Institutional Consultant

Custom Equity Solutions

We follow a rigorous and disciplined portfolio construction process that provides a structured approach while allowing for customization to each client’s unique needs and situation.

Multifactor Risk Model

In our custom equity solutions, our veteran investment team utilizes a quantitative methodology that combines a multifactor risk model with an optimization algorithm that matches the quantitative characteristics of a specific benchmark. We accomplish this while minimizing transaction costs and management fees to create a customized portfolio solution.

Optimization Process

  • Quadratic optimization methodology that attempts to match the characteristics of the underlying benchmark index while minimizing transaction costs to derive the lowest possible tracking error.
  • Optimization process searches the various combinations of securities to find the best match while considering the tradeoffs between parameters and constraints applied.
  • Quantitative factors categories include, but are not limited to: liquidity, size, residual volatility, beta, and leverage.

Sample Benchmarks

Benchmarks

Social and Ethical Constraints
Specified Financial Characteristics

Market Cap

Large Cap
Mid Cap
Small Cap
All Cap
International
Domestic Sectors

Style

Growth
Value
Blend

Screening Process

Our dedicated, professional screening department and institutional PMs work in collaboration with the client and consultant to deliver a portfolio that meets the investment objective of the client.

  • Primary Screening Resources
    • MSCI ESG Research – Robust social screening platform
    • Bloomberg – Supplemental social screening information

  • Secondary Screening Resources
    • Interfaith Center on Corporate Responsibility
    • Company Websites
    • Government Databases
    • Activist and Non-Government Organization (NGO) Websites
    • Carbon Tracker
    • Faith-Based Forums – United States Conference of Catholic Bishops (USCCB); General Board of Pension and Health Benefits (GBPHB)

  • Monitoring Process
    • Screen companies using MSCI’s ESG research system
    • Identify companies with various social or ethical violations
    • Conduct additional analysis to determine which companies to exclude from client portfolios
    • Evaluate companies to determine if they are eligible investments
    • Process additions and deletions of portfolio holdings on a quarterly basis
    • Update screening list as holdings change

SRI Sustainable Screening Categories

Life Ethics

Abortion
Contraceptives
Stem Cells

Defense/Weapons

Biological-Chemical Weapons
Civilian Firearms
Cluster Munitions
Conventional Weapons
Landmines
Nuclear Weapons
U.S. DOD Weapons Production

Sin Stocks

Alcohol
Adult Entertainment
Gambling
Tobacco

Global Sanctions

Sudan
Northern Ireland

Animal Welfare
Genetic Engineering
Others

ESG Screening Categories

Social

CUSTOMERS
Anticompetitive Practices
Customer Relations
Marketing & Advertising
Product Safety & Quality
Privacy & Data Security

HUMAN & LABOR RIGHTS
Civil Liberties
Employee Health & Safety
Community Impact
Labor Management Relations
Union Relations Practices
Child Labor
Supply Chain Standards
Workplace Discrimination & Diversity

Governance

Bribery & Fraud
Executive Compensation & Corporate Structure
Lending Practices
Financing Activities

Environmental

Carbon & Fossil Fuels
Climate Change
Biodiversity & Land Use
Non Hazardous Operational Waste
Nuclear Power
Supply Chain
Toxic Spills & Releases
Water Stress

Composite Disclosure

For more information, download our Custom Equity Solutions Screened Composite Full Disclosure Presentation.

Consultant Relations Team

Sales & Service Team

David Rentfrow
David Rentfrow
Managing Director & Head of Distribution
Andy Eras
Andy Eras
Managing Director - Global Institutional Group
Scott Wynant
Scott Wynant
Executive Vice President
Katherine Trang
Katherine Trang
Product Strategist - Global Institutional Group

Investment Team

John Wolf
John Wolf
Managing Director - Equity Investments
Paul Townsen
Paul Townsen
Senior Portfolio Manager
 Zachary Wehner
Zachary Wehner
Portfolio Manager
Tiffany Nunn
Tiffany Nunn
Senior Investment Analyst
Joshua Hartke
Joshua Hartke
Equity Investments Analyst

Contact Us

Direct

Andrew Eras, CFA, Senior Director, Global Institutional Sales
aeras@capstonefinancial.com
917.544.8061 Direct