Banking & Finance and Small Business & Startups

Return of the native

An EGR man plans to open a boutique investment management firm.

September 5, 2014
| By Pete Daly |
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When Brian Schwartz graduated from East Grand Rapids High School in 1984, he vowed to himself that he would never return because, well, sometimes it’s just too boring here in West Michigan for a young man.

Schwartz is back in EGR after a 25-year financial career in New York where, at various times, he was a trader for an investment bank, a traditional investor and a hedge-fund investor. 

In May, he registered his new company, 85 Capital Management, as a Michigan LLC. He describes it as a boutique investment management firm that will compete against Wall Street’s alternative asset money managers, but at a lower fee.

Schwartz has an as-yet unidentified partner waiting in the wings, an individual he worked with in New York who is still employed there as a hedge-fund investment manager but will join 85 Capital Management when it begins doing business.

Schwartz said he currently is seeking a strategic partnership with an organization that has assets under management and will share in the start-up expenses. That organization “could be a local family (investments) office” or an institutional client such as a pension fund, an endowment or a corporation.

According to Schwartz, 85 Capital Management will launch “an unconstrained bond fund designed to target 10 percent net returns with limited correlation to broader equity markets and tight volatility parameters.” 

“This product is designed as an institutional offering, as a strategy that could manage in excess of $1 billion,” according to a summary he gave the Business Journal.

He said he is shooting for a start with clients possibly in the first quarter of 2015. His firm, once launched, could initially employ up to 10 people, he said.

He said there is huge opportunity here for his business model “because nothing like this is being done in Grand Rapids and, in fact, there is only one hedge fund in the state of Michigan” (in southeast Michigan.)

Schwartz, who has been a Chartered Financial Analyst since 2001, earned an MBA at Fordham University in New York in 1995. He holds a B.S. in business administration from Miami University in Ohio.

Schwartz, 48, returned to West Michigan in January because he wanted to raise his two sons, ages 17 and 14, in a city where he has family. His wife, a Broadway actress and theater instructor, passed away suddenly in 2011 from a brain aneurism. She was a native of Ohio.

Schwartz has named his firm 85 Capital Management because he had read there is no place in Michigan that is more than 85 miles from one of the Great Lakes.

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