2. PLAYERS | SELECTOR PROFILE
CITYWIREAMERICAS.COM18
Lessons from
THE FRONTLINE
3. SELECTOR PROFILE | PLAYERS
NOVEMBER 2016 19
Y
ou don’t tend to find many investors like Ric
Mayfield these days. One of a dying breed
within the investment world, Mayfield has
spent almost his entire 23-year career with the
same firm – Atlanta’s SunTrust Bank. Drawing
from the experience he has accumulated over
the years, Mayfield has learnt the importance
of looking at the bigger picture.
While many post-financial crisis fund selectors continue to
obsess over quant stats and short-term performance, Mayfield
knows that more than anything, the business of selecting the
best fund managers is built around one simple factor.
‘One of the key things I’ve learned over time is that this is
very much a relationship business,’ he says. ‘You can sit around
and run screens all day but a quantitative output doesn’t
explain what goes into a process.’
Currently a managing director at SunTrust responsible for its
private wealth management unit, Mayfield says these days
everyone has a catchphrase to describe their approach, and his
team is no different. They search for the five Ps: price,
performance, people, philosophy and process.
Undoubtedly, the quant nature of the ‘price’ and
‘performance’ criteria play a key role in his process, but
Mayfield says it is the remaining three that absorb most of
his team’s time.
‘Quant is down to 10% of our process, it’s the science that
goes into it but the art – or the qualitative side – is really 90%
of it. It’s talking to the managers, to the analysts who are part
of the process, to get a clear understanding and the conviction
that everyone that is part of the strategy is on the same page.
That’s what really takes time.’
BUILDING FOUNDATIONS
A Georgia-born lifelong fan of the Atlanta Braves baseball
team, the 47-year-old Mayfield says in manager selection,
like baseball, going for the high scoring players isn’t always
the best tactic. ‘It’s better to aim for singles and doubles
instead of always swinging for a home run. Over time
that’s what wins games.’
Mayfield is responsible for the group’s manager research and
the due diligence process covering its $50 billion in
discretionary client assets. Of that figure, more than $3 billion
comes from international offshore clients, a section SunTrust
classes as a growth area.
‘Our offshore platform today has expanded but it will
continue to expand as we continue to grow our international
wealth business,’ says Mayfield. ‘Most of [our offshore clients]
are Latin American, that is the legacy of SunTrust, but we are
extending towards European-based clients as well.’
Mayfield took on his current role in 2008, but began making
his mark on SunTrust’s selection and investment process many
years earlier when the group decided to consolidate all its
portfolio managers into one division in the early 2000s.
‘When I joined we were a very decentralized company. What
people in Atlanta were doing wasn’t necessarily what all the
other divisions were doing.
‘After the dotcom crash we decided to consolidate it and
create a process and team which we called Personal Asset
Management,’ says Mayfield, adding that he was handed a
player/coach role as he ran the team while still managing his
own client book.
‘It was almost as though we were running a business
within a bank. We were responsible for setting up equity,
proprietary equity, fixed income processes, trading and I then
started focusing on building our asset allocation process.
Before that we’d had no global view of the world, we had no
view, for example, of emerging markets versus domestic
across our company.’
This process was the genesis of the program they have in
place today, he says, and paved the way for the group to
ultimately adopt third-party manager selection through their
private wealth management unit led by Mayfield and his team
of four analysts.
Initially set up in 2008, Mayfield built up this unit from
scratch, starting from a platform that used in-house funds to
one that fully embraced the open architecture philosophy.
Today, SunTrust no longer has its own mutual fund range and
its wealth management platform holds only third-party funds.
KEYS TO THE KINGDOM
As the gatekeeper to SunTrust’s third-party platform, Mayfield
has over the years developed his own method to find out if a
manager is worth backing. Not one to follow convention,
Mayfield favors the relaxed mood of a coffee shop over the
formal environment of a conference room.
‘I’m well known for having a coffee with managers. I’ll set up
a 30-minute coffee with manager, usually in our food court or
in a coffee place across the road from our office. It’s very
casual, hardly ever do we have an agenda.’
He recalls one such meeting back in 2010 when he was
searching, with little success, for suitable high yielding dividend
strategies for his yield hungry clients. Happening to mention
his struggle during an innocuous catch-up meeting with an
asset manager sales representative, he was duly informed they
had such products on offer – today that group is one of the
single largest mandates on his platform.
‘In this business, you can sit in your office all day and look at
screens on performance, but it’s running into people and these
random conversations that tend to pay off.’
Due to compliance restriction he was unable to reveal what
With more than 20 years at
SunTrust under his belt, Ric
Mayfield is a true industry
veteran. The gatekeeper tells
Atholl Simpson how he’s
coped with everything from
the dotcom crash to today’s
negative rates and reveals
the one question you should
always ask a fund manager
4. PLAYERS | SELECTOR PROFILE
CITYWIREAMERICAS.COM20
fund managers are on his platform.
The manager attribute most coveted
by Mayfield is conviction in their own
investment strategy, no matter what
form that takes.
‘We have all kinds of managers on our
platform, ones that are really dynamic,
ones that could be a talk show host or
run for political office, and then we’ve
got the portfolio managers that just
sound like the boring statistics professor
you had in MBA school.
‘They don’t have to be dynamic and
walk into a room where everyone wants
to talk to them, but they have to have
the conviction, the belief that they can
add value.’
