In this blog post, Tom talks about some of the personal and professional experiences that shaped his career and ultimately led to the founding of Riverbend.
TH: At Merrill Lynch, I worked on the institutional side of the business. From this vantage point the muni bond market appeared to be two-tiered. On one level are institutional investors who benefit from active management of portfolios, receive fair and competitive execution on trades, and have broad access to primary and secondary offerings. On the other tier are retail investors who typically are left with passively managed portfolios, frequently are subject to egregious price markups, and generally have limited choices other than their brokerage firm’s inventory. Seeing the need and opportunity to bring an institutional approach to individual and family office investors and their advisors, I launched a boutique asset management firm focused on the municipal bond market.
TH: Between college and graduate school, I started a t-shirt screen printing business with some college friends. During college we sold t-shirts door to door to students, but after graduation we pooled our own money and borrowed capital to buy equipment and obtain warehouse space. We branched out into printing t-shirts for restaurants, bars, and record companies. We didn’t really know what we were doing but we made it work. I was able to support myself for four years before leaving the business to go to grad school. One of the founding partners in the business still owns it and now prints shirts for the Super Bowl and other big events.
TH: I had good fortune and good relationships on my side. In the midst of planning my departure from Merrill Lynch, I was contacted by a friend at O’Brien International, a Chicago family office derived from the R.J. O’Brien company. The O’Brien’s are a successful, charitable family with whom I personally had been acquainted for several years. They wanted to make an allocation to munis and called me in search of specialized expertise. The timing was coincidental and fortuitous. After my resignation from Merrill and several follow-up meetings with this family office’s decision-makers, including John O’Brien, the family patriarch, the O’Brien’s became a strategic partner in the firm. This partnership enabled us to quickly build credibility and respect.
TH: Many of the clients we work with allocate to munis as a way of balancing out risk they’re taking elsewhere. Muni bond portfolios are generally not a place where they want to roll the dice. With this in mind, we treat client portfolios as the “safe money” allocation. Even within the investment grade spectrum, there are sectors we avoid because of project-specific risk. Nursing home facilities and convention centers are examples. The general idea is that Riverbend is conservative and focuses on high-quality bonds.
TH: Two of my most thrilling adventures happened by accident. One was a whitewater rafting trip through the Grand Canyon with two of my sons. I had never been rafting and signed up for the trip thinking it would be a leisurely float down the Colorado River. It turned out to be a wild ride through class four and five rapids, completely out of my comfort zone. The other adventure was a skydiving excursion I agreed to go on with my wife. We were only dating at the time and the excursion was part of an outing for her company. I didn’t want to be perceived as being a chicken, so I went through with it. It was both terrifying and traumatic, especially considering that I have never been on a roller coaster or even a ferris wheel in my life.
TH: That was definitely the end of my skydiving career. Mike Tyson once said: “Everybody's got a plan until they get punched in the face.” My interpretation: Be prepared for things not to go as planned and be resourceful. I’ve drawn from that notion over the course of my life, and it has served me well.
I also enjoy spending time with my family. After years of shuttling my five kids to their sports and activities, they’re older now and we’re finding more opportunities to golf together as a family. I was in my 30s the first time I picked up a club while my kids have become better golfers than me in just a short amount of time. A low hurdle!
TH: I would have liked being a teacher. As I’ve watched my children make their way through school over the years, I’ve been amazed at the rapid progression in which children develop and learn. A subject I’m particularly interested in and that’s somewhat related to my undergraduate studies is history — especially American history (editor’s note: Tom graduated with a B.A. in political science from the College of Holy Cross). The way the world is currently can be traced to past developments. If you don’t know history, it’s difficult to understand the context for what’s happening today.
My career clearly took a different direction, but I do still have the opportunity to “teach” investors. For example, in 2022, the bond market was down further than many of our clients have ever experienced, so I spent a lot of time talking with them about the factors contributing to the downturn in hopes of helping them better understand the rationale for the decisions we’re making in their portfolios. I've always felt that clients are happier and more appreciative of what we're doing for them and where we’re investing if we help them understand what’s happening in the market and why.