(quoted from their website unless otherwise noted)
“The Glenmede Trust Company was founded in Philadelphia, Pennsylvania in 1956 by four children of Joseph N. Pew, founder of Sun Oil Company, to serve as the corporate trustee for the trust they had endowed to honor their parents. The Pew Memorial Trust, as it came to be known, funded with Sun Oil Co. stock, made donations to support charitable organizations that shared the family’s beliefs and philosophies in the fields of education, medicine, religion and social welfare.
During the 1970s, diversification of The Pew Trusts’ concentrated stock holdings became a priority. With that diversification came sophisticated investment strategies to preserve principal, achieve capital appreciation, and generate income to meet distribution requirements. This was a significant turning point in the Company’s history. Although Glenmede was entrusted with outside assignments as early as 1960, it was not until 1978 that a formal service offering for families, foundations, and endowments was created. Over time, a comprehensive range of wealth advisory services was built to complement the core service of investment management and trust administration.
By the close of the 1990s, Glenmede had expanded its presence outside of Philadelphia to include offices in Princeton and Morristown, New Jersey, Wilmington, Delaware, and Cleveland, Ohio. Today, Glenmede is a national trust company, chartered under the National Bank Act and supervised by the Office of the Comptroller of the Currency, serving more than 1,700 clients located throughout the country. In 2009, Glenmede announced the opening of a New York office to enhance our existing footprint within that market.
Having managed its own proprietary equity and fixed income strategies for more than 25 years, Glenmede’s SEC-registered investment advisor, Glenmede Investment Management (“GIM”), provides access to those strategies for the institutional marketplace. GIM has $5 billion of institutional assets under management for Glenmede’s proprietary family of mutual funds and also serves corporations, public plans, foundations, endowments, and not-for-profit clients.
The Strength of Independence:
The financial services industry is characterized by a long history of ongoing consolidation and reorganization, notwithstanding the unprecedented turbulence of 2008. The unfortunate result of this is the loss of personal relationships between clients and the firms that serve them. Glenmede has quietly followed its own course and remained fiercely committed to independence. On its own, Glenmede possesses the scale and resources to attract accomplished professionals and offer a wide range of wealth advisory services and investment strategies. We steadfastly believe that all stakeholders – our clients, employees, and shareholders – are best served by our continued independence, stability, and a culture in which client interests take precedence. Glenmede has evolved since its founding, but its values as a company have remained consistent – our goal and daily task is to ensure that these same values continue to define Glenmede for the future.”[1]
Glenmede Investment Management
Website claims that GIM manages “over $20 billion” for “over 1,700 clients”[2]
“Glenmede Investment Management is a privately owned, independent investment management firm which provides alpha generating investment strategies in the following asset categories:
- US Equities – Large, Mid, Smid, and Small Cap Equities
- Extensions – 130/30 and Long Short
- US Fixed Income – Core, Intermediate and Short Duration Fixed Income
Glenmede has successfully managed institutional assets for over fifty years. We have expanded our capabilities to cover a wide range of asset classes combined with sophisticated analytics and research.
Glenmede Investment Management (GIM) is a registered investment advisor regulated by the SEC. With nearly $5 billion of institutional assets under management, GIM is advisor to Glenmede’s proprietary family of mutual funds and serves corporations, public plans, foundation & endowments, Taft-Hartley plans and not-for-profit clients.”[3]
Endowments and Foundations
“Glenmede provides a full range of sophisticated investment management and advisory services to endowments and foundations. We gain a clear understanding of the organization’s goals and objectives. Then we construct a balanced, multi-asset investment portfolio that incorporates the investment strategies practiced by the most forward-thinking endowments and foundations. Some of our clients choose to work with us as an outsourced CIO while others tap into our broad range of supplemental offerings such as trustee, grants management, tax, planned giving and foundation management services.”[4]
Personal Banker to the %1?
