ARCHIVE REPOST: Olcott Square Intro Letter
The following is a repost of a letter written January 2019 to friends, family and prospective clients.
I founded Olcott Square Investment Partners with the idea that incentives matter greatly. Accordingly, the firm is designed to be independent, aligned, accountable, and focused.
We are independent. We have no influencing affiliations with any financial institutions, no outside ownership interests to please, no quotas to hit, and no commission-based products to sell.
We are aligned. Substantially all of the principal’s investable assets are invested in the same holdings alongside our clients. We eat our own cooking.
We are accountable. We do not outsource accountability. You will never hear us blame performance on an external investment manager or on a mutual fund, because we do not use them. All investment decisions are generated internally. At the end of the day, we have to look our clients – in many cases friends and family – in the eyes and justify the veracity of a decision.
We are focused. We perform fee-based investment management and asset allocation services for our clients. We will never be distracted by ancillary activities or alternative revenue streams.
For many years I have given thought to this chapter of my life, knowing that one day the time would be right. More than a decade ago, in business school applications where each admissions committee inquires about a candidate’s longer-term goals, I described plans to “draw upon my entrepreneurial experiences from Sloan in opening my own investment management firm” and wrote that “a detailed prediction of how this future event will play out would be imprudent, but I can guarantee action”
Deciding on a name for the firm was a process that probably consumed more energy than it should have. I bounced ideas off several people whose opinions I value, searching for something that would represent an extension of the many parts of my life today that matter most to me. I decided to use a name that marks the center of the town where I live and raise my family.
Olcott Square in Bernardsville, New Jersey, is hardly a square at all. In fact, it’s more of a triangle, but its history is rich and respectable. Originally known as Fountain Square as far back as the mid-1700s, it was renamed Olcott Square circa 1906 in honor of Frederic Olcott’s philanthropic efforts. Olcott’s philanthropy included the acquisition and development of twenty-six acres of land that he would gift to Bernardsville as its first high school, and the purchase and gifting of the building that would become the town’s first public library. Through these acts, Olcott demonstrated his commitment to sustain the endeavor of lifelong learning, an ideal we strive for at Olcott Square Investment Partners.
Adding “Partners” to the firm’s name was also important to me. All of my investable assets are at the firm, the majority of which are invested in the same manner alongside client accounts. Whether we are having an up year or a down year, I will be feeling it as much as you. I view clients as partners in this respect and hope you view me the same. Likewise, for the companies we might invest in, an important consideration is whether the CEO and management treat shareholders as partners and whether they own a respectable amount of the company’s shares alongside our investment – enough where they, too, participate in both the downs and the ups. This is not necessarily synonymous with incentive compensation structures that management teams may have that offer them significant upside but no real downside, with those awards in some instances earned upon hitting performance targets based on things like revenue growth or operating profit levels rather than per share metrics that are more consistent with stockholder returns over time. Alignment is crucial from all angles, we believe.
My aspiration is to grow the value of our accounts – yours and mine – over a period of many years. If we are able to achieve reasonable rates of return, we may be able to look back after a decade and see a multiple or two of our original investment. Most of my time will be spent focusing on this rather than making solicitation efforts. If we do the former well, I am confident the latter will happen organically and through word of mouth.
Finally, I would be remiss if I failed to thank my wife, Lauren, for giving me the green light to pursue this journey. Partly in anticipation of this, she has continued her career, which in turn affords me a tremendous runway to focus my efforts on investing rather than over-allocating my time in a sprint to land new clients. The consequence is that the firm might “grow” its investor base more slowly, but I believe we will all be better rewarded longer-term for this selective focus today.
The time is indeed right. And so, Olcott Square Investment Partners was established in September 2018.
Brian J. Glenn, CFA
Olcott Square Investment Partners, LLC