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Waterfall Asset Management

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Waterfall Asset Management

Waterfall Asset Management

Waterfall Asset Management is an advisory firm with more than $12.42 billion in assets under management (AUM). The firm has around 75 advisors that maintain relationships with roughly 40 clients, including pooled investment vehicles, retirement plans and insurance companies. The firm currently does not have any individual clients. If you’re looking for an advisor firm that works with individual clients, try our financial advisor matching tool.

Waterfall Asset Management, which is headquartered in New York City, is a fee-only firm. This means that all of its earnings come from advisory fees paid by clients. Conversely, a fee-based firm may earn income from additional outlets, such as insurance and securities commissions.

Waterfall Asset Management Background

Co-managing partners Thomas Capasse and Jack Ross founded Waterfall Asset Management in 2004. The duo remains the firm’s principal owners to this day. Capasse and Ross, along with Chief Financial Officer Brian Breakstone, Chief Operating Officer Crager Boardman and Chief Technology Officer Ronen Rub, round out the firm’s management team.

There are 70 advisors employed at the firm, many of whom have earned professional certifications such as chartered financial analyst (CFA) or certified public accountant (CPA).

Waterfall Asset Management Client Types and Minimum Account Sizes

Waterfall Asset Management currently works with roughly 40 clients, which is a relatively small number of clients for a firm with 70 advisors. That may be because the firm works only with large institutional clients. Half of its client base is comprised of pooled investment vehicles, while the other half includes a range of investment companies, retirement plans, insurance companies, government entities and corporations.

Waterfall Asset Management generally requires at least $1 million in investable assets. However, the firm may waive this minimum at its discretion.

Services Offered by Waterfall Asset Management

The hallmark offering at Waterfall Asset Management is its investment management services, which it provides to private investment funds, separately managed accounts (SMAs), real estate investment trusts (REITs) and other clients.

The firm specializes in investment advice regarding less conventional securities. These might include asset-backed securities, consumer and commercial performing and non-performing loans, residential and commercial mortgage-backed securities, privately negotiated new issue assets, small-balance commercial mortgage loans, investments in pools of loans and private equity.

Waterfall Asset Management Investment Philosophy

There are four key elements to the investment philosophy at Waterfall Asset Management, according to the firm’s Form ADV:

  • Developing trading ideas based on evaluating available information or negotiated transactions sourced from firm relationships or analyses
  • Executing cash flow stress testing and due diligence
  • Reducing market risks through conservative leverage and hedging strategies
  • Reducing downside risk related to unanticipated events by frequently evaluating collateral pool performance and proactively managing investment positions

The firm generally starts its investment process by examining sectors in which issuers have been experiencing distress. From there, the firm will conduct analyses to screen for securities with a higher ratio of credit support to expected credit loss. Finally, the firm will conduct legal reviews and other due diligence before actually making investments.

Fees Under Waterfall Asset Management

Advisory fees at Waterfall Asset Management can vary in scope and size from one client to the next, so there is no set schedule of fees. Many of the private funds that the firm works with pay quarterly fees of between 0.375% and 0.4375% of the value of their assets.

What to Watch Out For

Waterfall Asset Management has no disclosures of legal or regulatory events in its more recent filings with the U.S. Securities and Exchange Commission, meaning it has a clean record.

One thing worth noting: for certain client accounts, Waterfall Asset Management will charge performance-based fees. The firm’s Form ADV goes into more detail, stating, “Performance-based compensation may create an incentive for Waterfall to make investments that are riskier or more speculative than would be the case in the absence of a performance fee. To the extent a particular investment is suitable for clients, such investment will be allocated on a basis which Waterfall believes is fair and equitable for all clients, based upon each client’s respective investment guidelines.”

Keep in mind that Waterfall Asset Management is a fiduciary, which means it has a legal obligation to always act in the best interests of its clients.

Opening an Account With Waterfall Asset Management

You can get in touch with Waterfall Asset Management by filling out the contact form provided on its website. The form requests your first and last name, email address and a brief message or question. If you’d prefer to reach the firm by phone, you can do so at (212) 257-4600.

All information is accurate as of the writing of this article.

Tips for Finding a Financial Advisor

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  • When searching for a financial advisor to work with, one of the most important things to pay attention to is whether the advisors you’re considering abide by a fiduciary duty. This is key, as fiduciaries are legally and ethically bound to act in their clients’ best interests at all times.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research