Publications

- September 1, 2017: Vol. 4, Number 9

The Best Unmade Plans: Chevy Chase Trust CIO Amy Raskin never drafted a professional blueprint, but her opportunism has blazed a torrid career path

by Mike Consol

Fortunately for Amy Raskin, life did not always go according to plan. She had no particular calling in life when she headed off to the University of Pennsylvania to pursue an engineering degree, despite having “no idea” how she would apply it professionally.

This much she did know: Her father — an actuary who worked for Buck Consulting and The Wyatt Co. (now Watson Wyatt Worldwide) before opening his own consulting business — insisted that he would pay for his three daughters’ college educations with the proviso they got accepted at institutions of higher learning that were “significantly better than a state school.”

A young Amy Raskin cleared that hurdle with an acceptance letter from Penn, but her father had a secondary stipulation, that college was a means to an end. In other words, select a major with a direct path to a profession with gainful employment opportunities. Hence, her decision to study engineering.

“My father’s famous saying was, ‘Go to museums on the weekends if you want to broaden your horizons,’” she recalls.

Let us remember that Mr. Raskin was an actuary, after all, and was in the business of ascertaining predictable and financially viable outcomes. With respect to his youngest daughter, his calculations might have grandly exceeded expectations. Today, after making short order of that engineering degree, Amy Raskin is CIO of Chevy Chase Trust Investment Advisors with responsibility for $26 billion in assets the organization has under management. Hence, “The $26 billion woman” moniker bestowed upon her by the Washington (D.C.) Business Journal.

WHEN THE SMOKE CLEARED

Raskin’s paternal grandfather had a cigar stand on the bottom level of the New York Stock Exchange that she visited occasionally as a child, and her grandmother sold bull and bear jewelry from the stand. (Raskin never took up her grandfather’s cigar-smoking habit, though her grandmother smoked cigars and lived to age 102.)

“I grew up around stocks and hearing about them,” she says. “So, I certainly knew what they were and I knew about how people traded stocks.”

Still, Raskin says, there was not an inkling she was destined for the financial profession at that point in her life. It was not until, consistent with her college program of study, she started her career as an engineer installing telecom systems at J.P. Morgan offices in New York City and London that the prospects of a career in financial services began to dawn. It was while in London she took notice of the team of investment banking analysts about her age, working harder and making more money than she was, and they appeared to be doing more interesting work.

Such number-intensive work as investment banking might seem droll to most people who consider numbers sterile and impersonal, but Raskin sees numbers as living and breathing strands of genetic code that often tell stories about companies that company executives are loath to confess.

Financial statements are puzzles, to Raskin, and puzzles are something she has been passionate about since childhood, when she spent so many hours assembling jigsaw puzzles that her parents set limits on the amount of time each day she was allowed to indulge.

“Most kids had limited hours watching TV, I had limited hours for doing jigsaw puzzles, so that tells you something,” she says — such as, perhaps, she inherited her father’s facility and affinity for numbers and analysis.

A crossword puzzle is still usually a part of her daily regimen.

Raskin’s exposure to J.P. Morgan investment bankers convinced her to switch fields from telecom to finance by joining a two-year investment analyst program at Lehman Bros. upon her return to the United States. After completing the program she worked in mergers and acquisitions at Lehman until 1999, working seven days a week and 12 to 16 hours per day.

“It was an incredible education,” she says. “That was where I really learned finance.”

Raskin would play a game where she examined a financial statement and tried to deduce what the company did by looking at sales growth, inventory turns, the balance sheet and so on.

“I just loved the stories that financial statements told me about a company,” she says. “They are incredibly revealing if you look at them carefully, which, interestingly, not a lot of people do.”

While doing M&A at Lehman Bros. she worked for an executive named Les Fabuss who promoted Raskin through the ranks, giving her access to the management teams of companies they were representing.

“I was in every meeting and I was given responsibility for doing work above where my title would lend itself. I learned so much in those five years,” she recalls. “It was grueling work. I loved every minute of it.”

Eventually, though, she was struck with the realization that convinced her to change her career course.

“I loved banking but I didn’t think I would be a great senior banker,” she says. “There is a lot of selling when you become a managing director in investment banking. I actually liked the work part of it more than the selling.”

She left Lehman in 1999 to join Donaldson, Luftkin & Jenrette and become a telecom equipment research analyst, right when telecom equipment had become a fully inflated bubble and was ready to burst. The first major turn of events at her new post was not a bursting telecom bubble, however. It was news that DLJ was being sold to First Boston just a year after she joined the firm, prompting her to make another course correction, even though First Boston had offered her a position with the merged organization. There were several other job offers on the table, including being offered the telecom equipment analyst post at Alliance Capital, an offer she accepted, bypassing several positions offering considerably more money, though for roles she considered less suitable.

