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July 19, 2017  

Dick Mayo Separates From Namesake Firm

Mayo Capital is forging a new identity following the exit of founder Dick Mayo.

The 75-year-old value-investing legend left the Boston firm in February, though word has been slow to get out. With the move, Mayo appears to be consolidating his personal assets with Game Creek Capital, also of Boston.

Mayo already was a shareholder in Game Creek, a value-oriented fund shop launched in 2007 by his late son, R. Scott Mayo. That operation was running $103 million of gross assets at yearend 2016.

Mayo Capital was running $441 million on Feb. 28. It plans to continue under a new name, managing partners Bill Barton, Peter Blum and Tim Quinlisk wrote in an April 12 letter disclosing Mayo’s exit to investors.

In the letter, Barton, Blum and Quinlisk said they would attempt to boost Mayo Capital’s performance by reducing the number of names in the firm’s portfolio and seeking more flexible use of cash. They cited a “skittish macro view” that guided the firm’s stock picks and led it to hold too many small positions — causing it to miss out on potential gains.

“Since 2008, execution issues began to detract from our well-articulated investment philosophy and from what has always been a consistent discovery of good investment ideas,” they wrote.

Mayo Capital’s composite portfolio has produced an 8.5% annualized gain since its formation in 2002, beating a 7% rise for the S&P 500 Total Return Index, the letter said.

Dick Mayo began his career as an analyst at Keystone Investment in 1968. The next year, he started Batterymarch Financial. In 1977, he co-founded Grantham, Mayo, Van Otterloo & Co., a $77 billion firm now known as GMO. Mayo Capital was his next venture.

Dick Mayo and Sean Murphy are the principal owners of Game Creek. But according to an SEC filing on March 30, Mayo didn’t share in the firm’s fees or exercise any managerial discretion at the time.