The professional turning point in Michelle Mathieu’s career came in March 2007 while attending a keynote address by T. Boone Pickens at the New York Athletic Club. Pickens was talking about oil prices, which were going crazy at the time, to a group composed almost entirely of men. Mathieu, who was CIO of a trust company at the time, had flown from her native Seattle to New York City to attend the strategy and research conference, geared toward institutional investment managers. She was sitting at a table with a group of big-city men donned in slick, dark suits listening to them banter with one another. It was then an epiphany struck with “crystal clarity.”
“I realized these guys didn’t know any more than I did about what was going to happen, whether it was oil prices or the capital markets,” she says. “I realized these guys aren’t rocket scientists, they aren’t any smarter than me. It was like a bomb went off in my head, that I had done all this work and didn’t have to prove myself anymore.”
Her realization was well timed, because just hours later news broke that Bear Stearns was collapsing, the first domino to fall in what became the global financial crisis.
“That confidence was like, ‘Alright, I got this. I am ready’,” she recalls.
Another confidence-builder for Mathieu, only 31 years old at the time, came when she was tapped to launch the investment division of a trust company for law firm Perkins Coie. As chief investment officer at the organization, Mathieu took Perkins Coie from zero to $500 million in only nine years.
It also didn’t hurt to have a good, albeit unofficial, mentor named Peter Glidden during her stint at First Interstate Banks (now Wells Fargo). Rather than making pronouncements or asking probing questions, Glidden kept tossing increasingly complex projects at Mathieu, as well as opening doors and making key introductions.
“He saw more potential in me than I even knew was possible,” she says. “He just made things happen and kept giving me more challenging projects and opportunities.”
Given that experience, it’s little wonder that Mathieu eventually found her way to Fulcrum Capital, a firm whose most cherished values include gender, ethnic, and other forms of diversity. Fulcrum is 100 percent employee owned and 100 percent female owned and founded, which Mathieu and her colleagues consider a differentiator, especially considering that only 2 percent of U.S. wealth advisory firm are women-owned, and almost half do not have a single female adviser.
“Diversity for us means 50 percent women, or at least something more than 30 percent and something less than 100,” she says. “In other words, having all women is not diverse either. We are striving for diversity in perspective and opinion and ability to engage and interact with clients. We take that very seriously.”
Fulcrum’s philosophy is that integrating sustainability into all investment decisions leads to stronger and more durable portfolios, and quality governance is one of the key drivers of sustainable portfolios, and that includes diverse leadership teams.
In broad terms, there are two approaches to gender-lens investing: One is to invest in companies that improve the lives of women and children; the other is to invest in companies where the leadership and policies promote gender diversity, which Fulcrum considers a proxy for other kinds of diversity. Diverse leadership teams have more than 30 percent representation of women on companies’ boards of directors and executive suites, and “quality” parental leave policies.
“There is some research indicating that diverse teams make better decisions, and diverse companies have better performance in terms of return on equity,” she says.
Among other metrics, Mathieu points to the five-year track record of the Pax Ellevate Global Women’s Leadership Fund, which was launched five years ago and tracks the first index focused on women on boards and in executive management.
The firm coined its own imprimatur for its philosophy: gender forward. As part of that ethos, Fulcrum Capital launched its gender-focused portfolio in June, which it considers a separate account. The firm raised seed capital to launch the fund that invests on behalf of individuals, though it is also open to families and nonprofits. The fund invests in 25 equally weighted stocks the firm considers leaders in gender diversity, as well as meeting other criteria such as growth and valuation characteristics. It is not an index, Mathieu stresses, because the firm researches, analyzes and actively selects and manages the fund’s constituent stocks.
When Fulcrum Capital was founded back in 2007, CEO Darcy Johnson declared the firm was not about them, that it was about something much greater than them. Johnson cherished the famous quotation from Archimedes, the Greek mathematician: “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”
“That is what Fulcrum is,” Mathieu asserts. “Finance is a force for change. By helping our clients align the pursuit of profit and purpose, they can leverage the impact on the things that matter most to them.”
Mathieu came aboard and began applying her pressure to the fulcrum three years ago. She hails from Richland, Wash., a member of the trio of cities that make up that region’s tri-cities area (the others being Pasco and Kennewick). Richland is home to the Columbia Generating Station nuclear power plant.
