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FirstCapital’s Framework for PMS Selection and Allocation

FirstCapital adopts a manager-selection and portfolio-construction approach to Portfolio Management Services (PMS), positioning PMS as a specialised alpha-seeking allocation within a client’s overall wealth architecture rather than a standalone product.

As an independent wealth management firm, FirstCapital does not manage portfolios directly under PMS structures. Instead, it applies a multi-layered due-diligence and monitoring framework to identify, evaluate, and allocate capital to external PMS managers who demonstrate sustainable investment edge, disciplined risk management, and strong alignment with client mandates.

Education

Investment Philosophy and Process Due Diligence

Each PMS strategy is assessed for clarity and repeatability of its investment philosophy, including:

  • Source of alpha (fundamental, quantitative, thematic, special situations)

  • Portfolio construction discipline (position sizing, concentration limits)

  • Buy/sell frameworks and capital deployment rules

  • Evidence of process adherence across market cycles

 

Preference is given to managers with process-driven decision-making rather than discretionary or narrative-led investing.

Quantitative Performance and Risk Analysis

Performance evaluation extends beyond absolute returns and includes:

  • Risk-adjusted metrics (Sharpe, Sortino, downside capture)

  • Drawdown magnitude, duration, and recovery periods

  • Performance consistency across bull, bear, and sideways markets

  • Rolling return analysis versus benchmarks and peer PMS strategies

 

Strategies exhibiting asymmetric risk-return profiles and controlled downside volatility are prioritised.

Portfolio Structure and Liquidity Assessment

FirstCapital evaluates PMS portfolios for:

  • Concentration risk and correlation across holdings

  • Liquidity profile of underlying securities

  • Sector and factor exposures

  • Impact cost and scalability constraints

 

This ensures PMS allocations remain liquidity-aware and scalable, especially for UHNI and family office mandates.

Portfolio Structure and Liquidity Assessment

FirstCapital evaluates PMS portfolios for:

  • Governance, Transparency, and Operational Controls

  • Operational robustness is a core filter, including:

  • Institutional-grade reporting and disclosure standards

  • Clear fee structures and incentive alignment

  • Custody, audit, and compliance frameworks

  • Risk management systems and internal controls

  • Only PMS managers meeting institutional governance thresholds are recommended.

  • 5. Client Mandate Alignment and Asset Allocation Role

  • PMS is recommended selectively where:

  • Customisation or concentration is required beyond mutual fund limits

  • Clients seek differentiated or high-conviction strategies

  • Portfolio size justifies active, manager-specific risk

  • PMS allocations are sized within a strategic asset allocation framework, ensuring alignment with liquidity needs, estate planning structures, and long-term capital preservation objectives.

  • 6. Ongoing Monitoring, Review, and Re-allocation

  • Post-allocation, PMS strategies are subject to:

  • Continuous performance and risk monitoring

  • Periodic strategy reviews against stated mandates

  • Assessment of style drift or process deviations

  • Rebalancing or exit decisions when risk-return dynamics deteriorate

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