Risk Management

Specific Investment Risks

  • Intense focus on detailed and extensive due diligence – more akin to a private equity fund than a typical hedge fund – is the primary means of managing specific investment risk
  • All positions must have an asymmetric pay-off profile (substantially greater upside than downside). This applies to both long and short positions

Market Risk

  • Market risk is reduced by selecting investments that are sufficiently under valued that, even if negative events or scenarios occur, a permanent loss of capital is unlikely
  • We aim to produce sufficient alpha that it will exceed likely negative movements in beta over a 24 month time frame

Currency Risk

  • Currency risk is hedged at an overall portfolio level if there is a substantial concentration of a particular currency

Preservation of capital is the key objective of the risk management process, mark to market losses on a monthly or quarterly basis are not a driving consideration