Zeo Joins Osterweis: A Client-Focused Opportunity

Throughout the years, we have valued the privilege you have bestowed upon us to steward your capital. As you have hopefully seen, it is a responsibility we have always taken seriously. We understand that our clients choose us both for our portfolios and for our philosophy, a combination that we believe sets us apart. We also understand that our clients trust us in part because of our foundational approach to put clients’ interests first always. Zeo was founded in 2009 with the explicit objective of always being aligned with those who hire us. By doing so, we could feel confident that the best interests of the firm were tied to making our clients’ priorities our own. We have sought to build a business which embodies these principles, brought to life by a team who internalizes our firm’s core values. We hold ourselves to high standards when it comes to how we serve our clients. And we take that as our mandate from you.

So when the opportunity presented itself to join Osterweis Capital Management, we realized quickly that the question we should be asking ourselves is not “Why would we?” but rather “Why wouldn’t we?” You, as our clients, would gain the benefits of working with a larger but still boutique asset manager without experiencing any interruption in portfolio management, client service, communications, access to the team or longevity. Marcus and Venk will continue as portfolio managers, Paige will continue as your client coverage and our entire team will continue in their respective areas of expertise surrounded by a depth of professionals. For you, it means more of the same with added resources. For us, it was the most prudent way to continue serving you and protecting your capital.

As you know, how we run our business allows us to have a larger impact beyond what our headcount might imply. Being targeted and disciplined in our investment universe affords us the chance to go deep on our credit work and recognize opportunities across industries. The successes we’ve had to date were possible because of your confidence and trust, something we do not take for granted. Any decision related to the structure of our business is one we don’t take lightly. For us to make such a move, it would take a stroke of serendipity: a firm that shares both our investment philosophies and our foundational values, that puts clients first and that values empathy and inclusivity in its highly functioning workforce. (We did say our standards were high, right?)

Without any hesitation, we are excited to say that Osterweis Capital Management is exactly that firm. We have known Osterweis for over a decade and as a San Francisco-based firm, they have been a friend to Zeo early on—we owe our mutual fund structure and initial sales approach to their guidance. From Zeo’s inception, we have been faced with decisions which seemed counterintuitive or were even discouraged by others, but we knew instinctively that we were doing the right thing for our investors.

One such example occurred in 2011, when we decided to launch our first mutual fund despite being advised to stick with a hedge fund structure by many of our peers. A private partnership, they argued, was so much better for the manager, who could more easily restrict client redemptions when the markets became volatile. Talk about a conflict of interest! With the wise counsel of Carl Kaufman, the current co-CEO of Osterweis, we decided instead to focus on the structure which was in the best interest of our clients, and we trusted that we could manage our business so that our clients’ success was our success.

Another example occurred in 2012, as we explored the best ways to market our young fund. Ironically, this time, we had veterans of the mutual fund industry telling us that we were going about it all wrong. The personal touch we had been known for in our hedge fund careers would not work in mutual fund sales and distribution. We were told a focus on consistent risk profiles instead of returns at all costs was not going to be effective. Again, with guidance from the like-minded team at Osterweis, we focused on fit. We trusted that those who resonated with our message of risk-reward would value what we did, and those who did not were better off investing elsewhere. Put simply, we did not have to try to be all things to all people.

With the opportunity to join Osterweis, we are again focused on fit. Our shared philosophy of prioritizing clients first, attracting high caliber professionals, and delivering competitive actively managed investment products only scratches the surface of our natural alignment. As our teams prepared for this transaction, we have found nothing but synergistic energy, a shared culture of compliance and complementary work ethics. It’s been a busy time, but because of the similar values and the integrity of the people, it’s also been fun. For anyone who has gone through a similar experience, you will appreciate that “fun” is rarely the word that is top of mind.

We look forward to sharing the depth of resources which will become available to our clients when our team joins Osterweis on May 1. We have admired Osterweis for a long time, and we are excited to be able to bring you our same high standards of client service and portfolio management for years to come from within a firm which shares the values we, and you, hold so dear.


By Venk Reddy and Paige Uher

Important Disclosure Information

Zeo Capital Advisors is a fundamental investment manager with a sustainably-focused short-duration credit mutual fund, a sustainable high yield mutual fund and separately managed accounts. Venk Reddy, Founder and Chief Investment Officer, and Paige Uher, Chief Marketing Officer and Head of Distribution, co-authored this piece.

For more information contact Zeo directly at 415-875-5604 or visit www.zeo.com.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Zeo Capital Advisors, LLC (“Zeo”)), or any non-investment related content, made reference to directly or indirectly herein will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from Zeo.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Zeo is neither a law firm, nor a certified public accounting firm, and no portion of the content should be construed as legal or accounting advice.  A copy of Zeo’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.zeo.com/disclosures.