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Bandon Isolated Alpha Fixed Income Fund
February 29, 2012
Unbiased
Unconstrained
Global Fixed Income
For Financial Professional Use Only
0367-NLD-3/12/2012
2
Bandon Overview
Privately owned firm based in Portland Oregon
Registered Investment Adviser with the Securities and Exchange Commission
Founder has implemented hedge fund manager research for investors since 2004
Strategies delivered through strategic relationships with specialized institutional managers
Seeks to deliver alternative return characteristics in both SMA and Mutual Fund format
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.
0367-NLD-3/12/2012
Bandon Capital Management – Alternatives Democratization Specialist
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Jan-62 Jan-68 Jan-74 Jan-80 Jan-86 Jan-92 Jan-98 Jan-04 Jan-10
10-Yr Yields (1/2/1962 - 12/31/2011)
3
Composition of the Barclays US Aggregate Bond Index
3%
1%
19%
77%
Government
Corporate Credit - IG
Asset-Backed Securities /Commercial Mortgages
Emerging Markets Debt
Why Fixed Income Alternatives?
* Includes domestic and sovereign debt, quasi government, such as agency government guaranteed and agency non-government guaranteed, municipal bonds and agency RMBS. Source: Barclays Capital as of December 31, 2010.
This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.
Duration: 5.05 yrs
0367-NLD-3/12/2012
Low developed government bond yields
Potential for losses if interest rates rise
Benchmarks have become concentrated in government back securities
4
Past performance is not indicative of future results, which may vary. Please note that you cannot invest directly in an index.Source: Barclays Capital, Bloomberg; as of January 31, 20111.The above-posted illustration demonstrates a steady decline in coupon returns for the Barclays Capital US Aggregate Bond Index and a structural drop in Treasury yields over the past 30 years. With the share of Treasuries in the Barclays Capital US Aggregate Bond Index never falling below 20% over the past three decades and accounting for 34.0% of the index as of December 31, 2010,we believe the index’s historical total return structure is partly correlated to the declining Treasury yields. Source: Barclays Capital. 2.The return components (i.e total return) accounts for two categories of fixed income return: income (i.e. coupon return) and price return. Income includes interest paid by the fixed-income investments, whereas price return represents the change in the market price of the fixed income security, which, depending on market conditions, can be negative.
Over the last 30 years bonds have had large coupons offering attractive return that has been often times enough to offset price change during periods of rising interest rates:
Low Yields Create Multiple Challenges
0367-NLD-3/12/2012
5
The Fixed Income Toolbox
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
ABS / MBS TIPS
ABS / MBS TIPS
Rate Hedge Credit Hedge
ABS / MBS TIPS
Rate Hedge Credit Hedge
Potential for Short Exposure
Core / High Quality (.9 – 1)
ABS / MBS
Total Return / Strategic Income (.6 - .9)
Unconstrained (.3 – .6) Absolute Return (0 - .3)
Reduced Benchmark Orientation
Reduced Long Bias
6
Fund Overview
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. 0367-NLD-3/12/2012
* The Performance, Risk and Correlation goals are current, subject to change, and should not be considered a predictor of investment return or risk characteristics. All investments involved the risk of loss and no measure of performance or risk is guaranteed. The fund aims to deliver its target return and risk over a full market cycle, which is likely to include stretches of both up and down performance.** Excludes developed market sovereign credit risks. Total fund notional exposure may exceed 100%.
Performance Goal*: Greater of 6 – 8% net or US T-bills + 4–6%
Risk Objective*: 3-5% standard deviation
Correlation Objective*: Between -.33 and +.33 over a market cycle
Unconstrained to a benchmark, the fund utilizes a diverse set of global absolute return-oriented strategies.
Seeking: positive returns through all market environments.limited volatility and downside risk (stop loss on every position).little to no correlation to traditional investments.
Duration -5 yrs 0 +5 yrs
Credit** -100% 0 +100%
Defined symmetrical bands for potential exposures
7
Universe of Fixed Income Exposures
US Treasury
German Bund
UK Gilt
Japanese JGB
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above.
