Our Investment Thesis
Our View on Portfolio Construction
As your financial architect, we strive to develop a blueprint that provides stability and generates results.
In our view, asset allocation is the foundation that is the key driver of portfolio returns. When it comes to asset classes, we look at the best approach for each individual client. That means identifying individual goals, objectives and risk tolerance.
We do not start with a standard 60/40 (stock/bond) portfolio, but rather define asset classes by their purpose or expected outcome within a portfolio: Growth, Income, Volatility and Liquidity.
Our approach seeks to create solutions that can utilize both public and bespoke private market investments when appropriate.
By expanding the options that have traditionally been used by most investors it allows us to customize portfolios for our clients' unique needs.
We can shift the asset allocation amongst a variety of options to take advantage of market dislocations and changes in technology. This flexibility helps us generate more predictable cash flows, minimize downside risk and to maximize after- tax returns.
Through our research and access, we strive to remove barriers which limit potential opportunities by building portfolios with more flexible, investor-friendly structures, while still providing access to world-class managers.
Growth
Growth and long-term capital appreciation requires diversified exposure to geography, style and market capitalization, and when appropriate, private equity.
Income
Income is generated from more than just traditional bonds, including assets such as infrastructure, real estate, and private credit. Alternative sources of yield are necessary, especially in a low-interest rate environment.
Volatility
Volatility is dampened via short-duration bonds, as well as defensive equity managers. Smoothing long-term returns and buffering severe market downturns means protecting on the downside.
Liquidity
Liquidity is maintained to take advantage of market swings. “Dry powder” can be an important source of portfolio return—if strategically deployed during times of market pain.
While core holdings are essential to proper diversification, we believe a tactical allocation or overlay can provide outsized returns when opportunities present themselves via a market dislocation, discoveries in innovation and technology or changes to the regulatory environment. For instance, artificial intelligence, block chain technology, cybersecurity and 3D printing are rapidly changing the way companies do business, creating attractive new investment opportunities.
In addition, alternative investments, including private equity, private credit and private real estate have historically been a means of securing higher returns; however, investing in these asset classes typically requires sacrifices, including long lock-up periods, higher fees and higher risk.