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ners, as a representative of the firm and proxy for the other partners. "It is our organization, not my organization," he emphasized.

Fittingly, the firm does not carry the name of any individuals but rather that of the hotel in London at which the founders struck their agreement to enter the venture.

CUMULATIVE WISDOM

Wilcox says their edge is the cumulative wisdom of the organization and its experience over 30 years and the ability to keep its current and retired principals nearby. Insight and context are also key.

Wilcox says Cumberland is truly different from most other hedge funds because it operates as a true partnership. The senior portfolio managers have discretion over the capital, and they have significant equity in the enterprise.

The partners include five portfolio managers and the chief financial officer. The funds are managed on a decentralized basis with each of the portfolio managers directly running, for example, 20 percent of the firm's capital. This means that all of the portfolio managers have about 80 percent of their own capital run by the other partners. This situation makes them interdependent on each other. It also means they care very much how the overall portfolio is run. The portfolio managers argue passionately about their differences yet they depend on each other. The result is a lot of give-and-take, challenge, debate, and compromise, says Wilcox. Thus the culture can be described as a true partnership with enfranchisement.

The management committee consists of Wilcox, Andrew Wallach, and Gary Tynes, the chief financial officer. The committee has broad authority to control the extent to which the overall portfolios are invested and sets specific guidelines on how capital is used by each manager. These are not sector allocations; they are risk limits. The job of the committee is to formulate a consensus and make a final determination.

The management committee allocates to each portfolio manager at the start of each year and adjusts if needed during the year. The allocations are based on several factors including the immediate opportunity for any given portfolio manager and his individual style as well as the demands from the other portfolio managers. The process is