Perhaps PanAgora Asset Management is most known for the work of its chief investment officer, Edward Qian, whose academic paper “On the Financial Interpretation of Risk: Risk Budgets Do Add up” was foundational to the investment strategy “risk parity,” which allocates risk (or volatility) rather than capital. According to the firm’s website, Qian’s research “has helped PanAgora become a leader in the area of risk budgeting strategies by launching the first Risk Parity Portfolios earlier this decade.”
PanAgora provides portfolio management services to institutional clients such as private investment funds. With 143 employees, including 48 advisors, the Boston firm manages nearly $44 billion in assets.
The firm does not serve individuals. To find one that does, use SmartAsset’s financial advisor matching tool. It connects you with up to three local advisors, vetted by us.
PanAgora Asset Management Background
PanAgora has been in operation since 1985. In addition to being a registered investment adviser (RIA), the firm serves as a commodity pool operator (CPO) and commodity trading advisor (CTA) and swap firm with the Commodity Futures Trading Commission (the CFTC).
PanAgora Asset Management Client Types and Minimum Account Sizes
PanAgora serves the following types of clients:
- Investment companies
- Domestic and offshore private funds
- Trusts including grouped ones
- Charitable organizations
- Pension and profit-sharing plans
- State or municipal government entities
- Corporations or other business entities not previously listed
On behalf of these clients, the firm sponsors private unregistered investment pools including funds organized under U.S. tax-qualified group trusts, domestic private funds organized as limited liability companies and offshore private funds organized as Cayman Islands exempted companies.
PanAgora doesn’t have a set minimum account size. However, it recommends one of at least $20 million due to its fee schedule.
Services Offered by PanAgora Asset Management
PanAgora primarily offers investment advisory services to private funds, group trusts and other large investment entities. It also is a sponsor to certain funds. The firm invests globally across several different asset classes and utilizes various investment strategies.
PanAgora Asset Management Investing Philosophy
PanAgora describes its investment approach as quantitative, which means it is driven by the idea that major inefficiencies exist within the global capital markets. To exploit these inefficiencies, it applies these investment strategies:
Risk Premia Parity - aims for stable returns through diversified exposure to global assets and market risk premia. These asset classes can include equity, fixed income and inflation hedging instruments.
Defense Equity - aims to capture the risk premia associated with long-term exposure to equities
Active Equity - aims to exploit market inefficiencies in the equity markets
Environmental Social Governance (ESG) - utilizes statistical machine learning to capture returns by investing in companies that operate in a way that upholds certain values
PanAgora Asset Management Fees
Fees for PanAgora’s advisory services are negotiable. But they’re generally taken as a percentage of the account’s market value. Client accounts may also face other expenses such as brokerage and custody fees. In addition, the firm may negotiate performance-based fees with its clients.
According to a 2018 study of 1,500 firms by RIA in a Box, the average financial advisor's investment advisory fee is 0.95% of AUM.
What to Watch Out For
Within the past 10 years, PanAgora has not faced any disciplinary action. For the latest details you can access the firm’s Form ADV and other disclosure documents on the official website of the Securities and Exchange Commission (SEC).
PanAgora’s indirect parent company Power Financial owns insurance, investment management and brokerage companies in addition to other financial services firms. PanAgora may provide investment advisory services to Power Financial portfolios that may in turn invest in PanAgora products. PanAgora may be incentivised to allocate more trades to affiliated accounts and other accounts that may result in a direct benefit to the company. However, PanAgora has a code of ethics and a fiduciary duty to operate in the best interests of its clients.
Opening an Account With PanAgora Asset Management
To contact PanAgora, call (617) 439-6300 or send a message via its website at https://www.panagora.com/contact-us/.
Tips for Finding the Right Financial Advisor
- There are plenty of money managers who work with individual clients. To start your search, use our five-minute financial advisor matching tool. It links you with up to three advisors in your area after you answer a few questions about your financial goals.
- Ask prospective advisors if they have any accreditations. Certified financial planners (CFPs), for example, hold themselves to high standards and work as fiduciaries. This means they are obligated to provide advice solely in their clients’ best interests.
All information was accurate as of the writing of this article.