Who We Are

Our Story

Concinnity indices are designed to identify companies that seek financial performance in a sustainable and responsible manner. Concinnity defines "well-managed" companies as those that appear to have adopted a multi-stakeholder operating system (MsOS) as the nucleus for their value creation process.

Management Team

Peter Derby

Founding Partner

"We believe this new era of capitalism is being ushered in by companies that are proving compromises do not have to be made between creating wealth for shareholders and tending to the interdependent needs of multiple stakeholders, (i.e., customers, employees, communities and suppliers)"

Rick Frazier

Founding Partner

"We believe companies operating with this more holistic view will paradoxically deliver more long-term value for shareholders than those operating with an overemphasis on shareholder value to the neglect of other stakeholders."

Alex Romeo

Head of Quantitative Research

"We believe companies that act in the long term best interest of all their stakeholders will outperform companies that are driven only by the short term benefit of their shareholders."

Our Foundations

Attitude of Caring

We measure a company’s success using the Multi-stakeholder Operating System (MsOS), where management adopts an attitude of caring towards all stakeholders (customers, employees, suppliers, communities, and the environment, as well as debtholders and shareholders).

Intangibles Matter

We believe a company’s performance is largely driven by intangibles such as culture, customer perception of value, and employee engagement.  These characteristics cannot be measured using traditional financial data metrics and fundamental analysis.  Concinnity MsOS model uses a diverse array of data sources that better measure these intangible characteristics.

ESG is just one Piece

We believe Environmental, Social, and Governance (ESG) metrics are important, but only capture a portion of a company’s culture and ability to achieve sustainable, long-term success.  MsOS metrics give a more thorough analysis than ESG metrics alone.

MsOS is our Alpha

We believe companies whose management follows the Multi-stakeholder Operating System (MsOS) are better positioned to achieve financial performance in a sustainable and responsible manner than companies whose management is shareholder centric.

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Attitude of Caring: Case Studies

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ESG is Just One Piece:

The Multi-stakeholder Operating System (MsOS) is more than just ESG

 

We believe Environmental, Social, and Governance (ESG) metrics are important, but only capture a portion of a company’s culture and ability to achieve sustainable, long-term success.  MsOS metrics give a more thorough analysis than ESG metrics alone.

From a portfolio management perspective, we believe ESG is primarily concerned with helping to control business risk.  But we feel culture and stakeholder relationships are a key driver of company performance and alpha generation.

Intangibles Matter

“[Analysts] have been slicing and dicing the same 20% pile of tangible asset information for a very long time.  At this point, it seems like they are all trying to squeeze alpha blood from the same information rock.  Meanwhile, the intangible asset information pile that makes up about 80% of corporate value is still largely virgin soil.”

Source: Firms of Endearment II, 2014, interview with Rick Frazier, Concinnity Advisors, LP

Intangible data is messy.  But as the graph above from Ocean Tomo, LLC shows, it explains corporate value better than tangible data. Yet financial analysts continue to get their data primarily from the Income Statement, Balance Sheet, and Statement of Cash Flows.  Why? Because it is easy, inexpensive, and accessible.  See the table below for a summary of the differences between tangible and intangible data.  Where do you get your alpha?

 

At Concinnity Advisors, LP, we believe that a company’s performance is driven by its culture, branding, management integrity, and employee engagement.  These characteristics cannot be measured using traditional financial data metrics and fundamental analysis.  Concinnity's MsOS model uses a diverse array of data sources that better measure these intangible characteristics.

Tangible Data

 

Advantages

  • Timely

  • Readily Available

  • Numerical Values

  • Mandated

Dis-Advantages

  • Describes 20% of corporate value

  • Lagging indicators

  • Where most analysts dig

Intangible Data

 

Dis-Advantages

  • Spotty Coverage

  • Infrequent Updates

  • Non-linear/Opinion ratings

  • Not mandated

Advantages

  • Describes 80% of corporate value

  • Leading indicators

  • Where Concinnity digs

Why the name Concinnity?

The definition of concinnity is "Concinnity (n.): A skillfull blending of the parts achieving elegant harmony".  We liken it to the notes on a musical scale .  Each note is important and necessary to come together to form a beautiful symphony.

Our core belief is that a company following the Multi-stakeholder Operating System (MsOS) will achieve concinnity with respect to its value creation process. If management achieves concinnity with all its stakeholders, including its customers, employees, suppliers, stock and debt holders, and the communities in which the companies operate, the company will achieve elegant harmony.

History

2006

The Concinnity Group, LLC was founded with an objective to develop a research process that would reliably identify companies guided by a multi-stakeholder operating system. 

2011

The Concinnity Group founders reach an agreement with Diamondback Capital to form a spin off entity, Concinnity Advisors, LP, while maintaining a contractual relationship with Diamondback for quantitative services. Shortly after reaching this agreement, Diamondback Capital chose to dissolve. Concinnity Advisors, LP enters into a new partnership with Guggenheim Partners Asset Management.

2017

Concinnity launches the Multi-stakeholder Operating Companies Index (CONCPR/CONCTR) and the Gender Diversity (Women in Leadership) Index (ELLEPR/ELLETR).

2008

The Concinnity Group, LLC founders join Diamondback Capital to incubate the multi-stakeholder operating system investment thesis. The strategy was funded with an initial investment of $100 million AUM. Additional capital was allocated to the strategy based on performance, eventually reaching $650 million AUM.  

2016

The Concinnity Conscious Companies Index is launched and licensed to Global X Funds.

2018

Concinnity launches the  Conscious Founders Index (FNDRPR/FNDRTR).

Our Indices

Multi-stakeholder Operating Companies Index

o Companies following the Multi-stakeholder Operating System (MsOS)

 

o Equally weighted index

 

o Consists of Large Cap US companies

ELLE

Gender Diversity

(Women in Leadership) Index

o Companies following the Multi-stakeholder Operating System (MsOS)

 

o Women in leadership positions

 

o Equally weighted index

 

o Consists of Large Cap US companies

Conscious Companies Index

o Companies following the Multi-stakeholder Operating System (MsOS)

 

o 3 years on CONC index

 

o Equally weighted index

 

o Consists of Large Cap US companies

Conscious Founders Index

o Companies following the Multi-stakeholder Operating System (MsOS)

 

o Founder of company is still CEO

 

o Equally weighted index

 

o Consists of Large Cap US companies