Client Focus and Objectives

 

At Galapagos Partners, we take a comprehensive and holistic approach to managing our clients’ portfolios. The principals of the firm directly manage each client relationship in order to provide high-touch service and address the individual needs of our clients. Our service is based on relationships built on trust and understanding between our clients and our focused team of professionals. By getting to know each family member personally, we maintain a comprehensive awareness of each family's entire needs.

 

We maintain complete oversight of our families' overall financial situations, their ongoing needs and their specific family objectives. We seek to eliminate time-consuming and worrisome tasks and run our clients’ estates more efficiently and cost-effectively. We provide our clients with sound, objective financial advice and guidance; proactive investment management; comprehensive financial analysis, and coordinate with leading firms concerning tax planning and preparation, insurance needs, and leading-edge trust, estate, and philanthropy planning.

 

By managing all the financial affairs of our clients under one roof, we can coordinate and exploit the critical interdependencies among investments, taxes, estate plans, insurance, expense management, and philanthropic decision-making for our clients. And, by effectively managing the information between all of our client's advisors, we're able to successfully integrate each family's unique and complex needs. Where appropriate, we will participate at the Board level for our client family's investments or operating businesses.

 

Our investment advisors, analysts, in-house accountants and portfolio tracking tools allow us to provide accurate and detailed aggregated reporting of an entire portfolio along with sound advice to our clients. Our goal is to leverage our collective expertise to help our clients address the responsibilities of wealth, so they reach their goals and create the life they want.

 

Because we are independent, we utilize relationships with those institutions and investment managers that have proven themselves to be sustainable over time. These include the largest money center banks and some of the best investment managers in the world.

 

 

Our Process

 

Every client and their family members’ objectives are unique. Our goal is to identify these objectives and work towards fulfilling them in the following manner:

 

  1. 1. Needs and Gap Assessment

We meet with our clients to learn about their financial and personal goals. Our services are comprehensive, and can include the following:

      • Multi-Generational Family Office: for those desiring full family-office services to sustain wealth across generations and for philanthropy
      • Financial Family Office: for those desiring a ‘Chief Financial Officer’ to manage, organize, and oversee their financial affairs
      • Family Investment Office: for those desiring a ‘Chief Investment Officer’ to manage and oversee their investments

Upon reviewing our client’s existing circumstances and their goals, we conduct a gap assessment and deliver a recommendation to solve each individual client’s specific needs. Through active and continuing dialog with each client, we develop specific asset allocation recommendations mindful of their current concentration risks in order to meet each client’s individual needs as defined by:

      • Return objectives within defined time-frames
      • Liquidity
      • Defined risk allowed

Our objective is to obtain the best long-term result for each individual client corresponding to their defined return and risk tolerance objectives.

 

  1. 2. Portfolio Construction and Ongoing Tactical Adjustments

Upon obtaining consensus on the asset reallocation plan, we begin to implement the plan and track performance. Our investment committee meets weekly to review the markets and their respective impact on a client’s portfolio and to propose necessary adjustments. The same attention is given to the other goals and needs of the family. 

 

  1. 3. Reporting and Family Meetings

We are in constant communication with our clients. Our sophisticated financial software allows for customized reporting of a client’s entire portfolio. We provide customized monthly reporting that clearly shows the portfolio’s performance for a particular period of time, as well as over the life of the client-firm relationship. These reports are reviewed with clients in person and remotely on a monthly or ad hoc basis.

 

 

Our Value-Add

 

  1. Practical Considerations

Clients’ interests are typically best served by a number of carefully selected financial relationships. This introduces complexity in managing and tracking their assets that is best met by an experienced multi-family office with a commitment to technology and our management of increasing amounts of data.

 

  1. Integrity and Transparency

One of our roles is to objectively evaluate existing and potential investment opportunities. Given the nature of our fee structure, we avoid any possible conflicts of interest with other financial institutions. We are only paid by our clients. We are regulated by the U.S. Securities and Exchange Commission and U.S. Commodities Futures Trading Commission.

