The unique feature of Culross is our 'forward thinking' three stage approach to portfolio construction.
The first stage is to identify a number of themes which we believe are about to develop. These themes form the backbone of the portfolio.
The second stage is to select the particular technique which is best suited to articulate the themes and finally execute the theme by selecting the manager who is most able to exploit the technique.
Each of these stages uses a strict qualitative and quantitative selection criteria.
FoHF managers traditionally use a 'backward looking' approach. They select managers who have performed well in the past and hope that their performance will continue into the future. Our forward looking approach does not require managers we select to have long historical track records managing large quantities of money; they require the ability to exploit the selected technique as the theme develops.
Early investing in young, hungry, focused managers delivers a performance advantage to the Culross Funds and a long term manager relationship. Large FoHF managers may wish for the same opportunities but their size often creates a barrier to investment that severely limits their flexibility and choice.
The themes are constantly monitored to assess their development or decay. The underlying managers contribution is continually assessed against the development of the theme and if necessary re-weighted or removed.