2. Our Company
Emerald Asset Advisors, LLC is a wealth management firm
based in South Florida that has served as a trusted financial
advisor to high net worth individuals, affluent families and
institutional investors for over a decade.
The firm has achieved a reputation for bypassing conventional
wisdom and designing insightful portfolio strategies that offer a
refreshing approach to protection, growth and diversification of
assets. We have gained national recognition for our flexible and
adaptive approach to portfolio management.
We are also the creators and managers of the Emerald
Allocation Strategies (EAS), which we make available to
other investment advisors as a sub-advisor for their clients.
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
3. Wealth Management Services
• Financial Consulting • Advisory Services
– Asset Allocation Modeling – Personalized and Objective
– Coordination of Retirement, Estate and Tax – Open Architecture Investment Platform
Planning (US and Non-US Clients) – Sophisticated Account Analysis
– Comprehensive, Consolidated Performance Reporting
• Investment Management – Fee Based
– Diversified Investment Portfolios
– Equity Investing • Family Office Services *
– Fixed Income Investing – Coordination of All Financial Affairs
– Alternative Investment Strategies / Hybrid – Highly Personalized Service Provided by Senior
Models Executive and Multi-Disciplined Team
– Consolidated Performance Reporting Including – Management of Multiple Entities
Investments Held Elsewhere – Coordination with CPA, Attorney & Insurance Provider
– Single Stock / Concentrated Position Strategies – Document Review
– Domestic Administration Including Payroll, Hiring,
Background Checks
– Family Meetings & Education
– 3rd Party Investment Manager Review
* Family Office Service offered through Stoloff Investment
Advisory
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
4. Wealth Planning Process
2. Implementation Stage
• Goal Planning & Assessment • Ongoing Portfolio
• Financial Needs Analysis Management, Reporting and
• Risk Tolerance Analysis Review
• Aggregated Asset Reporting
• Asset Allocation Strategy
and Personalized Portfolio • Responsive Client Service
Design • Ongoing Education,
• Coordination with Attorney, Communication and Review
CPA and Insurance Provider
1. Initial Planning Stage 3. Monitoring Stage
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
5. Our Philosophy
230
S&P 500 Full Capture
Capture: 66% upside, 33% downside
685 Capture: 70% upside, 30% downside
180 Full Capture
S&P 500
Capture: 66% upside, 33% downside
585
130 Capture: 70% upside, 30% downside
485
80
Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95
385
285
185
85
Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
The graph above shows the significance of downside protection relative to the S&P 500. The goal of Emerald Asset
Advisors is to Protect and Grow capital by capturing no more than 33% of the downside moves and at least 66% of the
upside moves of the S&P 500 over time.
The information and statistical data quoted herein were gathered from sources that we believe to be reliable; however, it is not warranted to be accurate. As in any
investment situation, past performance is no guarantee of future results.
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
6. Key Features of our Investment Philosophy
1. We use a diversified, multi-manager approach.
We use multiple investment styles, run by several different money
management firms nationwide.
2. We aim for low market correlation.
That is, we try to generate long-term returns that are largely
independent of what happens in the stock and bond markets.
3. We employ alternative strategies to classic stock or bond
portfolios.
We use styles that tend to have either a hedging mechanism in place
and/or have not historically moved in tandem with the broad stock or
bond indexes.
"We offer a spectrum of strategies that are flexible and forward-looking, not simply
based on what happened in the past. A rearview mirror is helpful to have in a car, but
you should not base your entire approach to driving on it. Looking ahead is the more
important factor in driving; so too is it in portfolio management. When we drive your
portfolio strategy, we use this same philosophy. As the saying goes, 'history doesn't
repeat but it rhymes.' To us, that means be mindful of past lessons, but don't get
addicted to them.“
Rob Isbitts, Chief Investment Officer
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
7. Why We’re Different – old idea, different approach
Asset allocation is the foundation of any investor's long-term strategy. However,
in our opinion, there are limits to traditional asset allocation approaches.
Investors and investment advisors have seen that the “easy money” days of the
1980s and 1990s did not last forever. They also started to see the gaps in
traditional asset allocation approaches. We aim to resolve that.
