Bobby Schwartz has spent his career capitalizing on hidden value in market inefficiencies for investors. A former commodities broker, he’s principal, CEO and founder of brokerage RCM Asset Management in Chicago. As principal and managing partner of the RCM Alternatives division, Schwartz aims to tap the value in managed futures funds, often considered a subset of hedge funds, to trade global futures contracts. He explains how he’s doing it with acquisitions, education and content.
Q. You’re announcing an acquisition Tuesday. What is it?
A. We have signed a deal to buy out Attain Capital Management, one of our competitor firms that is very complementary to us and will help us take our education and our online presence to the next level. One of the biggest issues we’ve had as a growing company is to get more presence online and also further our education services.
They have a great blog and have certain people who all they do is build out the education and the blog. Being and having a presence online is incredibly important, but they also have a fund platform that we’re really excited to be able to take to different clients. So that is going to step up our game not only in the events we do but also to reach more people in the U.S. and internationally.
Q. Why is education so critical for your growth?
A. When we first started trying to figure where to introduce these types of investments to people, we had to go to a wealth manager or registered investment advisor. While advisors know they want to get involved in the space, it’s been a challenge to get them to understand the benefits of the product and how to invest on behalf of their clients. We decided that creating education forums and content is the best way to approach wealth advisors and their clients, which is very different than what others in our space do.
Q. How does this disrupt the industry?
A. Massive conglomerates or large mutual funds that have a tremendous amount of money are doing their typical advertising or marketing on TV and magazines. But we have made a focus on doing a large, national education tour, which is sponsored by some major vendors to different funds and advisors.
Q. Bloomberg came out with a 2013 report criticizing the transparency of managed futures fees. How are you addressing those concerns?
A. I think in certain circumstances the Bloomberg article was somewhat true, but I also think it was limited in scope. The article points out a couple of different funds. But there are thousands of funds out there and a lot of fees associated with funds. As an investor and advisor you have to be knowledgeable about fee structures. No one fund is like the next. That’s why we do a lot of education so people understand the benefits of the overall strategies and the transparency that caused those strategies. Plus, the regulators are working to make sure that transparency is relatable to the end investor and their wealth advisor.
Q. Attain spoke out against that report, and its CEO and founding partner, Jeff Malec, was critical of regulators’ industry oversight. Was that part of your interest in them?
A. They have a large outreach with their blog. The fact that they realize transparency and education is very important, and that’s what’s attractive for us.
Q. You launched the film financing and production company Eleven Eleven Films in 2005. How are you addressing the ways in which technology is disrupting the film and financial industries?
A. That’s one of the reasons we’re buying Attain. You have more access to stream a movie and to do research and get that transparency and make investments in these alternative investments. While the entertainment industry is holding on to that, the managed futures and alternative space is struggling to get to that point and we’re hoping to lead that charge or at least be a thought leader in that area.
Q&As are edited for length and clarity.
