FIRM STRUCTURE
The Concord Advisory Group, Ltd. (CAG) was established in 1988 to provide
investment consulting services to institutional clients. CAG currently has a total of 34 full
and part time employees, including 12 associates that perform investment advisory
functions. The remaining 22 employees consist of research, analytic, and administrative
personnel. CAG’s principal office is located in Princeton, NJ. CAG has a regional
satellite office located in Orlando, FL.
CAG is independently owned and operated and does not have affiliations with any other
investment managers, broker/dealers, solicitors, placement agents or finders, either on
an operational or ownership basis.
CAG was incorporated in New Jersey in 1990 and is majority owned by the partners
Christopher E. Cahill and Scott Santin, and other employees own a minority interest.
FIRM SERVICES
CAG only provides non-discretionary investment advisory services, including (1)
investment policy statement preparation, (2) asset allocation, (3) recommendation of
underlying investment vehicles and/or managers, and (4) monitoring services, each as
further described below. CAG provides these services either separately or in
combination. The primary clients for these services are: pension, 401(k) and profit
sharing plans; corporations, healthcare and insurance companies; charitable
organizations, endowments and foundations; religious organizations; and family offices.
Upon engagement CAG will assign a primary (or “lead”) consultant to be the direct
contact with the client on an ongoing basis.
1. Investment Policy Statement Preparation (hereinafter referred to as "IPS"):
CAG develops a client’s policy by consulting with the client to determine the client’s
need(s) for the funds (i.e. liabilities) and when these needs will occur. From there, client
risk tolerance is assessed, not only in terms of how much volatility a client can tolerate
financially, but also how much volatility can be tolerated emotionally. These factors drive
the asset allocation process, in which asset classes are recommended, along with the
suggested weighting among such asset classes. CAG will then prepare a written IPS
identifying the needs, goals and policies as discussed with the client. The IPS also
generally lists the criteria for selection of investment vehicles and the procedures and
timing interval for monitoring of investment performance.
The following issues are covered in a typical IPS:
Purpose, needs, and time horizon of the investment assets
Responsibilities of interested parties
Risk / Return expectations
Asset allocation targets and ranges
Investment guidelines for each asset class
Performance Benchmarks
Risk Controls
2. Asset Allocation:
CAG provides assistance to clients in formulating long-term, strategic asset allocation
plans. Based on a client's underlying liability structure, CAG conducts asset allocation
optimization and modeling. The output of the process sets the parameters for the future
risk and return expectations. CAG’s asset allocation recommendations are formulated
utilizing our firm’s capital market / asset class risk and return assumptions. Our capital
market assumptions models take into consideration both long term historic index return
data for the asset classes being utilized in the modeling scenarios, as well as current
forecasted economic and market conditions (typically 3 - 5 years). Most of this data is
derived from consensus forecasts gathered from leading global economic and research-
oriented investment management firms. CAG will typically illustrate optimizations using
both short term and long term data. This allows clients to view both long term norms
and near term projections, and set their expectations accordingly. CAG generally
revisits the capital market assumptions every three months. We believe in keeping the
models fairly consistent, and adjusting the data when needed.
3. Recommendation of Managers and Investments:
Prospective clients should note that all investment strategies involve risk.
Investing in securities, including mutual funds, involves risk of loss of both
income and principal which clients should be prepared to bear.
When appropriate, CAG will review various independent investment managers and will
make a recommendation as to which manager(s) are appropriate to implement based
upon the client's IPS (or applicable portion thereof). In addition, CAG may from time to
time, review various investments (typically consisting of mutual funds, commingled
trusts, limited liability companies and private partnerships) to determine whether such
an investment would be an appropriate vehicle to implement based on the client’s IPS
(or applicable portion thereof). CAG does not charge a fee for recommending managers
and/or investments when CAG is engaged in a full service strategic advisory consulting
capacity. Please see Item 5 - Fees and Compensation.
