Fund of Funds 1 st November 2014

Transcription

1 Fund of Funds 1 st November 2014 Telephone: Knightsbridge Green info@headstartadvisers.com London SW1X 7NE Website: United Kingdom

2 Contents Introduction 3 Overview Performance Organisational Structure 4 Biographies 5 Performance vs. Major Equity & Fund of Funds Indices 6 Monthly Performance 7 Performance Comparisons 8 Returns Analysis 13 Investment Process Universe Filtering & Portfolio Diversification 14 Portfolio Construction 15 Portfolio Characteristics Strategy Breakdown 17 Strategy Evolution 18 Correlation Analysis 19 Advantages 20 Awards, Rankings & Nominations 21 Summary & Terms 22 Structure 23 Risk Warnings 24 2

3 Introduction Firm established in 1990 Diversified multi-strategy fund of hedge funds launched in 1999 Objective is to achieve long-term capital growth in excess of returns available in monetary markets while minimising risk Offers access to a strategically diversified portfolio of selected hedge funds, many of which are closed to new investment Record of consistent positive performance Objective of 10% to 15% net return per annum Strong infrastructure with experienced investment team Fast response in the investment process FCA authorised and regulated 3

4 Overview Organisational Structure 4

5 Overview Biographies Mr Najy Nasser is the Chief Investment Officer at Headstart Advisers Ltd. Prior to joining Headstart in 1997, Najy was Chief Investment Officer at Arab Commerce Bank where he was head of proprietary trading, having previously managed their proprietary asset allocation, traded Foreign Exchange Strategies and been active in international merchant banking deals on behalf of the bank. Najy began his career in 1987 with AMRO Bank and their wholly owned merchant bank, Pierson Heldring & Pierson in Hong Kong and Holland. He graduated from the London School of Economics with an MSc in Accounting and Finance and holds a BA in Business Administration and Economics. Mr Henry Watkinson is a Director at Headstart Advisers Ltd. Prior to joining Headstart in 2002, Henry worked for Credit Suisse Asset Management in Sydney specialising in Futures and Fixed Income, having previously supported the top performing Fund Manager at Morgan Stanley. Before this, Henry worked at ANZ Emerging Market Fund Management (later renamed Ashmore). Henry s career began at Bankers Trust in London working on the Fixed Income trading desk. He graduated with a BA in Business Studies from Bristol Business School. Mr Jonathan Gates, CAIA is the Senior Analyst at Headstart Advisers Ltd. Jonathan is responsible for manager research, due diligence and portfolio management. Jonathan initially joined Headstart on an internship in 2005 before joining full time as a research analyst upon finishing his studies at the University of Southampton. He graduated from the University of Southampton with a BSc in Economics, where he specialised in Macroeconomics and Empirical Finance. Jonathan holds the Chartered Institute for Securities and Investment certificate in Investment Management and holds the Chartered Alternative Investment Analyst designation. Mr Alan Cope is a Fund of Funds Analyst at Headstart Advisers Ltd. He joined Headstart in Alan holds a BA in Politics and International Business from the University of Loughborough and the Chartered Institute for Securities and Investment certificate in Investment Management. Mr Patrick Rutherford oversees client relations at Headstart Advisers Ltd. He joined Headstart in 2013 having previously worked as an adviser to a government minister. Patrick holds a BA in Law from Oxford University. 5

