By Rachel Lerman The Seattle Times
WWR Article Summary (tl;dr) Great look at a very successful investment fund out of Seattle run by a WOMAN! In fact this fund is not just run by a woman, half of Nancy Zevenbergen's six-person investment team is made up of women -- a rarity in the financial business. The company sees having female fund managers as a major advantage for its investors. The assertion being that women in business have a different perspective on investing, as well as different experiences and knowledge, bringing diversity to investments.
The Seattle Times
When Nancy Zevenbergen started her investment firm, Microsoft was still a private company. Amazon.com was years away from launching, and Tesla hadn't even been dreamed up.
Nearly 30 years later, Zevenbergen Capital Investments has invested in all three companies, along with a host of other early public businesses that the small team thinks will grow to be smashing successes. So far, many of their investments have paid off. The two longest running funds have annualized returns of more than 10 percent, outperforming the growth benchmark.
The Seattle firm largely flies under the radar despite managing $2.5 billion in assets for clients -- often large public pension funds or similar organizations -- that invest a minimum of $1 million.
Led by a management team predominantly made up of women, the 17-employee firm has successfully settled itself into Seattle's business community, surviving even through major economic downturns.
Now, Zevenbergen Capital is turning its focus to the next generation of wealth by launching two mutual funds targeted toward millennials.
Nancy Zevenbergen launched the company in 1987 after starting her career at Rainier National Bank as a teller and working her way up to research analyst. The job was interesting but the young financial analyst wanted to emulate Peter Lynch, whom she had studied in school.
Lynch, a famed Fidelity Investments fund manager, said the words Zevenbergen still follows: "The key to making money in stocks is not to get scared out of them."
Zevenbergen built her firm around this mentality. After conducting meticulous research on companies and their executives, the firm invests for the long-term in companies that have high growth potential. That often means investing in companies that are far from proven.
Zevenbergen still remembers when she added Starbucks to the company's portfolio. A client in New York, the manager of a pension fund, balked as she explained the choice of the Seattle coffee company.
"We on the East Coast will never buy coffee for $3," he said.
Zevenbergen was right about that one.
In fact, one of the advantages to setting up shop on the West Coast, when many investment firms make their home on the East Coast, is the way of thinking, Zevenbergen said. "Being on the West Coast, and specifically in Seattle, we can see a younger generation of company," she said. "...The West Coast to me is more open-minded."
The firm consistently invests in what the team calls "prequel blue chip stocks" or companies they believe are the next great giants. That includes Tesla, Amazon and Facebook. Many of its portfolio companies are technology businesses or businesses in other industries that are innovating through technology.
Zevenbergen herself isn't a tech expert, though her first job at Rainier bank included being the tech professional when it came to the word processor. But she and her team are experts at digging into every part of a company's strategy.
"The company is not fearful of investing for the future," said managing director Brooke de Boutray, who joined the firm in 1992.
Active investor Zevenbergen Capital is an active investor; the company invests in specific companies it thinks have potential, rather than in a large index fund.
The firm launched two mutual funds last August with a minimum of a $2,500 investment to make the strategy accessible to individuals.
"We were late to the party," Zevenbergen said of the mutual funds. "It's a way for us to address millennials, retirees and some financial advisers."
The firm's long-term view also means it's less troubled by the volatile stock market, which may help this year, when the future of tech stocks looks more uncertain. The company keeps a close eye on stock prices, of course, but recognizes that there are a lot of variables that are unrelated to the companies' overall performance, managing director Leslie Tubbs said.
In other words, the staff continually conducts research to make sure they choose companies that can stand the test of time. "The way that we construct the portfolio is (as) a growth portfolio that could go through an economic Chernobyl," said managing director Lisa Foley, who works in client relations. "That means that we're looking for things that will grow despite real wild volatile head winds."
That is crucial in the tech industry, said Tom Hull, a longtime Seattle tech entrepreneur who invests with Zevenbergen. The firm is the only financial-advisement company he trusts, Hull said. Though that trust started because Hull's wife and Zevenbergen were sorority sisters at the University of Washington, it grew as his investments did.
"I've lived through the dot-com crash with them, the crash in 2008 to 2009," Hull said. "When you've lived through those times, you have tremendous faith that the companies they're investing in are actually going to be around for the long term."
Hull, who led Union Bay Networks when it was bought by Apple and held executive positions at Seattle companies Visio, F5 Networks and Impinj, said there always will be bigger firms that offer perks like game tickets and schmoozing. But Zevenbergen focuses on what success really means, he said -- returns and focus.
Management team Half of Zevenbergen's six-person investment team are women -- de Boutray, Leslie Tubbs and Zevenbergen herself -- a rarity in the financial business. Nancy Zevenbergen brought on de Boutray and Tubbs more than 20 years ago. De Boutray met Zevenbergen at a bus stop when the two were recently out of college and worked for different banks in Seattle. "We knew everyone who was female in investment," de Boutray said. "There are not a lot of women who have succeeded in this business." The company sees having female fund managers as a major advantage for its investors. Women have a different perspective on investing, as well as different experiences and knowledge, bringing diversity to investments, they say. "We have a willingness to look at the art as well as the science," Zevenbergen said. When Foley left her last job to join Zevenbergen Capital more than 20 years ago, her former boss, a man, warned her against the move. He had a negative view about the young firm, despite knowing little about it, Foley said. That outlook has changed a little, but the Zevenbergen women agree there is a long way to go. Women hold 19 percent of senior-level positions in financial services, according to a 2013 study from PricewaterhouseCoopers (PwC), and make up just 2 percent of CEO roles. On the other hand, women in the U.S. control 50 percent of all private wealth, the study states. Women face challenges in the industry, said Kevin Baldwin, a managing partner with PwC's Pacific Northwest market, including unconscious bias from hiring managers and gender segregation in the workplace. But research shows companies perform better when women are in leadership and board positions. "The data shows that these companies with board and executive diversity just frankly perform better," Baldwin said. "It's better for business." Other aspects in the investment industry have changed much more rapidly in the past 30 years. Zevenbergen remembers when value sheets were sent in hard copy via snail mail. The Zevenbergen managing directors are taking on a mission to pass both part of their perspective and their long-term investment strategies onto the financial generation of the future, aka millennial financial advisers. The team brought on two associate portfolio managers who are recently out of college, and a few other employees are studying for their CFA (Chartered Financial Analyst) tests. "Youth is the group to watch," Zevenbergen said. "As a growth manager, you always have to think about the pulse of the next generation." Rachel Lerman: [email protected] ___ (c)2016 The Seattle Times Visit The Seattle Times at www.seattletimes.com Distributed by Tribune Content Agency, LLC.