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Asset Alliance is recognized as one of the first companies formed to acquire and seedhedge fund managers
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Minimum Investment: $2.5mm
Management Fee: 1.5%
Incentive Fee: 0% on inv. income
Carry: 15% only on Participation Interest
Lock-up: Capital commitment through December 31,2014
Liquidity: 120 days notice prior to December 31, 2014, December 29, 2016, December 31, 2018, and yearly thereafter
Fund Terms
Rob LingleSenior Managing Director(949) [email protected]
Michael BohlmannSenior Managing Director(212) [email protected]
Bill LongSenior Managing Director(212) [email protected]
Heath BraniganDirector(20) 7659 [email protected]
Hedgeharbor
Bruce H. LipnickChief Executive Officer(212) [email protected]
Arnold L. MintzPresident(212) [email protected]
Michael Wu, CFAExecutive Vice President(212) [email protected]
Nathan C. GorinChief Financial Officer(212) [email protected]
Asset Alliance
The Opportunity
Asset Alliance is recognized as one of the first companies formed to acquire and seed hedge fund managers
Recent exit of industry capital has created an opportunity to access a large pool of talented managers that are seeking strategic capital
Asset Alliance is seeking to raise $250 million to launch the Asset Alliance Manager Participation Fund (the “Fund”), which will place strategic capital with select emerging hedge fund managers. Investors will receive revenue sharing interests and the investment return achieved by the managers’ funds
Asset Alliance has achieved a 29% IRR(1) to date on the managers that it has seeded or re-seeded
Since inception, Asset Alliance and its affiliated managers have raised over $5.0 billionin assets
The Fund provides investors:► Participation incentive in the form of a growing annuity stream and potential future
monetization of revenue sharing interests from underlying managers (the “Participation Interests”)
► Private equity-like returns with better than private equity liquidity and pricing transparency
► Access to a select group of diversified emerging managers with higher return potential
► Access to future capacity rights
Fund capital can be reallocated to other managers as the initial managers mature
Reallocation provides the opportunity to expand the universe of managers from which the fund receives revenue shares
Affiliate managers benefit from seeding or acceleration capital, enhanced marketing reach and access to Asset Alliance’s infrastructure, experience and network
Hypothetical Gross Performance Returns to the Fund(2)
“The Fund’s revenue sharing participation improves fund returns and may represent a substantial portion of total fund performance as the underlying managers’ AUM grows”
Manager Participation Fund
*Capital commitment through December 31,2014 with 50% and 100% vesting of Participation Interests for investors remaining in the fund through the end of 2016 and 2018, respectively. Subject to terms of offering memorandum.
Past performance is not indicative of future results
Investment Selection
Focus on managers that are at their growth inflection points which provides the greatest upside potential for the Fund
► Seek managers with sustainable and transparent returns► Selective universe of highly qualified managers that meet Asset Alliance’s criteria for growth and expansion► Access to managers with attractive track records at reasonable valuations
Key differentiating factors of Asset Alliance’s approach are:► Business/operational development and marketing support► Business autonomy and manager branding at affiliate level► Long-term equity stakes to benefit in the profitable later years of the hedge funds’ life cycle► Non-controlling gross revenue sharing interests of up to 50%► Risk and operational oversight
Firm History
Founded in 1996, Asset Alliance is a multi-faceted alternative investment management company with a successful and scalable platform developed over its thirteen year history
► Core business is to acquire and/or seed established and early-stage managers► Management team with extensive experience in all facets of the alternative investment business and a highly
qualified support team, totaling more than 20 professionals► Provides sales and distribution support to its portfolio companies through Asset Alliance’s investment
placement specialist affiliate, Hedge Harbor► In-house capabilities include risk management, fund accounting, compliance research and operational support
Global presence with offices in New York, California and London
Disclaimer
The attached presentation does not represent an actual fund. It contains information relating to Asset Alliance and to selected affiliate managers of Asset Alliance. This presentation is presented solely for purposes of discussion, to determine preliminary interest in the product and Asset Alliance does not guarantee the accuracy or completeness of the information herein. It is intended only for the personal and confidential use of persons who received it directly from Asset Alliance and may not bedistributed for any purpose. Under no circumstances is this presentation to be used or considered as an offer to sell, or a solicitation of any offer to buy any security. All of the information is as of the dates shown and is subject to change at any time.
