Lipman Burgon & Partners is pleased to present a question-and-answer session with our managing partner and chief investment officer (CIO), Paul Burgon. Given Paul’s recent transition to CIO, the discussion offers a timely opportunity to examine the firm’s latest views on investment, asset allocation and portfolio construction and how they can enhance portfolio outcomes.


Having been in the CIO role for several months, how has the transition been, and where do you see it having a bearing on client outcomes?

Having worked intimately with both the investment and advisory teams since the firms’ inception, I have gained unique insight, not only into what clients need from an investment or portfolio perspective, but also an understanding of broader wealth objectives. First and foremost, the two must be aligned. They must also be ingrained in a culture that prioritises investment management and client service excellence.

My joint responsibility as managing partner means I’ve been actively involved in setting the broader strategic direction of the investment team for the past five years. The opportunity now is to lead that team and draw from my advisory experience.

One key goal is to put the client and the perspective of their advisor at the forefront of investment policy development. That promotes a deeper understanding of the importance of managing change, tailoring solutions, and educating clients about everything we do, and why.


As managing partner and now Chief Investment Officer, what’s your vision for the firm?

Great CIOs have a clear strategic vision that aligns with an organisation’s purpose and goals. I believe the key to success in wealth management is a progressive mindset and a collaborative leadership style.

Retaining the confidence of the advisers and clients that you service is essential, and the firm’s investment philosophy should be evidence-based and clearly articulated and understood.

As an organisation, LBP has always been values-driven, striving for excellence in investment management and client service. Our vision is to be the boutique wealth management firm of choice for clients who seek expert advice in the creation and protection of material financial legacies.

If we break that vision down, it reveals what drives us. We value independence and being free from institutional ownership which means we can always act in our clients’ best interests. We also strive to be the best, which relies on great people and a thirst for knowledge. It then captures our technical investment and asset management expertise, and our focus on providing a holistic view of multi-generational wealth.

In my joint roles, I will now be delivering against this vision with conviction for the benefit of clients, their families, our staff, and Partners. Achieving it requires hiring and retaining the best team, having a progressive work culture, striving for excellence in everything that we do, and listening to our clients and responding to feedback.

Our team is now 24 strong, and I envisage it will grow alongside our footprint, particularly as we continue to service an expanding client base in both east and west coast markets.


What do you believe underpins investment success?

I have core beliefs about what it takes to be a successful investor and how to construct portfolios that deliver the highest probability of clients achieving their goals. These beliefs have absolutely evolved over time and are based on many years of advising clients through market cycles.

The number one factor that I believe drives long-term performance is investor behaviour. This is occasionally due to individual perspectives but most often due to deficiencies in the investment program they are following. This leads to a lack of confidence and understanding among both the adviser and the client.

Today however, we can leverage various advanced portfolio construction and analytical tools to develop sophisticated investment programs for clients which optimise allocations between active and passive managers and monitor sectors, active weights, and risk factor exposures.

Additionally, the inclusion of private market opportunities and trading strategies that have low correlation to the direction of equity markets improves diversification. It reduces overall portfolio volatility, improving the likelihood of an investor staying the course.

Every asset class and position in the portfolio should have a direct line to optimising portfolio risk and return. That helps provide greater clarity of what to expect in terms of portfolio performance across market cycles.

A deeper understanding of the drivers of returns across portfolios helps our advisers and clients avoid the pitfalls of chopping and changing investment managers due to performance, and of taking outsized risk positions in terms of timing in and out of markets based on the macroeconomic or geopolitical news of the day.


What role are private assets typically playing within client portfolios?

As a multi-disciplinary wealth management firm, we’re focused on continuing to develop our capabilities to better service our evolving client base. This includes the origination of specialist private market opportunities.

For example, one asset class we believe can help drive better long-term risk-adjusted returns is private equity. When constructing private equity programs for family offices and endowments, we consider allocations across vintages, sectors and geographies and provide cash flow and distribution forecasting models that chart the j-curve of the portfolio and a range of key metrics.

For wholesale investors, liquidity is an important consideration and evergreen strategies are often a more attractive entry point. The conversation around the types of private equity allocation very much depends on the investors’ cash flow profile and investment time horizon.


Have client expectations changed, and how has the firm evolved to meet them?

While clients have always expected alignment of values and interests and portfolio management tailored to their objectives, developments in investment strategies, financial markets and technology continue to reshape preferences.

This is often unique to individual clients or situation based. For example, we’re seeing demand among private individuals and families for specialised investment opportunities and responsible investment strategies.

For our family office clients with larger, more complex mandates, there’s a need to offer sophisticated cross-asset reporting capabilities, administration and custody of alternative assets, and investment programs with robust governance frameworks

To meet these expectations, we’ve invested heavily into our internal capabilities, skills and technology stack to ensure we can continue effectively serving all our clients with varying needs and requirements.


How do technology and innovation fit into the firms’ ethos, and how is it benefitting clients?

 A combination of client demand and our pursuit of service excellence has led to ongoing technology adoption across the firm. We continue to invest and digitally transform the aspects of our offering that will benefit clients most. The intention is to ensure our people are intently focused on personal client relationships in a way technology cannot achieve.

A great example is the latest development in our ongoing partnership with Netwealth – the integration of their newly launched Multi-Asset Portfolio Service (MAPS) platform. While we will provide full details about the solution and its benefits to clients shortly, MAPS significantly improves the ability to integrate and report on assets that can’t be held in custody. It means we can now provide greater accuracy and transparency when it comes to reporting on- and off-platform private market assets.

We can see valuable applications for digital innovation for investment management too. One area we are watching closely is the fast-paced development of artificial intelligence. From a quantitative perspective, this could have a significant impact across public markets and trading strategies that deliver returns through financial statement analysis and statistical arbitrage.


If you would like to learn more about Lipman Burgon’s investment management or advisory capability, we encourage you to contact us.