She worked the telecom desk at Alliance Capital and picked up other sectors along the way. No sooner did Raskin get settled at Alliance Capital than it subsequently merged with Sanford Bernstein to become AllianceBernstein. When the telecom bubble finally burst, Raskin became an analyst in aerospace defense, a sector for which she did M&A deals during her Lehman days.

Another career inflection point came her way in 2003 when AllianceBernstein CEO Lew Sanders put Raskin in charge of building her own research team — a major score for a Wall Street analyst still in her early 30s.

Raskin’s work ethic and analytical skills convinced Sanders to offer her the opportunity to form a new research team called the Research on Strategic Change Group. The mission of that group was to look for investable ideas that stem from economic or technological changes powerful enough to profoundly influence corporate performance across multiple industries. In essence, it looked for the gaps in the financial business’s coverage of industries.

That new assignment turned out to be the first step in leading Raskin into the realm of thematic investing, which is the guiding principle of the investment strategy she leads today at Chevy Chase Trust.

“That became a very successful group within AllianceBernstein,” she says. “I went on to run the entire U.S. growth research department, then a global analyst team, and then the venture capital business.”

As part of her duties at AllianceBernstein, Raskin would give speeches around the world, in places as far flung as China, Vietnam and South Africa.

“I would take my father because he likes to travel and wanted to see the world,” she says. “We would go to these big venues and I would give speeches to hundreds of people. My father would be in the audience and would tell everybody how proud he is of me, but didn’t tell me as frequently as I wished.”

That unspoken pride has not damaged the father/daughter relationship, as Raskin says their relationship is strong and that her father remains a “guiding force” in her life.

THE HUNTER AND THE HUNTED

Clearly, Raskin was operating with a hot hand, so it would come as no surprise when executive recruiter George Wilbanks of Wilbanks Partners called to present a new opportunity, the CIO post at Chevy Chase Trust.

“I really hadn’t taken a headhunter call in about 12 years but he said it was a thematic investing opportunity, and those don’t come along that often,” she recalls. “So I listened and I met with him and I was intrigued enough to come down to Maryland.”

There she met Peter Welber, the CEO of Chevy Chase Trust, as well as other team members.

“Honestly, from the first time I got here, I kind of fell in love with Chevy Chase Trust,” she says. “It was a great mesh of my skill sets and what the company was looking for. It has been my best career move.”

At Chevy Chase Trust, she is dealing with clients with minimum investable assets of $3 million, including individuals, families, foundations, endowments and other institutional investors. The biggest issue Raskin sees with incoming clients is portfolios that are over diversified.

“They are paying fees upon fees and not really getting exposure to anything,” she explains. “What we do for most clients is invest them in 40 to 50 individual stocks, and individual bonds. That way, I really have an idea of what the exposure is and I can manage it. It’s pretty simple.”

Though now a CIO, Raskin says research is still in her blood, and the thematic investing skills she developed at AllianceBernstein are now being used to create investment themes at Chevy Chase Trust. It is the themes that drive everything Chevy Chase Trust does with its investment portfolios. The organization has five to seven investment themes at any one time, the multiple themes assuring client portfolios are adequately diversified. Raskin credits this thematic approach for differentiating Chevy Chase Trust from its competitors and providing a conceptual investment framework that is relatable.

Though she naturally expresses confidence in all of Chevy Chase Trust’s themes, Raskin is especially aglow about one that encompasses molecular medicine and the profound breakthroughs of bioscience. Consider the human genome, Raskin says, which, when first sequenced in 2003, took 13 years and cost roughly $3.5 billion. Today, we can sequence a genome in 24 to 48 hours at a cost of about $1,500.

“Actually understanding the mutations in our genome and which mutations lead to disease is really the core of how to cure diseases,” she explains. “The sequencing technology is getting better and cheaper and faster and as that proliferates and expands I think we’re going to make medicine a true science where your genome will be sequenced and doctors will actually understand what specific gene and what specific mutation is causing a disease and design a very targeted treatment.”

BUILDING PRESSURE

The day Raskin spoke with Real Assets Adviser, news broke that 222,000 new U.S. jobs had been created during the month of June, a number that put her on edge.

“I would have preferred it to be a much lower number,” she says, expressing concern the economy might be tightening in a way that signals an imminent downturn.

