Investment Strategy
Pecan’s aim is to create a highly diversified portfolio by accessing both the public and private markets. Investment diversification and a disciplined risk budget are core to Pecan FO’s philosophy.
Public Markets
Strategy
The public markets strategy revolves around our proprietary asset allocation model. Alpha generation versus our benchmark is sought primarily through:
Dynamic use of leverage via both closed-end funds (CEFs) and margin based on our view of absolute attractiveness of various asset classes and discount/premium to NAV
Strategic shifts in target asset allocations based on our macro view which ranges from ultra-bearish to ultra-bullish
The portfolio is rebalanced opportunistically when overbought or oversold conditions exist either through relative value trading amongst asset classes or cash deployment/build.
Private Markets
Strategy
Pecan’s private markets strategy is absolute return driven with strict adherence to internal risk budgets. We pride ourselves on thorough due diligence and our ability to analyze any given investment opportunity. Due diligence is focused first on investment suitability and then on risk/reward characteristics. Part of the risk/reward assessment includes a downside analysis which drives position sizing and naturally promotes portfolio diversity.
Investments are ultimately chosen either for their 1) demonstrated lack of correlation to public markets/economic cycles and/or 2) ability to generate absolute returns with double digit internal rates of return (IRR) and a strong multiple on invested capital (MOIC).