Portfolio Management
Portfolio Team Wealth Protection
The Portfolio Team
Over 15 years of operation in Asia Pacific, we at MONTPELIER have seen the needs of our clients change. To keep us at the forefront of our business so have we.
Over this period more and more of our clients have come to us with a need for access to Financial Structures to ensure protection from asset threats.
What are Assets Threats?
Some assets threats are obvious (like holding funds in politically unstable countries) some less so (like inflation and holding too much cash), whatever the threat the Portfolio Team are in place to highlight and plan accordingly against these.
- Common Asset Threats which the Portfolio Team plan against are:
- Invasive Tax Regimes
- Political Unrest
- Inflation
- Complications in Generation Planning (moving assets to across family lines)
- Unexpected Currency Movements
Total Asset Protection
There are a number of financial structures available, which the Portfolio Team commonly uses to protect client assets.
These Financial Structure are often (but not always) located in offshore environments as this can have an effect on privacy.
Examples of Financial Structures used are
- All types of Trusts including Trust Companies
- Limited Liability Companies
- Offshore Holding Companies
- Private Investment Funds
- Life Assurance Platforms
- Redemption Bond Platforms
Each of these Structures is specifically designed to protect assets from potential threats to value.
Total Asset Management
Many of our clients have been invested through some difficult climates, and often the first question is "How do you protect against a financial meltdown?"
Institutions realized long ago that the major factor effecting portfolio performance was asset allocation - this accounts for up to 90% of the risk/reward profile.
The major factors that contribute to investment performance and risk reduction are:
- Asset Allocation
- Currency Management
- Use of the best Asset Manager
A standard model for a client or institution aiming for balanced capital growth would look something like this:
Correct asset allocation often depends upon the client's own circumstances and it is essential to discuss this with your investment advisor
Over the medium term the largest contributor to growth comes from investing in the right asset class. Variations in weightings between asset classes will determine the long-term returns of a portfolio.
Total Investment Management
The Portfolio Team here at MONTPELIER has a pro-active approach to asset management. Advising our clients on the benefits of asset allocation and the importance of managing this on an ongoing basis.
The holdings in each asset class should be monitored on an ongoing basis. We use quantitative and qualitative methods to ensure that our clients assets are growing at the optimum levels.
In the fields of equity and fixed income investments we adopt a manager of managers approach.
Case Study - Investing Wisely
A holding in a global equity fund will usually form a major percentage of a client's core investment, how should the client access this growth area?
Two investments with similar aims will not necessary provide similar growth.
This demonstrates the importance of active management. The yellow lines show the sector average and the grey area represents fund performance.
The Portfolio Team manages both asset allocation and fund performance to ensure that our client's funds are invested with the best managers in the best areas.
Case Study -Mr. Brown
Mr. Brown, originally from the UK , has been working overseas for over 15 years. His French wife and their family have been living in Asia for over 15 years. They have a property in the UK , one in France and an apartment in Singapore .
Mr. Brown has built up a variety of liquid and non-liquid assets over his time in the Far East and is now looking at ensuring that should something happen to either him or his wife, they can pass their assets freely to their family. Unfortunately not.
Despite the fact that the Browns have been living overseas for over 15 years neither he, nor his wife, are able to pass their assets freely to their children. The taxation authorities in France and the UK will usually interfere. Inheritance tax is usually based on domicile and this is very difficult to change - living overseas for 15 years will not normally affect domicile.
This interference will come in two forms - IHT in the UK and succession taxes in France . The rates are staggering; up to 40% in the UK and 60% in France.
