John P. Calamos: Investor and philanthropist

The Greek American dream

John P. Calamos Sr is an American success story with Greek roots.

“The challenge for Greece is about becoming more competitive in a highly competitive world. Whether in the U.S., Australia, or Asia, competitiveness increases prosperity for everybody.”
– John P. Calamos

He is the chairman, chief executive officer and global co-chief investment officer of a firm he founded in 1977, and took public as Calamos Asset Management in 2004.

His firm is based in the Chicago metropolitan area, has offices in New York and London and is now planning to expand in Australia.

A pioneer in investment strategies to help manage risk, John P. Calamos, aged 74, has created a reputation for using investment techniques to control risk, preserve capital and build wealth for clients over the long term.

At the end of 2013 his company managed more than 26 billion US dollars in client assets, of which more than 9 billion dollars is managed on behalf of institutional clients and plans.

John P. Calamos was in Australia last week, searching for his next expansion step and attending amongst others the Sydney launch of The Hellenic Initiative. He was involved with the launching of The Hellenic Initiative both in the USA and in Greece from the very beginning.

Whilst in Melbourne, this well-known Greek American philanthropist, Chairman of the Board of trustees of the National Hellenic Museum in Chicago, member of the Board of trustees of the Illinois Institute of Technology (IIT), and a benefactor together with his wife Mae to the IIT in the vicinity of 10 million dollars for the foundation of a business and a philosophy chair, found time to grant Neos Kosmos an interview.

In between his business appointments, we had the opportunity to discuss his life, his driving philosophy, his reflections upon the fortunes of the United States and Greece in the future.

What follows is an account of the main points of that discussion.

John P. Calamos was born in Chicago in 1940. His father, migrated to the United States in 1915 from a small village in Arcadia, while his mother was American born, her family also originating from the wider region of Tripoli, in the Peloponnese.

“I grew up in Chicago when my father got his own grocery shop. The Greeks in the United States were either running restaurants or grocery shops. We lived upstairs on the second floor of the shop,” he told me.

“My parents were fluent in Greek, they would speak Greek to each other but unfortunately not to us, because they wanted us to assimilate. I did not learn Greek as a child.”.
I asked him what it was like growing up as a child in Chicago in the 1940s and 1950s and how he went about discovering his Greek roots. He responded by saying that there was a large Greek community at his high school and that he also went to the Assumption Greek Orthodox Parish Sunday School, which influenced his Greek American outlook. When he now looks back he wishes that he had learnt Greek, “But my mother was so determined for us to assimilate”, he stressed.

One of the larger factor that brought him closer to his Hellenic heritage he revealed was the study of philosophy at College. “I could have majored in philosophy, to this date I feel very strongly that our children need to learn more about philosophy.

“I tell my kids and grandchildren philosophy teaches you how to think, and that is the most important thing that you can get out of school, that means if you are thinking right you make the right choice and that’s very important”, he said, raising his calm voice slightly.

Mr Calamos received his undergraduate degree in Economics in 1963 and his M.B.A. in Finance in 1970, both from the Illinois Institute of Technology. He was the first member of his extended family to go to a tertiary Institution in the United States.

Joining the United States Air Force after graduation, he served as a combat pilot during the Vietnam War for one year and ultimately earned the rank of Major. “How did you decide to become a pilot in the US Air Force?” I asked him.

“I was in College and in those days you were required to take Reserve Officer Training, I had a couple of years of that, I transferred to the Illinois Institute of Technology, but I got a bit bored about the things I was going to be doing, I reflected about becoming a pilot, I volunteered. It was a good decision it taught me a lot,” he responded.

Others who have profiled him state that it was during his time in the Air Force that Mr. Calamos became intrigued by the risk management aspects of convertible bonds. By applying option price theory to the valuation of convertibles he was able to demonstrate the benefit of convertibles as part of an investment strategy and began to attract institutional investors and fame.

I asked him how important he thinks his Hellenic heritage was in his upbringing and in his life. “I think the Greek American culture was what we learnt, it was very important in how we viewed ourselves. Pride in my Greek heritage was a source of strength for me. In one of the schools that I went to, in those days we had factions, this is what we call bullying nowadays. Well they didn’t bully me, they called me the Greek. Where did that come from, the confidence? It comes from who you are. It wasn’t so much something that was taught, it was inherited in our culture”, he said.

