Our Approach to Private Alternatives

Homrich Berg: Established in private alternative for 25+ years

Private alternatives have been a key part of Homrich Berg’s investment philosophy for over 25 years, and we believe they are as relevant today as they have ever been. 

With the potential for rising interest rates (or conversely, continued low interest rates), heightened public market volatility, and lingering inflation, we believe this is an excellent time for investors to consider private alternatives as a potential source of yield, diversification, or capital appreciation—or a combination of all three. 

The range of opportunities in this asset class is vast—and continues to expand. In fact, more than $23 trillion is expected to be invested in private alts by 2026, up from $13 trillion today. 

This magnitude of rising allocations toward alternatives supports our desire at Homrich Berg to educate investors about this asset class and continue to expand our clients’ access to private market opportunities.

As a leader in this space among independent fiduciary RIAs, our firm has been investing in private alts since the early 1990s. Since then, we’ve grown to be one of the leading independent RIA firms focused on these investments. The amount of client assets under management that are invested in private alternatives is nearly $1.5 billion (as of 3/31/2022), and we have a dedicated team of analysts who source, evaluate and monitor private investments. This includes CFA charterholder Dan Ziznewski, who oversees Homrich Berg’s sourcing, due diligence, and manager selection for private alternative asset classes and is a frequent commentator on the topic. 

Homrich Berg has access to a wide range of institutional brand-name firms as well as smaller niche players, including funds on the platforms of other wealth managers. Because we are a fiduciary independent firm, we are not driven by a motivation to “sell” a specific investment based on financial incentives. Rather, our sole focus is to invest with the managers we believe have the greatest potential to generate the best risk-adjusted returns for our clients. 

For those who might not meet the minimums of some private funds, we assemble internal funds of funds (with no extra management fee or incentive fee of any kind), which are diversified portfolios of alternative strategies. We’ve created nine such investment vehicles since 2000 with 100+ manager relationships inside those funds.

We work with each client to understand how best to implement alternatives into the overall financial plan. Depending on the client situation, investment options may differ. This includes understanding whether the client is an Accredited Investor, a Qualified Client, or a Qualified Purchaser, as defined by U.S. securities laws.

Learn more about the opportunities in this asset class and how our firm helps clients navigate this complex category. 

Contact us to learn more about how Homrich Berg can help you find the potential fits for your portfolio. 

 

 

KEY DISCLOSURES:  Above is a general discussion from Homrich Berg of current investment themes, asset classes, and specific investment segments. The discussion includes our opinions and forward looking thoughts and analysis as of 04/07/2022 and is not a guarantee of future investment results.

Actual client portfolios are often customized and do not necessarily represent an exact replication of, if any, allocation discussed. This presentation focuses on a wide range of economics and finance issues in order to educate you on the linkages between these topics and their impact on the overall economy and investment markets. The content of this presentation represents the opinions of Homrich Berg regarding these educational topics and should not be interpreted as direct investment advice or marketing of HB services. This presentation includes third party sources which we believe are reliable but have not been independently verified. Investing involves risks including loss of principal. This document does not constitute legal, tax accounting or investment advice.

Private alternative investments are not for every client. You must be qualified to invest in a private investment based on your net worth and/or other criteria, and you may qualify to invest in some alternative investments while not be allowed to invest in other alternative investments. Alternative investments are not risk-free, and there is no guarantee of achieving superior performance compared to similar liquid investments. Past performance is not a guarantee of future results for any investment. Please consult your Homrich Berg client service team to determine if private investments are suitable for your overall investment portfolio and to determine the appropriate allocation to private alternative investments if used in the portfolio.

Homrich Berg Acquires $1.5B RIA Oakbridge Partners

ATLANTA — April 4, 2022 — Homrich Berg (HB) is pleased to announce that the firm is expanding its presence in metro Atlanta with the addition of Oakbridge Partners, a $1.5 billion RIA based in Buckhead. When the deal closes, the combined assets under management are expected to be over $13 billion, building on HB’s position as the largest fee-only fiduciary wealth management firm in Atlanta.  The deal is expected to close at the end of May.

Warren Wick II, CFP®, CPA, William Cohen, JD, LLM, Jennifer Storey, CFP®, Eric Toole, CFP®, and Brandon Downs, CFP® will join the firm as Principals along with the rest of the team from Oakbridge Partners. The team brings a combined 100+ years of wealth management experience, adding depth to Homrich Berg’s expertise across a wide range of planning and investments issues.

