2008 Annual Letter
We are pleased to celebrate the first anniversary of JCS Advisors, LLC. The stars aligned in our favor as the complacency in the investment world finally came to the forefront. For too long, managers have been increasing risk for incrementally lower return opportunities. Today, Chief Financial Officers and Chief Investment Officers are focusing on enterprise financial risk and searching for superior risk-adjusted returns. We are delivering solutions.
Our investment management and consulting business helped several organizations, from top 20 technology firms to large family offices. We provided insight on a multitude of best-in-class treasury solutions: investment policies and strategies, foreign exchange hedging, accounting & compliance, cash management and enterprise financial risk management.
The year’s market dislocations led to multiple engagements analyzing portfolios and designing investment policies and strategies. We correctly recommended clients sell out of risky “money market” securities and investment vehicles. However, we weren’t always recommending safe haven trades. We fortuitously recommended selling risk-free securities to capture profitable opportunities in municipal auction rate securities and long-duration municipal bonds. We believe the market will be ripe for investment opportunities in 2008.
JCS Advisors produced several investment policies: corporate cash, short-duration fixed income, absolute return global multi-asset class, global property & casualty insurance portfolios and pension plans. The development of complex investment strategies included various asset allocation modeling techniques, stress testing studies and scenario analysis. We led the search and implementation of external managers including contract and fee negotiations, and now oversee the portfolio risk and performance of those managers. Additionally, we are providing extended risk measures and annual in-depth external manager due diligence reviews.
Operationally, we led a $25 billion dollar organization in the selection and implementation of a global custodian and service provider of accounting, compliance, performance and risk. Furthermore, we designed the future infrastructure necessary for an enterprise risk management process to cover global equities, global fixed income, private equity, venture capital and real estate.
Looking back on an eventful first year we are encouraged to do more for our clients in the second year. We plan to expand our service offerings to include portfolio management and enterprise financial risk management. JCS Advisors looks forward to being a solution provider for your organization.
Best regards,
Jeffrey C. Scott, CFA
President