Fenimore Asset Management

One of today’s leading firms is not on Wall Street. How Fenimore has changed investing

By StoryStudio on March 7, 2023

Today’s market fluctuations, coupled with a cultural shift towards automation and DIY (do it yourself) servicing, have left many investors scratching their heads. Who can we trust? Of course, while automation may be fairly new, market moves that challenge investors are not. For example, today’s market is better off than in 1974, when a young, upstate New Yorker named Thomas O. Putnam was charged with investing his family’s assets after the sale of the family business. The 1970s were indeed a hectic time for investing, a time when many big Wall Street firms didn’t perform their best. And yet Putnam, who founded Fenimore Asset Management in the tiny enclave of Cobleskill, New York, continued to outperform these larger firms, earning him the recognition of Forbes magazine as “the” money man outside of Wall Street. Mr. Putnam’s strategy of investing in long-term assets that rewarded him and his investors with compounded returns was successful not just in the 70’s but has continued to deliver long term results. Fifty years later, the staunchly independent Fenimore Asset Management (FAM) continues Mr. Putnam’s legacy of delivering differentiated investment management solutions to discerning investors. “Fenimore is about more than just investing for retirement” noted Mr. Putnam. “It’s about helping our clients reach their goals at all stages of life.”

Quality matters

Fenimore manages risk by adhering to its enduring process and only investing in what it deems to be quality businesses. Fenimore’s team believes in-person research is still the best way to ensure they are investing in quality businesses that meet their four core criteria.

Understandable business models, growing cash profitability, and defensible competitive advantages.

“Fenimore has an amazing history, which really guides us in the work we do every day with clients,” says Liza Baran, director of shareholder services and operations at Fenimore Asset Management, who’s been in the financial services industry for more than 15 years. “Our founder, Tom Putnam, had notable investments to manage after the sale of the Putnam family business. It was through this careful stewardship of his own family’s assets that the investment management capabilities we know of today as Fenimore Asset Management were established.” What that means for clients is that Fenimore has a long history of risk managed, quality-oriented investment management while simultaneously understanding the need for careful planning. “Whether you are just starting out, planning for retirement or considering charitable giving, our history drives our understanding and commitment to giving our clients a partnership they can count on to maximize their finances,” says Baran. Fenimore’s humble beginnings — and subsequent success — can be credited to two overarching philosophies: first, that quality investments backed by intensive research and active investing is paramount to long term success, and second, a personal approach to service and partnership with our clients that is unparalleled in the industry adds long term value. These two priorities have been making a difference for Fenimore clients for nearly 50 years.

“Perhaps the fact that we are right here in the region and not on Wall Street is exactly why we’ve been so successful!” says Baran, noting how FAM’s close-to-home locations allow clients to walk into their Cobleskill or Albany offices and speak with a real human. “Fenimore has an incredible culture that focuses on high-quality solutions and service, while also being an active part of our community.” This type of right-in-your-own-backyard accessibility fosters valuable relationships on which successful, trustworthy investments are built. “If you walk into our Cobleskill office, on the lobby wall you will see the words Serve with Integrity and Be a Friend,” says William Preston, CFA® and portfolio manager of the FAM Dividend Focus Fund. “Every decision we make, we start with the question: is this in the best interest of our clients? The client-first mentality is ingrained in our company culture, and I believe this ultimately affords our clients peace of mind and a sense of trust that supports our partnership. Knowing your investment partner is not just trying to generate the highest returns but operates with the utmost integrity provides additional value for our clients.” Fenimore’s high-quality, long-term solutions are not what many people think of when they think of investing in the stock market. Unlike many firms who may be seeking ‘hot stocks’ or the ability to trade on quantitative data alone, Fenimore focuses on investing in companies on the U.S. stock exchanges handpicked by the investment research team. These companies reflect Fenimore’s key investment principles: invest in understandable businesses in strong financial positions with competitive advantages, run by proven, ethical management. And, these companies can and should be invested in without overpaying. At Fenimore, the goal is not a quick hit. Success here is measured in years, even decades, not months or quarters. It’s a philosophy supported by market data that demonstrates, historically, the exceptional long-term track record of U.S. stocks versus other asset classes like bonds, real estate or commodities.

At Fenimore, hands on research of businesses and their fundamentals drives the investment process. “It’s our fundamental research process that enables us to stay the course when markets and securities fluctuate. We gain conviction in our investments through our process,” explains Preston. “The research process entails extensive due diligence, including face-to-face management meetings and adhering to certain criteria on what makes for a solid long-term investment. And by staying invested and educating our investors on the importance of staying invested during times of market stress, we can weather the storms and benefit over the long term .” Thomas Putnam’s legacy looms large at Fenimore Asset Management. That’s a good thing. As a local, accessible firm, Fenimore was always meant to serve people, not a bottom line. Helping community members reach financial goals is the passion of today’s Fenimore ambassadors.

“I love helping individuals and families see how a little bit of planning and working with the right investment professionals can make all the difference,” says Baran. “Every day I get to see individuals and families realizing their goals thanks to careful planning and sound investing, whether that means funding a child’s or grandchild’s college education, taking a long-planned trip, or reaching their retirement with enough assets accumulated to do whatever they want, including planning for the next generation. And Fenimore is helping to make that happen. I am so honored to have the opportunity to serve our community in this way.” If you’re new to investing or are considering changing investment management, Fenimore is a nationally recognized yet locally rooted firm that can help. Learn more at fenimoreasset.com.

Strong financials including significant free cash flow generation and low leverage.

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