Background
An American family with investment assets managed across three separate wealth management firms had no independent oversight of their combined portfolio. Each manager had been appointed at a different point over the preceding fifteen years and was operating within their own mandate, with no common benchmark, no consolidated risk assessment and no regular independent review.
The family had become aware that the three mandates overlapped considerably in terms of asset class exposure and were concerned that they were carrying more concentration risk than they had intended. They were also uncertain whether the fees they were paying across all three relationships, which totalled approximately USD 680,000 per year, were justified given their combined performance.
A family member with some professional investment experience had raised these concerns internally, but the family recognised that an objective assessment required someone without a prior relationship with any of the existing managers.
What Lockmore Capital Did
Lockmore Capital conducted a comprehensive independent review of the family's investment arrangements by examining each mandate individually and then assessing the three portfolios on a consolidated basis. The review covered asset allocation, risk exposure, fee structures, performance attribution and the degree of overlap between the three managers' positions.
The findings confirmed the family's concerns about concentration. At the consolidated level, the portfolio had significantly greater exposure to a small number of sectors than any individual mandate suggested. This was because each manager had arrived at similar positions through their own process without any visibility of what the others held. Approximately 42% of the portfolio was concentrated in just two sectors (technology and healthcare) against an intended allocation closer to 25%.
Lockmore Capital presented the findings directly to the family and then worked with them to develop a revised oversight framework. The teams established clear mandates for each manager that reduced overlap, setting consolidated benchmarks against which aggregate performance would be measured, and putting in place a regular independent review cycle going forward. Two of the three manager relationships were renegotiated in terms of fee structure whilst one mandate was restructured to address the concentration issue directly. The revised fee arrangements reduced total annual costs from approximately USD 680,000 to USD 490,000.
Outcome
The family moved from three independently operating mandates with no consolidated governance to a coherent, independently overseen investment framework. Concentration risk was reduced and fee arrangements were brought into better alignment with what the family was receiving in return. The ongoing review cycle gave the family confidence that their investment arrangements were being assessed consistently over time, rather than only when a specific concern arose.