Billy Beane, the former general manager of the Oakland Athletics, realized the key to success on the diamond, especially for a team with limited resources, was not trying to compete for superstars that it could ill-afford but to identify “under-the-radar” players that could collectively help his team win.

After years of screening for the most consistently performing funds, I teamed up with the director of research at BarclayHedge (a key data source) and we concluded that the most efficient way to invest in hedge funds was to follow this strategy.

Certainly, there are large funds that have earned their reputation. But we found fund size alone doesn’t necessarily equate with consistent performance. Often, smaller well-established managers could offer more transparent and articulated investment processes that better delivered on the promise of active investment management.

And extending this approach to hedge fund portfolio construction challenges convention that overemphasizes strategy and reputation over long-term performance.