During his encounters with fund
managers, Mayfield says there is one
question he never fails to ask them
because it shines a light on their true
character.
‘I always ask managers the question
“what is keeping you awake at night?”
That is one of my favorite questions
because it really gives you better insight
into the way a fund manager is thinking
rather than asking them how their
portfolio is structured today compared to
the benchmark. It’s one of those
questions that forces them to think.’
Among some of the most memorable
and unexpected answers Mayfield’s
heard were: Russia’s decreasing
population because of its poor
demographics and how artificial
intelligence is going to displace sectors
that we haven’t even thought about yet.
It’s now his turn to be in the hot seat.
So, what keeps him awake him at night?
RIC’S RESUME:
RIC MAYFIELD
AmSouth Bank
Equity analyst
Wells Fargo
Equity analyst
(Wachovia
Bank)
SunTrust
Portfolio manager
SunTrust
Head of
personal asset
management
20031993 1995 1996 2002
KEYSTATS
$50bndiscretionary
AUM
$3bnoffshore
discretionary AUM
15+asset management
partnerships
55+funds on offshore
platform
250+fund manager
meetings per year
‘For me it’s the unintended
consequences of negative interest rates
and the idea that central banks can force
people to spend by charging them to
hold their money. The evidence is
showing that that is not the case and it
forces people to save more money. Low
and negative interest rates are really
having a horrendous impact on retirees.’
ALLOCATION ADVERSITY
One driving belief within SunTrust is
the idea that key indicators will be
‘lower for longer’, from interest rates to
growth and yield.
It’s a difficult environment to
navigate and while Mayfield has been
making good use of dividend yielding
and growth managers, he has been
making other changes to his portfolios.
‘On the fixed income side we’ve shied
away from high yield because we feel
like the best of the credit cycle is behind
us. We have gone towards US
investment grade corporates as we feel
we can find some more attractive yield
there in higher quality with an
acceptable level of credit risk with the
US’ stable growth.’
Within his equity outlook there has
also been an evolution of his
approach. Across the board, Mayfield
has been focusing his attention away
from developed markets like Europe as,
although valuations in some countries
look attractive, their earnings trends
don’t inspire confidence.
‘One of the more recent changes is
we have become more favorable on
emerging markets. Over the last few
US ELECTION FEVER
Mayfield admits that the US election campaign has been having more
impact on markets than expected. However, he believes it can be dangerous
to read into what is happening on the campaign trail, pointing to a recent
paper SunTrust’s Investment Advisory Group published in August titled
Portfolios Politics Don’t Mix, which makes this argument.
‘We caution about mixing portfolios and politics. We’re not trying to say
that who is in the White House doesn’t matter, it does, but it’s one of those
factors that always influence investments. The economics in the market
cycle matter just as much, if not more, than a short-term move on a
tracking poll or a performance in a debate.’
He advises investors to look towards the Brexit case as a warning sign.
‘There was a lot of really smart money on Remain, we all saw what
happened after that. It just shows the danger of trying to position a
portfolio ahead of an event that you really can’t control.
‘What we try to do is be longer-term and what we will do is we will assess
when there are known knowns out there.
‘Whoever gets elected presumably is going to be taking office after quite a
long bull market. Even though the economic expansion hasn’t been up to
historic standards it’s still been in expansion mode for quite a while. They will be
inheriting an economy that is long in the tooth and I think it’s more valuable to
position for that kind of event rather than
speculate who will be the winner or not.
5. SELECTOR PROFILE | PLAYERS
NOVEMBER 2016 21
SunTrust
Managing director private wealth management
2007 to present
years we had been concerned with
their earnings trend and growth
outlook as they’ve tended to be more
correlated to commodity markets’
downturn.
‘But the spread of EMs’ GDP growth
against developed markets looks to
have bottomed and started to trend
upward and that’s usually a good sign
EMs do better.’
China is one particular emerging
market he is feeling more confident
about.
‘We’ve been fairly sanguine on China
for a while but we feel their macro-
economic transition is proceeding in a
fairly orderly fashion, there are still
headline risks here and there.
‘The recent stabilization we are
seeing in commodity prices also tends
to reinforce the idea that China is fairly
stable.’
FUND MANAGER CHALLENGE
As well as having to face growing
demand for higher returns and yield,
Mayfield believes that fund managers
have also had to cope with a change in
investor mentality.
‘Since the financial crisis there is an
acknowledgement that the industry as
a whole has got a lot more short-term
minded,’ he says.
‘They are feeling the pressure of
performance. But it’s not just the
performance issues, fees are coming
down, whether it’s down to degree of
operating leverage issues or the money
being attracted into passive
investments and the almost daily fee
‘In investments there is a certain amount of ego but
it has to be coupled with the understanding that the
market is going to be smarter than you are at times’
compression happening there.’
Mayfield uses both active and
passive strategies but believes that the
rush into ETFs and index funds has
been exaggerated.
‘These trends go in cycles, active
management will have its day in the
sun once again’ he says, comparing it
to the early 2000s when value
investing fell out of favor but then
ultimately bounced back.
‘Who knows how long it will persist,
but when the index funds become the
market is when the tide turns.
‘I’m more and more convinced that
money managers are correct: the
monetary environment from the
central banks has had a larger impact
on active management than I originally
thought.
‘I believe that’s the main force
behind this move to passives.’
