by Sean McManus
Staff Writer
Imagine back-to-back America’s Cup winner Intrepid edging out the Australians and sailing you into the clear sunny waters of financial independence. The name, if maybe not the imagery, is something Mark Travis is hoping you’ll invoke when you think about who to let navigate the choppy waters of the stock market.
Named after what is thought to be the best designed sailboat ever, Intrepid Capital Management in Jacksonville Beach was started in 1995 by Mark Travis and his father Forrest Travis when both tired of working the sell-side at Smith Barney’s Consulting Group. In the last two years, Intrepid acquired local investment bank Allen Ewing & Co. and a larger but more diluted asset management firm, Investment Counsel based in Orlando. Combined, Intrepid now oversees about $500 million in capital for institutional and private clients.
But if the America’s Cup conjures up images of brash, high-risk upstarts like Ted Turner, this race couldn’t be more different. The father-and-son team has set Intrepid on a conservative, family-oriented voyage that may take longer to produce high yields than the instant gratification days of the Internet.
“One point eight percent in a money market isn’t sexy but it’s a lot sexier than losing 25 on an inflated tech stock,” said the laid-back Travis, who spends at least a couple weeks a year on surfing trips to Costa Rica. But Intrepid earned its confidence the old-fashioned way. Since its inception, their accounts have been up anywhere from 12-28 percent, produced from steady investments that Travis said “never goes out of style — like beer, shoes and sewer pumps.”
Intrepid likes to invest in smaller public companies that have a significant history of being family-run and are operated more like private enterprises. Travis said it can be a struggle trying to find enough of those to fill the books. Regardless, they’ve done well with natural gas, dog food, student loans, and blue jeans. Travis said that means they often buy when others sell.
“Nobody thought people would stay in hotels again after Sept. 11,” he said. “We bought Hilton.”
When picking a stock, Travis likes to look at something called the enterprise value, or the market capitalization minus debt.
“Basically, that means, what’s my yield?” said Travis. “That’s a different model than two years ago when brokers were hyping market caps and fast growth as the best factors in choosing a good stock. But it’s not that different from what conservative financial planners have always known, that the protection of wealth is priority number one, then it’s time to grow.”
With about 45 total employees, Intrepid represents family trusts, foundations, medical and legal practice funds, labor union funds and some public company asset funds and pension funds. Travis said the goal now is to streamline the half billion that they represent across the board. They also need to streamline the messages that Intrepid has for its original clients and the clients they recently absorbed from Investment Counsel in Orlando. That responsibility falls on the shoulders of Martha Ellen Hill, Intrepid’s new vice president of marketing. Having spent three and a half years working in New York for Lazard Asset Management, a division of Paris-based Investment bank Lazard Freres, Hill is hoping to effectively tap into Investment Counsel’s network to acquire new clients and reintroduce her company to their old ones.
“Our goal is to leverage Investment Counsel’s distribution channel to send the message that Intrepid can make you money,” said Hill. “Part of that is developing a consistent message and getting on the radar of the companies with money to invest.”
Intrepid’s pitch is that they are more cost effective and customer service oriented than what Travis calls the wire houses, like Morgan Stanley and PaineWebber. According to Travis there’s a tremendous amount of “group think” that goes along with those mega-firms.
“That’s what happened in March 2000,” said Travis, “when every analyst at a major bank was hyping the same companies. We want to challenge our portfolio managers to do different things with the index. We want to challenge the conventional wisdom of the big guys.”
Saying that CNBC has clouded people’s vision regarding the stock market and practical investing, Travis points to classic texts on the subject as guides for how to manage money, such as “The Classic Investment Anthology,” “The Intelligent Investor” and “The Problem with Prosperity.”
Travis said they’re still working on finding a message that distinguishes them from other asset managers in the area, but said intellectual capital and taking care of customers is definitely part of it. And the numbers speak for themselves.
In terms of local opportunities, Travis said they’re definitely trying to figure out the best way to capitalize on real estate expansion.
Travis said they’re also looking for a high-yield analyst, and noted that in conversations he has with “fast paced guys who send him resumes from New York,” the Floridian has to wrench it down. “I have to say, ‘Slow down, look at things carefully, we’re in this for the long haul.’”