Clear Asset Management: Investment #2
August 2004. I was in the process of negotiating my departure from Deutsche/DB Advisors. I had been approached several months earlier by a good friend, Andrew Corn, who had a vision for starting a quantitative asset management firm that took the human element out of investing. He had spent over 20 years working with investment banks and asset managers on IPO roadshows, how to present their numbers and systems for scaling reporting, and sold his successful business to a publicly-traded PR and marketing firm in 2002. After selling his business he had been SVP of TheStreet.com, helping to start Independent Research Group and running marketing. It was this experience that codified his thinking around the value of quant models, in stark contrast to Cramer’s approach of booyah and all that stuff. It was at this time that Andrew approached me to seed him and help with his business plan. And what emerged was the plan for the business Clear Asset Management.
Having run a large quant platform, Andrew’s vision for a fundamentally-driven series of quant algorithms resonated with me. I also knew personally that Andrew was a very persistent, very frugal person of high integrity, three key attributes I have to see in any entrepreneur. I also knew that he was flexible and that if things weren’t working he’d try other things, pushing on through until he found the right formula for success. For instance, his original view was that Clear Asset would offer institutional-quality asset management products to retail, using the Internet as the vehicle for asset accumulation. This helped build brand and a measure of awareness, but this did not attract the assets we had hoped. But as time went on and the firm’s portfolio performance was top-tier, Andy re-jiggered his plan to focus on institutions. He went to emerging manager conferences. He sat on panels. He networked like crazy. And all the while the company was winning performance awards like PSN’s Top Gun again and again. Further, he has hired and built an unconventional, process-driven product creation engine that has resulted in five top-performing long-only portfolios, a successful ETF business through Clear Indexes and a recently-launched Large Cap Value Long/Short hedge fund (which is currently being run as a 150/150 portable alpha strategy and is rocking it - hard). In short, it is amazing what Andrew and the Clear Asset team has accomplished in 3.5 years. Now the time has come to blow it out.
As I do with all my companies, I have worked with Andrew and Clear Asset’s Chairman, Fred Fraenkel, to identify strategic partners whose distribution networks we can leverage in order to scale up the portfolios. We are currently in advanced discussions with a few awesome partners. The foundation has been laid. The team has successfully executed the plan. 2008 will be an exciting year for Clear Asset, a year when alpha-generators will rule and beta-trackers will suffer. And the company has been consistently excellent at generating alpha. This is why it is exciting working with small, rapidly-growing companies. Times like these. When so much work has gone into getting the company, the business, the model to this point and all that remains is to scale. TheLadders.com did it. And I am confident that Clear Asset will do it as well.
