Power Asset Management™: Unique Capital Preservation

Investment Approach

We strive to be a partner. At Power Asset Management, we pride ourselves on knowing our clients. Direct lines of communication between clients and the Chief Investment Officer – the person who structures each portfolio – is what sets our firm apart from larger institutional money managers. It is this element that ensures that the investment policy and client goals are obeyed at all times. We are committed to having open lines of communication and all clients have direct access to Mike Power, the firm’s founder and CIO.

Power Asset individually tailors high quality taxable, tax-free, and blended portfolios to meet our clients’ specific needs. Safety of principle and secure income is our goal and is not sacrificed in pursuit of performance. While we focus on asset protection, performance is achieved with credit research and diligent portfolio duration analysis that is within State guidelines and the investment policy mandate.

We focus on asset protection, maximizing after-tax and risk adjusted returns based on our view of appropriate duration positioning on the Yield Curve and intense credit research.

Strategies

Attentive Barbell Strategy when opportunistic

Active barbell strategy that is particularly beneficial to tax-free clients.
Takes advantage of the “retail” buying patterns of typical municipal bond buyers, which emphasizes a “laddered” approach.
We typically over-weight our allocation to certain parts of the yield curve and buffer our weightings in the 1 to 5 and 10 to 15 year range to ensure proper liquidity and better returns.

Blended Asset Allocation

Blended portfolios are typically for clients who experience tax bracket changes, liquidity needs or are subject to alternative minimum tax.

Duration Management

We carefully manage the duration of all portfolios to match market dynamics with clients’ investment policy statements.
Each client’s personal needs and goals ultimately determine the most appropriate portfolio duration.

Structure Management

Structuring portfolios with the appropriate durations, credit quality and blend of callable and non-callable securities is critical for maximizing risk-adjusted returns and providing protection in a rising interest rate environment.

Execution

Block Trades Enable Institutional Pricing

We realize the power of “blocking up” trades to receive the benefit of institutional pricing.
We buy blocks of securities that are part of large issues as institutions often seek out these holdings to “match” to their current positions.
Creates greater demand and therefore better liquidity for our clients.

Relationships with Research Analysts, Brokers and Traders

Our broad industry relationships and significant “sell side” experience is invaluable when it comes to execution and obtaining market color.
Close relationships with analysts, traders and bond brokers, which are based on many years of trust, allow us to see product and gain market insight typically unavailable to other fixed income managers.
When capitalizing on market inefficiencies, it is not always what you know but who you know that drive superior execution.
Our goal is to buy the right bond at the right price at the right firm at the right time!

Competitive Advantage

We listen

We strive to intimately know our client’s objectives.
We read and help formulate appropriate Investment Policy Statements (IPS).
We strictly adhere to the IPS within our active management strategy.

We analyze and work every transaction

Before we make a trade, we analyze every transaction to make sure that making a trade is better for the client than holding the security.
For each transaction, we go out to the Street and look at multiple inventories to make sure we buy the right bonds at the right price.
We are patient; if the price isn’t right, if supply-demand is unfavorable, if holding the security is more beneficial, we will wait to make the trade.

We take advantage of market opportunities

Money market swap opportunity (for tax-free clients)

We attempt to add pre-refunded municipal bonds to client portfolios if the price is right.
Pre-refunded bonds are typically backed by U.S. Treasury securities and thus have lower yields/higher prices than other AAA-rated municipal bonds.
In addition to the credit enhancement, there is also a money market swap opportunity;

A bond is considered “money market eligible” when its maturity drops to 13 months
At this point, money market funds become eligible to buy them, creating huge demand for the securities
We look for reasonably priced pre-refunded bonds that span 2 to 6 years in maturity as these securities will ultimately become “money market eligible”

Supply and demand anomalies

Attentive bond managers can take advantage of supply and demand anomalies for the benefit of their clients.
Examples include;

April 15 tax day
June and July heavy redemption months
End of year bonuses
Foreign government demand for U.S. Treasuries
Equity market inflows/outflows
New issue market

Custody agnostic

We do not custody our client’s assets
We are able to manage our client’s bond portfolios through their custodian of choice

Customize reporting to meet the client’s need

Portfolio summaries, transactions, strategies
Per trade transaction details for any period upon client’s request

Creation of detailed, strict investment policy statement

We will work with you to create a detailed investment policy statement for your investment managers to follow

High net worth families ARE our business

All of our clients are high net worth families
We intimately understand our client’s wants, needs, goals and investment philosophies
We do not focus on insurance companies or pension funds which require fundamentally different management models

Extensive relationships benefit our high net worth families

We have strong relationships with people and institutions that can directly benefit each of our clients
Accountants, Lawyers, Financial Managers, Asset Managers, Private Equity, Real Estate, Trust Consultants
Wall Street Research, Investment Banking and Venture Capital relationships


