Jonathan Hirtle, founder and chairman of Hirtle, Callaghan & Co., has been called the “Oracle of Outsource” by Pension & Investments magazine for his work pioneering the “outsourced chief investment officer” business model for families and institutions. 

Here, Hirtle speaks with Wealth Management’s David Armstrong about the opportunity he saw to start the firm 35 years ago to bring  investment management services out of the banks, brokerages and product shops and offering it directly to wealthy families and institutions that aren’t quite wealthy enough to support their own in-house investment teams, and doing so without the conflicts of interest that often come with using traditional financial services.. 

Hirtle speaks about growing the firm to $20 billion in AUM, his team’s approach to the markets, how he builds portfolios and why the need for unconflicted and actively managed portfolios are even more important today than they were when he founded the company. 

Specifically, David and Jon discuss:

• How Hirtle, Callaghan & Co, took inspiration from the likes of Yale University’s  “endowment model” and Arthur Miltenberger, the chief investment officer for the Richard K. Mellon family office, and wanted to bring a similar level of dedicated investment management to a broader swath of clients. 
  
• The market taxonomy his team uses when evaluating all investment opportunities.
  
• His thoughts on John Bogle, founder of Vanguard. 
  
• How the investable market is tilting ever more heavily toward private companies, and far less toward publicly traded firms, and the opportunities – and risks – that exist for clients in alternatives. 
  
• How his firm charges clients, and why it’s important:. “We may be wrong, but we’ll never be conflicted.” 
  
• The attraction of “mission-oriented” clients and how his firm helps those clients navigate the balance between good returns and good impact. 
  
• Why the firm has been adamant about avoiding the red-hot M&A market for RIAs, but has started to pursue a strategy of finding smaller “lift outs” of like-minded advisors across the country that fit the firm’s ethos and value proposition.  
  

Resources:

RIA Edge Podcast

Connect With David Armstrong:

• WealthManagement.com
  
• LinkedIn: WealthManagment.com
  
• LinkedIn: David Armstrong
  
• Twitter: David Armstrong
  
• LinkedIn: Informa
  

Connect With John Hirtle:

• LinkedIn: Jon Hirtle
  
• Company Website: Hirtle, Callaghan & Co.
  
• Company LinkedIn: Hirtle, Callaghan & Co.
  

About Our Guest:

Jon is the Executive Chairman of Hirtle Callaghan. He also chairs the board of directors and serves on the Investment Policy Committee. Prior to founding Hirtle Callaghan in 1988, Jon worked at Goldman Sachs advising family groups and institutions on investment strategy and securities selection. He received his Bachelor of Science and M.B.A. degrees from Penn State. Jon served as an infantry officer in the United States Marine Corps from 1975 to 1982 and is a member of the Governing Council of the Miller Center for Public Affairs at the University of Virginia.