DISCIPLINED INVESTMENT PROCESS

The investment process for our multi-manager portfolios is rigorous, disciplined and consistent. It combines a top-down macro-economic view with bottom-up fundamental research performed by the investment and operations teams – all of which is supported by the Firm’s proprietary manager analysis and research system, OPERAS. Optima’s four-step investment process includes:

Macro/Asset Allocation is the product of our Investment Outlook which is based on the analysis of macro-economic data and other factors that impact the major geographic regions and hedge fund strategies in which we invest. Key data inputs are formally reviewed by the Research Department on a quarterly basis, resulting in a baseline outlook and asset allocations are then adjusted as appropriate.

Manager Selection is conducted through a systematic three-stage process which incorporates both qualitative and quantitative analyses. Prior to funding any manager, a detailed investment book, based upon the findings of the due diligence process, is finalized, bound and signed by the CIO, CFO/Chief Operations Risk Officer, Chief Portfolio Risk Officer and General Counsel.

Portfolio Construction similarly integrates both qualitative and quantitative elements in constructing portfolios from Optima’s list of managers approved for investment. An investment is made and sized based on factors including correlations, liquidity, exposures, and diversification.

Risk Management efforts are forward looking and aim to identify problems early enough to take pre-emptive action before substantial losses are incurred. The team is divided between specialists in portfolio risk and operational risk. The evaluation of risk is central to determining whether a manager is approved for investment and the risk team has the right to veto any manager unable to meet Optima’s strict standards.

 

“We evaluate numerous managers, across a broad spectrum of strategies. Only those we deem ‘best-in-class’ qualify for our single-manager funds.”
Michael Spelman, Managing Director