Investment Portfolio Management for Corporations

In recent years, an increasing number of companies, non-profit associations and organizations have recognized the need to manage their investment portfolios professionally and orderly, understanding that these investments cannot be managed in an amateurish or haphazard manner. This trend is intensifying due to the growing sophistication and complexity of the capital market, which includes new financial instruments and trading methods.

Various types of organizations – business companies, private entities, public entities, non-profits and other bodies – that seek to manage their investments professionally, consistently and systematically must decide how to approach this issue. Managing a company’s funds can be done in several ways: through in-house management, which requires dedicated personnel to make investment decisions and monitor the portfolio’s performance, or through external management, utilizing the services of professional investment managers.

The Corporate Portfolio Department at Meitav Portfolio Management Ltd. offers professional investment portfolio management services specifically for corporations.

Advantages of Corporate Portfolio Management through Portfolio Managers

Professionalism: Typically, a company’s financial manager does not have the knowledge or experience required to manage a large-scale investment portfolio. Even if they do, they often lack the time, and this could come at the expense of their core responsibilities. One of the key advantages of external portfolio management services is that key personnel, such as the financial manager and finance department staff, are relieved of the daily burden and responsibility of managing investments. These are transferred to an external entity specialized in this field. This is more convenient, as it allows decision-makers in the company to focus on their core areas of activity.

In addition, when a company contracts an external portfolio manager, it is not necessarily committing to a long-term arrangement and has the option to “dismiss” the manager’s services –cease the manager’s work on the portfolio – without the costs associated with dismissing company staff.

Access to Ongoing Information: When a company contracts an external portfolio manager, its finance personnel get to know the manager, his approach to the capital market, and typically maintain ongoing contact, allowing them to closely follow the manager’s views. Portfolio management companies also regularly provide corporate clients with relevant materials about the capital market, such as market and economic assessments, analyst recommendations and other papers. The company’s investments with the portfolio manager are managed in a securities account separate from other clients, operating according to an investment policy agreed upon with the company’s personnel. They also receive ongoing reports from the bank on every transaction in the investment portfolio and can learn the portfolio’s composition and value on a daily basis. The funds are managed in their bank and branch where the company currently has an account.

Flexibility in Setting and Modifying Policy: When working with a portfolio manager, it is possible and customary to draft an investment policy under which the company’s portfolio will be managed. This policy can be set in very general terms or with greater specificity. For example, the company can set limits on the percentage of stocks, of corporate bonds and of their ratings (for example, only bonds with collateral, or also uncollateralized bonds; only bonds rated above a certain grade, or any bonds), the maximum percentage of a specific stock in the portfolio, and so forth. Moreover, the company’s finance personnel or organization can easily modify the investment policy by providing updated instructions to the portfolio manager.

Cost: Competition among portfolio managers for market share in the business and non-profit sectors has led to a significant reduction in fees over the years. Fees vary between portfolio managers and depend, among other factors, on the portfolio’s size.

Meitav Portfolio Management Ltd. brings its experience, knowledge and professionalism, earned over some 40 years. The company’s expertise is reflected in its skilled workforce, large research department and deep familiarity with the history of the Israeli and global capital markets.
In addition to maximizing returns, Meitav Portfolio Management prioritizes the process, ensuring rigorous risk management tailored to the client’s needs. Meitav Portfolio Management is committed to providing high-level service, professionalism and alignment with the client’s needs.