We are driven to learn as much as we can about our clients, so we can customize the right solution for them. Our proprietary process, honed over decades of experience, is designed to achieve exactly that.
- Is your spending policy fixed or formulaic?
- What is your hedging policy?
- Do you have a floor on spending levels?
Our proprietary Total Risk Enterprise Engagement (TREE) is the foundation of Spruceview’s client-focused investment process. This three-pronged approach enables us to develop customized client solutions that are designed to meet near- and long-term investment objectives.
In order to create a customized solution, it’s imperative that we have a clear understanding of the critical factors impacting a client’s investment profile. First, we examine asset and liability constraints and concerns. Then we consider qualitative factors by going beyond the numbers to analyze critical elements of the underlying organization. Our goal is to develop a clear understanding of our client’s overarching objectives and constraints.
We leverage the information gathered in step one, along with answers to a series of in-depth questions designed to complete the client profile, to create a 16-factor model that identifies our clients’ near-, intermediate- and long-term goals, which include liquidity, return requirements, risk aversion and agency risk. From there, we create a heat map that guides the client’s strategic investment plan.
Drawing on our years of experience, we execute the strategic investment plan, which includes developing a strategic asset allocation among appropriate asset classes. As a final check, we apply a reasonableness test using expectations of capital markets returns, risk and correlations. We review statistical analysis, risk analytics and portfolio optimization to verify our approach.