due diligence questionaire - tavistock wealth global · · 2017-12-11questionaire november 2017....

DUE DILIGENCE QUESTIONAIRE

November 2017

DISCLAIMER

The information given herein is correct as of November 2017.

TAVISTOCK WEALTH (GLOBAL) LTD

Important Note

This questionnaire is supplied on a confidential basis and may not be distributed to any other party without the express permission of Tavistock Wealth (Global) Ltd.

You may copy the questionnaire for your own internal purposes. You may not copy it for any other purposes without the express permission of Tavistock Wealth Ltd.

About Tavistock Wealth (Global)

Tavistock Wealth (Global) is a wholly owned subsidiary of Tavistock Investments Plc, the UK wide financial services group. Currently Tavistock has over 200 financial advisers helping 50,000+ clients look after more than $4 billion of investments. Tavistock Wealth (Global) provides discretionary investment services outside of the UK.

Find out more at www.tavistockwealthglobal.com or contact [email protected]

TABLE OF CONTENTS

CONTENTS

PAGE 1 . - SECTION 1 & 2

COMPANY DETAILSCOMPANY STRUCTURE

PAGE 2. - SECTION 3

INVESTMENT PHILOSOPHY

PAGE 3. - SECTION 4

GLOBAL SERVICE

PAGE 5. - SECTION 5 & 6

THE TEAMASSETS UNDER MANAGEMENT

PAGE 6. - SECTION 7

WHY USE TAVISTOCK WEALTH (GLOBAL)?

PAGE 7. - SECTION 8

GLOBAL PORTFOLIOS

PAGE 11 . - SECTION 9

CUMMICATIONS AND UPDATES

PAGE 12. - SECTION 10, 1 1 & 12

SYSTEMSSERVICE PROVIDERS

REGULATION AND INSURANCE

PAGE 13. - SECTION 13 & 14

DISCRETIONARY CLIENT RELATIONSHIPSCHARIT Y RELATIONSHIPS

3

1.1 Company NameTavistock Wealth (Global) Ltd

1.2 Company Address

Suite 9885, 26 Upper Pembroke Street, Dublin 2, D02 X361 Ireland

1.3 Company Websitewww.tavistockwealthglobal.com

1.4 Contact Number+353 1 6111 595

1.5 Contact DetailsPeter Horbye – Managing Director: [email protected]

2.1 IndustryAsset ManagementDiscretionary Fund Management

2.2 Company BackgroundBlacksquare Capital LLP was founded in 2005 and launched its first funds in 2006. The company was acquired by Tavistock Investments Plc. in 2014 and renamed Tavistock Wealth Ltd. We aim to provide financial intermediaries and their clients with access to global, intitutional quality portfolio management.

2.3 Legal/Ownership StructureTavistock Wealth (Global) is a wholly owned subsidiary of Tavistock Investments Plc, the UK wide financial services group. Currently Tavistock has over 200 financial advisers helping 50,000+ clients look after more than $4 billion of investments.

COMPANY INFORMATION

COMPANY DETAILS

COMPANY STRUCTURE

Page | 1

1

2

2.4 Organisational Chart

COMPANY INFORMATION

COMPANY STRUCTURE

Andy FouracresCompliance

Director

Christopher PeelChief Investment

Officer

Brian Raven Chief Executive

Peter HorbyeManaging Director

LondonOffshore CentresIreland Switzerland LATAM

2

3.1 Our Investment Philosophy

We believe an actively managed, globally allocated, multi-asset portfolio, comprised of low-cost ETFs with diversified holdings in equity, bond, commodity and property markets is statistically more likely to outperform a traditional active manager.

Diversification within and between asset classes has always been important in spreading risk evenly across multi-asset portfolios. Investment portfolios have tended to be over-weight in equities and bonds of an investor’s country of domicile, for mainly historical reasons. However, the exponential growth in the ETF market and the relative ease of access to investment markets around the world enable this outdated approach to be replaced. Investor country agnostic global portfolios can lead to higher returns with lower risk, which is clearly a more desirable outcome.

INVESTMENT PHILOSOPHY3

Page | 2

4.1 Global Service

The GLOBAL Service is designed to cater for the varying risk appetites of international investors. The fund management industry has experienced significant change in the last quarter of a century. Product innovation has enabled investors to benefit from wider exposure to global financial markets with far greater efficiency and at a lower cost. Index-tracking investments such as ETFs have grown increasingly important and form the building blocks (ACUMEN) for the portfolios managed within the GLOBAL Service.

4.2 Global Portfolios

The GLOBAL Portfolios are amongst the most diversified multi-asset portfolios in the world. Each has been constructed with advanced, quantitative, fund management techniques. Exposure is spread across equity and debt securities of thousands of companies internationally. Multiple layers of diversification within and between asset classes are key to the portfolio construction process and are designed to mitigate risk. Each regional asset class is optimised separately into a sub-portfolio, and then aggregated into a multi-asset portfolio that targets a level of volatility consistent with the investment objectives of each GLOBAL Portfolio. Approximately 85% of the holdings within each portfolio are hedged back to the investing currency, be that the pound sterling, the euro or the US dollar.

INVESTMENT SERVICES & PROCESSES

Page | 3

GLOBAL SERVICE4

4.3 Long -Term Volitility Target Range

0%

3%

6%

9%

12%

15%

GLOBAL Portfolio 8

GLOBAL Portfolio 7

GLOBAL Portfolio 6

GLOBAL Portfolio 5

GLOBAL Portfolio 4

GLOBAL Portfolio 3


GLOBAL SERVICE4

Emerging Markets 3

Page | 4

4.5 Portfolio Construction

Each GLOBAL Portfolio is constructed using Tavistock’s Backward Induction optimisation process at a regional asset class, asset class and portfolio level. On average, twenty-two separate optimisations are required to finalise each portfolio of holdings. The process encompasses both historical and five-year rolling forecast data for asset class returns, correlation and volatility.

4.4 Quantitative Analysis

The end portfolio is a blend of the analyses run over the backward and forward-looking time frames. The same set of portfolio constraints and investment guidelines are also given to the quantitative analysis team at iShares (BlackRock) and they separately run a multi-step optimisation utilising their proprietary risk system, known as Aladdin. This vital element of our investment process independently validates the work done internally and helps distil any further improvement. The GLOBAL Portfolio investment team manages risk using IT systems such as Thomson Reuters Eikon, Lipper for Investment Management, Datastream and AlternativeSoft. The portfolios are actively managed, monitored daily and typically rebalanced on a quarterly basis.

1. Optimisation on a regional basis within an asset class.

2. Optimisation on an asset class basis.

3. Optimisation of final portfolio targeting a level of risk.

Final Portfolio

EquityWorld

US

UK

Europe

Japan

EM Equity

World

EM DebtBond

Property

Commodity

5.1 Key Personnel

Christopher Peel - Chief Investment OfficerChristopher Peel is the Chief Investment Officer of Tavistock Wealth and carries direct responsibility for all discretionary investments at the firm. Together with the investment team, he manages the GLOBAL Portfolios. Christopher is an economics graduate with more than 30 years’ experience in financial markets, managing both multi-asset traditional and alternative funds, having held senior management positions at both Citibank and Salomon Brothers.

Brian Raven – Chief Executive Officer Brian was Chairman of Blacksquare and has been involved in the financial services sector since 2010. He has a wide range of business experience, having held many senior posts, including running public companies on both AIM and the Official List. Most notably, in 1991 Brian founded Card Clear Plc, subsequently renamed Retail Decisions plc, a business engaged in combating the fraudulent use of plastic payment cards. He led the company until 1998 by which time it was an international group, listed on AIM, with a market capitalisation of some £100 million. As a principal, Brian has been responsible for identifying, negotiating and integrating numerous acquisitions, as well as for delivering organic growth. Brian has led the Tavistock Investments Group since its formation.

Peter Horbye - Managing DirectorPeter is Managing Director for Tavistock Wealth Global and is responsible for institutional sales and distribution of Tavistock Funds outside the United Kingdom. He has 35 years experience working in the international financial markets, at Lehman Brothers, Prudential Bache Securities, Family Offices, and as Co CEO of Heritage Capital, a subsidiary of Banque Heritage. He holds an MBA from Thunderbird, School of Global Management, and a BA in Business Admin/Spanish from University of Oregon.

COMPANY INFORMATION

THE TEAM

Page | 5

6.1 Total Assets Under Management (AUM)

6.2 Inflows Per Calendar Year

ASSETS UNDER MANAGEMENT

AUM

$1.3 billion*

Effective Date

November 2017

Year

2014

Year

2015

Inflows

$125 million

Year

2016

Inflows

$450 million

Inflows

$100 million

5

6

*$1.125 billion discretionary and $175 million non-discretionary

7.1 Currency Hedging

Tavistock Wealth (Global) believes in hedging the overseas currency exposure within our GLOBAL Portfolios. This brings a number of advantages to both clients and wealth managers.

