a blue Chicago Cubs pullover and sunglasses to avoid the rushing wind and glare of the road, money manager Joseph Fath spins his 1957 red-and-white Corvette around a corner. “Wait until we get this baby out onto the highway,” he says. As the convertible’s engine roars, a passing trucker honks his approval.
Companies on the wrong side are not just retail stores and automakers. A conspicuous place of disruption is the industry in which Fath works: money management. Active management, which has experts picking stocks, is losing ground to passive management, in which stocks are bought mechanically from a list of all those available in a certain category.
One advantage: deals like the one that got the fund into Rivian, which went public at a $90 billion valuation last November. Prior to that stock offering, Fath’s fund led several rounds of late-stage funding for Rivian, and Fath spent some time on the company’s board of directors as an observer. Fath’s fund has also enjoyed big gains from getting into DoorDash, Snowflake and Airbnb before they went public.
“The last thing you want to do in our business is wait, right?” Fath says. With more companies staying private longer and achieving large market values before going public, he says, you have to invest in early funding rounds to get ahead of their growth curve. “It’s pretty invigorating to be around these dynamic companies that either areThe other way an active fund like Fath’s can stand out is to make concentrated bets. The Vanguard fund owns 279 stocks to T. Rowe Price Growth’s 93.
“I had this bug for wanting to build stuff that tied into how I ended up investing as well,” Fath says. He joined T. Rowe Price as an analyst and eventually became an associate portfolio manager in 2008 before taking over the Growth Stock Fund in 2014.
Smart man.
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