Arta Team Spotlight
Q&A with Tomas Arlia—Head of Alternative Investments
Arta Team Spotlight
September 21, 2023
Meet Tomas Arlia
Tomas Arlia is a leading expert in the investment field, with more than 25 years of hands-on experience across both developed and emerging markets.
As Chief Investment Officer and Portfolio Manager at GE Asset Management, Tomas oversaw a $3.5 billion global hedge fund and private credit portfolio and approximately $1 billion in private equity fund investments.
Under his leadership, GE also ventured into direct private equity investments in Latin America. Tomas drew on this expertise to start his own alternative investments firm, DoubleBlue, spanning direct investing in private equity and private credit as well as fund investing across global hedge funds.
His achievements include recognition in the 2019 “Top 10 Hedge Fund of Funds” by Barclays Hedge, “Top 100 Under 50 Diverse Executive Leaders” by MBA Diversity Magazine, and the “GE CEO Awards for Outstanding Achievements.” Tomas has an MBA with Honors from Dartmouth College’s Tuck School of Business.
Tomas recently joined Arta Finance as Head of Alternative Investments.
Tell us a bit about who you are. What motivated you to enter the financial space, and how did you get started?
The first time I saw those esoteric stock tables in the newspaper as a new high school graduate, I sensed that my future lay somewhere in those numbers.
I didn't understand what the numbers meant - but I wanted to. So, I asked a stockbroker friend to explain. Half an hour later, he offered me a job. Fresh out of high school, I worked full-time at the Buenos Aires Stock Exchange while attending college at night. Those days were long, but I was getting real work experience that didn’t happen in the classroom or a part-time job. The paycheck wasn't bad either.
Fast forward a bit, and I was knee-deep in things like equity analysis, technical trading, bond analysis, and how markets and the macroeconomy interact. Wild bull and bear markets in emerging market equities and bonds taught me some costly but incredibly valuable lessons in just a few years.
That experience made it clear to me that if I wanted to invest well, I needed to know more. So, I made a plan to get a well-rounded education and learn the ins and outs of public markets, M&A, strategy, and how to run a business.
I went to business school for my undergrad and continued until I got my MBA. But book smarts are one thing; you must also know how things work in the real world.
I gained experience in M&A, which was invaluable. I spent three years at McKinsey, learning from and developing strategies for some of the world's most iconic companies. I took on two operating jobs, one of which was at GE Capital. All these experiences helped me to land an investment role at GE’s pension fund.
My time at GE and McKinsey taught me to seek excellence from myself and my team and have a “no excuses” approach to delivering on our objectives. My experience at GE Capital (once one of the largest lenders in the US) solidified my ability to understand and evaluate private credit strategies.
Before joining Arta, I founded and ran my own investment firm, DoubleBlue, where I raised and managed over $200MM, including a $100 million private credit fund, in addition to other hedge fund and private equity investments.
Each step of this journey taught me something valuable.
That’s quite a journey. How does your background distinguish your approach to work?
I don't fit the usual investor mold. I've got hands-on experience in strategy and operations. I know my way around developed and emerging markets. Living and investing in emerging markets is like finance boot camp: you quickly learn to keep an eye on the bigger picture, develop a keen sense of risk management, and have more backup plans than you can count!
I feel that this multifaceted experience gives me a unique lens for evaluating investments. I can quickly cut through the “window dressing” to see the true nature of an investment, which is especially important in the alternatives space. My skill set allows me to break down intricate hedge fund strategies to see the real risks and dig deep into our private equity or venture capital investments. I’ve also been fortunate to learn from so many experts and many of the best fund managers in the world, thanks to my time at GE.
These are all things I bring to Arta and its members.
With over 25 years in the investment arena, how have you seen the landscape of alternative investments evolve? Where do you see it heading in the next 5-10 years?
The world of alternative investments, or "alts," has come a long way. GE began managing its pension assets in 1928 and first ventured into alternatives in 1956. GE started investing in real estate in the '50s, private equity in the late '70s, and hedge funds in the '90s. They were early adopters before the institutional world made alts mainstream in the 2010s. Now, every institutional investor has some skin in the alts game. And while the ultra-wealthy have been in alts for ages, retail investors are only now starting to catch on.
The people managing alternative assets have stepped up their game, too. Everything from professionalism to transparency has seen a massive uptick in the last decade. Those perks once reserved for ultra-wealthy investors? Now, they're available to retail investors, a win for individual investors and the industry.
Looking ahead, I see the alts landscape evolving in several ways. Expect more retail investors coming in, primarily since institutional money is already fully allocated. I expect to see more niche strategies and an uptick in alternative managers outside the U.S. and Europe. These trends will be exciting and potentially very lucrative but must be approached with caution. Doing your due diligence on managers will be just as critical as ever.
As an industry insider, what made you want to join Arta?
Arta's mission resonated with me: opening access to wealth-building tools and financial products that, until now, were reserved for the ultra-rich and institutions. In a world where traditional company pension plans are becoming extinct – thanks in part to legislative shifts such as the Pension Act of 2006 in the U.S. – most of us have limited access to invest our retirement money in these complex but rewarding alts strategies.
The likely consequence is that millions of us will retire with savings portfolios that have underperformed what a corporate pension plan would have achieved for us. Arta offers a powerful solution, and my role as Head of Alternatives plays a critical part.
How do you measure success?
I’d like to measure my success in business by how many people I’ve helped achieve financial security. I’m thrilled by how well this aligns with Arta’s mission.
Can you discuss what makes a top-tier alts opportunity vs. a “run-of-the-mill” option?
It's all about the caliber and quality of returns. You've got to go deep, layer by layer, scrutinizing quantitative and qualitative metrics and assessing the people involved. This is where the trifecta of strategy, investment process, and team comes into play. We rigorously evaluate these pillars to ensure we're making great investments and investing in “great” vs. “lucky.”
Can you share your insights on how retail investors should approach alternative investments? What considerations should be top of mind?
As with other investments, investing in alts depends on your personal financial situation and objectives.
Three factors always take center stage in this decision-making process: performance requirements, liquidity, and risk appetite. But diversification remains critical, even within the alts sector. We're talking beyond merely spreading your allocations across multiple private equity funds. Consider diversifying across different vintages (the year a fund began its investing activity) and varying strategies too.
Think of your investment journey as a long-term endeavor, not a one-off transaction. It's prudent to sketch out a five-year plan detailing how and where you'll allocate assets in the alts space.
Lastly, if there's something you don't understand, ask questions—lots of them, even the ones you think may be "silly.” We're here precisely for that kind of dialogue. Take the time you need to make informed decisions.