Grey Owl Capital Management Organizes the Next Generation of Buffett’s Graham Group

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On May 20, 2015, representatives from over a dozen investment firms will meet in New York City at an event dubbed the “Michelangelo Forum." A purposefully small and diverse group will share their distinct capabilities and perspectives at an invite only gathering with the modest hopes of “sparking an idea” or “making a connection.”

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“The goal is to put a bunch of smart, entrepreneurial people in the room with a really loose objective – get smarter and better around investment decision making and the investment business," said Jeff Erber of Grey Owl Capital Management.

Several months ago, a group of investment professionals had the thought to put together a small, casual gathering of like-minded, but not-too-like-minded investors to collaborate on investment ideas and the business of investment management. There are plenty of conferences and gatherings for professional investors, but maybe there is room for at least one more?

With over forty thousand attendees, the Berkshire Hathaway annual meeting and its associated smaller events may be “Woodstock for Capitalists.” SkyBridge Capital’s SALT Conference has become a who’s who of the alternative investment, policy, and entertainment worlds. Both are terrific events, but there is an opportunity to take away all the noise and hoopla of Omaha in May and leave the focus on long-term thinking, remove the sales aspect of SALT and leave the multi-disciplinary participation, and create a peer-to-peer gathering for investment professionals similar to what Vistage International and YPO do for small business owner/executives. There is an opportunity to create a small gathering of fellow investment professionals with the sole purpose of sharing ideas and developing relationships so that collaboration can continue throughout the year. This is just what Warren Buffett did with the “Graham Group.”

“The goal is to put a bunch of smart, entrepreneurial people in the room with a really loose objective – get smarter and better around investment decision making and the investment business, use a few presentations to ‘shake everything up,’ and then see what happens,” said Jeff Erber of Grey Owl Capital Management, who helped to pull the event together.

“If a traditional value investor leaves the gathering knowing a bit more about the futures market and how it might impact a company she is looking at or if one of the newer firms gets some feedback on growth from one of the more established firms, mission accomplished,” added Steve Samuels of Bulldog Investors, the earliest collaborator who was instrumental in pulling the group and agenda together.

Wanting to gather individuals from multiple geographies, the first challenge was to find an anchor event. Participants chose the Leucadia National Corporation’s annual shareholder meeting which is being held on Thursday, May 21, 2015. Leucadia today is everything a value investor should love: a “platform company” with shareholder friendly capital allocators at the helm (ala the companies and executives profiled in William Thorndike’s The Outsiders), underfollowed (perhaps the only company with a $10 billion enterprise value and no sell-side coverage), and unloved (it trades at a significant discount to book value). Most importantly, the firm holds an annual meeting with several hours of substantive presentations and investor Q&A.

The idea was a bit of a lark, but friends told friends and the size and quality of the group grew. To paraphrase what John Tamny, one of the participants, wrote in his newly published book, Popular Economics, experimentation doesn’t always work, but it is required to make progress. Our experiment starts on Wednesday afternoon.

Participating firms include Bulldog Investors, Carmel Capital Partners, E.S. Barr & Company, KDI Capital Partners, Pacifica Capital Management, RealClearMarkets, Remsen Asset Management, Three Court, LP, and Grey Owl Capital Management, LLC among several others.

Event participants will tweet during the event using the hashtag #michelangeloforum

Grey Owl Capital Management, LLC is an SEC-registered investment advisor whose goal is to provide superior absolute investment returns with minimal drawdowns for our clients. We provide a go-anywhere, opportunity-driven investment process that seeks out the best alternatives for capital appreciation and protection across multiple asset classes. Clients can currently access this process through our separately managed account platform with assets custodied at Fidelity or through Grey Owl Partners, LP.

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Jeff Erber

Janet Rakoczy
since: 08/2009
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