“My high school was called the Richland Bombers and our symbol was a mushroom cloud,” she says. “During World War II, Richland was founded as a government town where the fuel for the atomic bombs was produced. They are very proud of their nuclear heritage.”
Having started kindergarten early, Mathieu was younger and smaller than her classmates and that turned her into an “outsider.” She spoke with a lisp and was bullied by the other girls. Her alienation was compounded when it was discovered Mathieu had attention deficit disorder and was dyslexic, requiring her to spend recess receiving specialized tutoring while her fellow pupils were on the playground engaged in recreational activities.
Mathieu’s father was a computer scientist who taught her math at home during evenings. By fifth grade she was doing math at a seventh-grade level.
“My family was extremely religious,” she says. “My younger sister and I weren’t allowed to go trick-or-treating. We were allowed to dress in costumes to hand out pamphlets of Bible verses at Halloween so, of course, our house would get egged or toilet-papered every year at Halloween. We weren’t allowed to watch TV shows or cartoons.”
There were many parental rules, one of which was the Mathieu children were required to carry through to completion anything they started. That discipline paid off, as Mathieu claims that persistence is the single characteristic that most contributed to her professional advancement.
“I have this ruthless ability to focus and do what it takes to get the job done,” she remarks.
Mathieu’s sister is a Christian missionary in Niger, Africa, with her husband and three children.
“I don’t have children, and I’m kind of the capitalist of the family,” she jokes. “I am no longer religious.”
Indeed, Mathieu took up belly dancing at age 26 and belly-danced professionally for 16 years. At the time, her male coworkers had encouraged her to take up golf, like the rest of the guys. She determined to flout convention by doing something far afield, something artistic and noncompetitive. She considered Bonsai trimming or chocolate making classes, but passed on those when she came across a Middle Eastern tribal dance class.
“I actually took up belly dancing because it was the opposite of golf,” she recalls. “I danced at Moroccan restaurants, festivals, nightclubs and even theaters with an audience of 8,000 people. I did the whole gamut. Now I do Brazilian samba.”
DIVERSITY, YES, BUT LET’S NOT GO OVERBOARD
Interestingly, one of Fulcrum Capital’s focal points is to guard against over diversification, dubbed the “spray and pray” method of investing by Mathieu. She reasons that a U.S. equity portfolio of 30 to 50 stocks achieves the same diversification and risk reduction as a 1,000-stock portfolio or index, and allows Fulcrum to be intimately familiar with its clients’ holdings.
“If you’re striving for mediocrity or the average that is fine,” she says of portfolios containing hundreds or thousands of stocks. “We are trying to be much more intentional about what we own and why we own it. A little diversification goes a long way.”
Though Fulcrum makes full use of alternatives and real assets, Mathieu’s favorite asset class is publicly traded stocks, pointing out that she has been in the business almost 30 years and during that time has witnessed public stocks outperform just about every other asset class, including median private equity managers.
“Public stocks are still under-appreciated and underrated relative to private investments,” she says. “You can’t go wrong with public stocks over the long term.”
On the real estate front, though, she prefers operating companies or direct investments in property rather than REITs for long-term investors.
Strategically, impact investing and ESG (environment, social, governance) excites Mathieu, though she acknowledges they are in their early stages of development and will require some maturation before their full power can be deployed.
“ESG and impact investing are here to stay,” she declares. “Our clients love knowing their money isn’t just working for them once or twice, it is working for them three times — delivering performance, being invested in a way that aligns with their values, and investing with a firm that represents those values.”
What’s more, Fulcrum Capital donates 10 percent of its annual profit to charity.
That charitable streak has Mathieu serving on three nonprofit boards, as well, something she regards as a civic obligation.
Meanwhile, the firm, based in the thriving Seattle market, is recruiting new advisers, looking to build capacity for the future. It has not taken another epiphany for Mathieu, or her colleagues, to see there is a strong and abiding future in the wealth advisory business, especially when focused on the mass market of underserved U.S. women.
Mike Consol (firstname.lastname@example.org) is editor of Real Assets Adviser. Follow him on Twitter
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