By Adam Sylvain

When she chose to attend Tuck, Sarah Ketterer T’87 was yearning for knowledge beyond the world of corporate finance.

In her two years in Hanover, she gained a more well-rounded understanding of business and a deeper “toolkit” as well, but looking back, Ketterer says the greatest benefit she received from Tuck was a dramatic shift in perspective. 

“I went into the MBA experience with pretty self-centered motives,” says Ketterer. “It was all about enhancing my education and thinking about what I wanted, but I left completely convinced that teamwork was the avenue to a far better outcome than anything I could hope to achieve individually.” 

Now, more than 20 years into her tenure as cofounder and CEO of the global equity firm Causeway Capital Management, Ketterer is equally convinced that human capital is the most important investment an asset management firm can make.  

“Working in this sector, you learn quickly how fragile asset management is,” says Ketterer. “It is a human capital business, and you need to have a team that is engaged and committed to what they do.” 

Ketterer learned this lesson firsthand when she joined Hotchkis & Wiley, the value investment firm cofounded by her late father, John Hotchkis. There she was asked to start a new international equity arm of the business. She hired a comanager, Harry Hartford, who remains a partner to this day, and together they assembled a team. Just as they were starting to generate assets, Hotchkis & Wiley sold to Merrill Lynch—a move that later prompted much of the team to leave the firm.  

“That experience was tremendously impactful because you try so hard to put great talent together and you can lose it in the blink of an eye,” she says.

When Merrill Lynch tried to sell the firm, they had acquired only five years prior, Ketterer and Hartford decided to strike out on their own, founding Causeway Capital Management in 2001. After surrendering many nights and weekends to prepare a presentation book and seek out investors, they eventually found one, but it was three years before the firm had positive cash flow.

Despite the risk, Ketterer was convinced that if they invested in Causeway, assembling the best investment, systems, operations, compliance, and legal teams they could muster, clients would follow. The clients did come, and the firm grew, though not in a linear fashion. They began putting billions in assets under management each year before the global financial crisis hit in 2008, cutting their assets in half. 

“It was terrifying,” admits Ketterer. “We had borrowed money and had a lot of personal liability in a business that was tied right into the financial crisis.”

By 2013, the firm had climbed out of the recession and was able to pay off the balance owed to its original seed investor. A few years later, just as momentum again seemed to be in their favor, the investment style the firm was known for—value orientation or investing in stocks that appear to be trading below their book value—was falling out of favor. 

“Our performance was lagging behind benchmarks and unfortunately the patience level of some clients doesn’t always extend as far as you hope,” says Ketterer. “Thankfully, from 2022 onward, we’ve been back in a market environment that is more propitious for what we do, and valuation is becoming more important in the eyes of investors.”

As Ketterer’s journey attests, leadership in asset management is not for the faint of heart and the pendulum can swing quickly. She says team success depends on resilience, collaboration, and maintaining a long-term perspective. To encourage this at Causeway, Ketterer says they instituted five-year plans to help employees think more proactively, and collaboratively, about their future. 

“We naturally get stuck in narrow thinking and allow ourselves to become siloed and overly concerned about tomorrow,” she says. “Our success, and theirs, really depends on stretching out that thinking to plan for a year from now, two years from now, and build out a longer runway.”

When she thinks about the indispensable traits of a leader, particularly those operating in the volatile world of asset management, Ketterer rests on one word: humility. 

“To be a great leader and investment manager you have to be humble,” says Ketterer. “The markets will mow you down if you think you’re smarter than they are. The same is true for managing a group of highly intelligent and motivated colleagues.”

Ketterer says a product of this humility is the ability to listen carefully and empathize without being solicitous. Ultimately, she considers it her responsibility to help team members find the opportunities they crave and do whatever possible to remove obstacles in their path. 

“You want to make sure everyone has a stake in the firm,” she says. “For us, that’s 30 partners and 107 employees—making sure they each have a vested interest in doing well personally, but also helping everyone else succeed.”

On Developing as a Leader:
“Take advantage of every opportunity to lead. Whether it’s your full-time job or something you’re doing in philanthropy or through board service, it’s all valuable and helps you gain trust and confidence as you work collaboratively toward a shared goal.”

On Curiosity:
“The one characteristic that has to be there from the beginning for any aspiring leader is insatiable curiosity. The people who consistently perform the best are constantly wanting to know more.”

On Collaboration:
“Our business model is built on collaboration. We have six primary portfolio managers who cover areas like financials, consumer health care, and information technology. They all have areas of deep expertise and our success as an organization depends on their collective knowledge. No one person could manage this entire portfolio well and I’m convinced we get a better outcome as a result of collaboration”

This story appeared in print in the winter 2024 issue of Tuck Today magazine.