Investment Objectives

In each client engagement, Algonquin’s investment process begins with assisting the client in determining their investment objectives.  A discovery process guides the Algonquin team in designing an appropriate investment plan.  And, it stands to reason, that only with a well thought out investment plan will the investment relationship have a reasonable chance to succeed.

The process utilized to determine a client’s investment objectives typically begins with a series of in-depth discussions.  Initially Algonquin professionals review the client’s current holdings to understand the thought process that went into building and managing the portfolio in the past.  For individual clients, elements such as tax status, concentrated or restricted holdings, estate and next generation planning, lifestyle needs and charitable interests are reviewed.  For institutional accounts such as endowments, foundations and retirement plans, an evaluation of the needs, spending policies, actuarial assumptions and fiduciary responsibilities are reviewed.  Algonquin has found that working with an individual’s trusted advisors such as attorneys and accountants or an institution’s finance or investment committees is an essential part of assisting its clients.

For many Algonquin high net worth clients, their primary investment goals involve preserving the market value of their assets after inflation and taxes, building value without taking on significant risk and earning enough to maintain a desired lifestyle.  While these goals sound desirable to many investors, individual preferences and the road map to making those preferences happen is where the investment expertise from the team at Algonquin makes a meaningful difference.

The result of this initial series of discussions is a roadmap detailing the steps which will be taken to implement the investment plan.  The plan typically provides an approach that leads to disciplined investment decision making and risk management in each client engagement.  It integrates the best of Algonquin’s asset management, research and client management skill sets.

This plan typically contains an asset allocation solution that is memorialized in a formal document, the Investment Policy Statement.  This document is a written game plan customized for each client.  It is valuable at the beginning of an engagement to communicate how the portfolio should be managed.  It is also used throughout the life of the engagement to measure the progress of the plan and is usually modified as the needs of the client change.  The Investment Policy Statement will typically include a statement of investment objectives as well as risk measures.  It will communicate special instructions such as criteria that can restrict the use of certain types of securities in the portfolio.  It will include benchmarks for performance measurement and will detail the prescribed strategic allocation of assets.  The strategic allocation will typically include asset classes to provide appropriate diversification to meet the client’s stated objective.  It could include equities, fixed income, cash, alternatives investments, etc. and will assign target weights to each class as well as a minimum and maximum weight for each.  This allows a degree of flexibility to take advantage of shorter term market movements in an attempt to add return, preserve capital or both.  Capital allocation, whether it is long term in nature or more tactical, is a dynamic undertaking and is something that is critical to be reviewed for each client engagement over the course of the year. 

For additional information on Algonquin's asset allocation process, please click here.

The firm believes that this disciplined approach has been a hallmark in Algonquin’s success.  While the work involved in developing an Investment Policy Statement can be time consuming at the beginning of the relationship, the investment pays off handsomely with a well understood foundation from which to build the investment relationship.  It is at this point that Algonquin begins working on constructing the portfolio.

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Investment Objectives