Concentrated Position Management

We assess concentration risks using metrics like portfolio beta and diversification ratios, where a single stock >10-20% amplifies volatility (e.g., 2000 dot-com bust saw tech drops of 80%). Derisking includes options collars (buy put, sell call) to protect downside while funding via premiums, or prepaid variable forwards for liquidity without immediate sale.
Exchange funds pool concentrated shares for diversified units, deferring gains (7-year hold for full basis step-up). For executives, we handle RSUs/ISOs with NUA strategies (net unrealized appreciation) to tax company stock at LTCG rates post-distribution. Systematic sales use dollar-cost averaging to mitigate timing risk, offsetting with harvested losses.
Projections model after-tax outcomes, incorporating 2026 gains rates (0-20%) and NIIT. We integrate ESG if the position aligns/misaligns with values, with ongoing monitoring for corporate events like mergers affecting liquidity.