Active managers and alternative investment strategies offer the opportunity to add value over passive investments and can offer capital protection. However, as recent cases of financial wrongdoing have shown, it is critically important for investors to adhere to best practices in evaluating a manager's claims and demanding both transparency and an alignment of interests.
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While it is critical to reward good performance by general partners, risks and returns should be equitably shared. Non-marketable alternative asset investors should hold frank discussions with general partners about fee arrangements, fund sizes and other activities that may dilute a proper alignment of incentives.
The crisis of confidence in private banking has some obvious causes. It also has one not so obvious remedy: change the ownership structure. This remedy, however, requires a high level of involvement in all aspects of the business. For those families willing to make the commitment, Mutual Private Bank says, the only confidence that matters may be in their own choices.
Wealthy global families are becoming increasingly aware of their need for a well thought out citizenship and residency strategy to protect their wealth and to safeguard their freedom of movement. This paper from Northwood Family Office makes the case for Canada as a safe and surprisingly tax-efficient alternative to many of the more well known citizenships the wealthy can consider acquiring.
Ecological agriculture is pre-programmed to generate superior climate change performance as measured by soil organic matter, biodiversity, carbon sequestration and materially reduced GHG emissions. This also generates significant opportunities for creating additional and attractive income streams from environmental markets, according to new research from Agro-Ecological Investment Management.
Contrary to what some investors think, embedded capital losses in stock mutual funds may not be tax advantageous, according to Hammond Associates. If capital gains rates remain at current levels, those capital loss carry-forwards add value for shareholders, albeit modest. If capital gains tax rates increase after 2010, loss carry-forwards may impose additional costs on shareholders who invest before 2011.
Portfolios can evaporate by being too concentrated, overly leveraged or simply having inferior investment management that does not focus on the long term or loses it on poorly timed speculation. A brief paper from The Beringer Group recommends that great wealth be invested utilizing a solid set of investment principles designed to preserve and grow assets over multiple market cycles.
This report from Credit Suisse examines historical trends for philanthropy during economic downturns and explores the effects of the current recession on funders and non-profits. It also provides a series of recommendations for philanthropists and their advisors on grantmaking during the downturn. While based on U.S. data, many of these recommendations are relevant to individuals and organizations globally.
Critical to the future success of wealth advisors is a solid understanding of how, and to what degree, the meltdown in financial markets affected investor attitudes, behaviors and needs. Rothstein Kass' Business Consulting Group assesses changes and their implications for other planning disciplines, such as philanthropy, wealth transfer and tax management.
The role of commodities in a strategic portfolio has not changed much during the past 40 years and, indeed, not in the 22 years of the Tangible Asset Program portfolio. In this paper, Gresham Investment Management explains why it believes commodities will continue to provide diversification benefits to a portfolio regardless of the roll yield regime.