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Investment Assessment and Manager Qualification

Finding what may appear to be a group of quality alternative investments is just the first step in building our platform of hedge funds and managed futures. From here, we evaluate the managers and opportunities very closely relative to the needs of our client base and the existing alternatives on our platform. The initial analysis phase is designed to include qualitative discussions with the investment manager as well as quantitative analysis of the investment strategy and program, coupled with the initial review of documentation, including legal and compliance as well as operational components. The typical process may include elements as outlined below.

We look for quality investment opportunities that we believe will persist. We work to secure capacity with these managers, to enable suitable clients to access the manager’s program, should they decide to invest. - Robert Amedeo, Executive Vice President

Document Collection and Review

The list of documentation we require of the investments reviewed for our platform is vast. However, as each investment is unique, not all documentation is required for Investment Committee approval, nor are all documents requested applicable or available. Requested documentation typically encompasses fund offering materials, due diligence questionnaire, fund reporting and annual audits, investor communications and other materials.

Investment Due Diligence

After a specific strategy and investment manager is identified, our investment due diligence process is conducted before the investment can be considered by the Investment Committee for inclusion on our platform. Representative specifics may include onsite manager visits, quantitative analysis, background checks and review of the investment program, process and risk management as well as business management issues.

This detailed investment review cannot, of course, remove all of the risks associated with an investment in hedge funds or managed futures.

Operational Due Diligence

While operational due diligence varies across funds and investment strategies, the process includes an onsite visit led by our Research and Investments team as well as multiple follow up calls. Representative specifics may include internal policies processes and procedures such as trading and investments, valuation, investor reporting, risk management, compliance, IT and administration as well as review of third party service providers.

This detailed operational review cannot, of course, remove all of the risks associated with an investment in hedge funds or managed futures.

Altegris Investment Committee

At each stage of qualification, the Altegris Investment Committee meets to review the results of the analysis and makes a decision to proceed with the stage of assessment and review. After numerous contact points including on-site visits and conference calls, all manager information is documented within a formal report for review and subject to final approval by the Altegris Investment Committee.

Maintaining our Premier Platform of Alternatives

Once a new manager or investment is added to our platform, we continually assess and monitor the program. Click here to learn about our Ongoing Monitoring of investments on our platform.

* Understanding Our Process

Altegris Investments offers its client’s what we believe are high quality alternative investments. As part of our effort to meet that goal, our investment professionals provide high quality due diligence on the investments on our platform. The term due diligence as it relates to securities offerings has its origins in the Securities Act of 1933 and provided a defense to underwriters in public offerings who could demonstrate that they made a reasonable investigation and reasonable determination that the terms of the registration statement were correct. The terms "reasonable investigation and made a reasonable determination" came to mean the standard of reasonableness that a prudent man would exercise in dealing with his property. Originally the term was limited to public offerings of equity investments, but over time it has come to be associated with investigations relating to private and other offerings as well. Of course, due diligence is not a panacea against investment failures or even against fraud. Even a well run fund can fail due to unpredictable market conditions, unforeseen competition, or technical setbacks. All investments contain risks and alternative investments are subject to a set of unique risks. Similarly, some frauds are difficult or impossible to detect regardless of the thoroughness of the due diligence effort. As a result, our due diligence effort is not a guarantee that the funds we offer will succeed or that we can uncover every instance of fraud or potential fraud. Rather, it is a designed to help us determine that the management and operations of the investments on our platform have sound operating and trading infrastructures and to increase the odds that that their managers are doing what they say they do and will continue to do so. Our due diligence is performed by a team of highly experienced professionals. Although there are components of our due diligence efforts that are common to all of the investments we offer, each due diligence effort will rise of fall on in light of the particular facts and circumstances of each offering. The following describes in general terms the starting point for our due diligence inquiry. The list is not exhaustive and not all items listed are components of every investment review. While checklists can provide a useful starting point, there is no "one size fits all" due diligence inquiry. For example some of the investments on our platform, like managed futures accounts and commodity funds, provide us with complete trade transparency. Other investments, like fund of funds, offer us little or no trade transparency.

The Altegris Process

Click on the steps below to learn more about the Altegris Research and Investment Process.

Register Today

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Toll Free: 800-828-5225 | Phone: 858-459-7040 | Fax: 858-456-9209 | info@altegris.com

Alternative investment products, including hedge funds and managed futures, involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-U.S. exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in U.S. markets. Additionally, alternative investments often entail commodity trading, which involves substantial risk of loss. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Altegris, a FINRA and NFA member, offers various alternative investments, including hedge funds, futures funds and managed futures and commodities accounts, that may operate in commodities markets and foreign markets, among others. Altegris and/or its officers/partners may have a financial interest in such alternative investments. In working with clients, Altegris acts in its capacity as an SEC-registered Broker-Dealer and/or as a CFTC-registered Introducing Broker and CTA. Although Altegris may give securities-related advice that is incidental to its securities brokerage services, it is not an Investment Adviser. When acting as an Introducing Broker for individually managed accounts, Altegris receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. CTAs may also pay Altegris a portion of the fees they receive from accounts introduced to them by Altegris. When acting as a Broker-Dealer, Altegris enters into selling agreements with hedge funds and futures funds that it offers (including funds sponsored by affiliates), pursuant to which Altegris, with respect to the interests it sells, is paid a portion of the management and/or performance fees charged by the funds or their managers in respect of those interests. Altegris may also provide ongoing managed futures consulting services to its clients for a monthly service charge pursuant to individual managed account consulting arrangements.