Building a Diversified Public Markets Core After a Business Sale

Profile

An entrepreneur sold a majority stake in a manufacturing business and wanted to redeploy a portion of liquidity into listed markets whilst preserving capacity for future direct deals.

Challenge

Historically, almost all wealth had been tied to the operating company, so there was limited experience with portfolio construction and with the tools used to select managers or allocate risk across a diversified portfolio. The client wanted growth, but with a clear downside framework and an explicit liquidity buffer for potential acquisitions.

What Rains Family Office Did

  • Defined an investment policy that separated liquidity reserves from the core public markets allocation, with a distinct sleeve for opportunistic situations.
  • Implemented a global equity and credit allocation using a blend of directly held securities and carefully selected funds, keeping costs transparent.
  • Introduced simple risk measures and scenario analysis to show how the portfolio might behave under equity drawdowns or credit spread widening.
  • Put in place a quarterly review rhythm, with reporting focused on sources of return and drawdown history, and with a clear link back to the objectives set out in the policy.

Outcome

The client now holds a diversified, liquid portfolio that has remained within its agreed risk parameters through several bouts of market volatility. When a later co-investment opportunity arose in an adjacent sector, the liquidity pool was available without forcing distressed sales of long-term holdings.