Lofton Holder ’90
Investor, Board Member, Entrepreneur, and Philanthropist
By Ted O’Callahan
“People’s talent and fundamental human spirit are the same,” says Lofton Holder. “But not enough people are given opportunities.”
It’s a pattern Holder has seen at every point in his education and career. “Historically, for many different reasons, there has been resistance. I’m hoping recent events are a catalyst for progress.”
He counts Martin Luther King Jr., Mahatma Gandhi, Malcolm X, James Baldwin, Maya Angelou, Tony Morrison, and Nelson Mandela as role models, leaders who fought for radical and reasonable change. He adds, “I’m a radical, too, one who cares about society and all members of the community.”
Holder is also an entrepreneur, philanthropist, and investor. He has more than 30 years of Wall Street experience including roles as a managing director at JP Morgan Asset Management and Investcorp. “Along the way, I learned how to finance, how to fund, how to use data,” he says—and “to use those tools to be a change agent.”
Holder frequently says that “talent is equally distributed.” And yet, the leading figures in C-suites, entrepreneurship, and finance— those who have power and representation in every aspect of market activity—don’t track the diversity of our population. In other words, talent is equally distributed but opportunity is not. His response? “There’s opportunity in the dissonance,” Holder says. “There’s a talent pool that’s undercapitalized and can outperform. Isn’t that what good capital allocators should be looking for?”
Holder grew up in the Bronx. His mother was a public-school teacher who then went to work in city government. His father was a public defender. Cases like Plessy v. Ferguson, the 1896 Supreme Court decision that upheld the constitutionality of “separate but equal,” and Miranda v. Arizona, the 1966 Supreme Court ruling that suspects must be informed of their protections against self-incrimination, were discussed at the dinner table.
After graduating from Columbia, Holder joined First Boston as an analyst on the investment bank’s public finance team. “I always had a sense of purpose associated with financing public works projects,” he says. He also enjoyed the intellectual challenge and the task of bridging disparate groups. “There are certain innate traits that I believe I was born with. One is to be collaborative, and another is to see the positives in all types of groups. I’m somebody who moves in and out of cliques easily. I’ve always been good at getting people to see the common good.”
Wall Street colleagues he admired had attended the Yale School of Management, so he came to visit when he decided to attend graduate school. “From the moment I walked on campus, it felt right. A school that applied the foundational principles of a business education to the corporate world, nonprofits, and government in an integrated way fit me quite well.”
While in New Haven, Holder was active on campus. He had participated in recruiting while at First Boston, so he contacted the Black Student Union. “We held mock interviews for Black undergraduate students to help them prepare for jobs on Wall Street. It was a way I could enhance opportunities for the Black and Hispanic undergraduates.”
He also volunteered off campus. “I recall knocking on the door of a homeless center and saying I’d like to volunteer,” Holder says. “Nobody from Yale had volunteered at that organization. This was in the late ’80s. It was different then. Yale does much better in the community now, but even then, a great attribute about the typical SOM student was they were willing to do it with me.” He adds, “My experiences at SOM reinforced the need to use the skills I’d acquired for the community. ‘Opportunity’ became even more of a mantra. I want to provide opportunities for others.”
After graduating, Holder returned to investment banking for a time before moving to asset management. All along he worked to expand the diversity of talent in finance. “We were successful at helping open the doors,” he says. “We did a good job of increasing the numbers at the entry level, but sustaining those percentages up the ranks eluded us.”
So he sought a more direct approach. “The quest became, how do I help create institutions that are Black-, Hispanic-, Native American-, and woman-owned?” While expanding representation of underrepresented groups at every level is important, ownership is a particularly powerful lever. “Through a different ownership profile, we can filter the benefits of that equity ownership back into the communities we come from, know well, and understand.”
Holder spent years making a data-driven case in an arena where relationships still hold tremendous sway. His argument was simple: find the talent. “Pre-crisis, I invested a lot of my intellectual and trust capital in trying to convince the institutional investor community that robust quantitative analytics to determine skill—versus luck—should be the factor that you use to make your allocations in the hedge fund space, rather than trust based purely on whom you know.” He adds, “Post-crisis, the market in effect came to us, and we had a lot of success.”
That included co-founding Pine Street Alternative Asset Management in 2011. It was data-driven asset management that “focused more intensively on my community.” Using proprietary analytical tools, Pine Street identifies women and minority hedge fund portfolio managers who are undercapitalized but nonetheless outperform.
“There were multiple motivational factors,” he says. “If we break down this barrier through rigorous analytics, excluded groups benefit. Society benefits as well. And, oh, by the way, it’s a tremendous economic opportunity.” Pine Street was named Hedge Fund Innovator of the Year in 2017. “Seeing talented 30-year-olds starting Black-owned firms gives me great pride.”
In 2020, Holder left Pine Street. A health scare a few years earlier had prompted reflection. “I was diagnosed with an aneurysm where the aorta attaches to the heart. Repairing the aneurysm was a very serious medical procedure,” Holder says. “My health is great now, but part of my recovery was asking life questions. It accelerated a path I was headed down.” He wanted to find new ways to take on structural inequities.
Holder continued working as a board member for the EGF Accelerator | New Ideas for Educational Equity, Maimonides Medical Center, and Pace University. He also began advising a startup called Landed. The company aims to make it easier for people to buy homes. “Essential professionals— teachers, healthcare workers, policemen, firemen—critical to the functioning of society are increasingly being locked out of buying houses in the communities they serve, particularly in large metropolitan areas,” Holder explains. “Landed is trying to unlock homeownership in a creative way without saddling buyers with more debt.”
Since the biggest barrier for many is accumulating a 20% down payment, Landed helps not through an additional loan but by taking a share of the equity in the house. The company shares exposure to any appreciation or loss of value.
Holder is helping Landed make the case for this model with the capital markets. “There’s no comparable investment,” he says. “That means we really have to prove it out to investors.” While there are investment products for commercial real estate, “there’s never been an asset that gives investors access to a diversified pool of single-family residences occupied by people who have steady income and recession-proof jobs,” Holder notes. “We’re taking a data-driven approach to demonstrating that home-price appreciation in diversified geographies will yield a good investment return over time for investors.”
In 2021, Holder began a fellowship at Stanford’s Distinguished Careers Institute. He sees it as a chance to think broadly about the next way to help make opportunity as equally distributed as talent is. “The purpose of diving into this program is to figure out the vehicle that will let me do that.”
Interviewed on August 12, 2021