2018 Knowledge Brokers

Rebecca Wood

Rebecca (Becky) Wood is the newly appointed president and CEO of FEG Investment Advisors, a Cincinnati-based provider of institutional investment management services. She is a key face at FEG, a firm she has seen undergo significant growth over the last 26 years.

Her path to the top was not what you would call “traditional.” She did not major in finance or economics like many in the industry—she was a liberal arts major whose interest in finance came about after beginning an entry-level position at CS First Boston in New York City. With encouragement from her department head, she joined their financial analyst program, and unknowingly began her path to leadership.

Five years later, she moved back home to Cincinnati and joined FEG as a financial analyst. Throughout her 26 years at the company, she rose to the role of consultant, led the consulting team, became a managing principal of the firm, and joined the leadership team in 2002. Her role before being named president and CEO was as head of institutional services, where she oversaw the firm’s largest department.

Wood says a lot has changed over the years, specifically noting the increased demand for investment expertise and in-house research as organizations incorporate increasingly complex investment strategies into their portfolios.

“I think the growing complexity of the landscape, coupled with the challenge of generating returns over the long term, has definitely been a struggle for investment committees that might lack investment expertise or are squeezed for time,” she said. These challenges have resulted in the rise of discretionary services, specifically OCIO, being offered by FEG and the institutional industry in general.

Wood said reduced return expectations for long-only equities and fixed income means institutional investors seek to add value elsewhere, often by implementing less-liquid strategies like private capital. The greater role these investments play in client portfolios, the more strain the investment program can put on the institution. Part of Wood’s role has been to identify client needs and create solutions that address the demands of these more sophisticated portfolios.

“As time moves forward, we have to remain at the forefront in terms of what we can offer to our clients to meet their needs,” she said. That can involve myriad strategies, including changing the way client assets are managed so that clients can benefit from scale in terms of fee savings, or dedicating resources to less traditional areas of focus like environmental, social, and governance (ESG). Regarding ESG, Wood notes that while FEG has been working in this arena for over two decades, she has been dedicating additional resources more recently, including adding an ESG liaison that works directly with advisors and their clients in building out specialized ESG programs.

Wood emphasizes the importance of alignment between client needs and FEG’s in-house research team. Three years ago, she created consultant liaisons within each sector team to serve as the bridge; the liaisons are responsible for bringing to the research team observations from the field, thereby ensuring that FEG is providing solutions commensurate with client needs. This initiative has been instrumental in strengthening clients’ direct access to FEG’s research team, something that is especially beneficial to clients with a chief investment officer that is charged with developing investment ideas.

“There is no intra-company billing or anything like that when clients want to talk to our research team. The client needs simply to pick up the phone to talk to a research professional. It’s a competitive advantage,” she said.

FEG is not a gigantic firm; it has accumulated $69 billion of assets under advisement, which enables it to be large enough to garner the attention of top investment firms, but small enough that its clients can add value by investing in strategies that are not so big that size becomes the enemy of return.

“We believe it’s a real goldilocks kind of size story where we can find unique investment opportunities for our clients,” she said. These investments include smaller dedicated funds with limited capacity within asset classes like private equity and emerging markets.

Wood led the initiative to reinforce diversity and inclusion at FEG. A committee of FEG employees was established to proactively seek diversity, further promote inclusion within the walls of FEG, and conduct due diligence on outside money managers in pursuit of best practices.

About a year ago, FEG’s managing principles transitioned the company to an employee stock ownership plan (ESOP). Wood said everyone at the nearly 140-person firm is now an owner, directly aligning the workforce with the great work that is being done for its clients.

By Randy Diamond

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