Oarsman Capital, Inc. (“OCI”) is an investment adviser registered with the U.S. Securities and Exchange
Commission (“SEC”) that provides investment-management services, mutual fund/exchange-traded fund
portfolios, separate accounts managed by independent investment managers (“Independent Managers”),
financial-planning services and retirement plan advisory services to a variety of retail and institutional
clients. OCI began providing advisory services in 2000. Registration does not imply a certain level of
skill or training. OCI is majority owned by Robert W. Phelps and Benjamin Kebbekus. OCI does not
control any other firm; its only business is providing investment advice.
In January 2023, OCI launched LRC Aviation Advisors (“LRC”), a division of OCI. This division has a
unique market niche that is focused on airline pilot retirement plans and financial planning. LRC’s target
market is airline pilots and their families to provide the knowledge and services specific to the different
retirement requirements in the airline industry.
The advisory services of OCI are described below.
Investment-Management Services
OCI provides Investment Management Services to individual, trust and institutional clients seeking to
implement long-term investment programs. OCI also serves as a sub-advisor to other investment advisory
entities. OCI constructs and manages portfolios for its clients that comprise one or more of the following
investment asset classes, among others: common stocks, debt securities (U.S. Treasury, U.S. Government
Agency, corporate and municipal), mutual funds, exchange-traded funds/notes, stock options, and cash
equivalents. OCI emphasizes the use of securities it believes are of fundamental quality and, in the case of
common stocks and stock-based mutual- and exchange-traded funds, offer capital-appreciation potential.
Investment programs for taxable individual and trust clients emphasize a long-term perspective, tax-
efficient strategies and the control of investment risk. Programs for tax-exempt/-deferred clients seek to
achieve risk-adjusted returns superior to an appropriate benchmark over multi-year periods that
encompass both ‘bull’ and ‘bear’ market phases.
OCI focuses on customized portfolios to meet client needs by analyzing multiple factors, including but
not limited to, risk preference, investment horizon, cash flows and tax consequences. Based on
discussions of a client's particular circumstances and objectives, OCI establishes goals and objectives.
OCI will use proprietary modeling tools or other financial tools to develop a client's personal investment
policy and creates and manages a portfolio based on that policy. OCI generally manages advisory
accounts on a discretionary basis. This means that after obtaining discretionary authority in writing from a
client, OCI will make purchases and sales as it deems necessary. Account supervision is guided by the
stated objectives of each client (i.e., maximum capital appreciation, growth, income, or growth and
income). Clients are permitted to place reasonable restrictions (e.g. sector, asset class, company specific)
on the types of investments which OCI utilizes in their accounts.
In identifying potentially attractive common stocks to purchase, OCI favors well established companies
that possess, among other desirable attributes, proprietary products and/or services, track records of
consistent earnings growth, financial strength, experienced management, and well articulated strategies for
future growth. Many, though not all such companies, are global industry leaders with large market
capitalizations. OCI also seeks to invest in stocks with reasonable valuations. In assessing valuation, OCI
typically analyzes current and historical data regarding a stock’s price/earnings, enterprise value/cash flow,
price/sales, and/or price/book ratios. Discounted-cash-flow analysis is also utilized where appropriate.
OCI constructs portfolio for its clients with common stock holdings that are broadly diversified among
several economic/industry sectors, while at the same time may include strategic concentrations intended to
benefit from cyclical and/or longer-term trends. To broaden portfolio holdings to include investments that
fall outside OCI’s core-equity discipline, OCI will invest a portion of client assets in equity mutual funds
and/or exchange-traded funds/notes whose managers employ an investment approach that differs from that
of OCI (e.g., small-company stocks, non-U.S. stocks, high-yield income investments, real-estate- and
commodity-related investments, among others).
OCI invests client assets in stocks with the intention of holding them for an extended period of time;
accordingly, portfolio turnover is expected to be relatively low. A stock is eliminated from a client’s
portfolio (sold) if OCI believes the company has lost its fundamental quality or growth potential. A stock
position is reduced (trimmed) in a portfolio if OCI believes the stock’s valuation more than adequately
reflects the company’s assessed quality and growth potential. Short-term market-timing strategies are
generally avoided. However, a major change in OCI’s market outlook can result in a reallocation of assets
among security classes (if consistent with client-established guidelines).
OCI invests a portion of most clients’ assets in U.S. dollar-denominated debt securities primarily to
provide a reliable source of portfolio income and to enhance stability of principal. In most cases,
investment-grade notes and bonds are used, and the average maturity of portfolio holdings generally does
not exceed 10 years. Tax-exempt (municipal) securities are diversified geographically and corporate debt
securities are diversified by industry. OCI generally holds debt securities for an extended period (e.g.,
maturity) and portfolio turnover is expected to be relatively low. A debt security may be sold if OCI
believes there has been a major reduction in the creditworthiness of the issuer, if OCI identifies a security
deemed more attractive in terms of yield and/or quality, or if a change in OCI’s interest rate and/or
economic forecast necessitates
an adjustment to the portfolio’s asset allocation, average maturity, sector
allocation (e.g., government vs. corporate), or industry exposure.
