Berwyn, Pa., March 23, 2011 – Brinker Capital, a leading investment management firm, today announced the introduction of its Crystal Strategy 1 to the institutional market. With a focus on bringing diversification, transparency, and liquidity to alternative investments, the Brinker Capital Crystal Strategy is a proprietary product designed to help institutional investors preserve their capital in down markets, while capturing appreciation in up markets. Crystal Strategy’s unique construction, one of the investment industry’s first, offers a global macro portfolio embedded in a separately management account (SMA) format.
Brinker Capital is eyeing smaller foundations, endowments, and pension plans in the $10 million-$100 million asset range looking to increase their global macro allocations in a format that doesn’t have of traditional hedge fund constraints.
Crystal Strategy has been available to financial advisors since September 2010. Brinker Capital, however, has been running the portfolio for the past two years to test its performance under a variety of market conditions.
“The reception to Crystal Strategy among financial advisors has been overwhelmingly positive because it fills an investment void in their high net-worth client portfolios and has a sophisticated built-in risk management overlay,” said Brinker Capital President John Coyne. “With that in mind, coupled with research indicating macro hedge funds are the new aggregators of choice, it made perfect sense to offer Crystal to institutional investors.”
Mr. Coyne also noted that Crystal Strategy recently signed on its first institutional pension plan client.
Using tactical and strategic processes, Brinker Capital broadly allocates the Brinker Capital Crystal Strategy to invest across six major asset classes, including domestic and foreign equity, fixed income, absolute return, real assets, private equity, and cash. Within these asset classes, Brinker Capital employs a diverse array of investment vehicles, including individual stocks, exchange-traded funds, closed-end funds, open-end funds, and Master Limited Partnerships, among others. In addition, highly focused stock selection is used, seeking to further increase the portfolio’s risk-adjusted rate of return.
By focusing the individual stock holdings on a limited number of stocks that represents its smartest ideas, Brinker Capital believes clients have the potential to receive enhanced returns with controlled portfolio risk.
The Brinker Capital Crystal Strategy performs much like other absolute return strategies, but has lower fees compared to many vehicles, and daily liquidity. Furthermore, institutional investors will have daily transparency into their account holdings. The strategy is constructed by merging top-down macroeconomic trends with a bottom-up strategy and stock selection. The target minimum is $1 million.
In determining the portfolio’s major asset allocation, Brinker Capital starts with a “null hypothesis,” meaning that no individual major asset class deserves a higher weight than any other. From there, based on factors such as valuation, technical trends, sentiment and risks, Brinker Capital strategically overweights the areas they believe will generate the best risk-adjusted return.
Also of major significance are the investment requirements of institutional investors, active risk containment to preserve capital in down markets, while capturing appreciation in up markets, closely parallel those of the financial advisors who have found this strategy to be so beneficial.
“There is a clear trend of endowments allocating more assets towards alternative investments,” said Thomas K.R. Wilson, Brinker Capital’s Managing Director of Institutional Investments and Private Client Group. “Since 2004, the average endowment’s alternative allocation has more than doubled. However, endowments have more concerns today than ever before with liquidity and transparency, all of which are alleviated by Crystal Strategy because of its daily liquidity and full transparency.”
Said Mr. Coyne: “Recent comments by NACUBO president John Walda that smaller endowments should not try to emulate their larger peers because of issues related to liquidity, transparency, and diversification, we feel can in part be addressed by the Crystal Strategy.”
About Brinker Capital
Brinker Capital, Inc. is a leading independent investment management firm which provides managed account investment programs to individual and institutional investors through financial advisors. Brinker was founded in 1987 by Charles Widger and is located in suburban Philadelphia . Visit Brinker’s website at www.brinkercapital.com.
