Risk Management

Risk management is integrated into our investment process, resulting in a framework to manage the portfolio across various environments.  We believe risk management is a skill and can be observed by a fund’s ability to consistently generate alpha during normal environments and protect capital during periods of higher correlation.

 

Hedging is executed at two levels for the Heard Opportunity Fund:

  • Portfolio-Level: We constantly assess risks that the portfolio is exposed to, including industry-specific risks, factors and events. We seek to construct efficient, portfolio-level hedges to provide protection during periods when such risks may be elevated.
  • Position-Level: We evaluate the potential for short-duration events to create volatility in existing positions, such as earnings and analyst days.  We seek to establish short-term, position-specific hedges to protect the position from volatility as our long-term thesis remains intact.


Note: The Heard High Conviction Long Only Fund does not hedge; it may use a limited amount of cash as a risk management tool as it deems appropriate.