Wealth Management

Aegean
Wealth Management ^®

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Client Case Studies

The following case studies should give you or your institution an idea about what our firm does and how we operate and if you can benefit from our services.

Case Study 1
We were contacted by a man who had a son who just inherited 120,000 Euros from a deceased grandparent. The young man was 16 years old. The first thing the young man wanted to do was to buy an expensive car with a good portion of the money. The father contacted us because he wanted to know what should be done with the money. Until now the father had no experience in money management. He was employed by a company as a quality control manager. We met with the father and the son and explained to the son that a such a sum invested properly over the next 30 years could reduce the amount of time he would have to spend in the workforce. The pitch stuck and the young man suddenly became interested in the financial markets and stock trading. We made a discreet suggestion to the father that the young man open up a personal brokerage account online with 1000 Euros so that he could gain real experience losing money in the financial markets. The other 119,000 Euros we recommended to be put in an asset allocation of index equity funds to be rebalanced once per year if necessary. The deployment of the 119,000 Euros was undertaken over a three year period to dollar cost average out market gyrations. Both clients were satisfied with the plan and the results.

Case Study 2
We were contacted by a middle aged man 45, who had just sold a small software company. He was disappointed in the amount he received on the sale. He had expected to get more as he had spent the last 10 years of his life into building this business. The net amount of the sale after taxes was 1,200,000 Euros. As he wanted to achieve a relatively high standard of living he wanted to start another company, possibly even another software company. But he did not want to use any of the proceeds of the sale of his first software company for this purpose. He wanted to be sure that he had something to retire with. This client had a good grasp of the capital markets, private equity funds, and venture capital funds, but did not have the time or interest in following capital markets or investment trends. This client also had a strong bias against money managers and financial institutions that we would have expected to see from someone who was the victim of investment fraud or bank failure. When questioned about his experience with investment managers the client told us that he read about people who were swindled. And he did not want this to happen to him. As the client was extremely skeptical about financial institutions, we recommended that he keep around 300,000 Euros in hard assets (gold) in physical holdings hidden in his home or allocated outside his home country or a combination of both. We recommended that he dollar cost average the gold purchases over a one or two year time frame. We also recommended that he have two different interest bearing bank accounts in two stable currencies in two politically stable banking havens outside his country to hold cash. The amount in each of these accounts was to be 150,000 Euros. We recommended that he split the remainder, 600,000 Euros of the money among a global dividend yielding equity fund and a global bond fund. He recommended that he hold the fund interests in two separate institutions in two separate countries. For the two funds, we prepared a purchase schedule that would span three years to average out the cost. As the client was his own venture capitalist using sweat equity as capital, it did not make sense to put any money in venture capital funds. His amount of capital did not allow for enough diversification in private equity or venture capital anyway.

We black swan tested the proposed portfolio with the client as follows by posing the following scenarios to him.

If all fiat currencies dissipated and the world financial system collapsed, he would still have his gold.

If one of his banks were to fail, he would still have another bank account, gold at home and in a safety deposit box, and his fund holdings.

If equities and bonds did poorly, he would still have his cash and gold.

The only way he could lose everything is if his house was robbed of his hard assets (gold), his allocated gold was stolen, and both of his banks failed and did not pay out in the future, and somehow he lost both his funds.

Or

Through some political seizure or theft someone came into his house and found his gold and information about his financial holdings and liquidated and transfered everything before he had a chance to stop it.

For this last scenario, we recommended that the client keep information about his holdings either only in his head, or distributed in very good hiding places throughout his home or somewhere else.

The client was very satisfied with the portfolio proposal. The client was also happy with the added privacy that the proposed portfolio would give him As the client was very eager to get started implementing the portfolio and as he had only one bank account in his home country holding his 1,200,000 Euros, we opened the two bank accounts with him right away and transfered half his money into each account. Then all gold purchases and fund transactions emanated from these accounts over the next few years. As the client's mind was at ease with his new financial structure, he could now focus on creating another software company and accumulating more wealth and achieving his new lifestyle without the burden of worrying about losing his life life savings.