Investor Profile:
James Torrey
Founder, The Torrey Funds

These herders were able to expand their livestock reserves thanks to a loan from MicroVest MFI Partner XacBank in Mongolia

Having been involved in Wall Street and financial markets for all of his adult life, Jim Torrey understands the power of investment.

As founder of The Torrey Funds, a fund of funds group that invests in hedge funds worldwide, he plays a major role in managing more than $950 million for wealthy individuals, endowments, and foundations. Prior to launching The Torrey Funds in 1990, he held executive positions at Kidder, Peabody & Co., The First Boston Corp., PaineWebber Inc., and Alex Brown & Sons. Furthermore, he is a member of the Board of Directors for the Milano Graduate School for Public Policy at the New School University.

 Torrey has a lifetime of experience directing him to microfinance. “I have always been very passionate about finding people with an entrepreneurial spirit and helping them discover their real potential,” Torrey explains.

So it was a natural conclusion that microfinance would capture his attention.

“I first became interested in microlending during a village stay in Ecuador six years ago,” he recalls. “I visited a microfinance institution (MFI) run by FINCA and just thought it made sense. The concept of microlending is beautiful in its simplicity, and, when executed well, it works extremely effectively.”

Later, while discussing his new interest with Ambassador Frank Wisner, the vice-chairman of external affairs at AIG and one of MicroVest’s earliest investors, Torrey learned of the microfinance investment opportunities available to him through MicroVest One, LP (the Fund).

“MicroVest really is an ingenious idea because, in a way, it acts as the Federal Reserve for microlending institutions,” notes Torrey. “If you look at the numbers, they are really extraordinary – the number of jobs created and people helped. I love the fact that this is not a handout; that it enables individuals to take ownership of their own lives.”

Torrey also contemplates the political implications that this empowering form of development can have in encouraging democracy in developing nations. He believes that “if we are really trying to export this American ideal of democracy and capitalism – this American way of life – it is probably not going to happen at the other end of a gun.”

On a more personal level, Torrey invests because he has witnessed first-hand how small loans can change lives. Shortly after becoming a member of the MV Board of Directors Investment Committee, Torrey traveled to Asia with MV General Manager Gil Crawford to visit XacBank, a Mongolian MFI receiving MicroVest One, LP funding.

As an investor, it was important to MicroVest that Torrey meet some of the people whose lives have been changed through microfinance. Here is his experience:

“While in Mongolia, I met with three XacBank clients. The first was a woman expanding her hand-made gifts business in the open air market. The second was a taxi driver purchasing a second car so that his son-in-law could join him. But it was the third client, a herder, who really inspired me.

After a couple of days in Ulaanbaatar [the capitol], we packed ourselves into off-highway Land Cruisers and headed cross country. There, in a remote part of the country, I met a herder who, thanks to a small XacBank loan, was able to get a great buy on ten cows- adding to his herd of 1,000 animals. By selling his cashmere and fattened livestock to the Russian market later in the season, this herder plans to quickly repay his loan.

I remember sitting in his yurt [mobile tent] one evening, enjoying his hospitality, and being overcome with a sense of utter fascination. Here was this man, practicing the same herding techniques of his ancestors and with an acute business sense. His life and acumen in terms of understanding business and borrowing were thoroughly modern. He knew exactly what interest rate he was paying, and had a wonderful grasp on operational details. In many ways he represented why I love the young, vibrant democracy that is the new Mongolia.”

Through his investment in MicroVest and his efforts on the Investment Committee, Torrey hopes to enable many more of the world’s entrepreneurial poor to achieve their own success stories.

And, since MicroVest offers products for both accredited investors as well as smaller retail investors, they are able to efficiently mobilize the gamut of capital available in the North American market. Torrey concludes, “This means more capital is reaching the entrepreneurs that need it most.”