Hedge fund solutions are an important component to a holistic and diversified approach to portfolio management. In comparison to their traditional counterparts, hedge fund managers have a larger array of tools at their disposal, with a wider dispersion between those delivering exceptional performance and those that underperform. It is for this reason that analysis and judgment in the selection of appropriate managers is paramount to a portfolio including hedge funds.
Central to Chi-Rho’s philosophy is to forge long-term partnerships with experienced managers who have demonstrated their ability to generate returns and more importantly, control risk. We define risk as the permanent impairment of capital and find that those managers who truly understand this concept are equipped to outperform the market and serve Chi-Rho’s investors over the long-term. Our investment team maintains an active and on-going dialogue with our managers, leveraging our network of talented investment minds to uncover opportunities with asymmetric risk and reward. We believe in an approach to portfolio construction that involves adjusting allocations based on our assessment of current and future market trends, striving to add alpha in the capital allocation process.
Chi-Rho’s investment committee meets regularly to discuss both current portfolio performance as well as new investment opportunities. Chi-Rho believes in ongoing, hands-on investment management, holding frequent calls with its managers and possessing a deep understanding of each fund’s investment objectives. Coupled with an opportunistic mandate, this strategy allows Chi-Rho to take advantage of timing and market volatility to deploy and withdraw capital at the most effective time.
In addition to portfolio management, Chi-Rho’s investment team is always exploring new opportunities. Drawing upon an extensive manager network and collective research capabilities, the team works cohesively to identify experienced and talented managers. Chi-Rho casts a wide net in its search for new managers, performing substantive qualitative and quantitative screens, interviews and network checks. From there, a lengthy due diligence process occurs before a manager is considered for the Fund.
For every prospective and current investment, Chi-Rho’s Investment Committee asks the following questions:
Demonstrated Performance – Does the manager have a clear understanding and ability to articulate how they generate alpha?
Proper Manager Alignment – Are the manager’s incentives and interests aligned with Chi-Rho’s?
Integrity – Does the manager possess the same values and standards of excellence as Chi-Rho?
Chi-Rho has 20 years of experience in navigating the hedge fund space and has demonstrated the ability to consistently identify hedge fund talent and uncover asymmetric investment opportunities. Through an effective, disciplined investment allocation methodology Chi-Rho has delivered strong risk-adjusted performance and built enduring, long-term client relationships since its founding in 1996.
Evaluating and implementing effective risk management requires good judgment. Of prime importance to Chi-Rho, particularly in the day-to-day management of risk, is our relationships with our managers. We take a bottom-up approach to risk analysis, understanding the drivers of each investment at the manager level and measuring adherence to internal risk policies and the quality of the manager’s judgment. From there we use prudence in managing risk at the portfolio level, by maintaining diversification and stressing the underlying drivers of investment performance. We are inherently skeptical of any strategies that utilize excessive leverage or rely on historical correlations and perfectly functioning markets.