S14 BARRON’S September 16, 2019
PHOTOGRAPH BY BEN SKLAR
Sarat
Sethi
overly reliant on debt. We’re in a world where
companies can access credit easily, and if you
get any type of blip that affects that access,
they could be in trouble. We’re looking carefully
at balance sheets, companies with good cash
flow that can sustain a credit freeze.
So where are you putting money right now?
The financial-services area has opportunity.
Coming through 2009, the sector got hurt really
badly. But our holdings cleaned up their balance
sheets and are now well capitalized and would
be more resilient in a downturn. Further, dereg-
ulation is removing some of the more onerous
restrictions, allowing companies to increase divi-
dends and share repurchases. We expect our
clients to be rewarded over the next three to
five years. We have been buyingBlackstone
Group(ticker: BX); the stock yields 4.25% and
the company has a very impressive management
team and a long runway for higher-quality, re-
silient fee-related earnings.JPMorgan Chase
(JPM) currently generates a 3.33% dividend
yield and is reinvesting in its business.
We get international exposure through com-
panies like those. They can decide where the
best opportunities are overseas. We’re investing
in their management.
There could be some interesting opportunity
in oil and gas, given that oil prices have come
down. The energy sector was down 18% last
year and is up only 2% this year. It’s a good
example of an area that’s underappreciated and
underowned, but we’re being cautious as there
are headwinds from tariffs.
Where are you finding portfolio ballast?
The fixed-income market is very expensive, so
we’ve kept our duration short. Generally, we are
keeping more in short-term Treasuries or cash.
Thanks, Sarat.
2019 Firm Rank: 34
Scott Hanson,
Allworth Financial
A
T TIMES, SCOTT HANSON SOUNDS MORE
like a life coach than the co-founder and
senior partner at $4.5 billion Allworth
Financial. After 27 years in the business, he un-
derstands that a big problem many folks have in
retirement isn’t that they haven’t saved enough
or invested wisely—it’s that they haven’t laid out
their life’s goals and are left feeling deflated and
unhappy. He wants his RIA firm’s broad reach—
through 45 advisors, 11 offices, and a deep digital
and radio presence (he’s had a call-in financial
radio show for 24 years)—to address this prob-
lem. Hanson recently reflected withBarron’son
his business model and how he relates to clients.
Barron’s: Why bother with nonfinancial goals?