6 Performance Monthly Performance Net of Fees Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD % 0.98% 0.08% -1.02% 0.33% 0.97% -0.11% 0.50% 0.43% -0.57% 1.99% % 0.64% 0.68% 1.78% 0.32% 0.86% 0.78% -0.45% 1.07% 1.80% 2.13% 1.77% 15.42% % 2.60% -0.28% -0.48% -0.68% -0.34% 0.95% 1.37% 1.88% 0.81% 0.97% 1.51% 11.22% % 2.58% 1.28% 1.50% -0.39% -0.96% 0.16% -3.87% -4.73% 1.94% -1.03% -0.25% -1.67% % 0.18% 2.04% 0.20% -2.56% -0.35% 2.74% 1.29% 3.79% 3.84% 1.01% 5.03% 19.69% % 1.81% 0.39% -2.01% 3.22% -1.28% -0.62% 2.19% 3.51% 3.51% 1.16% 0.44% 17.86% % 0.83% -3.31% 0.13% 2.08% -0.41% -2.28% -2.06% -8.52% -6.67% -4.14% -6.87% % % 1.48% 1.71% 1.94% 2.01% 0.01% -0.11% -3.04% 0.35% 2.70% -1.83% -0.29% 6.59% % 1.12% 1.95% 2.24% -1.91% -0.58% -0.07% 0.54% -0.26% 1.29% 1.66% 2.25% 12.49% % 2.98% 1.09% -2.44% 0.21% 0.86% 1.55% 0.89% 1.59% -1.21% 1.02% 1.65% 9.52% % 0.80% 0.25% 0.43% -0.20% 0.50% 0.39% 0.20% 1.11% 2.87% 4.20% 1.43% 14.11% % 0.44% 0.64% 1.33% 1.37% 0.80% -0.06% 0.41% 1.32% 1.01% 1.08% 1.02% 10.66% % 0.13% 0.48% 0.26% 0.73% -0.42% 0.18% 0.28% 0.66% 0.32% 0.93% 0.59% 4.60% % -0.90% -0.55% 1.33% 0.18% -0.56% -0.19% 0.38% -0.79% 1.76% 0.37% 0.78% 4.90% % 6.23% 1.91% -1.52% 0.21% 4.13% 0.53% 1.40% -0.32% -1.89% -1.95% 3.22% 15.48% % 5.16% 10.48% Italics denotes estimated return Audited performance information from Nov ember 1999 through December 2008 Class B and Class B2 from January 2009 through December Performance from January 2014 to the current month is Class B2 performance, unaudited and may be subject to change. The performance information presented here reflects an inv estment in the relev ant Headstart Fund of Funds share class during the indicated period w ithout additions, w ithdraw als or redemptions, is net of all fees and ex penses, is historical and is not indicativ e of future results. Indiv idual performance may v ary and be dependent on currency class. Inv estors must be able to bear the risk of a substantial impairment or loss of their entire inv estment. 6

7 Performance vs. Major Equity & Fund of Funds Indices 195% 180% 165% 150% 135% 120% 105% 90% 75% 60% 45% 30% 15% 0% -15% -30% Headstart HFR FOF Index Eurekahedge FOF Index Barclay FOF Index DAX 30 DJIA NASDAQ S&P 500 FTSE 100 Nikkei 225 CAC 40 US 3 Mth T-Bill Performance prior to 1 st January 2009 relates to Class B shares 7

8 Performance vs. Global Indices Since Inception Logarithmic: Headstart Fund of Funds vs. Global Indices Performance prior to 1 st January 2009 relates to Class B shares 8

9 Performance vs. Fund of Funds Indices Since % 80% 70% 60% 50% 40% 30% 20% 10% 0% 01-Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul-14 HFRI FOF EurekaHedge FOF Barclay Hedge FOF Annualised Return 10.77% 4.39% 4.02% 3.90% Annualised Volatility 6.03% 4.07% 3.73% 3.94% Sharpe Ratio

10 Annualised Return Global Equities Risk-Return Comparison Since Inception 8% 7% 6% Emerging Markets 5% 4% 3% S&P 500 Dow Jones DAX 30 2% US 3 Mth T-Bill MSCI World 1% FTSE 100 0% CAC 40 Nikkei 225-1% DJ EuroStoxx -2% 0% 5% 10% 15% 20% 25% Risk Performance prior to 1 st January 2009 relates to Class B shares 10

11 Performance vs. MSCI Down Months Since Inception 4% 2% 0% -2% -4% -6% -8% -10% -12% -14% -16% -18% MSCI FOF MSCI World Total Number of Down Months Average Performance -0.44% -3.73% % Positive Months 49.37% 0.00% % Negative Months 50.63% % -20% Performance prior to 1 st January 2009 relates to Class B shares 11

12 Performance vs. MSCI Down Months Since January 09 Date MSCI World Index Headstart Fund of Funds January % 4.46% February % 1.81% June % -1.28% October % 3.51% January % 1.14% April % 0.20% May % -2.56% June % -0.35% August % 1.29% November % 1.01% March % 1.28% May % -0.39% June % -0.96% July % 0.16% August % -3.87% September % -4.73% November % -1.03% December % -0.25% April % -0.48% May % -0.68% October % 0.81% February % 0.64% May % 0.32% June % 0.86% August % -0.45% January % 0.40% March % 0.08% July % -0.08% September % 0.61% Cumulative Total % 1.47% 12

