Whipsaw Wisdom with CEO Alan Lenahan





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Tune into "Whipsaw Wisdom" with FEG's CIO Greg Dowling and FEG's CEO Alan Lenahan as they discuss the story of "Whipsaw", Lenahan's career journey, the evolution of FEG, key industry trends, and much more. Don't miss out on these insights from FEG’s own CEO!

Join FEG CIO Greg Dowling and FEG CEO Alan Lenahan, for a discussion of “Whipsaw Wisdom.” In this episode, we uncover investment strategies, from historical trends to the landscape of today's markets. Discover FEG's approach to catering to the diverse needs of clients, ensuring resilience in times of change. Explore the evolution of asset management trends, the business model driving FEG forward, and learn how culture helps shape success.

Key Takeaways

  • Despite the dynamic nature of the investment industry, FEG maintains a long-term philosophical approach to investing. This approach prioritizes delivering exceptional investment experiences for clients and avoids contemporary fads.
  • FEG emphasizes understanding client's needs and governance structure before tailoring their services. Rather than offering specific business lines like OCIO or consulting, FEG views services as a spectrum that can be customized to meet each client's unique needs. This client-centric approach ensures FEG delivers value to clients by aligning capabilities with clients’ best interests.
  • The investment landscape has evolved, particularly with the decline in alpha generation from traditional investment strategies due to factors like increased regulation and information accessibility. FEG highlights the shift towards private markets, where opportunities exist for informational edge and alpha generation.
  • As CEO, Lenahan emphasizes the importance of focusing on people and culture. He discusses the significance of maintaining a shared vision and culture within the organization, particularly as it grows. Alan's approach involves actively engaging with both clients and team members, listening to their needs, and aligning FEG's capabilities to deliver exceptional results. He also emphasizes the importance of combining technical skills with strong communication and interpersonal skills for aspiring leaders in the industry.


Episode Chapters
 0:00 Introduction
 0:29 Episode Introduction
 1:03 Meet Alan Lenahan
 9:18 Joining FEG and Early Career
 13:12 FEG's Expansion
 17:19 Defining an ESOP
 18:20 Investment Philosophy and Client Focus
 21:20 Expanding the Business Model
 24:56 Evolution of Investing and Regulations
 27:17 Vision for FEG's Future and Managing Culture
 32:54 Utilizing Technology and AI
 36:46 Advice for Young Leaders
 39:16 Continuous Learning and Book Recommendations




Greg Dowling, CFA, CAIA

Chief Investment Officer, Head of Research, FEG

Greg Dowling is Chief Investment Officer and Head of Research at FEG. Greg joined FEG in 2004 and focuses on managing the day-to-day activities of the Research department. Greg chairs the Firm’s Investment Policy Committee, which approves all manager recommendations and provides oversight on strategic asset allocations and capital market assumptions. He also is a member of the firm’s Leadership Team and Risk Committee.

Alan Lenahan, CFA, CAIA

Chief Executive Officer, FEG

Alan Lenahan is FEG’s chief executive officer. He previously served as FEG's chief investment officer, leading the Firm's investment efforts.

Alan received his Bachelor of Science in Business Administration in Finance and Marketing from Xavier University. He then began his career with Arthur Andersen as a senior associate of valuation services before moving to The Western and Southern Life Insurance Company for a position as a senior corporate finance and risk management analyst. While at Western and Southern, he was responsible for researching asset managers for potential acquisition and developed a keen interest in alternative investment strategies. Alan subsequently joined the FEG team in 2002 as an alternatives research analyst, focusing on non-traditional strategies and assisting advisors with portfolio construction. He led the launch of FEG’s earliest discretionary pooled vehicles.

In addition to his position on the FEG Leadership Team, Alan is part of the FEG Board of Directors and Head of the FEG Portfolio Management Team. He also serves as executive advisor on Xavier University’s Finance Board, sits on the Investment Committee for the Cincinnati Parks Foundation, and is a member of the CFA Society of Cincinnati.


Greg Dowling (00:05):

Welcome to the FEG Insight Bridge. This is Greg Dowling, head of research and CIO at FEG. This show spans global markets and institutional investments through conversations with some of the world's leading investments, economic and philanthropic minds, to provide insight on how institutional investors can survive and even thrive in the world of markets and finance. Our next guest is FEG's own, Alan Lenahan. Alan is FEG's recently promoted, CEO. We have had some tremendous external guests over the years. We also have some incredible internal talent here at FEG too, and we probably do not do enough to highlight it. So even for those who know him well, you'll enjoy hearing about his journey in the investment industry, his vision for FEG, his views on leadership and thoughts on the rapidly changing investment industry. Today, he will share with us some great stories from a long career in investing. Alan, welcome to the FEG Insight Bridge. Would you please introduce yourself?

