For many wealthy families, concentrated liquid investment positions present special types of issues. More often than not, a diversification plan for a position that has been built up over decades, is relegated to a 5 minute discussion. And it shouldnâ€™t.
From low-cost basis issues, income requirements, family executive involvement and even other factors like emotional attachment, the decision to buy and sell liquid positions can be more complicated than it looks.
Based in Atlanta, Steve is the Director of Alternative Investments for Decatur and advises clients on a wide array of issues including concentrated position management.
Steve received a BS degree in Industrial Engineering at Columbia University, a BS degree in Math/Computer Science at Providence College, and a MS degree in Finance from Boston College.
Engineering and quantitative skills applied to finance
Lots of questions around â€œrisk vs returnâ€ turned into â€œemotion vs. reasonâ€
Kahneman and Taversky â€“ Risk avoiders instead of return enhancers
2000 a time of excitement and wealth creation in Boston/Silicon Valley
2005 Moved to ATL and worked w Wilmington Trust on DuPont heirs
2015 Moved to STI and worked on Coke heirs
2020 Moved to Decatur to help RIAs/family offices & institutions to manage risk
STEVEâ€™S APPROACH TO INVESTING â€“ PERFORMANCE, GOALS, EMOTIONAL COMPONENTS
Aligning clients to all goals and not just financial (work in chip space or health care soâ€¦)
Incorporating all factors including emotion in the investment process
ESG is about values and aligning your resources with things you believe in
MSCI/TruValue measure companies and companies write CSR
Like accounting standards, no global measures UNPRI for three years
Indexing â€“ Good, bad and UGLY, so inclusive to be â€œcompleteâ€
1: People want more so they can stay invested in tough times (sell at bottom â€“ 1.5%)
2: Lengthen horizon and
3: Lower fees are three legs to the stool of investment success
Investing in ideas/companies who you agree with, ESG may hold the key to better returns
Holding on may be more important than what you hold
(Blackrock buying Spiderworks, there is a limit to ETFs . . . )
1 â€“ Customize more holistic solution
2 – Use tools of options market to enhance the transition
3 â€“ Always adjust as the playing field changes
ETFs are a one solution fits all solution but client risk and return parameters are unique
BRK- example – FINDING INCOME in the OPTIONS (W/ NO DIVIDEND STREAMS)
Recently created wealth by IPO – UBER
Familial wealth, sitting versus actively managing Coke â€“ not selling is value added?
Complex situations require a sophisticated approach! Took a while to acquire so dispositionâ€¦.
INVESTING THEMES TO DEFEND AGAINST (OR TAKE ADVANTAGE OF) . . .
Inflation â€“ Fact or Fiction?
Present across the spectrum of risk: Crypto, NFT, SPAC, Meme, IPO, Real Estate, FANG
Fiscal and monetary coming together like never before
Is it Temporary or is a CB (central bank- not just US) Put option forever?
TAX AND POLICY CHANGES
Target the top 1% â€¦., Cap gains from 23% to 35-40%, planning for lifetime step up, dividends at OI rates
Ambitious plans need funding, never let a good crisis go to waste, $4 trillion and counting on COVID
Stimulus to get economy through 2022 election and beyond
Market reacts environment and creates solutions
Option overlays will be the beta adjuster
“Diversification sometimes fails when you need it most . . .” Research paper
Universal for the masses, Black Swans becoming more common so should solutions for them!
â€œWealth effectâ€ really not focused on Main Street and Fed knows this is increasing inequality
â€œTrickle downâ€ not backed by research so changed the name to protect the idea
With Fed in markets, there is very little that can be thought of as â€œnormal market operationsâ€
Best time to buy an umbrella is before it starts raining