The best investment ideas come to Todd Morris, lead portfolio manager of Polen Capital's international growth strategy, while he’s pulling weeds in his garden. When he told Stan Moss about his process, the CEO told him to spend more time with his hands in the dirt.
“That’s where he gets in the flow,” Moss told Institutional Investor.
Long before the Covid-19 pandemic shifted the working world to remote and hybrid structures, Polen Capital, a concentrated growth manager, allowed its employees to work from anywhere. At a time when the industry offered people few alternatives, Moss, who joined in 2003 when Polen had around 10 employees, made flexibility a top priority to attract the best employees. The founder of the firm had given him a strong foundation to work with. “David [Polen] really managed the firm from what could be referred to as a lifestyle asset management firm: keep it small, simple, one strategy with approximately 20 stocks in that strategy,” Moss said.
Moss argues that the work environment has helped Polen grow into a major competitor in the asset management industry. The firm has gone from catering only to high net-worth individuals to a 200-employee manager, that also oversees money for institutions, including pension funds and endowments. Although the bear market has taken a toll on assets, it is now managing $61 billion.
Polen gives employees autonomy by using what it calls a shared services model. Moss said its four separate investment teams share back-office services, including business management, operations, human resources, legal, compliance, distribution, and marketing — all non-investment related functions. This allows the firm to run four investment franchises that operate independently from one another. Polen’s large company growth team is based in Boca Raton, Florida, where Moss also lives and works. Its small company growth team is based in Boston, and in London, the firm operates an emerging markets growth team. In 2021, Polen acquired DDJ Capital Management, a boutique high-yield, loan, and private credit manager, which now is called Polen Credit.
Part of Polen’s growth came after iM Global Partner acquired a 20 percent equity stake in Polen in 2016. iM Global makes minority investments in boutique asset management firms, leaving them independent, while also providing them with additional resources such as distribution help.
Damon Ficklin, head of Polen’s large company growth team who joined in 2003, said Polen’s partnership with iM Global has helped expand its brand awareness and presence in Europe and Asia.
Added Moss, “We want the investment people at Polen Capital as close to 100 percent exclusively focused on investing as possible,” Moss said. “They don’t have to worry about administration or operations, or anything other than thinking about the securities that they’re investing in.”
The CEO stressed that an attractive work environment isn’t enough. Moss wants people with an aptitude for perseverance, or grit. He looks for resumes that show “demonstrable achievement,” self-motivation, and examples of overcoming obstacles. He’s not necessarily looking for pedigreed talent with a traditional investment background.
Part of Polen’s pitch to potential employees is that everyone receives a $5,000 stipend to grow professionally or personally; Moss leaves the definition intentionally vague.
While many staffers use the fund to book a few sessions with a career coach or take a class, Moss said some choices have generated interesting stories. Jeff Mueller, a portfolio manager who served as a fighter pilot in the U.S. Marine Corps before jumping into a career in investing, hired a public speaking coach and developed a talk called “5 Lessons Learned in the Face of Adversity.”
Clients, including Morgan Stanley, UBS, and Florida Public Pension Trustees Association, have heard Mueller’s speech and have asked him to speak to their own employees.
While many firms have adopted new ways of working in 2022, it’s not a no-brainer. “[When] I attend industry conferences, the majority of the conference will be about this topic,” Moss said. “While others are focusing on where everyone works, we’re actually working.”