Frequently Asked Questions
- Our primary business activity is portfolio management. We provide asset management services to institutions and private wealth clients. Portfolios are constructed on a separately managed account basis based on the risk and return objectives of each individual client.
- Authentic also provides consulting services upon request to institutions that seek to improve returns, teams and processes within the fast moving global marketplace.
- Our founding was motivated by a desire to provide a better alternative to large, slow moving investment firms hobbled by stale investment mandates and a penchant to emphasize fees and cross-selling above client interests and service.
- We are driven, love what we do, and eager to provide our investment platform that puts client interests first.
Yes. The principal securities regulator of Authentic Asset Management Inc. / Gestion D’actifs Authentic Inc. is the Ontario Securities Commission since 2015. The firm is a registered Portfolio Manager in Alberta, BC, New Brunswick, Ontario, and Quebec, a registered Commodity Trading Manager in Ontario, and a registered Derivatives Portfolio Manager in Quebec. Authentic undergoes a financial audit on an annual basis. The firm seeks to continually pursue best practices, and is a Member of the Portfolio Management Association of Canada (PMAC).
We bring seasoned institutional investment expertise directly to Clients without middlemen and without generic pre-packaged products. Our Clients are typically interested in longer term risk adjusted returns that are tailored to suit their requirements. Clients value our expertise in positioning portfolios with anticipation of both rising and falling markets.
Some reasons why Clients value an Authentic relationship:
- Seasoned team sourcing returns and assessing risks across asset classes and market conditions.
- Transparency and a client centric spirit, where conflicts of interest are not a client concern.
- Robust and straight-forward operating structure.
- Expand the investment frontier with innovative strategies tailored specifically to your risk and return objectives.
- An investment team that is driven, passionate about what they do, and always accessible with a client-first ethos.
We have organized our investment expertise into four product groupings, namely Global Equity, High Income, Equity+Income, and Global Macro.
Once we understand your expectations and requirements, we agree a strategy along a product line and structure your portfolio according to your return objectives and risk parameters.
Yes, that is our expectation.
- Our high income product focuses on micro and macro events to drive high returns of circa 10% annually. The sources of these returns are expected to have a low correlation to the domestic equity index. Hence the diversification benefit.
- The menu of opportunities are different from our Global Equity and Global Macro products. The High Income product seeks to capture arbitrage opportunities at the corporate level that generate stable returns, and at the macro level seeks efficient hedging capabilities and high convex payout opportunities, particularly in crisis or bubble conditions.
About Client Accounts
We have a very straightforward on-boarding process, just 4 steps:
Step 1 – We listen and learn. We understand your expectations, objectives, risk tolerances, liquidity needs, appetite for volatility, margin, and suitability across asset classes. We discover what your priorities are for wealth preservation and capital formation.
Step 2 – Together we develop a solution that utilizes our investment platform. We define a strategy and portfolio to target your return objectives within defined risk parameters to take the worry out of investing.
Step 3 – We put it to paper. We walk you through the necessary online documentation to completion. A broker-dealer/custodial account is opened and the investment management agreement with us is signed.
Step 4 – You fund the account, then we get started managing your account.
The minimum account size for long only accounts, such as an investment account of global equities, is 100-250k.
The minimum account size for our other products is 500k-1mln.
At the other end, we can accept account sizes of at least 500mln. We can scale some products significantly higher on our existing platform given our focus on liquid strategies.
No. Clients have a relationship with Authentic to act as the discretionary investment manager of their Client account which is held at an independent broker-custodian. The account holding the assets is in the Client’s name.
Clients can view the account 24/7, and can make withdrawals and deposits, but cannot trade in the account. Authentic does the investing.
A managed account is managed separately, exclusively with the assets of a single client. A fund is a pool of assets from multiple clients in which the client owns a share of the fund. The value of that share is based on valuations made on the securities in the fund.