“Glenmede is ideally suited to serve families and tax-exemptorganizations with $5 million or more of investable assets. … Glenmede has consistently been recognized by the Luxury Brand Institute’s private banking survey as one of the top three providersof quality service to high net worth individuals.”[5]
A private firm that keeps a low profile.
“Glenmede Trust is a private bank that doesn’t want to be a household name. And it’s happy being small, too. If Gordon Fowler has his way, Glenmede Trust will become the greatest wealth-management company the world- other than its clients has never heard of”
“We’re never going to be a household word on Wall Street or Main Street, and that is just fine,” says Fowler, who serves as both CEO and chief investment officer of the Philadelphia-based investment firm.
Private banks—especially those that started by catering to generations of a single family, as Glenmede did—may have a reputation for being conservative and slightly stuffy.
To Fowler, that image doesn’t matter a bit, as long as Glenmede is in the vanguard when it comes to delivering new ideas and products to its customers, most of whom have accounts of at least $3 million.
For Glenmede, being a contrarian is good, whether that means making a foray into overseas markets in the 1980s, a decade before that became de rigeur, or investing in private equity in the early 1990s, long before most investors discovered it. The private-equity experience paid off nicely, helping the firm snap up partnership interests on the secondary market at distressed prices immediately after the 2008 financial crisis.
“We had the skills to understand private equity, the different managers to put a value on those assets,” Fowler says, adding that the knowledge and willingness to go against the crowd at a time of stress translated into significant returns for Glenmede’s clients.
Despite the rocky market, Glenmede’s assets under management have climbed to about $18 billion, up from $16 billion at the end of 2008 and $14 billion at the end of 2003. Although its offices are concentrated on the Eastern seaboard and in Ohio, it has clients in all 50 states.
Glenmede was founded in 1956 by four of the children of Joseph N. Pew, founder of Sun Oil, to manage the assets in the charitable trust they had set up in memory of their parents. It wasn’t until the late 1970s that the firm branched out from its core business of investing and administering the assets of the Pew Charitable Trusts and actively sought mandates from other families and endowments and began offering a broader array of wealth-management services. Today, the Pew Charitable Trusts account for less than a quarter of the firm’s assets.
Fowler and his team develop contrarian ideas from what he describes as a “Bell Labs-style” investment process. “We aren’t on the bleeding edge of innovation, but the thoughtful edge,” he says.
While Glenmede’s investment team, which Fowler oversees, tries to identify opportunities that are overlooked or ignored by others, the goal is to emphasize those that have the potential to deliver long-term rewards for clients. “We see it as our job to separate the wheat from the chaff, to focus on the good, enduring ideas and strategies that will last for generations.”
That means being opportunistic as well as contrarian. Glenmede steered its clients into high-yield bonds in early 2009, anticipating a recovery in the credit markets, and helped them profit from the normalization of bond prices that followed. Now Fowler and his team are looking for ways to diversify clients’ assets, taking advantage of other markets where there is a gap between perception and what Glenmede’s analysts believe to be reality.
“We don’t really like the euro, but we do find some bargains in European stocks,” Fowler says. Glenmede investment managers also are scoping out the options market, where implied volatility levels remain at high levels—which could mean outsized returns.
THE NATURE OF GLENMEDE’S BUSINESS ensures the firm is on the radar screen of most of Wall Street’s inventive minds.
“As the manager of more than $5 billion in endowment funds, we are constantly being shown new investment opportunities that are out there,” says Fowler. “Our size doesn’t prevent us from doing anything; we have the scale to offer a wide range of services, but we are still small enough to be able to know and serve each client as an individual, not an account number. Clients know they can call me directly. I answer my own phone.”
The firm’s origins, Fowler says, affect not only the makeup of its business (working with both endowments and wealthy families) but also the way it manages wealth and the kind of clients Glenmede attracts. About half of the clients, he says, are ultra-high-net-worth families looking for someone to advise them on multigenerational issues, ranging from philanthropy to tax-efficient transfers of wealth.