13 Performance Return Occurrence Probability of Occurrence Return Analysis Total Number of Months (since inception): % % Positive Months: 72.22% 18 50% 16 40% % 10 20% 20.0% 13.9% % 4 0% 1.7% 1.7% 4.4% 3.3% 0.6% 2 - Monthly Return Monthly Return Performance prior to 1 st January 2009 relates to Class B shares 13

14 Investment Process Universe Filtering via Contacts and Databases Portfolio Diversification Investment Universe c. 8,300 active Hedge Funds globally Quantitative screen Network of industry contacts developed over 22 years Conferences and Capital Introduction Events Watch List funds Initial Due Diligence Approved List 5-10 funds Advanced Due Diligence Portfolio funds Asset Class Geographic Focus Hedge Fund Strategy Time Horizons 14

15 Investment Process Portfolio Construction Bottom Up fund selection Identifying investment managers that have the ability, track record and risk parameters in place to make long term investments Macro-Economic View Top-down macro analysis of markets to determine strategy weightings Risk Controls Risk Return and Market Condition analysis Quantitative analysis: Performance, consistency, volatility, peer group, assets, transparency (risk, exposures and liquidity), fees and leverage Qualitative analysis: Reputation, experience, integrity, team, discipline / process, edge, operations, regular office visits and monthly communication, fund structure including conditions, sideletters, scalability, risk controls and liquidity Correlation studies Understand source of returns and avoid chasing returns Ongoing monitoring and review of investment policy, structure, organization and asset growth implications Bi-monthly Investment Allocation and Review of Fund meetings Active re-balancing and re-allocation 15

16 Investment Process Portfolio Construction Satellite Holdings Opportunistic Strategies Short-Medium term investments Identifiable opportunity Identifiable and repeatable process Hedging strategies Track record Generally smaller AUM History with Manager Liquid strategy Core Holdings Blue-chip managers Long-term investments Identifiable and repeatable process Stability of strategy Ability to navigate across market cycles Business model longevity Significant track record Portfolio Manager pedigree Volatility, liquidity and capacity of strategy Proprietary investment Satellite Holdings New launches and Early-stage Managers Potential to become core positions Identifiable and repeatable process Portfolio Manager pedigree Business model Liquidity, risk and portfolio construction Ability to gain preferential fees Strong proprietary investment Pre-defined capacity 16

17 Portfolio Characteristics Strategy Breakdown General Strategy of Funds within the Portfolio Detailed Strategy Overview of funds Multi-Strategy 5.83% Multi-Strategy Credit 4.44% Emerging Market 6.12% Hedge 2.97% Global Macro - Multi Manager, 6.22% Emerging Market Macro, 1.75% Long/ Short Equity - Systematic Hedge, Systematic, 1.95% 1.97% Hedge, 1.01% Long Short Equity, 3.19% Long/ Short Equity - Global Utilities, 3.16% Long/ Short Equity - Thematic, 13.68% Statistical Arbitrage, 8.67% Structured Credit 6.59% Long Short 40.53% Long Short Equity - Asia, 3.97% Long/ Short Equity - European Mid Caps, 3.93% Global Macro, 6.89% Global Macro 14.87% L/S Equity - Multi- Sector Fundamental, 4.03% Multi-Strategy-Credit, 4.44% Capital Structure Arbitrage, 4.70% Structured Credit, 6.59% Long/ Short Equity - Multi-Manager, 6.64% Arbitrage 18.64% Volatility Arbitrage, 5.27% Long/ Short Equity - Emerging Markets, 6.12% Multi-Strategy, 5.83% 17

18 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Portfolio Characteristics Strategy Evolution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Capital Structure Arbitrage Commodities Distressed Debt Emerging Markets Equity Arbitrage Equity Short Bias European CLO Event Driven Global Macro Hedge Long Short Credit Long Short Equity Multi Strategy Multi Strategy - Credit Statistical Arbitrage Structured Credit Volatility Arbitrage 18

