KF Group, LP (“KFG” or the “Adviser”) was formed and registered with the SEC in 2019. The
principal owner of 25% or more of KFG is a trust for the benefit of the Klingenstein family.
Kenneth Pollinger serves as Chairman and Co-Chief Executive Officer of KFG.
KFG is under common control with Klingenstein, Fields & Co., L.P., (“KF&Co.”), which
together with KFG are doing business as Klingenstein Fields Advisors (“KF Advisors,” “we,”
“us” or “our”). KF&Co. is an investment adviser registered with the SEC, and KFG and
KF&Co. share the same principal office and place of business, personnel, and other
resources. KFG and KF&Co. operate a single compliance program and conduct and operate
a fully integrated advisory business. KFG and KF&Co. have entered into an agreement,
under which KF&Co. personnel, including client-facing staff and the primary team of
personnel providing services to KFG clients, manage the oversight, investment decisions
and servicing of such clients.
Types of Advisory Services We Offer
KFG (pursuant to an agreement with KF&Co.) generally creates wealth plans and
investment programs as part of its wealth management services and its investment
consulting services that are designed to meet each client’s specific needs and investment
objectives. For each client, we recommend and implement an individualized asset
allocation with a suite of investment managers and pooled investment funds, including,
where appropriate, hedge funds and private equity funds. This asset allocation process can
be augmented for operating non-profits by certain specialized analytical models that we
have created to understand better the impact of their operating and capital expenses on
their endowments. KFG has developed several strategic asset allocation models that
represent the implementation of the firm’s open architecture approach or asset allocation
framework and that can be applied consistently across applicable new and existing
accounts, as deemed appropriate (as described in Item 8). Ongoing monitoring and
detailed regular reporting is also provided to each client.
KFG provides wealth management services to high-net-worth individuals and families. For
individuals and families, optimal investment programs are predicated not simply on a
prescient view of the capital markets and an ability to uncover and allocate to managers we
deem to be top tier. Rather, they demand a deep understanding of the client’s unique
circumstances including liquidity requirements, risk appetite, current tax and legal
considerations, and the investment goals set forth at the outset of every engagement.
KFG provides investment consultancy services principally to non-profit staff, boards and
investment committees to help them make better, more fully integrated financial decisions.
KFG does this by providing actionable modeling information, discussion leadership and
extensive experience working on behalf of a broad array of not-for-profit organizations.
While KFG offers OCIO services as well, we are by nature collaborative, ensuring that our
client fiduciaries are fully informed and in a position to work closely with us to enhance
their investment programs.
Each relationship, whether individual or institutional, is separately managed and
recommendations are made and implemented on a risk-adjusted basis, taking into
consideration each client’s individualized circumstances.
Types of Investments We Invest In
For its clients, KFG (pursuant to an agreement with KF&Co.) can invest in some or all of the
various types of domestic or foreign investments that are currently available in the global
investment marketplace, including equity securities; warrants; options; government,
municipal and corporate debt of all types and maturities; mutual funds; exchange traded
funds; real estate investment trusts; and so on. In addition, depending upon a client’s needs
and investment objectives, KFG can invest client accounts in limited partnerships which
can include hedge funds, master limited partnerships, and private equity investments,
which in turn invest in some or all of the types of investments set forth above. With client
agreement, KFG invested in its limited partnership, the Solaris Ara Fund (the “Ara Fund”).
The Ara Fund does not have a performance fee although the Ara Fund pays fees to KFG for
the administrative services provided to it. The Ara Fund is closed to new investors and is
more fully described in Item 10 below titled “Other Financial Industry Activities and
Affiliations - Private Investment Funds Advised by KFG.”
How We Manage Your Assets
Typically, we will make investments after a thorough iterative process with each client. In
order to achieve a client’s desired investment objectives and needs, each individual client
asset allocation and manager and fund selection and corresponding investments can and
will vary based on that client’s particular circumstances and goals. After agreeing on an
individualized wealth plan with the client, KFG (pursuant to an agreement KF&Co.) will
effect the client’s plan by recommending and implementing specific investments, such as
separate account managers and/or public or private fund investments to the client.
