Raising Assets in the U.S.

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1 Raising Assets in the U.S. April 27,

2 Agenda Raising Asset in the U.S. About Hamersley Partners Institutional Investor Channels Asset Class Allocation Asset Class Flows evestment Manager Universes Role of Investment Consultants The Hamersley Marketing System Contact Information 2

3 About Hamersley Partners Hamersley Partners Background Boston-based institutional investment manager marketing firm Founded in 2004; Three partners $4.7 billion raised; 50 years experience SEC registered broker-dealer; member FINRA 2016 marathon winners Lemi Hayle, 2:12:45 Atsede Baysa, 2:29:19 3

4 About Hamersley Partners Hamersley Partners Team Peter Pavlina Michael Wren Kanwar Singh 4

5 About Hamersley Partners Hamersley Partners Current Strategies Global and international equities Global clean tech thematic Global healthcare long-short Fund of funds niche managers Credit long/short aviation sector 5

6 About Hamersley Partners Universe of Institutional Investors Channels Number of Firms Number of Contacts Consulting Firms 325 1,863 Corporate Plans 681 1,101 Endowments & Foundations 760 1,552 Public Funds & Unions Financial Firms & Insurance Companies 653 1,813 Family Office & Advisory Firms 957 1,619 Superannuation & Sovereign Wealth Funds Total 4,106 9,298 We believe our strongest relationships are with 1,000 of our contacts. Source: Hamersley Database, April

7 About Hamersley Partners Our Relationships AAA Asset Consulting Group Callan Associates Chevron Corporation Goldman Sachs Hewitt EnnisKnupp Hewlett Packard Company Intel J. Paul Getty Trust John D. & Catherine T. MacArthur Foundation Kaiser Permanente Lockheed Martin Investment Management Meketa Investment Group Mercer Investment Consulting Merrill Lynch Global Wealth Management Morgan Stanley Smith Barney Northern Trust Global Advisors Progress Investments Russell Investment Group SEI Investments Stanford Management Company The Bogdahn Group The Rockefeller Foundation University of California University of Pennsylvania Wilshire Associates 7

8 Institutional Investor Channels Global Wealth Distribution Institutional (total assets = $115 trillion) Private wealth Pension funds Insurers Sovereign wealth funds Foundations/endowments 33.9 Source (unless otherwise noted below): Asset Management 2020: A Brave New World. PWC. Data as of PWC analysis based on data from various sources including Credit Suisse Global Wealth Data Book, SWF Institute, TheCityUK, OECD, and Insurance Europe. Available at Some assets may be double counted. Represents largest 25 Banks. Source: As of McKinsey & Company. As of Cerulli estimates for US single-family offices. Limited data available on family office assets. 8

9 Institutional Investor Channels Top Consultants Consultant Name Worldwide Assets Under Advisement ($ billions) Mercer $6,900 Hewitt EnnisKnupp, an Aon Company $4,683 Cambridge Associates $4,246 Russell Investments $2,400 Willis Towers Watson $2,100 Callan Associates $2,000 Source: Hamersley Database, April

Assets ($ billions ) Federal Retirement Thrift Investment

California State Teachers Retirement System $182 New York

Systems $155 Corporate Fund Total Plan Assets ($ billions )

10 Institutional Investor Channels U.S. Universe of Institutional Investors Public Fund Total Plan Assets ($ billions ) Federal Retirement Thrift Investment $443 California Public Employees Retirement System $286 California State Teachers Retirement System $182 New York State Common Retirement Fund $174 New York City Retirement Systems $155 Corporate Fund Total Plan Assets ($ billions ) General Motors $118 IBM $94 Boeing $91 AT&T $81 GE $67 Source: Hamersley Database, April

Assets ($ billions ) Harvard University $37 Yale University

Permanent University Fund - Texas $18 Foundations Total

11 Institutional Investor Channels U.S. Universe of Institutional Investors Endowments Total Plan Assets ($ billions ) Harvard University $37 Yale University $24 Stanford University $22 Princeton University $21 Permanent University Fund - Texas $18 Foundations Total Plan Assets ($ billions ) Bill & Melinda Gates Foundation $44 Ford Foundation $13 J. Paul Getty Trust $12 The Robert Wood Johnson Foundation $11 Lilly Endowment Inc. $10 Source: Hamersley Database, April

Institutional Investor Channels U.S. Universe of Institutional Investors Multi Family Offices Total Plan Assets ($ billions ) Bessemer Trust $78 Rockefeller & Co.