Yes. The investment account is in your name. Authentic positions are typically highly liquid and able to be realized in a short period of time when required. It usually takes 1 to 5 days for a deposit or withdrawal transaction to be completed end-to-end.
- Customized investment mandate – Separately managed accounts provide more flexibility in tailoring a portfolio and overall strategy specific to the risk and return objectives of the Client.
- No constraint on strategy – The Client identifies the most suitable strategy for their objectives without the constraints that a fund may have.
- No restrictions on cash levels – Varying the cash allocation can be a source of additional alpha.
- Control – The Client owns the securities in the portfolio, not the fund – there is no additional legal entity in the middle.
- Transparency – The Client has a complete detailed view of the managed account 24/7. The account is in the name of the Client, and the Client can directly see how and where assets are invested.
- Relationship – Clients may enjoy greater access to and discussions with those investing their assets.
- Mercy – Clients are not at the mercy of others who may sell shares that distort the value or composition of a fund.
- No prospectus – No long document outlining the nature of the fund. Sometimes one has to dig to find and understand all the fees.
No. We do not typically invest client accounts in mutual funds or hedge funds.
We focus on individual securities that are broadly and publicly traded and where pricing is transparent.
Should we want exposure to a specific sector or industry, we may use baskets of securities such as ETFs (Exchange Traded Funds) provided they are efficient vehicles to get the exposures we require.
We actively manage portfolios. We recognize that passive investing has worked well over recent years as most risk assets have appreciated significantly. The traditional portfolio mix of 60% equities/40% bonds has also worked well for the same reason. What makes active investing particularly compelling now is our anticipation that real returns on most risk assets are set to diminish considerably during the market cycle ahead. We think investors will need more creativity to secure decent returns in the decade ahead than at any point in the last 50 years.
Active, nimble multifaceted investment strategies that can profit in all market conditions and utilize liquidity, flexibility, and rigorous analytical methods are enablers for generating more robust returns.
Vulnerable conditions for generic investment mandates may include:
- Elevated volatility levels
- Debt at record highs
- Richly valued stock & bond markets overall
- Rising inflation
- Central bank regimes in transition
- Aging demographics
- Tepid productivity growth
- Creative Thinking – Experience and skill supported by rigorous research are essential to unravel complexity – we layer that with an ethos of innovative thinking.
- Discipline – Discipline is essential to effective risk management, when to monetize gains or losses.
- Agility – Anticipate change to capture value during various market episodes, understand what you know, and what you think you know.
- Dynamic Allocation – Timely management of exposures based on market conditions coupled with the pursuit of differentiated sources of value can help generate required returns with less downside volatility over a market cycle.
Investment style – selective, active, and disciplined. We buy with conviction and sell with purpose – if we cannot do so, we are inclined to reduce risk.
Our analytical framework is flat and free flowing to promote collaboration. It is layered with:
- Fundamental approach – Macro, industry, sector, and micro level views to identify value gaps.
- Technical overlay – May provide additional insight on when and where to enter positions. Based on market conditions, potential mean reverting tendencies, seasonality, and measures of deviation from fair value.
- Risk Management – A key component of investment analytics. Constantly evaluate sensitivities to delta spread, beta, and convexity risk and consider exposures to extreme market dislocations through scenario analysis and value-at-risk measures.
No. We use some quantitative modelling to inform our investment decisions. However, those models are an input into the decision-making process, not the end point. We don’t invest on a purely quantitative basis as we do not want to lose sight of the underlying fundamental rationale.
- It is an opportunity to capture value when the price of an asset is above or below our estimate of fair value. That mispricing could be based on our macro risk view, the extent to which volatility should affect perceptions of value, financial imbalances including market overbought or oversold conditions, seasonality, policy impacts from changes in monetary and fiscal policy, event risks such as elections, and periods of volatility that can create forced selling conditions from which opportunities may arise.
- Value gaps are always in a state of flux and the holding periods required to capture them can vary considerably and affect their relative attractiveness.