Interest rate positions expressed with sovereign futures. Credit exposureunconstrained by geography, quality and security type:
0367-NLD-3/12/2012
Interest Rates (10yr)
ABS / MBS Inv. Grade Corp
Bank Loans High Yield Corp
CDS Govt Bonds
Convertible Bonds Preferreds
Credit
* The above are security type examples and do not represent the entire universe of potential investments for the fund or actual portfolio positions. Additional information regarding potential exposure can be found in the fund’s prospectus.
8
Institutionally Oriented Sub-Advisers
*As of December 31st, 2011.0367-NLD-3/12/2012
Founded in 2007 – Delaware Investments institutional investment team transaction
Fixed Income manager dedicated solely to the institutional marketplace
Over $13.5 Billion* in assets under management including 4 MF Sub-Advisory mandates
64 employees, 9 portfolio managers, 15 research analysts, and 13 traders
Purchased by Fortress Investment Group, LLC in April of 2010 (FIG)
Logan Circle Partners, LP – Credit Specialist
As a Sub-Adviser, Logan Circle seeks to produce positive total returns in all market environments by implementing unconstrained, multi-sector, global credit based absolute return strategies while minimizing interest rate duration exposure
The approach is a disciplined and active, bottom-up driven process augmented with stringent risk controls
Views driven by rigorous, bottom-up, in-depth research and analysisRisk management focused on liquidity and hard stopsAbility to modify exposures without moving marketsAccess to primary debt capital markets
There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.
9
Credit Strategies
*The examples are based on the holdings of the investment universe of Logan Circle. The Securities were not based on performance and should not be construed as recommendations or endorsements. These examples may or may not have been included in a composite at any given point in time. Ranges are subject to change.
DirectionalLongs
0% - 50%
Higher current yieldExpress via cash or CDSLow interest rate sensitivitySpecial situations
MGM 2011 SubsILFC 2012sBrazil 2014s
DirectionalShorts
- 50% - 0%
Shorts expressed via CDSSingle name or indexThematic basket tradesTypically used to hedge longs
CDX.IG14FDC 5yr CDSBasket Consumer/Retail
Directional / Relative Value
Cap Structure /Event Driven0% - 50%
Identifiable catalystsIndustry consolidationsLong & Short positionsSpecial situations
TXU Bank LoansCNH 2013sHasbro 5yr CDS (Short)
Relative ValuePairs Trades
0% - 50%
Special situationsIdentifiable catalystsIndustry consolidationsIntermediate holding period
Goldman/Morgan StanleyPrudential/MetLifeGE Capital/Capital One
Short Term MispricingOpportunistic
0% - 50%
Mispriced securityLiquidity imbalanceTypically hedged w / futuresVery short holding period
Anadarko 7yr BondsPrudential 30yr bondsWellPoint Inc. 10yr bonds
Category Characteristics Examples
Fundamental long/short “bottom up” global credit strategies with predetermined exposurebands unconstrained by a benchmark:
0367-NLD-3/12/2012
Strategy
10
Institutionally Oriented Sub-Advisers
Founded in 2003 with 12 full time employees, 4 founding partners
13 years experience managing active duration investment strategies
$729 Million* in assets under management
Strategic business partnership with Federated Investors, Inc.
Dix Hills Partners, LLC – Interest Rate Specialist
*As of December 31st, 2011.0367-NLD-3/12/2012
As a Sub-Adviser Dix Hills seeks to produce positive total returns in all market environments by actively managing interest rates using a systematic directional interest rate forecasting framework based on macro economic, bond market valuation and momentum indicators.
The strategy is a disciplined, monthly, systematized fundamentally rooted interest rate forecasting process augmented with stringent risk controls
Forecast four different developed sovereign 10-yr ratesRisk management include hard stops and pre-defined exposure bandsResearch data of over 49 years
There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.
11
Interest Rate Process
MonthlyEconomic
DataRelease
Inputs
TechnicalValuationMacro
Economic
Hard Data Multi-Factor Model
Interest RateForecast
Trading Signals
Target DurationExposure
to Interest RatesBetween
+5 years&
-5 years
A monthly systematized multi-factor approach to project interest rate exposures
Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above.
