Q&A with Dee Dee Ricks
Founder of Munificent Asset Management, LLC
Family Office Insights sits down with Dee Dee Ricks, an entrepreneur in the alternatives space and the subject of an HBO Documentary to discuss her life’s goal of being an enabler of equality and her launch of Munificent Asset Management
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You describe yourself as an entrepreneur within the alternatives industry, how did you start?
In 1994, I launched Ricks Consulting Group, Inc. with D.E. Shaw as my first client. I “grew up” with the industry, counseling leading multi-strategy firms during their growth and expansion phase by helping them understand new asset classes and strategies that fit within their businesses and their strategic and competitive position in the market place, helping them acquire funds and placing top investment talent to implement and grow their strategies.
You recently launched Munificent Asset Management in 2016. Why did you start it?
Emerging managers struggled after the financial crisis, the space is broken, and I created a model to address it. The idea to create a new model came to me in 2014 after I was engaged by a $5 billion family office to help expand its internal and external mandates and to potentially hire a Chief Investment Officer. In a meeting with over 100 public pension and endowment CIOs, I was repeatedly asked the same question: “You’ve helped build some of the best institutions in alternatives – why not start your own? And FYI, there’s a need for women business enterprises.”
You’ve been quoted as saying the alternatives space is ‘broken.’ Why do you think that?
Increased regulation, rising operating costs, greater demand by investors for transparency and fee compression have made it increasingly difficult for early-stage managers to attract sufficient capital to build a long-term viable business. This has been the case notwithstanding studies establishing emerging managers (based on size and/or diversity) typically outperform larger institutional funds. Whereas, large institutional funds tend to chase the same strategies and trades, smaller managers with different educational and professional backgrounds have the ability to think and act more independently. That said, allocations should not be based on ethnicity or gender but because the strategy fits a mandate in the portfolio.
There are a substantial number of emerging managers programs that often allocate to fund managers that lack long-term portfolio construction and risk management skills and have not seen multiple business cycles. Also, their assets can be below $300 million and highly concentrated, making it hard for institutional money to come in even if performance is stellar.
What is the opportunity?
The alternatives industry has always been static and undergone several phases. So it’s inevitable that it will continue to change and we’re on the precipice of the next phase. I love the quote “The best way to predict the future is to invent it.” Investors are tired of high fees and lagging performance. Flexible and innovative fee structures combined with a business that revolves around the best athlete is a winning edge.
I spent over two decades developing my skills in recognizing talent and understanding the environment best suited for managers to perform. One of the many reasons talented managers want to start their own fund is that they recognize they are considered to be “under-the radar.” They also want to take advantage of investment opportunities that larger financial institutions cannot due to their size. Smaller funds tend to outperform the multi-billion dollars funds by exploiting niche opportunities and are more nimble implementing trades.
With Munificent as general partner, managers focus solely on investing and developing the skills of their teams while maintaining ownership of their fund. Assets across the funds are aggregated at the Munificent level to meet institutional asset requirements.
To wrap up the best athlete and winning edge analogy, what makes a team a consistent winner is the talent on the field. This year’s Super Bowl with Tom Brady’s leadership and talent during the dramatic fourth quarter comeback was the winning edge. In a competitive marketplace, the winning edge is what survives and makes the difference.
You have said that one focus of Munificent will be impact investing. Can you explain?
Impact investing and social finance is growing within the family office community. Alternatives have been slow to adopt the strategy, especially in the United States. Many top performing fund managers don’t want to be told they can’t invest in companies with adverse societal or environmental impact. I believe that managers need to be eased into impact investing. For example, our vision to have each manager or analyst contribute their best ideas into an “Impact Portfolio,” which will be managed by an experienced portfolio manager responsible for portfolio construction and risk management of the portfolio. Consistent with the theme of impact investing and social responsibility, we intend to donate a portion of the profits to charity.
As I mentioned earlier, adding diversity to the investment profession is a major issue. Marching in a parade or wearing a pink hat isn’t the answer to a non-diverse industry, but I believe it helps to bring attention to the issues we want to address and help solve.
George Soros hired Dawn Fitzpatrick as Chief Investment Officer of his family office. I wish there were more Dawn Fitzpatricks or Anne Dinnings of D.E. Shaw out there and other minorities. At Munificent, we ask our fund managers to commit to hiring a woman or minority on their team and training and developing their portfolio construction and risk management skills. That said, we are in the business of making money for our investors. We believe adding diversity is one tool but gender or ethnicity alone will not guarantee success or a place on our team.
