We recently spoke with Attinger’s Head of Investment Analytics, Thomas Nicholson, to discuss how he’s using Addepar Navigator℠ to help manage liquidity for clients with significant investments in private capital assets. Attinger, a multifamily investment firm with approximately 40 clients and more than $600 million in assets under management, invests in a mix of private equity, private credit, real assets and long-only hedge funds.
Forecasting cash flows for clients in commitment-based funds
Because Attinger’s clients are often heavily exposed to commitment-based funds — with obligations to contribute additional capital over time — the firm needs an effective portfolio projection tool like Navigator to confidently model its clients’ cash flows going forward. Nicholson explains how he uses Navigator to simulate changing economic scenarios and forecast cash flows — empowering smarter decisions.
“We want to create robust, enhanced projections for clients,” explains Nicholson. “Navigator is a great visualization tool to help explain the mechanics of portfolios to clients. This is especially crucial for clients and advisors who are new to investing in commitment-based funds.”
Building flexible, easy-to-use models
Like many firms, Attinger had relied on Excel to support its portfolio modeling. But rapid growth made this a challenge. “It became clear that Excel-based models couldn’t keep up,” according to Nicholson. “They were slow and cumbersome. The process was manually intensive and could take two to three weeks to update and run.”
With Navigator, the firm can build cash flow models — including incorporating external data — in as little as a few days. Then, projections can be run and rerun as often as needed. Assumptions and allocations can also be changed on the fly, which wasn’t possible in Excel.
“In my opinion, Navigator’s biggest strength is its flexibility and ease of use,” states Nicholson. “When we meet with clients to discuss asset allocation decisions, we can revise projections in minutes as needed to account for future allocation adjustments.”
Navigator is ideal as both a decision-making and presentation tool, enabling Attinger’s advisors to quickly toggle between scenarios when they’re with clients.
Accommodating wide-ranging uses
Attinger leverages Navigator in various ways to better serve its clients. Use cases include:
Simulating hypothetical funding commitments to ensure clients are comfortable with their liquidity positions
Maintaining appropriate cash balances to meet future obligations
Modeling non-investment cash flows such as generational gifting, tax liabilities and charitable donations
Communicating potential shifts in investors’ portfolios beyond private equity and real asset funds
“For example, a client recently approached us with an aging legacy portfolio,” recalls Nicholson. “We used Navigator to model how we could transition and reallocate those assets over time into our structure of fund strategies.”
Navigator is also an ideal prospecting tool. “We’ll model different portfolios to illustrate how we’d put a prospect’s money to work more effectively,” Nicholson remarks. “We can incorporate existing investments, introduce new asset classes such as private equity and real assets, model potential future liquidity events, and show how we would invest the proceeds. It’s a great tool to spark an entirely new way of thinking and investing.”
Supporting more confident decision-making
With Navigator, Attinger can offer concrete projections that clients can consider and act upon.
“Being able to quickly and accurately model so many different scenarios helps prove our expertise to clients,” concludes Nicholson. “Clients have responded very positively. It has helped us build trust and increased confidence in our decision-making.”
Watch the entire interview here.
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