Pensions, Endowments & Family Offices

>>Pensions, Endowments & Family Offices
Pensions, Endowments & Family Offices 2019-07-25T14:39:35-05:00

As an investment adviser with a pension, endowment, or family office, you are likely under pressure from your board to maintain very specific performance numbers so you can meet the requirements of the organization and participants. The board may also be demanding increased investment transparency, better control over investments with the ability to move quickly in and out of positions, and reduction in fees in order to improve overall returns.

A Dedicated Managed Account (DMA) is a beneficial solution for your organization, as it allows you to deploy your complex investment strategies and meet all of these obligations in an operationally efficient way. Through one comprehensive technology and service package, a DMA provides you with the controls and reporting required to manage your investments in a cost-efficient and scalable way.

Through a DMA, your organization is the sole investor, so you have full ownership and control over the account. You select preferred trading advisers, custodians, clearing houses, and other service providers, and your account and each underlying fund are linked together only through an Investment Management Agreement. The structure gives you the flexibility to negotiate strategy customization, investment guidelines, and management and performance fees with each underlying fund manager, which can result in a significant reduction in investing costs. Overall, the DMA provides the exact controls, services, and granular reporting you need to make more informed investment decisions.

The DMA Structure
Ultimus’ comprehensive DMA solution provides:

Before you sign as a client with Ultimus, we thoroughly review with you our DMA structuring options, commingled managed accounts or separate, segregated LLCs with managers. You ultimately determine, with the guidance of your legal counsel, the structure that best suits your requirements.

We provide sample templates for legal documents, which allow you to see how investment management agreements can be drafted, along with the investment company documents. Please note: we do not provide legal advice, only examples of documents. You should consult your legal counsel for drafting any agreements.

Once you have selected your custodian / Prime Broker (PB) / Futures Commissions Merchant (FCM) and managers, we coordinate the opening of your accounts by completing the applications for your review and signature, gathering all the required information, testing connectivity and requirements, and more. We are not, however, a party to the agreements.

We provide the operational infrastructure for your DMA by utilizing our administration teams and technology. We utilize our systems to collect trade data, reconcile to custodian/PB/FCM, independently value the portfolio (Level 1 securities), and calculate portfolio performance.

When you become an Ultimus DMA client, we coordinate with you to determine the specific guidelines by which you wish to monitor your managers. After receiving this direction from you, we utilize an internal, proprietary database to perform guideline monitoring, which is provided on a T+1 basis.

We provide our DMA clients with standard risk measures on individual managers including Value at Risk (VaR) analysis, stress testing, and scenario analysis. We conduct scenario analysis on existing holdings with pre-defined scenarios (such as 9/11, ‘87 market crash, and flash crash), but you may also request other scenarios. Stress testing is completed on pre-determined factors including a percentage move in markets and volatility. All reporting is provided on existing holdings and on a T+1 basis. You should also construct your own risk monitoring and should not rely exclusively on our monitoring.

We provide you reporting on a daily basis through a variety of delivery methods. Our proprietary daily reporting package includes PDFs that summarize performance, risk, and guideline analytics. We also have a proprietary portal that allows you to see daily balances, exposures, and performance.

Our technology is seamlessly integrated between our DMA platform and administration services, thus allowing us to offer you robust and powerful data that can customized to your exact needs.

Let’s Talk

Contact a member of our team.