The first fully regulated FoF dedicated to Alternative Assets
Content The Emerald Team page 3 General Partners page 4 Service Providers page 5 Why Luxembourg page 6 The Challenge page 7 The Opportunity page 8 The three pillars of our investment philosophy page 9 Fund Manager Selection page 10 Fund Manager due diligence page 11 Why a Fund of Funds? page 12 Back testing page 13 Expected Allocation page 14 Summary page 15 Contact information page 16 Confidential - Not for public use 2
The Emerald Team The Emerald Diversified Fund of Funds Custodian / Administrator / team has the capability and expertise to Paying Agent provide investors with the optimal results Société Générale Bank & Trust combined with a piece of mind. Auditor Legal Advisor Deloitte Baker&Mckenzie Luxembourg There are few role players to enhance security and performance General Regulator in Emerald Partners Luxembourg Emerald Diversified FoF The general partners CSSF Managements Sarl The general partners do the overall asset allocation and investment decisions. Risk Investment Manager Advisor They are advised and guided by the Nova Inoks Capital Fund Advisor and the Risk Manager. Capital Confidential - Not for public use 3
General Partners Mr. Boaz Alpern is the Co-founder & CEO of Emerald Alternative Investments Group Ltd. Prior to that Boaz served in several investment management positions mostly with Institutional investors. Boaz is holding a MBA in finance from the Hebrew University in Jerusalem, and a Bachelor degree in psychology from the Hebrew University in Jerusalem. Mr. Xavier Deu , currently Chief Marketing Officer of Carlisle Management Company. Worked in the USA as wholesale distribution, futures and options trader, and risk management. In Europe, has been involved in securitization, private Equity consulting and Alternative Asset Management. Xavier is an Economist from the UAB of Barcelona and holds a MA in International Finance and Economics from Brandeis University in the USA. Mr. Paul Hunt owns an advisory company distributing funds to the wealth management market globally. Paul started his financial services career in 1987 working as an investment broker in Guernsey. He then worked as an investment manager for Lloyds bank in Guernsey for several years before moving to Europe to take up a position as regional manager of a large offshore insurance company. Adv. Michael Shmuelevitz is Co-founder & Chairman of Emerald Alternative Investments Group Ltd. with Mr. Alpern. Michael has an experience of over 12 years in offshore investments specializing in unique, non market correlated investments in the global arena. Michael is an advocate of the Supreme Court in Israel for over 25 years. He holds LL.B. degree from Tel Aviv University, LL.M. from University of Natal, Durban South Africa. Confidential - Not for public use 4
Service Providers Depositary Bank, Central Administration Agent, Registrar and Transfer Agent: Société Générale Bank & Trust • Part of one of the leading financial European groups and leading specialist bank in Luxembourg, will provide to the fund all the services required to have independent and professionally managed accounts for the Fund’s investors. Auditor: Deloitte Luxembourg • Among the Big 4 Audit firms globally and Top 3 in Luxembourg. Will audit the fund annually, at the end of each year. Legal Advisor: Baker&Mckenzie • Baker&Mckenzie is a global law firm, with a presence in over 46 countries, being one of the leaders in Luxembourg and in the fund management industry. Fund Advisor: INOKS Capital • An independently-owned alternative investments house based in Geneva and has been active in structured trade finance since its creation in 2004. INOKS Capital has been involved with commodities from its first days of existence and never deviated from that core focus since then. Risk Manager: NOVACAP • An independent management company authorized and regulated by the Commission de Surveillance du Secteur Financier in Luxembourg. Nova Capital provides for risk management services, to their clients, and is approved by the regulator in Luxembourg, CSSF . Confidential - Not for public use 5
Why Luxembourg? 1 st European Fund center and 2 nd global Fund center. Luxembourg regulation offers the best investor protection in the world. Flexible investment structures offering best quality to investors. Proved know-how and track record in designing efficient regulated fund and investment vehicles. A wide range of specialised service providers for the funds industry. Political and economic stability with a significant role in shaping the EU. Established financial centre with long-standing experience in fund administration and asset management. Modern legal, regulatory and tax framework. Efficient supervision of the financial sector. Highly qualified, multilingual workforce. Confidential - Not for public use 6
The Challenge Investment portfolios have a high Low degree of interest volatility. rates. All traded financial instruments are highly correlated. The challenge is to create a fund that generates returns uncorrelated to traditional financial markets, with low volatility Confidential - Not for public use 7
The Opportunity In recent years institutional investors have been moving from traditional investments (such as stocks and bonds) into alternative investments, mainly for: Diversification Volatility management Return potential • New exposures and • Low correlation to • Returns are higher, opportunities and traditional investments and alternative therefore investments have reduction of risk performed well during market crisis Confidential - Not for public use 8
The three pillars of our investment philosophy Trading Any portfolio should have an allocation finance 1. funds to non-market correlated assets. Various asset This allocation should include various 2. Structured classes / funds, uncorrelated to each other in Green SRI Credit Funds funds fund their core business. categories These funds demonstrate attractive 3. Property aspects of the alternative investments related funds spectrum and present different high quality managers. Confidential - Not for public use 9
Fund Manager selection Qualitative Assessment: • We select a group of asset managers for each asset class, in order to understand their value-added Quantitative Performance Metrics: • We run several data metrics to understand his return/risk profile for the asset class Portfolio Fit: • Fund’s strategy and risk/return must fit within our existing portfolio Confidential - Not for public use 10
Fund Manager due diligence Analyse fund or company track record Reputation and Review of full documentation character Investment process and risk management In-depth review of manager Administrative and internal controls Reporting and transparency Manager due diligence write-up Industry and country knowledge Investment committee approval Confidential - Not for public use 11
Why a Fund of Funds? A Fund of Funds serves as an investors proxy, performing professional due diligence, manager selection and oversight over the funds in its portfolio. Professional Due Emerald Diversified Individual Investors Diligence on Funds Fund of Funds Within a Fund of Funds it is possible to achieve asset and manager diversification, on a small investment compared with direct purchase of funds. It is a "one stop shop“, which includes a variety of funds, representing various aspects in this cosmos of alternative investments. It is simpler to purchase and hold, having the benefit of active and professional management, which will adjust and monitor asset allocation and risk Confidential - Not for public use 12
Back testing Emerald Diversified FoF vs. benchmark indexes 130.00% 125.00% 120.00% 115.00% 110.00% 105.00% 100.00% 95.00% 90.00% UCITS alternative Index Fund of Funds Barclays Fund of Fund Index Emerald Diversified FoF Portfolio average retun Confidential - Not for public use 13
Expected Allocation 10% 10% Cash 50% 10% Property related Green SRI Structured Credit 20% Trade Finance Confidential - Not for public use 14
Summary The small print A Fund of Funds dedicated to the cosmos of non-market correlated investments. Annual management fee: 2% Annual performance fee: 20% Diversification across the spectrum to reduce risk and enhance performance potential. Hurdle rate: 8% HWM Highly respected regulated environment in Luxembourg. High quality partners (Administrators, Custodian and Accountant). Independent risk manager and fund advisor. Robust Due Diligence process and continuous professional monitoring No leverage intended. Expected target return of 7% - 9% p.a. net of all fees. Confidential - Not for public use 15
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