Alan Lenahan (01:07):

Sure, Greg. It's great to be here. Alan Lenahan, I'm CEO here at FEG. Long time listener. First time caller. I think there's a burning question from your entire audience... Who canceled on you so that I'm in this seat right now.

Greg Dowling (01:22):

Ah, ah, you know what? We've had some great ones over the years, but today we have you and I'm glad you're here.

Alan Lenahan (01:29):

I'm glad to be here.

Greg Dowling (01:30):

We've had some tremendous external guests, but we have a lot of talent here and we probably don't do a great job of highlighting it. So we're starting with you. So if this is good, maybe in the future we'll highlight other FEG people.

Alan Lenahan (01:43):

Well, you've done a tremendous job with this podcast. Grown FEG and FEG awareness really spread the word about what we work on and who we work with. So for that, we're very appreciative.

Greg Dowling (01:54):

So before we talk about the firm and market trends, etc, let's spend a few minutes first getting to know you. So we have worked together for a very long time. So I knew you grew up in Louisville, Kentucky, but how did a kid from Kentucky become CEO of this big investment firm?

Alan Lenahan (02:12):

Well, we've worked together for a little bit of time. Let's start there. This will be our 21st year working together and for about the first decade, as you recall, anytime either of our name was said, it was said generally as Greg and Alan or Alan and Greg. because we were the hedge fund team.

Greg Dowling (02:28):

Preferred Greg and Alan, not Alan Greg.

Alan Lenahan (02:30):

I remember it as Alan and Greg, but we each have a selective memory there. But it's been an absolutely pleasure working with you. So that's nice. And you've heard some of those stories on our many trips around the world. Sourcing investment talent. For the audience, I'll, I'll spread the word a little bit. My story did start as a youngster growing up in Louisville, Kentucky. When I got the first bug for investing was after my sophomore year as an undecided major at Xavier University. I went to my father and said, I'm, you know, looking for some internships. He said, well, what do you want to do? And I said, I'm not sure, but I like what you do. I grew up with a dad who was a commodities broker. He had his own firm for a while. Worked for a number of A.G Edwards and some other institutions like that.

Alan Lenahan (03:16):

But his job was to primarily hedge crops for Kentucky farmers. So he traveled around the state, worked with farmers in preserving their income through hedging, and I'd spent enough time in his office in random summer days where I got stuck there looking at charts and knew it was interesting, but really didn't know that much about it. So after a couple years at Xavier University, I realized I think this finance thing is pretty interesting. So why don't I go to the source of my knowledge at that point. And my father was kind enough to give me an quote unquote internship. I don't recall being paid, but I did go to his office for that entire summer, confirm trades, work with their counterparties to make sure his futures contracts cleared, and kept learning and learned a lot. He took me on a couple trips around the state to do seminars with farmers to teach them about hedging their crops.

Alan Lenahan (04:12):

I learned a little bit about speculation because many times just hedging wasn't exciting enough for some of the clients. So we made some more speculative trades, but really got my feet wet on what investing and the, at least the commodities business was about. Went back to Xavier and immediately declared a finance major. And from there it was a great opportunity, primarily here in Cincinnati, working internships. Had a great internship with Chiquita. The Linder family here in Cincinnati, owned Chiquita, the banana business for decades and had an internship there. The banana business I learned was very difficult. I mean, you still, today, I'm not sure what they are, a pound, but it's less than a dollar. There's not a lot of margin in the banana business. In fact, the year I, or about 18 months I interned there, their highest profits were generated by my group. Now I was an intern. I didn't have a whole lot to do with this, but in hedging the Deutsche Mark about more than 50% of their business was European generated business at the time. Pre Euro, Deutsche Mark was the currency of choice to use to hedge and the treasury group. There's hedging program generated profits, well in excess of anything that could be made on bananas. So, great early career interning and learning from my father and Chiquita Bananas.

Greg Dowling (05:30):

Chiquita Bananas. So I'm going to lead the witness here, but, what was your dog's name growing up?

