Investment Team
Daniel WanzenbergPartner, Chief Investment Officer
My 30 year career has focused on studying the behavior of active equity managers. In 2005, as the head of ABN Amro’s North American global multi-manager program, I posed the following question: in an industry filled with some of the brightest and most highly credentialed people in society, why do so few equity managers outperform passive benchmarks?
What I discovered is that it is not the lack of manager skill but an inefficiency in how stock selection skill is typically harnessed and delivered to investors.
Specifically, active equity portfolios are often constructed too broadly and include “filler” or “alpha drag”. Research shows that equity portfolios often derive outperformance from just a few sectors; however, for diversification and risk control purposes, most portfolios include securities where no persistent stock selection skill exists. This active management dilution often produces passive-like returns and risk, with active fees.
By strategically selecting holdings only from sectors where managers had a proven track record of outperformance, I believed that we could avoid this dilution effect and capture better returns without sacrificing diversification.
In 2009, I set off to build a new company based on this innovative idea. At Portfolio Solutions Group, we’ve built a system to find and utilize the consistent stock-picking talents of managers in specific sectors. We do this by sifting through thousands of funds to identify sector portfolios with consistent outperformance. Then, we extract the holdings chosen by managers who have consistently demonstrated superior stock selection within each sector. Finally, we use rigorous portfolio construction techniques to strategically integrate these proven sources of excess returns (alpha) into a strategically diversified alpha-driven portfolio.
What I discovered is that it is not the lack of manager skill but an inefficiency in how stock selection skill is typically harnessed and delivered to investors.
Specifically, active equity portfolios are often constructed too broadly and include “filler” or “alpha drag”. Research shows that equity portfolios often derive outperformance from just a few sectors; however, for diversification and risk control purposes, most portfolios include securities where no persistent stock selection skill exists. This active management dilution often produces passive-like returns and risk, with active fees.
By strategically selecting holdings only from sectors where managers had a proven track record of outperformance, I believed that we could avoid this dilution effect and capture better returns without sacrificing diversification.
In 2009, I set off to build a new company based on this innovative idea. At Portfolio Solutions Group, we’ve built a system to find and utilize the consistent stock-picking talents of managers in specific sectors. We do this by sifting through thousands of funds to identify sector portfolios with consistent outperformance. Then, we extract the holdings chosen by managers who have consistently demonstrated superior stock selection within each sector. Finally, we use rigorous portfolio construction techniques to strategically integrate these proven sources of excess returns (alpha) into a strategically diversified alpha-driven portfolio.
Other:
After receiving a B.A. from University of Iowa, I started my career as a performance analyst at Nuveen Asset Management. I joined Envestnet at its founding in 2000, and helped build their investment manager platform. From 2007 – 2023, I served as Head of the Investment Committee at The Coleman Foundation and was responsible for overseeing its $200 million portfolio.
Samuel SchermanPortfolio Specialist
Sam’s passion for investment management began in 2012, inspired by Michael Lewis’ book “Moneyball.” The book’s exploration of data-driven decision-making in baseball resonated with Sam, akin to Jonah Hill’s role alongside Brad Pitt in the film adaptation. This inspiration led Sam to dive deeply into probability theory and sports analytics, where he developed a methodical and systematic approach, emphasizing the importance of avoiding emotional biases and focusing on data-driven decisions. After college, Sam served as the Director of Analytics at Daily Fantasy Sports (DFS) Karma, where he was responsible for creating simulations, projections and data-driven content for major leagues like the PGA, MLB, NBA, and NFL. Seeing the parallels between sports analytics and portfolio analysis, Sam joined Dan Wanzenberg at the predecessor to Portfolio Solutions Group in 2016, starting as an Intern and progressing to Senior Analyst and to his current role as Portfolio Specialist. Similar to evaluating sports metrics, Sam analyzes the performance of money managers, focusing on factors like alpha, attribution, and risk statistics to identify and combine manager skill in specifc sectors. Sam leads the analytics effort on the team and is responsible for managing the technology suite of models used throughout the process. As a Portfolio Specialist, Sam continuously looks for small advantages that, when combined, seek to enhance overall portfolio performance. Sam received a B.S. in Finance at Miami University.
