Andrew A. Ziegler is chief executive officer of Artisan Partners LP, Milwaukee, an equity boutique he founded in 1995 with his wife, portfolio manager Carlene Murphy Ziegler. Both came from Strong Capital Management, where Mr. Ziegler was president and chief operating officer. Artisan's primary focus is institutional. Five domestic strategies and one international growth equity strategy are offered through separate accounts and mutual funds. The company's annual growth has been between 50% and 100%. With a 25-year agreement from backers Hellman & Friedman and Sutter Hill Ventures, Mr. Ziegler is adamant the company has no need to sell and will remain independent. Mr. Ziegler said his biggest passions "are this place - Artisan - and my five kids" who range in age from 7 to 19. Intense focus on the lives of his children, skiing, maps and an interest in residential architecture are what rejuvenates this CEO.
Q How did you get into money management?
A I was a partner in a large law firm here in town and had concluded after a period of time practicing law that it wasn't very interesting to me because there was very little opportunity to create value. What I like is to create value. I like building things, putting things together, making a plan, a road map - creating value.
What my clients were doing was much more exciting than what I was doing, and I decided I was going to go over there. I got into investment management almost by accident because I had a client whose business was in a fairly serious situation and they asked me to come and help them. He (Dick Strong) was willing to give me lots and lots of responsibility, so that's how I got into investment management. It's an exciting industry. It's invigorating. And I turned out to be pretty good at it, so I stayed with it. That's the story.
Q What was the big vision when you started your firm?
A There isn't a big vision. There's a little vision. Change in business is rarely big-vision stuff.
We looked at the world and said ... If you brought together a really outstanding business management team, built an infrastructure and then brought in outstanding, high-alpha managers that were at the top of their asset class, you'd have something. And then if you kept your focus - and this is the most important part - if you kept your focus on clients, you could build a firm that created some value for the people that work there and for your investors and for clients.
Q Why focus so much on clients?
A Here's the problem in the investment world: Most people don't focus on clients. Most people focus on assets under management. And we would argue (that) when you start to focus on assets under management, that is actually inconsistent with the best interest of clients. We don't talk about marketing and we don't think about assets under management. If we're not focused on assets under management, it's really easy for us to turn down half the searches we're asked to participate in.
We could be a multiple of how big we are now, but would the business be as good as it is? I don't think so. It's almost religion here not to focus on asset levels.
Q Are new investment strategies planned?
A Global growth is interesting to us. We've got a team and a fellow who most people consider to be the No. 1 international growth manager, Mark Yockey. And we've got a team and a fellow that most people consider to be if not No. 1, certainly among the top U.S. growth managers. So what we're working on is a way to combine those two for clients that want global growth coverage.
Most of what we'll do in terms of new offerings is what we've done historically - liftouts or acquisitions. What we are really keen on is if we could find an international value team that offers us the kind of elegant process and consistency that Mark Yockey does in international growth, we'd do it. Or if we could find someone who ran a global value strategy.
Q How do you find portfolio managers?
A We talk to sell-side firms to see who they think is good. We talk to portfolio managers about who they respect and admire. We talk to consultants about who they think is good. We talk to clients about who they think is good. We comb the data bases.
Here's a great example. The first thing that happens when the new hard copy of Morningstar comes in is that I sit down and read it. That's how I found Scott Satterwhite. Scott Satterwhite was down at Wachovia Bank, running what was then the Biltmore Special Values Fund: five-star fund; elegant process; great consistency; incredibly intelligent man; $14 million in assets. The day that report came out, I read the whole report and it looked so exciting to me that I called Scott the next morning and said, `You've never heard of me, my name is Andy Ziegler from a little investment firm, I want to come down and see you.' I did and it proved to be even better than we were hoping it would be. Mr. Satterwhite manages $2 billion in small-cap value assets.
But that's one way, not the only way we do it. A lot of times, it's just turning over a lot of rocks. We probably look at 100 to 150 PMs a year. We've hired three out of all those.
Q What are you looking for in portfolio managers?
A When I look for portfolio management talent, I always look for unconventional backgrounds and different perspectives and with that, a lot of maturity, a lot of independence ... do you know that movie Forrest Gump? You know how Forrest Gump was always going around being successful and stuff, but it didn't really dawn on him? What I want in a portfolio manager is somebody not who's a contrarian ... but someone who has such self-confidence and such a different perspective that he or she doesn't even know where the crowd is. They're out there doing their thing and creating value in their way and they don't really care about the rest of the world. If you can find that, that's a really important ingredient. That and intellect. That's what we're really looking for.
Q Do you work closely with your wife?
A What we do on a day-to-day basis is very different and we don't spend a lot of time together at the office. So what we've done, sort of so Carlene and I can hang around a little bit, is I am the client service person for her strategy. That's only a dozen clients or so. But that gives us an opportunity to go to the committee meetings together so we can travel together and have dinner together and work on something together. The ancillary benefit is that I get to spend some time with clients.