OCIO CASE STUDY

TAILORED CLEARSTEAD PRISM OCIO APPROACH CAN INTEGRATE ORGANIZATIONAL AND FINANCIAL OBJECTIVES WITH ASSET ALLOCATION

Some clients can have complex balance sheets, and debt covenants that stipulate cash on hand, among other restrictions.  Clients  with cash needs for short and intermediate term projects, and restrictive covenants can limit the amount of risk they can take with their investments.

CLEARSTEAD’S ROLE IS TO DETERMINE A PROPER RISK PROFILE, AND TO ALIGN THE PORTFOLIO WITH THE FINANCIAL OBJECTIVES OF THE CLIENT.

Clearstead can develop a financial model for clients to assess the effects of various market conditions on spending and debt covenants.  We can help segregate assets into separate pools: short and intermediate term pools that have limited risk characteristics, and long term pools, that had endowment-like characteristics. We work with clients to make sure the asset allocation and the corresponding investment managers are properly assigned a risk objective.   We spend time meeting with CFOs and directors of finance to get updates on its balance sheet and cash on hand, and use that information to update our assumptions and implement an optimal asset allocation strategy.

Clearstead also must continuously educate client’s trustees and staff on interpreting investment results.  We spend time eductaing our clients that short and intermediate term pools, because they typically have more conservative allocations, could have results that are different than a client’s long-term pools, which tend to be invested like an endowment, or a foundation.  

We have found that after clients understand our approach with one pool of assets they engage with us with their other asset pools, such as retirement plans or foundation assets.  When this happens Clearstead applies the same approach of integrating organizational and financial objectives with the way assets are invested.  We understand that each client is unique and that we must tailor our investment program to the specific needs of the institution and plan.

Our proprietary Clearstead Prism OCIO service acts as a powerful extension to institutions, collaborating on a deep level to completely handle day-to-day management of investment portfolios after clearly defining objectives, quantifying risk, and creating benchmarks that continuously explain all results. Research drives our decision making, and we are quantitatively focused — tempered with the qualitative value of decades of experience and practical judgment.

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We bring our clients objective financial leadership through our fee-only advisory model, which enables us to remain objective. We do not offer proprietary products and take no commissions from product sales: our only source of revenue is fees we receive for financial advice. True to our founding principles, we do the hard work: the day-to-day investment management integrated with organizational priorities and family aspirations.

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Clearstead is an institutional and private client advisory firm that is relentless in providing solutions so our clients can exceed their aspirations and build stronger legacies for their families, their communities, and themselves.

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