In 2011, the Documentary The Education of Dee Dee Ricks aired on HBO. Tell us about that.
A week after my double mastectomy, I was introduced to Dr. Harold Freeman at the Ralph Lauren Cancer Center in Harlem through my friend David Saltzman at Robin Hood. At our first meeting he uttered the words “Poverty should not be an offense that is punishable by death.” My life changed forever that day. I often say in interviews and in my keynote speeches that cancer is the best thing that ever happened to me other than my sons.
Having worked in the hedge fund industry for over a decade when I was diagnosed in 2007, I realized I had lost the little girl from the south that left home at 13 and raised herself. I faced a daunting new reality undergoing treatment, the myriad of decisions, the morass of insurance questions and paperwork, and balancing treatment with work and life! If it was daunting for me – a well-off, highly successful professional – I could only imagine how difficult it must be for others without my resources. I knew that day with Dr. Freeman there was no better cause than to support his efforts around “patient navigation” - i.e., helping economically disadvantaged women navigate the system of healthcare, insurance and other hurdles.
I vowed that day to raise $2.5 million. I began creating five minute videos about the Ralph Lauren Cancer Center and sending them to my clients. The videos got into the hands of Perri Peltz, the director, and she knew she had a story to tell.
Tell us the story.
Everyone should have access to treatment regardless of socioeconomic status. The documentary follows me for 3 ½ years and illustrates my life and experience with breast cancer as a white successful woman vs. Cynthia who was African American and uninsured- two individuals from very different backgrounds who become dear friends.
It covers my experience with chemotherapy, the side effects and how my family and I managed during treatment while simultaneously covering Cynthia’s treatment and then tragically, her death. When I met Cynthia, I did not believe that is the way the story would end. As the documentary shows, we were both young, vivacious, and determined to survive this with grace and humor. BUT underneath it all, something separated our respective treatments that literally became a matter of life and death. Cynthia wasn’t given a fair opportunity to pursue her right to live. This happens way too often for those that are diagnosed at stage four and uninsured. The very words that changed my life forever “poverty should not be an offense that is punishable by death” painfully preoccupied me the day I learned of her passing.
What is patient navigation?
Overcoming barriers when treating underserved communities. In 1988, Dr. Harold Freeman was the President of the American Cancer Society and the chief architect of the ACS’s initiative on Cancer in the Poor. Dr. Freeman discovered that one of the biggest challenges for treating those that are underserved is not necessarily making sure they can afford the therapy, although that is part of it.
The larger obstacle goes beyond the medicine. It goes to the deeper issue of overcoming barriers to treatment such as not being able to afford transportation to get there, babysitting services for their children during chemotherapy, a place to stay if they receive treatment away from their home or the loss of income due to their illness.
Patient Navigation also helps put our country back to work. The only requirement is that they are from the community and speak the language of the community.
What’s your vision for the future?
I want my entire life to revolve around helping others. As an entrepreneur, I hope to set new standards for the financial services industry by putting investors first and creating diversity of thought with social responsibility and impact investing at its core. As a philanthropist, putting our country back to work as navigators and expanding patient navigation globally. In April, we are launching an international patient navigation advocacy campaign in Africa, with an emphasis on access to cancer treatment, partnering with government agencies, academic institutions and non-profit organizations. After my second primary cancer diagnosis of melanoma in December 2015, I know now more than ever that my mission in life is to advocate for access to healthcare for all regardless of socio-economic status. Think: Part 2 of The Education of Dee Dee Ricks globally.
What’s your biggest challenge?
As with most things in life, finding the right partners. When you have a unique structure in business or philanthropy and you don’t “check the box” in today’s fundraising environment, you have to find that unique investor who shares your vision and is willing to think outside the box.
At the forefront is connecting to the investor community and understanding their needs. I want Munificent to become an investor solutions provider, matching up top talent to launch an investment strategy that fits the hole in the investors’ portfolio. I’ve done this successfully for over two decades for my fund clients and I’m confident I will be able to do the same for the investor community.
Equality is the core of your life. Why?
A reporter once asked me where I obtained my sense of social justice. I was an at-risk youth and, as I mentioned earlier, I left home at an early age. I was fortunate to have had several wonderful mentors in my life. Helping those most in need is very near and dear to me. I’ve always volunteered with inner-city kids and my experience with Dr. Freeman launched my advocacy career for helping underserved communities gain access to quality medical care.
