Manager Selection

Our manager selection is rigorous and ongoing. We seek to enhance performance by assembling accomplished specialists to manage the various components of our investment programs.

Program Design/Structure
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Program
Design/Structure

  • Objectives and investment policies
  • Risk/return parameters
  • Investment focus
Strategic
Overview
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Strategic Overview

  • Assess economic trends
  • Develop market scenarios
  • Evaluate strategy dynamics and outlook
Manager
Universe
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Identify Manager Candidates

  • Criteria
    • Size
    • Domicile
    • Vehicle
  • Screens
    • Investment strategy
    • Risk/return characteristics
    • Contribution to diversification
    • Program criteria
  • Develop short list
Analysis
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Quantitative Analysis

  • Consistency/volatility, correlation, drawdown analysis
    • Versus peers
    • Versus indices
    • Versus benchmarks
  • Regression and optimization studies
  • Periods of outperformance/underperformance
    • Extent
    • Duration
  • Hypothetical program composite
    • Each manager's value added
    • Relationships within composite
  • RISK OF LOSS

Qualitative Analysis: Style

  • Investment philosophy and approach
  • Decision-making process
    • Flexible vs. disciplined
    • Ability to learn from mistakes
    • Sources of ideas
  • Portfolio characteristics
    • Exposures
    • Turnover
    • Concentration
    • Leverage
    • Hedging
  • RISK OF LOSS

Qualitative Analysis: Character

  • Manager profile
    • Integrity, commitment, motivation
    • Experience, background, reputation
  • Ability to communicate
    • Attitude toward investors
    • Openness and accessibility
  • RISK OF LOSS

Qualitative Analysis: Organization

  • Size
  • Asset growth
  • Ability to manage additional assets
  • RISK OF LOSS
Due
Diligence
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Due Diligence

  • Legal issues
    • Terms, liquidity
    • Documentation
    • Governance
    • Fees, expenses
  • Financial reports and audits
  • Regulatory issues and filings
  • Litigation
  • Conflicts of interest
  • Size of manager's investment in fund
  • Investor base, turnover
  • References
Investment
Decision
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Select Manager(s)

  • Confidence in manager's abilities and integrity
  • Confidence in manager's risk control
  • Confidence in manager's performance potential
  • Confidence in manager's "fit" in overall program
Implementation
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Investing Mechanics

  • Subscription process (for private funds)
    • Investor qualifications and requirements
    • Complete and execute documents
  • Verify receipt of funds, acceptance of documents
Ongoing
Management
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Monitor and Reevaluate

  • Evaluate performance relative to expectations/peers
  • Monitor investment process and portfolio characteristics
  • Assess impact of changes in investment environment, etc.
  • Identify alternatives
  • Sell discipline
    • We strive to manage the cycle of risk and opportunity. An underlying fund may be sold for three general reasons:
      1. Performance
        • Opportunity realized
        • Capital redeployed to better opportunity
        • Disappointing performance
        • Unexpected volatility
        • Uncharacteristic style and strategy shifts
      2. Markets
        • Changes in market opportunities
        • Changes in potential market risks
        • Changing risks or opportunities in specific alternative strategies
      3. Organization
        • Personnel changes
        • Changes in assets under management