Hedge Funds
Hedge funds are private investor partnerships where the manager is free to operate in a variety of markets using any number of investment strategies.
Benefits:
- Reduce portfolio volatility: The combination of high-quality managers and diverse strategies can add positive return while lowering volatility
- Excellent diversifier: These funds can be uncorrelated to both the equity and fixed income markets
Considerations:
- Access limited to Accredited Investors or Qualified Purchasers*
- Limited liquidity: These investments often lock up capital for a year or more and require advance notice for redemptions
- Can have limited transparency of underlying assets: Hedge funds often engage in complex trading strategies that require anonymity and the ability to be nimble
- High fees
- For taxable investors, late tax filings to be expected
Atlantic Trust constructs customized hedge fund portfolios for clients using high-quality managers across a variety of strategies that we believe are likely to provide premium returns, net of fees, within acceptable risk parameters. There are few hedge funds that meet our high standards of risk control and return opportunity. We avoid strategies that use significant leverage or rely on quantitative models or overly concentrated positions.
*Accredited Investors have investable assets of more than $1.5 million; Qualified Purchasers have investable assets of more than $5 million
The Chartered Financial Analysts® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis. The Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the U.S.
