VAN’s expertise in portfolio construction and consulting, as well as its comprehensive database of hedge funds, enables it to provide consistent alternative investment performance with relatively low risk and volatility.
DUE DILIGENCE REVIEW
Proper due diligence is vital to identifying the strengths and weaknesses of a hedge fund and its manager. However, this can be a difficult and time consuming process. Clients may elect to leverage VAN’s expertise by having the firm conduct its full due diligence process on a manager of interest. This review culminates in a document delivered to the client outlining VAN’s investment recommendation.
RISK MANAGEMENT OVERSIGHT
VAN believes that risk management is important to the success of any portfolio of investments and it is absolutely critical when working with alternative investments. The risk management team at VAN performs initial and ongoing risk management oversight for client portfolios. This includes working with each fund manager to establish risk factor exposures and monitoring these statistics each month. In addition, the VAN team creates a portfolio risk profile, which is analyzed and monitored periodically.
VAN is well known for the depth and reliability of its hedge fund indices, which investors use to measure the performance of managers against their peers and the broader market indices. VAN‘s indices cover not only the performance of the entire hedge fund universe, but individual strategies as well. VAN leverages its indices and its database to create a comprehensive performance measurement report which includes both absolute statistics on a fund as well as its relative performance versus the fund’s peer universe.
For clients who wish to invest in individual hedge fund managers or create their own hedge fund portfolio, VAN selects funds from the firm’s database that meet the client’s risk tolerance and desired return profile. VAN performs its due diligence processes to ensure that the hedge fund managers meet the appropriate criteria. Following investment, VAN provides fund performance reporting, ongoing risk management and reallocation advice.
CUSTOMIZED PORTFOLIO CONSTRUCTION
Many clients have different circumstances and needs outside of those covered by VAN’s existing products and therefore request a customized portfolio. VAN uses its broad proprietary database and portfolio construction experience to custom-design hedge fund portfolios. Each customized portfolio begins with an in-depth meeting with the client to determine risk-adjusted targets for the portfolio. The client may choose whether the portfolio will target either an absolute return or performance relative to a selected benchmark. The risk tolerance of the portfolio will also be set. VAN then uses a quantitative portfolio construction process with a qualitative overlay to select the appropriate mix of strategies and managers for the portfolio. Finally, frequent communication with VAN ensures that the client remains informed of the portfolio’s performance and understands any changes that VAN may recommend.