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Wealth Management*

Investment Philosophy

Contribution of Real Assets to Portfolio Returns

Real assets enable us to deliver strong, steady and consistent returns for our clients with the healthy generation of income along the journey, thereby reducing the volatility of returns.

Institutional in Approach

Our goal is to bring institutional investment and risk management to the private client world. Offering regulated investment solutions and processes, supported by highly regarded service providers.

Simplicity and Transparency

To us, this means our clients can easily understand how their wealth is being managed and be confident it will meet their expectations.

Long Term Focus

As a private client practice we seek to manage wealth over the longer term, including the succession to the next generation. This perspective means that we are unlikely to be distracted by short term events and focus instead on the meaningful investment decisions.

Priority of Risk Control

Our primary focus is the preservation of our clientʼs capital. Our investment products and processes are designed and managed to ensure we monitor and minimise key risks, be it the underlying investment, custody or operational.

Quality Management

We avoid structured and synthetic products where the risk and return may not be apparent to the investor.

Risk Management

We have carefully considered the risks faced by our clients and how we can help reduce those risks. They can be broken down into three main areas.
Investment Risk
At its most basic, investing is an exercise in taking risk and, therefore, having a firm grasp on risk management is essential. In our work with some of the largest investors globally we have found that having and overarching framework for allocating and monitoring risk can often make the difference between investment success and failure.
Fundamental to our approach is diversification across both financial and non-financial assets and within financial assets across sectors, geographies and securities. Drilling down a level, we summarise below the main aspects of investment risk along with the key tenets of our approach.

Volatility Risk

The risk that swings in asset prices may impact the value of the investment.

We do not employ complex models and whilst there is some merit in quantitative measures a level of qualitative analysis is also important. We use a range of measures including Sharpe, information ratios and Value at Risk (VaR) combined with a common sense analysis.

Liquidity Risk

The risk that you may not be able to access the investment when you require it.

We endeavour to run liquid portfolios and in our experience, if liquidating a managed portfolio in entirety, we typically receive substantially all the proceeds within an acceptable period, depending on the asset class.

Expectation Risk

The risk that the investment case is invalid and unsuitable.

The key here is to understand what you are dealing in, what the investment is supposed to do and for whom you are buying it for. Risks include counterparty risk and the use of leverage in the underlying investments. Market risk and stock specific risk are considered on an on-going basis.

Credit Risk

The risk of default on a debt that may arise from a borrower failing to make required payments.

We take a prudent approach when selecting bonds and other income generative investments for our clients. For instance, we select only investment grade bonds and a take time to have a deep understanding of the credit risk inherent in our real asset investments.
Security Risk
The security of our clientʼs assets is of paramount importance and to us, and central to our obligations as a Wealth Manager.
Our business is structured to provide the highest level of security, including the complete separation of clientʼs assets from the firmʼs assets and the outsourcing of critical functions such as custody of clientʼs assets, cash management and Trustee services. Key points to note:

100% protection of client assets

All assets managed on behalf of our clients are held with a custodian or on trust and do not in any way comprise assets of the Vertazen Group . This complete legal separation of assets ensures that the security of client assets has relationship to the financial wellbeing of the Vertazen Group.

Who holds your Investments

Our main custodian is BNP Paribas is one the worldʼs leading financial institutions. Headquartered in Germany, with offices around the globe in New York, Poland, France, and the UK.. Global Finance named BNP Paribas the Worldʼs Best Global Corporate Bank of 2013.

Cash in Safe Hands

Clients may retain surplus cash on deposit with major banks, which may be held in managed investment schemes or on trust. It is important to recognise that here too there is a complete separation of assets. That is no Vertazen Group corporate funds will be held in any clients cash accounts, and the cash balance will not be available any Vertazen Group creditor.

The role of a “Trustee”

In the context of investment funds a Trustee is one who safeguards assets that are held in trust for the investor(s). A trust is a legal structure commonly called a Managed Fund or Mutual Fund that holds assets on behalf of investors, who remain the beneficial owners of the assets held in the trust.

Structuring investments through a regulated trust provides security for investors as they may rest assured in the knowledge a substantial Trustee company is safeguarding their assets. For instance in jurisdictions like Australia the role of the Trustee or “Responsible Entity” is highly regulated with strict requirements including being a public company with substantial tangible assets and insurance cover in place, as well as holding an Australian Financial Services License.
Operational Risk

As a regulated investment management firm, we need to constantly verify we have the right people, procedures, systems and contingency plans in place.

This is to ensure we may minimise the potential risks arising from a possible breakdown in internal procedures, or when facing external risks. In detail:

People

The first line of defence in any organisation is its people. We are fortunate to attract and retain staff of the highest calibre, having decades of experience garnered from the worldʼs largest financial firms. Moreover as an independent firm owned by its staff, our interests are completely aligned with our clients in ensuring a successful business and financial partnership for the long term.

Procedures

Vertazen Group entities are licensed by the Securities & Futures Commission (SFC) of Hong Kong, and the Australian Securities and Investment Commission (ASIC). Accordingly we are required by law to establish and maintain a significant compliance framework across multiple jurisdictions, aided by specialist advice from leading professional firms.

Systems

In partnering with premium technology platform providers in each location, we ensure that our business is supported by state of the art systems that allow us and our clients to monitor, manage and reduce potential risks.

Business continuity management

We have in place a comprehensive Business Continuity Management Program and Disaster Recovery Plan to ensure there is no interruption in service to our clients and that their information and data is protected. Our formal security protocols for the safe keeping of all client information use technologies such as encryption, intrusion prevention systems and behavioural anomaly based monitoring solutions.