Our Investments

Hedge Funds

Winston’s hedge fund products seek to provide individual and institutional investors with diversified exposure to hedge funds. Winston manages several funds of funds, which are multi-manager portfolios of hedge funds. We focus exclusively on fundamental, research-driven “long/short equity” hedge fund strategies. Our goal is to provide equity-like returns with considerably less volatility (risk) than comparable equity benchmarks. To that end, our hedge fund group invests in a diverse portfolio of managers who we believe, individually and collectively, are not highly correlated with traditional asset classes and have demonstrated a superior acumen within their particular area of investment focus.

The time-intensive, analytically rigorous, fundamental research conducted by our portfolio hedge fund managers on public stocks mirrors the due diligence we conduct on our fund managers. Our principals rigorously assess prospective managers’ stock-picking acumen, risk management discipline, and the operational strength of their organizations to build conviction in our hedge fund investments.

Why Hedge Funds

Hedge funds generally have low correlation with traditional asset classes, which we believe makes them an effective diversification tool for improving an investment portfolio’s overall performance and reducing its volatility. The hedge fund format offers more flexibility than is available to conventionally managed funds, such as the ability to sell securities short. In the hands of a skilled fund manager, we believe that short selling combined with the prudent use of leverage permit enhanced risk management and the means to profit in most market environments.

Over the years a wealth of investment talent has shifted from traditional “long only” investment organizations to hedge funds, attracted by superior performance incentives. Incentive fees and co-investment of the manager’s capital permit small, yet skilled, fund managers to achieve and often surpass compensation common to larger conventional fund managers. Ultimately, we believe investors benefit from an alignment of interests with hedge fund managers who are compensated for superior absolute returns rather than for asset accumulation, which is the norm among mutual fund and traditional money managers.

The Rationale for a Long/Short Equity Strategy

Winston’s fund-of-funds business operates with a clearly defined single-strategy focus: long/short equity hedge funds, whose objective is to attempt to attain superior returns with significantly less volatility than comparable market indices. We believe that long/short hedge fund investing offers exposure to an asset class with an attractive record of absolute and risk-adjusted performance.

Within the Winston portfolios, each underlying manager generally relies on thorough, research-driven, fundamental analysis to select long and short equity positions. We believe our single-strategy focus enables us to research and follow this market segment with superior analytical depth and sophistication. Investment partners benefit by being able to understand, track, and benchmark our performance.