Reclaiming Twin Cities money center legacy, with a twist

“We’ve got a great list of public companies in Minnesota. Anything we can do as a state to publicize that, we should,” said Robert Buss, managing director at Disciplined Growth Investors, an independent investment adviser in Minneapolis with $2 billion under management.

Minnesota is home to more than 490 public companies and boasts more Fortune 500 companies per capita than any other state, according to the CFA Society of Minnesota, an organization representing 1,200 investment professionals across the Upper Midwest.

The Twin Cities metro is also home to 56 institutional asset managers, hedge funds and private equity firms managing an estimated $415 billion. In addition, more than 90 corporate, nonprofit and government pension plans and endowments around the state manage another $210 billion in assets.

So it seemed natural when as president of the Society, Buss and colleagues launched an effort to revive something the financial community hasn’t seen here in some time — a regional conference bringing local public companies together with local investors.

“We felt uniquely positioned to do this,” Buss said.

 “If I look back, we used to have annual investor conferences sponsored by Dain Raucher and Piper Jaffray. They were big events locally,” he recalled.

Next May, the CFA (Chartered Financial Analyst) Society is sponsoring InvestMNt, a day-long conference that aims to bring together 250 to 300 local institutional investors and 40 public companies at the Minneapolis Convention Center.

The society has never mounted an investor conference before, but Buss and former CFA Society President Tony Carideo said they hope that InvestMNt will help re-energize metro area financial professionals’ sense of community while showcasing the state’s diverse economy.

They also hope to set a model for how investors and companies can come together, free of perceived conflicts that have tainted traditional brokerage-sponsored conferences. Under the old model, firms that had investment banking or a trading relationship with the sponsoring broker would make up the majority of presenting companies.

While that approach worked for the brokerage industry, Buss says, it has failed to meet the needs of most institutional investors who want to meet a cross section of companies and managements,   regardless of which firm does the most banking business or generates the most trading commissions.

Institutional investors, who put six- and seven-figure bets down on a stock, talk about how they invest in management teams, as much as in the companies. Therefore, investors like to look a CEO and CFO in the eye before they put their clients’ money into a stock. As a result, access to senior management is a highly valued part of the investment process.

 “This is a conference developed by investors, not a brokerage firm. Invitations will not be limited to companies with investment banking relationships or potential but instead to the broader Minnesota Investment Community,” the society proclaimed in promoting the conference.

A decade ago, the Twin Cities enjoyed a reputation as a major U.S. money center — not as big as New York, Boston, Chicago, or San Francisco perhaps — but certainly in the top 10. Since 2000, consolidation within the industry has diminished the region’s heft and ranking, though not its reputation as a home for savvy investment management.

According to the U.S. Bureau of Labor Statistics, Twin Cities employment in the securities and investment sector has dropped by 25 percent over the past decade, from 20,000 to 15,000. The financial market meltdown and Great Recession further eroded employment ranks. In the past year alone, employment in the sector has dropped by more than 5 percent.