An advisor firm in the US that focuses on ultra-wealthy clients says there are plenty of reasons at present for a conservative attitude towards risk.
Delegate Advisors, with $1.91 billion of client assets under management, works with around two dozen families, keeping the overall volume of clients relatively small to ensure high-touch service. With 11 employees so far, this is a relatively young business that was founded in 2012; a team of investment professionals works out of North Carolina with an advisory team in San Francisco. The firm has picked up a number of industry awards in recent years, with its senior figures quoted in the media.
The kind of clients catered to will typically have to consider a stream of liabilities running across several generations. “We look at what they have on the asset side, their earnings capacity, and look at tax optimization,” Hart said. “Multi-generational tax planning is a must,” he said.
The custodian that most Delegate Advisors clients use has identified three particular Delegate Advisors strengths. First, Delegated Advisors has the ability to model a client’s situation regarding finances and investments. Second, Delegate is able to identify and analyze direct investment opportunities. Third, Delegate accepts clients on both a discretionary and non-discretionary basis.
One of the most important trends in the industry, Hart said, is that talented people in the banking and brokerage business sectors want to form independent wealth management houses. “Our firm’s plan for growth includes the possibility of bringing on a few select individuals who serve ultra-high net worth clients,” he said.
When the firm was created, Hart said he and his colleagues decided to focus on having few, but large clients. These clients have high interest in direct investments, an area that is difficult to scale, he said.
“Our clients have a high degree of interest in seed- and early-stage investments, a very attractive opportunity set but one that is very difficult to do well…..Over the past five years we have done preliminary analysis on more than 200 opportunities; in the end, we have only recommended a half dozen or so to our clients.”
Delegate clients’ holdings of alternative investments such as private equity, private real estate and private debt may range from zero to more than half their assets, Hart added.
With its focus on protecting wealth and focusing energies on where it can make a difference, this is a firm that hopes its measured approach continues to win dividends, whatever the economic weather holds.