Innovative Approach. Investing Advantage.
Lighthouse invests in portfolios of actively managed hedge funds that seek to diversify traditional market exposures. Our objective is to create and deliver innovative investment solutions that safely compound investor capital.
Lighthouse investors can place their assets in pooled investment funds or in customized solutions. We now typically structure all our hedge fund allocations within our proprietary managed account framework.
Each Lighthouse managed account is a separate, distinct entity typically owned by at least one Lighthouse fund and controlled by Lighthouse. Hedge fund managers are authorized by Lighthouse to trade the assets within each managed account. An Investment Advisory Agreement sets out investment guidelines and parameters within which the hedge fund manager may operate.
Managed Accounts: The Benefits.
The benefits of the Lighthouse managed account structure include:
- Direct ownership and control of the assets held in the managed account
- Daily position‑level transparency and valuation
- The ability to negotiate better terms
- Managers may not gate, suspend, or "side-pocket" investments*
* Lighthouse retains certain of these rights at the Lighthouse fund level.
- Access to a broader universe of hedge fund talent
- Using scale to lower trading costs and related fees
- Flexibility toward market opportunities as they emerge
- The ability to revoke manager trading authority at any time**
** The investment advisory agreement which governs the managed account relationship generally allows Lighthouse to revoke a manager’s trading authority over an account at any time, subject to limited exceptions.
Transparency. Flexibility. Control.
We are convinced that our proprietary managed account platform is a superior way to manage hedge fund portfolios. In our view, the transparency provided through this structure—in most cases, with information updated daily—supports more effective, informed investment decision‑making while providing greater control of assets and stricter oversight of counterparties.
In addition, the flexibility of our platform gives us the ability to take advantage of opportunities as they present themselves, whereas in a typical commingled fund investing format, reallocations of capital must wait until the end of the month—essentially a random period of time.
These advantages—transparency, control, and flexibility—are seldom available in a traditional, commingled hedge fund investment format.