Alternative Investments Advisory Services. kpmg.com

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1 Alternative Investments Advisory Services kpmg.com

2 Alternative investment opportunities are in great demand as investors seek out consistent, riskadjusted returns. But great demand for your business often places great demand on your business. The growth opportunity in the alternative investment asset class comes at a time of unprecedented challenges for fund managers. Investors appetite for reduced fees coupled with fund managers increased operating, risk, and regulatory costs are testing the traditional fund management operating model. Managers continue to seek out innovative process improvements in an effort to reduce risks, reduce costs, and streamline operations. It is an opportune time for alternative investment funds, but it is also when you need the support of a trustworthy and experienced advisor. As demands on fund managers increase and evolve, KPMG LLP s (KPMG) widely respected Alternative Investments (AI) Advisory practice possesses the global strength, knowledge, and reach investment managers need to support their success. With a deep commitment to the AI industry, we focus on providing fund managers and the industry providers who service them with the clarity and confidence to manage the present and build toward the future.

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4 2 Alternative Investments Advisory Services KPMG s Alternative Investments Advisory Services Our approach to generating value for our clients Helping fund managers work smarter, grow faster, and compete more effectively KPMG s AI Advisory professionals offer a set of services to help fund leaders make business decisions, manage internal operations, and prepare for tomorrow. Strategy Advising on the evolution of the alternatives industry into a more transparent institutional look and feel. Business planning and growth strategy: We help investment managers strategically grow and transform their operating model as they expand services, transition business models, acquire or combine with target firms, or become more transparent and institutional. Operational strategy: To meet the challenges involved in improving efficiency of operations within the AI industry, we help clients to analyze their current operational and IT infrastructure and focus on identifying opportunities to control costs, to enhance their workforce and organizational structure, to improve processes, and to increase the value generated by their use of technologies. The end result for our clients is increased efficiency of their people, reduced cost structure, and value-generating technology. Deal Advisory Supporting transactions in a fast-paced market. KPMG s AI Advisory practice specializes in operational due diligence assistance for investors. Drawing on our deep industry experience on the buy- and sellside, we seek to provide investors with insight into the operational aspects of their investment while increasing transparency into potential operational risks. We are focused on helping clients identify, evaluate, and implement their business strategies in today's complex business landscape. Specializing in assistance with pre-deal planning, target identification, due diligence, and business integration, we approach deals through an investor s lens, helping firms in the AI industry evaluate their opportunities. Financial and operational due diligence: We offer due diligence assistance and related services to help clients assess, plan, and manage their investments, acquisitions, mergers, divestments, and other transactions. In the AI industry, operational issues are of critical importance and have contributed to the failure of several investment manager businesses in recent history. For asset allocators, mitigating operational risks requires a well-designed operational due diligence team with deep professional experience. Our team of AI professionals has years of experience in alternative investments and understands what it takes to comply with industry leading operational practices. Our quality due diligence assistance helps our clients to identify key risks that may threaten their investment.

5 Alternative Investments Advisory Services 3 Management Consulting Collaborating with our clients to improve operations and navigate a complex business environment Outsourcing advisory: middle- and back-office transformation: Both new and long-standing fund managers can benefit from our assistance in reviewing their business models and processes to identify areas for efficiency improvements. From reviewing front-, middle-, and back-office operational processes. KPMG will provide strategic solutions from performing due diligence and assisting with the selection of third-party service providers to enhancing current processess by offering innovative solutions. KPMG s AI professionals are well positioned to improve internal business processes and enhance the value of external service relationships. IT advisory: Our transformation specialists help fund managers execute operational improvements and capture the strategic value of technology investments. Our goal is to improve the strategic value of your investments in technology by cutting through the complexity of today s dynamic technology environment. We have Advisory professionals across the globe providing assistance to our clients in order to: Advance their IT maturity to provide efficient and effective IT service management Align the IT organization to be a strategic business partner Rationalize complex application portfolios to better align the services provided by IT with the strategic direction of the organization KPMG s Value Delivery Framework The below is KPMG s framework and methodology that is composed of phases supporting an evolving and agile transformation journey. VDF 2.0 phases are composed of ACTIVITY GROUPS that deliver outcomes across the journey STRATEGY HIGH-LEVEL DESIGN DETAILED DESIGN BUILD IMPLEMENT IMPROVE Strategic & Financial Ambition Target Operating Model Requirements Management Develop Deployment Transition to Steady State Business Model Strategy Solution Design Test Release Management Continuous Improvement DESIGN LAYERS Operating Model Strategy DELIVERY MODEL ORGANIZATION PROCESS TECHNOLOGY INFORMATION GOVERNANCE PORTFOLIO, PROGRAM, AND PROJECT MANAGEMENT LEADERSHIP AND CHANGE VALUE DELIVERY