Alan Lenahan (05:37):

Oh, so and I didn't realize what this name meant until much later, but when I was a young child, we had a dog named Whipsaw. And if you kind of think about that in compared to my father's profession, the whipsaw was when the market rises quickly and falls or falls quickly and rises and you're on on the wrong side of the trade. So yeah, I didn't even know just how much I was being influenced towards finance and investing at a young age.

Greg Dowling (06:05):

Yeah, so I mean, that's the thing. You think of commodity trading especially, right? When you're playing trends, you can definitely get whipsawed. So what happens after you graduate from Xavier?

Alan Lenahan (06:15):

I was very fortunate. I did play soccer at Xavier University, like any graduate, good grades, but this was 1997 job market. I thought I would travel the world. I thought I would move to a big city. But I found an opportunity to work with a former Xavier soccer player, which is probably why he hired me at Arthur Anderson. So I was not tax, I was not audit. I was hired into the valuation services practice, which again was another fabulous baseline of learning for me and my career because we valued assets for both the audit and the tax groups. Tangible assets, intangible assets, complete businesses in a culture like that. At the time, a big five, aggressive competitive environment like that. Moving into that firm with another 50 or 75 staff members into the Cincinnati office, it was a great four year career really at Arthur Anderson. And yes, I was there just prior to the end of Arthur Anderson, which was the Enron fraud and learned a lot of lessons from that. Although I was here, I was not in Houston, I had nothing to do with Enron. Just for the record.

Greg Dowling (07:29):

You weren't valuing Enron's?

Alan Lenahan (07:31):

I did not perform any valuation of Enron balance sheet assets.

Greg Dowling (07:35):

Good to know. So from there, where do you go?

Alan Lenahan (07:38):

So I went to work with a former colleague from Chiquita that was within Treasury. Of course, warning valuation set me up well to be interested in mergers and acquisitions right down the street at Western and Southern Life Insurance Company. The former treasurer at Chiquita was very active in merger and acquisitions within the asset management space. By this time I'd also signed up for the CFA, I'd passed level one and level two and was interested in expanding my knowledge base across finance and investing. I went to Western Southern to work on M&A right before the tech collapse. Prior to the tech collapse, of course, everybody was extremely interested in asset management because those businesses were extremely profitable, seeing massive inflows and every year their top line increased just based on the growth of the stock market. It was an interesting time to jump into M&A and asset management because within about nine months of joining there, tech bubble collapsed and nobody wanted asset management anymore. But I did get to do a great deal of underwriting and M&A work in the interim. And some of that work was on investment managers that were very traditional, long only equity, long only fixed income. But a handful of firms we underwrote and I performed due diligence on, had groups or funds that were more interesting for me at that time. They were long and short, they were invested in commodities with trend-based strategies and I found that less constrained investment strategy extremely appealing as we did that work.

Greg Dowling (09:18):

So did that lead you to FEG?

Alan Lenahan (09:20):

It did. I joined FEG June of 2002 by the way, the same month I took and passed the third level of the CFA and got married. So change has always been something I'm comfortable with, but started June of 2002 as really the second research person focused on non-traditional investing alternatives, hedge funds, private equity.

Greg Dowling (09:45):

What does that journey look like here at FEG? You started out as just a junior analyst and now you're the CEO. So what happened in between?

Alan Lenahan (09:53):

It's been a fantastic 20 now two years, but at the time we were about 30 individuals, I think maybe $20 billion. All consulting assets in a office building down the street, very non-descript, small footprint. The growth has been absolutely tremendous. Maybe I'll spend a minute on the FEG story.

Greg Dowling (10:17):

Let's finish the Alan Lenahan story, then we'll go to the FEG story.

Alan Lenahan (10:20):

So there was about a decade connected at the hip with my work wife, Greg Dowling, which was focused on really combing the world for the greatest non-traditional hedge fund investment talent. Very proud of that work and being part of a research team that grew from about five to well over 20 in that timeframe. I mean, it's always a responsibility for us, for our clients to deliver exceptional investment results. And part of that is sourcing the greatest investment talent out there in the world. So whether it was the six tenants that we helped support and design or the processes around manager due diligence, the vetting, the constant monitoring efforts that you and I designed at the time, it was a great 10 year to build a solid framework for sourcing, monitoring, maintaining great talent to deliver alpha from there. And you might recall this back in our days in New York where we'd start the morning at Starbucks and pick up a Wall Street Journal.

