Kevin Lenaghan

Kevin Lenaghan was born in Washington, DC and grew up on the Jersey Shore. He studied Economics and Finance at the University of Pennsylvania (Wharton).

Kevin started his career in investment banking at Banc of America Securities and later joined FTI Consulting, where he developed further expertise in valuation analysis and econometric techniques.

Kevin Lenaghan completed his MBA at Wharton and then joined Cliffwater, a leading alternative investment advisory firm. He was a Managing Director and member of the Investment Committee, where he focused on hedge funds.

In 2017, he joined Clocktower Group as a Managing Director. He oversaw the firm’s hedge fund and asset allocation businesses and served as the key external client representative.

In early 2020, Kevin Lenaghan co-founded and serves as the CEO of Ivy Academy LLC, which provides admissions counseling and investment advisory services. He currently lives in Los Angeles, California, with his wife and two young children.

Where did the idea for Ivy Academy come from?

Ivy Academy LLC was founded by myself and partners, who have extensive experience in college admissions, technology, investment banking and asset management. The founders were educated at top-tier universities and the firm has two primary divisions: admissions counseling and investment advisory. The inspiration for the name Ivy Academy came from the admissions counseling division, as we partner with the most accomplished and ambitious students. We strive for excellence and integrity in all phases of the college and graduate preparatory and admissions process. Ivy Academy provides bespoke research and support and works tirelessly to help our clients achieve their higher education goals.

With respect to the investment advisory division, Ivy Academy provides strategic and tactical asset allocation, attempting to add value through tactical tilts that are driven by our own macroeconomic and market views, as well as the intelligence from our external investment partners. Ivy Academy also helps clients construct and manage alternative asset portfolios, with an emphasis on sustainable alpha strategies, dislocated asset classes, co-investments and partnership approaches.

What does your typical day look like and how do you make it productive?

Every day seems like both a marathon and a sprint. I try to wake up before my children at 5 or 6 am to work out, monitor overnight market moves, catch up with my team, and address incoming e-mails. I read the Wall Street Journal, the New York Times Business section, and the Economist. I then usually send my 4-year old son to preschool and focus on writing and analysis until lunch time. The afternoons are a mixture of work and childcare, depending on my and my wife’s schedule, but we try to eat dinner as a family most nights. Then, I try to get some relaxation and piano practice before the kids go to sleep around 8 pm. The evenings are devoted to catching up on e-mails (there is always a backlog!), reading research and client service functions.

How do you bring ideas to life?

Bringing ideas to life for me means identifying a market opportunity and then executing on a plan to attract clients, design high-quality, bespoke solutions, and finally deliver excellent results.

For Ivy Academy’s admissions counseling division, we have developed strategic partnerships for both customer acquisition and client service that emphasize alignment of interests, and we work tirelessly to help our students improve and succeed. The firm’s investment advisory division is relentlessly searching for and evaluating idiosyncratic investment opportunities and working with clients to design optimal portfolios.

In summary, bringing ideas to life is really about identifying your edge, attracting a client base with fair terms, and then working relentlessly to realize your vision.

What’s one trend that excites you?

I think one of the silver linings of the COVID pandemic is that finance professionals have quickly and efficiently adapted to the new environment, assisted by flexible working schedules and videoconferencing technology such as Zoom. While there are obvious downsides to not being able to travel and connect with colleagues in person, there are also clear benefits and some increased flexibility in the new environment. For example, it is actually easier to connect with some senior portfolio managers who would previously be reluctant to travel to in-person meetings. There is also some increased flexibility in the global investment pipeline, as I can now more easily interact with people in places that I would not regularly visit like Singapore and Tokyo. Vietnam is also a very interesting frontier market, and it is not a place I would have visited pre-COVID, but now I have actually done some conference calls and virtually met some people there.

What is one habit of yours that makes you more productive as an entrepreneur?

I think I am good at filtering out unimportant information and getting to the point. Markets have a very high noise-to-signal ratio, and it is a constant challenge to focus on what is actually important. At this point in my career, I have substantial experience observing security price movements in the context of the macroeconomic environment and identifying what is actually (more) important. I also have heard hundreds (maybe thousands) of marketing pitches for new investment opportunities, so I have learned exactly what questions to ask and which areas to focus on, while encouraging presenters to cut through the fluff.

What advice would you give your younger self?

Two key nuggets of advice: (1) don’t be afraid to try something different, as the opportunity cost of failure is really quite low (and the upside may be meaningful), (2) don’t take things personally. If something doesn’t work out or you don’t agree with a colleague, simply move on and focus on more productive endeavors.

