Laura Geritz: ‘Wherever we see great companies, we go.’
Star mutual-fund manager Laura Geritz last year left Wasatch Advisors and put everything she had into a new fund company in Salt Lake City.
She also left the world where managers get performance bonuses. At Rondure Global Advisors , she limited her own pay and cut out most of the bonus structure. “If I do my job and pick the right stocks,” she says, “I’ll be very well-compensated, along with our clients, in the end; if not, then I don’t deserve it.… I’m confident.”
Ms. Geritz, who made a name running international, emerging-markets and frontier funds for Wasatch, started her firm with Wasatch friends who five years before opened Grandeur Peak Global Advisors. That firm does back-office, compliance and accounting support for Rondure.
She put up 51% of the equity seed money and lent her company several million dollars to run operations; her funds— Rondure New World (RNWOX) and Rondure Overseas (ROSOX)—were launched May 1, 2017. At the end of March, investor shares were up 15.93% since inception for the New World fund and 15.03% for the Overseas fund.
The funds have amassed more than $140 million in combined assets, but because of the way Ms. Geritz structured them and her compensation, she won’t make anything until the firm is managing roughly 2.5 times that amount.
She says she isn’t worried, noting that controlling the company allows her to ignore short-term noise and pressure and focus on doing what pays off best in the long run.
Edited excerpts from a recent interview:
WSJ: Why start your own firm at a time when boutique shops and small funds are struggling to get a foothold in the market?
MS. GERITZ: Our industry put itself in the position it is in by not putting clients first and not putting research first. I had an entrepreneurial vision of what could be done better. What I wanted to do was align my interests 100% with clients. [Any bonuses go back into the funds, helping to reduce costs for all shareholders.]
After that, the rest of the focus should be on doing the best possible research.
WSJ: You go just about anywhere in the world to invest. How do you decide where to go and what to see?
MS. GERITZ: Our process is driven by bottom-up analysis, but wherever we see great companies, we go. So, the Philippines, India, Sri Lanka, Bangladesh, South Africa, I want to hit Latin America this year, Japan, Korea, Taiwan, and I want to get back to Nigeria this year.
WSJ: You’re on the road about six months a year, and you are notorious for traveling cheaply. Why?
MS. GERITZ: I’m on the road so much that I try to treat the road like it’s home. I really don’t like to go out and do fancy dinners or go out and celebrate.
What I do when I am on the road is read. Every country I go to, I take three books about the country and try to learn as much as I can about the places I am going to so that I can make better investments. I’m not spending a lot of money going out. I also try to save on ticket prices and accommodations because that is my clients’ money I’m spending, but I do fly so much that sometimes I get free upgrades. I’m not turning those down.
WSJ: What market do you most want to be investing in?
MS. GERITZ: We started with an overseas strategy—global developed markets—and then a strategy for global developing markets, because that is where I saw the best opportunities. I’m a balance-sheet investor; the first thing I look for in a company is the margin of safety in terms of what the balance sheet looks like. Is it net debt or net cash? We have a strong preference for net cash because cash enables companies to do really smart things when conditions get tougher.
I still like Japan’s balance sheets right now; generally speaking, the companies there have better balance sheets and have not gotten complacent about borrowing cheap money. Plus it is next to regions that are growing nicely, and it is set up well for growth.
WSJ: Why Rondure? What’s in the name?
MS. GERITZ: My father was an English professor who taught Shakespeare, and the name to me comes from Shakespeare and Walt Whitman, from Whitman’s “A Passage to India.” Rondure means orbital, spherical; it’s representative of the globe. Whitman was the ultimate free-verse poet, and we wanted to do something different, being global and kind of free-verse in how we invest, so it’s a word that fits.
And then, when we liked it, we googled Rondure, and the first thing it brought up was our partners’ firm, Grandeur Peak, so you really knew it fit then.