The Importance of Being EARNEST
This is an article from the fall 2016 issue of LSA Magazine. Read more stories from the magazine.
The Great Recession of 2008 put a number of finance firms out of business. (Remember Lehman Brothers?) Others came away wounded and stunned, limping into the next decade with less confidence and fewer resources.
That’s not true of Atlanta-based EARNEST Partners, founded by Paul Viera (A.B. ’81), which currently manages more than $20 billion worth of assets. For Viera, surviving—and thriving—is no accident.
At U-M, Viera was intrigued by the framework for human behavior offered by economics, which is how he selected his major, where his interest in business was piqued. But he kept a broad course load in LSA, seeking a more comprehensive view of the world.
“A liberal arts undergraduate education is way better than a refined business education, which you can get later,” says Viera. “You need broad life experience to be able to make good financial decisions.”
After graduation, Viera worked at Aetna in their financial department. Eager to learn more about finance, he applied to Harvard Business School, where he earned his M.B.A. But he didn’t consider that the end of his education.
“I try to learn at least one new thing each day,” he says. “I want to go to bed smarter at night than I was when I woke up. Everyone should live their life like a one-year-old, constantly learning and growing.”
Being the Change
Viera went into investment banking after Harvard. And for a few years, he slogged through 14-hour days valuing companies and honing his financial chops. Soon, though, he was eager to strike out on his own—to put his own capital on the line and create the kind of firm he’d always wanted to work for. This meant pulling lessons he’d learned from different industries and, most importantly, putting together a strong team.
“The difficult thing about finance is not the calculation itself, but the assumptions you make before you perform the calculation,” says Viera. “That’s where life experiences come in, and that’s where judgment comes into play.”
In building EARNEST Partners, Viera sought out people who had a wide array of life experiences: people who could bring together their diverse sets of knowledge for a truly holistic view of the companies they’d be working with. For Viera, having a workforce made up of different ages, races, genders, and lifestyles is not just a matter of goodwill—it makes for better business.
“I want to win,” says Viera. “Not only did I want to produce better returns than other firms, but I also wanted to work with people who think about the world in a broad way. Our job is to look at an idea and discover the truth about that idea. Since no one individual has a universal life experience, we get closer to the truth when we have as many perspectives as possible.”
It’s this emphasis on thinking broadly and comprehensively that helped EARNEST Partners come out of the 2008 recession relatively unscathed, while so many others went belly up.
“Survival comes through planning,” he says. “We were well prepared for bad weather, and when it came, although it was not pleasant, we survived. People who became content, who didn’t plan for a different economic landscape, didn’t.”
The Human Element
Viera’s emphasis on learning reaches even further into his work. In the course of his career, he has also developed his own sophisticated way to value companies, a process called Return Pattern Recognition. In his system, industries are viewed differently depending on their innate characteristics, and the definition of success varies from industry to industry. Although he’s game to use technology to help gather and analyze information, Viera stresses the importance of the human role in these calculations.
“Sometimes technology can lead to less thinking, because you can be paralyzed by the amount of data available,” he says. “Or you think of the information as an infallible tool and stop applying your own analysis to it. The world is complex and requires real thinking. You can’t write a line of code that can represent the entire world of experiences.”
Viera’s belief in people also extends into his personal life. He sits on the board of several nonprofits and civil rights organizations, including the Woodruff Arts Center and the National Center for Civil and Human Rights.
“I think that I have been really lucky, and I am interested in involving myself in things that allow other people to fully express their life’s talents and ambitions,” he says.
As for Viera’s own ambitions, they’re characteristically thoughtful.
“To continue to be curious about the world and to let that curiosity express itself in my life and business endeavors,” Viera says, “and to try to make the world a fairer place.”
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