Ongoing supervision and monitoring of a client’s investments will be provided and we
make recommendations for change whenever we believe it is appropriate in accordance
with each client’s needs and investment objectives. Each relationship will be separately
maintained, and recommendations are made and implemented on a risk-adjusted basis.
Restrictions on Types of Investments
The client can place restrictions on the types of investments in the client’s account. Such
restrictions can be on any basis, including asset classes, types of investments, market
sectors, industries, individual or types of securities or certain investment vehicles. In
managing a client’s account, we will follow those restrictions that we and the client have
agreed upon in writing. It is the client’s responsibility to inform the Adviser of additional
restrictions, changes in restrictions or when restrictions should no longer apply to their
account.
Where a Client’s Assets are Held
KFG requires that each client contract with and maintain a relationship with a reputable
qualified custodian that is unaffiliated with and fully independent from us. A client’s
custodian will hold the client’s assets and provide reports directly to the client on a
periodic basis.
Non-Investment Consulting/Implementation Services
To the extent requested by the client, KFG will provide as a part of its services incidental
consulting services regarding both investment and non-investment related matters such as
estate planning, tax planning, financial modeling, insurance, etc. Particularly with respect to
operating non-profits we can assist in evaluating the impact of their operating and capital
expenses on their endowments and the asset allocation, style and sector weighting and
manager selection. These activities are also described in Item 10 below titled “Other
Financial Industry Activities and Affiliations”. Neither KFG, nor any of its representatives,
serves clients as an attorney, accountant, or insurance agent.
Financial Planning and Non-Investment Consulting/Implementation Services. To the
extent specifically requested by the client or when we think appropriate, KF Advisors
provides financial planning services and assists in the development of detailed financial
plans and strategies, including non-investment related matters, such as estate planning,
insurance, etc. Neither KF Advisors, nor any of its representatives, serves as an attorney,
accountant, or insurance agent, and no portion of KF Advisors’ services should be
construed as such. To the extent requested by a client or when we think appropriate, KF
Advisors recommends the services of unaffiliated professionals for certain non-investment
implementation purposes (i.e. attorneys, accountants, insurance, etc.). KF Advisors does
not receive any direct or indirect compensation from clients’
use of any recommended
professionals nor will it charge for these referral services. The client is under no obligation
to engage the services of any such recommended professional. The client retains absolute
discretion over all such implementation decisions and is free to accept or reject any
recommendation from KF Advisors. Please Note: If the client engages any unaffiliated
recommended professional, and a dispute arises thereafter relative to such engagement,
the client agrees to seek recourse exclusively from and against the engaged professional.
Please Also Note: It remains the client’s responsibility to promptly notify KF Advisors if
there is ever any change in his/her/its financial situation or investment objectives for the
purpose of reviewing/evaluating/revising KF Advisors’ previous recommendations and/or
services.
PLEASE NOTE: RETIREMENT ROLLOVERS-No Obligation/Conflict of Interest: A client
leaving an employer typically has four options (and could engage in a combination of these
options): i) leave the money in his former employer’s plan, if permitted, ii) roll over the
assets to his new employer’s plan, if one is available and rollovers are permitted, iii)
rollover to an IRA, or iv) cash out the account value (which could, depending upon the
client’s age, result in adverse tax consequences). KFG can recommend an investor roll over
plan assets or an Individual Retirement Account (IRA) to an IRA managed by KFG. As a
result, KFG and its representatives will earn an asset-based fee (see Please Note below). In
contrast, a recommendation that a client or prospective client leave his or her plan assets
with his or her old employer or roll the assets to a plan sponsored by a new employer, or
alternatively to leave his or her IRA with its current adviser or roll the IRA to another
adviser, will generally result in no compensation to KFG (unless you engage KFG to
monitor and/or manage the account while maintained at your employer). KFG has an
economic incentive to encourage an investor to roll plan assets or IRA assets into an IRA
that KFG will manage or to engage KFG to monitor and/or manage plan assets while
maintained at your employer. There are various factors that KFG could consider before
recommending a rollover, including but not limited to: i) the investment options available
in the plan or IRA versus the contemplated investment options available in an IRA managed
by KFG, ii) fees and expenses in the plan or IRA versus the fees and expenses in the
proposed IRA, iii) the services and responsiveness of the plan’s investment professionals
versus KFG, iv) protection of assets from creditors and legal judgments, v) required
minimum distributions and age considerations, and vi) employer stock tax consequences, if
any. KFG’s determination of a recommendation of a rollover of plan assets can be limited by
the availability of information about the client’s employer plan alternatives. No client is
under any obligation to rollover plan or IRA assets to an IRA managed by KFG or to engage
KFG to monitor and/or manage the plan assets while maintained at your employer.
