Matthew Sherwood always wanted to work on Wall Street. He sped through his undergraduate degree in 2.5 years and spent the next decade or so cycling between investment jobs and education, including stints as an analyst at Morgan Stanley and as a proprietary trader and then portfolio manager at Schonfeld Group, among others.
And then he made a drastic change. The former portfolio manager took a job running MMBB Financial Services, the non-profit Christian organization managing $2.9 billion in retirement assets for Baptist ministers, missionaries, and employees of many other denominations. He is now juggling his money-manager past with a new Christian-focused reality: two ideologies that are often at odds.
The cultural shift was massive, Sherwood tells Institutional Investor Network, IIs private community for asset owners. Its going from having those sharp elbows trying to think fast, act fast, always be on to a Christian organization as an institutional investor, where moneys not the motivation.
Sherwood, 33, now manages $1 billion for 17,000 ministers. He runs the majority of the fund, excluding its private equity program.
So how did a traditional money manager like Sherwood end up at MMBB? The fund recruited Sherwood, who says he believed the roles value exceeded just managing assets.
Youre still trying to apply the same knowledge and expertise as at a hedge fund desk, but in a thoughtful, measured, slow, calculated process, Sherwood adds.
While some in the industry view making money and environmental, social and governance factors as being at odds with one another, Sherwood says they dont have to be.
ESG can be more than a CYA protection, or a policy to make students happy, Sherwood says. Its actually a way to harvest risk premia and alpha, and gain insights.
Sherwood has been working to blend his investors interest in ESG with their desire to make money on investments. For example, Sherwood led many educational meetings with the investment committee on derivatives, developing their trust and comfort, and has now implemented a derivatives program at MMBB, including options and futures strategies.
Beyond that, he still has hedge funds on the brain, despite no longer working for one.
Hedge funds are seen as dirty words now because weve been in a low growth environment, perfect for a 60/40, Sherwood says.
But that could change if the markets take a turn.
Bonds and equities will sell off at the same time, Sherwood adds. Thats when hedge funds will likely perform well they are something we should be looking at now more than ever.