Uncompromising Commitment

Pooled Retirement Plans

When Plan Sponsors have direct investment responsibility for Plan assets, unbiased council is mission critical. Our process begins with a detailed review of the Plan’s assumptions and interviews with the overall committee, individual committee members, and management. This initial step helps to ensure the investment portfolio is best designed to meet the specific needs and objectives of the client within a framework incorporating specific risk tolerances, objectives, and constraints.  We utilize asset/liability analysis when building investment portfolios.  We believe the best approach for establishing successful strategic asset allocation guidelines begins with a quantitative analysis of historical data (returns, risk, and correlation) as well as quantitative modeling (such as Monte Carlo simulations) of expected future results. Following the initial review, potential asset classes to be included in the portfolio are identified and defined based on their functional attributes (e.g., debt versus equity, domestic versus international, public versus private, liquid versus illiquid, inflation sensitive versus deflation sensitive) in order to identify those asset classes we believe offer the characteristics required for long-term investment success relative to the unique needs/objectives of the client.

After the appropriate asset classes have been defined, investment managers are identified to implement the asset class allocation decisions. We incorporate investment manager guidelines that establish the long-term performance goals/expectations, shorter-term performance characteristics, constraints on active management, and how each manager complements other investments in the portfolio.  Manager communication guidelines are defined to include any changes to the firm’s people, process, or philosophy.

Finally, we assist in drafting an investment policy statement which clearly outlines the goals and objectives of the portfolio, defines the roles of the participants, and defines “success” at both the portfolio and manager level.


For more information, please contact Jim Underwood at (205) 949-6055 or junderwood@welchhornsby.com.


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