Andrew Krei is Head of Investment Research for Crescent Grove Advisors, working closely with the firm’s Chief Investment Officer and the Crescent Grove Investment Committee to build and maintain a high-quality, open-architecture investment platform. Andrew is also an Institutional Portfolio Manager and Client Advisor.
Russ Alan Prince: Tell me about Crescent Grove Advisors and how you are different from other players in the industry.
Andrew Krei: Crescent Grove Advisors is a fully independent, 100% employee-owned RIA with approximately $4 billion in AUM. We have a talented team of professionals with deep experience across a variety of disciplines. Our clients include ultra-high-net-worth individuals and families, endowments, and foundations.
We offer clients holistic financial counseling services alongside our investment management capabilities. These services can range from tax planning and preparation to compensation and benefits reviews, in addition to estate and trust planning, philanthropic guidance, insurance reviews, and multi-generational education. We like to tell clients that, “if something touches your financial life, we need to know about it.”
One of our core strengths is understanding the interrelationships between each of the financial planning disciplines, and being in a position to act when we spot issues or inefficiencies. We often have prospective clients come to us with an existing set of service providers that are functioning in a vacuum—the right hand does not know what the left hand is doing. In those situations, we either assume some of the existing responsibilities to create a more streamlined structure, or we step into an oversight role to ensure that each provider is functioning efficiently within the context of the client’s overall financial plan.
From an investment perspective, we run an open-architecture platform with a commitment to offering clients access to best-in-class managers. Additionally, we view our size as an asset. We are large enough that we can negotiate preferential terms for our clients, but we can still access niche strategies in capacity-constrained areas of the market. We believe that our ability to identify skilled managers that can exploit less efficient market segments is a key differentiator relative to our peers.
Prince: What are your core values and the experience you provide for your clients?
Krei: We pride ourselves on being client-centric with everything that we do. That starts by developing a deep understanding of each client’s unique circumstances in the beginning stages of a relationship. We tailor our services to achieve specific goals, recognizing that no two clients will be exactly alike.
Once the relationship has been formed, our dynamic and customized approach allows us to adjust as circumstances change—whether that means making subtle tweaks to optimize a strategy or overhauling various facets of a financial plan due to material changes in a client’s life. We are a solutions-oriented group that focuses on delivering successful outcomes.
More broadly, our goal is to offer clients a concierge-style experience. We do that by operating under a single point-of-contact model where one Client Advisor acts as the point person for each client. In instances where outside service providers are involved, we work to set the overarching strategy and coordinate the flow of information between relevant parties. Importantly, we can offer this high level of service because we limit the number of engagements per Client Advisor.
Prince: You work with a lot of ultra-high-net-worth individuals and families, top executives, and first-generation wealth builders. How does Crescent Grove Advisors meet the financial needs of this diverse client base?
Krei: Catering to this segment of the market requires a unique service delivery model. For starters, the financial needs of public company executives and private business owners are often more complex and intermingled between planning disciplines. Our ability to identify and understand nuanced issues is the ante when it comes to working with these types of clients, and we are fortunate to have an experienced and extremely knowledgeable team in that regard.
Of equal significance, we recognize that our clients are all accomplished in their chosen fields, intelligent, and accustomed to making informed decisions. They have achieved great success because of their ability to think strategically. Instead of us dictating every move, it is critical that we operate as partners with our clients, presenting them with thoughtful solutions and working with them to choose a path forward. From there, we are responsible for executing the chosen solution.
Again, we limit the number of clients per Client Advisor. That is the only way we have found to effectively and repeatably deliver our high-touch service model.
Prince: What investing strategies are you interested in right now?
Krei: We are currently seeing opportunities at both ends of the risk spectrum. On one hand, with the Fed in the middle of an aggressive rate-hiking campaign, we are taking advantage of opportunities to boost yields within client portfolios by adding to higher-quality fixed-income strategies. One of the dilemmas that we faced during most of the 2010s was generating sufficient income from low-risk assets in client portfolios. With the Fed setting short-term rates at or near 0%, we had to look for thoughtful and creative solutions that would address clients’ cash flow needs. For retirees and clients counting on their portfolios for income, higher rates have been a welcome development.
At the other end of the spectrum, we expect that the valuation reset within equity markets and ongoing concerns about an impending recession will create opportunities within more speculative asset classes like private equity. Historically, these types of “risk off” periods have resulted in the best-performing vintages for private funds. Investors with sufficiently long time horizons and the wherewithal to take on illiquidity in their portfolios may benefit from an allocation to skilled private equity managers in this environment.
RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.