Most of those clients entrust between $10 million and $15 million to the firm, and pay a fee that typically starts at 1% of assets annually. That figure can rise, depending on the degree of complexity associated with the products and services the client needs, or shrink if the client has a particularly large pool of assets at Glenmede and more straightforward needs. In exchange, Glenmede’s bankers are asked not just to deliver creative investment ideas, but also to troubleshoot other problems that plague the ultra-rich.
In one case, Fowler recalls, a client sought Glenmede’s help after selling his company for a significant sum. “The news was in the papers, and all of a sudden the individual was responding to several requests for assistance by family members,” says Fowler. Glenmede’s solution was to create a family philanthropic bank: “Direct relatives can apply for a loan or grant for certain very specific purposes: four years of college tuition, the down payment on their first house, medical expenses for a catastrophic illness or seed money to start a business, either in the shape of a loan or an ownership interest. This way, the client had an orderly process for passing on some of the money as well as a way to communicate the family’s values to other relatives.” The goal—relieving the emotional and financial pressure on their client—was realized, Fowler says.
To clients like that, Glenmede’s roots working with the Pew family and its status as a privately owned financial institution are just as important as its contrarian investment ideas. Fowler prides himself on knowing every one of the firm’s clients, and insists that Glenmede needs to take a cautious approach to expansion.
“We are specialists. We are in one business and one business only, and that is advising our clients on managing their wealth,” he says firmly. “We don’t make loans. We don’t do any investment banking. We act as fiduciaries for our clients.”
Glenmede’s core group of clients come in two distinct groups. The first is made up of business owners who have sold their companies, only to realize they need help in managing the money. “There is an instant connection on their part to the fact that we are a privately owned company, because many of them built up their own companies by themselves. They didn’t make their money working for someone else,” Fowler says. “They are aware that we understand their values.”
THE SECOND GROUP OF CLIENTS includes heirs of wealthy entrepreneurs. Here the challenges are different. Rather than helping a newly wealthy family navigate the initial maze of decisions and choices, Glenmede advisors work to ensure that highly complex families with a web of trusts don’t face bureaucratic headaches or excessive taxes or other costs.
“Every client gets their own administrative officer as well as a portfolio manager, someone to oversee the whole of the relationship,” Fowler explains. In recent years, Glenmede has also been attracting assets from what Fowler refers to as “financial-industry entrepreneurs,” such as hedge-fund managers, who are looking to find a way to preserve some assets in trust outside of their core business. “We become the guardian of their ‘safety assets,’ ” he says.
The one contrarian play that doesn’t appeal to Fowler at the moment is to take advantage of the turmoil in the financial industry to transform Glenmede into a much larger institution. There are certainly intriguing opportunities, whether to add clients at a more rapid pace, acquire new teams of investment managers or other professionals, or even to make strategic acquisitions.
Glenmede hasn’t bypassed those altogether. Fowler says the firm has hired private-banking veterans from other institutions to fill senior roles in the investment arena and to oversee private-equity investments. But, he adds, there is a difference between hiring private bankers to reinforce an existing business and trying to change the nature of the firm.
“We don’t want to grow by leaps and bounds, but on a controlled and moderate basis,” he explains. “Frankly, this business doesn’t scale too well when you try to grow too rapidly. You lose touch with your clients.”
Indeed, if Fowler has his way, Glenmede is likely to remain a low-key firm, a contrarian contrarian. Measured growth should pay off for clients, without increased risk.
Fowler says Glenmede’s clients still will fare best in low-growth or slow-growth markets, as will the firm itself. “There are certainly growth opportunities for us all out there,” he says. “But we’ll be opportunistic. We will wait to see what unfolds.”
On that “thoughtful edge” of innovation, there’s always something to find. ”[6]
[5] Glenmede “Firm Profile” (in pdf in your files)
The Battle of Germantown 