Whether it's on the football field or Wall Street, Eugene Profit knows how to play the game.
Profit, a Yale University graduate with a bachelor's degree in economics and a former cornerback for the New England Patriots and the Washington Redskins, entered the financial sector in 1991 when he was forced to retire from the NFL due to a torn hamstring. He started as a financial consultant at Legg Mason and left the company in 1996 to found Profit Investments, a money management firm based in Washington, D.C., that serves institutional and retail clients.
U.S. News recently spoke with Profit, 48, about his passion for finance, what the NFL taught him about money and how the company he founded 15 years ago with $300,000 in assets under management has grown to nearly $2 billion today. His responses have been edited.
What was it like making the transition from the NFL to Wall Street?
Any transition from a sports league to something else is extraordinarily difficult. You go from being in this world where there's this degree of exposure and popularity. You've been used to having structured schedules and structured goals in your life. Then you transition over into this world of complete freedom and isolation. I think that's a pretty big adjustment. And don't forget that, in most cases, you're pretty young when this transition occurs.
What did you tell Emmitt Thomas, the Redskins position coach, when he asked you during your last year in the NFL whether you're going into coaching or going to Wall Street?
I told him I wasn't sure. I was equally split on what direction to take. In coaching, you are directing people to achieve. You are trying to analyze where they are and help them get better. It's like that in money management, where you help individuals with their portfolio and help them make good investments.
What was the deciding factor in choosing to pursue finance?
When I left Yale, I knew that when I stopped playing football, I would need something to do that I was passionate about and would enjoy. For me, that's always been based in economics and business and entrepreneurship.
Before I was injured, I had already started looking into business ventures and looking at stock brokerages. I had my hand in the stock market, so it was a [logical] switch.
Did the NFL prepare you for the fierce competition on Wall Street?
As an individual, I would say yes. There's an acronym a lot of NFL players use for the league: not for long. There's always somebody working as hard as you, and they're always training someone to be your replacement. I think Wall Street is that way - if you don't perform, clients replace you.
Did you gain financial knowledge on the football field?
As a football player, you have to be consumed with playing the game. You need to prepare and put yourself in the best position to keep playing. Intense focus and going through sequential steps to succeed is applicable to a lot of areas, so it was easy for me to apply it to working in finance.
Who was the most influential person in your financial career?
The answer may seem odd, but I think that person was me. I really didn't know how difficult this business is. I went out on my own and focused on growing my own firm - managing the money the way I saw fit. I didn't try to emulate a lot of other people. I think not knowing how this business works allowed me time to pay for my own mistakes. I wasn't making money starting out, but I had money from [my football career] to support my business.
The fact that I grew up without a lot of money allowed me to be comfortable not making a lot in the beginning. When I started my company, that was a period of time when I could have been making a lot more doing work for someone else, but I was focused on doing it my way and stayed with it long enough to convince more people to allow Profit Investments to manage their portfolio.
Are some of your old NFL teammates clients?
No, the majority of our business is in corporate pension funds. Early on, we managed money for athletes, but I shied away from it because I just wanted to manage the portfolio; I didn't want to get pulled more into representation or into managing careers for athletes.
Who is your ideal client?
An investor who is looking for a modest rate of return - at a reasonable degree of risk - over a market cycle, so around a three- to five-year time period. We want investors to stick to their investment objective - not jump around, trying to get a point here and a point there based on the headline of the day. I can't tell you what's going to happen today or tomorrow, but I can tell you what we've been able to achieve in a market cycle.
[See: 50 Smart Money Moves]
What's your investing philosophy?
I am a valuation-sensitive growth investor who seeks to provide investors with reasonable returns at reduced risk, versus an index of securities. We try to build a margin of safety into portfolios for unknown events by buying strong companies that have stumbled for a temporary reason.
What do people need to know about investing in today's market?
As is always the case, there is no guarantee that investing in today's market will provide a positive return today, this week or this year. Successful investing is most likely achieved with a longer-term perspective and with good advisers helping guide you through volatile markets.
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