Alan Lenahan (11:26):

I always did find myself gravitating towards the marketplace section of the journal. Of course, money and investing was my job and is absolutely a passion of mine. But building business, building the business more and more took my brain power and my interest. So with the time in research started transitioning to more client facing roles and responsibilities and over time moved from pure research effort to the portfolio management team and leading our OCIO effort from a business perspective, really that started about 10 years ago. At the time OCIO was still at nascent industry and what it meant and and how it was delivered was still from an industry perspective being designed and developed and we were in the same position of making sure our clients understood differences. What having full discretion meant, how we delivered a different experience for clients that had the OCIO mandate with us. So I helped develop process, procedure and the delivery of that business model to clients and found that extremely valuable, great growth. It happens to coincide with I think really a generational change in the do it yourself mentality that we see from investment committees being the key decision maker to maybe a more of a buyer build strategy where a decision to outsource to an expert or insource to a team that's been built. So all of this combined to create a great opportunity for FEG and myself personally to build out and work on that discretionary business.

Greg Dowling (13:08):

Alright, so we heard it, the journey, the Allen Lenahan FEG journey. So along the way, and I think you've kind of hit on a couple of these from a firm perspective, how has FEG changed since you've been here?

Alan Lenahan (13:19):

I'll bring in some of the learnings I've had from prior internships and work at Arthur Anderson and why I think we've gone the way we have. So when I started, as you know, we were a very closely owned partnership. In fact, I think it was the third month I was here at FEG, our founder Fred Diamond called a firm meeting to let everyone that didn't already know that he had a brain tumor and that was creating a need for liquidity and he would be retiring within the year and then he passed shortly after. So a very difficult time for an organization that was so proud. And the culture had been so well built around a founder like Fred. That created a need for a different governance model. And at the time we did not have the capability internally to get Fred and his family the value they needed for the great business he had built.

Alan Lenahan (14:17):

So we sold to Gold National Bank out of Evansville, Indiana. There was an auction process and we found a great owner. But very shortly after that sale, and I was still new at the firm and you were at the firm and knew as well, it was apparent that the third party ownership was not our optimal model forever. We knew that independence and objectivity was what we were founded for. Fred and his original founding group came out of a broker dealer because of the conflicts, because of the lack of transparency in fees, because of the lack of ability to build an open architecture best in class investment portfolio for clients, they said that's what these clients deserve. And they left that business to dedicate to an institutional non-for-profit open architecture, independent objective effort. It's hard to say we struggled with staying that way under bank ownership.

Alan Lenahan (15:16):

There were a lot more complexities and potential integration opportunities and from the bank's perspective, cross-selling opportunities and things like this. So for about three years we were owned by Old National Bank until we built up the capability to buy ourselves back out. And as you know with banks, sometimes they want to be in a non-core business and sometimes they want to exit those non-core businesses based on what the market and their investors or advisors are telling them. So we took the opportunity when they wanted to refocus on their core to buy ourselves back out. And then we went into generation two of a private partnership model where the time I think 10 partners bought us back out over time. We grew that to about a 14 partner group, which you and I participated in, and then we kind of reached stage three. So during this window of time, great growth, the business is really doing well.

Alan Lenahan (16:10):

We have a fantastic partnership group, but people get older and you can see that retirements are going to happen. And if you look at most partnerships throughout the history of time, one generation, two generation tends to work out about the third generation. You start to see cracks in that model. We saw that well ahead of time and said first and foremost, we have a desire to be an independent objective business. We have learned the lesson, analyzed all the different opportunities for transition and succession and settled on what we are today, which is maintaining an employee owned firm and business, which we employee owned firm and business, which we are extremely proud of. And I think that separates us in this industry that as you know and of this audience knows, has become a hotbed for acquisition and merger and all, all of these activities you've seen across many of our peers we're proudly independent objective.

Alan Lenahan (17:07):

And because we're employee owned, specifically as an ESOP, which we transitioned to six years ago, we have kind of cemented our ability to stay independent and objective for the rest of our history.

Greg Dowling (17:19):

What does an ESOP mean?

Alan Lenahan (17:20):

It means an employee stock ownership plan. You can look it up. We don't have time for however long this is going to be. We don't have time to get into all the specifics of that, but at the highest level, an ESOP is a retirement plan that is built on the company's value. All employees participate, so everybody you meet from FEG is an owner. The value of the business is distributed over the, in our case, the course of 30 years. And all current employees receive new shares each year. It is a retirement plan. And another great benefit of being an ESOP is because it's a retirement plan. We do not pay Uncle Sam's federal taxes. So from a cash flow perspective, from an ability to preserve capital, to grow, reinvest in the business, it's a fantastic model as long as you're willing to dedicate yourself to being independent and objective.

