Making the Grade

Investors have come to rely on PerTrac software to analyze manager performance and construct hedge fund portfolios, even as some complain about its limitations.

In the early 1990s, Frank Smith, a sales and marketing veteran who had grown up in the brokerage world, was working at a commodity trading adviser whose strategy had reached capacity. His firm decided to explore the possibility of becoming a fund of hedge funds, and Smith needed a software tool to help him choose managers, analyze their performance and blend them together to create a portfolio.

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