Emerald Asset Advisors' mission since inception has been to provide a
practical alternative to the traditional asset allocation solutions that Wall Street
typically offered to investors. Specifically, we wanted to construct portfolios that
produce the key benefits often found in hedge fund investing…
• An absolute return objective
• Low correlation to the global stock and bond markets
• Low volatility relative to the stock market
• Competitive upside capture with limited downside capture
• Flexible investment styles
…but without the issues inherent in the hedge fund Limited Partnership (LP)
structure:
• Lock-ups and limited liquidity
• Limited regulation and lack of transparency
• Potential for excess leverage
• High investment minimums and high management fees
• Tax inefficiency
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
8. Emerald Allocation Strategies - Overview
CONSERVATIVE: THIS STRATEGY exhibits low volatility and low correlation to
the broad markets. Our investment approach in this strategy is similar to the
multi-manager approach used by absolute return hedge funds-of-funds. The
difference is that we use mutual funds and other traditional, highly-liquid
investment vehicles that employ hedge fund-like strategies. By doing this,
we hope to deliver to the investor a competitive risk-reward profile as
compared to absolute return hedge funds as well as traditional fixed income
strategies.
MODERATE: This strategy pursues long-term growth of capital using a very
limited number of holdings (typically 30 or less). The managers chosen are
usually focused on finding companies they can own a piece of for a long time.
They tend to favor conducting thorough company research over analysis of
short-term market factors. While each manager's relatively small number of
holdings may produce greater short-term volatility than a broad-based
strategy, we attempt to lower portfolio volatility by diversifying amongst a
group of managers. We may also buy short-index securities as a hedge in
perceived periods of high market risk.
AGGRESSIVE: This strategy uses securities that seek to capitalize on long-
term trends identified by Emerald's research team. We believe some of these
themes will take place over many years, even decades. This strategy often
involves investing in areas of the markets that exhibit high short-term
volatility. While the themes are expected to play out over a long period, we
do recognize that it may be helpful to increase or decrease our position in a
particular theme over time. We may also buy short-index securities as a
hedge in perceived periods of high market risk.
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
9. Investment Philosophy
There is a bull in every market – our job is to find it
EMERALD ASSET ADVISORS (Emerald) is an asset allocation strategist that employs a flexible and adaptive investment approach
to portfolio management.
Emerald’s BULL MARKET FORECASTER is a compilation of what we believe to be our investment committee’s best macro
thinking. The investment themes below and their ranking reflect our view of the relative risk-reward potential on world-wide
investment themes over a 3 year period.
The selection of these themes is the genesis of our investment analysis process. The next slide shows how these themes are
applied across our three distinct investment strategies, the EMERALD ALLOCATION STRATEGIES.
EXCELLENT GOOD FAIR POOR
Contrarian Global Equity Market- “Busted” Equity-Income Large Cap Large Cap
US Dollar
Value Equity Infrastructure Neutral Convertibles (Dividends) Relative Value Growth
Environmental Equity L/S Financial Emerging Balanced
China Global REITs “Vice” Equity
Equities Stocks Market Bonds Funds
Convertible
Convertible Merger Oil High-Quality
Securities India Gold S&P 500 Index
Arbitrage Arbitrage Bond Funds
Nanotech
Hedged High Yield Stocks
Non-Japan Small-Midcap Dedicated Dedicated
Equity Bonds Japan Equity
Asia Equity Stocks Short Treasury Short Equity
Frontier Energy Stocks
Bank Loan ROI Growth Homebuilding Healthcare US T-bills (90-
Markets
Funds Equity Stocks Stocks day)
Non-US Bonds
Emerging
US REITs Brazil Equity Europe Equity
Pharma Stocks
Agricultural
Commodities
Tactical Asset
Utility Stocks Allocation
The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and styles highlighted above reflect the Advisor’s outlook as of 9/30/09 and
may change at any time. Projections are not guaranteed and may vary significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change.
VISION. EXPERIENCE. DEDICATION to our CLIENTS
10. Application of Themes
Reward - Frontier Markets - Oil
- Global - Energy Stocks
MODERATE STRATEGY OVERVIEW Infrastructure - Healthcare Stocks
Moderate: 5-year horizon - Homebuilding - Japan Equity
Stocks
• Concentrated equity portfolios - Non-US Bonds
• Long equity-biased AGGRESSIVE
• Periodic hedge overlay - China
- India
- Gold
- Large Cap Growth - Dedicated Short - Dedicated Short
- Contrarian Value Treasury Equity
CONSERVATIVE STRATEGY OVERVIEW - S&P 500 Index
Equity - Emerging Pharma - US Dollar
- Europe Equity Stocks
Conservative: 3-year horizon
• Absolute return focus
• Low net equity exposure
• Hedged strategies MODERATE AGGRESSIVE STRATEGY OVERVIEW
Aggressive: 10-year horizon
- ROI Growth Equity • Global portfolio
- Hedged Equity - Tactical Asset - Small-Midcap • Primarily net long
Allocation Stocks - Dedicated Short
- Convertible
Securities - Equity-Income
Equity • Opportunistic short positions
- High Yield Bonds (Dividends)
- Convertible
Arbitrage
- Equity L/S
CONSERVATIVE
- US REITS
- “Busted”
Convertibles
- Merger Arbitrage
Risk/Reward EXCELLENT
- Bank Loan Funds - Dedicated Short Assessment: GOOD
Equity
- Equity Market- FAIR
Neutral POOR
Risk
The above illustration is not a complete analysis and should not be considered investment advice. The positioning of the investment themes and styles highlighted above reflect the Advisor’s outlook as of 9/30/09 and
may change at any time. Projections are not guaranteed and may vary significantly. Any statements nonfactual in nature constitute current opinions, which are subject to change.
