Intro To Paragon Investing

Paragon Offers Private, Alternative Investments

The downside to private/alternative investments is threefold:

  • Illiquid: private investments are generally illiquid, meaning you cannot withdraw your capital for a period of time.
  • Limited access: historically, most private investments were only available via Limited Partnership (LP) deals with $1M stated minimums and extended lock-ups. Now, many funds will only work with clients through select Investment Advisors like Paragon.
  • Small size: Funds that make private investments are much smaller in size, around $1.0B, and can only accept a limited amount of new money at a time.

  • The upside of all these restrictions, is that it allows fund managers to identify and invest in what they view as the very best deals from a universe of investment or lending opportunities, including private & illiquid assets, allowing them to invest very selectively to achieve higher yields and lower losses.

What's Different In A Paragon Portfolio?

In today's world, where:

  1. interest rates and public bond yields are near all-time lows,
  2. stock market valuations are near all-time highs,
  3. and long-term U.S. stock return projections remain weak...
Investors may benefit from access to private markets
to increase returns and reduce risk

Paragon clients have access to restricted funds that invest in private debt which, when compared to public debt, has historically provided double the return at half the risk. Some funds* have high stated minimums (>$1M initial investment), but these minimums are waived when you invest with Paragon.

* Some funds are illiquid and some may be limited to accredited investors only.

By investing your wealth with Paragon, you can access private debt and alternative income funds that have historically matched long-term stock market returns.

Private Debt: direct lending to corporations not serviced by major banks targets a lucrative 7-10% yield, but these funds may be capacity constrained and could soft-close due to limited deal flow. Senior, secured, first-lien debt offers low volatility, in-line with investment-grade corporate bonds.

Alternative Income: invest in unconventional income-generating assets that target 7-10% yields: litigation finance, specialty finance, bridge financing, accounts receivable financing, and other non-traditional private debt.

In March 2020, when some high-yield investments and stocks were down 22-33%, our two highest conviction private debt funds were down less than 4%, fully recovered in less than three (3) months, and had trailing one year returns ranging from 6.3-7.1% at the end of September 2020. Details here.

Levels of Service

At Paragon, we offer four (4) different levels of service to cater to our clients' diverse needs. Pricing starts at an annual fee of 0.45% on your portfolio balance—or $45 per year for every $10,000 invested with us.

Our first two service tiers and fee rates are as follows:
(Fee rate for portfolios of one million ($1,000,000) or more)

  • Investment Platform: For DIY investors who want access to institutional shares and private investments, but still want to make their own trades, manage their own money, and be fully in control, this service costs 0.45% annually for a $1M portfolio.
  • Managed Portfolio: For clients who want to be fully hands-off, we offer to manage your portfolio directly via a model portfolio that is aligned with your risk tolerance. This service costs 0.60% annually for a $1M portfolio.
Fees are quoted as an annual rate, but fees are assessed and paid at the end of each quarter, after services are complete.

Levels of Service

Our final two service tiers and fee rates are as follows:
(Fee rate for portfolios of one million ($1,000,000) or more)

  • Custom Portfolio: For clients who have large legacy positions with capital gains, this service includes a custom-managed portfolio, tax-loss harvesting & management, and costs 0.75% annually for a $1M portfolio.
  • Full Service: For clients who want the complete suite of investment and financial services we offer and more face time with their advisor. Includes comprehensive tax loss harvesting, custom portfolio management, and quarterly meetings. This service costs 1.00% annually.
Fees are quoted as an annual rate, but fees are assessed and paid at the end of each quarter, after services are complete.

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