Truly Independent And Aligned With Client Aims
We were founded in 2001 with a mission to take the most advanced institutional investment approach to some of the wealthiest individuals around the globe and to small to medium sized institutional investors. Individual clients were most typically served by private banks and wealth managers recommending in-house investment products at high cost and often taking fees for recommending third party products. We were founded with the express intent of being the opposite. We set out to be truly independent with minimum conflicts of interest, offering access to what we believed to be the best of breed third party asset managers. These traditional advisors were also not known for transparency when it came to investment performance, fees, investment apportionment policies and many other aspects of treating clients fairly. We started life with what clients even today refer to as a refreshingly transparent approach to performance attribution which breaks down performance into its key components of market beta, manager outperformance, tactical asset allocation, currency, fees and costs. We sum up the full look-through fee burden of client portfolios and go on to quantify individual manager outperformance as a ratio of their fees (see our Whitepaper on Excess Return on Costs or EROC).
An Evolved Endowment Model Adapted For Individuals
The underpinning of our investment approach at our founding was known as the US endowment model as practiced then and now by such respected endowment investors as Yale, Stanford and Princeton. Since then we have evolved our investment approach beyond the basic building blocks of that model to include cutting edge risk management techniques, tactical asset allocation, value-added relationships with our core asset manager partners and creative co-investment strategies across many asset classes. Private clients have been late to the adoption of the best institutional investment approach partly due to the fact that most private client advisors are still wedded to the traditional equity and bond approach to investing with a very short time horizon. Our mission over the years with some of the very wealthiest of private clients has been to challenge and re-evaluate their time horizon in light of the sheer scale of their wealth. Most of our clients are looking to establish multigenerational wealth platforms or establish philanthropic foundations which will live in perpetuity. Such purposes are amenable to much longer time horizons enabling them to embrace and benefit from investment performance associated with the best institutional investment approach.
Taxes Drive The Strategy
With our focus on private clients over the last 16 years comes deep insights on the most tax efficient investment strategies. We are not tax advisers but strive to develop highly customized investment strategies that focus on maximizing after tax client returns for a given level of risk. Every client has a different situation where we need to understand the full income, estate and inheritance tax consequences of income and gains on a multitude of asset classes and investment vehicle structures. Many alternative investment asset classes, in particular, have highly complex tax consequences that we find many tax experts overlook.
Partners Capital Outsourced CIO Investment Platform
Today we advise over 300 different wealthy private clients around the globe, including investment professionals, entrepreneurs and multi-generational family offices. Most typically, we are engaged by clients as their sole outsourced investment office (often described as an outsourced chief investment officer or OCIO). However, we are much more than an outsourced CIO, as clients gain access to our 50 person global research team embodying deep expertise in each asset class and such clients are served by their own portfolio management team usually comprising three senior investment professionals, a portfolio analyst and two operations team members.
Partners Capital is not right for every private client. Our investment approach is simple, but not easy. Our clients generally have the appetite and the professional backgrounds to engage with us in what we do for them. The largest portion of our private clients comprises past or present professional investors themselves, many from the private equity and hedge fund industry. They test us every day and make us better investors for it. In many ways this forges our competitive advantage in the OCIO industry when combined with the best institutional approach.