Tim Kaijala just keeps going and going and going.
He did it as a successful middle-distance runner for the University of Pennsylvania, specializing in the 800 meters before embarking upon a short semi-professional career affiliated with New Balance.
He also did it when he proposed to his now-wife Joanie, having traced out the words ‘Marry me?’ as a GPS-plotted running route through the streets of Boston. Understandably, the stunt went viral.
And he’s doing it now too, as director of investment research at O’Brien Wealth Partners, a Boston-based advice firm managing around $580 million in assets.
All the while, Kaijala has tried to juggle working face-to-face with clients with his desire to bury himself in data. ‘It’s kind of a theme through my career,’ he says. ‘I’ve tried to balance client-facing work with pure, analytical, spreadsheet-based, behind-a-computer work.’
Like most people in his age group, Kaijala has had to strike that balance in the midst of a crisis. He graduated from Penn in 2008, right into the teeth of the market meltdown. While most of his classmates had accepted on-campus recruiting offers from investment banks and management consulting firms in the fall of 2007, Kaijala opted to take a different approach, signing a contract to work with Fidelity as a portfolio analyst after wrapping up an internship with the firm.
The decision may actually have saved his career from exploding before take-off. ‘I had a bunch of friends who ended up on Wall Street. One of them had gotten a job at Lehman Brothers through on-campus recruiting. He called me on the morning of the collapse and said: “I’m standing outside with a box of my stuff. I don’t know what’s going on.” It was a pretty scary time.’
Of course, Fidelity was no safe haven. During his three-year stint at the firm, Kaijala endured three rounds of layoffs. But it might have been a blessing in disguise for his career. In one round of cuts, he switched teams from equity to fixed income and moved to New Hampshire, while another round brought him back to Boston to work with the firm’s asset allocators once again.
‘Through that experience, I actually got to see the financial crisis up close from the equity, fixed income and asset allocation perspectives. It was a pretty broad view,’ he says.
Kaijala got his first taste of client-facing work in 2010, when he relocated to Philadelphia to spend a year as a private client specialist. The opportunity to train with his old track coach from college was a fringe benefit.
By 2011, Kaijala had become restless again, and he headed back to Boston for an institutional product specialist position at Old Mutual Asset Management. There, he returned to the back office to work in distribution and investments. He has remained in the area ever since.
The job itself was less important for Kaijala than a certain reunion. ‘Before I left for Philadelphia, I had met [Joanie] on New Balance Boston. She was also running on that team,’ Kaijala says. ‘She was actually the reason I came back to Boston. It was a little bit of a Good Will Hunting “Gotta go see about a girl” situation.’
After nearly two years at Old Mutual, Kaijala found himself working for law firm Ropes & Gray, but not as the attorney that
he had envisioned himself becoming when he first set foot on campus at Penn.
Instead, he spent four years as a portfolio manager at the firm and its affiliate RIA, Ropes Wealth Advisors, during which time he helped the firm to run money for its trust clients as it shifted money management responsibilities away from its legal employees.
It was at Ropes that Kaijala finally found the perfect balance of front-office and back-office work that had kept him on the career treadmill for so long.
‘The really big thing that it taught me was how to be a fiduciary. The one thing that lawyers do exceptionally well is realizing the responsibility that they have to their clients. In the case of trusts, it’s a responsibility to both current and future beneficiaries, and they take that very seriously,’ Kaijala says.
‘The biggest thing I got from Ropes & Gray was the weight of knowing that the decisions you make on the investment side affect the lives of people in a very profound way.’
These days, Kaijala applies those lessons in a rather different office environment. O’Brien Wealth Partners goes about its business with a staff of 10 people – five of which are advisors. Just as the pace of Kaijala’s running career has slowed – he’s a hobbyist now – so too has the pace of his work life.
‘I spend probably 80% of my time at O’Brien doing pure analytical work on the markets, on managers and on asset allocation,’ Kaijala says. ‘I don’t have any clients, but I have the ability to go to client meetings and tell our story about why we’re invested the way we are and why we’re doing what we’re doing.
‘It’s a perfect balance for me in terms of getting to do what I really enjoy, which is the research, but also being able to participate in those client interactions. That’s really important to me.’
Run your own race
This sense of balance is key to O’Brien’s entire investment strategy. The firm offers three different model portfolios: a 14-fund flagship model, a pared-down version of the flagship for smaller clients with between eight and 10 funds, and a 12-fund SRI model.
The exact allocation breakdown between asset classes varies depending on the individual, but Kaijala’s investment approach generally exposes O’Brien’s clients to a mixture of actively and passively managed mutual funds and ETFs in equities and fixed income. Around 10% of clients’ portfolios are dedicated to alternatives, and the firm has a particular affinity for an interval fund and an opportunistic mortgage fund.
‘I run a 100% equity sleeve, a 100% fixed income sleeve and a 100% alternatives sleeve. The allocations to those sleeves are decided between the client and their advisor at O’Brien,’ Kaijala says. ‘They’ll have their own conversation, go through the financial planning process and then the output of that will be their allocation to the sleeves.’
When it comes to fund selection in the traditional asset classes, it’s fair to say that Kaijala is an active advocate. Although the firm uses some passive funds from Dimensional Fund Advisors to populate its US equity allocations, it sticks to active managers for international equities and fixed income.
‘We’re what I would call a “looking active first” shop. We want to look at an asset class and see if it makes sense for our clients,’ Kaijala says. ‘Once it makes sense to express that idea, we want to see if we can find an active manager who can beat their benchmark over time in that area. If we can, great. If we can’t, we’ll buy an index for as little as possible.’
One active outperformer that has impressed Kaijala is the $6.4 billion Matthews Asia Dividend fund. Managed by Yu Zhang, Robert Horrocks, Vivek Tanneeru and Sherwood Zhang, the fund has delivered total returns of 20.2% over the past three years to the end of October, ranking it third out of the 19 International Equity Income funds tracked by Citywire. The average fund in the category has returned just 9.8% over that period.
‘We’re long-term investors and so we’re interested in long term themes,’ said Kaijala, who first allocated client assets to the fund earlier this year. ‘I think the rise of the middle class in Asia is a very powerful theme that’s going to play out over the next 10 or 20 years. Matthews Asia is one of the best Asia-specific managers you can find in the US, with analysts that speak all the different languages and that have lived in all the different countries.’
For the ESG portfolio, Kaijala directs client funds to the $22.3 million Matthews Asia ESG fund. Co-managed by Tanneeru and Winnie Chwang, the fund has returned 13.1% over the past three years, placing it eighth out of nine Pacific Region funds tracked by Citywire. The average manager in the space has returned 21.1% in that timeframe.
Keep on running
In fixed income, Kaijala says that he wants the firm’s allocation ‘to be a buffer for equity markets when they correct.’
‘We want it to provide income, and we want it to provide stability,’ he says. ‘We have a manager that expresses each of those roles in the portfolio.’
The firm allocates to a government-backed fund in mortgage-backed securities, as well as a pair of unconstrained bond fund managers.
For Kaijala, the standout unconstrained fund is the $36 billion BlackRock Strategic Income Opportunities fund. The fund is managed by the experienced trio of Rick Rieder, Bob Miller and David Rogal.
‘They go out across the fixed income market and allocate their risk budget pretty evenly across a lot of different instruments,’ Kaijala says. ‘The goal is to try and make a little bit of money in a lot of different places.’
The search for good managers certainly never stops. Luckily, Kaijala has the endurance to keep going and going and going.