Portfolio Construction

Critical decisions which shape the overall investment portfolio are informed by deep investment science and analytical rigour. These are codified into investment policies and risk management parameters.

In this section

Investment Policy

Illiquidity Budgeting

Asset Allocation

Tactical Asset Allocation

Risk Management (factors)

Investment Themes

Currency Management

After Tax Investing

Performance Benchmarking

Investment Policy

Portfolio Deployment: Immediate Deployment or Dollar-Cost Averaging

Investors with substantial uninvested capital face two key decisions: determining the optimal investment strategy for their needs, and deciding when this should be implemented. This article analyses the immediate deployment (or lump-sum investing) and dollar-cost averaging approaches in liquid equity markets and investigates whether it’s possible to improve the outcomes associated with dollar-cost averaging by

Partners Capital - How to Write an Investment Policy Statement

Partners Capital Approach to Risk Management c. 2013

Risk Budgeting

Portfolio Risk Budgeting

Partners Capital Investor Risk Profiling Questionnaire

This questionnaire helps us to understand and interpret a given client’s risk profile and investment goals and translate those into the optimal risk budget for the portfolio. We take various alternative approaches to assessing the client’s true ability to weather drawdowns in portfolio value, and combine those to arrive at the optimal risk budget. This

Illiquidity Budgeting

Setting a Portfolio’s Long-term Illiquidity Budget

The top performing endowments and foundations generally exploit their long-time horizon with sizeable allocations to Private Equity, Real Estate and Private Debt, enabling them to harvest the illiquidity premium and greater alpha potential that we believe is inherent in these more inefficient private markets. Given the higher expected risk-adjusted returns and the long time horizon

Asset Allocation

Asset Allocation

Asia as a source of diversification for global investors

Diversification was hard to come by for global investors last year. Rising U.S. interest rates sank almost all boats in a coordinated sell-off across capital markets: U.S. equities were down 18.1%, U.S. investment-grade bonds were down 15.6%, nominal Treasuries were down 12.5% and inflation-linked Treasuries were down 11.8%. European assets followed a similar path, with

A Primer on Alternative Asset Classes

The earliest of financial investments, pre-dating traditional stocks and bonds, were investments in private companies, private property, privately negotiated debt (non-bank loans made to companies, individuals or governments) and commodities like gold, wheat and corn. These private investments came about in a widespread manner in the middle of the 19th century. In the last 100

Tactical Asset Allocation

Partners Capital Insights 2024 Tactical Asset Allocation

The “Paradigm Shift” macro theme we highlighted last year involving structurally higher interest rates and volatile inflation is expected to remain in place. As such, we broadly recommend “Staying the Course”, with our 2024 Tactical Asset Allocation (TAA) and continue to position portfolios for an environment of heightened macro volatility.

Kamran Moghadam live on CNBC Squawk Box Europe

Partner and Head of Global Macro and Tactical Asset Allocation, Kamran Moghadam, was recently invited to CNBC’s Squawk Box Europe where he gave insights on the Fed’s rate cycle and implications for inflation and asset allocation.

Partners Capital Insights 2023 Tactical Asset Allocation

Partners Capital Insights 2022 Tactical Asset Allocations

Partners Capital Insights 2021 Tactical Asset Allocations

TAA Best Practices for Endowments & Foundations

It is Partners Capital’s belief that, since the onset of the Global Financial Crisis, tactical asset allocation (“TAA”) needs to comprise a larger part of overall portfolio management and should feature prominently on the agendas of quarterly endowment investment committee meetings. The vast majority of active asset managers across all asset classes are finding it

Risk Management (factors)

Apples and Oranges: The Power of Equity-Like Risk Measurement

There is a common saying when comparing unlike things – that comparing them is like “apples and oranges”. Nevertheless, those fruits are usually sold the same way, by weight or by count. Similarly, in this post, we explore how to compare securities across asset classes through the lens of equity-like risk. Risk is complex. Threats

A Practical Guide to Hedging Foreign Currency

The best risk-adjusted returns available to investors could be anywhere in the world and therefore an optimally invested, long-term portfolio will have exposure to foreign assets. Investors who own foreign assets and spend domestically have an asset liability mismatch; the currency exposure of their portfolio diverges from the currency exposure of their expenditure. In this

Investment Themes

Partners Capital Insights 2024 Investment Spotlights

As markets and economies continue to adjust to the post-pandemicworld of higher borrowing rates and geopolitical risks, we synthesisethe most important macroeconomic changes into the following‛investment spotlights’ that we believe will take centre stage ofshaping investor returns in the decade ahead: Against this backdrop, successful portfolios will need to placeeven higher consideration on asset quality,

Partners Capital Insights 2023 Investment Themes

Currency Management

A Practical Guide to Hedging Foreign Currency

The best risk-adjusted returns available to investors could be anywhere in the world and therefore an optimally invested, long-term portfolio will have exposure to foreign assets. Investors who own foreign assets and spend domestically have an asset liability mismatch; the currency exposure of their portfolio diverges from the currency exposure of their expenditure. In this

After Tax Investing

The Impact on Taxable Investment Programs from a Biden Presidency

The After-Tax Investment Lens: The Key to Tax Efficient Investing (California Taxpayer Version)

Note: This whitepaper has been explicitly written for California tax payers – the highest tax rate payers in the U.S. However, the lessons are highly applicable to U.S. taxpayers regardless of in which state they reside. When investing, taxes matter more than you think and more than you would like. For wealthy Californians, it just

Five Steps to Optimizing After Tax Investment Returns for New York City Tax Payers

When investing, taxes matter more than you think and more than you would like. For wealthy New Yorkers, it just got worse as the state and local tax burden, one of the highest in the country at 12.7%, lost the bulk of its deductibility against federal taxes. Adding together federal, state, and Obamacare (Net Investment

Partners Capital 2013 Tax-Advantage Investing for Private Equity MDs

Asset Class Attractiveness based on US After Tax Real Returns

Performance Benchmarking

Benchmarking Institutional Investment Portfolio Performance

In order to measure the success of the portfolio and the effectiveness of the team managing the overall institutional portfolio, it is important to clearly establish and agree the benchmarks against which the portfolio’s performance will be measured over specific time frames varying from three to ten years. The investment committee needs to agree three