I recently caught up with Forbes Family Trust CEO Keith Bloomfield to discuss his recent "Best Alternative Manager" victory at the Annual Family Wealth Report Awards. I serve at Vice Chairman of FFT and it has been an honor and privilege to watch Keith and his team build Forbes Family Trust into a ground breaking industry leader. We also went over other awards that FFT has recently received, his proprietary AlphaBeta system and how he thinks Forbes readers should be positioning their portfolios.
Here was our interview:
Miguel Forbes: Forbes Family Trust recently won an award can you tell us about this?
Bloomfield: Forbes Family Trust was recently acclaimed “Best Alternative Asset Manager” at the 4th Annual Family Wealth Report (FWR) Awards, solidifying our position as one of the pre-eminent players in the competitive global alternative assets space. The judges thought that our proprietary AlphaBeta software for modeling and reporting on hedge fund and other alternative investments set us apart from the other six prominent firms shortlisted for this category. Showcasing ‘best of breed’ providers in the global private banking, wealth management and trusted advisor communities, the FWR Awards were designed to recognize companies, teams and individuals, which were deemed to have ‘demonstrated innovation and excellence during 2016’.
Family Wealth Report is an organization dedicated to provide “need to know” business intelligence for the various stakeholders among the family office community in North America. Its dedication to this exclusive corner of the wealth management universe, along with its connectivity to senior executives, makes it uniquely influential among its peers. We were very honored to receive such a prestigious award from such an organization. It validates a lot of our efforts over the past few years, and motivates us to work even harder going forward.
Miguel Forbes: Please tell us about the AlphaBeta proprietary system that FFT has developed?
Bloomfield: AlphaBeta has been developed over multiple years by our Director of Research, James C. McGrath, and his team, drawing upon his experiences building risk management, analytical, and trading systems for major investment banks. AlphaBeta is a proprietary, institutional-quality, online suite of tools that allows our investment team to construct and test portfolios containing traditional investments alongside hedge funds and other alternatives; perform sophisticated statistical analyses; and assess risk and return across various dimensions.
We use it to track, report, and analyze thousands of hedge funds, long-only managers, capital markets benchmarks, and ‘factors.’ Secondarily, it serves as a portfolio management and accounting system, tracking contributions and withdrawals, underlying positions, and sector allocations. It allows us to create custom portfolios according to specific risk and return objectives, and assess their performance over time. We originally built the system for hedge funds, but now it informs our investment process across global asset classes.
AlphaBeta serves as an internal portal for anyone at the firm to have ready access to our investment team’s extensive due diligence materials. We feel that the sophisticated quantitative power of AlphaBeta along with the ease with which it makes qualitative and quantitative information available, serves as a foundation for rigorous investment research at FFT that we believe is second to none.
Over time, we have worked hard to build relationships with a wide variety of funds, investors, and other asset management industry participants. There are now over 8,000 different investment products tracked in AlphaBeta. A large number of firms look to Forbes Family Trust as a respected domain expert and sounding board, eagerly sharing their investment performance and color, and in turn, gaining access to our analytics and insights into industry developments. It has become a virtuous cycle.
Miguel Forbes: FFT has won other awards can you tell us about them?
Bloomfield: We have been recognized by a number of other leading wealth management and industry experts over the past several years. For example, our firm has been recognized as:
- 2016 PAM Awards – Best Investment Advisor for HNW Clients
- 2016 Philadelphia Business Journal – Top Money Managers
- 2016 Financial Times Top 300 Investment Advisors
- 2015 Financial Times Top 300 Investment Advisors
- 2015 PAM Awards – Best Private Wealth Manager – Client Service – Under $5BN
- 2015 Forbes Top 100 Wealth Managers 2015 - #41
- 2015 Wealth & Money Management Awards – Best for Customized Investment Solutions
- 2015 Financial Advisor Magazine - Top Investment Advisors - #50
- 2015 Financial Advisor Magazine – Fastest Growing Firms - #8
- 2014 PAM Awards – Best Multi-Family Office – Overall - Under $2.5BN
In addition to representing a prestigious group of organizations, the particular succession of rewards we have received highlight the progression of our firm in size and scope; they have become more global and include the most substantial and influential firms in the industry. Your readers can find more information about these awards on our website.
Miguel Forbes: You have grown significantly over the past few years what do you attribute this to?
Bloomfield: We have been very pleased to welcome a select group of meaningful family groups over the past few years. By design we haven't sought to add a large number of client relationships, but rather have endeavored to engage with a few families with considerable scope and complexity. We do our best work with families who have complicated balance sheets, multifaceted estate planning structures, ambitious lifestyles—and exacting standards. We are able to engage with such families as peers and trusted counselors. The level of service that we can provide, which depends upon sophisticated wealth management capabilities, but goes well beyond that, isn’t necessarily relevant to every ultra-affluent family. However, it is indispensable for those with whom we work.
We have been fortunate, through our connectivity with centers of influence, to be regarded as highly respected investors. But, this all goes back to the work and care we provide to every one of our current clients. Their advocacy is truly our most valuable asset and something we strive to earn every single day. Our reputation is truly our number one selling point and has led to a steady growth in our business, capabilities, and reach.
Miguel Forbes: Most of our readers are wondering how to position their portfolios what could you suggest for them?
Bloomfield: We are definitely moving into uncharted territory in the markets, but we believe these are times that present exceptional opportunities for the resourceful and nimble investor.
There’s no one right answer for every investor and we assess each client individually. However, there are a succession of substantial issues we are watching: Federal Reserve policy decisions, messaging, and anticipated rate increases; direction from Washington, particularly regarding the budget and big-ticket items such as healthcare reform, infrastructure investment, and trade policy; comings and goings in Europe, especially the coming French elections, which, even more so than Brexit, may have broader repercussions for the Euro and EU. Beyond these “known unknowns”, there are many issues which aren’t yet on anyone’s radar.
We are always looking at valuations of different asset classes and markets, changing technicals, and emerging tactical opportunities. We see risks in rate-sensitive bonds, but opportunities in some of the more flexible strategies in fixed income, particularly those delivered through alternative structures that have the ability to be long and short and to express differential views along the yield curve.
We like equities but are looking for value. We see opportunities outside the US, and will selectively increase allocations to certain international markets. Finally, we see potential rewards to certain strategies which can profit from spikes in volatility. Certain systematic and alternative strategies may be of interest over the next year.
All told, we are encouraged by the opportunity set we see, which should reward careful positioning, rigorous analysis, and a broad mandate, which plays particularly to our strengths.