The Discipline of No: Chip Caravati and Chris Dion of Brockenbrough

For our audience who are less familiar with the firm, Chip, would you mind just giving us a quick overview of the business? So what is the firm today? What are the services that you offer? And what are the ultimate goals you are trying to accomplish for your clients?

Yeah, so really two legs of the stool as we think about it.

Firms started largely servicing high net worth individuals and smaller institutions, as we talked about before.

almost exclusively done with proprietary strategies at that point.

That business started to evolve a little bit, diversification.

We kept those proprietary strategies.

That's where we felt like we had some edge.

We have obviously largely taxable investors in that part of the business.

And so have always continued to run that large cap core business.

single stock strategy and run individual bond strategies.

What we layered in with that part of the business and ultimately decided to do it more in a passive type structure is diversification to international small cap.

What we didn't have and what the OCO business allowed us to also layer into that was access to outside managers and asset classes that we didn't currently offer to those clients.

And made the decision on the OCIO business that we weren't going to use any of our proprietary strategies.

We didn't want any conflict whether that fit in those portfolios.

So OCIO business is all external managers.

We do use a little bit of passive investing just to keep some liquidity in portfolios.

But it's created a really interesting dynamic, I think, Rob, where we've been able to, you know, we've stayed small enough in our asset base to that it really still looked like a boutique firm and how we service clients.

I would say that's how Austin and Jim first and foremost thought was the most important thing in the business and how they built it was the client service piece and the client always comes first.

So that boutique nature of how we service clients really in-depthly get to know, even on the institutional side, the OCO side, really get to try to know the institutions we work with and the folks that are on those investment committees.

But it's created this interesting dynamic where some of those private wealth clients can piggyback on what we're doing on the OCO side.

And they don't have to use all those strategies.

Many of them don't use what we're doing in long only on the OCO side.

They've got an existing portfolio.

It doesn't make sense to necessarily go take those gains.

But things like profits or where it makes sense, different hedge fund strategies has really – broaden the investment platform that we're able to offer for the private wealth client.