Oakbridge Partners was founded in 1974 and, like Homrich Berg, is one of the oldest fee-only fiduciary wealth management firms in the Southeast. The move to join HB came as the firm had identified the need for greater infrastructure and resources to serve its client base as it continued to grow rapidly. As the largest independent fee-only wealth management RIA in Atlanta, HB provides the internal resources, executive management, private investments, and technology platform to allow the Oakbridge advisors to focus on clients and offer them an enhanced client experience.

“For us, every firm that joins HB must be a cultural fit and hold a strong belief in serving clients the way that we do by putting planning first,” says Thomas Carroll, president at Homrich Berg, who worked with both Toole and Downs previously. “With aligned firm philosophies and talent, we feel confident that the new team will be a seamless extension of our firm as we expand our strong presence in Atlanta.”

“We hit a critical point in our growth and had to make an important decision to either add infrastructure – including management, investment solutions, and technology – or to partner with a firm with those capabilities,” says Oakbridge principal William Cohen. “We have great respect for what our friends down the road at HB have built, and are excited to join the firm and be part of the firm’s growth trajectory in the Southeast.”

The Oakbridge Partners advisors serve more than 480 households across 19 different states.  The advisor team includes a talented group of younger associates and client service operations leaders.  The team will remain in its current office near HB’s Buckhead office until Homrich Berg’s current office expansion project at Three Alliance Center is complete in 2023. The estimated $1.5 billion of AUM associated with Oakbridge Partners includes roughly $300 million of AUM associated with Oakbridge Partners subsidiary Antares Wealth Management.

About Homrich Berg

Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients, including high-net-worth individuals, families and not-for-profits. Homrich Berg manages over $10 billion for more than 2,000 family relationships nationwide.

Tana Gildea

Help Your Kids March Toward Financial Security, Part 2

In a previous post, we talked about the importance of helping our kids March Toward Financial Security by having conversations about saving and how best to allocate a paycheck – or any money that comes their way.

We want to continue that theme by exploring ideas to help them save and invest on their own. An obvious first step is to open accounts like savings and checking accounts. You can walk into your own bank with your teen and open accounts like we did when we were kids. (Anybody remember having a “passbook?” Yes, I am that old.) Some banks allow teens to have their own account in their name prior to age 18; others may require a parent to be a joint account holder. Regardless, I recommend setting up balance alerts or some other method of monitoring because there are likely to be a few “oops” moments as your teen is learning the mechanics of banking, and overdraft fees are not cheap. (Although offer a good teaching moment!)

There are now many online options for teens to open an account from the convenience of a phone. Do your research and check ratings and user comments. Sites like NerdWallet and The Balance have ratings for such accounts and a quick online search will lead you to articles and resources to help analyze the options. The important part is to make sure that you help your child understand how these accounts work and what tools the online app has for monitoring and tracking.

The more interesting part comes in working through the mechanics of depositing paychecks and setting up automatic transfers to savings and investment accounts. What a gift it is to teens to get them primed to have a formula for receiving money:

  • X% to charity (if that’s important to your family),
  • Y% to the emergency savings account, and
  • Z% to long-term investing.
  • Maybe you add a C% for saving for college or a G% for paying for gas each week.

Teaching teens how to allocate their earnings to important goals and priorities sets them up for financial success throughout their lives. They don’t need a job to be introduced to this structure. It is great to set priorities for any money they receive.

This is also an opportunity to teach them about the differences between interest on a savings account and opportunities for dividends and investment growth in an investment account. Savings accounts have low interest rates because the safety of the principal is guaranteed – lower risk, lower reward (interest). Investing carries a risk of loss so must provide greater reward (higher interest rate, dividends, or the opportunity for increases in the value of the investment).

When your teen does have earned income[1] (wages from a job), we recommend they open a Roth IRA account. The beauty of a Roth IRA is that the owner can invest those funds and as long as they follow the Roth rules, they will never be taxed on the returns from those investments (called “unearned” income in tax lingo). Wow – that is a great deal! Interest, dividends, and capital gains over their lifetime build up and are never taxed (under the current tax rules anyway). Unearned income in a non-retirement investment account is subject to tax at “ordinary income” rates which go from 10% to 37%.

