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Inside Boys Town’s ‘Tenured’ Investment Team | Exclusive Q&A With Arnaldo Ovalles, Investment Analyst

by trusted insight posted 9months ago 1044 views
Arnaldo Ovalles is an investment analyst at Boys Town, an institution that assists at-risk children and families to succeed in life. He is responsible for evaluating existing and potential managers for all asset classes in the investment portfolio. From August 2013 to July 2016, Ovalles was an adjunct professor for the MBA program at the University of Nebraska at Omaha. He holds a M.S. in economics from the same university and also holds a Chartered Financial Analyst designation.

In this interview, he discussed the tenure and culture of the investment team at Boys Town; his involvement in the University of Nebraska's MBA Program; and why he follows a value investing approach. 

Ovalles was recently named on Trusted Insight’s Top 30 Foundation Rising Stars. He graciously spoke with us on July 11, 2017.

Trusted Insight: You have a master’s degree from the University of Nebraska and then you were an adjunct professor there for a couple of years. What did it mean to you to support your alma mater?

Arnaldo Ovalles: Since the beginning of graduate school, I wanted to be involved in some way with the University of Nebraska. I always felt like the University helped shape my character and my career. It was important to me. During my studies, I built strong relationships with my professors and chairman of the college. After graduating and completing the CFA program I was asked to give some lectures at the University and also teach the CFA program they offered. Thereafter, I was asked to be an adjunct professor for an MBA class - "Investment Principles," which I truly enjoyed as well. I did that for three years. Eventually, I got too busy with my growing family of three kids to continue. Maybe at some point, if things slow down, I will get back to teaching.

Trusted Insight: You’ve been an investment analyst at Boys Town for nearly 10 years. What does your typical day-to-day look like?

Arnaldo Ovalles: Each day is different, but most of my effort is toward doing manager due diligence, which might require calls or meetings with potential and current managers. This due diligence process might lead to some data gathering, reporting, research and analysis. Given that we are a small team of four investment professionals and we all are generalists covering the entire portfolio, we tend to have lots of informal meetings as well as some more formal meetings. These conversations allow me to continue learning from other team members, all who have decades of successful investment experience, including our CIO, Phil Ruden, who has been with Boys Town for over 35 years.

The tenure of our team speaks highly about our culture and sense of mission to Boys Town. It allows us to have deep knowledge of the organization and its values, an understanding of the different asset classes and allows us to stomach different market cycles.
Trusted Insight: In terms of the investment strategy, how does Boys Town differ from peer institutions, or are they similar?

Arnaldo Ovalles: What is different about us is the tenure of our team. As I mentioned, our CIO has been here for 35 plus years. I would say it’s pretty rare to find a team in our industry that has a leader that's been around for this long, and the other most senior member, Mike, has been around for 30 years, along with Todd who has couple decades of investment experience and half of that with Boys Town. My ten years with Boys Town makes me the newest member of the investment team.

The tenure of our team speaks highly about our culture and sense of mission to Boys Town. It allows us to have deep knowledge of the organization and its values, an understanding of the different asset classes and allows us to stomach different market cycles. The tenure, experience and mission has allowed us to build a lot of different relationships with other peers, highly respected managers, and people in the industry. I think this speaks highly about our approach and commitment – it is something that we're very proud of.

Trusted Insight: What trends are currently playing out that are impacting how you invest?

Arnaldo Ovalles: We take a long-term approach. There's a lot of noise in the short-term, even in the mid-term. For several years, we have been overweight non-U.S. equity markets, which detracted from our performance, but in the last year our bets have started to pay off. We continue to do some research in these markets.

Humility is an attribute that we can all benefit from; the markets can humble anybody. Humility is what allows us to be intellectually honest with ourselves and our team.
Trusted Insight: If there was one piece of advice that you can share with someone looking to enter institutional investing, what would it be?

Arnaldo Ovalles: Being intellectually curious allows somebody to ask questions, to look for answers and to continue learning. It’s always helpful to seek advice from seasoned and successful investors. Humility is an attribute that we can all benefit from; the markets can humble anybody. Humility is what allows us to be intellectually honest with ourselves and our team. Another quality is to have is patience. It's challenging to have the discipline to be a long-term investor. In fact, it seems like the new generations are less patient and more short-term driven. Let’s never forget about hard work.

Trusted Insight: Is there anything that we’ve failed to ask about you, the foundation or your role at Boys Town?

Arnaldo Ovalles: Similar to other foundations, we are an outflow-only fund. As of 2017, we are a strong 100-year-old institution. So, all the work that we do has made an impact to at-risk children, families and communities. We intend on being around for another 100 plus years to serve those in need.

In terms of my background, I'm originally from Venezuela and came here about 15 years ago. I came here on a scholarship to play college baseball. That's what brought me to Omaha, Nebraska. I came not knowing any English, and dedicated myself to learning English and going to school. By being in Omaha, I found myself more interested in investments. As you know, we have one of the most well-known investors on the planet, Warren Buffett. My colleagues and I are influenced by him. We follow his value investment approach.

To learn more about foundation investing, view the complete list of Top 30 Foundation Rising Stars.

You can view our full catalogue of interviews with institutional investors here.