Now, six months after parting company with his longtime employer in a dispute over returns and financial results, Salisbury is showing quite the appetite for risk.
Soon after exiting from Schroders, Salisbury, 49, was tracked down by David Booth, co-founder of Dimensional Fund Advisors, which has $35 billion in assets. Schroders had given DFA seed money, and Salisbury had served on its board. Booth wanted to know if Salisbury would join him.
The idea appealed to Salisbury, who bought a “substantial” minority stake in Santa Monica, California,based DFA’s European business and was appointed its European director out of London. What especially intrigued this supposedly risk-averse, thoroughly traditional investor was DFA’s investment approach: taking calculated , highly calculated , risks.
Under research director Eugene Fama, the well-known University of Chicago professor, DFA relies on quantitative methods and holds with the notion that to achieve outperformance, you must take deliberate risks. Fama sees overweighting small-company and value stocks, for instance, as disproportionately rewarded. DFA has a strong 15-year record.
“This is an environment of low returns and a heightened awareness of risk,” says Salisbury. “A manager that can offer outperformance that is proven over the long term and produced by a disciplined process should do well.” He’s willing to risk his money on it.