In addition to my advocacy work in healthcare and creating diversity in financial services, I have also taken on ice hockey. My sons are avid hockey players, and I wanted to involve them in an issue they could relate to “charity begins at home” concept.
In 2015, we launched the Roots Hockey Student-Athlete Development Program to address social inequality in youth hockey. The program has evolved into the mission of helping students achieve their dream of receiving NCAA D1 scholarships to play college hockey. In our first year it became evident that the travel coaches, family advisors, recruiters and colleges of our diverse AAA players were not sufficiently focused on the players’ grades or their ability to excel in a rigorous academic environment. The goal of our program is to promote character development and personal growth both on and off the ice, to increase athletic participation for minorities and to highlight the importance of academic excellence to the young athletes in the program. To achieve this goal, we provide tutoring, college and SAT/ACT Prep.
I’ve started my fifth career as a secondary school placement adviser. We just found out one of our star players was accepted to the prestigious Gunnery School. Last year we had another participant who is currently considering commitment letters from D1 schools. This particular student continued to be advanced year after year within the public school system despite having an average grade of 70.
We require our players to undergo a thorough evaluation of previous and current academic performance, including standardized testing. After testing, our tutors discovered reading and writing issues. A neuropsychological evaluation determined that he was reading at a 6th grade level while going into his junior year of high school. We immediately intervened with an action plan that provided full time tutoring over the summer and assisted in finding the right school for him.
In August 2016, he was accepted into a NYC Prep School’s Jumpstart Program as a sophomore. With our support and intervention, he now has a real chance of surviving the rigorous academic environment of a NCAA D1 college as not only a hockey player, but as a student. Whether finance, healthcare or education, I want to make the world a better place for my sons. Or in the immortal words or Gandhi “Be the change you wish to see in this world.”
Dee Dee Ricks
Ms. Ricks formed Munificent Asset Management in 2016, leveraging over two decades of expertise building businesses and strategically assessing alternative investment managers. Through her work within financial services, she realized the need for more diverse investors, transparency and impact investing within the alternatives industry which Munificent was created to address.
In 1994, Ms. Ricks founded Ricks Consulting Group, Inc. to advise hedge funds and family offices on strategy development and talent acquisition with D.E. Shaw as her first client. Her proprietary research process helps clients identify new asset classes and strategies to capitalize on synergies within their existing business structures, and to understand their strategic and competitive position in the market place. Ms. Ricks also helps clients acquire funds and places top investment talent to implement and grow their strategies.
Ms. Ricks has closed hundreds of complex deals with the founders of multi-billion dollar, multi-strategy funds. Her proven track record of onboarding top talent to launch successful strategies has allowed her to align her revenue with her clients. Building on her extensive experience, Ms. Ricks created the proprietary POPM model (Portfolio of Portfolio Managers), which enabled her to be the first to bear “netting risk” on innovative deal structures.
Ms. Ricks was one of four finalists in the Ernst & Young’s National Young Entrepreneur of Year Award in 1998 for her groundbreaking recruiter training venture, Internet Research Services, her second company that she ran alongside Ricks Consulting Group from 1996 to 1999.
In addition to her pioneering work in alternatives, Ms. Ricks is a recognized advocate for access to healthcare. Since her diagnosis with breast cancer and the debut of her HBO documentary, The Education of Dee Dee Ricks, she has given over 100 keynote addresses to Fortune 500 companies, foundations, financial service conferences and non-profit organizations in the US and abroad. Ms. Ricks is a sought after inspirational speaker on access to quality healthcare and patient navigation as well as alternatives and entrepreneurship. She understands the social injustices underserved individuals face in healthcare treatment as well as in their day-to-day activities. These experiences led her to found The Ricks Oberoi Foundation, a 501(c)3 that serves two purposes: funding healthcare equality through patient navigation of breast cancer patients; and sponsoring The Roots Student Athlete Development Program. Roots is a predominantly diverse youth hockey team aimed at providing minorities and underserved teens the opportunity to participate and excel as student-athletes in a sport that is virtually inaccessible to players from many lower income backgrounds.
She received her Bachelor of Science degree from the College of Health and Human Performance (HHP) at the University of Florida in 1991 and was inducted into the University of Florida’s HHP Hall of Fame in 2016.
For more information, please email Ms. Ricks at DeeDee@mamllc.com.