PRIVATE WEALTH MANAGEMENT

Transcription

1 PRIVATE WEALTH MANAGEMENT TEAM GLOBAL JANUARY, 2015 Putting Clients First Doing the Right Thing Leading with Exception al Ideas Giving Back

2 AGENDA OVERVIEW DISCRETIONARY PORTFOLIOS CONSULTING AND ADVISORY BROKERAGE CLIENT SERVICES 1

3 OVERVIEW 2

4 TEAM MEMBERS RON BASU Managing Director, Wealth Management Private Wealth Advisor Senior Investment Consultant, Senior Portfolio Management Director Barron s Top 100 Financial Advisors, 2014 Financial Times Top 400 Advisors, 2014 RACHAEL NAYLOR Senior Vice President Private Wealth Advisor Senior Portfolio Manager CHRISTOPHER TOOMEY, CFA Senior Vice President Private Wealth Advisor Alternative Investments Director MATTHEW NASH Private Wealth Advisor, Global Sports & Entertainment Director STUART DUBSON, CPM Business Development Associate BRAD MENDEL Private Wealth Advisor STEVEN CERVINO Wealth Management Associate ANNE LIN Senior Client Service Associate ALICE KIM Senior Client Service Associate LISETTE MONTALVO Senior Client Service Associate SHERYL DENNISTON Senior Client Service Associate PRIVATE WEALTH MANAGEMENT Focus: Equities Asset Allocation, Institutional Consulting; Years of Experience: 24 Oversees Asset Allocation and Client Portfolios Focuses on macroeconomic trade ideas and investment themes Develops and maintains customized hedge fund, pension plan and ultra-high net worth client solutions Focus: Fixed Income and Currencies; Years of Experience: 25 US and International Fixed Income portfolio manager and strategist Focuses on: Fixed Income, Foreign Exchange, Commodities, Futures and Derivatives Focus: Manager and Strategy Implementation; Years of Experience: 18 Focuses on manager selection and third-party manager solutions Alternative Investments, Proprietary Offerings and Asset Allocation Focus: Next Generation Advisory & Impact Investing; Years of Experience: 6 Develops customized impact investment portfolios Advises entrepreneurs on pre- and post-liquidity planning strategies Focus: Equities and Options; Years of Experience: 32 Global Equities and Options portfolio manager, strategist and analyst Advises on comprehensive portfolio hedging strategies Focus: Business Development & Equity Research; Years of Experience: 4 Advises on equities, options, and currency allocations Focus: Research & Portfolio Analytics; Years of Experience: 3 Focus: Fixed Income, Portfolio Implementation & Analytics; Years of Experience: 14 Focus: Equity, Options and Syndicate Trading; Years of Experience: 10 Focus: Client Account Maintenance & Service; Years of Experience: 19 Focus: Client Account Maintenance & Service; Years of Experience: 20 3

5 OUR TEAM S OFFERING PHILOSOPHY Seek Conservation of principal and active management of portfolios. Expert risk analysis and the ability to invest in all asset classes and global markets. Construction and customization of portfolios designed to satisfy client s risk / reward profile. Personalized attention and innovative financial solutions designed to maximize income. Institutional experience derived from partners previous experience in Institutional Fixed Income and Capital Markets, Hedge Fund Trading, Portfolio Management and Institutional Asset Management. Global, Multicurrency trading experience in local markets. Market immersion through team-managed discretionary client portfolios across asset classes. Senior Investment Consultant designation provides access to Consulting Group Institutional Services and Graystone Consulting, which consults to over $150 billion in institutional assets. 1 CLIENT BASE Over $3 billion assets under management 1 Clients include: Global families and entrepreneurs Money management principals Single & Multi-Family Offices Non-profit foundations & organizations Corporate pension plans Institutional money managers (Long only & Hedge Funds) High net worth individuals Small cap banks Offshore investors Consulting and Advisory Discretionary Portfolios Third Party Managers Hedge Funds GLOBAL VISION: MARKET INTELLIGENCE ATTAINED VIA OUR THREE COMPLEMENTARY BUSINESSES Discretionary Managed Fixed Income U.S. & International Equities Master Limited Partnerships Balanced Brokerage Global, multi-currency execution Portfolio Hedging International Swaps and Derivatives (ISDA) Trading 1 AUM as of December 31,