GovernmentBond Futures
Implementation
Stop LossProfit Taking
Bound Exposures
Risk Management
Trading Tools
0367-NLD-3/12/2012
12
Performance and Statistics
0367-NLD-3/12/2012
The Bandon Isolated Alpha Fixed Income Fund total annual operating expense ratio (gross) is 2.16% for Investor Class, 2.41% for class A shares, 3.16% for the class C shares and 2.66% for theclass R shares The Fund's adviser has contractually agreed to reduce its fees and/or absorb expenses of the Fund, until at least January 31, 2013, to ensure that total annual fund operatingexpenses after fee waiver and/or reimbursement will not exceed 1.95%, 2.20%, 2.95% and 2.45% of each class's net assets, respectively, for Investor Class, Class A, Class C and Class R shares.Expense waivers and reimbursements are subject to possible recoupment from the Fund in future years on a rolling three year basis (within the three years after the fees have been waived orreimbursed) if such recoupment can be achieved within the foregoing expense limits. *The Fund’s inception date is 12/31/10 and as such 2011 year to date performance also represents the fund’s1-year and since inception performance as of 12/31/2011. 1) Market value excludes cash used as collateral or covering notional exposures.
Results shown reflect the waiver, without which the results could have been lower. The performance data quotedhere represents past performance. Current performance may be lower or higher than the performance dataquoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worthmore or less than their original cost. Past performance is no guarantee of future results. A Fund's performance,especially for very short periods of time, should not be the sole factor in making your investment decisions. Toobtain performance information current to the most recent month-end, please call toll-free 1-503-477-8100.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD2012 0.50% 1.39% 1.90%2011 0.70% ‐0.79% ‐1.30% ‐0.81% 0.82% 0.30% 0.51% ‐1.31% ‐0.61% 0.82% 0.51% 1.11% ‐0.10%
Return Summary 2/29/12 BANIX BarclaysLast Month 1.39% ‐0.02%
Recent Quarter 12/31/11 2.46% 1.12%2011* ‐0.10% 7.84% 8.76%Since Inception 12/31/2010 1.8% 8.8%Ann. Standard Deviation 3.5% 3.8%Max Daily Drawdown ‐3.8% ‐1.8%Exposure Analysis Excl Cash %'sLong Market Value1 14,012,366 55%
Short Market Value1 (18,261,817) ‐72% 1.80%Net Market Value1 (4,249,451) ‐17%
Gross Market Value1 32,274,183 127%Total Fund Assets 25,451,826Risk Summary BANIXRate DurationSpread Duration 1.56 ‐3.83%Alpha vs Barclay's 4.42%Beta vs Barclay's ‐0.37Correlation vs Barclay's ‐0.40Correlation vs S&P 500 0.37
Cumulative Growth (12/31/10 ‐Current)
Monthly Performance: Actual results 12/31/2010 to current
-5 -4 -3 -2 -1 0 1 2 3 4 5
BANIX
BarclaysAggregate
HFRX Ab Return
‐6%
‐4%
‐2%
0%
2%
4%
6%
8%
10%
12/31/10 2/28/11 4/30/11 6/30/11 8/31/11 10/31/11 12/31/11 2/29/
13
Absolute Return Within Your Fixed Income Allocation
AlternativeFixed
Income
TIPS
Emerging Market Debt
Barclay’sAgg
High YieldBank Loans
Barclay’sAgg
TIPS
Emerging Market Debt
AlternativeFixed
Income
High YieldBank Loans
Replacing core fixed income during bear markets
A Fixed Income Diversifier
The information contained on this page is for discussion purposes only and is not intended to be a recommendation for a particular allocation. Allocations will vary based on each client’s needs, objectives and risk tolerance.
