Richmond Capital Management - Investment Advisor

Active Portfolio Management & Risk Analysis

 

 

Business Meeting - Portfolio Management

 

 

 

 

 

Richmond Capital Management utilizes a team-based decision-making structure for portfolio management and risk analysis. Our clients are pension plans, endowments, foundations, insurance companies, nonprofits, and Taft-Hartley plans. The minimum account size is $7 million.
 

Investment Strategy

We take a highly disciplined approach to portfolio construction and risk management, regardless of client type or size. Our investment staff, consisting of seven seasoned fixed-income portfolio managers and one portfolio analyst, decides on portfolio makeup and ongoing relative value opportunities as a unit.

Over the course of our long tenure in this business, we have developed our own portfolio analytics system. This proprietary system allows us to monitor risk and evaluate each portfolio in detail. Additionally, our conservative style and separate account management platform lends itself to customization. For example, we are very willing to accommodate requests for socially responsible investing or unique benchmarks.
 

Investment Process

Our core philosophy emphasizes investments in investment-grade corporate bonds and mortgage securities.  Much of the opportunity presented by these sectors is the result of the incremental yield which they offer.  We believe that a portfolio that offers a yield advantage over its benchmark is predisposed to outperform.

Critical to the investment process at Richmond Capital is the following:

We tend to overweight the corporate bond sector in order to earn the yield premium and to take advantage, we believe, of the inherent mispricing of default risk.  We offset the risk of this sector overweight in two ways.  First, we prefer to take the systematic risk of the sector and to minimize the unsystematic risk of individual credits.  Therefore, we carefully diversify our individual credit exposures.  Second, we tend to avoid the weakest tier of investment-grade credits (BBB-) in order to give ourselves a margin of safety from a downgrade below investment-grade.

From time to time, we will make small adjustments to the interest rate sensitivity (duration) of client portfolios.  We make these adjustments infrequently and make them based on long term valuation measures, not short term market timing strategies.  We confine our duration adjustments to a narrow band of 80% to 110% of the duration of a client’s benchmark.

We do our own research.  An advantage of being an independent firm is independent thinking.  While we pay attention to the bond ratings agencies and to Wall Street research, we make the decision to invest in a bond based on our own homework and the collective wisdom of our portfolio team.

We do our own trading.  Our investment professionals are directly involved in the marketplace.  We believe that involving portfolio managers in trading and conversely traders in portfolio management, results in smarter investing.


Composite Returns

Historical performance returns on our fixed-income composites are available along with a description of the types of portfolios included in each composite. Richmond Capital Management claims compliance with the Global Investment Performance Standards (GIPS®) and is registered with the Securities and Exchange Commission. To obtain a presentation of the requirements for GIPS and a list with descriptions of all firm composites, please call or email.