A Different Way of Looking

When Larry Jeddeloh was growing up in Waseca, he never imagined that some day he would be spending nearly a third of his days overseas. Or making 300 speeches and presentations annually around the world. Or shooting late-night e-mails from foreign money centers to investors scattered across the globe.

“I wanted to be a history teacher and a basketball coach,” he says.

But instead, Jeddeloh founded the TIS Group in 1995, now based in North Oaks, and manages $100 million for about 200 accounts. TIS invests most of this money internationally: Approximately $50 million is invested in global conservative portfolios, and $22 million is invested in global aggressive portfolios. The company also does international research projects.

Since its inception in 1995, the returns on the overall TIS global equities model portfolio and its Research Plus global equity product (launched in 2005) have outperformed the Morgan Stanley Capital International World Index, a benchmark index comprising equities from 23 countries, including the United States.

“We’re a global shop,” says Jeddeloh. “We have almost as many customers outside the U.S. as in.”

Jeddeloh has built his business on fortuitous timing, technical skills, international experience, and a capacity to take the risks that come with being a contrarian investor. His hero of heroes is Winston Churchill, the against-the-grain icon who led England through the darkest days of World War II.

In a Q & A early last spring in the business magazine Barron’s, Jeddeloh served up a sample of his antithetical approach. He noted that his clients, much of Wall Street, and even Federal Reserve Chairman Ben Bernanke were arguing that “the subprime problem is going to be contained.” Jeddeloh took the opposite stance. He was right.

TIS is focusing more on Eastern Europe and Russia. It is also looking more closely at "frontier markets," such as Botswana.

Variations on a Theme

Jeddeloh has a habit of turning up in the right places when it matters most. In the early 1990s, he worked in Zurich, Switzerland, as chief investment strategist for the giant Union Bank of Switzerland (now UBS). That job gave him a bird’s-eye view of a once-in-a-century transformation. The Soviet Union was collapsing. Money and goods were starting to stream into lands that had been saddled for decades with command-and-control economies. Suddenly, the Cold War was over and capitalism was triumphant.

It was then that Jeddeloh launched TIS—which stands for The Institutional Strategist—just as the great convergence of the established economies of the West with China and other emerging economies was picking up steam.

TIS specializes in “investment theme” research, which sets the firm apart from many of its peers. Themes revolve around actions—or turns in the global markets—as opposed to industries or indexes. The TIS Web site affirms the company’s dedication to finding “out-of-fashion ideas” as opposed to what’s popular with the investment industry at large. Consider its “CFO knows” theme. The idea: Check out the latest purchases by chief financial officers in the home mortgage lending industry of their own companies’ stocks. While many of these stocks have been doing terribly, Jeddeloh figures their CFOs will be the first to know when the worst is over. Sure enough, TIS found that in November, days after Fort Lauderdale, Florida–based BankAtlantic Bancorp’s (NYSE: BBX) CFO began buying his company’s shares, the stock turned up sharply from a rock-bottom price.