Risk Management

Risk management is one of Contego’s unique strengths. Our partners each bring a strong set of skills to bear on the risk management process including trading experience, due diligence, legal and analytic expertise, portfolio management experience and extensive knowledge of quantitative risk measures. This collection of skills allows Contego to monitor both the risk of client portfolios and the risk management capabilities of individual hedge fund managers.

Due diligence is an integral part of risk management and assessing the integrity of managers is a critical component of our process. However, quantitative analyses and peer group comparisons on managers and stress tests and scenario analyses of portfolios are also significant contributors to risk management.

Portfolios are typically diversified across 15 or more hedge funds, employing multiple strategies and there are position limits of no more than 10% in any one fund.

We monitor trends affecting chosen strategies on a daily basis and communicate with managers regularly to anticipate new risks. We also conduct quarterly quantitative and qualitative analyses of portfolio investments and conduct monthly risk assessment and allocation reviews. These assessments may lead to active substitution of hedge funds.

Clients have open access to their portfolios and to Contego for questions and comments. Each client receives a monthly letter updating them on their portfolios and has quarterly meetings to discuss comparative performance, market opportunities and asset allocations. Clients always have transparency on their invested assets.