In the ten years since Theodore Kokas was brought in to run investments, single family office EverWatch Financial has only registered one losing year.

This run of positive performance can be attributed to the thesis-led investment approach championed by Kokas, who honed his investing skills as a global macro portfolio manager at hedge funds including Millennium. This experience means that Kokas, one of the finalists for the 2025 Family Office Investor of the Year, looks at his portfolio in terms of asset allocation, as opposed to just a collection of managers.

“We’ve had managers that have been performing well where we decided we wanted to exit the space for one reason or another, and that’s a top-down decision,” he said in an interview with Institutional Investor.  “A number of areas we’ve allocated within the portfolio because we’ve liked the exposure, not because we found a great manager. In some cases, we’ve actually taken passive exposure because we could not find a good manager.”

Most of the public managers that EverWatch utilizes in its portfolio are custom mandates that the office works hand-in-hand with managers to design. Typically, the team approaches a manager with a specific mandate and the manager will then create a new fund for EverWatch to seed.

“Typically, we want very specific exposure and if we can find a manager that is offering that type of exposure, we will do it; otherwise, we have to create it,” Kokas said.

Even in 2020, when the world was reeling from Covid-19, a strong relationship with a CLO boutique meant the office had a very high allocation to floating rate credit that helped offset the correction in the equity markets. One could view this as luck, but Kokas argued it was the result of staying true to the investment strategy.

“If you have a thesis-driven approach, you have refutable points around a decision,” he said. “So, if something fundamental changes, either in the opportunity set or specific to the manager, we have a basis for making the decision to either increase exposure or terminate.”

When something goes wrong, Kokas added, “We want to be very mindful of the fundamental factors that broke the investment in the first place, so we don’t become reactive to short-term performance. We don’t want to hang on to a manager for too long and not recognize that something fundamental has changed either in the opportunity or the manager, and we don’t want to be so reactive that we terminate a manager on the lows.”

This aversion to reactive behavior has allowed EverWatch to make difficult decisions at crucial moments.

For example, in 2017, the firm seeded a fund of small- and micro-cap Japanese equities in order to gain exposure to that market. The fund initially had returns in the high 30s and low 40s and was EverWatch’s best performer for several years. However, the office has since exited the strategy because of dynamics in the Japanese market that have moved against those small-cap indices.

Another example saw the office terminate an agreement after leadership changes at a growth manager resulted in a strategic pivot away from quality growth to speculative growth, resulting in large losses following interest rate changes in 2022.

“We want to be very circumspect, data-led, and fundamentally driven around the investment decisions and, to the maximum extent possible, remove behavioral biases that tend to detract from most managers’ performance,” Kokas said.

A version of this article originally appeared in the family office newsletter Officium. You can subscribe for more content like this here.