Greg Dowling (18:20):

Sounds like since you've been here, one of the big evolutions has really been ownership. Anything on the investment side?

Alan Lenahan (18:26):

Yes, of course the investment world is extremely dynamic, but I think any great investor needs to have a stable, long-term philosophical approach to investing that does not chase the fads of the day. And everything we do, it comes down to our clients. In fact, I think if you ask anybody at FEG why we exist, they'll be able to tell you FEG exists because our clients deserve an exceptional investment experience. I think the key words there are deserve and exceptional, but they deserve is because our clients are primarily really over 90% nonprofits that are saving the world, healing our children, educating, taking care of religious organizations. And from our perspective, those clients deserve really special results and special treatment. So they also, because it's primarily almost always an institutional tax exempt client base, have an extremely long-term investment horizon. So it's our job to shepherd their assets for the greatest success possible.

Alan Lenahan (19:39):

And that's maintaining a long-term mentality and designing a portfolio that has the right level of risk. That's been the way we've approached the starting point of investing throughout and has never changed and will never change. Now surely we've gone through tech bubbles and great financial crisis and a lost decade of no return from equity markets, declining rate environment forever in a rising rate environment. So the tactics to deliver that result have to adjust. And that's where our 30 plus person investment team research and portfolio management dig in every day to make sure we're current on the investment strategy. But from what has changed in investing, like it's just all, it's all kind of full circle from my perspective. We've got, you know, if you go back to nifty 50 and now the magnificent seven, there's always going to be some hot trend again, what hasn't changed the desire for, and I'll say Wall Street with quotes, but the desire for the asset management industry to push a new hot trend, something interesting, AI, Bitcoin, Super Seven, ETFs, hedge funds, venture capital, there's always a strategy that's being pushed. And from our perspective, there's a insincere goal to help our clients part with their hard earned money by following these trends and these fads. It's our job to protect them from that type of activity and stick with a long-term program that is focused on the right amount of risk and not letting emotions get in the way of good decision making.

Greg Dowling (21:18):

Alright, since you've been at the firm for a long time, how do you feel FEG has evolved since you first joined the company?

Alan Lenahan (21:27):

Sure. I talked a good bit about ownership structure and how that's evolved, but from a business perspective, there's been a great evolution, a significant evolution. When I started the term OCIO didn't exist. Everybody was a consultant and a non-discretionary format generally with either a staff of a CIO and a team that we supported or an investment committee that we supported. In fact, 2002 the year that I started here was the first year a client came to us and said, Hey look, we do everything that you're suggesting anyway. Can you just do it? Can you just execute on that? There wasn't really a name for it at that time, but we were happy to do that. We have a group of advisors individually working with clients that understand the specifics of the relationship and the governance model they follow and how strong their leadership is supported or whether they are truly an advisor.

Alan Lenahan (22:21):

And we were more than happy to fulfill that request and it opened our eyes to the fact that many of our clients could benefit from that type of relationship. And it wasn't long after that that I got involved in what we had now term the OCIO business. But the way we look at the world from, it's not really a business line perspective. We view our clients as important unique situations every time. And our goal working with a client, a new client, even a current client, is to understand how best to take what FEG does exceptionally well and deliver it to them. So we don't wanna specifically have business lines, OCIO consulting, etc. We really view it as a spectrum of services that FEG has capabilities in. We understand the client and their governance need and will design our capabilities to meet what they need from us.

Alan Lenahan (23:17):

If you want to look at how we define it, that spectrum starts with OCIO. That spectrum starts with FEG taking discretion over portfolio management decision making, that's manager hire and fire decisions, tactical positioning, rebalancing, all the operational aspect of the relationship. Really that's the highest and best use of everything that that FEG does across our investment team, operational teams, and advisor teams. Some clients have a perspective or an ability to manage pieces of the portfolio or pieces of those responsibilities and, and in that case we customize relationships to what we call delegated investing where we will take discretion over pieces of the portfolio and where the client is excited or has extra capability, they will own pieces of the relationship. And then you have the traditional business, which was the business that really only existed when I joined here and that's consulting where the client maintains the operational control, they maintain decision making on the manager level on the positioning or opportunistic level as well as of course the asset allocation level. And that's traditional consulting. We are fairly objective and open to working with clients in any one of those categories depending on what's best for them. And that's been a major shift and that's been a shift in the industry. I think we've got the most objective way of looking at it that I've seen where we are not motivated to push a client in any specific direction. It's understanding what's best for them and taking all of our capabilities and delivering that.

