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About SkyRank

About The SkyRank System
SkyRank rewards a hedge fund that proves, through steady positive returns, its ability to exploit market inefficiencies, independent of stock and bond market direction. It rewards managers who are tenured through experience and who have successfully proven to satisfy and attract investors.
Over 13 interconnected formulas are utilized through a unique optimization process that analyzes hedge fund characteristics to derive interconnected equations in a patent-pending pivot technology. The SkyRank System was created to be flexible in nature, seeking to mirror the hedge fund industry as it changes through time. The inputs currently used to derive the optimization formulas are assets under management, time, volatility and returns. The linked formulas are then used to calculate output components and the quantitative Absolute SkyRank Rating. Absolute SkyRank assesses and analyzes all alternative investments witout regard to strategy-type. The Relative SkyRank Rating compares the Absolute SkyRank to all other Absolute SkyRanks in the hedge fund category to determine the relative attractiveness of the hedge fund versus its peers. Absolute SkyRank ranges between 0 and 5, and has a precision that goes out 16 decimal places. This means that it is possible for two hedge fund ratings to differ by less than one-hundred-trillionth of a point. The SkyRank Rating successfully identifies established, credible hedge funds exhibiting high risk-adjusted returns, unavailable in the traditional marketplace.

The SkyRank System produces a simple rating for the investor in three forms: Absolute SkyRank, Lettered SkyRank, and Relative SkyRank. The ratings are further segmented in four ways: 1-year, 3-year, 5-year, and Composite. The Composite applies 50% weight to the 1-year rating, 33% weight to the 3-year rating, and 17% weight to the 5-year rating. This weighting technique places more value on more recent data. SkyRank successfully finds and rewards hedge funds that perform the way they are supposed to: by understanding a market inefficiency and hedging away specific market risk associated with that market segment. The ability of the SkyRank System to do this provides unique applications of the System to the hedge fund industry.

Types of SkyRank Ratings
SkyRank utilizes a complex algorithm to reveal a simple rating to the investor in three forms: Absolute SkyRank, Lettered SkyRank and Relative SkyRank.

Absolute SkyRank
  • Rates hedge funds quantitatively.
  • Limits the rating and measures numerically on a basis of 0-5.
  • Compares hedge funds with 0 as the most attractive rating, and 5 as the least attractive.
Lettered SkyRank
  • Simplifies the rating into a lettered form.
  • Rates hedge funds in the form, A+ through E, with A+ as the most attractive rating, and E as the least attractive.
Relative SkyRank
  • Displays the percentage relative attractiveness of a hedge fund when compared to others in a peer group or category.
  • For example, a Relative SkyRank Rating of 12.5% for a Fund of Funds indicates that 12.5% of the Fund of Funds in the database exhibit a higher Absolute SkyRank than this particular fund.
The SkyRank System analyzes the hedge fund industry to reward those that are established, credible, and consistent performers as demonstrated by their proven abilities to exploit market inefficiencies.

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