When we provide investment advice to you regarding your retirement plan account or IRA,
we are fiduciaries within the meaning of Title I of the Employee Retirement Income
Security Act and/or the Internal Revenue Code, as applicable, which are laws governing
retirement accounts. The way we make money, as set forth above, creates some conflicts
with your interests, so we operate under a special rule that requires us to act in your best
interest and not put our interest ahead of yours.
Under this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations
(give prudent advice);
• Never put our financial interests ahead of yours when making recommendations
(give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in
your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.
There are various factors that KF Advisors will consider before recommending a rollover,
including but not limited to: i) the investment options available in the plan or IRA versus
the contemplated investment options available in an IRA managed by KF Advisors; ii) fees
and expenses in the plan or IRA versus the fees and expenses in the proposed IRA; which
analysis may include consideration of factors such as the long-term impact of any increased
costs; and why the rollover is appropriate notwithstanding any additional costs; iii)
whether the employer pays for some or all of the plan’s administrative expenses; iv) the
different levels of services, including, among others, the need for help with investments or
financial planning; the relationship with financial adviser; and the investment flexibility
available under the plan and the IRA; v) pre-retirement distribution; vi) potential tax
issues; and vii) other issues, including, among others, the desire to consolidate investment
assets; and bankruptcy protection. With respect to the plan, KF Advisors will consider all of
the investments in the plan’s line-up, and not solely the client’s current investments. KF
Advisors’ determination of a recommendation of a rollover of plan assets can be limited by
the availability of information about the client’s employer plan alternatives. No client is
under any obligation to rollover plan or IRA assets to an IRA managed by KF Advisors or to
engage KF Advisors to monitor and/or manage the plan assets while maintained at client’s
employer.
Client Obligations
In performing its services, KFG shall not be required to verify any information received
from the client or from the client’s other professionals and is expressly authorized to rely
thereon. Moreover, each client is advised that it remains his/her/its responsibility to
promptly notify KFG if there is ever any change in his/her/its financial situation or
investment objectives for the purpose of reviewing, evaluating or revising KFG’s previous
recommendations and/or services.
Non-Discretionary Service Limitations
Clients that determine to engage KFG on a non-discretionary investment advisory basis
must be willing to accept that KFG cannot effect any account transactions without obtaining
prior verbal consent to any such transaction(s) from the client. Thus, in the event of a
market correction during which the client is unavailable, KFG will be unable to effect any
account transactions (as it would for its discretionary clients) without first obtaining the
client’s verbal consent.
Investment Risk
Different types of investments involve varying degrees of risk, and it should not be
assumed that future performance of any specific investment or investment strategy
(including the investments and/or investment strategies that are recommended or
undertaken by KFG) will be profitable or equal any specific performance level(s).
Assets Under Management
KFG operates a single advisory business with KF&Co. KF&Co. (pursuant to the agreement
between it and KFG) provides continuous and regular supervisory or management services
to KFG’s clients. Accordingly, the regulatory assets under management (“RAUM”)
attributable to KFG’s clients is reported by KF&Co in its Form ADV Part 1, and not by KFG,
on a consolidated basis with KF&Co.’s other clients.
As of December 31, 2023, KF&Co. had approximately $4,590,005,998 in assets under
management, of which approximately $1,285,515,593 is attributable to the clients of both
KFG and KF&Co. KF&Co.’s Form ADV can be found by clicking
here or by
visiting
https://adviserinfo.sec.gov/Firm/105907.