At Verger, one of our core values is “bring your why to work.” For Verger’s Co-Chief Investment Officer (Co-CIO) Craig Thomas, the why can be summed up with two words: humility and service.
Craig has been foundational to Verger’s success, and in celebration of his contributions we’ve previously highlighted his leadership style and approach to nurturing and developing talent.
In this follow up interview, we sat down with Craig to learn more about his personal background, his career path, and what he sees for the future.
Craig: I was born in Cleveland, then lived in Pittsburgh and Cincinnati, but primarily grew up in western New York in a small town called Wellsville. My parents both worked at a nearby college – my mom was a counselor, and my dad was a professor and a dean. Some people have mentioned that my dad’s disposition as a professor rubbed off on me.
I went to Alfred University for college – in the same town where my parents worked. I majored in accounting there and I met my wife, Melissa, who was a science major.
Craig: What drew me to this field was the level of intellectual curiosity and intellectual rigor that are required to be successful. Markets are always changing, and you need to be open-minded enough to adapt. You need a thick skin, because to perform well over the long-term, you need to be willing to act differently and tune out the short-term noise. You also need conviction in your ideas and your process without being arrogant or driven by hubris. The challenge of constantly evolving, while balancing confidence and humility has always been top of mind for me.
Craig: I found my way into investments somewhat by happenstance. My first job out of college featured a rotational program where I spent 3 - 4 months in different corporate units of the company, Agway Inc.
After stints in audit, corporate accounting, and tax, my last rotation was the investment office, where the pension plan and other asset pools were managed. I had a great mentor there, and it was a great fit.
At the end of my rotation I stayed on full time, and the more time I spent there, the more confident I felt that investing was the right path for me, on a professional and personal level.
Craig: I spent over ten years at Agway helping to manage their pension plan and while I was there, I attended Syracuse University and earned my master’s degree in finance. As I was beginning to explore paths for taking the next step in my career, I read Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment, by David Swensen, Yale’s long time CIO. I was inspired – I became interested in the world of endowment management, specifically their forward-thinking views on asset allocation and portfolio construction, as well as their focus on partnering with unique investment managers across both traditional and alternative asset classes.
When I applied for an open position with Wake Forest University’s Office of Investments, I had no connection to or ties to North Carolina. I traveled down from New York for an interview, and the rest is history. That was twenty years ago, and I’m proud to have worked at Wake Forest and to have helped launch Verger out of Wake’s Office of Investments.
Craig: Looking back, I can point to two key lessons that have informed my career path, and my approach to investing.
First, focus on what you can control. This concept is a core part of our philosophy at Verger. In my case at Agway, I wasn’t involved in and didn’t have control over broader firm-wide company activities. I learned to hone my focus on the investment portfolios and tune out the noise.
Second, don’t take anything for granted. Companies change and evolve. Going back to the reasons why I initially was interested in investments, the key challenge in investing is to always be growing and evolving while balancing confidence and humility.
Craig: Our oldest child was going into first grade. We built a community here by getting to know our neighbors and the families of our kids’ classmates. Our daughters took local art classes for a number of years – we actually have one of my oldest daughter’s paintings on display in Verger’s office (but please note, they did not inherit their artistic skills from their father!). We’ve got a great arts district here in Winston-Salem.
When the kids were growing up, we would take day trips to the mountains and spend an annual week at the beach enjoying quality time with extended family. We love Winston-Salem’s location in that regard – we’ve got the mountains to the west and the ocean to the east, and all within driving distance. We were also quite happy to leave the upstate New York winters behind us.
As college sports fans, we were excited to be part of the Wake Forest community. To this day, my wife and I still attend Wake football and basketball games together.
Craig: I began my career at Wake Forest before Jim (Dunn) was hired as CIO. Jim changed the culture in a pretty significant way. We shifted to a flatter organization, with less hierarchy, where everyone’s opinion was valued. We also aligned to a philosophy focused on risk as well as return. Returns over full market cycles are most important and we worked diligently to construct a portfolio that would participate on the upside while protecting on the downside.
In 2013, Wake Forest saw an opportunity to take a step forward and position its endowment for the next stage of its evolution. It was an “all hands on deck” effort. Jim, Vicki, Liz, and I spent a lot of time together and we were excited to build a company from the ground up to scale the assets, bring on the best talent to manage those assets, and help more non-profits grow and flourish. Jim did a great job of setting the stage and communicating Verger’s mission and the long-term vision for the firm. Jim and I are proud of Verger’s all weather investment approach.
Craig: I’m proud of how we’ve grown the team and the portfolio side by side, focusing on unconstrained idea generation and building out the private markets component of the portfolio. As we’ve executed our vision and seen the portfolio tested over a variety of market environments, we’ve been pleased with the results.
As my role has evolved, I’ve spent more time working with my team members and empowering them to evaluate new investment strategies as well as considering the most efficient way to implement an investment idea. As the team has grown and developed, I’ve been able to spend more time on “bigger picture” items such as portfolio construction, liquidity, and exposure analysis, alongside guiding our iterative discussions and debates with this approach in mind.
Craig: An important one is how you define risk. For me, risk is not tracking error. A much more important risk is a large portfolio drawdown that could significantly impair a non-profit institution’s operations. When serving an institution that uses a lens of perpetuity, risk must be viewed differently.
Also, the price you pay for an asset matters. At a certain price, most things are worth considering, even assets that may be out of favor during a particular time.
I also ascribe to a long-term focus. When people focus on the short-term, there is a lot of noise. As Charlie Munger noted, “great investing requires a lot of delayed gratification.”
Finally, regarding asset allocation, it’s important to try to construct a portfolio that is likely not the best under any one set of assumptions, but is expected to perform reasonably well under a fairly wide range of assumptions.
Craig: The way I approach leadership and collaboration is grounded in the principles of mutual learning and growth. My advice is to help create an environment where all can learn, grow, and support each other along the way. Don’t be afraid to make mistakes, but rather use those experiences to shape your future actions.
And stay curious. There is always something new to learn about financial markets – they are always changing.
Please join us in celebrating Craig, his foundational role in Verger’s success and his contributions to Verger’s continued evolution.