Tell us something that’s true that almost nobody agrees with you on.

That classical music is without question more exciting than rock music. There is a higher barrier to entry for proper comprehension of classical music, as the harmonies, melodies, rhythms, and instrumentation tend to be much more complex. However, anyone who disagrees with me should listen to Shostakovich’s 10th Symphony or Messiaen’s Turangalila-Symphonie, both of which are powerful and hair-raising works.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

It is really crucial for entrepreneurs in general, and market participants in particular, to remain humble and open-minded, without relying on any one specific methodology or framework. Market strategists who portray themselves as infallible or overconfident are always eventually proven wrong. It is important to conduct extensive research and have an educated opinion but to avoid being dogmatic or fall in love with one’s view.

The stock market’s reaction to the 2020 presidential election is a good example of why keeping an open mind is so important. Equity markets rallied in the few days immediately following Election Day, despite the fact that the outcome was uncertain and likely to be contested. Furthermore, the most likely outcome (as of the time of writing) of a Biden win and Republican Senate was widely perceived to be negative for equities (due to a lower likelihood of sizeable fiscal stimulus). Ivy Academy’s investment advisory clients reduced risk in advance of the election, which was prudent given the hugely misguided polling and arguably unintuitive market reaction.

What is one strategy that has helped you grow your business?

Ivy Academy is a new business which is certainly still in growth mode. However, some key strategies that have worked early in the business’ lifecycle include the following: (1) leverage past relationships, (2) offer economic terms that encourage alignment of interests, and (3) be completely upfront and transparent about your strengths and weaknesses. It is critical to know where your edge is, and not engage in too much mission- or style-drift.

What is one failure you had as an entrepreneur, and how did you overcome it?

As mentioned earlier, I am pretty early into my tenure as a business owner and entrepreneur. However, I have worked in several highly entrepreneurial environments. One thing that I could have done differently in the past is that I focused too much on prior mistakes made by myself and former colleagues. While I thought this was a more “analytical” approach, it can come across as negativity or indecisiveness, and can just frankly be a big waste of time. What I learned is that every day is a new opportunity to improve, make better decisions, and continue finding attractive investment opportunities.

What is one business idea that you’re willing to give away to our readers?

All investors should carve out a portion of their portfolios for opportunistic ideas and co-investments. The conventional wisdom is that attempting to time the market is a losing proposition for most investors. However, establishing partnerships with leading fund managers who are willing to offer their best ideas as co-investments can add substantial value over time. While I have high confidence in this investment approach overall, one does need an experienced advisor to identify and evaluate these potential opportunities, as well as a governance/decision-making structure to act quickly as attractive investments present themselves.

What is the best $100 you recently spent? What and why?

I recently spent about $100 taking my wife and children out to dinner at a great, family-friendly restaurant. The food was delicious, the weather was beautiful (important for outdoor seating), and the kids were in a great mood. It was a really wonderful family bonding experience, with several precious moments (like my 2-year old daughter “flirting” with the handsome waiter) that will stay with me for the rest of my life.

What is one piece of software or a web service that helps you be productive?

LinkedIn is a very widely used, powerful networking and information sharing tool that has really become essential now that business travel and in-person meetings are basically impossible. This service has been super helpful for staying on top of people moves, assessing market trends, and sharing intelligence/market views. It is also a great way to connect with people for whom you don’t have current contact information or have been out of touch with.

What is the one book that you recommend our community should read and why?

Mastering the Market Cycle by legendary investor and Oaktree Capital Management founder Howard Marks is an eminently readable and sophisticated guide for helping investors navigate through inevitable economic and market cycles.

What is your favorite quote?

“All bubbles start with some nugget of truth” – Howard Marks, also a reminder to be cautious when betting against high growth, innovative companies.

“To achieve great things, two things are needed: a plan, and not quite enough time.” – Leonard Bernstein, composer, conductor, pianist & educator

Key Learnings:

• The key to success is identifying your edge, attracting a client base with fair terms, and then working relentlessly to realize your vision.
• Don’t be afraid to try something different, as the opportunity’s cost of failure early in a career is really quite low (and the upside may be meaningful).
• Don’t take things personally; if something doesn’t work out or you don’t agree with a colleague, simply move on and focus on more productive endeavors.
• Be completely upfront about your strengths and weaknesses, and always present yourself and your company with the highest standards of ethics and transparency.
• If you are fortunate to have a family, recognize that time with young children is priceless and try to design a work-life balance that allows you time to watch them grow.