SINECERA CAPITAL CASE STUDIES
Case Study #1 (Estate Planning)
SineCera Capital was pleased to onboard a new client family consisting of a husband and wife with three high school and college age children. This family’s asset portfolio represented significant first-generation wealth of in excess of $75 million. Initial review discussions brought to light the client’s desire for asset protection and tax-effective transfer of wealth to the children.
There was an existing trust, but it was not being effectively utilized because the clients feared losing control of their wealth. We engaged an estate planning attorney, chosen from among our existing service providers because of his expertise in the industry at the core of this family’s wealth. The ultimate structure was developed to move assets into entities that would provide protection from general liability exposure without an undue level of complication.
The outcome was:
1. A simple, effective, and flexible estate structure.
2. Estimated estate tax savings of $30-40mm*.
3. Maintained control of the assets within the new structures during the clients’ lifetimes.
Case Study #2 (Family Office Services)
One SineCera client is the CFO of her company, with a husband and three college-aged children. After spending all day mired in the finances of the business, the last thing she wanted to do was to come home and do the same for her household.
SineCera brought a whole array of services to this client, including:
1. Consolidated investment reporting of all the family’s assets regardless of their location and who manages them. This includes public market accounts, personal and investment real estate, oil & gas holdings, private equity, venture capital, collectibles, retirement accounts, education accounts, trusts and other entity accounts, and philanthropic accounts.
2. Secure document management. Documents eVaulted include estate documents such as wills and powers of attorney, insurance documents, trust documents, tax returns and more. The document storage system includes the capability for secure transmission with other professionals, including CPAs, attorneys and bankers.
3. Insurance review and upgrades. As documents were collected for storage, we identified the need for an upgrade in insurance coverage. Working with an insurance broker that specializes in the high net worth market, the result was new property and casualty policies for multiple homes, antique vehicles, art and jewelry.
4. Banking enhancements. SineCera identified the opportunity to move cash into accounts offering FDIC insurance on up to $100million. We also helped to arrange a securities-backed line of credit to assist in cash management as the client considered future private investments.
5. Philanthropic guidance for the family’s donor advised fund. SineCera is able to provide due diligence on areas of philanthropic interest or on specific charities that the client and her family might be interested in supporting.
6. Financial Accounting and Bill Pay. Last but not least, SineCera was able to assist the client with her least favorite activity, managing the family’s cash and bills. Through another strategic partner that provides these financial services, bills are paid, expenses are logged and tracked, a schedule of anticipated bills is maintained for things such as property taxes and insurance, credit cards are coded and tracked, family financial statements are generated, and tax prep is provided for the family’s CPA.
Case Study #3 (General Partner - Private Equity Firm)
SineCera Capital recently welcomed a new client, Tim, a divorced father of two college-aged children who is a General Partner in a large private equity firm. His holdings included personal real estate, GP and LP interests, and a substantial number of direct investments, co-investments, and sidecar investments in private equity deals, and public market holdings.
This vast array of investments had become overwhelming. He was seeking a partner who could help him:
1. View and track the performance of all investments and assets in one place.
Consolidate all of his investments into a unified family office reporting platform. Tim had 12 brokerage accounts, 3 trust accounts, 6 entity accounts, and 12 PE fund commitments, and 39 direct investments.
2. Monitor unfunded commitments and cash on hand to ensure the ability to meet capital call requirements.
Tim not needed a more optimal way to track his commitments and ensure new commitments were being made within entities that aligned with his tax, estate, and liquidity structures.
3. Invest his public market portfolio in such a way to reduce correlation to his private investments**.
Given Tim’s extensive private market portfolio, SineCera Capital constructed a customized portfolio for his public market assets that was designed to cut his correlation to equity markets by almost 50% without sacrificing the performance.
The client now has one login to view all assets and liabilities in one place, a fully liquid, low-cost, tax efficient public markets portfolio that is significantly less correlated to his private equity holdings. The aim of this was to bring a greater peace of mind and freedom to focus on enjoying life.
*The figures quoted in this case study are a result of estate tax rules enacted in the 2017 Tax Cuts and Jobs act. They are specific to the client and their individual circumstances. Results will vary depending upon the techniques used. You should always seek the counsel of a qualified estate planning attorney and tax counsel for tax and legal advice.
**Correlation figures based upon a representative portfolio consisting of 60% in VT (Global Equities and 40% in BND (US bonds) between (01/01/2009 - 03/07/2023), which is a commonly held benchmark.
SineCera Capital, LLC (“SineCera”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where SineCera and its representatives are properly licensed or exempt from licensure.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of SineCera strategies are disclosed in the publicly available Form ADV Part 2A.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
The scenarios described in this content are case studies that represent real Client experiences, with all names changed. Results are situational and may not be representative of all Client experiences, which may vary substantially. Circumstances are presented for informational purposes only and does not guarantee any level of success as a Client of SineCera.