While we prioritize investment and operational due diligence, we believe that organizational health is the most enduring competitive advantage that investment management firms have at their disposal. We’re active observers of corporate leadership and culture, and we delve deeply into the mechanics behind a strategy and the causal factors that affect correlations across different market conditions.
Drawing on both our deep experience and the ability to tap a broad and high-quality global network allows us to optimally shape our offerings and further strengthen our decisions.
We approach investing with both a creative and disciplined process, and always for the long term.
We will always look beyond current trends to identify cutting edge investors with innovative strategies. And we will secure capacity—consistent with our principles—at an early stage.
WHAT WE VALUE
In analyzing quantitative potential, we look at qualitative factors:
In our experience, most investors, whether an investment firm, fund of funds or direct investor, tend to significantly prioritize investment and operational due diligence. While these are obviously imperative, we believe that organizational health is the greatest, most enduring competitive advantage that investment management firms have at their disposal.
If a company isn’t healthy at the top, the rest of the organization can’t perform optimally. We look for firms that have a strong, coordinated leadership team with clarity around its goals, clear communication of those goals, and a culture that promotes teamwork, recognition and professional development.
We look for organizations that understand the power of diversity, particularly the diversity of thought. Environments where leaders only listen to people who validate their views can lead to gross misjudgments. We look for organizations with leaders who encourage creative thinking, candor and healthy debate.
A culture that values ingenuity and human relationships
We share the beliefs espoused by Dan Pink in A Whole New Mind, that “The future belongs to a very different kind of person with a very different kind of mind. The era of left brain dominance, and the Information Age that it engendered, is giving way to a new world in which right brain qualities—inventiveness, empathy, meaning—predominate.”
Hyper-rationality has its place in an investment decision-making process, but if it defines a culture it can lead to dysfunction, low morale, low productivity and high turnover—ultimately a workplace environment that’s less likely to generate superior investment performance.
Our approach to investing is based on the following principles:
We focus exclusively on alternative investment strategies—specifically those that generate positively skewed asymmetric risk and return profiles that reflect uncorrelated alpha. At the same time, we look for capital preservation techniques across different market environments.
We prioritize off-the-run, differentiated but not completely esoteric strategies that are often thematic, topical and/or opportunistic.
Benefits of specialization
We gravitate towards managers who specialize in a particular strategy. Our clients can get more “pure play” investment exposure. The nature of Erigo’s size and orientation allows us to represent smaller, capacity-constrained specialized and niche managers.
We avoid investments where we can’t identify the source of alpha or understand the causal factors driving correlations. Clarity and transparency are essential.
We only represent managers with a solid record of ethical behavior and seek strategies that are environmentally and socially responsible.
TRAITS THAT DEFINE STRONG ORGANIZATIONS
IQ and EQ
Authoritative not autocratic mindset
Discipline with flexibility
Intellectual integrity with an awareness of behavioral biases
Dispassionate objectivity and
Technical specialization and diversity of thought
Well defined and repeatable investment process
Strong, cohesive leadership with an openness to debate
Strict avoidance of style drift
Internal and external alignment of interests
Firms that employ “time arbitrage”, exploiting excess focus on the short term