The Privor Capital Preservation Doctrine
Wealth management at PRIVALOR AG is not defined by the pursuit of spectacular returns, but by the discipline of avoiding permanent loss. We operate under a doctrine that treats capital preservation as the absolute prerequisite for compounding. This is a subtle but decisive distinction: while the market chases momentum, we focus on the integrity of the principal.
Our methodology begins with an inversion of traditional thinking. Instead of asking "What returns can we capture?", we ask "What risks must we eliminate?". This risk-first approach informs every decision, from asset selection to portfolio construction. It is a philosophy rooted in the Swiss-German tradition of prudent stewardship, adapted for the complexity of modern global markets. The goal is not to outperform in every quarter, but to ensure that our clients’ financial future is never compromised by foreseeable volatility.
For the discerning investor, this means transparency over complexity, resilience over speculation, and a steadfast commitment to the long-term horizon. PRIVALOR does not sell products; we engineer financial certainty.
"Risk management is not a constraint on returns; it is the engine of sustainable wealth."
— Investment Committee Manual
The Privor Lexicon
Key terms defined with intent.
Absolute Return
A target unmoored from market benchmarks. We seek positive outcomes regardless of index performance, focusing on the client's specific financial objectives.
Conviction Weighting
Capital allocation is not equal; it is proportional to the depth of analysis. High-conviction ideas receive disproportionate capital, while speculative positions are minimized.
Tail Risk
The risk of rare, high-impact events. We actively hedge against tail risks through diversification and non-correlated assets, ensuring portfolio survival.
Illiquidity Premium
The compensation for locking away capital. We selectively embrace illiquidity when it offers a structural pricing advantage unavailable in public markets.
The Three Pillars of Allocation
Our portfolio architecture is built on a triangular foundation designed to withstand market turbulence while capturing structural growth.
1. Core Defensive
The anchor of the portfolio. Comprised of high-quality fixed income, defensive equities, and capital preservation vehicles. This layer generates stability and predictable cash flow, serving as the ballast during market dislocations.
- Investment Grade Bonds
- Dividend Aristocrats
- Short-duration Treasuries
2. Strategic Growth
The engine of wealth creation. This layer targets secular trends and structural growth opportunities across global markets. Selection is rigorous, emphasizing quality and durable competitive advantages.
- Global Equities
- Real Assets
- Infrastructure
3. Tactical Alpha
The precision tool. Shorter-term opportunities arising from market inefficiencies, event-driven scenarios, or valuation dislocations. Deployed opportunistically and sized conservatively.
- Special Situations
- Convertible Arbitrage
- Private Equity Co-invest
Institutional-Grade Risk Management
Our risk framework is not a checklist; it is a continuous, multi-layered process designed to protect capital against both known and unknown threats. We treat risk management as a proactive discipline, not a reactive compliance measure.
Every position undergoes a rigorous "failure mode" analysis. We simulate extreme scenarios to understand how an asset behaves under stress. This includes stress testing for geopolitical shocks, interest rate spikes, and liquidity crises. The objective is singular: ensure that no single event can imperil the structural integrity of the portfolio.
Daily Liquidity Mapping
We model exit scenarios for every position daily, ensuring sufficient liquidity to meet client obligations without forced selling.
The Cost of Discipline
Our strategy involves deliberate trade-offs. We believe in full transparency regarding the compromises required for long-term capital preservation.
Upside Capture
Downside: During aggressive bull markets, our returns may lag high-beta indices.
Mitigation: We accept this as a feature, not a bug. Our focus is on risk-adjusted returns over full market cycles, not chasing momentum at the peak.
Liquidity
Downside: Access to private markets and special situations requires capital lock-up.
Mitigation: We maintain a strict liquidity ladder, ensuring the core defensive pillar covers 12-18 months of client cash flow needs.
Complexity
Downside: Sophisticated strategies require deeper client education and trust.
Mitigation: We provide direct access to the Investment Committee and detailed monthly reporting that explains performance drivers, not just numbers.
Performance Through Cycles
Proof of concept is not found in a single quarter's outperformance. It is found in the behavior of the portfolio during periods of market stress. Our historical track record demonstrates a consistent ability to preserve capital during downturns and participate in recovery.
- • Lower Drawdowns: Our strategies historically exhibit 30-40% lower peak-to-trough declines compared to broad indices.
- • Faster Recovery: Capital preservation allows for immediate reinvestment at lower valuations, accelerating the path to new highs.
- • Smoother Equity Curve: Reducing volatility drag compounds wealth more effectively than sporadic high returns.
Comparative Drawdown Analysis
Last 10 YearsMax Drawdown % (Lower is Better)
Direct Access to Decision Makers
At PRIVALOR AG, you do not interface with a sales team or a relationship manager who merely reports decisions made by others. You have direct access to the Investment Committee—the individuals responsible for the strategic direction of your portfolio.
The Committee meets weekly to review portfolio positioning, risk exposure, and macroeconomic shifts. For our private clients and foundation trustees, this means you can speak directly to the portfolio managers and analysts managing your wealth. We believe this alignment is non-negotiable for true fiduciary stewardship.
Meet the TeamReady to discuss your investment strategy?
Schedule a confidential consultation with a member of our investment team.