Slow and steady in a frenetic world

The plastic tortoises that decorate his downtown White Plains office are gifts from clients, but the philosophy they embody is the business owner”™s: “Slow and steady wins the race.”

That is Ian Yankwitt”™s conservative approach to financial investment. At Tortoise Investment Management L.L.C., the company name “helps convey to somebody very succinctly what the philosophy is” when managing a client”™s assets, he said.  

“My business model is, let”™s not try to be a hero,” he said last week in his four-person office at 222 Mamaroneck Ave. “Let”™s try to be reasonable. Let”™s manage your risks.”

“There are a couple of clients who said they don”™t really love the name,” said the 39-year-old company president. “That”™s because at heart they want to make money more quickly.”

Yankwitt got more calls from that breed of client last fall than he does in these wintry days of economic gloom and uncertainty. Those clients suggested being “more aggressive”

with their investments. “In the late stages of a bull market, nobody cares about risk management,” Yankwitt noted. Now, those investors are grateful their adviser stuck to his slow-and-steady approach.

“You”™re getting new business in choppy times like this,” he said. “And it certainly looks like things are going to be choppy. What”™s interesting is that so much more business comes in at a time like this when the market goes down.

“Everybody wants to focus on, are we going into a recession? What are the odds? My view is, it doesn”™t really matter.

“Rather than try to figure out precisely what the odds are, you”™ve got to balance out the risks. The question is, how much risk is appropriate for you to take both objectively and subjectively? Number two, how should that risk be allocated?  That”™s my job.”

As his company”™s name might too suggest, Yankwitt was slow to arrive at a career in finance. A graduate of Yale University and Cornell University Law School, he practiced law for more than a decade, including seven years in the federal defenders division of the Legal Aid Society in Manhattan and Brooklyn ”“ “which people say is not the most obvious segue to this kind of business,” he noted.

In 2001 and 2002, as “the stock market started to fall apart,” Yankwitt began giving financial advice to some of his parents”™ friends, who recalled his well-founded skepticism about the Internet high-tech start-up bubble. He received an offer to manage the finances of one such friend.

 “The seminal thought behind the business is, you have to provide both advice and execution,” said Yankwitt, who gave up his public defender”™s job to launch his business full-time four years ago. His wife, Rochelle, a former tax attorney, assists part-time as the firm”™s business manager and tax researcher.

“It”™s my job to be sort of a bulwark” against the information overload to which clients are exposed, Yankwitt said. “It”™s our job to provide objective guidance. Let”™s not get caught up in the hype.”

 He focuses less on market-swaying current events and the latest hot stocks and foreign countries for investment and more on conservative strategies, such as efficient tax management and inflation-protected Treasury bonds, that are, as Yankwitt often describes them, “not sexy” or endowed with “zero sex appeal.” Taking the long-term view of his client”™s diversified portfolio, he looks at asset classes “that aren”™t going to be subject to the same forces, that ideally aren”™t going to go down at the same time.”

For investors in today”™s volatile economy, “Put something together that works in light of the fact that we don”™t know what the future will hold,” Yankwitt advised. “And then adjust as you go forward, adjust as you get more information.”Â   

While applying the slow-and-steady strategy, the business has grown at more of a hare”™s pace. Starting in 2004 with a core of 10 to 12 clients and about $11 million of assets under management, Tortoise Investment Management now has 72 clients and manages about $109 million of assets. The median asset value of his clients is between $1.2 million and $1.5 million, he said.

 “It”™s grown much faster than I”™ve expected so far and I”™m sure it will grow much more slowly at times,” said Yankwitt. The financial markets surely have taught him that.