Summary

The Fortress Fund is designed to produce consistent returns with low volatility across multiple market cycles. It does so by combining traditional asset class beta with diversifying alpha from institutional-quality hedge funds. Beta is return from passively held long positions and earns the market risk premium. The Fortress Fund’s beta components include equity beta and fixed income beta. Many portfolios have equity beta exposure of 60-75%. The Fortress Fund aims to cap equity beta exposure at 50%, thereby reducing portfolio volatility and reducing the fund’s exposure to extreme moves in equity markets. Alpha is return from actively trading and timing markets. The Fortress Fund’s alpha selection identifies hedge funds that appear to be resilient through market cycles, exhibit low correlation to other strategies, and operate with the highest institutional standards. The Fortress Fund combines equity and fixed income beta with multiple sources of value-adding and risk-reducing institutional alpha with the objective of outperforming traditional 60/40 and 70/30 equity/bond portfolios on both an absolute return and risk-adjusted return basis.