These issues are sometimes tied to headlines about tax hikes, tales about market actions, or a generalized fear about volatility. Feenstra’s strategy is to handle these issues intimately, exhibiting his shoppers precisely how they’re positioned and highlighting how their portfolio is protected in opposition to a very worrying development.
He cites the instance of actual property. Nicola presents its shoppers a personal asset allocation together with investments in public securities. A type of personal asset lessons is actual property. That publicity has labored out very properly for his or her shoppers over the previous decade, however the latest spate of rate of interest will increase have left many actual property investments on shakier floor.
Feenstra’s strategy, when shoppers include actual property issues, is to point out them which actual property property are struggling, which have remained sturdy, and the way their portfolios are at the moment allotted. He highlights Nicola’s workforce of 60 actual property professionals managing his shoppers’ publicity to that asset class, and reveals why regardless of damaging headlines his agency stays constructive in that area over the long-term.
That doesn’t imply he’s holding shoppers in precisely the identical allocations. Because the economic system has shifted, Feenstra has seen new alternatives open up, particularly in areas like mounted earnings. He and his workforce are discussing these property with shoppers and demonstrating what they’ll ship now on a risk-adjusted return foundation.
Shaky financial occasions additionally include alternatives, and Feenstra believes that’s an space the place personal asset allocations can additional profit shoppers. There might be alternative for consolidation sooner or later that his UHNW shoppers can seize by way of an publicity to personal fairness. He expects that after a roughly 18-month lull, IPO and M&A exercise is prone to choose up. Personal fairness allocations might help UHNW shoppers entry these alternatives earlier.