We deploy a comprehensive client-service approach that includes a tailored on boarding process, a full range of investment and advisory services (such as portfolio construction, liquidity management, and economic and financial research) and a suite of investment strategies and products.
Client-Centric Approach to Portfolio Construction
At IMCO, we take a client-centric view on portfolio construction, built exclusively around your unique set of needs and requirements. This means we collaborate with your board, actuaries and external advisers, and we work diligently to understand the characteristics of your liabilities and financial objectives.
We work closely with you to define investment objectives and to advise on a strategic asset allocation that optimizes expected returns, consistent with your risk appetite. This work is supported by dedicated portfolio construction and research teams. We consider asset classes and risk factors to construct durable portfolios that can adapt to potential long-term trends and market fluctuations.
Once we fully understand your requirements, we apply our expertise to analyze and construct a total portfolio using a full suite of traditional (and if needed, alternative) investment solutions that are supported by market-leading tools and risk management systems.
Our Risk Management Framework
Phase 1 Planning and Forecasting
We work with clients to identify their investment objective, risk tolerance and constraints, forecasting long-term expected returns and risk. These inputs are incorporated in Asset Liability studies in Phase 2.
Phase 2 Asset Allocation
Consistent with the long-term horizon of the Asset Liability study, we construct a strategic asset mix based on long term risk and expected return models. We assess the sensitivity of the resulting portfolio to different long-term assumptions, market shocks and stress tests. We develop alternative views of long-term capital market returns and risk to assess the robustness of the base case assumptions. Alternative asset mixes are analyzed, and stress-tests are designed to evaluate specific downside risk scenarios, such as higher inflation or short-term negative investment performance.
Phase 3Transitioning Asset Mix Toward Model Approach
Now we translate the client asset mix determined in Phase 2 to IMCO products available to clients of all sizes. Given the expected long-term return of each product and investment strategy, we guide the transition of our clients’ original portfolio to an enhanced strategic asset mix that is consistent with the results in the Asset Liability study. The allocation to IMCO strategies remains consistent with our clients’ long-term investment objective and risk tolerance.
We understand that our clients face a heightened demand for transparency by their stakeholders and must meet regulatory oversight requirements. Accessing complete, accurate and timely information on their portfolio holdings and performance is also critical to managing risk.
Our clients can expect regular comprehensive reporting that summarizes key relevant data, so they can understand the drivers of their portfolio's performance. Our suite of reports includes timely market and economic updates, quarterly performance recaps, summary of portfolio positioning and IMCO's forward-looking views, among other analysis and commentary tailored to our clients' respective objectives and risk/return targets. We interpret client-specific performance as well as economic and investment strategy research.
Learn More About Our Thoughts on Economic and Investment Strategy Research.
Our Cost Focus
Cost matters. So, we strive to provide our clients with access to a sophisticated investment platform at a lower cost than they would have to incur to develop similar capabilities themselves.
Today, we serve our clients on a cost-recovery basis and are focused on prudently managing our investment and operating costs. We want to preserve the cost advantage arising from economies of scale for our clients.
Scale is a key driver of our ability to manage investing costs. Our size means we can enter strategic partnerships, co-invest and access investments directly in a manner that would be difficult for smaller funds. As a result, we can reduce overall costs associated with alternative investments for our clients.
Our clients will incur costs of 2 basis points (estimated) to access dedicated asset allocation and risk management capabilities. For a $1-billion fund, without our scale, this same management and oversight team would add in the range of 60-80 basis points to their costs, which is not affordable for many clients.
Since we began managing funds, our clients have saved over $14 million while enhancing capabilities (asset mix, risk management, direct investing and reporting) that they didn’t previously have, at no incremental costs, on an asset mix adjusted basis. These greater capabilities will enable us to increase their long-term risk-adjusted returns and generate significantly more savings.
IMCO pools its clients' assets to achieve economies of scale, enabling clients to benefit from cost competitiveness, value, and access to a diverse and differentiated range of global investment opportunities.