How do you build an investment fund that consistently beats the benchmarks? For classmates Eleanor (Ellie) Brigham Wehlen; her husband, Thomas Wehlen; and business partner Rainer Genschel, the answer is by breaking the rules and putting into practice what they learned at Haas.
The principal fund at their San Francisco boutique investment firm Coburn Barrett has outperformed more than 99% of other funds over the past 22 years. They credit Haas—especially Prof. Rich Lyons’ International Finance class—for the insights that enabled them to achieve such outstanding results. “There’s a big difference between what’s taught in business schools about how to invest and what most hedge funds actually do,” Ellie Wehlen says. “Ours is different in that we took what we learned in class and applied it.”
Lesson one: diversify. Coburn Barrett puts money into a dizzying array of assets all over the world, including stocks, government bonds, currencies, money market instruments, and commodities, taking advantage of a growing world economy while minimizing risk. Lesson two: Don’t try to predict markets. “Money managers are paid to pick individual stocks and time the market,” Thomas Wehlen says. “We don’t do that.” Instead, the firm favors index funds and doesn’t move money around, following a buy-and-hold strategy based on its investment formula.
Notes Genschel: “Our model has been successful because it relies on proven financial theory rather than wild guesses on where the market will be tomorrow or next week.”