The asset management firm has diversified into three synergistic business areas since its inception. It manages roughly $7 billion in long-only funds, primarily investing in convertibles, over $1 billion in three closed-end funds listed on the NYSE, and approximately $400 million in alternatives, including absolute return funds, hedge funds, and liquid alternatives, according to The Hedge Fund Journal.
Tracy is the son of Dr. Leo Cecil Maitland, one of the surgeons who operated on Dr. Martin Luther King Jr. at Harlem Hospital after he was stabbed at a book signing – while celebrating his narrative of the Montgomery bus boycott.
He decided to pursue finance instead of medicine, and his first job after graduating from Columbia University was at Merill Lynch; where he went through the ranks to lead the firm’s office in Detroit.
Raised in the Bronx, Tracy’s breakthrough came in 1985 when Merill Lynch invented a hybrid zero coupon bond that could be converted to cash or stock called “liquid yield option notes,” or LYONs.
Tracy became a top producer when LYONs became a big hit for Merrill Lynch. He made his big break while selling them to major clients like billionaire investor, Howard Marks, at the Trust Company of the West.
“Since the mid-1990s, his two largest strategies ($4 billion in assets), Advent Balanced Convertible and Advent Phoenix Convertible Income, have returned after fees, about as much as an S&P 500 Index fund, with less risk,” Forbes noted.
His success in Detroit resulted in him being recalled to Merrill Lynch’s New York offices in 1987. He was put in charge of convertible sales, a backwater at the firm, and led the unit to become the most profitable in the firm for several years.
He soon gained a reputation for weathering turbulent markets in 1995 with strategies ranging from defensive convertibles to riskier high-yield bonds and hedge funds. According to Forbes, each has returned between 7% and 8% annually since inception.
Today, Tracy is worth an estimated $250 million, and loads up on the convertibles of unleveraged technology and healthcare companies. His company’s buys include Massachusetts-based Akamai Technologies, which sells cloud infrastructure to web and streaming businesses; Workday, a Pleasanton, California-based payroll provider, among others, according to Forbes.