Albany asset managers bet on the country's happiest companies for new investment portfolio
August 20, 2020
By Mike De Socio – Digital Editor, Albany Business Review
Aug 7, 2020
When investment managers Reid Prinzo and Shawn Maloney moved back to the Albany region from Boston and New York City, they wanted to create something new in their industry.
The idea was a fund that would invest in companies with the happiest employees and out perform the stock market index. It grew out of Maloney's research going back five years and his experience working at Morgan Stanley.
Maloney analyzed public data on 50,000 companies from LinkedIn, Indeed and GlassDoor in an attempt to find the ones that truly had the happiest employees — not just the firms that said so from internal surveys.
"I was able to find a correlation between the happiness of an employee and the firm's value," Maloney said. "We’re able to capture that premium for investors and gave it back to them as a return."
Maloney and Prinzo, who work with Bryant Asset Management based in Slingerlands, built a portfolio of 30 companies identified by Maloney's algorithm. They call it Eudaimonia, a Greek word that can be translated to "happiness" or "welfare."
Maloney has been managing the fund for about three years now. What began as $200,000 in seed capital has attracted significant investment and grown to $13 million in assets.
"We’ve had a lot of success working with local Albany business owners because they can understand the concept," Maloney said.
One of the investors is Joe Richardson, the managing partner of the Eastern New York Angels venture capital fund. He started looking into the Eudaimonia fund back in February, and decided to invest personally in May.
"It seems to be holding up really well in this really volatile market that we live in," said Richardson, who has a career in banking and investment going back 30 years, including as the New York region executive for Berkshire Bank.
"The performance has been way above any index that you want to use in terms of measuring," he said.
The concept of the portfolio isn't entirely new. Portfolio manager Jerome Dodson has been running the Parnassus Workplace Fund since 2005 with the goal of investing in large companies with outstanding workplaces. It has been consistently successful: The fund had a 9.63% annual return between 2005 and 2013, compared to the 5.58% return of the S&P 500 index during the same period, according to Fast Company.
Maloney and Prinzo's fund, however, may be unique in its reliance on data and algorithms to choose the companies. There are some obvious companies like Google included, Maloney said, but also some smaller firms he had never heard of before.
"I would never give these companies a first look if I was investing like I normally was," Maloney said.
Because the portfolio is managed in-house by Bryan Asset Management, investors pay only an advisory fee and not an additional fee that would go along with typical third-party mutual or index funds. When investors buy in to Eudaimonia, they are purchasing the 30 individual stocks in the portfolio.
So far, Richardson said he's pleased with his decision to invest in Eudaimonia. And he's been impressed by Maloney's algorithm.
"This is all stock picking, with an interesting nuance. Time is the element of total proof, but so far since he started this fund, his performance has been right on," he said.
Aug 7, 2020
When investment managers Reid Prinzo and Shawn Maloney moved back to the Albany region from Boston and New York City, they wanted to create something new in their industry.
The idea was a fund that would invest in companies with the happiest employees and out perform the stock market index. It grew out of Maloney's research going back five years and his experience working at Morgan Stanley.
Maloney analyzed public data on 50,000 companies from LinkedIn, Indeed and GlassDoor in an attempt to find the ones that truly had the happiest employees — not just the firms that said so from internal surveys.
"I was able to find a correlation between the happiness of an employee and the firm's value," Maloney said. "We’re able to capture that premium for investors and gave it back to them as a return."
Maloney and Prinzo, who work with Bryant Asset Management based in Slingerlands, built a portfolio of 30 companies identified by Maloney's algorithm. They call it Eudaimonia, a Greek word that can be translated to "happiness" or "welfare."
Maloney has been managing the fund for about three years now. What began as $200,000 in seed capital has attracted significant investment and grown to $13 million in assets.
"We’ve had a lot of success working with local Albany business owners because they can understand the concept," Maloney said.
One of the investors is Joe Richardson, the managing partner of the Eastern New York Angels venture capital fund. He started looking into the Eudaimonia fund back in February, and decided to invest personally in May.
"It seems to be holding up really well in this really volatile market that we live in," said Richardson, who has a career in banking and investment going back 30 years, including as the New York region executive for Berkshire Bank.
"The performance has been way above any index that you want to use in terms of measuring," he said.
The concept of the portfolio isn't entirely new. Portfolio manager Jerome Dodson has been running the Parnassus Workplace Fund since 2005 with the goal of investing in large companies with outstanding workplaces. It has been consistently successful: The fund had a 9.63% annual return between 2005 and 2013, compared to the 5.58% return of the S&P 500 index during the same period, according to Fast Company.
Maloney and Prinzo's fund, however, may be unique in its reliance on data and algorithms to choose the companies. There are some obvious companies like Google included, Maloney said, but also some smaller firms he had never heard of before.
"I would never give these companies a first look if I was investing like I normally was," Maloney said.
Because the portfolio is managed in-house by Bryan Asset Management, investors pay only an advisory fee and not an additional fee that would go along with typical third-party mutual or index funds. When investors buy in to Eudaimonia, they are purchasing the 30 individual stocks in the portfolio.
So far, Richardson said he's pleased with his decision to invest in Eudaimonia. And he's been impressed by Maloney's algorithm.
"This is all stock picking, with an interesting nuance. Time is the element of total proof, but so far since he started this fund, his performance has been right on," he said.