Mutual Fund/Exchange-Traded Fund Portfolios
For clients whose investment needs or preferences do not call for a fully customized portfolio comprising
primarily of individual common stocks and fixed-income securities, OCI offers a program that utilizes
model asset-allocation strategies, each targeting a specific investment objective/risk tolerance, and
implemented using mutual funds and exchange-traded funds (MFs, ETFs).
In OCI’s MF/ETF program, the Firm offers several model asset allocations, with initial portfolio
composition and ongoing management driven by the firm’s economic and financial-market outlook. OCI
makes recommendations regarding a particular model/strategy based on factors including, but not limited
to, the client’s financial situation, long-term goals, investment objectives and attitude toward risk. Specific
mutual funds/ETFs are selected based on their ability to provide desired asset exposure, historical
investment performance, and cost-efficiency.
Use of Independent Managers
For clients whose investment needs require additional diversification, OCI recommends that clients engage
certain Independent Managers through Charles Schwab & Co., Inc.’s Managed Account Marketplace
program (“Schwab Marketplace”) to actively manage a portion of some clients’ assets by investing in a
variety of investments and employing various investment techniques. OCI recommends Independent
Managers only when it is in the client’s best interest and reviews suitability at least annually. OCI
evaluates a variety of information about Independent Managers, which generally includes the Independent
Managers’ public disclosure documents, materials supplied by the Independent Managers themselves and
other third-party analyses that OCI believes are reputable. Independent Managers are selected based on
their ability to provide desired asset exposure, historical investment performance, and cost efficiency. On
an ongoing basis, OCI monitors the performance of those accounts being managed by Independent
Managers. OCI seeks to ensure the Independent Managers’ strategies remain aligned with its clients’
investment objectives and overall best interests. Refer to Item 10 for additional information on conflicts
of interest created by OCI’s recommendation of Independent Managers on Schwab Marketplace.
The specific terms and conditions under which a client engages an Independent Manager are set forth in a
separate written agreement with the designated Independent Manager. In addition to this brochure, clients
should also review the written disclosure brochures of the respective Independent Managers engaged to
manage their assets.
Financial-Planning Services
OCI provides financial-planning services that include, among other things, household/business cash-flow
analysis; retirement-income planning; risk-tolerance profiling; asset-allocation design; pension- and health-
care benefits analysis; tax planning; and family-survivorship guidance. Financial-planning services are
generally provided at no additional cost to clients who have retained OCI for Investment Management
and/or Mutual Fund/Exchange-Traded Fund Portfolio services. OCI generally does not provide financial
planning services to clients as a standalone service.
Financial-planning services assist clients in evaluating the appropriateness of existing and/or potential
financial arrangements, with the aim of enhancing the probability of attaining various financial goals. In
providing these services, OCI uses industry-standard methods and technology-based tools to perform
calculations based on information provided by the client or prospect and informed by capital-market
assumptions and alternative planning scenarios. Results are hypothetical and intended to be reviewed and
updated regularly. Individuals should consult with their legal and/or tax advisers regarding the
appropriateness of any financial plan. Clients and prospects are to notify OCI immediately if there have
been any material changes in their financial situation.
In conjunction with financial-planning services, OCI may provide clients with discretionary investment-
advisory services for their self-directed employer-sponsored retirement-plan (e.g., 401(k),
403(b), PRAP) accounts and/or Individual Retirement Accounts (IRAs). If OCI recommends that a client
retain OCI to provide investment-advisory services for retirement-plan assets not previously overseen by
OCI, that recommendation creates a conflict of interest, as OCI will earn incremental fees if the client
follows the recommendation. OCI policies require that all such recommendations be in the client’s best
interest.
Retirement-Plan Advisory Services
OCI offers educational and/or advisory services to retirement plans and their participants. OCI’s services
are designed to complement the services of unaffiliated third-party retirement plan administrators in
assisting plan sponsors, plan trustees, and investment committees in meeting their management and
fiduciary obligations to plan participants under the Employee Retirement Income and Securities Act
(“ERISA”).
OCI supplements the services provided by the plan administer – who assists the plan in creating an
investment policy statement defining the types of investments to be offered and the restrictions that may be
imposed – by providing education services to plan participants and monitoring the performance of the
plan’s investment vehicles. OCI assists with participant enrollment meetings and provides
investment-related educational seminars to plan participants on topics including, but not limited to,
diversification, asset allocation, risk tolerance, time horizon as well as other topics specific to a particular
plan. Plan participants are responsible for all individual investment decisions and allocations made within
the plan.
As of December 31, 2023, OCI had assets of $698,050,258 under discretionary management and
$5,254,948 under non-discretionary management.