Q2 2022: SPI Spotlight - Sean Callaway
Team Spotlight: Sean Callaway
Written by Sean Callaway & Lily Turner
Q2 2022 Newsletter
SEAN CALLAWAY, Director of Acquisitions, SPI Advisory, LLC
Sean Callaway
was recently promoted to SPI's Director of Acquisitions.
Before his promotion, Sean served on the team as a Senior Financial Analyst.
Sean is a lifelong Texan, born and raised in Dallas, and has spent the past 15 years in Austin, TX. Currently, he works at SPI’s Austin office which oversees most of the company’s deal sourcing & negotiation, acquisitions, underwriting, portfolio management, and investor relations. In his new role, Sean is primarily responsible for leading all acquisition-related activities such as underwriting, due diligence, market research, & managing SPI’s deal pipeline. Before joining SPI, Sean spent 8 years at Greenwave Capital Management, an Austin-based hedge fund, where his main focus was macroeconomic research, idea generation, and managing the fund’s global macro portfolio. In 2012, Sean was Greenwave’s third employee - as such, he played an instrumental role in cultivating relationships with clients, institutional allocators, and brokerage firms, helping grow the firm’s AUM from $200M to a peak of $450M. Sean is a Chartered Alternative Investment Analyst and received a BBA in Finance from McCombs School of Business at The University of Texas at Austin.
I got to sit down with Sean and ask about his experience navigating a career change from working in hedge funds to real estate private equity and explore how this pivotal experience influences his continued contributions to SPI and the SPI team as a whole.
How did you decide to pursue a career in finance?
"I've always known that I wanted to work in Finance," Sean says. “Both of my older brothers pursued a career in Finance, the oldest went the Investment Banking route…in combination of their influence and my own interests, it was a natural direction.” Sean expresses that math, analytical strategy, and financial markets have interested him since he was young. He learned to play poker at a very young age and even became a semi-professional poker player in college. During high school is when he became interested in things like the stock market. “Still to this day, I find a lot of parallels between successful poker playing and investing,” Sean states. “To be successful at either, you have to be able to make probability-weighted decisions, separate your emotions from the analysis, and consider a range of variables and potential outcomes to settle on the optimal decision. This type of analytical mindset and strategy is something I have always enjoyed and has always felt very instinctive to me, so a path towards financial markets and investing seemed like the best fit.”
“I find a lot of parallels between successful poker playing & investing . . .
To be successful at either, you have to be able to make probability-weighted decisions, separate your emotions from the analysis, & consider a range of variables & potential outcomes to settle on the optimal decision.”
How did you come to work in Hedge Funds?
“During my senior year of college, I was interning at a hedge fund in Austin called Abraham Trading Company, a Commodity Trading Advisor.” Sean explains that he felt fortunate to have vital, early exposure to the industry and global markets, so he absorbed everything that he possibly could. He had performed well enough that they extended him an offer after graduation and asked him to stick around to help them raise capital as well. “At the time, I ultimately wanted to be a portfolio manager, so this felt like a viable route and stepping-stone to getting there,” Sean shared. A year later, his boss would introduce him to his next company, Greenwave Capital Management. In late 2012, he would onboard as the hedge fund’s 3rd employee.
What about the hedge fund industry did you learn you like & don't like?
“I liked the part of my role that required me to perform thorough, analytical research to help manage the company's global macroeconomic portfolio and ultimately decide where to deploy capital and in which asset class.” A global macro hedge fund strategy spans a broad range of assets, from equities to bonds, to commodities and FX. “It was certainly never a boring day,” Sean claims, “and the consistent brain exercise taught me to be a better analytical thinker and strategist with both a top-down and bottom-up approach. Macro typically entails having a global view or country-to-country relative value thesis, so, even to this day, when I evaluate investment decisions, I consider the bigger picture in order to choose an asset that optimally expresses that view. You could say, I’ve been somewhat cross-trained from a finance, analysis, investing, risk management, and capital raising perspective.”
“To this day, when I evaluate investment decisions,
I consider the bigger picture in order to choose an asset that optimally expresses that view."
“One aspect I didn’t like was the environment that changed by the hour and included a lot of ‘scoreboard-watching’ between our firm, peers, and the market. To be frank, ever since the Financial Crisis, the hedge fund industry has largely underperformed in comparison to the broader stock market. Actively managed hedge funds do benefit from some level of normal volatility to capture opportunities, but as central banks embarked on unprecedented levels of QE in tandem and volatility continued to decline, the opportunity set grew thinner. Investor appetite for true uncorrelated strategies suffered, especially when stock and bond portfolios had performed well for ten straight years. Outside of that, having to keep your finger on the pulse of the world at all times is a different type of stress than deadline or deal stress. It was exhausting waking up every day and needing to know what China, the European Central Bank, or the Bank of Japan did while you slept and how that impacts your firm’s exposure and positioning.” While Sean’s firm outperformed many of its macro peers on a relative basis, the absolute returns kept a lid on growth & investor interest -- Sean voiced this was a huge reason he decided it was time for a change.
Why did you decide to leave the hedge fund industry & move into a career in private equity real estate?
“Besides the reasons I mentioned, Greenwave was contemplating winding down its main fund, and I was tired of what [the industry] required…plus, I didn’t want to move to New York, I wanted to stay in Texas,” Sean explains. “So, I knew it was time to move on to another industry, one that was familiar enough and would allow me to translate my skillset in finance and investing and continue to grow professionally.” Sean disclosed that many of his close friends working in real estate in DFW and Austin had been trying to convince him to transition for years. “[My friends] assured me [it was an industry where] I could still apply an analytical skillset and enjoy it. My career also involved fundraising, traveling, and meeting with institutional allocators and brokers, so I felt like my experience could contribute [to real estate private equity] in many ways.”
What drew you to private equity real estate?
“Initially, I was drawn to the industry partly on account of the tangibility of the asset class,” Sean states. “In the hedge fund industry, you’re effectively selling an idea of what you predict the market might do, which can change on a daily basis, sometimes dramatically. But real estate is something that can be seen and touched, and as it relates to apartments, involves ownership in cash-flow generating assets. It’s been a welcome landscape change, and it’s an industry with a longer-term, smoother trajectory.” Sean professes that he used his “macro brain” to make the career pivot in view of the fact that the industry not only allowed him to still do much of what he enjoyed and excelled at, but he also favored the long-term outlook for real estate in an inflationary environment. “I also wanted to grow professionally and grow with a company,” Sean adds. “Private equity firms are often on the smaller side in terms of headcount, and that’s something I’ve appreciated in my career thus far –– This type of close-knit, team-oriented environment is one of the many reasons I love being at SPI as we continue growing.”
“Real estate is something that can be seen and touched…
and involves cash-flow generating assets.”
How did you come to join the SPI team?
“In the summer of 2020, my close friend, a broker at JLL, introduced me to Sean and Mike (SPI Co-founders & Principals) and we started the interview process from there.”
SEAN BECAME AN OFFICIAL MEMBER OF THE SPI TEAM IN OCTOBER 2020 WHEN HE JOINED AS A SENIOR FINANCIAL ANALYST.