0367-NLD-3/12/2012
A Differentiated Alternative Fixed Income Strategy
Strategic Income, Unconstrained Bond
Beta-oriented returns
Interest rate long bias
Limited short exposure as hedge
Blurred alpha/beta characteristics
Many strategies have seen increased
correlation to risk assets during periods of
market stress
Long rate bias may provide limited relief
during periods of rising rates
Bandon Isolated Alpha
Seeks alpha not beta
No directional interest rate bias
Shorts often for return not hedge
Seeks isolated alpha
Has historically exhibited low correlation
to risk assets including periods of market
stress
Lack of directional rate bias creates equal
opportunity for gains in both up and down
interest rate environments
140367-NLD-3/12/2012
15
Operational and Administrative Considerations
Available Custodians Pershing, Fidelity/NFS, TD Ameritrade Trust Company of America
I Class Ticker BANIX (1.95%) A Class Ticker BANAX (2.20% C Class Ticker CBANX (2.95%)
Minimum Investment $10,000
Tax Reporting 1099
– A & C classes may require operational items in order to become available at custodians listed above– R share classes (50bps 12-b1) available upon capital commitments
For more information please contact Mike Miller at 503-477-8100 or [email protected]
www.bandonalts.com 0367-NLD-3/12/2012
16
Portfolio Manager Bios
Joseph A. Baggett, CFA - Mr. Baggett is a founder and Senior Portfolio Manager for Dix Hills Partners, LLC and its affiliate management company, Dix HillsAssociates, LLC. Until his departure in January 2003, Mr. Baggett served as Executive Director, Quantitative Investments Group, UBS Global AssetManagement in New York. At UBS, Joe was senior portfolio manager/research analyst for the quantitatively driven investment strategy group that managedover $6 billion in assets. Joe served as Model Developer and Portfolio Manager for Quantitative Fixed Income Strategies and Quantitative Allocation, LLC(“Q.A.”). Additionally, Joe was also a member of the Portfolio Management Team for UBS Tactical Allocation Fund, a $3 billion, fully flexible mutual fund thatallocated between stocks (S&P 500), bonds (intermediate-term Treasury notes) and cash on the basis of a quantitatively-driven market valuation model. Hehas extensive experience in other traditional quantitative disciplines as well, including portfolio optimization, indexation, stock selection models, performanceattribution/analysis, risk management and securities and derivatives trading. At UBS, he was also actively involved in marketing these products to institutionaland individual prospects. Prior to UBS Asset Management, Joe worked as an Economist at PaineWebber, Inc., part of a three-person unit that produced thefirm's U.S. economic growth, inflation and interest rate outlooks. Prior to PaineWebber, Joe worked at the Federal Reserve Bank of New York as an AssistantEconomist, Domestic Financial Markets Division. Mr. Baggett holds a B.A. in Economics from Columbia University (Summa Cum Laude, Phi Beta Kappa). Healso attended the University of Chicago Graduate School of Business, completing the first year of a two year M.B.A. program with a 4.0 G.P.A.
Andrew J. Kronschnabel, CFA - Mr. Kronschnabel is a senior portfolio manager at Logan Circle Partners. As a member of the portfolio management teamhe is responsible for the firm’s absolute return strategies with a specialization in high grade. Prior to joining Logan Circle Partners, he was a member of theportfolio management team at Delaware Investments where he was responsible for Core-based and high grade products from 2000 to 2007. Mr.Kronschnabel received a Bachelor of Science degree in international economics and politics from Colorado College.
William F. Woodruff - Mr. Woodruff is Bandon’s Founder, Managing Principal and Chief Investment Officer. He is responsible for all investmentmanagement activity at Bandon. Prior to founding Bandon in 2007, Mr. Woodruff spent four years with Beacon Investment Group and its subsidiaries,ultimately serving as a portfolio manager for the firm’s various hedge funds and alternative investment products. In that role, Mr. Woodruff evaluated andinvested in a wide variety of alternative strategies. His primary focus was developing ways to democratize alternative strategies. These efforts lead to thecreation of the trading approach for the DIRS Program that is now a flagship Bandon product. Mr. Woodruff began his career working for Portland, Oregonbased Philips & Co. Securities in 2002. He holds a B.B.A. in Finance from the University of Portland.