6 4 Alternative Investments Advisory Services Risk Consulting Manage risk and compliance through supplier management, data integrity, security, privacy, governance, and controls. Cyber-attacks and unauthorized data leakage are growing threats to alternative investment fund managers and industry providers who service them. Cybersecurity: We can assist organizations with the application of appropriate information security measures to help provide ongoing confidentiality, integrity, availability, and protection of their most sensitive data assets. Our approach to Cybersecurity Prevent, Improve, Detect, Respond is designed to be simple and effective, and most importantly aligned with your business needs. At KPMG we understand that cybersecurity is not just a technology problem it is a holistic one: Your people need ready access to critical business applications and they need it everywhere, anytime via all their devices; Your vendors need real-time access to your systems to perform and to deliver their services; Your investors want to know their data is safe without sacrificing service quality and investment performance; and Your regulators need to know you are complying with their guidelines and expectations. Supporting effective enterprise-wide compliance processes to adapt to evolving regulatory complexity Regulatory and Compliance impact assessment: We provide assistance to fund managers to interpret new regulatory obligations, assess associated risks, understand their practical application, and align the operating model to meet compliance requirements. We help fund managers make an objective assessment of their current compliance framework by performing a set of specific procedures to test the effectiveness of their compliance rules. Regulatory reporting: As funds are required to provide increased transparency and reporting to various regulatory bodies, we help ensure they have sufficient resources, technology, and know-how to comply. Process improvement for expense allocations: With the changing economic and regulatory environment, we are helping fund advisors examine this allocation methodology logic and budgeting process in order to achieve highly efficient structures with strong controls by leveraging the use of sophisticated technologies. KPMG s team of AI professionals have worked with asset managers of all sizes to develop a streamlined process for regulatory reporting. Starting with a thorough review of the business requirements, our engagement teams follow a robust process to help design and implement a strategy for all of your regulatory reporting needs. Who we serve KPMG s AI Advisory practice professionals have real-world experience spanning various fund types, structures, and asset classes throughout an alternative manager s life cycle. We service fund managers of all types and the industry providers who service them: Hedge funds Real estate funds Private equity funds Fund of funds Fund administrators, technology companies, prime brokers, and counterparties

7 Alternative Investments Advisory Services 5 What sets us apart Why the AI industry should consider KPMG Alternative managers are looking outside of their organization to engage a trusted advisor who understands current industry practices, anticipates impending challenges, and connects strategy to long-term business goals. The credentials and capabilities of KPMG s AI Advisory practice have made us the trusted advisor of choice in the alternative investments sector: C-suite experience and perspective: A number of our AI Advisory professionals have held leadership roles at alternative fund managers and industry providers that service them. We draw on the firm s extensive subject-matter knowledge to deploy experienced leaders who understand your perspective and can provide the insights you need to tackle challenges and seize opportunities. Deep industry insight: With a constant eye on what is happening across the industry, we provide clients with the vision to manage strategic, operational, IT, regulatory, risk, economic, and competitive challenges. Global reach: Through the global network of KPMG member firms, our professionals can tap into the local knowledge of individuals globally to gain a big picture view of the global business environment. Our AI Advisory professionals worldwide have the financial market and business acumen to provide in-depth, valuable analysis of trends to inform you as you choose the best course of action for your fund and investors. Outstanding client service: Forming enduring relationships based on integrity, objectivity, responsiveness, open communication, personalized attention, and partner involvement is a high priority for us. We work with you in a collaborative, hands-on fashion to deliver the targeted services you need to run your fund, in line with your current operating reality and budget. By the numbers KPMG member firms provide market-leading professional services to alternative funds worldwide. 10,000 global professionals 800 global partners 60 major alternative investment fund centers 3,000 U.S. alternative investment fund clients 20,000 financial services clients, the largest industry presence of all major accounting firms Serving 25 percent of Fortune 1000 clients Source: Audit Analytics and Fortune 2015

8 6 Alternative Investments Advisory Services About KPMG s AI Advisory practice Within KPMG, the AI Advisory group is the leading provider of services for the alternative investments market. Our objectives are to integrate, align and deliver our service offering across all advisory disciplines and to satisfy the needs of both alternative investment fund managers and those industry providers who service them.

9 Alternative Investments Advisory Services 7 Meet our practice leaders Jeffrey KOLLIN Jeffrey is the lead principal for the AI Advisory practice at KPMG, where he focuses the firm s resources in the alternative investments market, as well as coordinating the business development initiatives for the AI go-to-market strategy. Jeffrey also serves as the lead advisory partner on several of the firm s leading AI clients, where he delivers the KPMG s advisory products to his clients such as strategy, operational transformation, technology solutions, deal advisory, and regulatory change management. EDWARD TEDESCHI Edward is a Principal in KPMG s Alternative Investment practice and is responsible for the Northern California Region. He possesses over 35 years of diverse buy and sell side financial industry experience in alternative investments, asset management, finance, trading, regulation and compliance and all operating infrastructure components. He specializes in business creation and development, business transformation, establishing and maintaining strategic industry relationships and performing senior project management roles for business owners and executive management. Carl Versella Carl is a managing director in KPMG s Advisory group and has more than 30 years of professional experience on both the buy- and sell-side in finance, operations, and consulting in the alternative investments and financial services sector. His focus is on c-level relationship management for client engagements and advisory services and business development. Kevin Goldstein Kevin is a director in KPMG s Management Consulting AI Advisory practice. With more than 20 years of experience creating, selling, and delivering solutions in the financial services industry, Kevin specializes in providing business strategy, technology, operational, and cybersecurity consulting to the C-suite at investment managers and service providers in the alternative investments industry. David Berger David is a director in KPMG s Management Consulting AI Advisory practice. With more than 10 years of experience in the financial services industry, David focuses on middle and back office transformation, operations and regulatory consulting for alternative investment companies, including, hedge funds, private equity, venture capital and securitized asset funds.

10 Contact us Learn more about how KPMG s AI Advisory practice can help you navigate the most complex business issues affecting your investment and fund decisions. Jeffrey Kollin Principal, Alternative Investments jkollin@kpmg.com Edward Tedeschi Principal, Alternative Investments etedeschi@kpmg.com Carl Versella Managing Director, Advisory cversella@kpmg.com Kevin Goldstein Director, Advisory kevingoldstein@kpmg.com David Berger Director, Advisory davidberger@kpmg.com kpmg.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Some or all of the services described herein may not permissible to KPMG audit clients and their affiliates KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. NDPPS