Investment Advisory Services for Institutional Investors
CapGroup uses a consultative approach in providing comprehensive investment management services for middle market fiduciary investors, including endowments, foundations, associations, and retirement plans. Our services are certified to by CEFEX to be in conformance with the best practices under the Global Fiduciary Standard of Excellence[i].
CapGroup specializes in providing institutional services on a consultative or discretionary basis for endowments, foundations, associations, and retirement plans.
Outsourced Chief Investment Officer Model
Over the past decade, larger institutional investors have been quick adopters of investment strategies designed and employed by large universities and pension plans. The so-called “endowment model” is distinguished by asset allocation strategies that diversify widely from core stocks and bonds into a number of alternative investments, including hedge funds, real assets, managed futures, timber and others. Many midsized organizations seek to mimic this model, but have learned that managing this approach is far more complex, time consuming and costly than expected.
CapGroup resolves these issues with an “Outsourced Chief Investment Officer” or “CIO” services model whereby the client oversees investment policy design and delegates to CapGroup the responsibility for implementation. The CapGroup Outsourced CIO Service uses an open architecture approach to investment strategy design and implementation that features:
- Investment strategies customized to the specific mission goals and objectives of the client organization.
- Diversification to include both traditional and alternatives investments.
- Expert implementation with top tier investment managers.
- Intensive cost controls.
- Dynamic strategy execution through a proprietary unified managed accounts system.
- Ongoing documentation of client conformance to the Global Fiduciary Standard of Excellence
Advantages of the CapGroup CIO Services
Improved Performance
- Advanced Portfolio Design – CapGroup strategists develop portfolio structures that offer many of the risk management advantages enjoyed by large institutions, including alternative investments in a daily liquidity format.
- Reduced Opportunity Costs – CapGroup formulates investment ideas with its Adaptive Risk Management approach (see below) and executes it in a timely manner.
Adaptive Risk Management (ARM)
Adaptive Risk Management (ARM) is our approach to designing and implementing investment portfolios that are tailored to individual client goals and objectives. The central purpose of our ARM process is to enhance investment risk management and the consistency of returns over time, as compared to more conventional approaches to asset allocation and portfolio management. The design of our ARM Portfolio Strategies is based on three fundamental principles:
1. Performance consistency can be enhanced with allocations to alternative assets;
2. Excess returns can be generated with synergistic manager structures; and
3. Downside risk can be reduced by limiting exposures to overvalued asset classes.
Enhanced Fiduciary Governance
- CEFEX Certification – We are one of the few investment advisers in the nation that have been certified by the Centre for Fiduciary Excellence as providing services that diligently follow established investment management best practices. Our clients enjoy the legal compliance protections afforded fiduciary investors who are assigned the responsibility for hiring competent investment advisors.
- Focus on Primary Mission – Unlike “one size fits all” solutions offered by some platform managers, CapGroup designs portfolios around the client’s specific mission and/or emerging capital needs, including socially responsible investment screens.
- Fiduciary Prudence Documentation – CapGroup’s investment process offers protection from legal liabilities by documenting a high level of procedural prudence.
- Reduced Client Workload – Manager selection and performance monitoring is delegated to CapGroup, thereby avoiding the need for time consuming manager search meetings and excessive performance evaluation reviews.
CEFEX Certified Investment Advisory Services
Fiduciary Investor Program for Associations & Nonprofits
The Fiduciary Investor Program provides a comprehensive and coordinated investment solution custom designed for the unique needs of associations and related nonprofit entities.
Specifically, the program provides the following services:
- Strategic planning and investment policy development.
- An integrated asset management platform utilizing institutional strategies
- Clear quarterly reporting showing performance versus relevant benchmarks and peers.
- Secure access to our proprietary online document tracking system.
A complimentary Fiduciary Practices Review is available to ASAE members.
Fiduciary Practices Review
Fiduciary Practice Reviews are provided as part of CapGroup’s normal advisory services to encourage the client’s conformance to investment governance best practices as set forth under the Global Fiduciary Standard of Excellence. These Reviews demonstrate a high level of procedural prudence in the management of investment assets. In addition, conformity of the practices should work to improve investment decision making and thereby enhance long-term performance.
[i] CEFEX is the Centre for Fiduciary Excellence, Toronto, Canada (www.cefex.org). The Global Fiduciary Standard of Excellence is described in the handbook Prudent Practices for Investment Stewards, Fiduciary360, 2010, (www.fi360.com).