Hedge Fund. Strategy Discussion. April 2010

Transcription

1 Hedge Fund D Strategy Discussion April 2010

2 Introduction Client Solution Oriented Benchmarked or Absolute Return Macro View, Top Down process Focus on disproportionate reward Controlled risk, conservative reward Buy when attractive fundamentals Sell when asymmetric relative risk 2

3 Hedge Funds: 10,000 to consider very few meet Strategia Liquidity and Risk Control and Transparency Hedge fund is a broad term Complex, diverse portfolios are susceptible to black swans LTCM fund had 7000 positions, a disaster. Multi-Billion dollar funds are not always Not a haven of safety Macro portfolios can provide outsized gains Paulson fund returned 700% by focus on sub-prime as a focused, macro view Liquid, public securities are ripe with the kinds of upside, often only found in less liquid strategies. Risk Control is more important that ever before. 3

4 Investment Process Macro view 4

5 Hedge Fund Portfolio Investment Macro value Manager value Client Goals solution Risk / Reward Discipline 5

6 Principal Investment Strategies: Client Goals Driven Target Returns, Target, Stable or un-correlated Sector or Global Regional Volatility Liquidity of underlying and lock-up Income Transparency Complement Reporting frequency and attribution customized Underlying holdings, valuations fit client needs Manager selection and strategy can complement Client traditional or other client portfolio component Single Sector or multi-sector based on correlation 6

7 Filter Sector and Manager Opportunities Strategia U. S. Office saw nearly 1 dozen managers in March Strategia Kuwait Office meets regularly with managers Sector awareness of opportunity due to decades of experience Proven ability to Uncover Great Global strategies and new funds Proven ability to deliver Client reporting and communication Alternative investment funds are utilized only when appropriate and a separate account can not accomplish client goal. 7

8 Global Access Top Tier Performance history Fund Size Platform Operations benefits Emerging Managers Performance benefits Turmoil in bulge bracket firms brings opportunities Market changes bring Sector and Style opportunities Side-car opportunities Strategia is your Local Partner Meeting Client Goals and Managing Risk 8

9 Discussion: Size Matters to Performance and Risk Return 2009 Avg Fund Size ($) # Funds sample Size TOP Tier * $1 Billion+ 21% $1.7B 16 Funds $500M+ * $500M to $3.3B 24% $1B 45 Mid Tier * $100M to $300M 31% $170M 16 All HF * $10M to $3.3 Billion 27% $161M 142 All Funds (HF, FOF, Funds) * 32% Barclays FOF Index ** 10% HFR Index of HF's ** 13% MSCI World Index ** 31% Strategia Largest Alloc ** Mid Tier 112% * 12 months to Feb '10 **

10 Discussion: Regional Profile size Source: capintro partners March

11 Discussion: Regional Profile Source: capintro partners March

12 Discussion: Regional Profile Liquidity Source: capintro partners March

13 Discussion: Regional Profile Allocating 10 Source: capintro partners March

14 Discussion: Goal Profile Hedge Funds add Performance (sector, style) Hedge Funds reduce market Risk (short) Hedge Funds allow Access to a market (co-investors) Hedge Funds impart Knowledge (side-car) 14

15 Examples for Discussion Emerging Markets European Equity Real Estate Debt Emerging Managers Real Estate Equity: Outperformed benchmark by avg 15% annually since inception 05 Real Estate Bonds: Distressed Bonds: Equity, Tech: Stable Value: outperformed equity by nearly 4x 1 year outperformed equity by nearly 2x 1 year outperformed the sector by nearly 70% 1 year Avg 9% return past 2 yrs with only 2% volatility 15

16 Portfolio Tools Risk Control Risk management The portfolio and each holding will be monitored daily for risks. Portfolio reporting Monthly. Portfolio risk control will be monitored by a portfolio system that is linked custodial accounts and a data feed automatically updating holdings, exposure, and market data. Individual positions will be monitored for technical, fundamental, basis and industry exposure risks. Example on page 14 Risk is controlled to potential downside.2% with Upside 4%. Medium term holdings and long term holdings will be mostly monitored for Macro and fundamental risks. These holdings will be mostly target to macro opportunities and fundamental rich or cheap market conditions. Short term holdings will be mostly monitored for technical risks. Shorter term holdings are intended to take advantage of near term opportunities, especially when market and macro uncertainty reduces risk/reward analysis and during markets that are fair priced and lack direction. Tools for risk management will include over 10 technical models, proprietary evaluation system and a portfolio system that reports daily risk as fed all trades and positions automatically from the custodian bank. 16

