Since 1976, Harris Associates, L.P., has been offering investment advisory services. Today, it handles more than $107 billion in assets under management (AUM). The financial advisor firm has made a name for itself as a value investor, identifying stocks of companies it believes are trading at a major discount to their true underlying value.
Harris Associates Background
Harris began serving clients in 1976. Its mission remains to deliver superior investment advice by maintaining a consistent investment philosophy that revolves around in-depth, fundamental market research. Its Chicago-based team currently features 40 investment professionals and nearly 200 total employees.
Harris is a limited partnership with Harris Associates, Inc. as its major partner. Both are indirect subsidiaries of Natixis Investment Managers, L.P. That firm, in turn, is an indirect subsidiary of Natixis Investment Managers, an international asset management group based in Paris.
What Types of Clients Does Harris Associates Accept?
Harris serves a diverse group of clients spread out across the globe. According to records filed with the Securities Exchange Commission (SEC), the firm serves the following types of clients:
- Government retirement plans
- Corporate pension and profit sharing plans
- Charitable organizations, foundations and endowments
- Trust companies
- Insurance companies
- Sovereign funds and other types of entities
- Wrap-fee programs
- Mutual funds, private investment partnerships and other pooled investment vehicles
Harris Associates Minimum Account Size
Minimum account sizes for institutional clients vary under Harris, depending on the portfolio program. We lay out these programs below:
|Investment Strategy||Account Minimum|
|Equity and income||$100 million|
|Global all cap equity||$100 million|
|Global equity||$100 million|
|Global concentrated equity||$100 million|
|International equity||$100 million|
|International small cap equity||$100 million|
|Japan equity||$100 million|
|U.S. equity||$3 million|
Services Offered by Harris Associates
Harris primarily offers investment advisory services. Depending on the client's risk tolerance and overall financial profile, the firm may allocate the client’s assets across one of its many portfolio models or strategies. The firm may also provide variations of these models in order to accommodate for factors such as currency hedging and country exclusions.
The firm extends these services on a discretionary basis. This means it has complete authority to make all investment decisions and execute trades within your account as it deems fit based on your individual circumstances.
In addition, Harris delivers discretionary investment advisory and administrative services to pooled investment vehicles such as mutual funds and private investment partnerships.
Harris also serves as an advisor or sub-advisor to sponsored wrap-fee programs for third parties. It provides various services to clients of these programs including advice around asset allocation and choosing investment managers.
Harris Associates Investment Philosophy
Harris’s investment philosophy is driven by value investing concepts. This means the firm seeks to invest in companies that it deems are trading at a major discount to their underlying value in order to capture strong long-term returns. Accordingly, most of the firm’s portfolio models are built with equity and equity-like securities.
The firm focuses on small- to large-cap U.S. companies, but it also considers exposure to foreign currency. Its balanced portfolios provide exposure to debt securities from around the world.
In evaluating these securities, the firm adopts a strategy of fundamental research. This method involves analyzing the state of different companies by taking a deep dive into its financial records, competition and other factors that may tell the advisor more about its potential to grow.
Fees Under Harris Associates
Harris charges individual clients fees based on their AUM. Below, you can find the firm’s current fee schedule for each of the Harris portfolio models:
|Investment Strategy||Advisory Fees|
|Blanced||0.75% on the first $15 million 0.45% on assets valued above $20 million|
|Equity and income||0.60%|
|Global all cap equity||0.80% on the first $100 million 0.65% on assets valued at more than $100 million|
|Global equity||0.70% on the first $100 million 0.50% on assets valued above $100 million|
|Global concentrated equity||0.70% on the first $100 million 0.55% on assets valued at more than $100 million|
|International equity||0.70% on the first $100 million 0.50% on assets valued above $100 million|
|International small cap equity||1.00%|
|Japan equity||0.75% on the first $100 million 0.60% on assets valued at more than $100 million|
|U.S. equity||1.00% on the first $10 million 0.50% on assets valued at more than $10 million|
|Balanced||1.00% on the first $10 million 0.50% on assets valued at more than $10 million|
But keep in mind that the firm generally charges fees on a quarterly basis in advance. This means you’d have to divide your annual asset-based fee rate by 4 to determine the quarterly fee. Harris deducts these fees from your account. The firm notes that asset values are typically determined based on the last sale price if the securities are listed and traded on such date, or the previous day’s closing price or other standard methods if not traded.
Also note that these are advisory fees for services by Harris. Your account will also bear external fees and expenses. These can come in the form of custodial fees, transaction costs and expenses related to the underlying funds your program invests in.
What to Watch Out For
In delivering its services, Harris and associated persons may work with various affiliated and non-affiliated firms in the financial services industry. In doing so, it may be incentivised to recommend products or services from such firms in exchange for compensation.
This structure, however, is common among the financial services industry. Moreover, Harris must uphold its fiduciary duty to provide advice in your best interests at all times. It also has a written Code of Ethics designed to prevent potential conflicts of interest. You can find this Code as well as company disclosures by looking Harris up on the SEC website.
Harris Associates Disclosures
At the time of this writing, Harris has no legal or disciplinary events in the past 10 years to disclose.
Opening an Account With Harris Associates
You can open an account with Harris by visiting its website at http://www.harrisassoc.com/ or by calling the firm at (312) 646-3600.
Where Is Harris Associates Located?
Harris Associates is located at the following address:
111 S. Wacker Drive
Chicago, Illinois 60606
All information was accurate as of the writing of this article.
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