	Investment Approach At Power Asset Management, we pride ourselves on knowing our clients. Direct lines of communication between clients and the Chief Investment Officer – the person who structures each portfolio – is what sets our firm apart from larger institutional money managers. It is this element that ensures that the investment policy and client goals are obeyed at all times. We are committed to having open lines of communication and all clients have direct access to Mike Power, the firm’s founder and CIO. Power Asset individually tailors high quality taxable, tax-free, and blended portfolios to meet our clients’ specific needs. Safety of principle and secure income is our goal and is not sacrificed in pursuit of performance. While we focus on asset protection, performance is achieved with credit research and diligent portfolio duration analysis that is within State guidelines and the investment policy mandate. We focus on asset protection, maximizing after-tax and risk adjusted returns based on our view of appropriate duration positioning on the Yield Curve and intense credit research. Strategies Attentive Barbell Strategy when opportunistic Active barbell strategy that is particularly beneficial to tax-free clients. Takes advantage of the “retail” buying patterns of typical municipal bond buyers, which emphasizes a “laddered” approach. We typically over-weight our allocation to certain parts of the yield curve and buffer our weightings in the 1 to 5 and 10 to 15 year range to ensure proper liquidity and better returns. Blended Asset Allocation Blended portfolios are typically for clients who experience tax bracket changes, liquidity needs or are subject to alternative minimum tax. Duration Management We carefully manage the duration of all portfolios to match market dynamics with clients’ investment policy statements. Each client’s personal needs and goals ultimately determine the most appropriate portfolio duration. Structure Management Structuring portfolios with the appropriate durations, credit quality and blend of callable and non-callable securities is critical for maximizing risk-adjusted returns and providing protection in a rising interest rate environment. Execution Block Trades Enable Institutional Pricing We realize the power of “blocking up” trades to receive the benefit of institutional pricing. We buy blocks of securities that are part of large issues as institutions often seek out these holdings to “match” to their current positions. Creates greater demand and therefore better liquidity for our clients. Relationships with Research Analysts, Brokers and Traders Our broad industry relationships and significant “sell side” experience is invaluable when it comes to execution and obtaining market color. Close relationships with analysts, traders and bond brokers, which are based on many years of trust, allow us to see product and gain market insight typically unavailable to other fixed income managers. When capitalizing on market inefficiencies, it is not always what you know but who you know that drive superior execution. Our goal is to buy the right bond at the right price at the right firm at the right time! Competitive Advantage We listen We strive to intimately know our client’s objectives. We read and help formulate appropriate Investment Policy Statements (IPS). We strictly adhere to the IPS within our active management strategy. We analyze and work every transaction Before we make a trade, we analyze every transaction to make sure that making a trade is better for the client than holding the security. For each transaction, we go out to the Street and look at multiple inventories to make sure we buy the right bonds at the right price. We are patient; if the price isn’t right, if supply-demand is unfavorable, if holding the security is more beneficial, we will wait to make the trade. We take advantage of market opportunities Money market swap opportunity (for tax-free clients) We attempt to add pre-refunded municipal bonds to client portfolios if the price is right. Pre-refunded bonds are typically backed by U.S. Treasury securities and thus have lower yields/higher prices than other AAA-rated municipal bonds. In addition to the credit enhancement, there is also a money market swap opportunity; A bond is considered “money market eligible” when its maturity drops to 13 months At this point, money market funds become eligible to buy them, creating huge demand for the securities We look for reasonably priced pre-refunded bonds that span 2 to 6 years in maturity as these securities will ultimately become “money market eligible” Supply and demand anomalies Attentive bond managers can take advantage of supply and demand anomalies for the benefit of their clients. Examples include; April 15 tax day June and July heavy redemption months End of year bonuses Foreign government demand for U.S. Treasuries Equity market inflows/outflows New issue market Custody agnostic We do not custody our client’s assets We are able to manage our client’s bond portfolios through their custodian of choice Customize reporting to meet the client’s need Portfolio summaries, transactions, strategies Per trade transaction details for any period upon client’s request Creation of detailed, strict investment policy statement We will work with you to create a detailed investment policy statement for your investment managers to follow High net worth families ARE our business All of our clients are high net worth families We intimately understand our client’s wants, needs, goals and investment philosophies We do not focus on insurance companies or pension funds which require fundamentally different management models Extensive relationships benefit our high net worth families We have strong relationships with people and institutions that can directly benefit each of our clients Accountants, Lawyers, Financial Managers, Asset Managers, Private Equity, Real Estate, Trust Consultants Wall Street Research, Investment Banking and Venture Capital relationships