Investment Process

Due diligence for all investments involves assessing a hedge fund’s consistency of strategy implementation, quality of investment team and risk management processes, as well as business risk (i.e., prospects for survival and success).

Contego identifies prospective hedge fund managers through its network of business relationships with fund managers and other industry professionals, investors and marketers. These relationships permit the first level of filtering of the considerable information available on fund managers.

The second filter occurs when Contego’s Investment Committee determines which strategies to consider for a given portfolio. Strategies are chosen with a top down view of market opportunities and are reviewed monthly. Selections are based on exhaustive market research and constant interaction with managers and other experts across all strategies. Diversification of the portfolio also influences strategy and manager choices.

Once the key strategies are identified, the manager due diligence process begins. At least two members of the Investment Committee must meet a manager and approve the manager’s inclusion on the investment platform. Separate meetings are held to review back office operations and business risks. Reference and background checks, when appropriate, are done on all managers prior to investment using a variety of sources including peers in the field, prime brokers, administrators, accountants, lawyers and background investigation services.

Contego looks for specific features in every manager with which its clients invest. Foremost, the manager must have a history of success. This success must be the result of a clearly defined, repeatable and scaleable investment methodology that is based on experience and expertise.