Doni Fordyce was given a mandate when she became CEO of Bear Stearns Asset Management Inc.: Grow the business organically, no liftouts, no acquisitions. It was a tall order for a small asset management company, which had just $8.2 billion under management when Ms. Fordyce joined the firm in 1996 as director of marketing and product development. But Ms. Fordyce had experience in firm building at Goldman, Sachs & Co., where she started in the structured bond portfolio group and ended up 11 years later as head of institutional marketing. Ms. Fordyce was part of the group that ushered Goldman Sachs into asset management in 1988. Ms. Fordyce fulfilled the Bear Stearns goal by creating or expanding alternative investments, structured strategies, mutual funds, separate accounts and wrap programs. The assets were $21.6 billion by the end of 2001. Now, at last, Ms. Fordyce is permitting herself to consider growth by acquisition. She talked with reporter Christine Williamson about her job and the future at Bear Stearns.
Q Why did you enter the asset management business?
A Well, I didn't think of asset management coming out of college. I was a math and economics major and I tended to gravitate to things that are mathematical in nature that I could solve. Problem solving I love to do. I loved reading about what was going on in the economy and how it impacted different things. Also, I think asset management has a very practical aspect. Every day you deal with finance in the portfolio and how to invest your dollars to become greater. I always worked my way through school and always tried to invest my money. I think the practical as well as the theoretical experience had an awful lot to do with it.
Q Have you ever managed money?
A I managed bond portfolios here and there. I've never managed an equity portfolio. I did a lot of modeling and structuring of portfolios, but no, I never really wanted to be chained to a chair, quite honestly.
For me, the part of asset management I enjoyed the most was building and structuring products. That's where I gravitated, when Goldman, Sachs was growing, toward building the business by creating new product ideas, structuring new products, working with the lawyers and the compliance people, and setting up the technology you needed to service it, visiting with the clients to find out what they liked and didn't like.
Q What are your days like?
A Every single day is different. I'm concerned about the clients, the technology, the portfolio managers, the media, the marketing literature, the budget, the planning, the strategic planning, the new product side. Every single day has a new challenge.
Q Are there days when you think you simply can't deal with anything else?
A No. I thrive on this. It's my life. I've got children, the office, I work out. Everything I do is in constant change. The challenge for me is to have the ability to manage that change and manage it well - and make good decisions consistently in every single situation. You don't make good decisions every time. I make mistakes. But to be able to learn from it for the next decision is important.
My best days are when I walk in and I have five problems to solve. I solve those problems and then I have time to think about my next business plan or where we're going to go or who we're going to hire.
Q Have you ever thought about setting up your own money management firm?
A No. Never. I don't think I would. Quite honestly, I love large environments because of the resources. They're very stimulating, they tend to be complex and have very very bright people. One of the things about growing up at Goldman, Sachs is that you were in this training program with a lot of very bright people who added tremendous value, and you could always learn from someone on your left or right. I do much better in an environment where people challenge me and push me and I can learn from different aspects of the business.
Q Do you have a star system or a team approach?
A We have both a team approach here, and we have stars. Both present their own challenges.
I prefer to have a team approach because you tend to have better ideas because people challenge those ideas and tend to make better decisions. And I think in the asset management world people tend to get burned out and it helps to be able to rely on someone who you can trust to say "Gee, what do you think about this?"
Having said that, there are some stars in our organization. They have a very particular expertise that they have built a career upon and the knowledge of that particular product area is in their heads. Certain people operate better when they work alone. And you have to respect that. I wouldn't want to have a lot of those guys because you can't scale it. Having a few of them around, if they're good leaders and people respect them and they've done extremely well, isn't a bad thing.
Q What are you missing at Bear Stearns?
A We have a lot of the product that will enable us to grow the firm. Our biggest hole right now is distribution. If you think about it, we're a great manufacturer. We have lots of product, good track records, we have great talented people, but we don't have a huge distribution network.
Q Will you build distribution?
A Maybe we'll rent it. The answer is, I think we'll have to do both - renting and building. I think I'll have to build something more than we have today, especially for the high-net worth market. I'm spending lots of time thinking about how to do this.
Q What changed your mind about acquisitions vs. an organic build-out?
A Initially, when I came in, we were a one-product shop and we had to set in place a platform to build and grow. I also had to prove my ability to recruit people, to manage a business profitably and to develop credibility within the organization.
Five or six years later, as a team in the asset management business, we have gained some respect for our ability to grow, to recruit, to sustain our P&L in bad markets and in good markets. Bear Stearns now is very open to how we can build and grow the firm.
Q If you had to change careers today, what would you do?
A At some point, I'd love the challenge of being the CEO of another organization outside asset management. Maybe being the president of a product and service-oriented firm would be challenging. Something completely different, where you could use all the management skills. I'd like something client-oriented. I really love working closely with clients.