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Message from the President – July 2017

by AOG Wealth Management

Jim Ortlip and I just returned from three days of due diligence in New York City. Having been a proponent of the Endowment Model for regular investors for almost twenty years, it has been interesting to watch how much the investment landscape has changed. Twenty years ago, many institutional managers such as Blackstone, Apollo, Kohlberg Kravis Roberts & Co. (now KKR), Cantor Fitzgerald and Carlyle depended on pension plans, endowment funds and sovereign wealth funds as clients. High Net Worth Families could access the funds as well, so long as they could meet the minimum investments for each fund that often require $5 Million or more. Now many of these managers that in the past catered only to vast wealth, are seeking the opportunity to invest for people of more modest means. Just last week Blackstone, which has lead the way in this transition, announced that over the next several years they expect that 50% of the assets they manage will come from retail investors. One would hope that the inclusion of these world class asset managers will both improve the performance in this space, and provide a more competitive fee arrangement to the further benefit of investors.

museum-visit-aogThe potential for better performance with lower fees is music to my ears. However, I had two experiences that were even more meaningful. While in Howard Lutnick’s office (the CEO of Cantor Fitzgerald) I observed a replica of Rodin’s Hand of God on his desk. This treasure was one of the few things salvaged from the ruins of One World Trade Center, where Cantor occupied the 101st-105th floor. The only reason Lutnick survived that day was because he was late going to work that day since he was dropping his young daughter off at her first day of school. The hand shows scorch marks, but it is hard to believe that it survived a fall of 100 floors, fire and water damage, and was found among the debris. Even amid all that tragic loss of life, the symbol of hope remains.

fred and sheilaSheila joined me later in the weekend, and we celebrated her birthday by attending the musical Come from Away, which chronicles the unselfish Canadian community of Gander, Newfoundland. With 39 planes making emergency landings, Gander, with a normal population of about 6,000 people, took in more than 7,000 stranded passengers. We laughed and cried at the poignant depiction of the absolute determination of people, both Canadians and passengers, to help one another. Since the locals would accept no cash, the grateful passengers have raised more than a million dollars for scholarship funds. Both the survival of the replica of Rodin’s sculpture, and the celebration of the generosity of the Canadian community reminded me of what a hopeful and generous people we are. Happy Independence Day!



Securities offered through TD Ameritrade Institutional Services located at 7801 Mesquite Bend Drive, Suite 112, Irving, TX 75063-6043. Investment advisory services offered through AOG Wealth Management, Inc. AOG Wealth Management, Inc. is neither an affiliate nor subsidiary of TD Ameritrade Institutional Services.

There are material differences between the terms under which endowments and individuals can invest in alternative investments. These differences include, but are not limited to commissions and fees, conflicts of interest, access to investment opportunities, size, investment time horizons, and the ability to tolerate illiquidity. There is no standard or exact definition of the endowment model. Portfolio design, specific investments and ultimately performance vary considerably among endowments and investors. Kalos does not claim that any investor will achieve the same result as any endowment, institution, or other investor. Kalos’ Investment Adviser Representatives have a conflict of interest when they recommend securities where they earn a commission as Registered Representatives of Kalos Capital. We address this conflict by disclosing the fees and commissions related to the investments recommended to our clients. Also, Kalos representatives do not earn both advisory fees and brokerage commissions on the same assets.

Category: Company Updates