Investment Process

Aetos implements a fundamentally-based investment process, coupled with a disciplined approach to strategy allocation, manager selection and portfolio monitoring. Risk management is incorporated throughout every step of our investment process, and is an integral component of manager evaluation and portfolio construction from start to finish.

Strategy Allocation

  • Analyze fundamental data and capital market trends to assess relative attractiveness of various investment strategies
  • Anticipate shifts in public policy (including fiscal and monetary policy) and determine potential impacts on investor portfolios
  • Perform in-depth primary research on high-priority topics to form timely and differentiated views on market themes

Manager Evaluation and Selection

  • Combine qualitative and quantitative analysis of managers to assess competitive advantage and ability to generate alpha
  • Engage managers at multiple levels of seniority and responsibility (holistic team perspective)
  • Perform extensive diligence on managers’ operational, business and legal infrastructures
  • Employ proprietary and third-party reference check systems

Portfolio Construction

  • Construct diversified, high-conviction portfolios using “core/satellite/opportunistic” model, aiming to be relatively concentrated by manager and well-diversified by strategy
  • Tailor portfolio exposures specifically to client objectives
  • Utilize constrained mean-variance optimization techniques, stress tests and VaR analyses

Manager and Portfolio Monitoring

  • Perform detailed monthly reviews of manager performance, positions, and risk exposures based on quantitative data and regular conversations with managers
  • Assess material operational developments through continuous monitoring
  • Supplement monthly manager reviews with comprehensive formal updates on an annual basis