Factor management for family offices
Use of factor management has increased rapidly in recent years. The world’s largest and most professional managers such as the “Oil Fund” here in Norway (Statens Pensjonskasse Utland) have adopted factor management and standard solutions have been launched in the form of factor funds aimed at the private market. Also among family offices and institutional investors, there is a clear trend in getting started using factor management to reduce risk, save costs and increase returns.
“We get paid based on the job we do, not based on the capital you have.”
Family offices aim to allocate capital from the family business, where the values are built up, to a more diversified investment strategy to preserve values and ensure further growth. Unfortunately, analysis shows that almost no traditional managers over time generate excess return on costs. Research shows that management based on factor models provides a better return on lower risk and costs.
The dilemma for family offices that see the great potential of factor management is then to either pay relatively large amounts for standard solutions that calculate a% of managed capital, to rely on suppliers in the industry who often do not have the same incentives, or to spend a lot on developing their own solutions. This is where NorQuant can help you. We do independent, transparent analysis and help you find the solutions that are best for you. We pay based on the work we do, not on the capital you have. Especially for larger family offices, this is more favorable than paying an annual percentage of managed capital. The way we can help is as follows:
1. Analysis of your existing investments.
Our analysis of your existing investments (funds, other investment products, equity portfolios) will quickly give you specific advice to reduce risk and save costs.
2. Evaluate your needs and create a customized solution.
Must be custom, but long-term cost-effective works best (keep it simple). Investment parameters: time horizon and desired risk, possible descriptions / flexibility, ESG.
3. Implementation and follow-up of optimal investment strategy
(rule-based and 100% transparent, based on research, cost-effective). We build on our systems and create a customized solution and develop follow-up routines.
Feel free to contact us for a non-binding conversation.