Unconventional Opportunities in Private Wealth Management

Nov. 2, 2011 - PRLog -- Unconventional investing does not mean taking additional risks, according to Helen Kearns, President & Chief Executive Officer, Bell Kearns & Associates Ltd. & Board Member, Ontario Teachers’ Pension Plan. On the contrary, it can mean reducing risks.

A keynote speaker at the upcoming marcus evans Private Wealth Management Summit Fall 2011 in Las Vegas, Nevada, December 5-7, Kearns talks about unconventional investment strategies, risk management and exploring new opportunities.

What unconventional, yet successful, investment strategies have you observed at the Ontario Teachers’ Pension Plan?

Helen Kearns: I have made a number of observations that investors could benefit from. Although they deviate from conventional thinking, that does not necessarily mean taking on more risks.

For instance at our firm, we utilize re-balancing tools to move capital between asset classes and portfolios in order to manage risk and returns. Our system means that we often advise clients to buy when they do not feel like doing so, and sell when they are optimistic. Selling Canadian equities to buy bonds in early 2008 is an example.

We also assign a risk budget, a discipline that we imported from the pension world. We can do this at the total portfolio level, deciding with the client how much of their assets can be used to try and achieve value added returns, this sometimes includes alternative asset classes.  

In most portfolios, real estate falls in the alternatives category. We try to find income producing real estate with boring but sustainable returns, as it can compliment bonds in bringing stability to the portfolio with slightly higher returns.

How do you identify investment opportunities?

Helen Kearns: One of the major lessons that I have taken away from Ontario Teachers’ is to embrace the exploration of new opportunities. To be unafraid of looking at new markets and investment opportunities, but in a very measured way and in incremental steps. If it does not work out, the risk will be contained in a small amount. If it does work out, then you will have identified a source of return that may punch above its weight in the portfolio.

What strategies are available for mitigating risks?

Helen Kearns: The first and most important risk management strategy is changing the conversation. Most investors begin the investment process by focusing on the return they are seeking: “I am looking to achieve eight per cent per annum”. We think this is a backwards way of approaching a portfolio, as risks become secondary.

We begin by discussing risks at length. One of the lessons of 2008 was that risk is not one word. There is capital risk, liquidity risk and duplication of risk. This helps us focus on diversification across the total portfolio and cross-check our risk reference points along the way, to ensure that all stakeholders are comfortable with the investment risks that we will be assuming.

Any final thoughts?

Helen Kearns: The most important thing that we do for our clients is to build a framework for decision-making. Instituting a framework and proper governance allows a family to go back to the dinner table and enjoy being a family.


Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

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About the Private Wealth Management Summit Fall 2011

This unique forum will take place at the Red Rock Casino, Resort & Spa, Las Vegas, Nevada, December 5-7, 2011. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on unconventional investment strategies, Federal Tax Policy challenges, risk management strategies and the family office governance structure.

For more information please send an email to info@marcusevanscy.com or visit the event website at www.privatewealthsummit.com/HelenKearnsInterview

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