12 Institutional Investor Channels U.S. Universe of Institutional Investors Multi Family Offices Total Plan Assets ($ billions ) Bessemer Trust $78 Rockefeller & Co. $23 Glenmede $21 Atlantic Trust $19 GenSpring $16 Wealth Advisors/Private Banks Total Plan Assets ($ billions ) Bank of America Wealth & Investment Mgmt $1,119 Morgan Stanley Wealth Mgmt $987 JP Morgan $671 Wells Fargo $508 UBS Wealth Management $499 Source: Hamersley Database, April

13 Asset Class Allocation Trends in Asset Allocation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 20% 15% 10% 6% 5% 10% 15% 10% 45% 55% Princeton University Endowment Policy Portfolio Targets 10% 18% 23% 15% 15% 25% 23% 25% 25% 25% 25% 8% 9% 8% 9% 9% 10% 20% 15% 7% 6% 8% 10% % 26% Domestic Equity Developed Markets Emerging Markets Independent Return Private Equity Real Assets Fixed Income and Cash Source: Princeton University

14 Asset Class Allocation Large endowments are the forward thinkers 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 13% 24% 33% 30% Harvard University 8% 5% 5% 26% 50% 15% Yale University 18% 19% 48% 50% 10% 1% 62% 29% 26% 27% Stanford University Asset Allocation for Top Ten University Endowments Princeton University Permanent University Fund - Texas 18% 14% 19% 27% 42% 36% MIT 15% 28% University of Michigan Ann Arbor 9% 13% 9% 38% 44% University of Pennsylvania 15% 53% 19% Columbia University 6% 11% 44% 39% University of Notre Dame Public Equities Alternatives Real Assets Fixed Income & Cash Source: Recent annual reports ( ) of the various universities. Alternatives includes venture capital, private equity, absolute return and hedge funds. Public equities includes U.S. equity, developed market equity and emerging market equity. 14

15 Asset Class Allocation Smaller endowments will follow the leaders 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4% 4% 6% 5% 5% 6% 8% 52% 19% 9% 57% 19% 7% 16% 13% 44% 20% 9% 21% Total Institutions Over $1 Billion $501 Million - $1 Billion 2015 Asset Allocation by Endowment Size 34% 21% 13% 27% 25% 20% 17% 33% 16% 11% 18% 20% 15% 24% 40% 42% $101-$500 Million $51-$100 Million $25-$50 Million Under $25 Million Domestic equities Fixed income International equities Alternative strategies Short-term securities/cash Source: NACUBO

16 Asset Class Flows Flows to active traditional managers (USD millions) $400,000 $300,000 $200,000 $100,000 Shift to alternatives and passive Annual Asset Flows ($ millions) Flight to Safety: European Crisis & S&P Downgrade $0 $-100,000 Public Equities Fixed Income $-200,000 $-300,000 $-400, Source: evestment Alliance, April

17 Asset Class Flows Flows to long-only equity managers (USD millions) $100,000 Annual Asset Flows ($ millions) $50,000 $0 $-50,000 US Equity Global Equity International Equity EM Equity Europe Equity Japan Equity Asia Pacific Equity Other Equity $-100,000 $-150,000 $-200,000 $-250, $-300,000 Source: evestment Alliance, April Other Equity includes UK Equity, Canadian Equity, Australian Equity and Africa Equity. Global Equity includes MSCI World (Developed) and MSCI ACWI (Developed and Emerging Markets). International Equity includes MSCI EAFE Equity (Europe, Australasia and the Far East) and MSCI ACWI ex-us (Developed and Emerging Markets ex US). 17

18 Asset Class Flows Flows to hedge funds (USD millions) $80,000 $60,000 Money moving from long-only into hedge fund strategies Annual Asset Flows ($ millions) Flight to Opportunity: European Crisis & S&P Downgrade $40,000 Cyclical $20,000 $0 $-20,000 Equity Hedge Funds Multi-Asset Fixed Income Commodities $-40, Source: evestment Alliance, April Fixed Income includes mortgages, corporates and government. Equity hedge funds includes technology, healthcare, finance and energy. Multi-Asset includes multiple asset classes, including but not limited to managed futures, macro, currencies, among others. 18

19 Asset Class Flows Anticipated demand Public Strategies Private Strategies Source: evestment Alliance, Asset Allocation and Consultant Survey, February Other includes sector focused, ESG, special situations, quant, currencies, trend, among other responses. 19

20 evestment Manager Universes Universe of Managers Number of Products by Strategy (33,691 total) Alternatives, 787 Balanced/Multi-Asset, 3296 Hedge Funds, 4680 Fixed Income, 7782 Public Equities, Source: evestment Alliance, April Self-reported 20

21 evestment Manager Universes Traditional Managers by Investment Focus # Public Equities (17,146 total) # Fixed Income (7,782 total) United States Global International Emerging Market Other 0 United States Global Other Source: evestment Alliance, April Self-reported. N=24,928. Other includes strategies in Latin America, Europe, Asia, and Australia among other regions. 21

