Strategic Investment Group - Hedge Fund of Funds Capabilities

Hedge Fund of funds capabilities

The term “hedge fund” encompasses a broad range of investments with different risk and return characteristics and implementation strategies. While hedge funds invest in traditional stocks and bonds, they use nontraditional strategies including short sales, arbitrage, and leverage. Hedge fund returns are more dependent on a manager’s skill in correctly assessing market mispricings, or alpha, than traditional strategies. Alpha is the extra return added above and beyond the performance of the underlying market sector. Because each manager’s skill may be considered an individual investment, style and manager diversification are critical to building a portfolio of hedge funds.

From our experience, we at Strategic Investment Group have found that one of the purest forms of alpha can be generated from a well-chosen, diversified portfolio of hedge funds, potentially delivering excess returns both on an absolute and risk-adjusted basis. Because investors typically have stock and bond market exposures elsewhere in their portfolios, Strategic seeks to construct hedge funds of funds whose returns have low correlation or beta to traditional public markets.

To learn more about Strategic’s capabilities, please click here.

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