The Fortress Strategy began as an investment
strategy for a foundation.
The Fortress Fund
In 2008, Salem partnered with T. Boone Pickens to create the Pickens-Abraham Foundation, a scholarship endowment fund for graduating seniors in the Texas Panhandle.
Salem knew that endowment and foundation portfolios have a tendency to do well in good economic times and poorly in bad economic times. As a result, he wanted to construct a foundation portfolio that delivered consistently positive performance regardless of movement in equities, interest rates, or other traditional investment classes. The resulting investment strategy was turned into the Fortress Fund in July 2018, making the strategy available to outside investors. The Fund seeks to use our team's risk management principles and investing experience to provide protection and growth to client capital. With our team’s unique expertise in alternative investments, the Fortress Fund’s diversified portfolio aims to provide investors with better diversification and results than one may not be able to achieve with only equity and fixed income investments. We believe the Abraham Fortress Fund can be an investment solution for foundations and endowments.
What does the Fortress Fund aim to provide to foundations and endowments?
Prioritize risk management and portfolio protection
Many foundations and endowments have 60-80% equity exposure. We believe this heavy equity exposure can make your portfolio particularly vulnerable during economic downturns when your community needs you the most. Foundations and endowments have recurring financial commitments, which means it's particularly important for those groups to find an investment approach that prioritizes risk management and capital protection. Our team’s primary goal is to safeguard your foundation’s capital better than traditional stock and bond portfolios.
Financially support your organization and your mission
In today’s markets, it can feel more complicated than ever for foundations and endowments to meet their return and spending targets. The search for significant returns can lead to high risk, while the search for portfolio protection can lead to performance that fails to outpace inflation. We believe our team can help you navigate the complexities of today’s markets. We want to assist you in your effort to protect the longevity of your organization and to financially support your organization's priorities.
Fair fees and liquidity
Some endowments and foundations are charged significant fees by their investment advisors or consultants, and sometimes, these fees are not plainly disclosed. Investment fees should be fair and transparent. In the Fortress Fund, Abraham Trading receives a 0.65% annual management fee and no incentive fee. The only other fees in the fund are those paid to the third-party hedge funds in the portfolio, and Abraham Trading does not receive any cut of those fees. The Fund's monthly liquidity ensures that your money is available when you need it. Subscriptions, additions, and redemptions are possible each month with 6 business days notice.
Investing expertise
When managing a foundation or endowment's portfolio, asset classes beyond equities and fixed income can be intimidating. You don’t have to miss out on other investment opportunities. We believe there is no substitute for experience. Our team has over three decades of broad investing experience, and we bring unique expertise about asset classes that are more complex, like alternatives.
Simplified reporting
We aggregate all of the Fortress Fund's investments into one monthly statement. That means one K-1 and a streamlined accounting process for your team.
The Abraham Fortress Fund aims for better balance and risk management than traditional stock/bond portfolios.
The Fortress Fund uses a multi-asset approach with the goal of producing lower risk, consistent returns. By combing traditional investments in equity and fixed income with diversifying hedge funds and gold, we aim to create a portfolio that prioritizes the protection and growth of client capital.
Equity
Fixed Income
Diversifying Alternatives
We use the following principles in the Fortress Fund portfolio.
The Fund aims to provide better balance and stronger risk management in our portfolio compared to traditional stock/bond portfolios. By combining equity and fixed income investments with diversifying investments in hedge funds and gold, we aim to create a portfolio that prioritizes the protection and growth of client capital.
Risk-based asset allocation and market exposure
Some portfolios have equity exposure of 60-80%. These portfolios usually do well when the economy is prospering and poorly when the economy is suffering. In the Fortress Fund portfolio, we generally limit direct equity exposure at 50% in an effort to reduce the portfolio's exposure to extreme moves in equity markets and the broader economy.
Overall, the asset classes in the Fortress Fund portfolio are balanced by risk, not dollar value. We do this in an effort to ensure that no individual asset class exposes the portfolio to an outsized amount of risk.
Prioritizing diversification
An important difference between Fortress and typical investment portfolios is the inclusion of diversifying hedge funds in the portfolio. Diversifying hedge funds are an integral part of Fortress’ aim to produce consistent returns with lower risk. Only hedge funds that appear to be resilient through market cycles, that exhibit low correlation to the economy and other strategies, and that operate with high institutional standards are selected for the fund. The fund's portfolio usually includes a small allocation to gold as well.
With our team’s unique expertise in alternative investments, the alternatives portion of the portfolio aims to provide clients with better diversification than they may be able to achieve with only equity and fixed income investments in a personal portfolio. The Fortress Fund is not appropriate for all investors, however. All investment strategies, including the Fortress Fund, involve risk. Please carefully consider your personal financial situation prior to investing.
Looking for more information?
Review the Fortress Strategy presentation.
What’s the true cost of your portfolio?
Review hidden costs that your brokerage company, broker, adviser, or wealth manager may be charging you.
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