6 GLOBAL RECOGNITION BARRON S TOP 100 FINANCIAL ADVISERS Ron has been recognized by Barron s Magazines annual ranking of America s top financial advisers for three years running from ; placing in the top ten in New York in each of the last two years. The Barron s ranking shown reflects the volume of assets overseen by the adviser and their team, revenues generated for the firms and the quality of the advisers practice. The scoring system assigns a top score of 100 and rates the rest by comparing them with the top ranked adviser. TOP 400 ADVISER LIST Ron has been named to the Financial Times Top 400 Adviser list in America since the lists inaugural year in The formula the FT uses to grade advisers is based on 6 broad factors and calculates a score for each. Areas considered include: AUM, asset growth, years of experience, industry certification, Financial Industry Regulatory Authority compliance record and online accessibility AUM and asset growth comprise 80-85% of each score. We present the FT 400 as an elite group and not ranked from Loren Fox, Financial Times Morgan Stanley Private Wealth Management, a division of Morgan Stanley Smith Barney LLC, Member SIPC 5

7 DISCRETIONARY PORTFOLIOS 6

8 DISCRETIONARY MANAGED STRATEGIES OVERALL STRATEGY OBJECTIVES: To create discretionary managed portfolios that focus on capital preservation, income and long-term growth. The portfolios seek to provide diversification across asset classes, industries, and geography, including exposure to non-usd assets. INDIVIDUAL STRATEGIES Flexible Fixed Income Buy Write Master Limited Partnerships (MLPs) Global Income Growth Global Total Return Investment Objective: Investment Objective: Investment Objective: Investment Objective: Investment Objective: The primary objective will always be capital preservation. Unlike most managers who only solve for income, we take a more active approach and view our objective with a total return philosophy, managing both for income and capital appreciation. The portfolio has the ability to move tactically within and between various fixed income sub-asset classes. To generate an income stream and achieve growth at a reasonable price by purchasing a diversified basket of high quality, multinational stocks. Call options may be written on certain positions to harness volatility, enhance the income stream and protect against downside risk. Our strategy seeks to achieve a diversified exposure to Master Limited Partnership subsectors with a target yield greater than or equal to that of the Alerian MLP Index. To diversify across geographic regions and economic sectors by investing in listed common stock of high-quality, multinational companies. The portfolio will be actively managed and seeks to obtain a yield that exceeds its index. The portfolio may over or under-weight sectors or countries relative to their index weight. A transparent, balanced portfolio that allocates to multiple asset classes with an income and growth focus. The portfolio is diversified across currency and geography. Asset Classes include: Fixed Income, Equities, Master Limited Partnerships, Convertible Bonds, Commodities, Hedge Funds, Managed Futures, Cash and Currencies. 7

9 CONSULTING AND ADVISORY 8

10 OVERVIEW For more than 30 years, Morgan Stanley s Consulting Group has been committed to helping trustees, directors and investment committees manage their fiduciary responsibilities and navigate the increasingly complex world of investing by delivering objective and customized investment advice and services. As a team with a member who is a Senior Investment Consultant (SIC), we are positioned to leverage the scale of Morgan Stanley s Consulting Group and Graystone Consulting, which consults to over $150 billion in institutional assets. 1 We draw on the strength, resources and experience of the firm s Investment Advisor Research team. This team is composed of approximately 50 experienced manager-evaluation analysts who are trained and experienced in assessing the merits of the thousands of investment firms available today. 9

