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Think Like an Endowment

While many investors (and their advisors) still think about investment portfolios in terms of cash, stocks, and bonds, a growing number of investors and advisors have expanded their investment universe to include non-traditional investments, often called “alternatives”. The primary benefit of using non-traditional investments in a portfolio is to augment the risk-adjusted returns provided by a common stock-bond portfolio. This strategy is commonly referred to as taking an “endowment approach” because the endowments of large universities were early adopters of non-traditional investments.

As an example, as of June 30, 2015, Harvard University’s Endowment was valued at $37.6 billion, making it the single largest university endowment. Below outlines Harvard’s asset allocation shifts over the years[1]:

As can be seen in the table above, the percentage allocation to non-traditional investments increased from 25% in 1995 to almost 57% by 2014.

Harvard University Endowment’s annualized performance over the last 10- and 20-year periods ending June 30, 2015 was 7.6% and 11.8%, respectively, as compared to a standard 60% stock / 40% bond portfolio (using the S&P 500 Index and the Barclays Aggregate Bond Index), which provided 6.8% and 7.9% average annualized returns over those same time periods[2].

[1] Source: Harvard Management Company Annual Report 2015.

[2] Source: Harvard 2014 Annual Report.

Recapturing Tax Credits & Other Incentives

There are numerous tax credit and other tax-related incentives available to businesses of all sizes. The most popular tax credit is the R&D Tax Credit, which was created from the Economic Recovery Act of 1981. This tax credit was designed to help American businesses be more competitive while incentivizing companies to keep jobs in the United States. These credits reward companies that innovate, expand their business, and develop or improve existing products and services. Additionally, over 40 states offer state-level tax credits and other tax incentives are available.

Not surprisingly, typically only very large corporations tend to enjoy these benefits. The IRS recently reported that over 15,000 large businesses claimed R&D tax credits to which they were entitled, with an average benefit of over $650,000[1]. And yet, only 5% of small businesses claim these tax credits and incentives[2]. It is estimated that over 95% of the $9.24 billion in available tax credits are claimed by just 5% of U.S. firms[3].

The R&D credit is one of the most overlooked opportunities afforded to small- and medium-sized businesses. For example, when a business makes any changes to its design or development process, the business could be earning tax credits. This tax credit can be applied to both new product development as well as the production side of manufacturing, software development, fabrication, machine shops, agriculture, architecture, biotechnology, as well as a broad range of other industries. These dollar for dollar credits may have a huge impact on a company’s bottom line.

[1] Source: Includes returns of active corporations.

[2] Source:

[3] Source: George Mason University Mercatus Center.

1031 Exchange
Do You Qualify?
There are many different industries that may qualify for one of the different incentives & tax credits, including…
  • Semiconductor

  • Software

  • Manufacturing

  • Telecommunications

  • Paper and forest products

  • Chemicals and plastics

  • Construction and engineering

  • Consumer products

  • Automotive

  • Oil and gas

  • Food processing

  • Entertainment and media


If your company is involved in any of the following activities, you may be able to claim the R&D tax credit:

  • Developing an innovative product that is new to the market

  • Research aimed at discovering new knowledge

  • Designing product alternatives

  • Significant modifications to the concept or design of a product

  • Experimenting with new technologies and materials

  • Developing and modifying research methods / formulations / products

  • Engineering and designing a new product

How It Works

Atomi partners with industry leading experts in tax credit and incentive recapture services. We start with a complimentary analysis of the incentives and credits that may be available to your business. These processes provide for an effective and efficient tax credit study.

Our analysis focuses on identifying and documenting qualified research costs throughout a business, from wages to supplies to outsourced contract research expenditures, and quantifying qualified research expenditures.

We leverage extensive experience to develop an efficient process that is designed to effectively calculate and authenticate your research tax credits in a manner accepted by the IRS, State & local governments. Key programs that are evaluated include:

  • R&D Tax Credit

  • Energy Efficient Commercial Building Deduction – 179D

  • Cost Segregation Services

  • WOTC Hiring Credit


Upon conclusion of our analysis, we deliver to you a report with an estimate of the total amount of tax credits and other incentives for which you may be eligible. Given that you are allowed a two-year look back, you may be eligible for a substantial tax credit recapture.


Following our analysis, you may choose to enter into a contract with us in which we will amend your tax statements and facilitate both federal and state tax rebates. Our fee is a percentage of the total money recaptured, which means a) we are incentivized to maximize your total rebate, and b) there is no financial risk to you; if we do not collect any rebates, you pay nothing.


The entire process may take upwards of 90 days to complete.


Need more details? Contact us

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