Investment Process
We seek to maximize risk-adjusted
returns with limited correlation, low volatility and defensive drawdown protection
to preserve capital. We achieve our objectives by implementing an extensive investment
process that helps us identify managers who take advantage of identifiable inefficiencies
across global markets. We manage risk by adhering to and leveraging our rigorous
due diligence process -- both quantitative and qualitative and our cutting edge
proprietary technology.
Manager Selection
The ARIS team consistently
explores the marketplace in search of managers who have a distinct investment edge
that is sustainable regardless of market environment. Although we use prime brokers,
databases, and marketers to discover compelling investments, the best investment
ideas are usually discovered through our extensive network of industry contacts
and know-how.
While we are opportunistic
in selecting managers, our research provides strong evidence that new and developing
managers typically outperform their larger counterparts. These managers are small
enough to take advantage of strategies and trades that their larger counterparts
can no longer do. Therefore, we are biased towards these types of investments.
We investigate all compelling
investment opportunities regardless of their acceptance by the rest of the investors.
We strongly believe that the lesser known and more obscure strategies can become
the most compelling opportunities and offer investors outsized returns for the associated
risk.
Our due diligence process
continually narrows our manager candidates. The foundations of this process are:
1.
On-site visits for qualitative evaluation and understanding of each manager’s portfolio,
investment team and business practices.
2.
Background checks and investigation of the managers’ professional and personal background.
3.
Quantitative analysis of the manager using our internally developed proprietary
technology HFAM and MAM.
Portfolio Construction
We seek to add managers
that will be advantageous to the risk/return profile of the overall portfolio. The
ARIS team accomplishes this by utilizing its proprietary risk analytical platforms.
Conversely, these tools also aid the ARIS team in removing managers that no longer
are advantageous to the risk/return profile of the overall portfolio.
Risk Management
ARIS utilizes a range of
tools in order to structure the portfolios to meet our strict objectives while minimizing
exposure to unknown or unforeseen risks. Our proprietary risk platform enables us
to systematically monitor the inter-temporal factor exposure of a portfolio and
each of its underlying manager holdings to a myriad of pertinent risk factors. This
helps us to minimize any single manager bringing detrimental exposure. We are also
extremely cognizant of tail risk and have developed a number of methods to mitigate
it.
Ongoing Monitoring
We routinely monitor each
of our investments and frequently communicate and make follow-up visits to ascertain,
among other things, style drift or fundamental business changes. Several potentially
disruptive measures include a sudden substantial increase or decrease in assets
under management, performance (particularly a substantial increase or decrease relative
to peers), liquidity of their overall portfolio, and personnel changes. In addition,
we monitor manager’s risk controls, changes in service providers, and back office
systems.
Top tier infrastructure and support systems
Our investment team is
supported by top tier service providers.
Custodian:
BNP Paribas Bank and Trust Limited
Administrator:
Swiss Financial Services Inc.
Auditor:
Weiser LLP
Legal Counsel:
Seward & Kissel, LLP (Domestic) and
Maples Calder (Offshore)
|