Frequently Asked Questions
We take our client relationships seriously and want to earn your trust. Founded on the belief that long-lasting relationships lead to successful investment programs, Fourth Street values continuity. We have purposefully structured our firm to retain our best and brightest employees.
Our senior consultants are owners of the firm and have a vested interest in the long term success of Fourth Street. Each consultant has relationships that span two decades or more. In addition, our firm has developed competitive compensation and employee benefits packages and is committed to professional development. These efforts to retain our best employees have proven successful as all of our Associate Consultants started their careers as Analysts and worked their way up in our firm. The average tenure of our Associate Consultants is eleven years.
Finally Fourth Street embraces a team approach. Each team is comprised of Senior Consultant, Associate Consultant and Analyst. Client decisions are discussed at a group level and vetted with our Investment Committee. Associate Consultants work directly with our clients and often accompany the Senior Consultants to client meetings. This structure ensures that all members of your team are well-informed about your organization. In the event that there would be a change in leadership on your account, it would be a member of our team with whom you have worked with in the past.
Fourth Street receives 100% of its revenue from its clients. We receive no revenue from fund managers or investment products, so you know exactly how much you are paying for our consulting services. This fee structure enables us to focus on optimal investment strategies that improve portfolio performance. Other consulting firms’ programs may limit investment options to proprietary platforms or investment products that provide them with additional compensation. Fourth Street's fee structure promotes total objectivity and ensures that we sit on your side of the table.
A long-term, strategic asset allocation plan is the most significant contributing factor to the performance of an investment program. While we believe in highly diversified portfolios, our approach is not to simply check off each style box but rather to optimize the return and risk profile by constructing a harmonious blend of asset classes and investment styles. Having the discipline to maintain this long-term approach through many different market environments is the key.
The following are three of the most important ways that Fourth Street adds value to your portfolio.
- Asset Allocation: We make every effort to ensure that your portfolio is structured with an appropriate level of expected return and volatility, commensurate with the length of your investment horizon, tolerance for loss, and cash flow projections. Once a long-term asset allocation strategy is developed, we will allow the allocations to fluctuate within a reasonable range around the long-term targets, and rebalance when required by the client's investment policy. We always monitor the performance of asset classes and investment styles relative to one another and relative to their own histories.
- Manager Selection: We believe active management risk should be focused on those asset classes where active management has a proven track record of success. If, over time, the median active manager in a specific asset class has consistently outperformed its benchmark, after fees, then there is an opportunity to add value in that area of the market. Studies have shown that active management has not added value in the most efficiently priced asset classes. In these areas we may recommend low cost index funds or ETFs to capture the beta of the asset class, while minimizing the costs of the investment program. Our manager selection process aims to identify managers with proven track records within their specific areas of expertise, which further increases the probability of outperformance.
- Lower costs: There are many different fees associated with the management of an institutional investment portfolio. Investment management fees, either paid out of pocket or embedded in a mutual fund’s net asset value, custody, and consulting fees are just a few examples. Our independence and open-architecture structure gives us the ability to identify the most qualified service providers. We complete a comprehensive fee analysis and aggressively negotiate fees.