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Portfolio > Portfolio Construction > Investment Strategies

Small Alternatives Firm CEO Casts Large Shadow

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Altegris is not a huge company; managing around $3.3 billion in client assets—a modest size for the financial services industry. But the Genworth-owned small company casts a large shadow for at least a few reasons.

For one, it has a highly focused niche. “100% alternatives. 100% of the time,” is the company’s motto, and it has caught a wave of growth on that space since the company’s 2002 founding.

Second, its annual investment conference, concluding Friday in Carlsbad, Calif., could fairly be said to be the most interesting on the circuit. If your objective is to cast a long shadow and be sure everyone has heard of you, inviting Mohamed El-Erian, Nouriel Roubini, David Rosenberg, A. Gary Shilling, Jeffrey Gundlach, Niall Ferguson and Ayaan Hirsi Ali to your event more than accomplishes that goal.

Jon SundtA third reason for Altegris’ rise is doubtless the role of its co-founder and current CEO Jon Sundt (left).

Much has been written about how he created this unique alternatives shop—mainly by democratizing the market for exotic investment strategies such as long-short and managed futures, formerly reserved for hedge fund investors, available to the masses.

“Jon has made the ‘alternative investments’ universe—as broad and ill-defined as it is—much more understandable and accessible to a wide variety of investors,” says  Bob Seawright, chief investment officer of Madison Avenue Securities. “He seems to have a clear vision of what he wants Altegris to accomplish and a commitment to remain true to it.”

I had the merit of sitting with Sundt at the Altegris conference and was able to get a little bit behind the quant-focused exterior to see a bit of the interior world that fueled his rise.

For one thing, I learned that he has a technical background. A computer science major at UC San Diego, Sundt was just a few credits shy of completing his degree but never did so. “I showed up at the graduation and walked with the others. Then I kept on walking,” he told me.

Note to today’s students evaluating the worth of a degree: not having one is not a hindrance to fabulous success.

Not completing the degree was not his ambition at the time, Sundt told me. He had other things on his mind, like the distraction of two brothers suffering under the influence of chemical addiction. He needed to help his family.

Eventually, he lost both brothers, his younger brother Steven to a cocaine overdose, then his older brother Eric, whose addiction-fueled depression led him to suicide.

The vision and commitment that Seawright credits Sundt with in building Altegris has been more broadly apportioned than most investors here in Carlsbad probably imagine. The CEO quant has also built a drug abuse prevention organization called Natural High, its name indicating its mission of discouraging artificial highs by helping youth discover more wholesome activities that make people feel good.

Sundt identifies his natural highs as business—no surprise there—as well as surfing and family—also no surprise to conference attendees, since he talks about his favorite sport and, most of all, his kids, at virtually every speaker introduction.

His work is proof that people in business truly can cast a giant shadow.


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