It is important to note that the contribution amount is limited to the lessor of earned income or the limit set in the Tax Code which is $6,000 for 2021 and 2022. Other important points:

  • The contribution can be made from any source so a parent could incent savings by matching the teen’s contribution. So, if the teen is going to contribute 20% of their income to the Roth, a parent could match that and gift the teen the money to contribute an additional 20%, thus, doubling the contribution to 40% of income. The limit would be that total contributions cannot exceed the $6,000 limit (2021 & 2022).
  • Everyone has until April 15th to make the contribution for the PRIOR tax year so you can fund 2021’s contribution until April 15, 2022. (They must have earned income for 2021, though, so if they just got a job this year, they would be funding their 2022 contribution.)
  • Your teen should report the contribution on his or her tax return for the year of contribution but is not required to. If no return was required to be filed or they have already filed for 2021, they can still make the contribution. They should track their contributions, and the custodian of the account will send a Form 5498 each year, usually in May, which they should keep for record-keeping purposes.

How should they invest those funds? That is a topic for a different day, but this is a great way to get teens interested in and exploring the differences between stocks, bonds, ETF’s, and mutual funds. All of the online investing platforms like Schwab, TD Ameritrade, and Fidelity have tools and resources to help people learn about investing and are reputable sources of information. Time is a real friend in terms of investing so starting early and investing consistently will make their march toward financial security that much easier.

As part of our Financial Foundations series, we have a free webinar on April 6th at noon on Investing Basics for our clients.  These webinars are a great resource for children of our clients to learn more about the basics of personal finance.

[1] Earned income is a tax-related term and indicates that wages and other such income is available for contributions to retirement accounts like IRAs and Roth IRAs while unearned income, like interest and dividends, is not available for such contributions.

Tana Gildea

Help Your Kids March Toward Financial Security, Part 1

As parents, we all want to raise kids to be independent and competent adults. We work hard to build their self-esteem, their confidence, and guide them through life’s many choices. However, we don’t always do a lot to build their financial skills. Sometimes this is because it’s difficult or uncomfortable to talk about money. Sometimes it’s because we don’t feel very confident in our own financial prowess and are concerned about questions that we may not know how to answer ourselves!

Regardless of the reasons, if we want our kids to be financially stable and secure, it’s up to us to start teaching them about money basics. One easy way to do that is to teach them about saving once they get their first job.

Before the paycheck comes, discuss these questions with your kids:

  • Does your family believe in tithing or making charitable contributions with those first dollars?
  • What percentage of income goes to “emergency” savings? (We recommend at least 10% for those with bills to pay but perhaps much higher for a teen.)
  • What percentage of income goes to long-term financial security? (We recommend at least 10% for those with bills to pay but perhaps much higher for a teen.)
  • Do you expect your child to contribute toward college expenses? What percentage should be saved for that expense?
  • How about for buying or maintaining a car? Do they have responsibilities toward that or for gas and insurance? It’s important to learn that those things get expensive!
  • Do they need to start paying for their cell phone or clothing?
  • How much should be free to spend on “wants,” fun, and entertainment?

If teens get a check and are free to spend it all on anything they want, they go down a spending path. Their wants can get bigger and bigger, and they can become less and less discerning about how they spend their money. When it is time to pay their own bills, it’s a brutal shift in their reality! Most of the money goes to taxes and living expenses! Where’s the fun stuff? (We know, parents feel the pain every payday.)

However, if they learn that earned income should be allocated to financial security first, to basic needs next, and then to “fun stuff,” they learn how life really works for adults. They are building up their own resources and starting to create financial security for themselves separate from their parents. We all hope this creates a feeling of pride and independence for them and puts them on a path to self-sufficiency and financial confidence.

We recommend that parents have these discussions with their teens, whether or not they currently have a job, and share their own beliefs and practices around saving. It’s ok to admit to not knowing all the answers but offering to work together to find good answers. It’s also important to admit to your own financial mistakes and regrets. No one has been perfect with their money, and there is always much to be learned from mistakes. It’s great to teach our kids the power of learning from successes and failures. Henry Ford said it best, “The only real mistake is the one from which we learn nothing.” You bet.

In future posts, we’ll continue to help our kids March Toward Financial Security by discussing the benefits of opening and funding checking and savings accounts, starting Roth IRA accounts, and using other tools to help them improve their financial skills.

Andy-Berg

Andy Berg Named To Atlanta Magazine 500 Most Powerful Leaders In 2022

Homrich Berg is pleased to announce that CEO Andy Berg was named to Atlanta Magazine 500 Most Powerful Leaders in 2022. Andy co-founded Homrich Berg in 1989 with the belief that high-net-worth individuals need access to conflict-free financial planning and investment advice. Over 30 years later, Berg has been named to the Atlanta Magazine’s 2022 Atlanta 500 list of influential business leaders.