Greg Dowling (24:57):

Gotcha. So ownership has changed, our business model has evolved. What about investments? Have there been different types of investments over your career?

Alan Lenahan (25:07):

Well, if you go back to the early days of the hedge fund industry, there was a lot of alpha to be generated and there was alpha to be generated across the active, let's call it traditional or equity fixed income areas of the market. So what's really evolved is kind of regulation between Reg FD, the SEC, insider trading focus. What we've seen is a degradation in the ability for public market investors to find edge. There's more information, there's less unique information available 'cause it's broadcast to everybody immediately. And what used to exist as far as informational edge working with management teams, understanding businesses has become much tougher to come by where that's not the case. So we've seen a degradation in Alpha and we've, from traditional investment strategies where we haven't seen that because there is still informational edge to be had is in the private markets.

Alan Lenahan (26:09):

Of course our clients have increased allocations to private markets due to our recommendation and efforts for the last 30 years since the founding of FEG. But we continue to see great opportunity there with informational edge, alpha generation potential and really some of the greatest investment talent migrating away from public markets to private markets. I think, I don't have the exact numbers in front of me, but about a decade ago, I think it was Jim Simons at Deutsche Bank Hedge fund conference made the point that at the time the Russell 5,000 index of stocks only had 3,200 companies in it because there were no longer 5,000 public companies. Today that number continues to shrink and in fact over 90% of businesses with over $10 million of revenue private and only accessible through private markets. And they're more than happy to share information and, and have conversations and talk about their business with their investors.

Greg Dowling (27:08):

Jim Simon is the founder of Renaissance Technology.

Alan Lenahan (27:11):

Rentech, yes.

Greg Dowling (27:13):

One of the more famous and successful quant hedge funds out there. Alright, so we talked about the changes that you've seen over the last 20 years. You're now the CEO. Where do we go from here? So what is vision for FEG going forward?

Alan Lenahan (27:26):

I love investing. That's been my career. I love building businesses. Being the CEO has a really different primary focus and that is on people. I was at a conference late in the fall having a discussion with one of our peers, new CEO "people-ing" was the term that we came up with. And that is supporting these great organizations, FEG, through working on culture, working with people and for people. So as, as we move forward, my responsibility is making sure this talented group that we've built up over 35 years is equipped, has the resources they need and the motivation to succeed for the benefit of our clients. So what does that look like going forward? It's continuing culture focus. Really that for me started about eight years ago. Our CEO at the time said, Hey, I'm not sure about our culture. If everybody understands what's going on, can you lead a project to help define our culture?

Alan Lenahan (28:34):

And at the time I said, what do you mean? Like culture is, it's just natural. It just develops and it is grown within a company and then it expresses itself. And I started studying that. I'll never forget reading the book Sapiens, which really helped me understand what was going on with FEG and what goes on at many companies as they grow. When I started FEG, there were 30 people. We were all on one floor. Everybody knew each other, they knew their kids' names, they had the opportunity to speak with each other just about every day, if not interpersonally interact weekly. By the time we began this project, FEG was about 115 people or about 140 right now. What I came to understand is at a certain size, the ability for a group to have a shared vision, a shared mentality breaks down. And in the book Sapiens, they put the number around 30 to 40.

Alan Lenahan (29:31):

It's really kind of an extended family unit size at that size. Everybody can share with each other on a level where culture is natural and it is organic. Once you start getting beyond that, it actually does need to be managed and it needs to be projected from the top down. It needs to be communicated and rallied around. So we put a great deal of work into that effort back almost a decade ago. It resulted in tenants around culture that we believe in and hold ourselves accountable to here at FEG. Respect and excellence are the two key terms there. And part of my job as I go forward is to continue to manage, communicate, project culture so that everybody at FEG feels respected and then can deliver excellence. So the latest project there is I've reached out to everybody at the firm to set up one-on-one meetings.

Alan Lenahan (30:28):

I mean, I feel like I know a great deal of FEG organically, but there are a number of people that I don't know well and I want to know well, and I need to understand them, what motivates them, what they feel about their FEG journey and how we can build a firm that allows them to take their superpower and we know everybody's got one and align their superpower with what helps FEG and our clients generate results. There's more to it than that, but right now that's top of mind building culture, taking the great team and really unleashing superpowers for the benefit of our clients.

