A US-based multi-family office wanted an emerging markets strategy that met risk and return targets, while excluding particular regions and any state-owned enterprises (SOEs). They wanted to establish two funds, one of which would be tax efficient.
In order to incorporate these restrictions without sacrificing alpha we:
- Presented the client with a range of risk/return profiles for the Broad MSCI EM All Cap Universe, including SOE exclusions and initial regional exclusions.
- Thoroughly discussed portfolio liquidity and transactions cost projections for potential future evolutions of the strategy.
- Provided a hands-on client service experience.
- Designed tax-managed and non-tax managed versions of our Emerging Market All Cap portfolios in line with their clients’ needs.
- Developed the operational and investment technology to keep track of the prices of thousands of tranches across hundreds of stocks to harvest taxable losses.
Since launching these portfolios, we have successfully managed to the stated risk goals and return targets for both, while accommodating regional exclusions and achieving tax efficiency where needed.