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
17
Important Disclosures
The material contained in this document is for general information purposes only and is based oninformation that is considered to be reliable. However, Bandon makes this information available on an“as is” basis and make no warranties, express or implied, regarding the accuracy of the informationcontained herein, for any particular purpose. Bandon and its independent providers are not liable for anyinformation errors, incompleteness, or delays, or for any actions taken in reliance on informationcontained herein. Nothing contained in this material is intended to constitute legal, tax, securities,financial or investment advice, nor an opinion regarding the appropriateness of any investment. Theinformation herein should not be acted upon without obtaining specific legal, tax or investment advicefrom a licensed professional.
Bandon Capital Management, LLC, Dix Hills Partners, LLC and Logan Circle Partners, LLC are notaffiliated with Northern Lights Distributors, LLC
Investors should carefully consider the investment objectives, risks, charges and expenses ofthe Bandon Isolated Alpha Fixed Income Fund. This and other important information about theFund is contained in the prospectus, which can be obtained at www.bandonfunds.com or bycalling 503-477-8100. The prospectus should be read carefully before investing. The BandonIsolated Alpha Fixed Income Fund is distributed by Northern Lights Distributors, LLC memberFINRA.
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
18
Important Disclosures
Mutual Funds involve risk including the possible loss of principal. Closed-end funds are subject toinvestment advisory and other expenses, which will be indirectly paid by the Fund. There is a risk thatissuers and counterparties will not make payments on securities and other investments held by theFund, resulting in losses to the Fund. The Fund's use of derivative instruments involves risks differentfrom, or possibly greater than, the risks associated with investing directly in securities and othertraditional investments. Emerging market countries may have relatively unstable governments, weakereconomies, and less-developed legal systems with fewer security holder rights. The value of the Fund'sinvestments in fixed income securities and derivatives will fluctuate with changes in interest rates.Currency trading risks include market risk, credit risk and country risk. Investments in foreign securitiescould subject the Fund to greater risks including, currency fluctuation, economic conditions, anddifferent governmental and accounting standards. The Fund may invest in high yield securities, alsoknown as "junk bonds." High yield securities provide greater income and opportunity for gain, but entailgreater risk of loss of principal. Using derivatives to increase the Fund's combined long and shortexposure creates leverage, which can magnify the Fund's potential for gain or loss. The default rate onunderlying mortgage loans or asset loans may be higher than anticipated, potentially reducingpayments to the Fund. As a non-diversified fund, the Fund may invest more than 5% of its total assetsin the securities of one or more issuers. The Fund will incur a loss as a result of a short position if theprice of the short position instrument increases in value between the date of the short position sale andthe date on which the Fund purchases an offsetting position.
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
19
Definitions
S&P: Refers to the Standard and Poor's 500 Index which is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broaddomestic equity market. This index is used for comparative purposes only.
Barclays Agg (BarCap): Refers to the Barclays Aggregate US Bond Index. The index is designed to measure performance of the broad based investment-grade, fixed rate,taxable bond market. This index is used for comparative purposes only.
IEF: An Exchange Traded Fund that seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital U.S. 7-10Year Treasury Bond Index.
TLT: An Exchange Traded Fund that seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital U.S. 20+Year Treasury Bond Index.
Alpha: A risk-adjusted measure of the active return on an investment. It is a measure of the manager’s contribution to performance. A positive annual Alpha indicates theportfolio outperformed the market on a risk-adjusted basis, and a negative Alpha indicates the portfolio underperformed in relation to the market.
Beta: Describes how the expected return of a stock or portfolio is correlated to the return of the financial market as a whole. A Beta greater than 1.00 indicates the portfoliois more volatile than the market, and a Beta less than 1.00 indicates the portfolio is less volatile than the market.
Duration: A measure of a bonds price sensitivity to yield. It can also be described as the percentage change in price for a parallel shift in yield.
Standard Deviation: Measures the degree of variation of monthly returns around the mean (average) return. The higher the volatility of the investment returns, the higherthe standard deviation will be.
Correlation: Measures how closely the investment tracks the market (the "market" can be defined as an index).
Absolute Return: The return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a percentage) thatan asset - usually a stock or a mutual fund - achieves over a given period of time.
Directional Trading: A strategy used by investors that open positions, either long or short, on the belief that they are able to correctly predict the movement of price in asecurity.
