CITY: New York
AUM: $5.3 billion
NUMBER OF CLIENTS: 500
NUMBER OF PARTNERS: 5
NUMBER OF STAFF: 24
Registered Rep.: Your RIA is one of just a couple of firms on our Top 100 list that actually gained assets between 2008 and 2009. How did you manage that?
Sontag Advisory: Bringing equity exposure down by 20 to 30 percent, and increasing cash and bond exposure. There was so much panic to raise cash at hedge funds. All of a sudden, bonds were trading as if the entire bond universe was going to default. We saw that as a rare opportunity and bought convertible bond funds, high yield munis and corporate bonds.
RR: Holy grail of investing?
SA: Last year was unprecedented. We had to reign in risk in a big way. But that's not the hard part. After you've done that, then what? Clients are asking, ‘How do I reallocate? Where and what do I allocate to? When do I start investing again?’ That all requires good judgment and an understanding of the investment landscape at all times. That's what we do.
RR: How is a typical client portfolio mixed now?
SA: About 40 percent equities and 50 percent fixed income. The other 10 percent is in alternative strategies whose risk and return are in between equities and bonds.
RR: Have you gained new clients in the last year?
SA: We've brought on a number of new clients. Many were self-directed investors who are now looking for help and the remainder are investors who used to work with the big brokerage firms.