Currency hedging ensures that the asset allocation is the driver of portfolio returns, rather than currency moves. It also ensures the projected volatility of a portfolio is accurate at all times. Crucially for a wealth manager, this means the level of volatility the client is being exposed to is appropriate at all times.

Client portfolios benefit significantly from the insurance resulting from currency hedging. As they are unlikely to become misaligned with their risk appetite. The GLOBAL Portfolios hedge at least 85% of all non-UK exposure back to sterling.

Unhedged investments expose clients to significantly increased risk because their investments are affected by market moves that are not part of their intended strategy. However, the investor is actually exposed to the equity market AND the currency market. The currency market is one of the most volatile of all financial markets and we believe care should be taken to minimise exposure to this risk wherever possible. A portfolio of hedged investments costs more than a portfolio of unhedged investments but the investor is much more protected in terms of both investment strategy and volatility (risk). The wealth manager is also protected in terms of the suitability of the investment recommendations they make.

7.2 Transparency of charges

Tavistock Wealth (Global) believe in operating a transparent pricing structure for the GLOBAL Portfolios. The industry practice is to quote an Ongoing Charges Figure (OCF) however, crucially, an OCF does not need to disclose any ‘variable’ costs such as the cost of trading a portfolio. Therefore, for a portfolio which is actively managed, clients may often see an OCF in the region of 1.00%, however in reality that same portfolio may incur further trading costs of approximately 1.50% a year. This means that fund may need to overcome a 2.50%1 cost hurdle each year before a client makes any money. For further information please visit our blog page - (http://blog.tavistockwealth.com/).


WHY USE TAVISTOCK WEALTH (GLOBAL)?

Page | 6

7

1 Shedding light on 'invisible' costs: trading costs and mutual fund performance. Roger Edelen, Richard Evans, Gregory Kadlec.

7.3 White-Labelled DFM Offering

Tavistock Wealth can offer wealth management firms a white-labelled DFM offering on a number of different platforms. This option is available to wealth managers who are looking to improve their investment offering and revolutionise their business.

By entering into a working relationship with Tavistock Wealth (Global), wealth managers are able to alleviate themselves of the administrative burden of running advisory models whilst simultaneously mitigating the compliance risk and TCF implications of orchestrating portfolio re-balances on an advisory basis. Crucially this also enables wealth managers to free up more time to write new business and subsequently increase their valuation.

The underlying model portfolios would be run centrally by Tavistock Wealth with 24/7 monitoring of all holdings and the ability to implement portfolio changes instantly. Additional benefits such as currency hedging, transparency of charges and access to the market-leading AlternativeSoft risk management system would also be available to the wealth manager. Marketing literature as well as monthly factsheets, mid-month performance updates and ad-hoc research can all be produced in the wealth manager’s own branding.


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8.1 GLOBAL Portfolios

The GLOBAL Portfolios cater for clients wishing to invest in risk profiles 3-8, as defined by the A2R risk profiling tool. Tavistock Wealth (Global) operate with a key focus on risk management ensuring our GLOBAL Portfolios operate within defined long-term volatility parameters.

The GLOBAL Portfolios allocate across nine primary asset classes – Government Bonds, Corporate Bonds, Inflation-Linked Bonds, Emerging Market Bonds, Developed Market Equities, Emerging Market Equities, Commodity Equities, Property Equities and cash. The GLOBAL Portfolios provide exposure to approximately 18,500 underlying positions.

The GLOBAL Portfolios are re-balanced centrally by the Tavistock Wealth investment team. Re-balances take place approximately once per quarter.

GLOBAL PORTFOLIOS 8

WHY USE TAVISTOCK WEALTH (GLOBAL)?7

8.3 Investment Objectives

The investment objective of GLOBAL Portfolio 3 is to deliver long term capital

growth by investing in a range of global financial markets. The Portfolio is typically

comprised of lower and medium risk investments such as cash, bonds and property

as well as a few higher risk investments such as equities and commodities.


growth by investing in a range of global financial markets. The portfolio is typically


as well as a few higher risk investments such as equities and commodities.




as well as higher risk investments such as equities and commodities.



comprised of higher risk investments such as equities and commodities but will also

contain a few lower and medium risk investments such as cash, bonds and property.




contain a few lower and medium risk investments such as cash, bonds and property.




contain a few medium risk investments such as bonds and property.

