A Portfolio Construction Framework helps investors by providing a structured approach to building a diversified investment portfolio. Based on assumptions that each asset is not mutually perfectly correlated, it aims to optimize risk and return, ensuring alignment with individual goals and portfolio constraints. In addition to traditional approaches such as Modern Portfolio Theory, we incorporate machine learning techniques to enhance predictive accuracy of asset behavior, enabling more adaptive and data-driven portfolio decisions. This combination supports better risk-adjusted returns and more informed, forward-looking investment strategies to better support investment decision and benefit investors.

Our Portfolio Construction Framework is a disciplined and adaptive approach to building high-conviction investment portfolios. It integrates traditional financial theory—such as risk-return optimization and diversification—with advanced machine learning models that enhance predictive accuracy and market responsiveness. Our portfolio is thoughtfully divided into three core strategy pillars: - Event Driven: Focused on catalysts such as mergers, restructurings, and special situations, leveraging deep fundamental and risk arbitrage expertise. - Equity Long Only: High-conviction, research-driven equity positions targeting structural winners across global markets (incl. Engagement Strategy) - Quantitative & Other Hedge Fund Strategies: AI-enhanced, rules-based models applied to alpha extraction, asset allocation, and risk management. This multi-strategy framework allows Abundia to dynamically adjust exposures, optimize risk-adjusted returns, and align capital deployment with both macro and micro-level signals. By combining human judgment with AI-enhanced systems, we aim to build portfolios that are resilient, opportunistic, and strategically positioned for long-term performance.

The core elements typically include investment objectives, asset allocation, diversification, time horizon, liquidity needs, and risk tolerance. Additionally, it incorporates guidelines for portfolio rebalancing, performance monitoring, and tactical adjustments. These components help ensure the portfolio remains resilient, adaptable, and aligned with the investor’s evolving financial needs.

Building a Portfolio Construction Framework begins with defining clear investment objectives and assessing the investor’s risk profile. Next, suitable asset classes are selected and strategically allocated to reflect those goals. The process includes setting diversification guidelines, establishing monitoring tools, and determining rebalancing rules. Continuous evaluation and refinement help the framework remain effective over time.

Risk management is a foundational element of the framework, aiming to protect capital while enabling growth. It involves identifying potential risks—such as market, credit, or liquidity risk—and implementing strategies to mitigate them through diversification, position sizing, and scenario analysis. A robust risk management approach ensures that the portfolio stays aligned with its intended risk-return profile across market cycles.