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board enhance the quality of the investment fund program. The first step was to adopt a new strategic investment policy in May, including adding more alternative investments, a higher concentration on equities, and less reliance on fixed income. UNC also wanted to be more aggressive in hiring emerging managers. By the fall of 1998, the first major portfolio changes were made to begin the realignment of the fund to the new investment policy.

UNC's allocation to marketable alternatives (hedge fund type products) has remained fairly constant at 30 percent since 1998. One unique feature of the UNC program is the ban on the use of the "h" word. As mentioned earlier, UNC does not use the hedge fund label, primarily because it is a generic phrase that has evolved over time to describe many different unrelated styles of trading. Yusko also emphasizes that UNC does not see hedge funds, or marketable alternative managers, as an asset class but as a style, or strategy, of gaining exposure to specific asset classes like equities or bonds.

One of UNC's portfolio management themes is that it likes to have multiple manager relationships in each asset class and be well diversified in each segment of the portfolio. The investment staff does their own independent due diligence on all managers and is very thorough in their evaluation prior to manager selection. Across the marketable alternatives portfolio, UNC allocates funds to more than 20 managers in three general categories—long/short, opportunistic equity, and absolute return.

Long/short managers are long-biased and can focus on either U.S. or non-U.S. equities. There are multiple managers in this category, including firms such as Feirstein Capital, Raptor Fund, and Boyer Allan.

The opportunistic equity category includes many different types of funds. All use the long/short model, but are not necessarily long-biased, and are global in nature; and the category includes nonequity managers as well as equity managers. There are multiple mangers in this category, including Maverick and previously Tiger prior to liquidation of the fund. In fact, as mentioned earlier, by the time Robertson wound down Tiger in March 2000, UNC's allocation had dwindled to 3 percent as it had gradually increased allocations to other managers.

Absolute return, the third category, includes lower-volatility strategies such as event arbitrage, relative value, and distressed managers. This segment has the highest number of individual managers, as diversi-