Harris Associates, L.P.
Harris Associates has been offering investment advisory services since 1975. Today, it oversees billions in assets. 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' mission is 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 45 investment professionals and nearly 200 total employees.
Harris Associates Background
Harris Associates is a limited partnership with Harris Associates, Inc. as its major partner. Both are indirect subsidiaries of Natixis Investment Managers, LLC. That firm, in turn, is an indirect subsidiary of Natixis Investment Managers, an international asset management group based in Paris.
Harris Associates Client Types and Minimum Account Sizes
Harris serves a diverse group of clients spread out across the globe. The firm serves the following types of clients:
- Individuals with a high net worth
- Investment companies
- Pooled investment vehicles
- Pension and profit-sharing plans
- Charitable organizations
- State and municipal governments
- Corporations
- Insurance companies
- Sovereign wealth funds
- Other investment advisors
Minimum account sizes for institutional clients vary under Harris, depending on the portfolio program. We lay out these programs below:
- Balanced: $20 million
- 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. mid cap equity: $5 million
- Private client balanced: $3 million
- Private client 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 assets undr management. Below, you can find the firm’s current fee schedule for each of its portfolio models:
| Harris Associates Fee Schedule | |
| Investment Strategy | Advisory Fees |
| U.S. Equity | 0.45% - 0.75%, depending on asset value |
| U.S. Concentrated Equity | 0.50% - 1.00%, depending on asset value |
| Equity and Income | 0.60% on all assets |
| Global All-Cap Equity | 0.65% - 0.80%, depending on asset value |
| Global Equity | 0.50% - 0.70%, depending on asset value |
| Global Concentrated Equity | 0.55% - 0.78%, depending on asset value |
| International Equity | 0.50% - 0.70%, depending on asset value |
| International Small-Cap Equity | 1.00% on all assets |
| Japan Equity | 0.60% - 0.75%, depending on asset value |
| Balanced | 0.45% - 0.75%, depending on asset value |
| U.S. Mid-Cap Equity | 0.50% - 1.00%, depending on asset value |
| Private Client Balanced | 0.50% - 1.00%, depending on asset value |
| Private Client Equity | 0.50% - 1.00%, depending on asset value |
The firm generally charges fees on a quarterly basis in advance. 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. Harris deducts these fees from your account.
What to Watch Out For
Harris Associates has two disclosures on its SEC-filed Form ADV. One of these in criminal in nature, while the other is a regulatory disclosure. The former is attributed to Natixis, an advisory affiliate of the firm. The latter is directly attributed to the firm, though, due to a situation where it failed to file a notification with the German Federal Financial Supervisory Authority when its holdings in a Germany-based security exceeded a preset limit. This resulted in a fine of $63,252, which, at the time, was equal to 52,500 euros.
Opening an Account With Harris Associates
You can open an account with Harris by visiting its website or by calling the firm at (312) 646-3600.
All information was accurate as of the writing of this article.
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