The process of portfolio creation and management is centered around providing each client their targeted risk adjusted return. We will attempt to achieve this goal using a combination of strategies that maximize investment performance while trying to control downside exposure.
1. Client Mandate ~ Conduct in-depth meeting with client to clearly determine investment mandate. Quantify investment objectives for return profile, risk tolerance, investment strategies, liquidity, manager size and transparency.
2. Strategy Allocation ~ Determine which mix of various hedge fund strategies would create a profile that meets or exceeds performance of client’s mandate.
3. Fund Screening and Managing Peer Review~Perform peer review by strategy to identify funds with the best risk-adjusted performance. Funds are analyzed in different time frames to achieve the appropriate universe for due diligence.
4. Comprehensive Due Diligence ~ Perform due diligence on each selected fund to determine whether an investment in that a manager would be suitable for the portfolio in question.
5. Quantitative Portfolio Construction ~ Utilize appropriate quantitative portfolio construction techniques to maximize returns and minimize cross-correlation between underlying managers.
6. Risk Management Review and Performance Measurement~ Monitor portfolio to ensure that it stays within the stated limits of its quantitative risk metrics and qualitative risk guidelines. Performance reports are also distributed to appropriate parties, typically on a monthly basis.
7. Portfolio Rebalancing ~ Periodically recommend portfolio rebalancing to stay within investment guidelines and/or replace managers who have deviated from their investment style