11 INSTITUTIONAL CONSULTING Six-stage process that encompasses the design of an investment strategy, the selection of appropriate managers to implement that strategy and regular portfolio monitoring and rebalancing activities: NEEDS ANALYSIS Review time horizon, risk tolerance, future liabilities and cash inflows spending policy, assets and liabilities and desired fund surpluses and reserves. INVESTMENT POLICY Help you (and where appropriate, your counsel) establish guidelines for investment policy statement. Define the duties of all parties to the process, set risk and return targets, describe portfolio constraints and state manager selection criteria. ASSET ALLOCATION Build a diversified portfolio designed to optimize the trade-off between expected risk and return in accordance with the investment policy. MANAGER/PRODUCT SELECTION Identify appropriate investment vehicles and/or portfolio managers for each asset class in the portfolio. Establish procedures for evaluating, negotiating and contracting with investment managers. PORTFOLIO MONITORING Conduct performance measurement and evaluation in relation to stated risk-return targets, inflation, liability growth, customized market indexes or other relevant benchmarks. REVIEW & REBALANCING Portfolio weights may be adjusted periodically to track the allocation targets. Managers may be downgraded or replaced due to changing requirements or deficiencies. Continual review of investment policy in light of changing needs and market environment. THE INVESTMENT ADVISOR RESEARCH PROCESS Information Gathering Quantitative & Qualitative Analyses Recommendations Advice Identify traditional and alternativeinvestment money managers through a research and recommendations. Provide unbiased, independent manager rigorous quantitative and qualitative Continually evaluate investmentmanagement firms to help ensure quality. research process. Build platforms of researched investment Provide published manager and products across asset classes and styles. investment product research reports Identify appropriate investment to help demonstrate prudent opportunities that can suit diverse fiduciary decisions. client needs. 10

12 MORGAN STANLEY MANAGER SELECTION & DUE DILIGENCE CAPABILITIES MANAGER RESEARCH GUIDELINES To help you receive unbiased and objective investment advice, as well as to ensure the integrity of our process, the Consulting Group Investment Advisor Research team adheres to the guidelines below. We focus our recommendations on investment management firms that are unaffiliated with Morgan Stanley. Our investment manager research process is highly disciplined and consistently applied, allowing us to objectively compare strengths and weaknesses across firms of similar styles and philosophies. We utilize one of the industry s largest databases of manager analytics and investment statistics, which includes information on more than 7,700 investment strategies. The compensation of our manager research analysts is tied to the quality of their research, not the client assets placed in the investment firms they examine. Investment firms may be removed from our programs, regardless of asset levels, if they have strayed from their original mandate or experienced significant changes to their management or operations. UNIVERSE COVERAGE* 1,100+ investment products 70+ investment styles 500+ separately managed accounts 400+ mutual funds 100+ exchange-traded funds Traditional and alternative investment strategies 3 5% annual turnover among investment products covered * As of March, 2013 APPROVED LIST Meets Qualitative and Quantitative Standards FOCUS LIST Higher level of research conviction Based on expected long-term performance TACTICAL OPPORTUNITIES LIST Based on expected short-term performance MANAGER RESEARCH TEAM* More than 300 domestic and international on-site investment manager visits per year More than 20 investment professionals with an average of 15 years industry experience Senior manager research analysts who specialize by asset class Source: Consulting Group Investment Advisor Research 1 There is no guarantee that any product on the Focus List will outperform its benchmark or peer group. 2 There is no guarantee that this objective will be met. 11

13 IMPACT INVESTING DEFINING A FRAMEWORK 1 1 Each family s path into impact investing is unique. The following framework is designed to help customize a unique engagement with impact investing. Define Vision Define a clear vision for impact investing. As there is no one-size-fits-all approach, we work with investors to define a strategy that suits their motivations and unique context. This includes setting distinct impact goals and evaluation criteria. 2 Determine Engagement Strategy Determine how to engage with impact investing. Once the vision has been set, what is the best way to get started? What portion of the portfolio should be allocated to impact investments? We help investors evaluate fit within their existing portfolios and prepare a plan to implement investments. 4 3 Execute Strategy Implement the investment strategy. Deploy capital based upon the investment guidelines and impact portfolio construction model The asset allocation framework will be based on impact objectives as well as traditional financial parameters, including risk tolerance, liquidity needs, etc.. Develop Investment Guidelines Create formalized impact investment guidelines. We work with investors to review existing or develop a new set of investment guidelines, integrating impact goals. These will inform the portfolio construction process and the ongoing evaluation strategy. 5 Evaluate Portfolio & Adjust Strategy Evaluate the portfolio on a regular basis and improve the strategy. We help families to monitor both the financial performance and the impact goals. Based on the results of the evaluation, we work with families to fine-tune the strategy with updated investment and impact goals. 1 Impact Investing Framework developed by World Economic Forum, as published in Impact Investing: A Primer for Family Offices, December,

