s reputations for our contacts.”
Knowing and working within one’s expertise is a lot like remembering who your friends are.
“You become less of a threat to accountants and estate-planning attorneys that are going to refer business to you, because you’re not trying to poach on what they’re doing,” Carney said. “Part of our strategy is to take some of these accountants and estate planning attorneys to lunch and make sure that we’re at the top of their list when they’re thinking about these clients.”
One strategic partner of Bridgcreek’s is Summit Bank, where the list of the board of directors reads like a who’s who in regional banking.
“They (Summit Bank) have identified that they’re a bank, and that’s what they want to do,” Carney said. “They decided that they needed someone like Harvie Roe on the trust side to help with trust issues. If we do the investment management piece, Summit Bank can make the referral and not get sidetracked on their stuff.”
Having a diversified set of professionals on staff at a trust company generates referrals as well as happy clients, said Harvie Roe, AmeriTrust Cos. president and CEO.
“We don’t do a lot of advertising. We’re very dependent on referrals. Those come from attorneys, CPAs and clients – by far, that would be the best testimony we could get,” Roe said.
Roe keeps attorneys, CPAs and CFPs on staff, which totals 13. He takes pride in blending the right people, “because no one person is going to know everything there is to know about the financial industry,” Roe said.
“A high-net worth person is going to have several advisers. One of the problems high-net worth people have is the advisers don’t talk to each other. They go to their CPA at times, they go to their attorney at times, and the banker at other times,” Roe said. “But, no one is really pulling it all together and saying, ‘Why are we doing all of this? What’s the goal? Are we even on track to reach that goal?’” ?