Once upon a time, everyone was going to live happily ever after with perpetual growth in the equity market.
"That pipe dream is over," says Dan Genter, president of RNC Genter Capital Management, explaining that the aftermath of the 2008 financial crisis has shown that people cannot rely on capital appreciation to meet their needs.
Most of Genter's clients have been investing for at least a decade, and have made it through the dot-com bust and the mortgage meltdown. "Not only have they been hit between the eyes twice, but also the runway they have to retirement is significantly shorter. They realize they can't keep going through these types of cycles," he says.
Genter says clients are preoccupied with risk-with smoothing out returns and reducing their volatility. In what is basically a 1.5%-return environment, they wonder where a predictable income stream to live on will come from. "Those two [issues] go hand in hand, and that's what people are struggling with," he says.
Separate Account Management
RNC Genter helps clients deal with these issues with individualized separate account management that uses the common stocks of large- and medium-capitalized corporations, government fixed income and investment-grade corporate and municipal fixed income.
When Genter came on board in 1979, the firm was known as RNC Capital Management. With some $40 million under management, it was operating as a sister company to one primarily involved in real estate syndications. By 1990, its assets had grown to around $1 billion, and it was sold to Austria's Länderbank, which merged the following year with Zentralsparkasse und Kommerzialbank to become Bank Austria.
Genter ran the operation for Bank Austria until 1998, when he bought it back and put his name on the shingle. Today, RNC Genter manages nearly $4 billion with a staff of 66 and has some 5,000 clients.
The firm caters to high-net-worth families and individuals, representing both multigenerational and new wealth, and to medium-size pension plans. A second client category comprises professional entertainers who appear on camera or on screen; producers, writers and directors; and professional athletes. These are different from private clients in that the firm works mainly with their business managers, who act as their liaison, and their portfolios often require considerable custom tailoring because of sporadic income flows.
Many clients also come via boutique RIAs and national brokerage firms on whose platforms RNC Genter is a
manager, including Oppenheimer, Credit Suisse, Brinker Capital and LPL.
All accounts except those coming in through the platforms are individually structured. This means looking at clients' overall risk profile, time horizons and individual tax situation in order to structure their portfolios in a way to provide any income or cash flow they need, provide for any known liabilities that may be coming up in their lives and provide the highest after-tax rate of return.
After Genter bought back the firm, he and his colleagues, who had been in the fixed-income game for many years, found a niche that wasn't being served, where RNC Genter felt it could garner assets. They noted a void in institutional-caliber, fixed-income management to the middle market, both institutional and high-net-worth individuals.