 

  1. Confidentiality

We understand and honor confidentiality. Internal and external controls to protect privacy are regularly reviewed, and our firm undergoes cybersecurity testing and has 24x7 network monitoring.

 

  1. Seasoned Expertise

Our investment committee is comprised of seasoned professionals who utilize their operating experience in conducting due diligence and risk analysis. Our team members have deep roots in alternative investments, and we have served clients’ needs in the family office space for over twenty years.

 

  1. Buying Power

Our economies of scale have a number of realized benefits to our clients including lower fees, aggregation of assets to reach manager minimums, and more access to senior management and third-party portfolio managers.

 

  1. Communication

We are in constant communication with our clients. We provide customized monthly reporting that clearly shows the portfolio’s performance for a particular period of time, as well as over the life of the client-firm relationship.

 

 

Investment Philosophy

 

At Galapagos Partners, our focus is to preserve and grow our client families’ wealth for them and their future generations. This is achieved through investment expertise, independent portfolio management, rigorous analysis, and access to diverse research and investment opportunities.

The core tenets of our investment philosophy include:

 

      • Preservation of capital. Diversification and non-correlation reduce risk substantially.
      • Rigorous manager selection and portfolio construction to focus on investments with the potential to provide greater risk-adjusted after-tax, real rates of return.
      • Active management of managers that adapt to market evolutions, produces superior returns for certain asset classes rather than relying on a “buy and hold” strategy.
      • Passive indexing may be appropriate in certain circumstances.

 

Fund Selection

Each specific investment or fund is selected according to a rigorous internal methodology concentrating on long- term performance measures. All associated data is updated and reviewed on a monthly basis including the incorporation and consideration of newly identified, high-performing funds.

 

Quantitative Analysis

A rigorous quantitative analysis is carried out on those funds ranking highest according to our internal proprietary methodology. This relates primarily to the performance of the funds, their risk levels and the consistency of management.

 

Risk Management

The risk management approach reflects systematic attention to understanding each manager’s individual stress risk and how that stress risk is correlated to the other managers in the portfolio. Utilizing volatility is helpful in portfolio construction, but truly understanding correlation in stress events is key to avoiding drawdowns.

 

Qualitative Due Diligence

For managers who have passed our initial selection process, this analysis focuses on each manager’s investment philosophy and the consistency of its implementation, the profile of its management team, and its approach to risk management. A meeting with each fund manager at their location is part of our final selection decision.

 

Portfolio Monitoring

Ongoing portfolio monitoring reflects a systematic analysis of overall performance results achieved to include the positive and negative contributions of each asset class and individual investment within portfolios. We benchmark all our managers and monitor them for correlation and style drift. We further develop proprietary macro-economic and manager-specific key performance indicators for our investments. The breadth of analysis involved in this effort demands extensive use of carefully selected and developed quantitative management tools for the evaluation of single investments and portfolios overall. 

 

Galapagos Partners’ investment philosophy reflects many of the attributes of the Galapagos tortoise including:

 

  • Compounding Wealth Over Time

While the eggs of a Galapagos tortoise are small, the tortoise itself grows to an enormous size. Therefore, over the long life of a tortoise (they can live to be over 200 years old), their size compounds many times over. Each of our client families have a nest egg of their own. They come to us to help compound their wealth over time.

 

  • Adapting to the Environment

Through the process of evolution, the Galapagos tortoise constantly adapts to its changing environment. Since the inception of our firm, Galapagos Partners has successfully managed a select group of large, multi-generational family offices, while constantly evolving our business to better serve our clients. 

 

  • Preservation of Capital

The Galapagos tortoise’s heavy shell provides protection from harsh environments. Their ability to move with speed and determination is surprising given their size. Similarly, our approach to investing is designed to protect our clients during down markets, while allowing them to excel in favorable environments.