AIS Capital Management, L.P.

Transcription

1 AIS Capital Management, L.P. Gold Strategy Presentation For Presentation in Calendar Year 2017 AIS CAPITAL MANAGEMENT, L.P. 187 Danbury Road, Suite 201 Wilton, Connecticut (203)

2 Definitions and Disclaimers Definitions: Price Ratio: The spot market price of one market divided by the spot market price of another Total Return Index: Includes reinvestment of dividends and interest Cash Prices: The price an asset trades at in the spot market Disclaimers: Any decision to invest in any AIS product must be made solely on the information provided in the necessary documents to effect the transaction which will be provided upon request. All of the material presented here is either historical fact or AIS s opinion of the future. As such, any characteristic of AIS products portrayed on an individual basis or in combinations with other AIS products or other more common traditional investments, including the ability of AIS products to mitigate volatility, declines in account value, or even make positive returns are historically based and may or may not continue into the future. One must invest in AIS products with the knowledge that any opinion presented is just that, an opinion of AIS and not a statement of fact. AIS is confident about its research and ability to continue to add investment value going forward and its principals back this belief by having sizable personal investments in AIS products, however, markets continually change and the ability for AIS to add value going forward is uncertain. In fact, it is possible that an investor may lose all of his or her investment in any AIS product either gradually or suddenly. Past performance is not necessarily indicative of future results. 2

3 Contents Page AIS Capital Management L.P. 4 AIS Gold Fund L.P. Net Returns 5 Financial & Economic Environment (The Case for Gold) The Opportunity in Gold Stocks AIS Gold Stock Investment Strategy Summary 27 Terms 28 Biographies 29 3

4 AIS Capital Management, L.P. Registered: Products: Investment Advisor Commodity Trading Advisor Commodity Pool Operator TAAP: Asset Allocation Accounts MAAP: Global Macro Diversified Futures Accounts AIS Gold Fund L.P. Portfolio of Junior Mining Companies Individualized Portfolios: Designed to Meet Client Goals Manage Risk 4

5 AIS Gold Fund Through 1/31/2017 S&P 500 Total Return 5

6 Financial & Economic Environment Low Real Interest Rate Core Inflation Rising Food and Energy Prices No Longer Declining Slow Economic Growth Federal Reserve Caught Between Conflicting Mandates (Employment/Growth Vs. Inflation) Credibility of All Fiat Currencies Increasingly Questioned Dollar Reserve Status Under Attack Triffin s Dilemma: Need for Global Dollars Eventually Destroys Reserve Currency Central Banks Net Buyers of Gold Unfunded Liabilities Continue to Increase Debt Increasing Faster than GDP Growth New Gold Production Growth Much Slower than Debt Growth Gold Miner Valuations at Historic Low Relative to Gold Price The material presented here is only relevant when combined with the Definitions & Disclaimers page included in this presentation. 6

7 Cash Gold Closing Price Thru 2/6/2017 Believe Gold Price Commencing Major New Advance 7

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9 U.S. Financial Trends (2000-6/30/16) 9

10 World Official Gold Reserves Relative to World Currency Reserves (09/30/2016) Band (dashed lines): Uses world official gold reserves at market prices ( ) relative to world currency reserves. Band after 1980 indicates price level of gold necessary to support foreign currency reserves, if relationship reestablished. $18,619 $6,206 $1,250 Average Gold Price

11 Adjusted Monetary Base (Not Seasonally Adjusted) Through 1/31/2017 Y2K 9/11 11

12 Annual production as a percent of total aboveground gold (Through 2015) 12

13 Central Banks Holding More Gold Reserves Net Buying by Central Banks Through December 31, 2016 Source: World Gold Council, GFMS 13

14 Gold / S&P 500 Index Month End Data Through January 31, 2017 Gold Undervalued Relative to Stocks 14

15 Gold Vs Real 90 T-bill Rate 3/31/ /30/2016 Low or Negative Real Interest Rates Positive for Gold 15

16 Impact of Government on Inflation Producer Prices (1720- January 31, 2017) Prior to 1951, price inflation occurred during wars and other times of shortage. After the event ended, prices deflated back to where they had been. Since 1951, our government has fought deflation at the cost of inflation. March 31,

