We firmly believe that a tailored hedge fund allocation is an integral component to a well-diversified portfolio for individuals and institutions. Core to our belief is that the very best global investment talent has gravitated to the hedge fund industry and will continue to do so in the future. Hedge fund managers have more investment capabilities available to both protect capital and take advantage of market opportunities than traditional investment managers.
A cohesive team of experienced professionals is required to source hedge fund talent, conduct in-depth due diligence, build well-constructed portfolios, and actively monitor manager allocations. The performance difference between top quartile managers and bottom quartile managers is often substantial. We conduct hundreds of meetings each year with talented managers to source the few that we will allocate to over the long-term. We target managers that are in the prime of their investment life cycle – not too early, but before they reach asset levels that might overwhelm investment capacity and often diminish performance. We allocate only to exceptional managers that exhibit a proven and disciplined investment process that has resulted in strong, risk-adjusted performance over time. For portfolio construction, we believe a concentrated combination of these managers with diverse and complementary drivers of return is a powerful and sustainable approach.
Our ideal hedge fund manager characteristics may broadly include: