Risk Management

Diversification
We generally hold in excess of 30 companies in the portfolio to maintain appropriate diversification.

Leverage
We are very cautious in the use of leverage. When margin is utilized, it will be employed judiciously and, except in extraordinary circumstances, total exposure will not exceed 150% of fund equity.

Weighting
No one stock will comprise more than 5% of the portfolio upon initial investment; the typical weighting is very conservative at 2-3%.

Valuation
We buy long positions well below our calculation of intrinsic value and short companies only when we believe a catalyst exists for an imminent decline. We evaluate all our positions regularly with a view to minimize the risk of permanent loss of capital.

Volatility
Our investments are contrarian and can be volatile by their very nature, but we believe that such volatility is indispensable for long-term out performance.

Management Incentive
Alder Capital professionals have a significant component of their liquid net worth in the fund. We manage investor money as if it is our own.
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