Among the macroeconomic forces Raskin sees at play are structural and secular deflationary pressures that will not go away any time soon, and may be intensifying.

“Amazon itself is a huge factor in deflation, or at least lower inflation tendencies,” she says, in addition to demographic trends, such as baby boomers moving into a stage of life when the volume of their purchases are diminishing. “There are a lot of deflationary pressures in the economy and I don’t see them going away.”

To underscore the situation, Raskin points to Japan, which has used an aggressive economic stimulus program and still cannot muster any inflation.

FISTFIGHTS IN THE BOARD ROOM

Raskin says Chevy Chase Trust has not yet taken a defensive posture with its client portfolios, though it has added a theme to the portfolios that addresses the current situation and has started the repositioning process. By her estimation, the United States is closer to the end of the current business cycle than other developed markets, which is why the firm has increased its international holdings.

“That move has been a big help for us this year,” she says.

While international holdings are on the rise at Chevy Chase Trust, emerging markets are not places you will find Raskin placing very many bets, and that includes China. Despite all its potential, Raskin is wary of China, calling it “scary and dangerous” because of its government’s lack of openness and the business sector’s lack of transparency. She recalled an investment in a Chinese company she participated in during her days with the AllianceBernstein venture fund that ran amok.

“I saw up close a lot of the governance and licensing issues,” she says. “It’s fraught with risk.”

It was a company that had been given one of only three available GPS licenses in China and looked like a blue-chip investment. But the GPS license was revoked and restored multiple times, and there were literally fistfights in the boardroom. Not exactly the business environment Raskin and her AllianceBernstein colleagues expected their dollars would underwrite.

“The traditional analysis that we do on companies in developed markets and many emerging markets just didn’t apply in China,” she concludes.

TURNING POINTS

Raskin initially resisted the opportunity to run her own research team at AllianceBernstein, in part because she liked what she was doing and was not looking for a new challenge at the time. But the larger barrier standing between Raskin and “yes” was misgivings about her ability to successfully do that job.

“Lew Sanders pushed me to take it. He said, ‘You should do this. This is going to be good for your career.’ He believed in me and he saw that I could do it,” she says.

It was not the first time Raskin was thrown into the deep end of a pool she considered too large to navigate. She identified one of her most memorable clients as British Aerospace. Her boss at the time, Les Fabuss, suddenly could not make the meeting with the client’s CEO and CFO, and told her to carry on without him. Just a 25-year-old investment banker at the time, Raskin was “terrified” at the prospect. As it turned out, the British Aerospace brass “could not have been nicer.”

“He believed in me when I didn’t necessarily even believe in myself,” she says, “and it proved to me I could do the job. It proved that I had things to say that were worth listening to. That happened to me a number of times in my career, where I was just sort of thrown into the ocean to see if I could swim. Luckily, I stayed afloat.”

ROUNDABOUT

Raskin, in turn, has extended her professional experience and influence to others looking to advance in their careers, as she is actively involved in the Trustees Council of Penn Women, an organization focused on helping female University of Pennsylvania graduates accelerate and navigate their professional lives.

“That is something I feel very strongly about, because in the financial services industry women are dramatically underrepresented in senior positions, especially in fund management,” she remarks. “Only 10 percent of fund managers are women, whereas one in three doctors and one in three lawyers are women; so there is something that happens in the financial services industry, particularly in midcareer, that causes women to get off track.”

She is also active in the Penn Alumni Association, which seeks to maintain lifelong connections with the school’s graduates, offering them various forms of support and guidance, as well as encouraging the school’s alumni to stay connected with one another.

Being a Penn Quaker was “an amazing growth experience” for Raskin, after admittedly having graduated from a “mediocre” high school. At Penn, she met people from all walks of life, many of whom attended prestigious private high schools and came to the esteemed university much better prepared than she.

“I had to catch up to a lot of my peers,” she recalls, “but it was a wonderful experience for me, a growth experience. It opened my eyes to a world that I knew nothing about.”

For that reason, Raskin feels a strong connection to Penn, which is why she is involved in both the Penn Alumni Association and the Trustees Council of Penn Women.

HARK! IS THAT DESTINY CALLING?

Though she has blazed a torrid career path, Raskin never had a plan in mind.

“I took my career one step at a time,” she says, taking advantage as opportunities presented themselves, rather than trying to foment or direct each career step.

Despite her accolades and reputation, she still does not have a plan, content to let the career path unfold before her.

“As you can kind of tell,” Raskin says, “that has always been my MO. So far it’s worked for me.”

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser.

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