Norman Mains, WaveFront’s Chief Investment Officer, Dies at 72by
He worked for ‘Random Walk Down Wall Street’ author Malkiel
‘What is it that ultra-high-net-worth investors are seeking?’
Norman Mains, the chief investment officer at Burton Malkiel’s WaveFront Capital who advocated that hedge fund strategies should be available to mutual fund clients, has died. He was 72.
He died June 22 at his home in Napa, California, his wife Ginna Beharry, said in a telephone interview. The cause was cancer.
Last August, Mains joined WaveFront after more than 45 years as an economist and investment adviser. Malkiel, a professor of economics at Princeton University in New Jersey and author of the stock market classic, “A Random Walk Down Wall Street,” is the firm’s chairman and co-founder. WaveFront focuses on investing in emerging markets and China through diversified portfolios, an options strategy and “the exploitation of unique market inefficiencies,” according to its website.
“Norman was a wise and thoughtful student of financial markets with a unique ability to bridge the gap between theory and practice,” Malkiel said in an e-mail.
Mains, who earned a Ph.D. in economics at the University of Warwick in the U.K., arrived at WaveFront after six years as managing director and chief risk officer at San Francisco-based Forward Management, now part of Salient Partners.
In his 2014 book, “Winning with Liquid Alternatives,” Mains advocated for his former firm’s specialization “in investment products that use the techniques and strategies employed by hedge funds.” These investments, he wrote, offered clients “daily liquidity, high transparency and the regulatory regime of mutual funds.”
From 2001 to 2009, Mains was chief investment officer at Morgan Stanley’s Graystone Research. The Chicago-based unit specialized in designing customized funds of hedge funds for wealthy clients, he said. Mains oversaw the growth of Graystone’s fund of hedge funds platform by 15-fold to $6 billion, WaveFront said in a release announcing his hiring.
Mains wrote that he “was always amazed” at how many individuals had $50 million to invest and that the typical Graystone client had at least that amount to put to work.
“What is it that ultra-high-net-worth investors are seeking allocating to hedge funds?” he asked. “The answer is straightforward: acceptably high returns with risk controls that moderate losses. But why should these types of investments be limited to the wealthiest investors? They shouldn’t.”
Mains began his career in 1969, as an economist at the Investment Company Institute, a Washington-based industry association. In 1975, he moved to the Federal Reserve Board as a senior economist. There, he met Beharry, who worked as a research assistant at the central bank, while standing in the cafeteria line.
In 1982, Mains became director of research for financial futures and options at New York-based Drexel Burnham Lambert. He left a year after the 1987 stock market crash, when two Drexel futures funds he was involved with lost half their value.
“It proved a lasting lesson for me that financial market outcomes can be highly unpredictable, and therefore adequate risk control is paramount,” he wrote in “Winning with Liquid Alternatives.”
Following jobs at two other firms, in 1993 Mains moved to the Chicago Mercantile Exchange as chief economist and director of research.
At WaveFront, “we were attracted to his resume and his gravitas,” Michael Loukas, a managing principal, said in a telephone interview. “His history in the investment business was quite impressive.” The firm manages $50 million in assets.
Norman Ellsworth Mains was born July 15, 1943, in Wichita, Kansas, to Norman Mains and the former Mary Lucille Matthews, his wife said. His father was a regional branch manager for General Cable Corp. and the family lived in Denver.
Mains worked as a draftsman to put himself through the University of Colorado Boulder, earning two degrees in economics: a bachelor’s in 1966 and a master’s the following year. He then followed a professor to the University of Warwick, which awarded his doctorate in 1973.
His marriage to Marilyn Anne Laing ended in divorce. They had a son, Norman Ellsworth Mains III, who survives him. His survivors also include his two sons with Beharry, Clinton and Spencer, and two grandchildren.