14 BROKERAGE 13

15 ACCESS TO INDUSTRY LEADING CAPITAL MARKETS RESEARCH AND CAPABILITIES Fixed Income Broad inventory across credit, municipals, FX, Industry & Company Analysts Create detailed analyses and investment opinions interest rates and commodities with traders dedicated to the ultra high net worth client of individual stocks within regions, sectors and industries Structured Solutions Create structures that are tailored to an investor s Global Economists Provide macro perspectives on global and regional specific risk/return profile and investment needs as an alternative to direct investment Product Specialists Team dedicated to ultra high net worth families with expertise across asset classes and products Proprietary Offerings and Capabilities Extensive Capital Markets Resources Intellectual Capital policy, economic and political trends Global Strategists Leverage economic insight to help identify market trends and investment themes in regional markets and major asset classes Syndicate Access to a variety of the most sought after new issue deals across both fixed income and equities Connectivity to Morgan Stanley & Co. Affiliates Sophisticated Products Opportunity to access institutional products and resources Global Reach and Execution Execution in financial markets in more than 25 countries across the globe 14

16 CLIENT SERVICES 15

17 FAMILY OFFICE SERVICES FAMILY OFFICE OVERVIEW An integrated approach to planning that includes family issues, wealth transfer, asset protection and business succession planning Helps you maintain family unity across generations by focusing on family mission, governance, conflict management and family endowments 1 TAX, TRUST & ESTATE WEALTH PLANNING STRATEGIES GROUP 2 3 ACCESS TO BANKING & LENDING Solutions to help ease administration burdens from consolidating your financial reports to managing some of the most complex aspects of your life Management of wealth that is focused on your family s interests over the long term 4 FAMILY GOVERNANCE & DYNAMICS 5 PHILANTHROPY MANAGEMENT Helping to protect what you will transfer to the next generation your values as well as financial assets Access to a highly exclusive range of resources and solutions tailored specifically to you 6 LIFESTYLE ADVISORY 1 7 EDUCATIONAL PROGRAMS 8 PRIVATE HEALTH CARE ADVISORY 1 Morgan Stanley Smith Barney LLC (Morgan Stanley Wealth Management), its affiliates, and Financial Advisors and employees are not in the business of providing tax or legal advice, and these materials and any statements contained herein should not be construed as tax or legal advice. Individuals are urged to consult their personal tax advisor or attorney for matters involving taxation and tax planning and their personal attorney for matters involving trust and estate planning and other legal matters. 1 Services may be provided by a third-party or through an affiliate of Morgan Stanley Smith Barney LLC 16

18 IMPORTANT INFORMATION This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor or Private Wealth Advisor. The appropriateness of a particular investment or strategy will depend on an investor s individual circumstances and objectives. Morgan Stanley Smith Barney LLC offers a wide array of brokerage and advisory services to its clients, each of which may create a different type of relationship with different obligations to you. Please visit us at or consult with your Financial Advisor or Private Wealth Advisor to understand these differences An investment in alternative investments can be highly illiquid, is speculative and not suitable for all investors. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing to bear the high economic risks associated with such an investment. Investors should carefully review and consider potential risks before investing. Some of these risks may include: loss of all or a substantial portion of the investment due to leveraging, short-selling, or other speculative practices; lack of liquidity in that there may be no secondary market for the fund and none is expected to develop; volatility of returns; restrictions on transferring interests; potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized; absence of information regarding valuations and pricing; complex tax structures and delays in tax reporting; less regulation and higher fees than mutual funds; and manager risk. Individual funds will have specific risks related to their investment programs that will vary from fund to fund. Actual results may vary and past performance is no guarantee of future results. This material is intended only for clients and prospective clients of the Discretionary Management program. It has been prepared solely for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. The individuals mentioned as the Discretionary Management Team are Private Wealth Advisors with Morgan Stanley participating in the Morgan Stanley Discretionary Management program. The Discretionary Management program is an investment advisory program in which the client s Private Wealth Advisor invests the client s assets on a discretionary basis in a range of securities. The Discretionary Management program is described in the applicable Morgan Stanley ADV Part 2, available at stanley.com/adv or from your Private Wealth Advisor. Past performance of any security is not a guarantee of future performance. There is no guarantee that this investment strategy will work under all market conditions. Holdings are subject to change daily, so any securities discussed in this profile may or may not be included in your account if you invest in this investment strategy. Do not assume that any holdings mentioned were, or will be, profitable. The performance, holdings, sector weightings, portfolio traits and other data for an actual account may differ from that in this material due to various factors including the size of an account, cash flows within an account, and restrictions on an account. Top holdings, sector allocation, portfolio statics and credit quality are based on the recommended portfolio for new investors as of the date specified. Holdings lists indicate the largest security holdings by allocation weight as of the specified date. Other data in this material is believed to be accurate as of the date this material was prepared unless stated otherwise. Data in this material may be calculated by Morgan Stanley or by third party providers licensed by the Private Wealth Advisors or Morgan Stanley. Morgan Stanley Private Wealth Management has no obligation to notify you when information in this presentation changes. International investing may not be suitable for every investor and is subject to additional risks, including currency fluctuations, political factors, withholding, lack of liquidity, the absence of adequate financial information, and exchange control restrictions impacting foreign issuers. These risks may be magnified in emerging markets. 17