Andy developed HB’s model for serving clients’ wealth management needs on a fiduciary, fee-only basis.  Andy offers his diverse clientele hands-on counsel and oversees the management and operations of the firm. Andy’s expertise spans the wealth management profession and includes financial and estate planning, taxation, and investment strategy.

Please see Important Disclosure Information Regarding Awards and Recognition

Robin Aiken, CFP® Named to Forbes America’s Top Women Wealth Advisors 2022

Congratulations to Robin Aiken, CFP® for being named to America’s Top Women Wealth Advisors, presented by Forbes. Robin has been named on this list several times now, and we could not be more proud of her dedication to guiding successful women towards their financial goals. See Robin’s ranking here.

Please see Important Disclosure Information Regarding Awards and Recognition

HB Invests in Risk Management Expertise

Our new Chief Risk Officer Kruti Bolick discusses the proactive approach we’re taking to risk management as we pass $10B in AUM and expand outside the Atlanta region via RIABiz

PLEASE SEE IMPORTANT DISCLOSURE INFORMATION REGARDING AWARDS AND RECOGNITION

This document is for information purposes only and does not constitute an offering of any product. Certain of the information herein is forward-looking in nature, such as forecasts, projections and other assessments of potential future outcomes. There is no assurance that the results contemplated by such statements will occur, or that actual results will not vary materially.

Understanding Lifestyle Creep — and How to Avoid it

As you make more money, it’s important to be mindful of lifestyle creep. But Principal Robin Aiken, CFP® also explains it’s OK to allow the occasional indulgence. Read more via Insider.

Everyone Is Moving to Florida. What That Means for Financial Advisors and Their Clients.

As many RIAs migrate to Florida, we always knew it was a natural fit for our expansion out of Georgia. Read more about this trend and our very own President Thomas Carroll’s take via Barron’s.

Meet Homrich Berg’s Newest Principals

Homrich Berg (HB) is pleased to announce the appointment of Ford Donohue, Jeff Rosengarten and Dan Ziznewski as the newest Principals for the firm. “Ford, Jeff, and Dan are important members of our HB team” said Andy Berg, co-founder and CEO of Homrich Berg. “My partners and I are proud to welcome them as the newest owners of HB.”

About Ford

Ford joined Homrich Berg in 2014 and currently leads our research and due diligence efforts in both hedge funds and equities.

Ford is the President and a Portfolio Manager of the Peachtree Alternative Strategies Fund, a fund of hedge funds originally created internally for HB clients who do not pay additional fees to utilize the Fund. In his role as President, Ford is in charge of managing the day to day operations of the Fund. In his role as Portfolio Manager, he leads the effort to source new investment ideas and leads the due diligence efforts on potential and existing portfolio investments. He has extensive experience in analyzing the various hedge fund strategies in which we invest including equity long/short, credit, macro, structured credit, and multi-strategy funds, among others.

About Jeff

Jeff joined Homrich Berg in 2011 after interning with the firm. Jeff earned two Bachelor’s degrees in Finance and Financial Planning from the University of Georgia. He is a CERTIFIED FINANCIAL PLANNER™ practitioner and serves as the firm’s expert on social security and annuities.

An active member in the community, Jeff is a member of Temple Sinai and recently served on the Board of Trustees and currently serves on the Endowment Investment Committee. Jeff is an active member of the North Atlanta Tax Council and the National Association of Personal Financial Advisors (NAPFA) study group for young, fee-only advisors in Atlanta. Jeff also serves on the boards of the Atlanta Tax Forum and University of Georgia Financial Planning Alumni Board.

About Dan

Dan joined Homrich Berg in 2014 and currently oversees sourcing, due diligence, and manager selection for various private alternative asset classes, including private equity (buyout, growth equity, and venture capital), private debt, natural resources, and other opportunistic strategies. His research and due diligence efforts are implemented into HB’s proprietary funds of funds and client portfolios directly.

Prior to HB, Dan earned his MBA in finance from Emory’s Goizueta Business School, where he served as a Fellow in Emory’s Center for Alternative Investments. Prior to Emory, Dan spent four years at Portfolio Advisors, a private equity, private real estate, and private credit investment firm. As a Senior Associate he performed due diligence on private equity fund managers for the firm’s funds of funds and advisory clients.