Event Driven: A strategy where positions seek profits from the consummation of a given event (e.g. takeover, merger, etc).
Cap Structure: A strategy that attempts to exploit a pricing inefficiency between two securities of the same company.
Paris Trade: The strategy of matching a long position with a short position in two stocks of the same sector. This creates a hedge against the sector and the overall marketthat the two stocks are in.
Opportunistic: A strategy that seeks to take advantage of short-term mispricing in securities.
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
20
Appendix 1: Alpha / Beta Separation
By going away from traditional actively managed product where Beta and Alpha areblurred together you gain control of your asset allocation. Giving you the choice ofeither minimizing costs or reducing beta.
90%
Beta
10% Alpha
Actively Managed Bond Portfolio0.58% total cost
BND0.12%
Exp Ratio
Cost of Alpha4.70%
Isolated Alpha (Cost Reduction)
0.30% Avg cost
90%
Beta
10% BANIX
BND0.12%
Exp Ratio
Cost of Alpha1.95%
Isolated Alpha (Beta Reduction)
0.58% Avg cost
75%
Beta
25% BANIX
BND0.12%
Exp Ratio
Cost of Alpha1.95%
BND: Vanguard Total Bond Market ETF.The portfolios are hypothetical examples created by Bandon and are provided for illustration purposes only. No assumptions should be made that the allocations above will be profitable or provide alpha. Allocations and their percentages should change based on an individual investor's needs. 0367-NLD-3/12/2012
21
PORTFOLIO & RISK MANAGEMENT
Jude Driscoll, CIO
High GradeAndy Kronschnabel, CFA
Stephen Mullin, CFA
High YieldTim Rabe, CFA
EM / Non-DollarScott Moses, CFATodd Howard, CFA
Structured ProductAl Leone, CFA
TRADING / TECHNICAL ANALYSIS
High GradeMatt BuchananDana CottrellLou Petriello
High YieldTom McClinticSpencer Tullo
EM / Non-DollarTodd Howard, CFA
Structured ProductJoseph Watkins
Kevin Hendrickson
FUNDAMENTAL RESEACH Brian Funk, CFA,
DirectorZach Bauer, CFA
Michael BorowskeIan Bowman
Evan Driedger, CFA
Michael FreyXimena GalvezBrent Garrels
Lee RubensteinGreg Zappin, CFA
Matt Higgins, CFAChris Moon, CFAMichael Recchiuti
Risk AnalyticsPaul Polichino
Credit Research Team
Appendix 2: Logan Circle - Investment Team
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
22
Appendix 3: Logan Circle – Investment Process
Proprietary ResearchRisk Management/Portfolio Review
1
34
Idea Generation
Portfolio ConstructionSell Discipline
Research
PortfolioManagement Trading
25 • Examination of critical industry trends.• Identification of potential relative value opportunities.• 5 Senior Analysts/Group Leaders closely monitoring 20-25 companies.• Industry Specialists Monitoring 50-75 Companies
• Research• Portfolio Management• Trading
• Directional (Long & Short)• Event Driven / Cap Structure• Pairs Trades• Opportunistic
• Research identifies negative change in fundamentals• Securities reach price targets or stop losses• Better opportunities arise (relative value)
• Forward Looking Risk Identification• Position Sizing• Portfolio Level Assessments
• Gross / Net Exposure• Strategy Allocation %’s
The information in this presentation is for informational purposes only and is not intended as an offer to buy or sell, or amount to a solicitation to buy or sell, any securities referred to herein. Important fee, performance and disclaimer information is contained towards the end of this presentation and should be read in conjunction with the information presented above. 0367-NLD-3/12/2012
23
Appendix 4: Active Duration Framework
A robust directional interest rate forecasting framework based onMacro economic, bond market Valuation and Momentum indicators.
0367-NLD-3/12/2012
overall forecast higher rates lower rates
STRONG WEAK STRONG
macro indicators expanding contracting
valuation indicators expensive cheap
momentum indicators rising rate declining rate
Forecast is for illustrative purposes only. Not an example of a current interest rate forecast.