19 Portfolio Characteristics Correlation Analysis FUND LEVEL CORRELATION ANALYSIS FOF FUND 1 FUND 2 FUND 3 FUND 4 FUND 5 FUND 6 FUND 7 FUND 8 FUND 9 FUND 10 FUND 11 FUND 12 FUND 13 FUND 14 FUND 15 FUND 16 FUND 17 FUND 18 FUND 19 FUND 20 FUND 21 FUND 22 FUND 23 FOF FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND

20 Portfolio Characteristics Advantages Repeatable investment process honed through actively investing into hedge funds since Headstart inner-circle of industry contacts Dynamic portfolio management Non-correlation to markets Low minimum investment for portfolio of seasoned funds, many with high minimum investments Monthly liquidity with no lock-up Strong Corporate Governance Independent board of directors Institutional cash controls 20

21 Awards, Rankings & Nominations Winner Fund of Hedge Funds Multi-Strategy (Funds under $500m Award) Winner Diversified Fund of Hedge Funds of the Year Winner Best Diversified Fund of Hedge Funds of the Year Award (Funds under $250m category) Winner Best European Diversified Fund of Hedge Funds 2013 Award Routinely ranked in the Top 10 Multi-Strategy Fund of Hedge Funds on a rolling 12, 9, 6 and 3 month basis in 2010, 2011 and 2012 Winner Best UK Diversified Fund of Hedge Funds HFM European Performance Award nominations Fund of Hedge Funds long-term performance (5 years) 2014 Fund of Hedge Funds Long-Term Performance (3 years) 2012 Best Multi-Strategy Fund of Hedge Funds

22 Summary & Terms The primary goal of the HeadStart Fund of Funds is to preserve investors capital while achieving consistent profitable monthly returns regardless of market conditions. Since inception in November 1999, the HeadStart Fund of Funds has achieved low volatility and good consistency of performance despite some of the most volatile markets in history. HeadStart Fund of Funds offers investors exposure to a wide range of high quality alternative investment styles and strategies whose objectives are to produce consistent absolute returns with relatively low levels of risk. Subscriptions Redemptions Fees Monthly with 10 business days notice Monthly with 2 calendar months notice plus 5 business days 1.5% (Management) and 15% (Performance with HWM) All reported returns net of all fees 22

23 Structure Fund Registered Office Equity Trust Company (Cayman) Ltd First Floor, Windward 1 Regatta Office Park, P.O. Box Grand Cayman KY Cayman Islands British West Indies Investment Adviser Headstart Advisers Ltd 1 Knightsbridge Green London SW1X 7NE United Kingdom Independent Auditors Deloitte & Touche P.O. Box 1787 GT 2nd Floor, One Capital Place Shedden Road, George Town Grand Cayman, Cayman Islands British West Indies Investment Manager Headstart Management Inc. Offshore Incorporations Centre PO Box 850 The Valley Anguilla British West Indies Banker The Royal Bank of Scotland International Limited Royal Bank House 2 Victoria Street, Douglas Isle of Man IM99 1NJ British Isles Legal Adviser Mourant Ozannes Harbour Chambers Third Floor, Harbour Centre PO Box 1348, George Town Grand Cayman, Cayman Islands British West Indies Administrator Custom House Group 25 Eden Quay Dublin 1 Republic of Ireland 23

24 Risk Warnings The Fund is not a recognised Collective Investment Scheme under the UK Financial Services and Markets Act 2000 and associated legislation and investors may not be protected by any statutory investors compensation scheme. Past performance is not necessarily a guide to future performance. The price of participating shares can go down as well as up and investors may not get back the amount they invest. Money should not be invested which an investor cannot afford to lose. An investment in this Fund is not suitable for investors who require a regular or immediate flow of income from their investment. This material is for information only and does not constitute an offer or recommendation to buy or sell any investment. In the United Kingdom it is intended only for the use of existing clients, authorised persons, institutional and other professional investors falling within the categories set out in the Financial Services and Markets Act Recipients may pass on this document, but only to others falling within those categories. Documents relating to this Fund may be inspected at, and Offering Memorandum or Report and Accounts obtained from Headstart Advisers Ltd. 24