While Touchstone plans to pursue a number of acquisition targets, it does not plan to make a significant change to its current management structure until its overall portfolio size increases. A new management team will not be formed until the company begins to execute on its expansion strategy. The acquisition of Vanguard funds is one part of the company’s long-term investment strategy and the company expects to increase its overall portfolio size gradually. Learn more on touchstone fund.
Touchstone expects to implement a cost-based method of compensation and capital allocation. In the past, compensation has been based on a predetermined rate of return. In conjunction with the acquisition of Vanguard funds, Touchstone plans to create a managed futures account. The managed futures account will be an Internet-based service and will be accessible to all investors who maintain a high degree of net asset exposure. The fund manager will have the authority to select and manage portfolios and buy and sell securities. The fund manager will also have the authority to enter into trading agreements with third parties to execute orders through the Internet.
Touchstone expects that it will still retain a large majority of its fund manager workforce. Most of the new acquisitions are expected to be funded through the acquisition of small, private-company-owned businesses. The managed futures account is intended to help the company reduce its reliance on larger organizations and their fund management staff. In addition, the company is planning to maintain a sizable portion of its investment management team as part of the acquisitions and fund purchases.
The acquisition of funds under this option should lead to a reduction in the number of staff required to support the fund management and operation of the funds. This reduction in staff should benefit Touchstone by allowing the company to increase its ability to allocate capital more efficiently.
Touchstone believes that its strategy to increase its investment portfolio size will help the company achieve its investment objective by improving its management efficiency and decreasing operating expenses. While the cost-based compensation plan is similar to that of most large organizations, the goal is to increase return on investment. The company also plans to increase sales and revenue through investment activities in markets such as foreign currencies and foreign stocks and bonds.