Specialized. Distinctive Approach.
Our Unique Characteristics
We are specialized US equity investors who are focused on opportunities in the S&P 500 index, a collection of America's biggest companies.
We believe that specializing in equity investing, doing detailed analytical work, sticking to a rigorous investment process, and focusing on the US equity market enhances investment performance for our clients.
We link our fees to our performance. Most investors pay a fixed fee to their investment manager whether their manager outperforms or underperforms.
This is an important point, we believe there is a reduced incentive for traditional investment managers to seek outperformance in managing client funds, but rather their focus shifts to growing their AUM and not on performing for their clients.
A 2020 study of fees charged by investment advisers found:
Most investors with $250,000 to $1,000,000 in investable assets paid 1% p.a. in fixed fees on assets under management, and
81.4% of investors with $250,000 in investable assets paid more than 1% p.a. in fixed fees on assets under management.
Source: Veres, B., “2020 Inside Information Fee Report”, 2020, p. 27, date accessed 12/01/2020.
You can read more about our fees, Fees and High Watermark.
The high watermark is the highest return your account has achieved in comparison to the S&P 500 benchmark since the account was launched.
A performance fee is only charged when your account's accumulated total return in comparison to the benchmark reaches a new high. When this happens, the high watermark is reset at this level.
High watermarking keeps track of accumulated losses, based on the relative performance of our client’s account versus the broad market index, S&P 500, from prior periods. We cannot charge a performance fee if accumulated losses exist.
Focused on Results
Investment management is an industry that has too many active managers managing too much money. Asset bloat is a real-life problem for portfolio managers of multi-billion dollar funds. Making portfolio changes in a gigantic fund is akin to
turning a battleship in a bathtub.
Fixed fees have long incentivized managers to grow assets under management rather than pursue outperformance. We focus on results.
Simple Organization Structure
As a boutique, we have simple, horizontal organizational structures without layers upon layers of management, this makes us highly agile.
In a 2014 survey by WealthManagement.com, 80% of respondents saw boutique firms as highly agile, compared to just 35% for large firms, while 56% of advisors using boutiques considered agility to be an important criterion when selecting an asset management firm.
Portfolio Manager Accessibility
One of the potential advantages to working with boutique fund managers is the increased accessibility to key decision-makers. This is an often-overlooked benefit, as many advisors wish to hear directly about the money manager’s investment philosophy but are unable to reach these contacts at large global investment firms.
Often unseen be essential in times of severe market volatility, we practice a high degree of risk management in the analysis of companies, the selection of companies, and in a portfolio context.
Many investment managers focus on volatility risk, we believe this is too simplistic and not entirely relevant to longer-term superior investment returns.
We do not rely on third-party equities research and prefer to conduct all investment research in-house. The benefits of this are that we better understand what we are investing in, rather than relying on broadly distributed equities research sold by third-party investment research houses or investment banks.
Value and Growth Can Coexist
The idea is that we seek out companies that exhibit both value and growth characteristics that sets us apart from most other investment managers. These are not mutually exclusive investment options.
We never accept sales charges or commissions of any kind from any other institutions. Instead, we are compensated by fees paid to us directly, these are fully transparent.
We are not part of a larger asset manager or alliance which makes it difficult or impossible to recommend investment ideas outside of their platform.