Choosing Peregrine over other investment advisors is sensible because we possess a number of competitive advantages that set us apart from our competitors:
Attention to Clients
Peregrine is a boutique investment management firm, and we offer high-touch service to our clients. We recognize that all clients are unique in their financial circumstances, goals, investing temperament and time horizon, so we customize portfolios according to the client's objectives. It is important to us that we preserve our client-focused culture, so we carefully consider our advisory and operational capacity as we take on new clients. We think investors looking for personal attention and a custom solution will find our offering attractive.
Peregrine is employee-owned, and all of our fee-only compensation comes from our clients. We do not represent any financial institutions, we do not pay or receive any referral fees, nor do we earn any commissions from selling products to our clients. Thus, we are free to base our portfolio decisions entirely on their investment merits.
With the objective of investing in the finest no-load mutual funds available, we employ a rigorous due diligence process at Peregrine. A differentiating feature of our research is that we travel to meet face-to-face with portfolio managers and research analysts. We like to have a thorough understanding of the culture and investment process at the fund's management firm. The investment professionals with whom we meet seem to find our line of questioning to be informed and refreshing, and they often comment on how uncommon it is to be visited by advisors like us.
Whether it is innate or somehow learned, we possess an even temperament which allows us to avoid becoming emotional during the inevitable periods of excessive pessimism or optimism in the investment markets. As a result, we have the ability to remain objective and make rational investment decisions in the midst of emotionally charged financial situations. We believe this allows us to be better investors on our clients' behalf.
Benjamin Graham, the "Father of Value Investing", wrote that investment is most intelligent when it is most businesslike. Prior to managing money professionally, both of our firm's principals had careers in business. Thus, the idea of taking a businessman's approach to investing has real meaning at Peregrine. Additionally, both principals have masters-level educational backgrounds in finance.
At Peregrine, our expertise is in managing investment portfolios, so that is where we concentrate our efforts. We do not split our time performing other duties like estate, tax, insurance or financial planning. As a result, we have an investment process with significant depth and sophistication that we sense is not found in the typical advisory relationship.
Peregrine is organized as a Registered Investment Advisor (as opposed to a broker-dealer) and thus operates under the fiduciary standard of care. That is, Peregrine has an undivided duty of loyalty to act solely in the best interests of the client. We are registered with the U.S. Securities and Exchange Commission and are subject to regulatory obligations under the Investment Advisers Act of 1940.
Recent years have given witness to the potential perils of utilizing an advisor-affiliated custodian to hold one's investments. (We are reminded of Bernard Madoff.) Peregrine does not take custody of client assets. We assist clients with establishing separate accounts in their names at a reputable and unaffiliated financial institution. This arrangement prevents commingling of client assets and provides a system of checks and balances that clients should demand.
We give clients on-demand, secure access to an industry-leading provider of web-based investment performance reporting so that they can see how their investments are doing over any period during their relationship with Peregrine. We outsource this function to an unbiased third-party so that clients can have confidence that their performance results have been accurately calculated using data provided by the unaffiliated account custodian. Returns are reported on a Time-Weighted Rate of Return (TWRR) basis. TWRR is a measure of a portfolio's compound rate of growth over a stated time period. This methodology is not sensitive to contributions or withdrawals, which are generally client-driven, so the distorting effects of cash flows are eliminated. TWRR is the industry-preferred method for gauging investment manager performance in most situations.
Seth Klarman, founder of The Baupost Group, a celebrated investment firm, has said that one of the keys to maintaining investment success is to attract great clients. At Peregrine, we have the good fortune of working with knowledgeable clients with a long-term perspective. This permits us to adhere to our investment philosophy and process, especially during irrational periods in the market. We believe this ability to remain disciplined will lead to better long-term results.