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Our clients, whether families or institutions, have built wealth through hard work and RISK MANAGEMENT There are three components to our service. All three components address risk management from multiple perspectives:
Investment Policy Statement - The Business Plan The first critical element of our service is the development of a client's Investment Policy Statement. This document is essentially a client's business plan for their liquid assets. Not only does it outline the desired asset allocation, it clearly defines a client's specific return and risk objectives as well as their constraints and management guidelines such as security criteria, benchmarks for performance and the criteria for hiring and terminating managers. Although the Investment Policy Statement is not the most exciting document, it lays the foundation for risk management for the portfolio. We review it annually with our clients or more frequently if required. A special quality of our service is that we develop this document and the optimal asset allocation using both qualitative and quantitative methods. This is unique as many investment professionals depend on quantitative assessments which we believe are too narrow in focus. Manager Structure and Manager Selection The second step is the development of the manager structure and the selection of managers. The manager structure is the determination of how many managers and what type of managers are required to execute the client's strategy. One may say "why not just have one manager execute the whole strategy?" The reason is that for every 100 managers, there are only a few worth paying for and within that small group, each manager has its strengths and weaknesses. Therefore we want to find the best managers and hire them only for what they do best - this is another element of risk management. A quality manager structure design and effective manager selection provides: • The effective and efficient diversification of managers and investment styles;• Employing the best managers for what they do best; • Maximizing downside protection; and • Optimizing return. We have a data base of over 15,000 from around the world including Canada. When we look for the best managers - those that make a difference - our process begins with a quantitative analysis which reduces mangers down to a list where we focus the majority of our time on the qualitative assessment of the top performing managers. Recommended managers meet our risk and return criteria as well as qualitative requirements such as stability of key personnel and operational integrity. Good investment managers manage risk and return effectively and their key success factor is their people. "People, People, People" Our independent analysis of the historical attribution of the key professionals' return and risk management and the on-going assessment of this management separates good managers from average to bad managers. Implementation Plan Once the managers are selected we develop and execute the implementation plan which pays attention to transaction costs, market timing and taxes. Our administrative department executes all the manager and custodian documentation and ensures the implementation strategy is executed properly. All documentation is direct between the custodian, managers and the client. Once the implementation has been completed, we provide a comprehensive reconciliation to the client. This process maximizes return and minimizes market risk throughout the implementation and ensures the managers execute as planned. Continuous Performance Reporting and Advice. The third component of risk management is Continuous Independent Monitoring. The following quote outlines the benefit of this feature:
In Summary, the Benefits of our service are: • Comprehensive strategy design and maintenance;• Independent manager search and selection; • Transparent quarterly performance reporting, calculated net of all fees; • Comprehensive review and maintenance of strategy's objectives and constraints with each manager and the overall portfolio; • Independent manager analysis and peer group analysis; • Monitoring the performance against the client's objectives & constraints; • Rebalancing of asset and manager allocation; • Administrative support; • Transparent and effective overall fee structure; and • Continuous Independent and Objective Advice. Our service empowers our clients with |