Lakeville Capital Management offers an integrated service to improve existing hedge fund portfolios and to develop and manage customized portfolios. A unique combination of quantitative and qualitative methods are used to analyze the risk and return of managers and to identify optimal hedge fund portfolio based on each customers’ risk and return objectives and investments in traditional assets.

LCM delivers a comprehensive portfolio management service that includes initial review and investment recommendations and ongoing monitoring of portfolio and hedge fund performance and risks and rebalancing as needed.

See LCM wealth management presentation.

The service can be applied to investors with existing hedge fund investments or those that wish to add hedge funds to their existing investment portfolios.

• Individual Manager Selection and Due Diligence

  Our depth of industry knowledge is used to identify the top performing and alpha generating managers in each hedge fund strategy

  • Factor analysis identifies sources of manager returns, generation of unique alpha (return due to manager skill), and market risks
  • Comprehensive quantitative and qualitative review identifies market, performance and operational risks
  • Peer group analysis directly compares hedge funds in each strategy along multiple dimensions of risk and return

• Hedge Fund Portfolio Construction

  Our allocation to specific managers and hedge fund strategies are based on a thorough analysis of the effect of each in the overall portfolio

  • Factor analysis identifies the exposure of individual managers, strategies and the overall portfolio to market risks
  • The contribution of each manager and strategy to the overall portfolio risk and return profile is carefully analyzed
  • Stress testing, scenario analysis and statistical analysis sheds light on the portfolio’s historical and likely future response to movements in a wide range of markets
  • See sample custom portfolio proposal.

• Integrated Wealth Management Portfolios

  LCM the impact of hedge funds on their risk and return profile of existing portfolios of equities, fixed income and other investments with the creative use of Black-Litterman portfolio optimization technique

  • Factor and correlation analysis identify the extent that hedge funds are duplicating a portfolio’s exposure to traditional stock and bond markets or providing true diversification and generating alpha
  • Aggregate analysis measures the contribution of hedge funds to the risk and return of the overall portfolio
  • Innovative use of the Black-Litterman method of portfolio optimization overcomes many of the problems of traditional optimizers to construct robust asset allocation portfolios
  • Do hedge funds boost the returns or lower the risk of existing portfolios?