19 IMPORTANT INFORMATION Options are not suitable for all investors. Before engaging in the purchase or sale of options, potential clients should understand the nature of and extent of their rights and obligations and be aware of the risks involved, including, without limitation, the risks pertaining to the business and financial condition of the issuer of the underlying security or instrument. Options investing, like other forms of investing, involves tax considerations, transaction costs and margin requirements that can significantly affect the profit and loss of buying and writing options. The transaction costs of options investing consist primarily of commissions (which are imposed in opening, closing, exercise and assignment transactions), but may also include margin and interest costs in particular transactions. Transaction costs are especially significant in options strategies calling for multiple purchases and sales of options, such as multiple leg strategies, including spreads, straddles and collars. If you are considering options as part of your investment plan, your Morgan Stanley Financial Advisor or Private Wealth Advisor is required to provide you with the "Characteristics and Risks of Standardized Options" booklet from the Options Clearing Corporation. Clients should not enter into options transactions until they have read and understood the Disclosure Document, as options are not suitable for everyone, and discuss transaction costs with their Financial Advisor or Private Wealth Advisor. Please ask your Financial Advisor or Private Wealth Advisor for a copy of the Characteristics and Risks of Standardized Options booklet. A copy of the ODD is also available online at: An investment in an exchange-traded fund involves risks similar to those of investing in a broadly based portfolio of equity securities traded on an exchange in the relevant securities market, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock and bond prices. (For specifics and a greater explanation of possible risks with ETFs, please consult a copy of the prospectus.) Investing in sectors may be more volatile than diversifying across many industries. The investment return and principal value of ETF investments will fluctuate, so an investor s ETF shares (creation units), if or when sold, may be worth more or less than the original cost. Source: Barron's Top 100 Financial Advisors, April 21, Barron s Top 100 Financial Advisors bases its ratings on qualitative criteria: professionals with a minimum of 7 years of financial services experience, acceptable compliance records, client retention reports, customer satisfaction, and more. Financial Advisors are quantitatively rated based on varying types of revenues and assets advised by the financial professional, with weightings associated for each. Because individual client portfolio performance varies and is typically unaudited, this rating focuses on customer satisfaction and quality of advice. The rating may not be representative of any one client s experience because it reflects a sample of all of the experiences of the Financial Advisor s clients. The rating is not indicative of the Financial Advisor s future performance. Neither Morgan Stanley Smith Barney LLC nor its Financial Advisors or Private Wealth Advisors pay a fee to Barron's in exchange for the rating. Barron s is a registered trademark of Dow Jones & Company, L.P. All rights reserved. Source: The Financial Times Top 400 Financial Advisors, April, Criteria are based, in part, upon data gathered from and verified by Morgan Stanley as well as qualitative and quantitative criteria, including but not limited to, assets under management, asset growth, compliance records, and experience. Morgan Stanley Financial Advisors were nominated by Morgan Stanley. The rating may not be representative of any one client s experience and is not indicative of the Financial Advisor s future performance. Neither Morgan Stanley Smith Barney LLC nor its Financial Advisors or Private Wealth Advisors pays a fee to The Financial Times in exchange for the rating. The MSCI All Country World (ex US) Index is a market-capitalization-weighted index designed to provide a broad measure of stock performance throughout the world, with the exception of U.S.-based companies. The MSCI All Country World Index Ex-U.S. includes both developed and emerging markets. An investment cannot be made directly in a market index. Consulting Group is a division of Morgan Stanley Smith Barney LLC. Member SIPC.. 18