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2© Liquid Holdings Group, Inc. 2014
1 As of the end of Q2 20142 Third Party Development Staff3 As of August 18, 2014
Simplify success for today’s alternative asset manager
OUR MANTRA
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LIQUID AT A GLANCE
© Liquid Holdings Group, Inc. 2014
1 As of the end of Q2 20142 Third Party Development Staff3 As of August 18, 2014
1 Third Party Development Staff 2 As of December 1, 2014; includes 60 full-time employees and 30 full-time technology consultants
People • 90 Employees• Offices in NYC, Hoboken, Aventura and Romania1
• Development: 10+ years average experience
Processes• Platform-as-a-service• Data-as-a-service• Connectivity-as-a-service• Infrastructure-as-a-service
Products • Liquid Platform
- LiquidTradeSM - LiquidMetrics®- LiquidMobileSM
LIQUID OFFICE REMOTE LIQUID EMPLOYEE(S)
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Connectivity-as-a-Service: To counterparties and trading venues without independent infrastructure costs
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Data-as-a-Service: Historical repository of and real-time access to all portfolio and market data; end-of-day services to ensure accuracy
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Software-as-a-Service: Multi-strategy trading, risk management and reporting capabilities– accessible everywhere
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Redefining the concepts of ‘mission-critical’ and ‘vendor’
THE NEXT WAVE OF PREFERRED PROVIDERS
Infrastructure-as-a-Service: Business continuity and disaster recovery; seamless upgrades and maintenance without interruption
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LIQUID– A MODERN HF OPERATING SYSTEM
1. Industry’s First OERMS
2. With Managed Services
3. Through our Proprietary Cloud
4. Leveraging Next Gen, Open Technology
PLATFORMTHE LIQUID
A high value alternative to legacy solutions, delivering:
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Performance and risk analysis, client reporting and shadow NAVLIQUIDMETRICS®
I. SOFTWARE-AS-A-SERVICECONVERGENCE OF REAL-TIME FRONT-OFFICE CONTROLS
APPLICATION DESCRIPTION
Broker-neutral order and execution management systemLIQUIDTRADE℠
Web-optimized dashboards and reports on any mobile deviceLIQUIDMOBILE℠
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OUR SOLUTIONS: BROKER-NEUTRAL OEMS LIQUIDTRADE℠
Integrates the speed, workflow and trading tools of broker-neutral EMS with OMS capabilities:
• Select and trade single and basket orders
• Choose best broker(s) for your strategy
• Route trades to the execution venue of your choice
• Analyze performance and compliance in real-time
• Allocate trades to accounts in compliant manner
• Access full transactions history for deeper analysis
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OUR SOLUTIONS: REAL-TIME RISK & REPORTINGLIQUIDMETRICS®
Real-time dashboards and reports for continuous portfolio monitoring, and investor reporting:
• Extensive library of risk, performance, and P&L statistics and reports
• Isolate drivers of performance
• Identify and mitigate potentially adverse events
• Automate client reporting
• Crosscheck fund admin with shadow NAV
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OUR SOLUTIONS: ANYTIME MONITORINGLIQUIDMOBILE℠
Mobile-optimized investment management platform:
• View real-time portfolio and risk analytics for immediate insight on the market’s impact on your investments
• Stress test potential scenarios to answer investor questions, e.g. “How does the price-drop in oil affect my investments?”
• Create custom dashboards and reports to address the most specific investor mandates
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Outsourced services that enable firms to rapidly scale the business
Reduce Capital Expense
Re-allocate capital from ops to the front-office with outsourced start- and
end-of-day processes
Ensures data integrity and accuracy for analysis and reporting purposes
Eliminate Manual Processes
On-board new locations, users, and portfolio products to take advantage
of new opportunities
Faster Time to Market
Business Benefits
1. End-of-Day Reporting
2. Data Consumption
3. Trade & Position Reconciliation
4. Shadow NAV
II. DATA-AS-A-SERVICE
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III. CONNECTIVITY-AS-A-SERVICE
Simplified connectivity to growing number of liquidity venues and market data feeds in a broker-neutral environment
Access Range of Brokers
Expedites connectivity to brokers to take advantage of market opportunities
Reduces dependence on a single partner through ability to execute and clear trades with custodian of choice
Custody Neutral
Eliminates latency and multiple points of failure that can erode TCA
Direct-Fiber Connect to Markets
Business Benefits
EXECUTING BROKERS: BAML, Barclays, CITI, CS, Deutsche, Fidelity, Goldman, Instinet, Morgan Stanley, UBS, and others…
CLEARING BROKERS: BAML, Bank of New York, ConvergEx, Credit Suisse, GPP, JPM, MS, Nomura, SS&C, UBS, and others…
MARKET DATA FEEDS: ACTIV, Thomson Reuters