Greg Dowling (31:07):

So culture can be so squishy, right? So how would you define success? Like when you look back and say we accomplished it or we didn't accomplish it, how will you know?

Alan Lenahan (31:17):

So healthy things grow. I think I stole that from you, who I'm sure stole that from somebody else. If you can remember where you originally came up with that statement, Greg.

Greg Dowling (31:27):

I don't.

Alan Lenahan (31:27):

I think you were the first one. I heard say that FEG is growing and will continue to grow to create the opportunity for our people. We need to grow, we need to do it in a manageable way, which we have thus far. We'll continue to do it in a manageable way. So success from a business perspective is growth from a client perspective, they will benefit from that because we will retain great talent. We'll be able to continue to invest in the technology and the services they need to make their experience with us exceptional. And from an investment perspective, by maintaining that talent, by maintaining that growth internally, we'll continue to be able to deliver results and perform.

Alan Lenahan (32:13):

At the end of the day, we can care about our clients the most. I think we do. We can serve our clients the best. I think we do, but that doesn't matter unless we're generating performance results for their portfolio that give them the ability to fulfill their dreams, which is deliver on their missions at a level hopefully that they never imagined. I mean, that's the dream for us and what gets us out of bed every morning and excited, yeah, we get to do great investment work that, that we're passionate about, but we get to do it for clients that are making dreams come true and saving the world. And the more money we can make for them at the end of the day is what it really comes down to.

Greg Dowling (32:53):

You mentioned technology in your response. How do you think about technology, especially if you look at the market right now, it's all about AI technology and specifically AI. What is FEG doing?

Alan Lenahan (33:05):

We've been analyzing AI to help us with process for years. Staff's time is not best spent rewriting or writing paragraphs for research reports. It's best spent thinking, sourcing, and analyzing talent. The same can be said for processes across operations and processes across client development. So wherever AI can come in and take care of some of those mundane tasks, we're going to utilize it. So we've already begun doing that as far as utilizing AI to keep notes, take notes, summarize, take big data scrapes and deliver it and bite-size information. Your team did a great job. I think we took 25 30 investment bank and other economists and others outlooks for the 2024 market and put it all through AI and give us the top bullet points, the most contrarian statements, etc. Really easy way to take a great deal of data going forward. There will be utilizations for AI for higher level decision making. We haven't seen anything yet that we're ready to say. Let's just outsource investment decision making to AI. That's not going to happen in the short term.

Greg Dowling (34:26):

What about the CEO? Can we outsource the CEO through AI?

Alan Lenahan (34:30):

That is your dream. It's my dream too. I mean I clearly don't see a successor in this room, Greg. So I'm going to need to find something. And if it's a machine, a great artificial talent.

Alan Lenahan (34:43):

I like it. I like it. We might have, we might have to go with that.

Greg Dowling (34:45):

I like it. Well, very good. So I wanted to maybe close up with some advice that you could give to others. So first off, I mean, time is finite, right? And there's just so much information out there and you're in charge of knowing everything, right? Everything that goes on at FEG, you kind of have to know what's going on in the market. You're talking about culture and reading books. How do you stay informed and just continuously learn in such an evolving industry?

Alan Lenahan (35:12):

I listen a lot. We run a fantastic Monday morning research meeting here, which you lead Greg and condenses what's going on in the world from an economic market standpoint, down to a very solid 15 minute soundbite. So that's helpful in staying current with a current environment. But listening to clients is very key aspect of my responsibility. And as I transitioned into CEO, our retiring, CEO, Becky Wood was president and CEO, we split those responsibilities. So I'm CEO, Bill Goslee here. My colleague stepped into the president role and we did that very intentionally for the purpose of allowing both myself and Bill to be with clients, to spend time in the field to understand what they need, what they care about, and how we can continue to serve them. So yes, I stay current with markets, but even more important, I need to stay current with our client, our client base, and our prospective clients, what they're interested in and how FEG can build the solution that's right for them. So I get to travel just about every week to go see somebody, see a client, understand directly from them and listening to them I think is the key for FEG success. And of course they already said listening to our team, our team also has the opportunity open door, but also required 30 minute meeting with the CEO, so I can keep learning.

Greg Dowling (36:45):

Great. Do you have any advice for aspiring young leaders?

