Types of Clients
Newhaven generally provides investment management services to individuals, corporations, foundations
and trusts. There are no minimum account size requirements for opening or maintaining an account.
Methods of Analysis, Investment Strategies and Risk of Loss
Newhaven’s portfolio managers take a fundamental investment approach. Valuation, risk, diversification
and income generation are the key parameters that Newhaven considers when constructing portfolios.
Newhaven is focused on working with its clients to help achieve each client’s financial goals. Each client
has a unique financial circumstance and Newhaven’s portfolio managers seek to ensure that our clients'
individual objectives are addressed by their portfolio construction.
To select investments, we utilize fundamental analysis, which means that we focus on the underlying
fundamental characteristics of each investment. The information that we utilize for this analysis is
primarily procured from paid subscriptions to financial databases and publications. We also review
financial newspapers, magazines, company reports, regulatory filings, press releases, research materials
prepared by other firms, and other data available over the internet.
Newhaven uses quantitative methods, including statistical resampling, to determine asset allocation
strategies for clients. Newhaven also uses historical data on asset classes from one or more vendors to
analyze risk premiums associated with asset classes.
Risk of Loss
Clients should carefully consider whether an investment is appropriate for them in light of their
experience, objectives, financial resources and other relevant circumstances. Clients should understand
the nature of the investment and the extent of their exposure to risk. Depending on the nature of a
client’s investment, the type of investment risk will vary. Investment risks include:
Debt and Other Income Producing Risk - income securities are subject to interest rate, market
and credit risk. Interest rate risk relates to changes in a security’s value as a result of changes in
interest rates generally. Even though such instruments are investments that may promise a
stable stream of income, the prices of such securities are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price fluctuations. In general, the
values of fixed income securities increase when prevailing interest rates fall and decrease when
interest rates rise. Market risk relates to the changes in the risk or perceived risk of an issuer,
country or region. Credit risk relates to the ability of the issuer to make payments of principal and
interest. A client could lose money if the issuer of a fixed income security is unable to pay
interest or repay principal when due. Credit risk applies to most fixed income securities. The
values of income securities may also be affected by changes in the credit rating or financial
condition of the issuing entities.
Equity Strategies Risk - The returns of an account invested in an Equity Strategy may vary and
could lose value. Because an Equity Strategy invests substantially in common stocks, the value
of the stocks held might increase or decrease in response to the activities of an individual
company or in response to general market and/or economic conditions. Investment in common
stocks, particularly in common stocks of small- and medium-size companies with high growth
potential, can be volatile. Because of this volatility, investment in an Equity Strategy should be
long-term only. Dividends are expected to be minimal and there can be no assurance that an
Equity Strategy objective will be met.
Capital risk – the risk a client may lose the money he/she invests.
Liquidity risk – the risk that a client’s investment may not be easy to sell.
Currency risk – the risk that currency movements alone may affect the value of a client’s
investment if it is held in another currency.
Interest rate risk –the risk that the principal value of a debt instrument that a client is invested in
will go up or down as the interest rates in the economy fluctuate.
Business risk – the risk inherent in the operations of the entity or industry in which a client has
invested.
Financial risk – the risk associated with the amount of leverage or debt that the entity in which a
client has invested has used to finance assets.