VISION. EXPERIENCE. DEDICATION to our CLIENTS
12. Portfolio Construction Process
Top-down Macroeconomic Assessment
Fundamental analysis of critical factors that drive markets and
Theme
prices
Bottom-up Analysis
Investments
Identify the investment vehicles that best express the themes
Quantitative Analysis
Analyze all key metrics (trading turnover; expenses; risk stats
Weightings
and tax implications)
Technical Analysis Manager
Choice
Determine entry / exit points through charting analysis
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
13. Ongoing Manager Due Diligence Process
Review Assess market
written factors and
material & their impact
interview on manager’s
managers strategy
Monitor any
change in Analyze
Continuous
manager Interactive
valuation ratios
thinking and Process and economic
style indicators
consistency
Identify
Evaluate bond
change in
rates and yield
macro
curve
environment
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
14. Your Investment Team
Seasoned professionals with a combined 90 years of experience
Robert A. Isbitts Allan M. Budelman Mathew J. MacEachern
Chief Investment Officer Managing Partner Portfolio Manager
•Co-Founded Emerald in 1998 •Joined Emerald in 1999 •Joined Emerald in 2004
•20+ years in the investment field •15+ years in the investment field •16+ years in the investment field
•DLJ, Morgan Stanley, Fiduciary Trust •JP Morgan, Bankers Trust, Chase •Fidelity Investments, Leerink Swann &
•CFS Designation, 1997 Manhattan Company, Inc.
•MBA, Rutgers University •MBA, University of Miami •Suffolk University
•BS, SUNY Albany •BA, University of Maryland
Keith D. Stoloff Michael N. Kahn
Research Analyst Technical Analyst
•Joined Emerald in 2007 •Joined Emerald 2008
•19+ years in the investment field •20+ years in the investment field
•Stoloff Advisory, Raymond James, Citicorp, •Barron’s Online Columnist since 2001
Great Western Securities •CMT designation, 2008
•CIMA, CIMC, CPWA, CMFC, AAMS •MBA, New York University
•BS, University of South Florida •BA, Brandeis University
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
15. National Media Recognition
Cover story: Cover story:
Wealth Manager, March 2008 Registered Rep, February 2007
WORTH Magazine:
Top Advisors - 2005, 2006, 2007, 2008
VISION. EXPERIENCE. DEDICATION to our CLIENTS
16. Biography - Jack F. Gonzalez, Director of Business Development
Jack is the Director of Business Development for Emerald Asset
Advisors, LLC. As a South Florida native, he began his career in
financial services with Amerifirst FSB in 1986. In the span of 22
years, Jack has gathered the knowledge and experience necessary
to lead the business development efforts for the firm. In addition to
his administrative responsibilities, Jack specializes in the design
and implementation of customized wealth strategies for high net
worth individuals, families, institutions, foundations and not-for-
profit organizations.
Jack earned his Bachelor of Arts degree in Business Administration
from Florida International University with a major course of study
in International Business and Business Management. He has
earned his FINRA Series 24 licensed as a Supervising Principal, 7
licensed as a Registered Representative as well as Series 66
Licensed as an Investment Advisor Representative and is licensed
in Florida to sell Life insurance as well as Variable Annuities.
Jack spends most of his spare time supporting his children’s
activities and enjoys playing golf and working in the community.
He has been involved with many civic and community service
organizations including the Boys Scouts of America and the
International Task Force of The Beacon Council. He currently
serves as Secretary of Miami Symphony Orchestra Board of
Directors, President Elect of Florida International University
Alumni Association Board of Directors, and a member of Florida
International University’s “President’s Council.”
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VISION. EXPERIENCE. DEDICATION to our CLIENTS
17. WEALTH STRATEGISTS for
SUCCESSFUL FAMILIES
2843 Executive Park Drive
Weston, Florida 33331
Telephone: 954.385.9624
www.emeraldassetadvisors.com
“The Noah Rule: Predicting rain doesn't count; building arks does.”
-Warren Buffet
VISION. EXPERIENCE. DEDICATION to our CLIENTS
