Maximizing Your Potential for Investing Success

Tab 1

March 21, 2014


Our rigorous due diligence process aims to accomplish one major outcome: to sift through the universe of outside investment managers to help us select those who will potentially meet and exceed our clients’ investment objectives.

 

A seasoned investment manager should be able to mitigate risk in clients’ portfolios and potentially produce risk-adjusted returns by observing and responding to trends and market changes that might affect a client’s investments.

 

“Since we cast our net wide by hiring outside investment managers, we’re able to find individuals with niche areas of expertise,” says John De Clue, Chief Investment Officer of The Private Client Reserve.

 

“Each of our clients has unique goals, and we wantto give them the peace of mind that comes withknowing that their investments are in experienced hands.”

 

 

 

 

 

 

 

An important goal at the heart of an investor’s decision to select an active investment approach is the investor’s belief in a manager’s ability to provide superior risk-adjusted performance over a passive alternative.

 

We believe that identifying investment managers with the skills, education and talent to align with your goals requires highly experienced analysts who leverage a systematic, forward-looking and repeatable due diligence process.

Tab 2

March 21, 2014


U.S. Bank Wealth Management commits a significant number of people and technology resources to the selection of active managers. This helps us maintain a platform of managers who we believe can provide value and may help you achieve your investment objectives.

 

“We carefully select experienced and knowledgeable candidates from a global pool of investment managers,” De Clue says. “We strive to select top-ranked managers with proven track records who can leverage their experience and expertise to manage clients’ investments.”

 

We believe our competitive advantage lies in the foundation of our research philosophy, which is based on three vital components:

 

1. Our People: Our most valuable assets are the seasoned leaders who have decades of experience spanning multiple market cycles. Each due diligence expert brings a diverse background, knowledge and skill set to the collaborative team. They have worked in many related areas within the financial management industry, including investment management consulting, equity portfolio management and fixed-income portfolio management.

2. Our Collective Intelligence: In addition to our dedicated research group, we leverage knowledge across our organization. We work with more than 30 investment professionals across the United States who are the research group’s eyes and ears on the ground to help provide meaningful value to clients. These professionals often have long-standing relationships with external investment managers and may provide invaluable insights for the research group’s analyses. In addition to internal resources, our strategic business relationships with nationally recognized research and consulting firms help to efficiently gain unbiased feedback.

 

3. Our Process: Not all organizations have established a truly comprehensive due diligence process. We have consistently executed our due diligence process utilizing a proprietary, time-tested, rigorous and systematic forward-looking investment manager evaluation model.

 

At the same time, we allow for flexibility in our model. We complete our analysis considering each individual investment manager’s philosophy and approach to investing. We believe that an investment manager’s business model must, at its core, make sense to us and be consistent. No investment manager or firm has every aspect of his or her process perfected, but we want to identify enough factors to maximize the potential for success.

Tab 3

March 21, 2014


Our Investment Manager Evaluation Model

Our holistic approach incorporates selection, monitoring and de-selection of investment managers.

 

Learn about our five foundational pillars

 

Selection: We integrate two due diligence levels into our model, each viewed separately with its own focus:

 

  • Firm level: We believe investment managers have the potential for more success inside well-managed companies, so investment managers must first demonstrate the competency of their firm. We assess the firm’s organizational stability and competitive position in the marketplace, followed by an in-depth evaluation of the firm’s history, ownership structure, revenue model, risk management practices, research resources, legal and compliance structure, operations, trading and service model.
  • Strategy level: We spend the majority of our time on the strategy level. Our goal is to determine if an investment manager has the skills and a repeatable process to help provide sustainable competitive advantages.

Monitoring: An important component of our process is the continuous evaluation of managers over the long term. We monitor our investment managers on both qualitative and quantitative factors. Our process includes regular weekly meetings, reporting, quarterly committee meetings and periodic onsite visits.

 

De-selection: Our evaluation model includes a systematic de-selection process. Thus, we are able to remove managers who do not meet expectations.

 

We take the time and employ the resources necessary to understand and document the reasons managers underperform. Through years of data collection and experience, we’ve developed our skills and are often able to spot early red flags — before potential problems might arise.

 

The ultimate goal of our due diligence process is to enhance the potential for you to meet your investment objectives.

 

Please see important information below.