Our Approach

Sourcing

We are investors who believe that the best investment decisions are made from bottom-up, fundamental analysis. Ideas are sourced at the investment group level, where teams collaborate on the formulation of investment pitches.

Rigorous Due Diligence

The fund retains a research-heavy focus that plays to the academic strengths of its membership. Investment teams work on pitches that incorporate rigorous due diligence, utilizing significant primary and secondary research to complement detailed modeling and valuation and qualitative analysis of the business.

Contrarian Bent

Black Diamond leverages the expertise of its highly-curated membership to develop contrarian investment theses that seek to identify a differentiated view from the existing price consensus.

Stress Testing

All investment pitches are submitted for evaluation by the Investment Committee. At these weekly meetings, ideas are stress-tested by all invested partners. In order to be executed, a trade must receive a majority vote of the investment committee.

Portfolio Construction

Upon approval, the Chief Investment Officer works in unison with pitch teams and our Macro group to optimize position sizing based on existing portfolio exposures. Our targeted time horizon is 3 months–12 months for equities and 3 months–36 months for macro strategies. We typically hold 8-10 equity long positions and 5+ equity short positions at any time. We target a Net exposure of 25-75% and Gross of 75-100% while using volatility and index funds to manage risk exposure. Global-Macro alpha positions are overlaid on the equity portfolio.