First Manhattan Co. is a New-York based limited partnership offering portfolio management to both individual and institutional clients. The firm is fee-based and works with several types of clients. It employs a large team of financial advisors to help manage the firm.
First Manhattan Background
Principally owned by David Gottesman, founder, and Robert W. Gottesman, executive chairman, First Manhattan’s website mentions that it strives to build stock portfolios with the goal of capital appreciation over time. Though it offers individually managed portfolios, the firm also provides investment advisory services for two private funds that invest in publicly-traded companies (the funds) located in mainland China.
As for First Manhattan’s team, several have the chartered financial analyst (CFA) designation.
First Manhattan Client Types and Minimum Account Sizes
First Manhattan offers investment advisory services for individuals, estates, charitable organizations, investment companies, trusts, retirement accounts, corporations and other business entities.
The firm generally imposes an account minimum requirement of $200,000 for new clients, though it has the discretion to adjust account size requirements.
Services Offered by First Manhattan
First Manhattan mainly provides investment management services. The firm's research process typically involves lots of face to face meetings.
First Manhattan Investment Philosophy
The firm’s website touts that it applies a risk-averse, long-term and value-oriented approach to its investment services. In honoring its core philosophy, First Manhattan says it uses in-house, proprietary research to identify opportunities, avoids undue risk by being rigorous in portfolio construction and delivers outstanding client service.
In alignment with its long-term investment approach, the firm uses fundamental analysis and proprietary research to inform each of its investment decisions. First Manhattan mainly invests in equity securities, municipal securities and corporate fixed-income taxable securities.
Fees Under First Manhattan
First Manhattan primarily manages client accounts invested in equity securities and fixed-income securities. For equity securities, First Manhattan charges 1.20% of the value of the client’s portfolio invested or available for investment. The firm charges 0.375% for fixed-income securities. First Manhattan handles all portfolio transactions since it also acts as a broker-dealer.
First Manhattan requires different brokerage charges for customers whose portfolios aren’t invested in equity securities. These clients either pay a $25 charge for each fixed-income securities transaction, or $2.50 per $1,000 principal amount of the first $250,000 and $1.00 per $1,000 multiple on accounts over $250,000, according to First Manhattan’s firm brochure. The maximum charge is $1,000 per transaction.
What to Watch Out For
The firm has 13 disclosures listed on its Form ADV. One of First Manhattan's latest disclosures was resolved in 2010 after it received a censure and fine of $7,500 for late filing to the Trade Reporting and Compliance Engine (TRACE).
First Manhattan generates performance-based compensation from pooled investment vehicles, and some advisors simultaneously manage both performance accounts and accounts that pay standard fees. This creates a potential conflict of interest if portfolio managers favor pooled investment vehicles, but First Manhattan is a fiduciary.
Opening an Account With First Manhattan
If you'd like more information about working with First Manhattan, you can call them over the phone at (212) 756-3300. You can also reach out via email.
All information was accurate as of the writing of this article.
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