The William Blair Fund of Funds team formed the core of Guidance Capital LLC, which was founded in 2001. The team focuses exclusively on hedge fund research and management of funds of hedge funds. The seven investment committee members have on average 25 years of investment experience and represent an unusually broad range of investment backgrounds. A proven, team-oriented process brings together these complementary perspectives and produces robust manager selection and fund construction.
Guiding principles of our investment philosophy:
- We seek only well-defined and analyzable strategies. Each underlying hedge fund must demonstrate an economic logic behind its ability to generate returns. Transparency is essential to facilitate analysis.
- We emphasize specialist managers rather than generalists. A focused manager is more likely to maintain a sharp investment edge. The use of specialists also facilitates manager comparisons, makes style drift more apparent, and helps us avoid unintended redundancies and concentrations.
- We avoid opaque (black box) and guru strategies. Each hedge fund’s return should draw on recognized economic relationships.
Multistrategy (All Terrain)
- Invests its assets in a diversified portfolio of hedge funds that invest in the following strategies: absolute return, long bias, long/short equity, futures, and commodities, as well as aggressive return.
Equity Long/Short (Blue Terrain)
- Invests in a diversified portfolio of hedge funds that invest in the following four strategies: growth, value, growth at a reasonable price, and specialist.
Absolute Return (Green Terrain)
- Invests in a diversified portfolio of hedge funds that invest in the following six strategies: convertible arbitrage, fixed income arbitrage, merger arbitrage, equity market neutral, niche, and multistrategy.
Opportunistic/Aggressive (Black Terrain)
- Invests in a diversified portfolio of hedge funds that may invest using the following strategies: emerging markets, event driven, distressed equity, credit long/short, global macro, fixed income arbitrage, equity long/short, and managed futures.
- Is invested in a diversified portfolio of hedge funds that invest in the following strategies: trend following, commodities, contrarian, and fast trading.
- Is invested in a diversified portfolio of commodity pools and maintains a core of systematic trend-following managers, supplemented with fundamental and commodity-sector specialists. The commodity pools may invest in portfolios of commodities, including grains, meats, energies, metals, softs, and commodity indices; they may include some smaller and more esoteric markets, such as milk and rapeseed. The fund can use the physical commodity markets’ separate futures contracts worldwide.