Avoiding risk is key to Stenham's success

Tue May 4, 2010



Stenham Asset Management owes a great deal of its success to keeping out of trouble – specialising in consistent returns with low volatility


By Claire Makin

Stenham Asset Management owes a great deal of its success to keeping out of trouble, says Kevin Arenson, chief investment officer of the $3 billion fund of hedge funds operation. His mantra is that avoiding risk is just as important as achieving returns.


Kevin Arenson


For Arenson, risk does not mean degrees of volatility. Risk means the potential to lose money, and Stenham relies on a wide array of tools to identify it, from quants crunching numbers to a simple hunch that something is just not right with a manager or a market.

"There is no magic to this. We are following a Warren Buffett approach: avoid things you don't understand, avoid fancy derivatives, and make sure you understand the risks," Arenson says.

Stenham specialises in consistent returns with low volatility, an achievement for which its funds have won many awards, including the 2009 InvestHedge Long Term...

ISSN: 2151-1845 / CDC10004H

TAKE A FREE TRIAL

The full contents of this article are available to active InvestHedge subscribers and trialists only.

To continue reading please,
take a free trialsubscribe or log in to InvestHedge.

Subscribe

Subscribers have unlimited access to all current content, including fund performance Live League Tables. Start your subscription today - click on the button below.

Subscribe now