“The way we've always done it” might be the guiding principle for some firms, but for the founding partners of Balentine LLC, which runs $1.6 billion, it's a good reason to do the opposite.
Chairman and CEO Robert M. Balentine already has experienced the traditional approach several times, first with Merrill, Lynch, Pierce, Fenner & Smith, and then as co-founder with his father of Balentine & Co. in 1987. When it was acquired in 2002 by Wilmington Trust Co., Robert Balentine stayed on as chairman and CEO of the investment management division, which managed $36 billion in assets.
But by 2009, Mr. Balentine and colleague Jeffrey P. Adams knew there had to be a better way, so they started their own firm. “We restarted Balentine on the fundamental of client focus, as if we had a clean piece of paper,” said Mr. Adams, the firm's president and partner.
The two also felt strongly that CIO outsourcing would grow substantially, particularly among the endowments and foundations that make up the bulk of their institutional clients.
To get the best results for clients, the founders wanted to instill in their staff a sense of a common goal, “instead of barriers based on job descriptions,” said Mr. Balentine. “It took me awhile to wrap my head around it, but it is a very refreshing environment because it eliminates competition within the firm. Like a football team, it's not about the star player, it's about winning. It's not just the people on the front lines making it happen.”
Creating a sense of teamwork starts with what Mr. Adams calls an “agonizingly slow hiring process” that includes a psychological profile and some serious grilling on an applicant's volunteer activities, a core Balentine value. Unusual resumes — like the former video game designer who now handles strategic communications — are encouraged. “It's a culture of openness and respect for diversity and innovation,” said one employee.
The teamwork is nurtured through Thursday morning “what's-on-your-mind” meetings where all staff members are encouraged to speak up regardless of experience.
Staffers also appreciate a Lunch & Learn series that covers everything from the demystification of hedge funds to public speaking. “We get better about talking about things,” said Adrian Cronje, chief investment officer and partner, whose investment team includes several former CIOs from much larger firms. “That promotes collaboration and it helps drive innovation.”
The chance for advancement and financial gain as a partner or as part of a profit-sharing pool also helps motivate people. “Everybody in the firm has the ability to become a partner,” said Mr. Balentine. “If you take care of the employees, that comes through to the client, and that returns profits to the owners.”
Balentine clients also like that “we eat our own cooking,” he said. “We invest 100% of our capital right along with our clients.” They also appreciate the strong emphasis on volunteer activity by all staff members, many of whom serve on local and professional boards and committees. “It's part of our DNA,” said Mr. Balentine. “I think our endowment clients truly appreciate that our people give back, and it helps us because it gives us insight into how boards think.”
Balentine clients chime in through frequent client surveys, rating the firm's culture and community involvement ahead of their investment returns. As one Balentine employee puts it: “We are like a giant family.”
