Constellation Plots Global Growth

05-07-2010 | Source: Private Asset Management

Multi-family office Constellation Wealth Advisors is staffing up in its existing New York and Menlo Park, Calif., hubs and plotting a Los Angeles office and potential future locations in Europe and Asia. Paul Tramontano, co-ceo, told PAM the firm just added three advisors in New York and is currently talking to several advisors in California. “We want to attract both advisors and those on the support side,” said Tramontano. The firm is branching out on the heels of its three-year anniversary.

It most recently tapped Christopher Smith, a 25-year Wall Street veteran from RBC Capital Markets, as principal, responsible for the ultra-high-net-worth business in New York. It also hired Peter Sayer from Bernstein Global Wealth Management and Mark Mulvoy from Merrill Lynch Global Wealth Management as advisors. As for global growth, Tramontano added he’s most interested in setting up shop in Asia or Europe, but declined to name particular regions as plans aren’t finalized.

Tramontano said the firm is eyeing clients primarily in the $25-250 million range and currently has roughly $4 billion in assets under management. It targets a mix of entrepreneurial clients and multi-generational wealth. “The benefit of having worked with third and fourth generation families is that when you get some of the newer folks, many of the family issues remain the same,” added Tramontano. He also noted that the firm’s biggest competitors are independent wealth management firms.

On Investing

Constellation predominately uses outside managers. Sam Katzman, cio, noted that the firm is allocating a portion of clients’ portfolios to make money on the long and short side. In the hedge fund portion of a portfolio, about 70% is allocated to long/short equity and 15% is allocated to credit and global macro strategies. Clients are increasingly concerned about money market funds and are asking what to do with cash. “We’ve been careful to vet the money market funds, trying to get some yield by using the right funds and using short-term strategies,” said Katzman.

The firm’s manager due diligence process entails looking at a manager’s infrastructure and business process. It reviews managers’ trades on a weekly basis in the event the firm has to act quickly to drop a manager or add a new one to the platform.

Special Touch

The MFO has continued to grow since its 2007 inception by working with families and helping them work with their other advisors. “We’re all things to some people,” explained Tramontano. He said families often choose to link up with the MFO because of its customized reporting system, but others are attracted to aspects such as negotiation of employment contacts or creation of severance packages for family staff. It will also look to outsource certain aspects of servicing families, such as drafting documents and wills, and will work closely with outside accountants and law firms to further the process along.