Helping clients manage risk, find value and make better decisions 

We provide objective portfolio reviews to help clients manage risk and find additional value. We also provide unique insights and solutions for better corporate decisions and strategies. 

Helping an investment fund blend objective and subjective analysis to refocus its portfolio

The challenge

The international team at a large US mutual fund approached HOLT for assistance with a major review of their holdings. The fund had delivered very strong performance historically (top quartile for the last three, five, and ten years), but was in the bottom 10% of its peer group year-to-date. The client asked us to evaluate the portfolio through the lens of HOLT's methodology and recommend modifications.

Our solution

We employed three different analytical approaches to review the portfolio: HOLT Portfolio Consultant review, HOLT Sector Specialist review, and an objective, quantitative scorecard ranking of the portfolio. We found that the fund's "Blue Chip" strategy was too restrictive, contributing to sharp underperformance during periods of outperformance by lower-quality stocks.

The outcome

The client incorporated the scorecard ranking into their monthly portfolio review, and the fund has since modified its investment objectives.

Applying HOLT-screened indices to select outperforming stocks

The challenge

High net worth clients often want exposure to regions or themes, and ETFs are the most common way to gain that exposure. However, ETFs most often include the largest stocks, but not necessarily the most attractive ones.

Our solution

In order to identify the most attractive stocks linked to a theme or region, we introduced a wealth manager to HOLT's series of indices, which use our highly developed screening process.

The outcome

The historical simulations of results with this unique HOLT portfolio made the wealth manager comfortable making a significant investment for his client.

Hedging a client's large portfolio position

The challenge

A private bank client with large single stock positions was interested in diversifying, but wanted to realize the full value of their holdings.

Our solution

The client, wealth manager and HOLT team worked through plausible fundamental scenarios and the resulting valuations to help determine reasonable levels at which to hedge or monetize a position.

The outcome

Our team quickly and clearly demonstrated the market's expectations for each company, which allowed the client to make selective disposals at advantageous prices.

Broadening a fund's reach through direct investments in undervalued companies

The challenge

A private equity firm wanted to implement a new strategy for investing in firms that had lagged the market significantly.

Our solution

Working with the client and leveraging the HOLT methodology, we developed a new screening process that:

• Highlighted well-managed firms with low market expectations, giving them significant upside potential;
• Used HOLT's focus on cash to ferret out accounting quality issues and quantify the performance risk where relevant;
• Identified relevant companies in diverse geographic regions.

The outcome

The client identified new targets in sectors where they had been operating for years. They also decided to broaden their investments to industry sectors and geographic regions, which they had previously ignored.

Helping a retailer get a better view of its own performance

The challenge

A large US retailer needed a clear, comprehensive picture of its operations to reveal which business units were acting as the true drivers of value.

Our solution

We helped the company develop an internal performance measurement framework based on the CFROI® measure. The metric served as a comparable measure of operating performance across business units and as a means of setting corporate strategy.

The outcome

The HOLT treatment of goodwill, operating leases and inflation adjustment serves the company well due to its acquisitive history and broad mix of assets.

Using equity market expectations to identify excessive credit risk

The challenge

A bond investor, worried by signals from the equities markets, sensed his portfolio had started to carry excessive risk. But he wasn't sure which of his holdings were most vulnerable.

Our solution

With HOLT's forward-looking credit metrics, we were able to tell the client which companies were most likely to experience deteriorating credit fundamentals. Furthermore, we were able to identify which of these companies was the object of bearish equity market sentiment, further indicating likely credit quality deterioration. The credit metrics eventually deteriorated over the subsequent months as implied by the equity market.

The outcome

By utilizing the equity market expectations our client was able to reduce exposure in the risky bonds prior their decline in value.

Proving the value of an M&A bid target to the acquirer

The challenge

After receiving an unsolicited takeover approach, a client of Credit Suisse needed a fast, thorough assessment of the situation so it could enter negotiations with the maximum possible advantage.

Our solution

Our client was a key player in a consolidating industry. For the acquirer, the company fit their desired profile of a high-return business with a growth platform and sustainable operating performance.

Using the HOLT framework, we quantified the expectations embedded in our client's share price and highlighted the growth and profitability improvements implied by the offer price. We then valued the management plan and compared it with the acquisition scenario.

Our M&A evaluation was not focused on accounting EPS accretion, but on whether the acquisition premium would deliver more value to shareholders than the stand-alone strategy.

The outcome

Significant merger-synergies were identified, and helped convince the acquirer to bid an 11.5x EBITDA multiple on a $2 billion offer.