In this episode, Vince Lorusso, Founder and CEO of Clough Capital Partners, shares his journey from a family of lawyers in Philadelphia to becoming a trailblazer in the finance industry. His career transformation began in the late 90s during the tech bubble, a pivotal era that sparked his interest in finance. Vince reflects on his educational journey at Boston College, where he initially intended to pursue law. His newfound interest in finance led him to pivotal roles at New England Funds and collaborations with Loomis Sayles and Oakmark. These experiences were instrumental in shaping his passion for security analysis and portfolio management.
In addition to his career shifts, Vince delves into the investment processes of client-focused strategies that have been the driving force behind his success in alternative investments.
Vince moved from managing traditional long-short hedge funds to the more regulated world of exchange-traded funds (ETFs). This shift required significant strategic adjustments to comply with the constraints of 40 Act funds, where transparency and liquidity are highly important. He highlights the unique challenges of operating within this framework, emphasizing the importance of balancing high active share with stability. His insights into managing volatility in active ETFs are particularly relevant in the unpredictable post-COVID market conditions, where client feedback has been crucial in shaping his approach.
Clough Capital's investment philosophy emphasizes the necessity of active management in market cycles. Vince highlights the importance of leveraging opportunities, particularly within the technology sector, and discusses the art of managing short positions. Our conversation emphasizes the critical role of advisory awareness and informed decision-making, highlighting the need for thorough risk evaluation amidst evolving market dynamics.
Clough Capital navigates the complexities of the ETF structure, ensuring alignment with liquidity profiles and maintaining a balance between gross exposure and risk management. There are challenges in aligning investment strategies with regulatory standards; maintain investor accessibility while adhering to necessary constraints.
In examining the role of short selling in financial markets, Vince highlights its importance for price discovery and risk management. There is an asymmetric risk-reward of shorting, as both long and short positions carry risks, but with proper management, these can be mitigated. There are inherent risks involved in investing and it’s important to consult with licensed professionals to make informed decisions. Investments are not Federal Deposit Insurance Corporation (FDIC) insured and may lose value, which emphasizes the need for careful evaluation of investment objectives and risks. The value of fundamental analysis in active management provides balanced market insights amidst the dominance of passive investing.
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