Content provided by Robyn Murray, Freelance Writer
Three nights a week, Marc Pfeffer can be found at a poker table. Sometimes at a house, other times at a clubhouse or local firehouse. He plays with people from his neighborhood that he could call friends. But that’s not quite the word for them.
“People aren’t friends at the poker table,” Pfeffer says, speaking from his home in Westchester County, New York.
Pfeffer is playing for money, and that changes the game. In fact, it’s really not a game.
“I’m there for a purpose,” he says. “I’m there to make money.”
Pfeffer tracks every dime he wins or loses on spreadsheets that detail loss percentages and standard deviation. “It’s charted like an Apple stock,” he says.
A native New Yorker, and senior portfolio manager at CLS, Pfeffer has always been a numbers guy. As a kid, he’d rattle off calculations at the grocery store for his father: “If it’s 25% off $30, how much will it cost?” He loved math and had an early awareness of money and savings from his father, who was a businessman. Today, with his wife and three children at home, Pfeffer is no different. He knows where the family’s income and investments are at all times—savings, stocks, large cap, small cap. He has blotters he’s kept for 15 years. “I just have to know that,” he says. “I can’t imagine not knowing those things.”
Pfeffer puts that same kind of passion into his work. As an investment manager for more than 25 years, he has made it his business to treat every client’s money as if it were his own. “You’ll always do a better job,” he says. “Even if someone else’s [financial] objectives are different than mine, I try to put myself in their shoes.”
Pfeffer put himself in a lot of different shoes a few years ago when Wall Street careened and crashed around him. A former investment manager at Bear Stearns, Pfeffer watched friends and former colleagues scramble when liquidity abruptly dried up in 2008, and the company’s stock price plummeted from $130/share to $10/share.
Pfeffer had seen it coming. He’d kept in touch with the repo desk and watched for days as they pulled cash from anywhere they could. “I had seen it evolve right before my eyes so it wasn’t a total surprise,” he says. On Friday, March 14, two days before Bear Stearns was bought by JP Morgan Chase, Pfeffer sent an email he never thought he’d write. “I can’t believe I’m going to say this, but I think Bear Stearns is going to go under.”
Prior to working at Bear Stearns, Pfeffer had been a senior portfolio manager and vice president at Goldman Sachs. But for the last few years, he’d managed a private firm, Milestone Capital Management. Giant institutions faltering and failing around him, Pfeffer got frantic calls from clients worried about their exposure. But he wasn’t nervous—he wasn’t exposed; he hadn’t taken risks.
“If anything, it felt like we were in a position of strength because we were picking up cash from other firms,” he says.
The crash and resulting Great Recession brought things sharply into focus for Pfeffer. “Diversification is paramount,” he says. And, needless to add, “You have to have enough of an emergency stash, so if it all goes to hell in a hand basket…”
That kind of catastrophic planning is embedded in Pfeffer’s thinking now. But it’s a natural fit as a conservative money manager—an approach that sets him apart from many investors on Wall Street where old habits have returned since the shock of the crash. “Greed is always going to be out there,” he says. “I’m not saying greed is bad. There’s nothing wrong with trying to hit home runs.” But, for Pfeffer, losses are more concerning than wins. “[Most people] seem to get more upset about missing out on upsides than worrying about down sides,” he says. “I’m the opposite way.”
Though Pfeffer’s company fared well during the crash, it felt the squeeze when everyone around him lost money, including his clients. That’s when a deal was struck with NorthStar and Pfeffer joined CLS, taking his place as an “East Coast guy” in a new, Midwestern home.
A self-described ‘student of the market,’ Pfeffer feels the move is a good fit. And he’s seen enough ups, downs and transformative disruptions to trust his instincts.
“It’s difficult to out-think the market,” he says, “but what I try to do is have a conviction about what I believe in and stick to it.”