Life after Russell

There is life after Russell.

There always was.

The international investment advisory company left Tacoma last fall, but its legacy remains in the form of former associates who have chosen to remain in Pierce County.

Founded in 1936 – once the Frank Russell Co., then Russell Investment Group and finally Russell Investments – the company was purchased in 1999 by Northwestern Mutual, a Wisconsin insurance company.

Much of what now obtains from Russell’s presence in Tacoma derives from the spirit of former board chairman George Russell and his late wife, Jane. The Russells and their employees were known for their contributions of time and money to the arts, education and other nonprofit enterprises. The News Tribune met last week with five Russell veterans – Peter Mafteiu, Dennis Jensen, Don Gartlan, Jerome Petteys and Kelly Haughton – who have left the company over the past few years and used the skills, expertise and contacts they gained to join or establish new enterprises.

It was always difficult to explain in a few words what Russell did, being a “manager of managers.” Does anyone outside the industry actually understand what the company does?

Haughton: When I first got there, I think it took me two years to understand it. The structure was very complex. That’s part of the problem, trying to explain.

Mafteiu: It took me 18 months to figure out Russell, and every day was a surprise.

Gartlan: What got lost – Russell is in the business of selling mutual funds.

You’ve each moved on to other businesses, whether they’re your own startups or partnerships. What did you take away from your time at Russell?

Gartlan: I came in thinking I knew a great deal about manager research. I learned a lot about portfolio construction. I had the opportunity to work with advisers around the country – I learned the appropriate way to manage money.

Jensen: It was phenomenal the way George and Jane, and (former chairman) Mike Phillips, were striving for excellence, and how long they were able to sustain that through Russell’s growth.

More personally, it was amazing to meet with so many managers, and assess them. Now I’m able to transfer that, assessing mini-cap managers.

Petteys: I’m grateful to have worked there, and I’m grateful to have moved on.

Haughton: One of the things that was good about Russell – the opportunity to participate in the global financial industry and live in the Pacific Northwest. We were encouraged, and had aspirations to be global participants. One of the things this community misses by the departure of the company – Russell received less than 1 percent of its revenue from people in Washington. One of the things this community needs is more primary businesses.

Mafteiu: I essentially received an MBA in risk management. We’re all here doing what we’re doing because of the experience at Russell.

Russell was founded and based in what was essentially an obscure corner of the financial universe. Was that – or is that still, with Russell in Seattle – a disadvantage?

Haughton: It was part of the brand. We had a lot of success in the Midwest and South – people loved the idea that we were from Tacoma, that we weren’t slick, Wall Street guys.

Jensen: We were also the best at what we did.

Haughton: There were times when I was on the front page in Tokyo more than I was in Tacoma.

Gartlan: A culture takes decades to build – and it can be gone in a year.

And does the Russell name help now, in your new endeavors?

Haughton: I just got stunned. We went on an East Coast swing to interview potential custodians (of an exchange-traded fund formation). Three of the top four custodial firms pitched us. One of them had nine people in the room for four hours.

Jensen: It’s huge for us. If it wasn’t for the background, it would be, “Who are you?” The background definitely gives us instant credibility. People who wouldn’t consider a startup wouldn’t give us a second look otherwise.

What about former colleagues? Have they helped you after you left?

Haughton: For some of us, we ended up talking to a lot of people outside Russell. (There is) a network of people throughout the industry who can help us. It’s not just the alumni. It’s also the people you met.

Jensen: (We’ve received) advice, expertise and capital coming from people internal and outside of Russell. If we tried to do that without the network, it would have been impossible.

Gartlan: It’s also an interesting community in the South Sound.

Haughton: The “Russell Alumni Association” at the Tides Tavern is about 35 to 40 people.

Jensen: The last time I was at the Tides on a Friday, there were five tables.

What was it like to leave the company?

Mafteiu: No matter what anybody says, it’s a very demoralizing thing. There’s a lot of stress. When I joined, there were 2,200 people at Russell, and 1,000 people there in less than five years. One of the reasons to lay off so many – whatever their planning was – they just threw bodies at growth. To this day I’m still surprised.

