Adventures of a Risk Arbitrageur-II

Orient PaperPresentation # 1

Nifty Has gone NOWHERE in 5 Years

How to make money in a market like THAT?

Special Situation Example Absolute ReturnsMerger Arbitrage Siscol- JSW Steel 93%Capital Structure Arbitrage Network 18 PCCPS 23%

Going Private Transactions

Essar Steel 14%Going Private Transactions Blue Dart 18%

Bankruptcy WorkoutsNagarjuna Fertilizer 187%

Bankruptcy WorkoutsJVSL 273%

Asset Sales Smartlink 43%

Holding Companies Nalwa Sons 487%

Spinoffs GE Shipping 79%Buybacks MICO 175%

Tender OffersSSI 10%

Tender OffersAlfa laval 17%

Bought @ 55Sold @ 82

Captured 49% Absolute Return in 4 monthsAnnualized Return: 147%

Stock up 49%Market up: 17%

Significant OutperformanceReturns Un-correlated to Market Volatility

Spinoffs as a theme

We KNEW the break up value is more than market valueThere was a PLAN to spinoff the cement businessBreak up values were several times current market priceThere was a risk from CCI but we KNEW it will take several years to resolve and market will ignore it and will instead focus on underlying results which we KNEW would be greatA LOW Risk High Return TradeSpinoffs as a theme - Focus, Stock as a currency, Access to capital markets, Stock Options as incentivesElimination of cross subsidies - elimination of conglomerate discounts.

A Pipeline of Ideas

Transaction IRRs not same as portfolio IRRs. We have a pipeline.Explosion in transactionsLow competitionSignificant InefficienciesDespite the zero return in India over 5 years, can you afford to lose on such opportunities? Can you afford to ignore India?

Orient PaperPresentation # 2

How would it not?

Scene from Benjamin Button

http://www.youtube.com/watch?v=UdJDEvmYX28

Competition (Commission) is hazardous to Investors’ Wealth

No Deal Yet

Parallel Universes, Alternate Histories,

Role of Luck

Market Ignored CCI

Consequences of Shorting

Orient paper Restructuring - Alternate

History

A Value Trap Before?

Process vs. Outcome

Thank You