E73: John Merrill on GroveStreet’s $10.5 Billion Investment Strategy

John Merrill, Partner at GroveStreet sits down with David Weisburd to discuss GroveStreet’s $10.5B SMA model. In addition, they talk about the keys to building long-term SMA relationships, a highly selective set of criteria for managers and reasons why GP’s should prefer rigorous, discerning LPs vs. fast-followers. (0:00) Introduction and background of John Merrill and Grove Street (1:34) Benefits of separately managed accounts (SMAs) for institutional investors (3:39) The problem Grove Street is solving for clients (5:03) Importance of alignment in asset management (6:30) Investment process and criteria for selecting funds (10:13) Client management and characteristics Grove Street looks for in clients (13:25) Benefits of a boutique client model (16:17) Studying under David Swenson and his impact (20:14) The give and take in LP-GP relationships (22:27) Importance of landing an anchor investor for new funds (24:25) Characteristics of a good partnership between LPs and GPs (29:43) Characteristics of a top limited partner (33:17) Global investment insights and local biases (35:09) Final thoughts and closing remarks