Getting the Skinny On Down-and-Dirty Investing

by Cheryl Hall

Source: Dallas Morning News

Dory Wiley wants his alma mater, SMU, to spring to mind when people talk about alternative investing.

So next week, the 49-year-old CEO of Commerce Street Capital LLC is hosting a daylong seminar at the Cox School of Business that will bring together some of the sharpest minds in making money beyond the traditional realm of stocks, bonds and cash.

Think precious metals, real estate, credit instruments, hedge funds, oil and gas, private equity, managed futures, commodities and derivatives.

“We want to brand SMU as a forerunner of thought in alternative investment theory,” says Wiley, who has his MBA in finance from The Hilltop.

This second annual conference is aimed at institutional investors and really rich folks who may be better-suited to handle these often risky, complex, regulated and illiquid investments.

And Dallas has plenty of those, Wiley says.

“There’s probably more hedge fund and private equity money concentrated at the Crescent than any other building in the world,” Wiley says in his Fountain Place offices downtown. “Think about it. Dallas is the center of America. SMU is one of the top-ranked business schools in the country. We need to be at the front of investment thought. This conference is intended to do that.”

But it also is intended as an academic experience for those who just want to learn more about how big fund managers choose and allocate their investments.

“You’re going to hear some really smart folks,” says Wiley. Glenn Youngkin, chief operating officer of Carlyle Group, is a “meat-on-the-bones” kind of guy, Wiley says. “He’s going to go through how Carlyle buys companies and adds value even when the market is bad.”

Bob McTeer, former president of the Federal Reserve Bank of Dallas and now a distinguished fellow at the National Center for Policy Analysis, will give an economic overview.

Tickets cost $250, but Dallas Morning News readers can get a $25 discount by entering the code DMNCSC when registering online at www.commercestreetcapital .com . The price for students is $50. Registration includes breakfast, lunch and an evening reception at the George W. Bush Presidential Center at SMU.

“This is not a moneymaker by any means,” says Wiley, who estimates that Commerce Street kicks in $30,000 to host the event.

Street cred

Commerce Street is best known for brokering bank mergers and acquisitions, most often representing the sellers. But it has expanded its services to include alternative assets management for small institutions and family offices.

Wiley has considerable street cred, having served as a trustee of the Teacher Retirement System of Texas from 2003 through 2009. He chaired its investment committee for most of that time. During his tenure, the $100 billion pension fund went from one of the poorest-performing public pension funds to the nation’s best.

As a result, Wiley became a popular speaker at alternative-investment seminars — including ones at Harvard, Yale, Rice, Duke and Stanford universities.

“Everybody wanted to know, ‘What are you guys doing?’” Wiley says.

Last year, he decided it was time for SMU to come out of the academic woodwork with a conference of its own.

Wiley enlisted the support of Scott MacDonald, president and CEO of the Southwestern Graduate School of Banking (known as SWGSB, or “swigsbie”) at SMU.

Bankers attending SWGSB’s community bank director certification program will attend Commerce Street’s reception the evening after the seminar before the banking sessions begin on Friday.

“It’s a great opportunity for our bankers and Dory’s investors to collide while on campus,” MacDonald says.

Geopolitical peril

This year’s keynoter, George Friedman, chairman and founder of Stratfor Global Intelligence in Austin, is apt to make heads spin with his company’s latest geopolitical intelligence. He’ll discuss why Europe poses a greater danger to world peace than the Middle East and how falling oil prices might be the undoing of Vladimir Putin.

“Europe is entering a crisis that’s no longer an economic crisis,” Friedman says from his office in Austin. “It’s a social and political one. How this plays out could destabilize the entire world.”

Speakers, including Friedman, donate their time and travel expenses. Friedman, who normally charges $50,000 to $100,000 plus travel costs to share his wisdom, is doing this as a favor to his longtime friend Don Kuykendall, managing director of Commerce Street’s Austin office.

Friedman also wants to hear what the other speakers have to say.

“I deal in wars and politics and finance in that context,” says the 65-year-old geopolitical expert, who sells his firm’s analysis to government agencies, nongovernmental organizations and major corporations around the world. “So the decline in oil prices interests me because it probably is going to destabilize the Putin government, because it makes the Turks stronger, yada, yada, yada.

“These guys think about how this will make them money. I’m very big on money and want to understand that better. But I come from a different world. When the two worlds meet, the conversation gets richer.”

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