Your Investment

At Monroe Vos, our investment consulting philosophy centers on risk control and customization. We do this through the use of strategic and dynamic asset allocation methods and manager selection using institutional level software.

We have extensive expertise in both traditional financial markets and alternative investments. And we’ve developed programs to achieve client liability requirements, spending needs, or other goals.

Below is a look at some of the services we provide.

Investment Policy

We always begin with an Investment Policy Statement (IPS). We believe that each client is unique. And so we sit down with each client and develop a policy that sets out goals and objectives within your risk tolerance, time horizons, and investment restrictions. 

By creating a thorough and workable IPS, we are able to take each client through a deliberate consideration of policy alternatives and the consequences of each. This becomes a key reference point when assessing performance of the investment program.

Asset Allocation

After we do an in-depth analysis of your guidelines and objectives — including: risk tolerance, rate of return needs, cash flow projection, and permissible investments — we then use a multi-functional model to simulate various combinations of asset mixes. This is so that we can optimize your asset allocation.

Next, we establish a long-term Strategic Asset Allocation to meet your needs. This includes various combinations of asset classes; historic risk and correlation of these asset classes; and expected returns using various accepted methods.

Manager Search

We believe that identifying managers that meet our client’s objectives is one of the most important roles we can fill as investment consultants.

The unique features of the Monroe Vos Manager Search Process are its discipline, efficiency, and transparency.

We will provide you with a Manager Search Report, organized in a logical format, so that you can make the most informed decision. This includes research from databases that include over 47,000 money managers and mutual funds — none of which charge a fee for inclusion. Then we apply a proprietary and extensive multi-factor set of criteria to find the best of class managers for you.

Client Education

We believe that an informed client is the best client. 

So every quarter, our team — made up of some of the industry’s foremost thought leaders — meets with each of our clients. We discuss the markets, the economy, and investment opportunities, while providing research and a range of other programs.

You can also read our quarterly report, for free, in the Insights section on our website. 

Alternative Investments

In addition to Traditional Investments (stocks and bonds), we also evaluate and provide advice on non-traditional (alternative) asset classes. Alternative investments are not only hedge funds, real assets and private equity, but include a range of alternatives, such as mezzanine debt, emerging market debt, and energy/natural resources, among others. Alternative investments can add value in certain market environments.

We’ve worked with alternative investments since the 1980s. And since that time, we’ve developed the expertise to evaluate these asset classes for our clients so that, when appropriate, we are able to integrate these investments into the portfolio at the right time.

Real Assets

For years, we have diversified client portfolios using real assets. The results have been impressive as a hedge against inflation and added performance.

When it comes to real estate, our expertise spans a wide range of investment styles with experience in most major geographic markets. Our consulting services cover equity and debt vehicles in both private and public markets, including both Private Real Estate as well as REITs.

A close companion to real estate, natural resources can be a logical adjunct to real estate investments. And finally, commodities fulfill a vital role in both the global economy and in rounding out a well-diversified investment portfolio. We helped clients understand the various ways to gain exposure to these markets.

Private Equity

Private equity investing seeks to generate substantially greater returns than the traditional equity markets, enhancing overall portfolio performance. The opportunity to achieve such performance often entails higher levels of risk and limited liquidity.

Given these factors, there’s a great deal of specialization among management firms. Monroe Vos works closely with clients to structure a plan that’s diversified by style and vintage year, and to identify the best qualified, most appropriate managers.

And when managers are retained, we follow their progress with performance analytics and qualitative updates.

Performance Measurement

We provide a comprehensive report as an independent review of performance results, completed from the master trustee statements. The results we provide are relative to your objectives, appropriate market indices, various appropriate databases, manager peer groups, as well as relative to the risk taken.

During a quarterly meeting we also review each manager’s performance relative to their peers and their benchmark to determine if any manager should be terminated or placed on watch. Because we do not manage your assets in house, we can remove and replace managers in an efficient and effective way. 

We also review your current asset allocation to determine if any changes are needed.

Additionally, as part of our quarterly report we include a comprehensive comparison between the policies, guidelines, and objectives in the Investment Policy Statement (IPS) to the actions and returns of the managers/mutual funds. This process is unique to Monroe Vos. We make sure that the portfolio is progressing according to the IPS.

We also provide an extensive Fee Analysis — with full transparency — which will show our fee plus all other vendor fees. You’ll also see your total cost. And then finally, we will benchmark this against the industry, so that you have a full picture of how your cost compares.

Discretionary Services

After 2008, clients have requested more in-depth portfolio management.  To accommodate their needs we have expanded our services to include quasi and fully discretionary services. This need comes from a skyrocketing complexity and volatility of the markets, as well as the inability of investors to get the people, systems, and required in-house talent to properly manage their portfolio.

To this end, we offer our clients three structures to facilitate timely decision making (especially during volatile periods like 2008):

Traditional Structure: Monroe Vos recommends changes in asset allocation and/or managers. The Investment Committee approves these changes prior to execution.

Quasi-OCIO (or Quasi Outsourced Chief Investment Officer): The Board authorizes a designated person to approve recommended changes to asset allocation and/or managers (within boundaries set out in the IPS).

OCIO (Outsourced Chief Investment Officer): You give Monroe Vos discretion to make changes in asset allocation and/or managers as we see fit and always within the boundaries set out in the IPS (such as the maximum and minimum exposure to each asset class and the manager quantitative and qualitative criteria). 

The OCIO structure gives the investment program the flexibility to move out of the way quickly, as in the case of a crisis, like 2008, and to then move into opportunistic investments, to increase return as opportunities present themselves. The changes are reported when made and thoroughly discussed at the next regularly scheduled meeting. Monroe Vos becomes an extension of our clients’ investment team, working closely with our clients’ in house investment professionals.

In all cases our recommendations will be the same.  The only difference is the timeliness of the execution of changes.