Nearly three years of bad markets have created the perfect environment for Hirtle, Callaghan & Co., which provides what might be called rent-a-CIO services.
Hirtle, Callaghan, West Conshohocken, Pa., provides a completely outsourced investment committee for plan sponsors, taking over tasks from the creation of investment policy guidelines to manager selection and monitoring. Many clients can eliminate their pension plan investment staff after hiring the firm. About 35% of clients are institutional, but 65% of directed assets come from institutional investors. The balance of clients is high net-worth individuals and family offices.
With 40 people on staff, 220 clients and $6 billion under direct supervision, the company is able to spread the costs of reviewing custodians, brokers, asset managers, credit lenders, etc., across a broad universe. "We are the free-enterprise version of a co-op," said Jonathan J. Hirtle, founder and principal.
The firm assigns a regional representative to every client but makes investment decisions by committee, which "keeps us from making big mistakes. Any suggestion for investment changes has to run through a committee at Hirtle, Callaghan, just like in an internal investment committee," Mr. Hirtle said. All Hirtle, Callaghan staff have investment management experience, and many are qualified to be chief investment officers - indeed, many were CIOs in their past lives, Mr. Hirtle said.
The company has been in business for 15 years, but the business has really taken flight lately, with 20% growth in each of the last five years, said Mr. Hirtle. "Business is picking up because this kind of market is exposing the cracks. We do well during times when money is in motion, like now, when everyone is unhappy," Mr. Hirtle said.