17 Investment Team Harry J. Milne (Managing Director, Strategia, U.S.) Harry Milne has over 20 years of trading and portfolio strategies experience in public securities, and private equity investment and investment banking. Mr. Milne joined Strategia in 2007 as managing Director of the Strategia U.S. entity and Director of 3 SPV investment vehicles. Strategia Investors, Inc U.S. (SII) is a wholly-owned subsidiary of Strategia Kuwait (SIC). Investments include global stocks, bonds, private equity and hedge funds. Experience in all 4 quadrants of the investment world and overseeing several styles of funds helps understand risk and opportunity. Over 20 years of investment trading and portfolio management helps uncover unique opportunities and protect client capital. Deep expertise in Debt markets and broad investment contacts helped him understand risks and strategies that led to exceptional investment performance leading up to and through the global financial crisis. Prior to SII, Mr. Milne was advisor to major investors managed separated accounts for U.S. pension funds and endowments, generating top percentile returns. Mr. Milne s earlier positions include Vice President with Drexel Burnham, RBC, and ING Furman Selz, where he was involved in securities and loan trading, and in establishing a new division in London. Mr. Milne holds a B.A. from Hartwick College and an MBA Hofstra University. 17

18 Investment Team Abdullah Al-Ghanim (Vice President, Strategia Investment Company) Abdullah Al-Ghanim is Vice-President of Strategia Investment Company. Mr. Al-Ghanim manages Strategia s proprietary funds and evaluates the full range of investment opportunities sourced by Strategia s network of global partners. Abdullah is director of 3 SPV investment vehicles and oversees many of the companies most important investment and client relationships for Strategia. He has been involved in investing in Hedge Funds and traditional investments for many years, providing exceptional service and investment results for Strategia and Client investments. Earlier in his career, Mr. Al-Ghanim served in various capacities within the Real Estate, Hedge Fund, and Securities Divisions of Wafra Investment Advisory Group, the New York-based asset manager beneficially owned by The Public Institution for Social Security of Kuwait. Mr. Al-Ghanim received his B.A. in Finance and Information Technology from Old Dominion University in the U.S., where he also minored in Marketing, and additionally earned his Certificate in Finance from the New York University. Mr. Al-Ghanim s department is the distinguished recipient of the 2007, Euromoney Liquid Real Estate Award for Best Investment Manager in Kuwait and MENA. 18

19 Investment Team Hetaf M. Khajah (Chairman, Strategia Investment Company) Ms. Hetaf M. Khajah currently works with Kuwait-based National Industries Group Holding (NIGH), one of the leading industrial conglomerates in the Middle East, as Executive Investment Manager with the Asset Management team since She is responsible for developing and implementing the company s investment strategy for its financial assets in the international capital markets. She presently manages a portfolio of over $500 million in international assets that includes structured products, equities, hedge funds, real estate funds and private equity funds. Ms. Khajah also serves as a board member of NIG s associate company, Strategia Investment Company (SIC), and has served for more than two years, recently elected as a Chairman of the Board to play an instrumental part in the company s growth plans moving forward. Prior to joining NIGH, Ms. Khajah served as Deputy Head of the Asset Management Division and Head of the Funds Structuring Department with the National Bank of Kuwait (NBK), the leading retail and investment bank in the Middle East, for a period of four years. The division is responsible for providing mutual funds and investment services to retail, high net worth and corporate clients. Ms. Khajah was instrumental in the launch of 12 funds of the bank's platform. Ms. Khajah holds a Masters of Science in Information Systems and a Bachelor of Science in Computer Engineering from The George Washington University, Washington DC. She has also completed the Harvard Executive Program for Leadership Development. 19

20 Next Steps for Strategia services Customize Guidelines Choose Custodial bank based on client discussion. Engage services of Strategia via Investment Management agreement. 20

21 Contacts Abdullah Al-Ghanim Kuwait Office (965) a-alghanim@strategia.com.kw Harry Milne USA Office (203) hmilne@strategia-us.com 21