Alan Lenahan (36:49):

So I have 12-year-old, 14-year-old, 16-year-old, an 18-year-old that I'm constantly trying to give advice to and they of course won't listen. But when a young aspiring investment or finance person talks to me, I always suggest to become very strong technically in an area that you want to pursue, but never forget long term. The secret to success will be communication and people skills. So it's easy to dive in, be an analyst, get lost in data and analytics, and that will serve anybody well in the early parts of their career. But over time, more and more to grow and expand your capability to bring whoever you work for greater results, it's going to gravitate towards communication and people. So put yourself out there, sign up for the project where you know you're going to have to put the presentation on. You know, you're going to have to meet with a lot of individuals to lead a team or to be involved in a team. So combining the technical with the interpersonal and the communication, I think is the way to success for just about anybody.

Greg Dowling (38:01):

So if I'm hearing you correctly, you're saying that if you're a young aspiring leader, you should just work remotely.

Alan Lenahan (38:08):

Um, Greg, I know that's a trap, but remote's tough. Remote's tough in our business, especially. This is an apprenticeship business. I learned from everybody around me. Of course back then we showed up at the office every day and spent a great deal of time as a team discussing, debating, going to lunch, learning how to communicate individually and as a team, I don't think we'll ever replace that broadly, but especially in the investment business where yeah, you can get your CFA, fabulous certification, fabulous program, but it won't lead to long-term success in your career. You've got to do that oftentimes by learning from other people like you learn from those books. So look, flexibility, work life balance, when I talk about people and culture and retaining talent, those are important aspects for consideration, but they won't ever replace real human interaction and learning from your peers.

Greg Dowling (39:10):

I heard you say people that comes first. I also heard you mention a few books and you mentioned Sapiens earlier. So finally, do you have any favorite books on either investing or leadership?

Alan Lenahan (39:22):

Greg, you know me and I like to read short blurbs and snippets and I will not tell anyone that the secret of success is to read every book out there. I'm a little bit more of an intuitive person, so I don't want books to get in the way of original thought. That being said, I do read, I do enjoy reading, but I interviewed Melody Hobson at the FEG Investment Forum last year and she made a great book Recommendation, Unreasonable Hospitality by Will Gadara, I believe is his name, a chef and great restaurateur. And while not an investment book by any means, it is a book about taking care of clients and a hospitality mindset that directly applies to our organization and any organization that deals with expectations and exceeding expectations. So I'm about halfway through it, very entertaining and a lot of great takeaways for us and how we continue to create an exceptional investment experience for our deserving clients.

Greg Dowling (40:25):

Alright, respect and excellence. Alright, Alan, thank you so much for your time today. If people are interested, they can hear more from you while you are out and about on the circuit, you're out meeting with clients, you do quite a bit of writing and other things. So, yeah, anything else you wanted to highlight before we go?

Alan Lenahan (40:44):

No, Greg, just thank you for allowing me to access this amazing platform you've built to tell the FEG story. Hopefully connect with your audience that didn't get a deep dive on nuclear or the energy patch or anything that exciting today, but have a little bit of perspective about FEG, what we're going for here, and how excited we are to deliver results. So congratulations on building this fantastic podcast and thanks for taking it so easy on me.

Greg Dowling (41:16):

If you are interested in more information on FEG, check out our website@www.feg.com. And don't forget to subscribe to our communications. You don't miss the next episode. Please keep in mind that this information is intended to be general education that needs to be framed with a unique risk and return objectives of each client. Therefore, nobody should consider these to be FEG recommendations. This podcast was prepared by FEG. Neither the information nor any opinion expressed in this podcast constitutes an offer or an invitation to make an offer to buy or sell any securities. The views and opinions expressed by guest speakers are solely their own and do not necessarily represent the views or opinions of their firm or of FEG.

This was prepared by FEG (also known as Fund Evaluation Group, LLC), a federally registered investment adviser under the Investment Advisers Act of 1940, as amended, providing non-discretionary and discretionary investment advice to its clients on an individual basis. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Fund Evaluation Group, LLC, Form ADV Part 2A & 2B can be obtained by written request directly to: Fund Evaluation Group, LLC, 201 East Fifth Street, Suite 1600, Cincinnati, OH 45202, Attention: Compliance Department. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities. The information herein was obtained from various sources. FEG does not guarantee the accuracy or completeness of such information provided by third parties. The information is given as of the date indicated and believed to be reliable. FEG assumes no obligation to update this information, or to advise on further developments relating to it. Past performance is not an indicator or guarantee of future results. Diversification or Asset Allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss. The views or opinions expressed by guest speakers are solely their own and do not represent the views or opinions of Fund Evaluation Group, LLC.


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