Firm Description CapVisor Associates, LLC (“CapVisor”) is an investment advisory firm specializing in
serving the needs of the insurance industry. We provide highly customized insurance
asset management solutions including investment strategy design, strategic asset
allocation analysis, asset liability management, tactical portfolio optimization, investment
management firm selection and manager review and performance analysis. CapVisor
has been in operation since November 2008. Carl E Terzer, is principal, founder and
owner.
Carl E Terzer Date of birth: November 17, 1958
Educational background:
Rutgers College, Rutgers University; B.S. in Business
Administration and Economics, 1980
Business experience:
2008 - Present: Principal and Founder of CapVisor Associates, LLC
2006-2008: Director of the Principal Global Investors (PGI) Insurance Advisory
Group
PGI is a division of Principal Financial Group, Des Moines, Iowa
1999 -2006: Senior Vice President and Director of the Brown Brothers Harriman
Insurance Asset Management Group
1996 -1998 Managing Director, Bankers Trust Company Insurance Asset
Management Group
Disciplinary information: none
Other business activities: none
Advisory Services CapVisor provides investment advisory services to the insurance industry and private
clients. These services include:
1. Investment Advisory /Consulting - provide investment plan
design/revision (investment policy statement, guidelines, benchmarks, etc.),
strategic allocation analysis, tactical portfolio construction and rebalancing
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advice, implementation and ongoing monitoring of investment programs. In this
capacity, CapVisor functions much like a Rent- a-CIO.
2. Investment Advisory/Manager Selection - align unique client
requirements with best-in-class insurance asset managers to improve investment
results through CapVisor’s proprietary, multi-manager network.
Unbiased plan implementation and ongoing maintenance of client investment
programs are key attributes of each service above.
3. Project Work - includes strategic asset allocation studies, tactical portfolio
optimizations, peer group analysis, trustee/custodian vendor analysis, etc.
4. Private Client Consulting - CapVisor also works with private
clients/individuals that are accredited/qualified investors as defined in the
Securities Act of 1933 and defined in Regulation D. (requiring an annual income of
at least $200,000 in each of the past two years ($300,000 for joint income) or a net
worth of at least $1 million). Our services are restricted to provide “advice-only” and
our relationship is Non-discretionary. At no time will CapVisor make decisions on
behalf of clients or take control over client assets for trading, safekeeping or other
purposes. Our services will be restricted to evaluating investment choices for clients
and providing research and recommendations of several alternative choices for the
client’s decision and action (execution of strategies, trades and cash movements).
Client Customization All services are tailored to the unique requirements of each client. Correlating
appropriate investment strategies to the insurer’s liabilities (asset/liability management),
their business and investment objectives and risk tolerance are key components of our
approach to insurance asset management. We have over 100 years of collective
experience working with insurers and have honed our expertise in designing,
implementing and monitoring investment programs that are highly customized and
constrained by each client’s unique tax, accounting and regulatory situation.
As of March 31, 2020, CapVisor provides advisory services for over $ 889,446,677.00
Insurance client assets on a non-discretionary basis. CapVisor does not manage
assets on a discretionary basis nor does it manage client assets internally. After an in-
depth evaluation of the insurance company client, including interviews with their
executive management, we will recommend appropriate external investment
management firms to clients to manage their securities portfolios.
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CapVisor is compensated in the following manner for our services:
1. Investment Advisory /Consulting First five million dollars of market value 20 basis points
Next five million dollars of market value 18 basis points
Next five million dollars of market value 15 basis points
Next $10,000,000 of market value 12.5 basis points
Next $25,000,000 of market value 10 basis points
Excess 5 basis points
Minimum annual fee equals $10,000. Fees may become negotiable at larger market
values.
2. Investment Advisory/Manager Selection – There is no fee to CapVisor clients for this service. CapVisor is compensated by the
external investment management firm selected by our client, at a rate of 40% of the
management firm’s revenue earned from our client’s relationship. Transparency of
CapVisor revenue is fully disclosed to all parties, in accordance with the provisions of
Rule 206(4)-3, as promulgated under the Investment Advisers Act of 1940.
3. Project Work –
Fees for these services are quoted based on the project's parameters.
4. Private Client – Fee schedule: Bracket ($000s) % Fee on breakpoint
($s)
Cumulative Assets
($000s)
first 1,000 0.750% $ 7,500 1,000
next 250 0.700% 9,250 1,250
next 250 0.650% 10,875 1,500
next 500 0.600% 13,875 2,000
next 1,500 0.600% 22,875 3,500
next 1,500 0.500% 30,375 5,000
CapVisor does not buy or sell securities (portfolio management) for our clients. The
external investment management firm selected by our clients to provide portfolio
management services will directly bill our clients for their services. CapVisor does not
provide trust or custody services. Trustee and/or custodian fees may or may not be
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included in the external investment management firm’s fee, depending on the manager
selected by the client. CapVisor does not provide brokerage services. Brokerage or
other transaction costs are included in the external investment manager’s fee.
CapVisor generally bills client fees quarterly, in arrears.
Performance-based Fees and Side-by-Side Management Not applicable -
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CapVisor provides investment advisory services to insurance companies, alternative
risk insurance vehicles (captives, risk retention groups, etc.) self- insurance funds or
Reg 114 reinsurance trusts. CapVisor also provides investment advisory service es to
private clients.