PORTFOLIO Investment Objective


GLOBAL PORTFOLIOS 8

Page | 8

8.2 Long-Term Volatility Targets

LOW END OF CAUTIOUS TO MODERATE RISK

CAUTIOUS TO MODERATE RISK

LOW END OF MODERATE RISK

MODERATE RISK

LOW END OF MODERATE TO ADVENTUROUS RISK

MODERATE TO ADVENTUROUS RISK

3.1% - 4.5%

4.6% - 6.0%

6.1% - 7.5%

7.6% - 9.0%

9.1% - 10.5%

10.6% - 12.0%

PORTFOLIO Risk Profile Volatility Target

8.4 Investment Policies


GLOBAL PORTFOLIOS

Page | 9

The investment policy GLOBAL 3 is to gain exposure through investment in a diversified portfolio comprised of regulated collective investment schemes, transferable securities, and cash. The minimum exposure to investment grade bonds and/or cash is 45% and the maximum equity exposure is 35%.

The investment policy of GLOBAL 4 is to gain exposure through investment in a diversified portfolio comprised of regulated collective investment schemes, transferable securities, and cash. The minimum bond and/or cash exposure is 30% and equity exposure ranges between 20-60%.

The investment policy of GLOBAL 5 is to gain exposure through investment in a diversified portfolio comprised of regulated collective investment schemes, transferable securities, and cash. The minimum bond and/or cash exposure is 30% and the equity exposure ranges between 20-60%.

The investment policy of GLOBAL 6 is to gain exposure through investment in a diversified portfolio comprised of regulated collective investment schemes, transferable securities, and cash. There is no minimum exposure to bonds and/or cash and the equity exposure ranges between 40-85%.

The investment policy of GLOBAL 7 is to gain exposure through investment in a diversified portfolio comprised of regulated collective investment schemes, transferable securities, and cash. There is no minimum exposure to bonds and/or cash and the maximum equity exposure is 100%.

The investment policy of GLOBAL 8 is to gain exposure through investment in a diversified portfolio comprised of regulated collective investment schemes, transferable securities, and cash. There is no minimum exposure to bonds and/or cash and the maximum equity exposure is 100%.

Portfolio Investment Policy

8

6.1 Total Assets Under Management (AUM)

6.2 Inflows Per Calendar Year

8.5 Risk Profiles


GLOBAL PORTFOLIOS

Page | 10

PORTFOLIO 3 targets a risk profile of 3 on a scale from 1-10, which can be characterised as “low end of cautious to moderate risk”. It is typically comprised of lower and medium risk investments such as cash, bonds, and property as well as a few higher risk investments such as equities and commodities. The portfolio targets annualised volatility in the range of 3.1% to 4.5%.

PORTFOLIO 4 targets a risk profile of 4 on a scale from 1-10, which can be characterised as “cautious to moderate risk”. The portfolio is typically comprised of lower and medium risk investments such as cash, bonds, and property as well as a few higher risk investments such as equities and commodities. The portfolio targets annualised volatility in the range of 4.6% to 6.0%.

PORTFOLIO 5 targets a risk profile of 5 on a scale from 1-10, which can be characterised as “low end of moderate risk”. The portfolio is typically comprised of lower and medium risk investments such as cash, bonds, and property as well as higher risk investments such as equities and commodities. The portfolio targets annualised volatility in the range of 6.1% to 7.5%.

PORTFOLIO 6 targets a risk profile of 6 on a scale from 1-10, which can be characterised as “moderate risk”. The portfolio is typically comprised of higher risk investments such as equities and commodities but will also contain a few lower and medium risk investments such as cash, bonds, and property. The portfolio targets annualised volatility in the range of 7.6% to 9.0%.

PORTFOLIO 7 targets a risk profile of 7 on a scale from 1-10, which can be characterised as “low end of moderate to adventurous risk”. The portfolio is typically comprised of higher risk investments such as equities and commodities but will also contain a few lower and medium risk investments such as cash, bonds, and property. The portfolio targets annualised volatility in the range of 9.1% to 10.5%.

PORTFOLIO 8 targets a risk profile of 8 on a scale from 1-10, which can be characterised as “moderate to adventurous risk”. The portfolio is typically comprised of higher risk investments such as equities and commodities but will also contain a few medium risk investments such as bonds and property. The portfolio targets annualised volatility in the range of 10.6% to 12.0%.

