Services
Client Groups |
- High Net Worth Individuals and Families
- Charitable Foundations and Trusts
- Retirement Plans
- Corporations
- College Endowments
- Foreign Trusts
|
|
Complete portfolio structuring and supervision involves developing a mix of assets and strategies that will meet client requirements with a reasonable degree of certainty. There are a variety of client groups that currently benefit from these portfolio planning services offered at McCabe Capital Managers. We work closely with clients in these groups throughout the portfolio decision-making process.
Financial Planning and Asset Allocation
At the beginning of each client relationship, we believe that it is essential to help clients determine their financial objectives, time horizons, and risk and budgetary constraints. When determining the optimal portfolio for the client, we use either a Black-Litterman process which focuses upon tilts away from the market equilibrium asset mix to avoid extreme and counterintuitive allocations, or a more traditional mean-variance optimization approach.
Portfolio Construction and Ongoing Portfolio Management
To help clients implement their financial plans, we provide preferred access to quality managers for each asset class, often at discounted fee rates. In addition to our qualitative evaluation, we furnish statistical data sheets on managers that strive to include historical performance, return volatility, and peer comparisons within a given style category. We use advanced risk analysis tools and review various stress tests with the client.
Once the process of manager selection and portfolio construction has been completed, we provide ongoing oversight that involves proactive and structured account monitoring and reporting. Depending on individual needs and preferences, we usually meet with our clients at least semi-annually to review asset allocation, returns, and current investment strategy. We generally send written analyses and statements to clients every quarter, which summarize each account's financial position. We assist our clients in rebalancing their portfolios in a disciplined fashion in order to control risk.
Individual Manager Oversight
We expose clients to both a qualitative and quantitative approach to individual manager and fund monitoring. This includes giving them returns and other available data that can be used to evaluate each manager’s risk/return profile for consistency with the stated investment strategy. We provide information on returns, risk levels, organizational changes, style drift, and recent site visits. Material changes that may justify termination are flagged and replacements proposed.
Alternative Investment Tracking
We have analyzed alternative investments for over a decade. We recognize that certain alternative investments such as private equity and hedge funds are difficult to evaluate. Here we attempt to determine on an ongoing basis the degree of financial risk for our clients by examining leverage ratios and potential tail risk or exposure to specific events. In the case of hedge funds, we evaluate responses to due diligence questionnaires and observe outsized positive or negative returns, as well as all monthly returns, to determine whether they have the expected correlations with certain benchmarks.
We carefully evaluate a hedge fund manager’s reported value added (alpha). When the stock market is used as the sole risk factor to measure a fund’s alpha, the risk premiums appear as alpha because they are not correlated with the risk of the overall market. However, when viewed in the proper framework this ‘alpha’ would be identified as beta. Thus, it can be argued that the superiority of some hedge funds mostly depends on “packaging beta and selling it at alpha prices”* unless one adjusts to reflect additional risk factors when measuring value added.
Special Financial Services
McCabe Capital Managers provides a range of special financial advisory and management services for our clients, domestic and foreign, and for their attorneys, accountants, and trustees. These include valuation of illiquid securities, estate planning and the use of capital loss harvesting.
|