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of Loss CapVisor may use either internally developed or licensed external vendor software for
proposing strategic asset allocations. This software allows various economic scenarios,
of varying degrees of risk, to be applied to our analysis. These risks scenarios are
discussed with clients and mutually agreed upon.
For tactical portfolio allocation advice, CapVisor’s approach begins with a thorough
company evaluation including each client's unique investment objectives and risk
tolerance. Specifically this evaluation minimally involves an examination of their
balance sheet, income statements, and actuarial reports including claims payout
patterns, cash flows and liability durations by line of business. This information enables
us to design a portfolio construction process reflective of the client's insurance liabilities,
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risk/reward parameters, with consideration of constraints related to the client’s tax,
accounting and regulatory circumstances. Fixed income security type/sectors risks, as
well as equity and alternative investment asset class and style risks are described fully
to clients. Clients will also receive peer group analysis information to help guide their
decisions concerning their ability to bear investment risk. CapVisor often works with
network manager(s)' analytic packages to test the suitability of various portfolio
allocations for our clients and to identify risk/reward trade-offs.
CapVisor does not recommend, nor do we buy or sell individual securities or other
Investment products for clients.
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Registered investment advisers are required to disclose all material facts regarding any
legal or disciplinary events that would be material to your evaluation of CapVisor or the
integrity of CapVisor’s management. Neither CapVisor, Carl E Terzer, Principal, nor
any other associate has had any legal or disciplinary events or other information
applicable to this item.
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Carl E Terzer serves on the board of directors of the Captive Insurance Council of the
District of Columbia. He serves as a member of the Board of Directors of ICCIE the
International Center for Captive Insurance Education. Neither CapVisor nor its
associates has any other Financial Industry Activities or Affiliations.
Code of Ethics, Participation or Interest in Client Transactions and Personal Trading CapVisor Associates has adopted a code of ethics pursuant to SEC rule 204 A-1. We
provide a copy of the CapVisor’s code of ethics to any client or perspective client upon
request.
CapVisor holds itself to the highest standards of business conduct, and fiduciary duty to
its clients. The Code of Ethics includes provisions relating to the confidentiality of client
information, a prohibition on insider trading, a prohibition of rumor mongering,
restrictions on the acceptance of significant gifts and the reporting of certain gifts and
business entertainment items, and personal securities trading procedures, among other
things. All supervised persons at CapVisor must acknowledge the terms of the Code of
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Ethics annually, or as amended.
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Client accounts are reviewed on a quarterly basis, or on a more frequent basis, by Carl
E. Terzer, Principal and/or other associates assigned to client accounts. Specific
factors for more frequent reviews may include market volatility or changes to our clients’
situation. Client reports may be customized to meet each client’s needs. These reports
usually summarize progress toward client-defined investment objectives, investment
return analyses, overall evaluation of external investment manager performance,
economic review and outlook, implications for anticipated market conditions on client
portfolios, etc. Many client reports are verbally presented to Executive Management, the
Investment Committee or the Board of Directors.
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Incoming referrals CapVisor has built a strong reputation in the insurance asset management business,
and as such, receives many client referrals from clients, business associates and
industry intermediaries. These intermediaries may include accountants, attorneys,
actuaries, consultants, captive managers and others. CapVisor does not compensate
referring parties for these referrals.
Outgoing referrals Investment Advisory/Consulting clients - CapVisor receives no compensation from any
third party vendors that it may recommend to clients.
Investment Advisory/Manager Search clients - CapVisor will introduce third party
investment managers appropriate to manage securities portfolios for our clients.
CapVisor receives 40% of revenues from client-selected Investment managers
participating in CapVisor's proprietary manager network. This compensation is for client
introduction and ongoing client relationship management /account maintenance.
All managers participating in our proprietary network compensate CapVisor at the same
level (40% of revenue). This eliminates potential conflicts of interest in our ability to
introduce and present managers in an independent and unbiased manner for selection
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by our clients. All clients are aware, before the selection process begins, that CapVisor
is compensated by the managers in accordance with Rule 206(4)-3 as promulgated
under the Investment Adviser Act of 1940. Upon selection of their manager, clients sign
the required compensation disclosure agreement (in accordance with Rule 206(4)-3) in
triplicate with originals of this agreement provided to the Investment Manager, CapVisor
and client files, respectively.
CapVisor does not receive any compensation from any third parties selected by clients
except network investment management firms, as described above.
Other Compensation CapVisor/Carl Terzer receives a stipend from ICCIE for teaching an Investment Basics
for Captives course.
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Not applicable - CapVisor does not provide custody of client assets. CapVisor does
urge clients to reconcile their custodial and external investment manager reports.
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Not applicable - As a matter of firm policy and practice, CapVisor does not have any
authority to and does not vote proxies on behalf of advisory clients. Clients, or their
selected investment managers, retain the responsibility for receiving and voting proxies
for any and all securities maintained in client portfolios.
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Not applicable - CapVisor has no financial commitment that impairs its ability to meet
contractual and fiduciary commitments to clients, and has not been the subject of a
bankruptcy proceeding.
CapVisor does not require nor solicit payment from clients in advance. CapVisor bills
clients quarterly in arrears.
Page 11 Requirements for State-Registered Advisers Not applicable - CapVisor is not and is not required to be a state registered adviser
CapVisor Associates, LLC
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Open Brochure from SEC website