Investment management company Ascent/Meredith Asset Management Inc. will soon open its fixed income portfolio to asset-backed securities, providing investment for a market that has yet to be tapped by most ABS portfolio managers: the super rich.
Ascent/Meredith will be purchasing asset-backeds through its subsidiary Ascent/Meredith Portfolio Management Inc., a company that manages portfolios specifically tailored for wealthy individuals.
The investments are spread across the debt, public equity and mutual fund sectors to provide, according to the company, "long-term, tax-effective cumulative results," with each account "managed separately to meet the specific tax needs and risk profiles of the client."
While the inclusion of asset-backeds in the company's taxable fixed income management portfolio is new - Ascent/Meredith has never allocated resources to ABS in the past - the trend is expected to continue at the company. While Ascent/Meredith has an initial ABS target of $15 million for its $150 million in tax exempt accounts, officials at the company said this number should rise.
"We'll probably grow that," said Peggy Farley, president and chief executive officer of Ascent/Meredith. "We're looking to attract more money that's tax exempt, so we will be marketing to pension funds and the like. We have a real good capability that I think hasn't been marketed effectively in the past."
The company will focus on buying investment-grade ABS, the same strategy used for the rest of the fixed income instruments it purchases, which include municipal bonds, corporate bonds and agency securities of the U.S. and certain foreign markets.
"We tend to be conservative, because most of our clients are risk averse," Farley said. "Though they'd like huge returns, they're interested in preserving their capital rather than risking loss."
Most of the company's clients typically have assets between $10 million and $200 million, and are previous owners of businesses they've sold or brought public, said Wolfgang Schoellkopf, the head of fixed-income strategies at Ascent/Meredith. Schoellkopf will be managing the new asset-backed allocations for the company.
Ascent/Meredith is a New York-based company offering investment advisory, broker/dealer and merchant bank financial services through three subsidiaries. The company currently has $1 billion in combined assets under management.