We believe that the due diligence and portfolio construction process is a dynamic rather than a static process. As managers perform above or below expectations, the due diligence process extends into the ongoing monitoring of all of our managers. With investment conditions continually changing, it is imperative to track those changes with respect to the impact on both the existing portfolio of managers as well as the candidate list.

We believe that the various styles of hedge funds exhibit a cyclical nature with respect to their periods of profitability. By analysis of this regression to the mean and adjusting the exposure to various styles accordingly ICG is able to construct portfolios that over time should outperform their peers.

When we invest with a manager, we are investing in that manager’s business. Therefore it is imperative for us to examine their business and ensure that the proper support, systems, and staff are in place to allow the manager the ability to function properly.