Gartlan: I’m 48. When you do something for 20 years, it becomes less fun. It hit me how short our time on Earth is. I wasn’t so much being pushed from Russell – it was just time, with the move.

Haughton: For a lot of people, it was a combination of things. There was a wide variety of circumstances. Some of us were blessed with options. One of the reasons I ended up leaving – the incentive plan. I had my 55th birthday in ’08; if I’d stayed, I’d be working for two or three years for free.

Jensen: The program worked, until it didn’t.

Petteys: I was part of (one of the reorganizations). The company made a change for me. I do appreciate having had that. Having left, it made me realize that design is still my passion.

Gartlan: I think the whole process – leaving the corporation – is a process in itself. On Day 7 I had my own panic attack. Now, I have not been more excited. It’s like I’m out of college. It’s very empowering.

And the downside?

Gartlan (smiling): There’s less people to delegate to. You have to do everything.

In general, what’s become of your former colleagues?

Mafteiu: There was such a large group caught up in the reorganization. Most of the people, after the layoffs, of those I know – 50 percent found new positions in the greater Tacoma area. The others might have been recruited away, and gone to New York or elsewhere.

And what do you hear from the people still in the company?

Petteys: It’s a mix, depending on who you speak to. For some, it’s just another company. It’s still a good company.

Gartlan: At one time, Russell was a small and family-owned, and became a global player. Now it’s a global player, and they’re trying to act like a global player. They never did that before.

There are things about Russell today that nobody can probably do better. Anybody who is working there now, who was hired in the last year, is thrilled.

I have the sense that none of you is out to bash your former employer.

Haughton: The words I use: “It was a great ride.” How many people have worked for an organization for 26 years and been treated decently? There’s not a lot of people on that list.

Jensen: I feel incredibly lucky to have worked there.

Gartlan: There are people at Russell today, they’ve been there for 15 years, and (they are) still happy. There are still very many good people there, (but) it’s a different company today. When people get together they don’t necessarily bash Russell – they reminisce.

Any reminiscences you’d like to share?

Haughton: One of my memories of Jane – it was right after my wife and I had our second child. I was at the hospital, the baby was born and I went home, and the phone rang. It was George and Jane calling to congratulate me. That was a different company.

Gartlan: I’m part of a small business in Gig Harbor, and I (look forward) to the chance to treat our employees just like we were treated.

And a chance to treat the community the way Russell treated Tacoma?

Mafteiu: You can’t pass the Museum of Glass without seeing what George and Jane did.

Haughton: For a big chunk of my career at Russell, whenever I went to a charitable event, one of the sponsors was Russell.

Gartlan: It’s the ultimate economic multiplier.

Given the nature of the business you were in, or are in again, do you have any advice for average investors?

Gartlan: You can’t control markets, (but) there are things you can control. They need to have the right conversation with their advisers so they can be clear on what it takes to send their children to college and have a dignified retirement.

And any summing-up?

Gartlan: There is life after Russell. There always was.

C.R. Roberts: 253-597-8535
c.r.roberts@thenewstribune.com

Five former associates at Russell Investments recently sat down for a conversation with The News Tribune. Here’s a look at where each one called home early on, what they did at Russell, how long they served and what they’re doing now.

Peter Mafteiu

• Springfield, Mo.

• Global chief compliance officer for investment management and research

• August 2006 to April 2009

• Principal at Sound Compliance Services, a compliance and operations consultancy, in Gig Harbor

Donald Gartlan, Jr.

• Turkey-born Air Force child, claims Texas (A&M)

• Director of Russell- managed portfolios, consulting services

• October 2001 to December 2010

• Principal, Evergreen Asset Management, in Gig Harbor

Dennis Jensen

• Port Orchard

• Manager, research analysis and portfolio

• 16 years

• Partner and director of research at Acuitas Investments, in Tacoma

Kelly Haughton

• Los Gatos, Calif.

• Strategic director and innovator of Russell indexes

• May 1982 - October 2008

• CEO, Global Index Group, in Gig Harbor

Jerome Petteys

• Fircrest

• Art director, online media

• 23 years

• Principal, Jerome Petteys Design, in Tacoma