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Wealth Management - Investment Management Process

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Core Process

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Asset Allocation

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The most critical phase of the investment management process is asset allocation. Most studies of market-exposed portfolios have conclusively demonstrated that over 90% of a portfolio's return is determined by the allocation chosen across asset classes. To this end, we work within the context of your wealth planning to provide a diversified portfolio which takes into account not only the traditional equities/fixed income/cash mix, but other key components of a truly diversified portfolio such as real estate, precious metals, and alternative investments.

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Portfolio Implementation

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The foundation of our portfolio construction centers around the premise that the primary path to investment success is through exposure to broadly diversified markets via ownership of low-cost investments that seek to mimic market returns (i.e., index funds). Extensive research has demonstrated that in general, the highest chance of investment success comes from achieving direct market participation while minimizing fees.

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Portfolio Hedging and Risk Management

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For certain clients, we seek to provide a hedged overlay onto their portfolio in order to reduce volatility in their portfolios as well as define limits in negative outlier market conditions. This achieves two goals:

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(a) Our clients can have clearly defined risk limits on portions of their portfolios that at certain times demonstrate high levels of volatility, instead of relying on traditional correlations to hold up in a range of economic environments. This has the effect of not only preventing irregular losses in extreme market conditions, but also allowing our clients to have better clarity on meeting their long-term financial goals.

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(b) Traditionally, equities have always exhibited higher returns over meaningful time horizons than those of fixed income. With interest rates near all-time lows, fixed income is even less attractive as an asset class than traditionally. Defining limits on portions of client portfolios can allow our clients to feel confident in shifting more money to work in equities (a long-term higher return asset class), and away from fixed income (a long-term lower return asset class), while maintaining a similar risk profile.

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Satellite Considerations

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Tactical Considerations

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While taking a long-term view of returns is critical to investment success, there are market conditions which occur where Ironview is able to tactically deploy additional assets into places where there have been market dislocations. These may come about because of temporary overreactions in the market, or more thematic secular changes where our clients permanence of capital allows for differentiation in allocation. These occasions provide clients with an opportunity to source additional returns in their portfolios.

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Investment Location

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A compliment to asset allocation is the concept of asset location. When we initially evaluate and transition client accounts, we often find the client has had inefficient location of assets from a tax and potential litigation exposure perspective. Because we typically manage money globally for our clients, we are able to create efficient portfolios, including working with the client's other service providers to determine considerations beyond simple taxable vs. retirement accounts, such as setting up generation skipping trusts, charitable trusts and family LLCs.

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Concentrated Stock Management

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Large exposures to specific companies or sectors can come about from a variety of circumstances. Perhaps a client is an executive at, or has sold his or her company to a publicly-traded company. Or perhaps a family-owned business with specific exposures comprises a large portion of a client portfolio. Or maybe a client has had outsized returns from a single stock over a period of time. Any of these circumstances need to be taken into account when managing a client's global assets in order to maintain diversification and protection against wild swings in volatility. We work with a client to integrate these specific circumstances into their larger financial planning process, and can provide answers on timing and execution.

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Direct Access to Alternative Investments

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Private equity, private transactions, hedge funds, and other alternative investments provide clients with the opportunity to gain exposure to asset classes which have no or low correlation to publicly-traded markets, providing an additional layer of diversification and potential outsized returns. The Ironview team is comprised of professionals who have been doing direct investing their entire careers at some of the world's largest and most sophisticated investment funds. We have created investment vehicles (“fund of funds”) and executed specific transactions in alternative assets and strategies for the exclusive use of Ironview clients, and the principals of the firm always put our own capital alongside our clients' money to ensure an alignment of interests and demonstrate our own "skin in the game".

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