Moody Aldrich Partners offers a centralized team of experienced non-investment professionals and an institutional infrastructure to support each of its investment teams. Shared business services ensures consistency across operational capabilities and adherence to a robust compliance program.
Shared Services
William B. Moody, CFAFounder, Managing Partner
Bill is co-Managing Partner of Moody Aldrich Partners (MAP) and is responsible for profitably growing the business through development of affiliates. Bill and Eli Kent lead the firm’s overall business strategy and oversee its centralized business management activities. In 1988, Bill co-founded Moody Aldrich & Sullivan which became MAP in 2003. He has been a portfolio manager and business leader throughout his career. Previously, he was co-founder, President and Chief Investment Officer at Dewey Square Investors, a multi-billion dollar diverse strategy firm that was sold to United Asset Management. Formerly, he was Senior Vice President and Head of Institutional Investment Management at Bank Boston for fourteen years. Bill is a Chartered Financial Analyst and earned a B.S. in Economics from Syracuse University.
Eli S. KentManaging Partner
Eli is co-Managing Partner of Moody Aldrich Partners (MAP) and is responsible for profitably growing the business through development of affiliates. Eli and Bill Moody lead the firm’s overall business strategy and oversee its centralized business management activities. Eli joined MAP in 2002 as Director of Marketing and Client Service and became a partner in 2007. He co-founded Harvest Funds Management in 2010 and became co-managing partner of MAP in 2012. Prior to joining MAP, Eli earned an MBA, Magna Cum Laude, from the F.W. Olin Graduate School of Business at Babson College with a concentration in Entrepreneurship and Finance. Previously, he worked at MFS Investment Management in institutional sales and at Fidelity Investments in institutional client management. He attended The Wharton School for Executive Education at the University of Pennsylvania and received the Certified Investment Management Analyst designation and earned a BA in Government and History from St. Lawrence University.
Joseph StowellChief Compliance Officer
Joe has over 25 years of compliance experience working in the investment management industry. As an outsourced Chief Compliance Officer and the Managing Member of Ally Compliance Partners, Joe serves as the designated CCO for a limited number of SEC registered investment advisers. Joe has served in this role since June 2018. Previously, Joe served as Global Chief Compliance Officer for Oechsle International Advisors for 18 years. Joe was responsible for administering the firm’s global compliance program. Additionally, Joe served as Director of Operations, where he was responsible for managing the firm’s vendors, front/middle/back-office systems, and the outsourcing of technology and legal. Before joining Oechsle in 2004, Joe held the position of Compliance Manager for Putnam Investments, and Compliance Analyst for State Street, and Scudder Stevens and Clark.
Joseph LaMarcaMarketing and Communications Associate
Joe is a Marketing and Communications Associate. He joined Moody Aldrich Partners (MAP) in 2022 and has over six years of industry experience. Joe is responsible for the accurate and timely dissemination of investment information to the firm’s clients including the preparation and updating of marketing materials, maintaining consultant databases, and responding to requests for information. He also works closely with business, portfolio management and client service teams on marketing and communication projects. Joe began his career at Bank of New York Mellon where he was a Client Service Manager prior to joining MAP. He earned his B.A. in Economics from the University of Massachusetts Lowell.
John P. SherlockSenior Director, Trading & Investment Operations
John has over 17 years of industry experience. John is responsible for trade execution, trade cost analysis, policy, broker/vendor management, and portfolio administration oversight. John joined Moody Aldrich Partners in 2007 as a Portfolio Administrator and Trading Operations Associate. John previously worked at State Street Global Advisors in international operations as a Portfolio Accounting Analyst and began his career at State Street Bank in Boston as a Portfolio Administrator. John earned a B.A. in Business from Saint Anselm College.
John HemenwayDirector, Trading & Investment Operations
John joined Moody Aldrich Partners (MAP) in 2018 and has over 7 years of industry experience. John is responsible for setting up accounts, updating portfolio information and managing workflows. He also supports the firm’s Chief Compliance Officer, Senior Trader and investment teams. Prior to joining MAP firm, John was a Trade Specialist at Bank of New York Mellon. Previously, he was a Mutual Fund Specialist at Bank of New York Mellon and began his career at Putnam Investments. He earned his MBA from Plymouth State University and BBA in Finance from Stetson University.