Octane focuses on identifying fund of hedge funds that will add value over time by producing consistent, risk-adjusted returns. The selection of managers is driven by quantitative and qualitative screening processes.

Our quantitative analysis team analyses the track record of potential fund of hedge funds to ascertain whether the stated objectives of the funds have been achieved. In addition, we run attribution analysis to determine the sources of risk and return and monitor adherence to the investment guidelines.

Where the results look compelling and the fund of hedge funds has shown an ability to add value through manager selection, strategy allocation or both, we will perform additional extensive onsite due diligences.

Our objective is to fully understand where the fund of hedge funds adds value and what the competitive edge in their investment process is. Various areas of the business are covered, including:

• Company background and structure
• Operational stability and financial strength
• People: experience, remuneration and retention structures
• Investment philosophy
• Investment process
• Risk management
• Performance

Possibly the most important factor is the qualitative appraisal that is made based on our experience. Our team consists of professionals who have actually managed hedge funds, multi-manager funds and funds of hedge funds. This provides the ability to judge whether a fund of hedge funds manager is simply providing "check the box" answers to questions.

The entire due diligence process usually takes three to six months - from inital contact with the fund of hedge funds, until the final step of setting up a separate account with the manager and recommending an allocation to them.