CORE OVERVIEW

WHAT WE DO

Core Capital manages global portfolios of hedge funds and other alternative investment funds.

THE CASE FOR SPECIALIZED MANAGEMENT OF HEDGE FUND PORTFOLIOS

Both academic and industry research show that in hedge fund investing poor manager selection is far more costly than in any traditional investing.

Historically, top decile equity hedge funds outperform lowest decile by more than 25% annually.  The same differential is only 5% for equity mutual funds and less than 1% for bond mutual funds.  Due to this huge performance dispersion, in the case of hedge fund investing, manager selection and portfolio construction have a decisive impact on portfolio performance.  For details on the case for specialized management of hedge fund portfolios please refer to our white paper “Hedge Fund Investing – Core Perspective.”

WHY HAVE CORE AS YOUR PARTNER IN MANAGING ALTERNATIVE INVESTMENTS

Today, most alternative investors face an industry reality:  many fund of funds have become too large to serve investors well.   The tidal wave of institutional money has forced these fund of funds to overdiversify their portfolio in order to put all money to work resulting in an overweight in their portfolio’s largest – not best – hedge funds.  Portfolios are built to satisfy the risk/return appetite of only their largest investors. 

At Core,

• We run our money alongside yours
• We secure capacity in the best managers, not only in the big and open ones
• We manage the portfolio based on unaltered optimization and value added criteria
• We are committed to client service, including personal access to Core principals
• We care about taxes

INVESTMENT PHILOSOPHY

Manage conviction-based portfolios

Over-diversification masks either lack of conviction or excess assets in the portfolio

Invest only if the investment thesis warrants a long-term horizon

Never invest with the hope to time an exit

Avoid being a follower; aim to be a leader of thought

We believe that success in the ever changing landscape of opportunities and risks demands:

• propensity to be contrarian
• flexibility
• capability to innovate

Prefer process-orientation to holistic approaches

An investment solution is not robust if it cannot be implemented through a repeatable process

Manage honestly the capacity of each fund

When a small manager cannot have a large enough allocation in the portfolio, the fund is too big

 

DISTINCTIVE STRENGTHS

Clear alignment of interests

• Partners, family, employees and affiliates are the largest investor in all funds

Experienced team and established processes

• Partners have worked together for 7 years
• Senior management has a combined experience of 75 years
• All activities are based on repeatable and proprietary processes

Innovative approach to investing

• Experienced in managing investments in areas of investor portfolios that are poorly understood and underserved
• Demonstrable flexibility in thinking, in processes and in organization
• Ability to design investment solutions that address specific portfolio risks or needs

Focus on long-term performance, not on asset gathering

• Embrace a contrarian investment style for the benefit of long-term performance
• Reject solutions that manage short-term volatility at the expense of long-term returns

 

CORE COMPETENCIES

Analysts and portfolio managers are “generalists with accents”. Each investment area of expertise, no matter how niche, is covered by at least two team members.

CORE has a history of investing and/or performing due diligence on the following:

• FUND STRATEGIES
  • L/S EQUITY (Long bias, No bias, Value, Growth, Trading, Risk arbitrage, Activist)
  • CREDIT (Long-short, Value Recovery - reorganization, DIP, rescue, litigation, Distressed, Control, Trading, Risk arbitrage, Structured finance)
  • VOLATILITY (Vega neutral, Long volatility, Dispersion, Skew, Term structure)
  • MACRO (Discretionary, Systematic)
  • CTA (Trend, Mean-reverting, Behavioral)
  • REAL ASSETS (Natural resources, Commodities, Real Estate)
• ASSET CLASSES
  • Public equities, corporate credit, sovereign credit, private securities, commodities, securitized products, derivatives, currencies
• GEOGRAPHIES
  • Developed countries, emerging countries, frontier countries
• FUND STRUCTURES
  • Evergreen (hedge funds), limited life (PE structure), day-1 investments, seed investments, secondary LP interests