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Through active and continuing dialog with each client, we develop specific asset allocation solutions in order to meet each client’s individual needs as defined by:
1) return objectives within defined time-frames,
2) liquidity, and
3) defined risk allowed.
Our objective is to obtain the best long-term result for each individual client corresponding to defined return and risk tolerance objectives.
Our investment committee decision-making reflects on-going input from a range of carefully selected third party sources as well as specialised publications. Normally, asset allocation decisions are reached on a quarterly basis unless events in the interim require more immediate consideration.
This analysis allows us to over or under-weight the various portfolio elements, notably by asset class, sector, style, duration, and credit.
Each asset class is treated independently of the remainder of the portfolio according to a “modular” approach. This enables us to concentrate on the construction of a standard distribution within each asset class “module” (e.g. equities, fixed income, hedge funds, etc.), thereby incorporating the best managers and ideas according to a weighting determined by our investment committee following careful and continuing review.
In this way, each portfolio, without reference to size, profits from the same allocation (within a given asset class) as well as the advantages related to economies of scale associated with transaction costs and management fees at individual fund levels.
Each specific investment or fund is selected according to a rigorous internal methodology concentrating on long-term performance measures (defined by investment performance and volatility of return). All associated data are updated and reviewed on a monthly basis. Specifically, this process includes:
A rigorous quantitative analysis is carried out on those funds ranking highest according to our internal methodology. This relates primarily to the performance of the funds, their risk levels and the consistency of management based on study of the underlying holdings within each fund.
For managers who have passed our initial selection process, this analysis focuses on each manager’s investment philosophy (and consistency of its implementation), the profile of its management team and overall firm, and its approach to risk management. This analysis is initially based on the study of managers’ “due diligence questionnaires” as well as complementary rating agencies’ reports. Finally, a meeting with each fund manager at their location precedes our final selection decision.
During the construction of each asset class module, we focus on selecting managers generating added value compared to their benchmark (alpha) and whose association would not create significant overlap in terms of style, sector, geography or individual security.
Each specific investment or fund is selected according to a rigorous internal methodology concentrating on long-term performance measures (defined by investment performance and volatility of return). All associated data are updated and reviewed on a monthly basis. Specifically, this process includes:
Ongoing portfolio analysis reflects a systematic analysis of overall performance results achieved to include the positive and negative contributions of each asset class and individual investment weighting within portfolios and individual portfolio components.
The breadth of analysis involved in this effort demands extensive use of carefully selected quantitative management tools for the evaluation of single investments and portfolios overall. These tools include Morningstar, Bloomberg and Advent APX.