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When Less is More

CLIENT SITUATION

In March of 2009, a fund manager contacted Abbot Downing, saying that one of its clients, an Ivy League university, was overcommitted to illiquid investments and hoped to sell some assets. Abbot Downing clients would have the right to first refusal. Four different assets were for sale, all priced at 40 cents on the dollar. “We got a sense of where we thought the value was and took shares of three of the four assets that we felt were very undervalued,” said John Lorentz, the foundation’s Abbot Downing investment manager.

OUR SOLUTION

The team had just ten business days to make a decision and finalize the purchase. "We wouldn't have been able to do this as a consultant. However, as the foundation's outsourced chief investment officer, we were able to move quickly and take advantage of this limited opportunity," Lorentz said.

THE RESULT

The foundation recouped 90% of its investments within four months, and still had an asset that was worth much more than we paid.


DISCLOSURES

These materials are provided for general education and illustration purposes only. They were prepared by Abbot Downing and have been obtained or derived from information we consider reliable, but we cannot guarantee their accuracy or completeness. Abbot Downing does not undertake to advise you of any change in the information contained in these materials.

Wells Fargo & Company and its affiliates do not provide legal advice. Please consult your legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of you own situation at the time your taxes are prepared.