Process

Investment Process

Our portfolio strives to maintain significant diversification on a security, sector, geography, manager and strategy basis. We are diligent in maintaining diverse sources of return with multiple investment styles, market niches and skill sets. Our absolute return oriented portfolios are designed to exploit opportunities in a number of market conditions by combining the right mix of manager styles, philosophies and strategies.

Manager Sourcing

Among the most important differentiators of SCS is our belief that our job is to provide our clients with more than "access to top managers." Our competitive advantage is that we not only invest with a core of established managers, but we also have a proven track record in finding emerging managers and niche strategies. This allows us to truly diversify the portfolio and get the benefits of scale (where it is needed) and nimbleness. We also stand apart in our strong relationships with our managers which allow us to explore co-investments opportunities. This is unique and allows us to focus on our managers' best ideas.

Risk Management

We believe that "Knowing What You Own" should be an investor's first priority. Therefore, we do not rely on external risk management tools or services. SCS manages portfolios with a view to reduce volatility, drawdown and liquidity risk. We use multi-factor models, portfolio exposure analyses with forward looking Value at Risk, and historical simulations. We proactively manage our risk budget to maintain the right risk-adjusted balance.

Due Diligence

SCS performs a deep and extensive due diligence review of all prospective managers before any initial investment. Our standards are high and we expect our managers to maintain those high standards once we have a vested interest. On-site meetings and contacts are a regular part of our due diligence process. Our due diligence team uses both quantitative and qualitative methods to evaluate the investment operations of each prospective manager ensuring each has the appropriate checks and balances within their organizational design.