| Plimsoll Mark Capital’s asset management services revolve around a unique framework that wealthy families from all over the globe have been using for years. The over-arching goal of the strategy is to generate superior returns while mitigating risk.
The elegance of the approach is found in its simplicity where the enduring financial principles of capital preservation, liquidity and transparency are emphasized. Plimsoll’s dynamic core/satellite approach places investments into two distinctive universes – the core and a higher risk non-core periphery.
The initial focus is on the lower risk core where the primary purpose is to preserve and prudently grow a family’s money. In the lower risk core, there are contingency investments that provide the cash needed to fund living expenses and to meet shorter term obligations. To protect against the twin threats of inflation and deflation, a distinctive set of investments is held to hedge against each of these dangers. At the heart of the core and to provide for capital appreciation, is a foundation investment in a carefully selected and appraised group of highly rated growth companies.
Outside of the core, on the higher risk periphery, sit a set of very specialized and expertly vetted investment opportunities in non-traditional strategies like private equity, hedge funds, emerging markets, high yield, micro cap stocks and venture capital that are integrated only after thoughtful consideration.
The Risk Return Relationship
The conventional relationship between risk and return is linear; higher risk results in higher return and lower risk results in lower return.
The Plimsoll risk/return relationship is multi-dimensional. Higher risk levels often result in lower than expected returns. By balancing asset allocation across carefully selected Core and Non-Core capabilities, it is possible to achieve controlled risk and attractive absolute total returns.
Diversification
The conventional view of diversification is that a more diversified portfolio results in lower risk and a less diversified portfolio results in higher risk
Plimsoll believes that higher diversification often translates into increased risk and lower than expected returns. By balancing asset allocation across carefully selected Core and Non-Core capabilities, it is possible to achieve controlled risk and optimal portfolio diversification.
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