The Northern Trust’s Hedge Fund Group is focused on providing comprehensive hedge fund solutions to its investors. The team utilizes a three pronged due diligence process built on investments, operations, and compliance to discover hedge funds focused on capital preservation and lower correlations to traditional asset classes.
Since 2001, the group has managed a series of fund-of-funds and separate accounts for wealthy families and institutions. Leveraging the Northern Trust platform, the team seeks to produce outstanding risk-adjusted returns utilizing the best hedge fund talent from around the world.
The Northern Trust Hedge Fund Group has three core competitive advantages:
1 - Extensive Northern Trust brand network and infrastructure
2 - A reputation for picking small to mid-sized managers with a definable "edge"
3 - Strong risk management and oversight implemented at several levels
Northern Trust currently manages three distinct hedge fund-of-funds strategies: Diversified, Alpha, and Equity Long/Short. The profile of each strategy differs based on target volatility and style, but our philosophy of seeking to preserve capital and being positioned defensively against market volatility, while capturing alpha in up markets, remains consistent across all. Additionally, we have the capability of creating Custom Hedge Fund Portfolios tailored to specific investment goals or to complement current strategies in place.
Hedge Fund Strategies
There are a broad array of hedge fund managers that cover different strategies that have different risk/return characteristics
Diversified Strategies Fund: Low volatility target. Conservatively managed and used primarily as a fixed income alternative. It is constructed and actively managed to provide diversification across markets, managers, instruments, and strategies with continual portfolio monitoring and risk management.
Alpha Strategies Fund: Medium volatility target. Multi-manager fund with increased risk/return profile over that of the Diversified Strategies Fund. The fund targets a return more similar to a balanced portfolio but with less volatility, and can be viewed as either a fixed income alternative or a more conservative equity substitute. It provides a cost and risk efficient means of gaining broad hedge fund exposure accomplished through sector allocation changes and manager selection.
Equity Long/Short Strategies Fund: High volatility target with higher beta exposure. Positioned as a complement to long only equity exposure with lower volatility. For investors seeking more “equity-like” returns with less risk over a full market cycle.
Custom Hedge Fund Solutions: Designed to achieve unique hedge fund and overall portfolio objectives by addressing specific investment and risk needs. Examples of how clients have taken advantage of our custom hedge fund solutions include building a new hedge fund allocation, restructuring a current hedge fund portfolio, and implementing a completion strategy.
Benefits of a Diversified Hedge Fund of Funds Portfolio
Hedge Fund of Funds invest in other hedge funds rather than investing in the markets directly. The hedge fund of funds manager seeks to add value through expertise in evaluating single hedge fund strategies as well as through portfolio construction.
About Northern Trust's Hedge Funds
The Hedge Fund Group was established in 2001 with the launch of its first multi-strategy hedge fund-of-funds. Since then, the team has launched two additional fund-of-funds offerings and services many custom advisory programs for private bank and institutional clients. To date, the group manages $2B+ in hedge fund assets and is supported by a strong team headquartered in Chicago, with key members sitting alongside other asset class partners in our Connecticut office. Today, we are a part of Northern Trust Alternatives Group, which oversees more than $3.6 billion across multiple alternative asset classes.
Tony Lissuzzo, CFA
Tony Lissuzzo is Director of Hedge Fund Research responsible for manager selection and monitoring.
Prior to joining Northern Trust, Tony was the portfolio manager at Lakeview Investment Management responsible for all aspects of manager research and portfolio construction. Tony was previously Head of New Investments for Man Investments’ global multi manager business. At Man, Tony led a global team responsible for all aspects of due diligence for new hedge fund investments. His primary focus on this team was defining the research process. He began his career at D.E. Shaw as an options trader and portfolio manager, and subsequently held positions at Bank One and Sirius Partners.
He holds an MBA from The University of Chicago Booth School of Business, and a B.S. from the University of Wisconsin in economics. Tony is a CFA® charterholder and a member of the CFA Institute.
Investment advisory services are offered by Northern Trust Investments, Inc., an investment advisor registered with the U.S. Securities and Exchange Commission and subsidiary of Northern Trust Corporation.
An investment advisor typically is deemed a fiduciary under the Employee Retirement Income Securities Act of 1974 and must act with strict honesty and candor solely in the interest of the participants of the plan.
Securities products and services including brokerage activities are offered and sold by Northern Trust Securities, Inc. (member FINRA (FINRA)/SIPC), a subsidiary of Northern Trust Corporation.