We are an advisory firm focused on advancing the interests of asset managers, family offices, insurers, reinsurers, and banks that have recognized the benefits of Structural Alpha and want to take advantage of them.
To the extent that alpha is the measure of added value that a portfolio manager contributes to the returns of his portfolio relative to the general market, Structural Alpha is the measure of the added value that a portfolio manager gains by executing his or her investment strategy through an insurer, reinsurer, or bank rather than executing an identical investment strategy in a fund or managed account.
In this context, we believe that Warren Buffett’s success has far more to do with his investing through Berkshire Hathaway’s insurance, reinsurance, and banking (until 1979) businesses than his stock picking. As such, we primarily advise asset managers who want to significantly outperform their funds or managed accounts, enjoy the stability of permanent capital, significantly increase AuM from sources otherwise unavailable in a fund or managed account, generate fees far in excess of their seed investments, and increase the likelihood of being able to monetize the value of their asset management businesses.
We also advise established insurers, reinsurers, and banks on the concept of Total Return Financial Institutions (as well as entrepreneurs with good insurance, reinsurance, or banking ideas) who want to raise capital and are willing to take it from family offices or asset managers, their investors, and/or an asset manager’s funds in exchange for permitting the family office or asset manager to manage some or all of the assets of the given financial institution for full fees.