This paper explores the influencing factors and special considerations that are key to successful portfolio construction for private investors and wealthy families, and that are fundamental to the work that we undertake for our clients.
Enterprising families seeking more comprehensive private allocations can consider building a PI fund program to serve as a pathway to a multitude of new opportunities. Understanding the potential advantages and challenges of PI fund programs can help family investors consider whether an expansion of their private allocations is right for them.
For many families, navigating the complexities of outsourcing investment functions can be challenging. This paper helps families understand the different structural components to consider as they seek to create an institutional-caliber portfolio.
In today’s environment, we believe private investors and wealth families can benefit from private credit, positioning their portfolios for strong returns supported by protected assets and faster capital deployment than other growth assets.
Creating portfolios customized to a family’s unique investment goals and risk tolerance requires ingenuity and flexible thinking. However, the execution of risk management should be more systematic, and families and their advisors should consider four components: strategic risk, implementation risk, portfolio monitoring, and communication.
Consistently revisiting potential liquidity risk is important work for family investors. To manage liquidity risk, families should employ best practices, monitoring illiquid investments, spending needs, and currency considerations. By doing so, they can guard against unanticipated stressors and remain on track to achieve their investment goals.
For families of significant wealth, complexity is a natural byproduct of a well-managed portfolio, but there is such a thing as overcomplexity. This paper discusses a range of best practices to consider if and when a portfolio is encountering sluggishness, inefficiency, or ambiguity.
Costs are an important consideration when devising an overall wealth management strategy. Each family’s wealth management cost formula is different. Various tools and insights are available to help them make informed decisions about how to meet their unique service requirements and investment goals at a reasonable cost.
Most families of significant wealth inevitably grapple with intergenerational wealth transitions. While shifting the responsibility for a family’s long-term financial health can be a challenging endeavor, generational transfers are also an opportunity for families to take a fresh look at their financial goals. With this in mind, we advocate a three-part framework for families seeking to integrate members of the next generation into the wealth management process, which focuses on engagement, education, and empowerment.
Investment governance plays a critical role in the ability of families with substantial wealth to define their financial objectives and formulate a strategy for a diversified portfolio. This paper provides an overview of investment governance that families can use in the development of their own investment decision-making framework.