Optimizing the tax efficiency of hedge funds in Charitable Remainder Trusts

Active Tax Indexing

Optimizing the tax efficiency of hedge funds in Charitable Remainder Trusts

Advisor's client had $300MM across multiple Charitable Remainder Trusts (CRTs), including a significant allocation to hedge funds. Aperio designed a "tax arbitrage" strategy to track the MSCI All Country World Index expected to save the client an estimated $32.7MM in taxes over 10 years.

Raising cash in a portfolio while maintaining asset allocation targets

Active Tax Indexing

Raising cash in a portfolio while maintaining asset allocation targets

Advisor needed to raise $4MM in cash for a client while maintaining asset allocation targets across multiple managers. Aperio analyzed the tax costs and saved the client $136K in taxes by integrating two portfolios.

Maximizing the tax benefit from charitable gifting

Active Tax Indexing

Maximizing the tax benefit from charitable gifting

Advisor’s client wished to gift $6.0MM of his Aperio portfolio to charity. Aperio selected the optimal securities, and also helped the advisor avoid paying $1.0MM in unnecessary taxes.

Diversification of concentrated stock

Active Tax Indexing

Diversification of concentrated stock

Advisor’s client had $20MM, representing 93% of her wealth, in low-basis Cisco stock. Aperio modeled outcome scenarios and built a presentation which the advisor used to persuade the client to liquidate 85% of the stock.

Tax-efficient transition of a low-basis portfolio

Active Tax Indexing

Tax-efficient transition of a low-basis portfolio

Advisor’s prospective client had $37MM in low-basis stocks spread across nine managers. Aperio conducted a transition analysis by tax lot helping the advisor tax efficiently re-allocate $20MM and win the client.

Using tax-loss harvesting to eliminate taxes from hedge funds

Active Tax Indexing

Using tax-loss harvesting to eliminate taxes from hedge funds

Advisor used Aperio’s Active Tax Indexing strategy in combination with other asset classes. Aperio demonstrated that the Active Tax Indexing strategy completely eliminated the taxes due from the client’s hedge fund exposure.