​KPS Advisors LLC

  • We possess stringent criteria when selecting managers. We can much easily tolerate loss of opportunity than loss of capital. We focus on managers with:

    • Highly differentiated portfolios.

    • Attractive track record > 12 months.

    • Assets under management < $2B (US managers) and < $1B (Asia managers).

    • Use little to no leverage.

    • Reasonable liquidity profile.

  • We belong to a close-knitted and experienced global network to help in global idea generation and manager due diligence.

  • Qualitative due diligence through interviews with fund managers to determine their comparative edge by focusing on manager experience, soundness and quality of investment process/style, risk management, hedging methodology and business skills.

  • Quantitative performance and risk analysis on both individual manager and portfolio levels.

  • Holdings based (13F) analysis to understand what has been driving performance.

    • Decompose performance into stock selection and sector allocation.

    • Develop appreciation of portfolio concentration, uniqueness of names, turnover over time.

    • Be cognizant of overlap in names between existing and prospective managers. Crowdedness in common names is a serious current problem in the hedge fund industry.

  • Perform due diligence on operational and business aspects of the firm.

  • Create customized portfolios based on each client's risk/reward objectives and liquidity needs.

  • Focus on investment diversification to improve returns consistency, maximize risk-adjusted returns and reduce market correlation.

    • ​Diversification based only on asset class does not work well as we learnt in 2008 that correlations among different asset classes go to 1 under extreme market conditions.

    • We diversify our portfolios in terms of investment strategy and style, portfolio net and gross exposures, time frame, sector, geography and market cap. 

  • Objective, unbiased, independent review of current portfolio investments and recommendation for subsequent actions.

  • Help clients prevent from incurring further losses by redeeming from under-performing managers.


Manager sourcing and selection

Investment due diligence

Portfolio construction and asset allocation

Evaluation of existing investments and current portfolio review