I brought up his involvement with the National Hellenic Museum in Chicago where he is chairman of the Board of Trustees.

“I’m chairman of the Hellenic Museum and one of our goals is that future generations have a strong sense of their culture. It’s extremely important to do that. As I tell people you don’t know where you are going unless you know where you ‘ve been. To me that was very important in my growing up”, he said emphatically.

I wanted to know whether in his opinion we do have in the United States a strong philanthropic tradition in the Greek American Community.

He responded by saying “I’m probably not an expert, however, I think there is a very positive contribution of the successful Greek American community in Philanthropy.”

The discussion also moved on to his area of professional expertise – economics and finance. I enquired about his views on the way the U.S., the west and Greece dealt with the Global Financial crisis.

“The US is coming out of the recession a bit slower that we would all like, but it’s positive in the sense that we are coming out of the recession. Our sense right now is that Europe seems to be on a better track. The global economy does seem to be out of the recession, although it is a slow recovery. Southern Europe including Greece seem to be on a better trajectory. I’m very positive about what the Greek government is doing. Prime Minister Samaras is doing a good job trying to build and revitalise the private sector in Greece, I think that’s very important.”

“If we look at the success of people that left Greece, whether they are in Australia or in the United States. We know that the DNA is there.

“The challenge for Greece is about becoming more competitive in a highly competitive world. Whether in the U.S., Australia, or Asia, competitiveness increases prosperity for everybody. You have to create prosperity. You create prosperity through increasing the private sector not increasing the public sector, and that’s what I hope happens in Greece. Greece has a number of competitive strengths that it can capitalise on, such as tourism and energy resources.

“I’m very positive on what the Greek government is doing to promote and strengthen the Greek public sector. This can encourage Greek entrepreneurs to remain in Greece. National and individual prosperity requires a government structure that allows you to create a business, to build upon your ideas, and to take risks to pursue profits. Profit is not a bad word, profit is a motivation.”
Can the US and the west remain competitive, I asked him, given that the 21st century has been described as the Asian century?

“What’s happening around the world is positive for the global economy. What the US has exported to the rest of the world is the growth of the middle class. The possibility that a Greek immigrant can come in and have upward mobility. Personal betterment creates innovation. The growth of the middle class around the world is a terrific long term thing, we see that happening in China, Brazil, India. The growth of the middle class this is what made the US a successful country as it is. The success in emerging markets doesn’t prevent other countries from continuing to prosper,” he concluded.

What does the American paradigm tell us? I asked.

“What it really shows is that there is opportunity in the US, and that’s a positive element. I believe strongly with the philosophy that everyone should have equal opportunity. That’s not the same as having an equalized distribution of wealth. Risk and hard work should be rewarded. Out of equal opportunity comes innovation. I’m hopeful that the idea of having a society of equal opportunity to breed innovation will continue to be a big force in the United States.”
We concluded our discussion by asking him whether or not he has been to Melbourne before. “No. It’s my first visit to Melbourne and to Australia. It’s my pleasure to be here in Australia, I’m really enjoying it”.

The company that John P. Calamos set up in 1977 is an expert in the global convertible bond area. His company is equally successful in also managing global equities, emerging market equities, long and short term equities.

A frequent speaker at investment seminars and conferences, he has often been quoted as an authority on risk-managed investment strategies in Barron’s, Fortune, Forbes, Pensions & Investments, Financial World, Nation’s Business, The Wall Street Journal and on CNBC and Bloomberg Forum.
Mr.Calamos has also written two books: “Investing in Convertible Securities: Your Complete Guide to the Risks and Rewards”, and “Convertible Securities: the Latest Instruments, Portfolio Strategies, and Valuation Analysis”.

“We built a good diversified company and we hope to do business here in Australia. We have something that can add value to what is happening here, we are very excited to be here,” he said, while we were shaking hands as a farewell gesture.

Axius Partners Pty Limited, established in 2011 by George Giovas and John Maragiannis, a firm that provides tailored Funds Management and Capital Advisory solutions to its local and overseas clients acts as Calamos Investments local distribution and marketing partner in Australia, New Zealand and PNG.