While hedge funds can be a beneficial addition to many investor portfolios, not all hedge fund strategies are equally attractive. Strategy diversification is important, but it is not necessary to allocate to all hedge fund strategies to achieve sufficient diversification. Nantucket gravitates toward strategies where process and skill are believed repeatable over full market cycles. We want the benefits of both strategy and manager diversification without diluting exposure to high conviction hedge fund managers. Nantucket generally has a contrarian view toward the current "in favour" strategies. When it is easiest to raise capital in a strategy, it is often the worst possible time to invest in that strategy.
We have a strong preference for managers registered with the SEC, CFTC or FCA who follow industry best practices through their use of high quality service providers such as third party administrators, auditors, prime brokers and custodians. Since a wide dispersion of performance results occur within each hedge fund strategy, manager skill is the determining factor for superior results. Manager selection is paramount!
Through Nantucket's multi-manager, multi-strategy approach, our clients gain access to firms whom we believe are world class investment managers, many of whom are difficult to access due to onerous investment minimum requirements or who may be closed to new investor capital from time to time.