EQA Partners LP : EQA Global Macro Program

Summary

EQA employs a discretionary portfolio management process that is based on multi-model quantitative research. Combining the judgment and expertise of our experienced portfolio management team with our transparent, dynamic quantitative systems allows us to enhance returns and control risks simultaneously. This approach enables us to incorporate market conditions which are not otherwise captured in a quantitative-only approach.

Investment Strategy

Our multi-model quantitative system produces portfolios constructed with multiple themes that incorporate both speculative and hedge positions. By allocating among our models, the portfolio management team seeks a blended portfolio that has the greatest upside potential for a given risk level and exhibits the traits of stability and diversification. Risk management is integrated into the portfolio construction process and the result of our discretionary blending process is a balanced portfolio, not simply a series of stacked trades. Portfolio risk is also evaluated on a continuous basis as market conditions evolve. By using this hybrid approach, our portfolio management team has captured most of the models’ upside and limited most of the models’ drawdowns.

Fully Integrated Risk Management throughout the Investment Process: We construct appropriate risk-adjusted portfolios by taking into account current market risk factors, the models’ views on risk and expert information on systemic risk. We believe if you are simply measuring risk after trades are made, you are monitoring risk, not managing risk. Since relying solely on the risk management built into the research models would constitute model risk, we also apply separate, market-based, risk models to the actual portfolio. We continuously monitor the risk profile to ensure that it is inline with our research models’ expectations.

Risk Management

Liquidity, Credit and Operational Risks: We are fully aware that risk extends beyond just market volatility and that often what creates the greatest risk for a portfolio has little to do with daily market variability. Even though our investment strategies are designed to o!er high liquidity with very low credit risk, we routinely evaluate these positions and adjust the strategy if necessary. Operational risk is greatly mitigated by our state-of-the-art technology, which delivers straightthrough processing of our trading activity requiring a single point of entry for all positions. Positions are then twice reconciled against the prime broker’s positions by our systems before they are reconciled a third time by our fund administrator. This data is the basis for our data warehouse which stores everything from the models’ output and complete trading activity to the final performance values determined by our fund administrator.