How we Manage your Wealth

Asset management is a dynamic process that requires several inputs and interactions among professionals from various disciplines.

The successful execution of an asset management mandate, calls for a refined process that should adapt to changing market conditions combining the expertise and effort of all the professionals involved. Our asset management process is the product of our collective experience and advances in the field of financial economics, statistics, and computing. The process we use with each and every client can be summarized as follows:

Our Asset Management Process

Interaction with Client In the first step of the process, we work closely with individual and institutional investors to determine their risk profile, specific needs and investment objectives. Furthermore, we analyze their existing portfolio and investments in real assets. We also make the required considerations regarding the taxation regime and regulatory environment. This is to ensure that the proposed investment solution, is optimal from a tax perspective and compatible with regulatory and operational constraints.

Plan Development The appropriate design and disciplined execution of a financial plan, can help private investors meet their specific life goals and ensure financial independence. Institutional clients, on the other hand, require a well-defined framework and an action plan to help them manage their assets, liabilities, cash flows, and the risks they face, efficiently. The plan development step involves the formulation of a comprehensive financial plan based on your objectives and risk preferences. In most cases, the outcome is an asset allocation recommendation. In this step we also decide on basic operational issues, such as the most appropriate custody platform for your assets. Before continuing to Step 3, we make sure that the client comprehends the proposed plan.

Portfolio Construction The construction of an investment portfolio starts with the asset allocation decision. In particular, the Strategic Asset Allocation (SAA) decision refers to the allocation of capital to major asset classes (e.g. cash, bonds, stocks) that are optimal in view of an investor’s risk profile, objectives, and constraints. In most cases, the product of the SAA decision is a constant mix of asset classes. However, the proportion of each asset class in the investment portfolio is likely to change over time as a result of changes in market conditions and investment opportunities. Financial markets and real economic activity are characterized by cycles (temporary changes in fundamentals) as well as structural changes (permanent changes in fundamentals). What is more, the actions of fiscal and monetary policy makers can impact asset prices directly. The dynamic behavior of economic variables and financial markets, implies that holding the asset allocation mix constant indefinitely, may not be optimal. To this end, our investment committee is responsible for determining the optimal investment strategy given the phase of the business cycle and the conditions of credit and capital markets. To hold the optimal portfolio, may involve minor to moderate departures from the strategic asset allocation mix. This dynamic adjustment is referred to as Tactical Asset Allocation (TAA). In the next step of the portfolio construction process, our portfolio managers determine the specific components of the investment portfolio. Given the strategic allocation of equities, for instance, we utilize our proprietary portfolio construction models to identify the stocks (and their weights) that will constitute the equity part of the total portfolio. In determining portfolio weights, we optimize the risk-return tradeoff.

Plan Implementation This step refers to the appropriate actions that ensure best trade execution, tax efficient trading and tactical rebalancing, to keep your portfolio aligned with your risk preferences, goals, and investment objectives. Significant changes in the investment opportunity set can result in changes in the optimal asset allocation mix. To this end, we rebalance your portfolio in a way that reflects such developments. However, adjustments are made only if a wide array of strict criteria is met. This ensures that the expected benefit from rebalancing your investment portfolio, is larger than the transaction costs involved.

Monitoring Constant monitoring and frequent performance evaluation, ensure that your plan stays on track. In case of significant changes in your situation, such as a life event, the process starts over by analyzing the new conditions.