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First Republic Securities Company, LLC - Member FINRA/SIPC
Concentrated Wealth Strategies
First Republic Securities believes in diversification, and our clients benefit from our risk management strategy expertise, especially the diversification of concentrated equity holdings. We focus on hedging transactions that help investors protect their single stock position's value and generate liquidity without selling the underlying shares. First Republic Securities acts as an objective intermediary in these transactions, serving as the client's advocate. All transactions are bid competitively among multiple firms and we work with the client's counsel to negotiate documentation. The result, we believe, is an optimal overall transaction for the client with respect to pricing, documentation, execution and service.
Investors may find themselves holding a large position in a single, publicly-traded stock or basket of stocks. This concentrated position can result from any of the following situations:
- A company sells to a public corporation in a stock-for-sale acquisition.
- A private company elects to go public.
- A security or concentrated basket of securities appreciates significantly.
- Low basis stock acquired through a family transfer.
- Shares in a public corporation are received as employment or consulting compensation.
Managing this concentrated equity position requires careful thought and analysis. If an investor does not manage the concentrated position, its value is vulnerable to market movement and volatility (market risk), negative news about the stock (security risk), a change in market perception about the relevant market sector (industry risk), and other factors that can cause a significant decline in the value of the position.
The specific hedging strategies used include:
- Purchasing put options
- Equity collars
- Participating collars
- Variable pre-paid forward contracts
First Republic Securities also offers a fully coordinated cashless stock option exercise program.
Restricted Stock Sales
First Republic Securities offers clients with closely-held stock knowledgeable comprehensive support of sales and transfers of restricted and control securities. We work with clients to explore alternative scenarios for exercise and coordinate payment and settlement with the issuing company. Clients are also able to use margin financing to cover the associated cost of exercise.
Rule 10b5-1 Plans
New Rule 10b5-1 provides significant planning opportunities for both individuals and entities that have access to inside information to trade their securities while minimizing any risk of insider trading liability. A 10b5-1 Plan provides corporate insiders the opportunity to minimize the risk of insider trading liability by incorporating the defenses of the new rule into their liquidity or diversification planning. Corporate insiders, working with their counsel, can develop a trading plan and enter into a binding contract with First Republic Securities to purchase or sell a security.
Money Management and Alternative Investments
Through our affiliated Investment Advisor companies, First Republic Investment Management and First Republic Wealth Advisors, First Republic Securities offers personalized investment management services. Additionally, periodically, we offer private placements and hedge fund investments to qualified investors.
| Investments through First Republic Securities Company, LLC are: | ||
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| NOT FDIC-INSURED |
NOT BANK GUARANTEED |
MAY LOSE VALUE |
| Special Notice to Non-U.S. Investors |
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| Each of the investment products and services referred to on this website is intended to be made available to U.S. residents. This website shall not be considered a solicitation or offering for any investment product or service to any person in any jurisdiction where such solicitation or offer would be unlawful. |