17 TOTAL WORLD FINANCIAL ASSETS VERSUS TOTAL ABOVE GROUND GOLD o World financial assets (stocks, bonds, gold and deposits) total $250 trillion. The total value of all gold ever mined to date (186,700 metric tons, or 6.6 billion ounces) is $7.0 trillion. Source: GFMS for gold; McKinsey Global Institute pre-2000; Credit Suisse data thereafter 17

18 Throughout History, Governments Debasement of Currency Undermines its Purchasing Power and Reserve Status 18

19 Gold Stocks Relative to Gold Most undervalued in History 19

20 World Gold Trends The Number of Major Gold Discoveries Made Per Year is Shrinking New Finds Are Significantly Smaller Than Earlier Ones Average Gold Grade of These Discoveries Has declined, and is Now Half of What it was in 1980 Gold s Role as an Alternative Store of Value Increasing Central Banks Once again Net Buyers 20

21 Gold-Mining Industry Discoveries Source: CIBC 21

22 Declining Gold Discovery Grade 22

23 AIS Gold Strategy Equity Holdings Producing Versus Non-Producing Companies 12/31/16 23

24 AIS Gold Strategy Equity Holdings By Location 12/31/16 Focus on Safe Jurisdictions 24

25 AIS Gold Strategy Equity Holdings Positions by Market Cap 12/31/16 Focus on Well Managed Juniors 25

26 AIS Gold Strategy: Equity Selection Bottom-Up, Fundamental Research is Critical AIS Focuses on Companies (Among Other Variables) High-Quality Managements Mining-Friendly Jurisdictions Undervalued and Quality Resources Minimal Hedge of Production Low Production Costs Per Ounce to Maximize Cash Flow Attractive Valuation Focus on Juniors Majors Production in Decline Majors have Cut Exploration Budgets Majors Investing and Acquiring Juniors 26

27 AIS Gold Strategy Summary Investment in Gold and Precious Metals Sector Growth of Capital Protection Against Fiat Currency Devaluation Protection Against Inflation 27

28 Terms Management Fee: 1% Incentive Fee: 20% Minimum: $500,000 Monthly Liquidity Offshore Capability The material presented here is only relevant when combined with the Definitions and Disclaimer page included in this presentation. 28

29 AIS Biographies John R. Hummel, Principal, Chief Investment Officer. Mr. Hummel has over 40 years experience in portfolio management. He has managed assets for Fortune 500 retirement plans, endowments, foundations and the Federal Reserve retirement plan, as well as high net worth individuals. Prior to founding AIS, Mr. Hummel was a partner at Cowen & Co., a partner at Matuschka & Co., and a managing director at Mitchell Hutchins Asset Management. Mr. Hummel holds a B.S. in Investment Management from Northwestern University. He serves on the Young Life Board of Trustees and the board of directors of Tyndale Seminary, and Family Institute of Connecticut. Bradley C. Stern, Principal, Chief Compliance Officer. Mr. Stern has over 20 years experience in investment management with an emphasis on statistics and capital markets theory. Prior to the founding of AIS, Mr. Stern was an associate at Cowen & Co. where he designed the proprietary modeling system that would later Linna Ru, Partner, Chief Accounting Officer. Ms. Ru has 25 years of experience in business operations, computer programming and financial reporting. Prior to joining AIS, Ms. Ru worked for Texlnnova Company. She holds an M.S. in Computer Science from WuHan University in China and an M.S. in Applied Mathematics from Toledo University. Lu-Ann Roth, Information Technology & Administration. Ms. Roth has 20+ years experience in IT infrastructure and business administration. Prior to joining AIS, Ms. Roth spent 15 years with GE Capital Corporation where she provided leadership in information technology and LAN management. 29