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IV. INFRASTRUCTURE-AS-A-SERVICE
Outsourced data center, equipment and maintenance to safeguard mission-critical workflows and data; ensures the highest levels of security and operational reliability
1. Trading Operations Equipment
2. Central Data Repository
3. Redundant Data Centers4. Automated Upgrades
Security
Controls access to equipment and data to combat access to
services and data
Ensures optimal speed and performance for low-latency
investing and analysis
Consistent Performance
Proven 99.9999% uptime with full back-up systems and redundancy
Improved Business Continuity
Business Benefits
Maintains portfolio data since inception for analysis and
reporting purposes
Unlimited Data Repository
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A COMPARATIVE VIEWMODERN VS. LEGACY APPROACHES TO SERVICING HEDGE FUNDS & THEIR INVESTORS
OMSEMS Pre-Trade Risk &
Compliance
Portfolio &Risk Analytics
Shadow NAVReal-TimeReporting
Liquid Platform
Data M’gmt Services
Legacy Suite
Point Solutions
Multi-Tenant Cloud
Multi-Asset Coverage
“This is (now) a cloud first and mobile first world. The industry does not respect tradition, it only respects innovation.” – Microsoft CEO
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REAL SOLUTIONS REAL CLIENTS$2.5B Boston-Based RIA
• Running 3 funds; preparing to launch a 4th
• Were evaluating OMS’ when we uncovered drivers:
• Real-time performance and risk statistics
• Ability to run compliance rules and client reports
$600M Activist Hedge Fund
Launched in 2013; tripled AUM in 18 months
Requirements: integrated OMS/EMS/PMS with reporting
Referred to us by their largest investor
$100M New Launch– HealthCare Focus$800M Options-Based Asset Manager
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Management team came from Soros & SAC Capital
Priming at Goldman and Morgan Stanley
Required EMS/PMS with real-time risk and reporting to actively manage investments
• Established fund built and managed in-house investment systems
• Infrastructure did not keep pace with markets
• Scalability, TCO and the ability to launch new products were an issue
16© Liquid Holdings Group, Inc. 2014
1 As of the end of Q2 20142 Third Party Development Staff3 As of August 18, 2014
LiquidMobile provides my investment team with modern, real-time analytics to proactively manage our investments and client relationships. I’m in and out of two particular dashboards constantly, whether I’m at my desk or on my iPad, so I have a handle on the business at all times.
“
Pablo Garcia, Founding Partner, Goldwater
CLIENT TESTIMONIAL
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ROI OF INVESTING IN INFRASTRUCTUREINSTITUTIONALIZED MANAGER• $800M Options-Based Manager
• Dynamic Funds + Managed Accounts
• Very Established; 26 Year Track Record
CRITICAL BUSINESS ISSUESDisparate, Non Real-Time Systems
Multiple Points of Failure
Inability to Expand into New Markets
High TCO
Single End-to-End Platform
Market-Tested Options Capabilities
Proprietary Cloud; Managed Services
Eliminate Systems and Ops Headcount• 89% Annual Savings vs Legacy Approach
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VALUE OF MODERNROI
$129K
Alternative¹
Modern
1 Average 3rd party expenses by % of AUM; Citi Prime Finance Expense Survey
TRADING COSTS RISK COSTSTECH COSTS OPERATIONS COSTS
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ROI OF INVESTING IN INFRASTRUCTURE
• Allocated $140K per annum back to the front-office
ROI
TRADING COSTS RISK COSTSTECH COSTS OPERATIONS COSTS
$60K
Alternative
Modern
$200K
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ROI OF INVESTING IN INFRASTRUCTUREEMERGING MANAGER• $250M L/S Equity Fund
• 3 Funds + Managed Accounts
• Strong Pedigree; 5 Year Track Record
CRITICAL ISSUESAnalytics and investor reporting; Mobile access
Non real-time systems that do not synch
Tech costs outpaced growth & fees
Single end-to-end platform
Integrated real-time risk analytics
Limited IT; No operations footprint
Institutionalized to raise more assets• Allocate $140K per annum back to the front-office
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1 Technology and Operations Expenses as Reported by Liquid Holdings Client
VALUE OF MODERNROI
TRADING COSTS RISK COSTSTECH COSTS OPERATIONS COSTS
$60K
Alternative¹
Modern
$200K
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ROI OF INVESTING IN INFRASTRUCTURESTART-UP• $40M Event Driven Fund
• 3 Employees: CIO, Head Trader, CFO
• CIO & Head Trader: 10-year track record
CRITICAL ISSUES AT LAUNCHReal-time workflows to synch front-office
Present-day & future transparency
Appear institutional to pension funds
Front-office system scales as business grows
Support different fund structures
Automate middle-office with repeatable controls
Tech and ops expenses align with cash flow• Allocate $90K per annum back to the front-office
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1 Technology and Operations Expenses as Reported by Liquid Holdings Client
VALUE OF MODERNROI
$40K
Alternative¹
Modern
$130K
TRADING COSTS RISK COSTSTECH COSTS OPERATIONS COSTS
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