Why Hammond rejoined St. Louis advisers after selling firm for $60M & house to Billy Joel
By: Sunpointe Investments
With word that he is rejoining two former Hammond colleagues, Mike Pompian and Jack Dwyer at Sunpointe Investments in St. Louis, we gave him a call.
What have you been up to the last nine years? When I ran Hammond, we worked with Hands of Hope, which feeds about 80,000 kids across the world everyday. When we moved to Florida, we created a company, SandPointe Asset Management, a hedge fund, with 50% of the profits going to the SandPointe Foundation, helping kids in Haiti. We grew it to $130 million in assets, but that's not enough to support a company. After six years, we called it a day and closed it last year.
Why rejoin your old colleagues in St. Louis? I ran into Mike Pompian in Miami. He ran the family office division at Hammond Associates, accounting for about $5 billion of our $50 billion or so, and I think the world of him. I asked if he could use some help.
What will you be doing? I'll be a senior adviser, helping to build the institutional side, focusing on school endowments and foundations. Sunpointe serves about a dozen family offices, with about $2.4 billion in assets under advisement. I'd like to help build out an institutional practice.
Why get back in the game? You can only stay home and stare at the walls for so long. I missed meetings and being around smart kids. I wanted to get out there again.
You built Hammond Associates on foundations and endowments. What has changed in the last nine years? It is much more difficult to make outsize returns. Advisers are having a tough time beating a straightforward 60-40 mix of stocks and bonds. For the 40-year period ended June 30, 2018, a manager with a 60-40 mix outperformed the average school endowment. In the last decade, the largest endowments — those with more than $1 billion — averaged about 180 basis points a year less than the 60-40 mix.
What can you do to beat the 60-40 mix? We are trying to find investments that align with the goals of socially responsible investing at college endowments. For example, those companies with a high governance score, with significant gender diversification on their boards, correlate to higher returns, almost 150 basis points. A public company with three or more women on their boards tend to have higher return on investment and earnings per share. The reason may be that those companies tend to have diversity throughout the company, and diversity of thought leads to innovation.
Are you moving back to St. Louis or staying in Florida? I have to stay in Florida. I play tennis at 7:30 every morning, and it's very difficult to play tennis outdoors in St. Louis in the winter.
Did you sell your mansion in Palm Beach County to entertainer Billy Joel for $11.8 million? I never met him, but he did buy the house. It's on the intercoastal, and he was building boats at the time. They renovated it for a year and never lived in it. It's on the market if you're interested.