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I believe we have built an investment process that will endure for many years and through many market cycles.”
Matt Weatherbie has managed money for 48 years and it hasn’t gotten old for him. He still wakes up each day looking for exciting new stocks to add to the mutual funds and strategies Weatherbie Capital is responsible for. Over the course of his career, Matt has earned a reputation as an excellent evaluator and mentor for investment talent and a terrific growth investor. Matt’s investment process is based upon the eponymous “Weatherbie Way.” His career includes many notable highlights, such as winning a highly coveted summer research job at Fidelity, being taken under the wing of the head of research at MFS and being recruited by Putnam to run a flagship strategy and, ultimately, lead the firm’s growth equity team. However, perhaps the most formative moment in Matt’s investment career was meeting with a mundane industrial company, which gave him unique insight into finding attractive growth companies.
After establishing an impressive track record managing the Voyager Fund at Putnam Investments, Matt started his own investment firm, Boston-based Weatherbie Capital, which just celebrated its 25th anniversary and was merged into Alger in 2017. Today, his team still maintains the Weatherbie moniker under the Alger umbrella. “The DNA of the two organizations is remarkably similar,” he says, reflecting on his satisfaction with the merger and successful partnership with Alger’s CEO. In his spare time, Matt and his wife Susan have assembled a world-class collection of Dutch and Flemish art from the 17th century. In 2017, they committed to donating most of the paintings to Boston’s Museum of Fine Arts.
Many successful people were stars in school. Was that the case with you?
Actually, I dropped out of college twice—once from the University of Toronto and later from the University of Waterloo in Ontario. I guess in hindsight I wasn’t really ready to go to college. Eventually I went to night school and received my BA in Economics from the University of Toronto while working full time during the day. Once I determined my path, I was pretty focused, but it took a couple of false starts to get there.
Your first full-time job was at an insurance company. Did that lead you to money management?
In a way it did. I worked at a reinsurance company and my job was evaluating substandard risks. It was fascinating work. Once, for instance, we had to decide whether to insure Frank Sinatra in a movie. He was someone who was known for burning the candle at both ends, so he was a risk. It was a good foundation for investing because when you think about stocks, you need to focus on risk as well as reward.
You came to America from Canada to go to the Harvard Business School and you have been in the U.S. ever since. What about America was attractive to you?
Two things. In investment management the U.S. is the big league. The stock markets here are at least 10 times larger than the Canadian market. But there was something else. I have always had an affinity for free market capitalism. In those days, Canada leaned in a more socialist direction, which I didn’t find appealing. I have now lived here for almost 50 years. I think American. I act American. I am an American. In 1987 when I was managing the Voyager Fund and about a month after the stock market crash, I went down to the federal building in downtown Boston and was sworn in as a U.S. citizen.
Investors tend to fall into one of two buckets, growth or value. What drew you to growth stocks?
By the time I completed Harvard Business School, I was hooked on investing, in part because of what I learned as a summer research analyst at Fidelity. After graduation, I joined MFS, a Boston asset manager, where the director of research gave me special guidance, which helped me learn about securities analysis. It was early in my career and all of the young analysts were given a growth industry and a value industry to follow. On the growth side, I was given Electronics, which included companies like Digital Equipment and Hewlett-Packard. For value I got the Steel industry, which was then in terminal decline. I determined then that I much preferred investing in growth companies.
Was there any one stock in your career that gave you a whole new insight into investing?
Early in my time at Putnam, Bob Kierlin, the founder of Fastenal Corporation, visited our offices. My colleagues and I wanted to know whether this company, an industrial distributor, had the business model and management to be a true growth company in a mature and mundane industry, industrial fasteners and related supplies. I was intrigued and after listening to Bob, we invested in the company, and Fastenal turned into a very successful investment for our shareholders. But more than that, a lightbulb lit up in my head. I realized we could find other great companies in mundane industries. Today, we have a number of them in our portfolios at Weatherbie and we relish finding gems where some people wouldn’t think to look.
Why did you leave the security of being at a large investment firm where you had established a strong track record to start your firm?
Things were going well at Putnam, but the appeal of starting my own firm compelled me to go out on my own. I was also curious about applying my investment strategy to a focused business that I could build from the ground up. I was fortunate because my wife was very supportive of this new venture and understood that I felt strongly about it.
Why did you choose Alger?
After my first dinner with Dan Chung, Alger’s CEO and Chief Investment Officer, he described our two firms as kindred spirits. I feel exactly the same way four years later. The DNA of the two organizations is remarkably similar. Both of us invest in growth companies and both of us are active investors who use bottom-up fundamental research.
What makes your job fun?
The best part of the job continues to be managing money. It’s exciting to identify new companies and see them prosper over time. It’s been especially fun over the last few years because it has been a stock picker’s market and we have done very well for our shareholders and clients. I also have a great team of investors I work with, respect and like.
What does the future look like for Weatherbie?
I am not going anywhere, but at some point, others will be in the driver’s seat. I’m most proud that I created an institutionalized investment process that is no longer dependent on one person as it was for so many years. I am very confident that my colleagues will not skip a beat. I believe we have built an investment process that will endure for many years and through many market cycles.
You and your wife put together a remarkable art collection over the past 35 years. What does the art do for you?
If you think about the business I am in, it can be stressful. The market fluctuates every day, sometimes violently and not always in your favor. To be able to come home and look at these wonderful objects on the wall, evergreens that have seen wars, revolution and inflation over their 400-year history, it gives you a sense of perspective and a sense of peace that is really wonderful.
You and your wife also have a charitable foundation. What causes do you support?
We have had a few main areas of focus: the Boston public schools, Boston cultural institutions and Mount Holyoke College, where my wife is a distinguished alumna. More recently, and building off Dan Chung’s initiatives at Alger, we back social and racial justice causes in Boston. If you are investing with good people with worthy causes and objectives, nothing really gives you more satisfaction. I tell people only half-jokingly that it is a lot of fun giving stuff away, including money.
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