The Art of the Pivot: From IBM Exec to Investment Advisor
West High class of 1974 alumnus Paul Hendricks is the managing director for a small, completely independent registered investment advisory business. Based in Charlottesville, VA, his firm uses state-of-the-art information processing technology to provide portfolio management services at a surprisingly modest cost to high-net-worth individuals (HNWI) and small institutions. Simply put, and in his own words, he’s “just a humble guy helping a few of [his] friends amass more money.”
After receiving his Bachelor of Science degree in Industrial and Operations Engineering from the University of Michigan in 1981, Hendricks began a career in the computer industry with IBM. “I was known at IBM as being a savvy financial type,” he comments. “After a variety of sales and sales management jobs, I joined a marketing support team and developed the most comprehensive ‘customer perspective’ proforma financial model in the industry.” After one member of his team developed the first options valuation model and made it available to the general public, Hendricks worked alongside his colleagues to experiment with derivatives, specializing in “black swans” and convexity. At this stage, he was plucked to run a very specialized, albeit floundering, team that sold multi-year IT “in-sourcing” contracts to Fortune 50 clients. He was unsurprisingly good at it, and after turning the team around, a powerhouse emerged that sold “roughly 5 dozen contracts worth X Billions”. It was time to seek a new adventure.
“This pivot was a really good move,” Hendricks comments. “Given my background, I was inspired to dig a bit deeper into exploring the use of risk management and volatility in a manner that could benefit someone with limited assets (as defined as positions under the size of an institution). My local circle of friends, an ex-employee, and contacts at a sovereign wealth fund helped me evolve my approach and I was legally obligated to start my current firm. Today, I am registered solely as a money manager and fiduciary, not a broker – which is just what some folks need.”
Reflecting on his years in Madison, Hendricks is thankful for the education that West High provided. He commented: “Maybe it was the times, but what I really liked about Madison is that folks could accept you for who you are. There was also a very egalitarian approach to sports and virtually all fields of endeavor … And the teachers were fantastic – I particularly liked one specific music teacher who inspired my love of a diverse range of European music…and Porsche’s.” Throughout his high school years, he became involved with the hockey and tennis communities in town, translating to a lifelong love of sports, especially the game of squash. Hendricks has played in virtually all the big-time US squash championships and stays involved with several after-school enrichment programs for kids who might not have the opportunity to play squash. Recently, he returned to Madison to play the folks at the Madison Squash Workshop.
Always humble, Hendricks shared his reservations about being a featured MMSD alum, commenting: “I only managed to be in the lower tier of IBM executives. I’ve managed to make a select group of friends a good amount of money. I’ve managed to fundraise and contribute to the education of numerous young Black and Hispanic kids. Finally, I managed to be a good enough salesman to secure a wonderful relationship with my devoted wife, Melinda.”
Madison’s public schools are proud to count Paul Hendricks among their alumni!