In performing an investment manager/and or investment vehicle search for a client, our
firm utilizes both quantitative, as well as qualitative criteria, in
selecting finalists for our
clients to interview. CAG will review various investment vehicles and/or separately
managed portfolios offered by the investment manager. A recommendation will be
made based on a “best-fit” analysis based on client needs. The quantitative criteria
include items such as long-term performance, consistency of returns, risk
characteristics, a review of the investment manager’s overall performance in both up
and down markets and their performance versus benchmarks and peers. The qualitative
criteria include, among other considerations, strength of personnel, structure of
investment process, client servicing and pricing. In conducting an investment manager
search CAG will run preliminary screens from both internal and external databases. We
will rank finalist firms based on our view of what manager may achieve the “best client
fit.”
CAG does not have discretionary authority to hire or fire managers. We only
recommend managers to our clients that pass our selection criteria. The client, in
consultation with our firm, is responsible for the final hiring or firing decision.
CAG bases its investment manager research on data from outside vendors, such as
eVestment Alliance and Morningstar Direct, and, as such, we rely on the accuracy of
their data. Clients should also be aware that past manager performance/returns do
not guarantee future performance. Please see below for CAG’s ongoing monitoring of
investment managers.
4. Monitoring of Investment Performance and Managers:
Client investments will be monitored based on the procedures and timing intervals
delineated in the client’s IPS. Our consulting staff will supervise the client's portfolio and
will make recommendations to the client as market factors and the client's needs dictate.
Our analytical staff completes our portfolio analytics work in conjunction with our
research staff. CAG employs a full suite of portfolio analytics, both in terms of holdings-
based analysis and returns-based analysis. We use these tools to analyze performance
attribution, style drift, and study short and long term performance patterns or cycles. In
addition to operating and maintaining our proprietary system, CAG utilizes software
services from Morningstar and eVestment Alliance for asset allocation, style analysis,
and performance attribution. In addition to downloading monthly and quarterly manager
information to our database, all investment managers in which CAG’s clients are
actively engaged also receive a questionnaire that they are required to complete on a
quarterly basis. This questionnaire covers performance, organizational changes, and
investment process. CAG uses this information received directly from the investment
managers to verify the information housed within our proprietary database.
Our research staff conducts ongoing due diligence meetings with investment managers.
Our associates perform periodic on-site due diligence meetings for actively monitored
investment managers that invest client assets. These meetings offer the opportunity to
speak face-to-face with key decision-makers at the firm, including portfolio managers,
analysts, operations, and compliance personnel. On-site meetings are supplemented by
investment manager meetings at our office as well as conference calls throughout the
year.
Our firm utilizes a “Degree of Concern” ranking system for monitoring investment
managers. We may recommend that an investment manager be terminated or placed
on a formal watch list (under review) depending on the circumstances. The basic
causes of an increase in our degree of concern can be boiled down to one or a
combination of the following scenarios: performance-related, key personnel departures
from the investment team, organizational concerns/uncertainty, and a weak investment
process/changes to the investment process.
If we recommend that an investment manager should be terminated, we will assist in
selecting a new investment manager. However, the move to a new investment manager
and/or program is at the discretion of the client.
5. Monitoring of Out Sourced Investment Programs (OCIO)
Concord will oversee the performance of the outsourced investment program to
compare the portfolio performance with standard indices, OCIO peer groups, and the
impact from manager selection and the OCIO’s strategic / tactical asset allocation
advice. The cost structure and efficiency of the program will be analyzed and Concord
will negotiate fee structures. Review and revision of the client’s Investment Policy,
including investment objectives and guidelines, and evaluation of the OCIO’s
compliance with investment guidelines will be performed. An executive summary of
Concord’s findings is delivered quarterly, with personal presentations as needed.
PROJECT BASED SERVICES
Portfolio Review; Manager Searches; Defined Contribution Plan Reviews; RFP
Management (review candidates, evaluate, summarize, negotiate fees); Cost Analysis.
ASSETS UNDER MANAGEMENT
As of December 31, 2023, CAG had approximately $35.3 billion in non-discretionary
assets under management.