This material contains “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts or estimates of cash flows, yields or returns, scenario analyses and proposed or expected portfolio composition. The forward-looking information contained herein is based upon certain assumptions about future events or conditions and is intended only to illustrate hypothetical results under those assumptions (not all of which will be specified herein). Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly actual results will vary and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes.
(1) Based on cash purchase/seed outlays and revenue inflows and return of seeding capital to date on managers that Asset Alliance has seeded or re-seeded. All inflows and outflows during a period are aggregated as a yearly inflow/outflow. Revenue inflows are recorded on an annual accrual basis and not when actual cash is received from an affiliate. Including managers that it has acquired for an upfront purchase payment without providing initial seeding capital, Asset Alliance has achieved a 24% IRR to date on all managers that it has seeded and/or acquired. Does not include potential future exit values or an implied exit multiple. Return percentages are based on gross receipts before any expenses of Asset Alliance or which the Fund may incur. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
(2) Asset Alliance has modeled the hypothetical gross performance returns chart (the “Model”) which is designed to assist prospective investors in the Fund in understanding the potential returns which can be achieved by investing in a seeding fund. The Model was not prepared as a projection of the Fund’s performance and is not a guarantee or meant to be indicative of the future performance of the Fund. The Model assumes that the Fund invests $25MM and receives a 25% interest in a managers’ revenues (“Revenue Share”) and that the Fund’s seeding capital is invested with such manager at the respective AUM levels. Potential monetization of the Participation Interest is computed by assuming a buyout at a 5x multiple of the Revenue Share at each respective AUM level divided over seven years. The Model shows the hypothetical accretion to returns arising from the Fund’s Participation Interests in hedge fund managers assuming varying levels of total AUM. Returns are presented before operating expenses of the Fund and prior to the Advisor’s 1.5% management fee and 15% carry only on any Revenue Share received from the Fund’s Participation Interest in the manager and from the sale or monetization of the Participation Interests. The net performance of the Fund after the Advisor’s fees and before the Fund’s operating expenses would be 11.8%, 15.1%, 28.2%, 41.3%, 57.7% under the various AUM levels. This Assumes 10.0% net performance on the capital placed with an underlying manager, that the underlying manager charges a 2.0% management fee and 20% incentive fee on all assets that it manages and does not pay capital introduction fees to a third party marketer. It further assumes that the Fund has the right to redeem all or part of its seeding capital following any lock-up periods. Following any such redemption, it is anticipated that the Fund will retain Participation Interests in the manager, although the terms of such Participation Interests may change. Any redemptions or changes to the terms of such revenue sharing interest may change the return profile of the chart. Additional detailed information on the assumptions is available on request. There are likely to be numerous material differences between the assumptions underlying the Model as compared to the Fund and its portfolio, and the performance of the Fund is likely to deviate significantly from the Model. Depending on the performance of the underlying funds and their ability to raise assets, the net returns to investors in the Fund, including the portion attributable to the Participation Interests, could be significantly lower than returns shown in the Model, and investors could lose some or all of their investment.
Hedge Harbor Inc. (“Hedgeharbor”) is a member of FINRA/SIPC. Hedge Harbor Ltd. (“Hedgeharbor”) is a FSA-registered Appointed Representative of Asset Alliance International (UK) Ltd., an entity regulated by the FSA. Both entities are wholly-owned subsidiaries of Asset Alliance Corporation. All information set forth herein is provided by the advisor and is subject to change without notice.
