Returns since inception.
The first two lines of the table above shows the return of all Bireme client accounts net of accrued fees at the indicated level. Bireme charges a 1% management fee and a 10% performance fee for qualified clients. We prefer to charge performance fees to better align our incentives with our clients' interests, but SEC rules only permit advisors to charge performance fees to certain clients. For clients who aren't qualified, we charge a 1.75% management fee with no performance fee, which we view as roughly equivalent in expectation. Learn more about our fees here.
The table then compares client account returns to two different benchmarks: the synthetic benchmark, comprising the performance of competing passive investments, and the ARC Private Client Index, comprising the performance of some of our wealth management competitors. By comparing the performance of their account to these benchmarks, we allow clients to objectively assess Bireme's added value.
The synthetic benchmark serves as a hypothetical proxy for the performance of client investment portfolios had they not invested with Bireme. Each client gets their own individualized synthetic benchmark, constructed from an investment in underlying strategy benchmarks proportional to that client's unique allocation bands.
The ARC Private Client Index is a third-party estimate of the performance results of competing wealth managers. We've included this index of our competitors for the sake of completeness and transparency, but we think our synthetic benchmark is the toughtest and most accurate benchmark. There are four APCIs for varying levels of world equity risk. For this comparison, we use the Steady Growth index, corresponding to 60-80% equity risk, which most closely corresponds to the dollar-weighted average exposure of Bireme clients to our two equity strategies over this period (60.6%).
Does your current wealth manager show your account performance and an appropriate benchmark side-by-side? If not, you should be concerned that he doesn't want you to make that comparison. By using synthetic benchmarks at Bireme, we hold ourselves to a tough and transparent standard. We think others should too.
For more detailed results, including a breakdown by strategy, please contact us.