Andres Capital Management, an independent investment advisory firm formed by former Merrill Lynch municipal market executives Bob Andres, Ted Palatucci, and Fred Offenberg, opened for business this week in Berwyn, Pa.
The firm, registered with the Securities and Exchange Commission, specializes in managing fixed-income portfolios. It plans to provide asset allocation and portfolio management services to independent financial advisors, family offices, and high-net worth investors.
Andres Capital was created to be "an alternative to the passive, consensus-driven approaches utilized by many traditional investment management organizations," the company said in a press release. "The firm is intent on providing its clients with a conservative, yet active and opportunistic investment experience, delivering focused, objective and timely investment solutions."
The New Team
Andres, the firm's chief investment officer, has spent the last 40 years in the fixed-income sector. He was formerly national sales manager for municipal securities at Kidder Peabody; national sales manager at Merrill Lynch, where he led efforts to finance the Dallas-Fort Worth Airport and the Meadowlands Sports Complex; director of taxable credit and underwriting at Merrill; and president of Merrill Lynch Mortgage Capital Corp.
He later co-founded Martindale Andres & Co., a buy-side investment management firm focused on fixed-income. He also was chief investment strategist for Envestnet, an investment services company. Andres is the founder and editor of the Andres Review, which provides economic and market commentary.
"We believe the next five years will prove difficult for investors, particularly with so few professional money managers having experience managing assets in an environment characterized by broad uncertainty, increasing geo-political risks and the potential for rising interest rates," Andres said. "Experience counts."
Palatucci, a partner and portfolio manager at Andres Capital, has been in the municipal bond industry for 35 years. He joined Merrill Lynch in 1981 as municipal bond product manager and was named managing director in 1984 with responsibility for the firm's national municipal bond trading and underwriting desks. He was also a member of Merrill's risk management committee. Palatucci played an instrumental role in the development of the interest-rate swaps market and worked closely with the Chicago Board of Trade in the development of the muni bond futures contract, the company said. In addition to his new role with Andres Capital, he is a consultant to a regional securities firm.
Offenberg is a partner and portfolio manager at Andres Capital. Formerly, he was senior vice president of corporate and municipal trading at Fox Chase Capital Partners. He began his career at Merrill in 1978 where he was vice president and head of the New York municipal desk. Later, he became a senior corporate bond trader. He went to work at Chase Bank as vice president and head trader of corporate and asset-backed securities. He was then recruited by Chemical Bank to build and manage its new corporate bond department, with responsibility for all investment-grade credit trading and new issue underwriting. He was also managing director responsible for all fixed income trading at Rodman and Renshaw, and director of middle markets and senior vice president of institutional sales at UBS.
Tax-Exempt Municipal Strategies
Andres Capital offers three actively managed tax-exempt portfolio strategies.
The objective of the Short-Duration Municipal is to provide a viable risk/adjusted after-tax alternative to traditional money market funds, according to the firm. It takes an approach that is ultra conservative: high-quality short-duration/liquid securities driven by a value approach that emphasizes research and optimal execution. Its parameters include a maximum maturity of three-years; average ratings of A1 to A-plus; and uses as a benchmark the Barclays One-Year Bond Index.
The Intermediate-Duration Municipal's objective is to control volatility while providing enhanced income and risk/adjusted returns from a portfolio of intermediate-duration securities. Its approach involves moderate risk, driven by a careful analysis of the yield curve's slope, leveraging transient dislocations, employing optimal execution strategies and leveraging our long established national dealer relationships, the firm said. Its parameters include a maximum maturity of 10-years; an average rating of A-plus; and uses as a benchmark the Barclays Five-Year Municipal Index.
The objective of the Long-Duration Municipal is to help those investors looking to maximize income and return potential. Its approach is to mitigate the somewhat higher risk and volatility associated with the long end of the yield curve while delivering solid risk/adjusted returns. This is done by applying internal and external research, identifying value across the yield curve, and broadly diversifying the portfolio with names well known for credit quality and liquidity. Its parameters include an average rating of AA; a maximum maturity of 30-years; and uses as benchmark the Barclays 15-years+ Index, the company said.
