Helping managers understand risk and reward.
Sounds simple enough? Thats the mission of Tina Byles Williams, Founder and CEO of FIS Group. The firm, which bills itself as a as a manager-of-managers, launched in 1996 and set out to find entrepreneurial managers that can find the opportunities in market segments where the potential risks and rewards are often misunderstood. In a conversation with Traders Magazine, Byles Williams discussed her business and approach to helping companies solve problems and make smarter investment and business choices.
Byles Williams told Traders Magazine that FIS Group was built on the foundation that diversity can be an alpha driver for investors.
FIS Group has brought over 160 investment firms into its portfolios, 60 percent of which are women and minority-owned, Byles Williams explained. FIS Group has funded over 75 products offered by diverse firms. Among the boutique firms FIS Group has funded, 50 percent were recommended or retained for direct allocations by pension plan sponsors.
Byles Williams founded FIS Group 21 years ago and has over 31 years of investment experience. She is the chief investment strategist and portfolio manager for the firm’s global equities product. As Chief Investment Officer, she chairs the firm’s Investment Committee, overseeing all investment strategy, manager search and disposition decisions. Prior to founding FIS Group, Ms. Byles Williams was a principal and senior consultant with the investment consulting firm WHP, Inc.
Before joining WHP, Byles Williams served as Chief Investment Officer to the City of Philadelphia’s $2.5 billionBoard of Pensions and Retirement. Prior to her work with the Board of Pensions and Retirement, she was Chief Investment Officer for the $300 million Philadelphia Gas Works Pension Fund.She knows the buyside intimately nd the challenged it faces when sourcing alpha.
In addition to providing early funding to managers, she added, through the FIS Ecosystem, FIS Group supports and develops the growth of entrepreneurial and emerging managers by addressing many of the development challenges they face. This ecosystem is built to provide networking, best practice guidance, coaching, access to a network of private operating capital providers and meaningful discounts for various investment management support services.
So where does she look for investment opportunities?
We will source globally, she began. We look to find talented, lesser-known managers in frontier and emerging markets. We also like regional specialists – thats a big part of our business.
Byles Williams explained that at first FIS Group only looked for domestic opportunities, but as alpha became harder to source, the firm expanded globally.
We now encourage looking overseas for opportunities, she said. The value proposition in these market segments is tremendous. In the last five years, weve focused on these strategies and boutique firms that can help in some of these liquidity-challenged markets.
Also, part of her philosophy is to provide research – and not on particular securities but rather on the market structure and trends.
When searching for local managers, our research analysts look for days to source talent, Byles Williams explained. This allows us to be the first funder for some of these managers in some instances. From there, we are able to establish a relationship and help them negotiate their asset under management (AUM) capacity. This is a meaningful benefit to getting to these firms first.
But getting there first also means FIS Group has to perform a great deal of due diligence. FIS Group, and in some cases Byles Williams herself, will visit the manager wherever they are located. In some instances, this vetting process requires several trips.
This entire process takes at least one year, she explained. Were always on lookout for talent. Once approved after this extended vetting, they become part of the FIS Group stable.
FIS Group currently has relationships with almost 100 managers on its recommended buy list. And of those, FIS has committed capital to 50. And once getting on this list doesnt mean a firm is there for the long haul. FIS has had to remove managers if they fail to meet standards. Byles wiliams said the firm reviews a managers capitalization, stress limits, network of vendors, trading systems, accounting systems and even compliance providers.
At the end of the day, Byles Williams wants to allow these nascent firms to acquire services that would make them U.S. institutional investor ready. And stay that way.
Over the course of the year, we could remove 20 or so firms, Byles Williams said. Our investment committee meets weekly and approves or removes managers.
