SICART ASSOCIATES: OUR FIRST-YEAR ANNIVERSARY!

This September marks the first anniversary of Sicart Associates LLC, the firm we created together with three close partners: Patsy Jaganath, Allen Huang and Bogumil Baranowski.  Shortly afterward Diandra Ramsammy joined us in New York, and Delphine Chevalier in Paris.

Looking back, it is clear that I had underestimated the amount of work involved in creating a new investment advisory company. Fortunately, I also had underestimated – by a large margin — the combined abilities of my long-time associates and new colleagues. So here we are a year later, as an established and fully operational entity.

Of course, the necessary bureaucratic chores and regulatory hurdles were predictably time-consuming. But they were minimized by the helpful attitudes of many solid contacts in the industry, as well as by the appreciation of regulators and other supervisors for our understanding of the business.

Back to Our Roots

Personally, Sicart Associates has allowed me to rediscover the blessing of a small, commando-like team where there are no job descriptions and yet nothing falls between the cracks. Whenever a problem arises, no one thinks “That’s not my job” — it just gets taken care of. And since other team members are never far away, their support is also automatic.

Beyond this, however, what has boosted our morale throughout this adventure has been the loyalty and enthusiasm of a large majority of our historic clients. In several of these families, the older generation remembered with fondness the genial atmosphere and efficacy of the small firm I had founded in 1985. Like me, they looked forward to rediscovering the blessing of a close-knit team where everyone knows them and they do not get bounced from department to department.

Treating Client Families as Our Own

This rebirth also gave us the opportunity to streamline and simplify our operation to make it even more client-friendly. It should be remembered that I initially contemplated creating a family office to serve my family and a few others who had been so loyal for so long that they felt like family.

Over the years, as the financial industry kept inventing new products and services, the potential for conflicts of interest between client, broker and investment manager multiplied accordingly. But we have retained the original goals we had outlined from the start of our planning: to eliminate as many of these potential conflicts as possible while also steering clear of fee duplications and the temptation to use our own “products” rather than other, possibly cheaper, ones. This is why, from the start, we elected not to act as a broker/dealer and not to offer in-house mutual funds or other collective investment vehicles.

Sticking to What We Know: Investment Management AND Our Clients

I also had in mind a notion of what a family office should be that was quite different from the one which the name has come to signify. Families are made up of individuals of several generations, sometimes of diverse origins, who have different aspirations and lifestyles and are likely to face different problems and challenges.

In many cases, family members find it hard to communicate, especially about money. For this reason, the idea of presenting this disparate group with one-size-fits-all solutions does not seem to be the best way to customize client care. This is where we believe that our combined experience in dealing with families on one side and specialists on the other can be particularly helpful. Our primary activity is to manage client families’ investment portfolios. In our associated role as a family office, we prefer to get advice from the legal and tax professionals we know, selecting where possible the most compatible with each client or else working closely with the ones with whom the client already entertains a satisfactory relationship.

Going beyond this, we find that, faced with novel financial or other problems, many people find it hard to identify and prioritize the right questions to ask before consulting a technician. The role of a family office, similar to that of the 19th century’s homme d’affaires, is to use its knowledge of a family’s history and personalities in order ease this process and orient its clients toward the most compatible expert when necessary.

 

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After only one year, we are now an established business where we look forward with enthusiasm to each day of work. How do we plan to preserve this culture?

First, we plan to grow at a very measured pace. The qualities that a small firm like ours enjoys tend to erode with the growth of organization charts and the multiplication and expansion of staff meetings. These are not challenges we plan to encounter any time soon.

Second, we will continue to insist on the distinction between running a business and operating a practice. We certainly don’t scorn the profit motive but we believe that there are rewards beyond increasing profits each year. Just as the traditional family doctor’s reward is the healthy condition of his patients over a lifetime, we hope that the financial well-being of our clients and their families will be our reward for many years to come.

François Sicart

September 1, 2017

 

Disclosure:

This article is not intended to be a client‐specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally.