Investment Approach
Several key factors influence Contego’s investment approach: the
risk and return goals of the client, correlation to the client’s other
assets, leverage and macro-economic cycles.
The risk and return parameters of the client help to shape portfolio
construction decisions such as diversification, volatility and asset
focus. In addition, Contego structures a client’s portfolio to provide
low correlation to broad financial markets.
Our investment approach differs for levered and non-levered funds due
to their differing risk profiles. Asset allocation processes for
levered funds pay more fine-tuned attention to volatility and
predictability of returns, resulting in some asset classes or
management styles being ruled out. Levered funds will also have a
greater number of investments in order to diversify the risk attendant
to return magnification.
Top down views of market opportunities also influence portfolio
construction and are frequently reviewed.
A Tailored Approach To Hedge Fund Investing
For individuals and institutions who wish to make hedge funds a
part of their investment strategy but are concerned about their
ability to choose among the growing number of funds and strategies,
Contego offers a unique resource. We have the expertise and experience
needed to assist clients in including this asset class effectively in
an investment portfolio.
We can create a customized fund of funds for each investor that is
designed to meet that investor’s particular goals -- non-correlation
with public equities, reduced over-all risk or volatility or other
goals -- and can choose the managers and funds most likely to meet
those goals. Unlike an investment in a typical fund of hedge funds,
clients avoid dilution of their investments in top tier managers by
having their own personalized portfolios. Once a client’s hedge fund
portfolio has been determined, we provide consistent, effective
monitoring of the resulting portfolio to make sure that the strategy
remains sound and the managers perform as expected.
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