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Adaptive Valuation Strategies is our own distinctive strategic asset allocation methodology, which we use to customize a long-term investment plan for you.
By assembling an appropriate mix of equities, fixed income, cash, and other asset classes, you can potentially enhance your core portfolio’s returns and help manage risk.
Adaptive Valuation Strategies (AVS) is Citi Private Bank’s own distinctive strategic asset allocation methodology, which is built upon key principles from our Investment Philosophy.
AVS’s aim is to maximize your returns given the amount of risk you are willing to take.
Our investment process therefore begins by gaining an understanding of your return goals, risk tolerance, and your liquidity, geographic, and currency preferences.
We then customize a long-term plan – or strategic asset allocation – to pursue your goals.
AVS has five levels of allocation according to how much risk you are willing to take on.
Having established an appropriate long-term plan for you, we make tactical adjustments to it, based on the outlook for the next 12 to 18 months.
We can then implement your allocation by building you a core portfolio, using strategies from our own discretionary managers and third-party managers, as well as capital markets strategies.
The long-term plan we create for you highlights what we believe to be the optimal course for pursuing your investment goals in your core portfolio.
BUILT ON SOLID INVESTMENT PRINCIPLES
It is built upon principles established through academic research and proven in practice, and which help form our Investment Philosophy.
These include global multi-asset class diversification, the discipline of regular portfolio rebalancing, and staying fully invested for the long term.
FORWARD-LOOKING RETURNS
SREs are based on valuations and other fundamentals.
When an asset class valuation is expensive or cheap compared to its long-term average, AVS lowers or raises its SRE respectively.
This is because low valuations have tended to give way to high subsequent returns and high valuations to low returns.
A lower SRE will likely lead AVS to recommend a smaller allocation to an asset class, and a higher SRE to a larger allocation.
SPECIALIZED TREATMENT OF RISK
Traditional asset allocation methodologies have often failed to anticipate the frequency and severity of such losses.
AVS therefore uses a specialized measure of risk called Extreme Downside Risk (EDR), which draws upon many decades of asset class history to highlight the risks you may face.
There is a close relationship between SREs and EDRs: higher returns come with higher risks attached.
Paisan has responsibility for our quantitative asset allocation models and research and contributes to related thought leadership. He joined the Private Bank in 2013 to help build a quantitative stock selection model.
Previously, Paisan was a quantitative equity portfolio manager and researcher at BlackRock, where was responsible for stock selection modeling as well as managing index portfolios. Before that, he was a partner at Thunder Bay Capital Management, overseeing statistical arbitrage and asset allocation.
Paisan holds a bachelor’s in computer engineering from Chulalongkorn University, Thailand, an MBA from Thammasat University and a PhD with a concentration in finance from the Kenan-Flagler School, University of North Carolina at Chapel Hill.
David has overall responsibility for Citi Global Wealth Investments, which unifies the Investments teams of the Private Bank and the Consumer Bank worldwide.
As Chief Investment Officer, David ensures the integration of our asset allocation, manager research and portfolio management teams, and offers his perspectives on the markets.
David joined the Private Bank in 2009 as the Global Head of Managed Investments. He designed the architecture of our global managed investments platform, including its Citi Investment Management unit, and our distinctive private equity, real estate, hedge fund and traditional investment teams. He became Global Head of Investments in October of 2017.
Prior to joining Citi, David was Head of Alternative Investment Asset Management for Bank of America Global Wealth and Investment Management, where he was responsible for client alternative investments across private equity, real estate, venture capital and hedge funds. He has been a co-founder of a hedge fund of funds, Martello Investment Management, and a senior executive at two leading hedge funds, John W. Henry and Company and Ellington Management Group.
David holds a BA with honors from Amherst College and an MBA with honors from Harvard Business School.
Philip heads the Private Bank’s Office of Innovation, which he helped to establish in 2018. He chairs the Growth Board, participates on accelerator programs and other initiatives designed to improve the client experience.
He has more than 20 years of financial industry experience, mostly gained at Citi. Before joining the Private Bank, he held a variety of positions within Citi’s Institutional Clients Group. As well as leading the Global Investment Lab, Philip sits on the Global Investment Committee and Multi-Asset Class Committees, which inform the tactical market views and management of discretionary portfolios respectively.
Steven heads our Global Strategy team which formulates our macro investment views across all regions and asset classes. He chairs our Global Investment Committee, which sets our tactical asset allocation, the basis for discretionary portfolios we manage for clients.
As Chief Economist, Steven provides detailed macroeconomic analyses to inform portfolio decisions.
Previously, Steven was Head of Economics for US institutional equities at Citi Investment Research. He advised the firm’s institutional and government clients globally on macroeconomic developments, forecasts and policy analysis.
He was also economic advisor to the Morgan Stanley Smith Barney Global Investment Committee and a voting member of predecessor Asset Allocation Committees at Salomon Smith Barney.
Steven has a master’s in quantitative economics from the Zicklin School of Business, Bernard M. Baruch College, City University of New York
OUTLOOK
While our asset allocation strategy remains defensive, investors should consider staying invested and modify portfolios over time.
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