22 evestment Manager Universes Hedge Fund Managers # 2500 Hedge Funds By Investment Focus (4,680 total) Areas of growth: These strategies will likely have a growing presence Equity Long Short 494 Macro Multi Strategy Credit Long Short Event Driven Commodities Niche Volatility Source: evestment Alliance, April Self-reported 22

23 evestment Manager Universes Hedge Fund Managers # Number of Hedge Fund Strategies by AUM (USD) % of AUM % 94% Most strategies have under $100M in AUM % 80% 70% 60% 50% 40% 94% of assets are in large funds <100M M 500M-1B 1B-5B 5B % 20% 10% 0% 0% 1% 1% 3% <100M M 500M-1B 1B-5B 5B+ Source: evestment Alliance, April N=2,234, Self-reported 23

24 evestment Manager Universes Alternatives Managers # 600 Alternatives Funds By Investment Focus (787 total) Areas of growth: These strategies will likely have a growing presence Source: evestment Alliance, April Self-reported 24

25 evestment Manager Universes Alternatives Managers # Number of Alternatives Strategies by AUM (USD) Most strategies have under $100M in AUM <100M M 500M-1B 1B-5B 5B % 80% 70% 60% 50% 40% 30% 20% 10% 0% % of AUM 82% of assets are in large funds 12% 1% 3% 3% 82% <100M M 500M-1B 1B-5B 5B+ Source: evestment Alliance, April N=314, Self-reported 25

26 Role of Investment Consultants Consultants are widely used in the U.S. Global Use of Investment Consultants by Institutional Investors 2014/ % 90% 80% 70% 92% 86% 83% 72% 64% 63% 60% 57% 55% 50% 48% 40% 30% 20% 10% 0% UK US IRL CAN ITA NLD NOR CHE JPN Source: Greenwich Associates, Based on 412 in respondents in the U.K., 1,341 in the U.S., 790 in Europe ex-u.k., 235 in Canada, and 357 in Japan. 26

27 Role of Investment Consultants Consultants are extremely selective Average number of U.S. Equity Managers followed during searches Average number of International Equity Managers followed during searches Average number of Fixed Income Managers followed during searches Followed 2,433 1, Meeting Onsite Finalists * 3% 4% 8% Source: Greenwich Associates, *Fixed-income managers were more easily able to jump straight to finals presentations. 27

28 The Hamersley Marketing System Nontraditional marketing approach 28

29 The Hamersley Marketing System The Hamersley Marketing System Pre-Marketing Lead Generation & Channel Cultivation Aggressive Campaign Implementation Data Analysis & Ongoing Marketing Client Feedback, Collaboration & Reporting

30 The Hamersley Marketing System Factors for successful asset raising Favorable strategy supply/demand AUM and track record; consistent outperformance Healthy ownership structure; Aligned incentives Proven, passionate investment team Competitive advantage why you are good Differentiated edge why you are different Invest in active marketing; timely response to information requests Realistic expectations Supply refers to the number of peers/competitors in the strategy. Demand refers to whether allocators are increasing or decreasing their allocation to that strategy. 30

31 The Hamersley Marketing System Mass Marketing Channels 31

The Hamersley Marketing System Examples of Strategies of Interest Agriculture Credit FinTech

Hardware and Software Industrial, Automotive and Transportation Business Products and

Latin America Equities MENA China and Far East Equities EM Debt European Equities MSCI ACWI

Absolute Return Currency Distressed Debt Infrastructure Mezzanine Debt Portable Alpha

32 The Hamersley Marketing System Examples of Strategies of Interest Agriculture Credit FinTech Healthcare Internet Software Mobile and Telecommunications Energy and Utilities Computer Hardware and Software Industrial, Automotive and Transportation Business Products and Services European Debt International Small Cap Asian Real Estate Asian Concentrated Equities Latin America Equities MENA China and Far East Equities EM Debt European Equities MSCI ACWI ex U.S. Absolute Return Currency Distressed Debt Infrastructure Mezzanine Debt Portable Alpha Private Equity Real Estate Financing Secondary Markets Special Situations Commodities Credit Long Short Equity Long Short Event Driven Insurance Macro Multi Strategy Niche Real Estate Volatility 32

33 The Hamersley Marketing System What differentiates Hamersley Partners The Hamersley Marketing System Disciplined, process-oriented marketing Leverage industry leading technology Strong data analysis to improve hit rates Longstanding relationships across channels Close collaboration with manager client Team-structure support throughout sales cycle Institutional, High-quality reputation 33

34 The Hamersley Marketing System Typical Contract Terms Assets-raised target and capacity allocation Contract length Incentive fee Retainer fee Expense reimbursement Momentum clause length Exclusion list considerations Contract terms are negotiated based on type of manager and level of engagement Confidential and proprietary 34

35 Contact Information Thank you! For more information, please contact: Kanwar Singh

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