We manage investment portfolios on a fee-only,
discretionary basis (via individual managed accounts or separate
portfolios) to various types of clients, pursuant to investment
advisory contracts. After digesting the information supplied
by a client on their financial position, investment objectives,
time horizon, and risk tolerance, we make appropriate investments
in a client’s account to best meet their long-term goals.
The investment vehicles used comprise an appropriate mix of
individual securities and mutual funds (primarily no-load).
We focus on managing individual portfolios that are oriented
towards long-term Capital Appreciation. We endeavor to achieve
this objective by investing principally in a combination of
publicly-traded equities, equity mutual funds (primarily no-load),
and at times in other types of securities (irrespective of
asset class considerations) that look attractive from a capital
appreciation standpoint. While identifying individual securities,
the principal method is a disciplined investment process used
to identify securities that, in our opinion, are trading at
market prices that are at an appropriate discount to our calculated
intrinsic worth of these securities (Basically, we are looking
for attractive businesses and securities we believe are “on
sale”). While identifying suitable no-load mutual fund
investments, we strive to identify and use funds/ managers
that share our investment philosophy and will give due consideration
to past performance, transaction fees, expense ratios, and
management style among other factors.
Long-term preservation of capital and producing an adequate
return are extremely important to us. In other words, we are
very concerned about the downside risk inherent in any of
the purchases, and subsequently endeavor to stay out of situations
that tend to magnify this risk—such as chasing the hottest
stock in the hottest sectors, buying speculative names, and
so on. In buying equities while investing on behalf of our
clients, we act like prospective owners of the businesses
we are buying into and will be mindful of factors that a true
long-term owner would be concerned about.
Please see the section on Investment Philosophy and Form
ADV Part II for detailed discussions.
Investment Advisory Agreement and Discretionary
Our clients appoint us as their investment advisor to manage
an investment portfolio for them effective when an Investment
Advisory Agreement is signed. We manage client portfolios
(accounts) on a discretionary basis, i.e. based on the client
giving us the authority, we make all decisions to buy, sell
or hold securities, cash or other investments for a client’s
account at our discretion in line with the objectives discussed
with the client. The client gives us full power and authority
to carry out these decisions on their behalf by giving instructions
to brokers and dealers, and the Custodian for their account.
Our discretionary authority is limited to investment decisions
and we are prohibited from withdrawing funds and/or securities
from client accounts.
We do not maintain custody of any of our clients’ assets.
A client’s assets will be held by an independent Custodian
selected by the client and recommended* by us, if so desired.
The account (s) will, at all times, be held solely in the
client’s name and will require their authorization for
any withdrawal (s). The client pays all the fees and costs
of the Custodian--expenses related to the account such as
brokerage and other execution costs, custody fees and margin
costs, if any. The client instructs the Custodian to send
quarterly/ monthly statements showing the assets in and all
transactions for the account during the period corresponding
to the statement, and to provide us with copies of those statements
and confirmations of any transactions effected in a client’s
*We recommend using the institutional brokerage division
of TD Ameritrade, Inc., TD Ameritrade Institutional (TDA),
as the Custodian for our clients’ assets.
We provide our clients with periodic reviews that discuss
the performance of their accounts against relevant benchmarks.
As discussed above, our clients will also get regular statements
from their broker/dealers, custodians, and mutual funds as
appropriate. In addition, our clients who use TDA as their
Custodian will be provided with online access to eWebPortfolio.com,
a third-party provider of an online portfolio management and
reporting system. This online system allows our clients to
securely access several reports on their portfolios 24x7.
The performance of each portfolio that we manage is benchmarked,
on a long-term basis of at least 3 to 5 years,
against appropriate market indices that reflect the objectives
of that portfolio and the client. For example, a portfolio
with an objective of 100% towards Capital Appreciation would
be benchmarked against the S&P500 index (that is considered
a proxy for the equity market as a whole).
We offer two types of fee schedules (described in more
detail in Form ADV, Part II and Schedule F under the
Disclosures section), as follows:
Management Fee Schedule:
Under this arrangement, the client compensates Ceera via an
annual management fee (paid quarterly) that is typically 1% of the assets under
management. This annual fee is negotiable and can vary up to
1.75% of the assets under management depending on the size
and complexity of a client’s
account, and other business considerations.
Performance-based Fee Schedule:
We also offer to clients who
securities laws, a performance-based fee schedule (Hurdle
Rate Method) where we
get compensated if and only if we generate a rate of return,
on an annual basis, in excess of a negotiated hurdle rate
(typically 6%). There is a performance fee if and only if
the portfolio’s performance crosses this hurdle, and when it
does so Ceera receives 25% of the returns in excess of the
hurdle rate (For example, if Ceera generates a 10% rate of
return in a year, it gets paid 25% of 4% which is 1%, at the
end of the year). Under this fee schedule there are no other
annual management fees of any kind—in other words, Ceera
needs to generate a rate of return more than the hurdle rate
during a year or it does not get paid any fees.
Please also see Form ADV II Schedule F (under the
Disclosures Section) for a modified version of this fee
schedule called Watermark Method.
do not receive any compensation in the form of trade or sales
commissions from any other sources.
Becoming a Client
Please visit the following section for more information.