Hedge Funds: Custom Portfolios Strategy
Hedge Funds: Custom Portfolios Strategy

Hedge Funds: Custom Portfolios Strategy


Portfolios of hedge fund interests designed to address clients’ specific requirements, such as risk exposures, return targets, strategy constraints, liquidity preferences and integration with existing investments.  

Investment Approach

Superior investment returns, in the team’s view, are driven by an intense focus on risk vs. reward. The overarching investment philosophy hinges on managing risk first and foremost, then maximizing returns within that risk-managed portfolio. Each hedge fund must offer strong risk/reward potential, both on an individual basis, and when combined with other hedge funds.  The primary focus is picking the best managers using a bottom-up research approach. A top-down strategy analysis guides the team's manager search efforts to higher alpha opportunities.

Outcome-oriented Portfolios

Discretionary hedge fund investment solutions tailored to address a client's needs and preferences regarding return target, risk exposures, liquidity, strategy or geographic concentration, portfolio reporting and administrative services. 

Experienced and Stable Team of Investment Specialists

Portfolio managers average close to 20 years of industry experience and close to ten years of experience working together. Investment professionals work in strategy-focused teams that, in the team's view, enable them to: gain deep technical knowledge of alpha generation strategies within their designated hedge fund sector, build strong relationships that enhance sourcing and due diligence activities and identify innovative managers and strategies before they are widely known.  

Disciplined Investment Process

The team employs a tested multi-step due diligence process that combines qualitative, quantitative and operational risk perspectives. Bottom up manager evaluation is combined with a top-down view of the investment landscape to arrive at desirable position sizes and strategy, geographic and regional exposure.

Strong Operational Risk Management Team and Processes

Well-resourced team with veto power over investment decision. Conducts on-site due diligence, background investigations, service provider evaluations, document review and analysis of the control environment, among other activities.

Investment Process
Understand Client Objectives

In-depth discussions to determine needs and preferences—return targets, risk exposures, liquidity, strategy or geographic concentration, correlations with existing holdings and reporting/tax requirements.

Investment Selection

Through an open-door sourcing policy, and by conducting rigorous investment, operational and quantitative due diligence, the team seeks to arrive at a focused group of hedge fund managers that they believe are capable of generating high degrees of alpha on a persistent basis.

Portfolio Construction

The team first takes a holistic view of the client's overall investment portfolio, seeking to determine the current level of exposure to market risk, active risk and liquidity risk. They then proceed to construct a custom investment portfolio that they believe has the potential to achieve the client's specific investment objectives. 

Risk Management

Post-investment, both the overall portfolio and all underlying hedge fund investments are continuously evaluated through qualitative and quantitative measures. If the performance of an underlying investment deviates from the team's expectations, appropriate action is taken to remediate the effects of the investment on the portfolio. Continuous dialogue with underlying managers is central to the team's risk management process.

Portfolio Management

Frequent communication with clients enables the team to identify their changing needs and adjust the investment program accordingly.

Portfolio Managers
Chief Investment Officer and Head of the AIP Hedge Funds Team
22 years industry experience
Executive Director
20 years industry experience
Managing Director
24 years industry experience
Managing Director
24 years industry experience
Executive Director
14 years industry experience
Managing Director
27 years industry experience
Managing Director
16 years industry experience
Managing Director
20 years industry experience
Managing Director
21 years industry experience
Vice President
11 years industry experience
Managing Director
16 years industry experience