PORTFOLIO Risk Profile

8

8.6 Benchmarks


Page | 11

Portfolio Benchmark

8.7 Platform AvailabilityThe GLOBAL Portfolios are available on the following platforms:

9.1 CommunicationsTavistock Wealth (Global) issue the following communications to wealth managers:

Monthly performance reportMonthly factsheetsMid-month performance flashMid-month market commentary

COMMUNICATIONS & UPDATES9

Ad-hoc research publications – e.g. Brexit/ Bond market bubbleTavistock Wealth blogTavistock Wealth PR articles/video

The market composite benchmark (GBP, EUR and USD Hedged) is the Bloomberg Barclays Global Aggregate Bond Index (70%) and the MSCI World Equity Index (30%). Benchmark performance is evaluated over a rolling twelve-month investment period.






GLOBAL PORTFOLIOS8

10.1 Investment Management SystemsThe systems used by the Tavistock Wealth investment management team are:

Lipper for Investment ManagementThomson Reuters EikonAlternativeSoft

10.2 Trade Execution ProcessA copy of the Tavistock Wealth trade execution policy is available upon request.

10.3 Is there an in-house dealing function?Yes

10.4 Affiliated BrokersBNP Paribas and Marlborough Investments


Page | 12

SYSTEMS10

12.1 Regulated JurisdictionsUnited Kingdom

12.2 Regulatory Body ReviewN/A

REGULATION AND INSURANCE12

CORPORATE GOVERNANCE

11.1 Corporate GovernanceFurther details regarding Corporate Governance are available upon request.

11.2 Environmental and Social ImpactTavistock Wealth is committed to sustainable waste disposal, with polices in place to ensure the appropriate re-use and recycling of equipment/waste wherever possible.Tavistock Wealth engages with the community by working with charities local to our Head Office in Bracknell.

11.3 DirectorsBrian Raven | Christopher Peel | Oliver Cooke | Peter Horbye

11.4 Frequency of Board of Directors MeetingsMonthly

11

DatastreamFE Analytics


Page | 13

12.3 Disciplinary Action by RegulatorsN/A

12.4 Client ComplaintsWithin the last 3 years: 0

12.5 Retail Distribution ReviewTavistock Wealth (Global) does not provide advice to clients.

DISCRETIONARY CLIENT RELATIONSHIPS

13.1 Primary Point of ContactTavistock Wealth does not maintain relationships with clients. A client’s primary point of contact is their wealth manager, who is responsible for managing the client relationship and the suitability of their investment strategy.

13.2 Discretionary Clients Relationships>10,000

13.3 Average Discretionary Client Size$50,000 - $100,000

13.4 What is the smallest discretionary client size considered?GLOBAL Portfolio minimum investment: No minimum investment

13.5 What percentage of AUM is accounted for by the 5 largest clients?<1.00%

CHARIT Y RELATIONSHIPS

14.1 What Charity Relationships does the company maintain?Tavistock Wealth is a sponsor of Project Volunteer (PV). PV was founded by David Villa-Clarke, our Business Management Consultant. PV works with over 500 orphans in Botswana living in SOS Children’s Villages. PV encourages people to give up a week of their working lives to help run a holiday camp in Botswana, where the volunteers interact with the children and the local community to make a difference. For his charitable services, David has been awarded the British Empire Medal by HM Queen Elizabeth II. For more information, please visit www.project-volunteer.com.

13

14

REGULATION AND INSURANCE12

INTEGRITY • VIGILANCETavistock Investments Plc Group

Tavistock Wealth (Global) Limited is a wholly owned subsidiary of Tavistock Investments Plc and is an affiliate of Tavistock Wealth Limited. Tavistock Wealth Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom with Firm Reference Number 568089.

THIS DOCUMENT IS ISSUED BY TAVISTOCK WEALTH LIMITED AND IS FOR USE BY PROFESSIONAL INTERMEDIARIES ONLY. IT SHOULD NOT BE RELIED ON BY A RETAIL CLIENT. This document does not constitute an offer to subscribe or invest in the GLOBAL Portfolios. Tavistock Wealth Limited does not provide investment advice. This document may not be reproduced, disclosed or distributed without the prior written permission of Tavistock Wealth Limited. The GLOBAL Portfolio returns are quoted gross of any applicable DFM fees and the inception date is 1st October 2014 unless otherwise stated. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated. Date of data: 30th November 2017 unless otherwise stated.

The value of investments held in the GLOBAL Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance.

For more information about Tavistock Wealth (Global) Limited or our investments products please write to the address below or email us at [email protected]

Tavistock Wealth (Global) LimitedSuite 9885, 26 Upper Pembroke Street, Dublin 2, D02 X361 Ireland

Telephone : +353 1 6111 595

due diligence questionaire - tavistock wealth global · · 2017-12-11questionaire november 2017....

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