Overview Presentation

Transcription

1 Overview Presentation August 2009 Manager: Miles Howland & Co. LLC Sub-Advisor: UBP Asset Management LLC

2 Deep Value Fund of Funds Value Proposition to Investors Allows investors access to funds whose managers apply private equity style investing techniques to their investments in public companies Provides a diversified way to invest in the best performing deep value, activist and distressed hedge fund managers, many of whom are currently inaccessible to high net worth individuals either because of prohibitively high minimums or because they are closed to new investors Provides balanced diversification into up to 15 funds Underlying managers have consistently demonstrated the ability to earn competitive returns at risk levels below the S&P 500 and other equity benchmarks 1

3 Why Deep Value as a Strategy? Only a limited number of hedge funds possess the business, legal and capital resources to successfully implement change in underperforming large capitalization corporations The deep value sector has been less prone to capacity constraints and returns have not been compressed by capital inflows Top deep value managers are patient, long-term investors, willing to wait for value realization - many managers (and their investors) in other strategies are far less patient and more short-term in perspective Long-term investment strategies of deep value managers and concentrated portfolios generally result in lower turnover and higher tax efficiency relative to other strategies 2

4 How Proven Deep Value Investors Generate Returns Understanding industry sectors and anticipating changes and trends that create investment opportunities Recognizing untapped value in companies ahead of other investors Analyzing and capturing the value of distressed securities across the capital structure Developing and implementing a specific plan to unlock and grow value in an investment position Being a catalyst for change through dialogue with management and other shareholders ranging from suggestions to activism Ongoing strategic input at management and board levels Implementing proper corporate governance 3

5 The Investment Strategy Allocate capital to hedge funds that have demonstrated consistent results over the long term by creating value within public company investments Focus on hedge fund managers that have the industry knowledge, strategic board level involvement and ability to create value that is often associated with the best private equity investors Select fund managers with a strategy style based on creating positive change within companies and when necessary being an Activist or catalyst for such change Build a diversified portfolio of deep value hedge funds to balance concentrated portfolios at the fund level, with prudent diversification at the fund of funds level Allocate capital to managers making investments in the U.S., U.K., Europe and Asia 4

6 Miles Howland & Co. LLC Miles Howland & Co. LLC is an investment management firm focused on alternative assets. Our primary focus is the management of multi-manager portfolios (fund of funds). The firm is headquartered in New York and works with substantial private investors and institutional investors as clients. Miles Howland & Co. LLC works with clients including family offices, investment advisors, private banks, institutional consultants and institutional investors. The current client base of the firm includes investors based in the United States, United Kingdom, Europe and the Middle East. The investment philosophy of the firm is based on quality of manager research and selection, appropriate diversification, transparency and minimal use of leverage 5

7 UBP Asset Management LLC ( UBPAM ) Established its first U.S. fund of funds in 1997 Depth of infrastructure: seasoned team of investment and business professionals Approved list of approximately 85 managers to be recommended during the portfolio construction process UBPAM is able to leverage its relationship with its parent company, Union Bancaire Privée, ( UBP ) which has been a pioneer in alternative investments since 1972 Over 20 global offices spanning three continents UBP has relationships with the world s top hedge fund managers Global network and teams sharing information, intelligence, and sourcing opportunities UBPAM was engaged by the Manager to act as Sub-Advisor to the Fund on a non-discretionary basis 6

8 Performance Summary Since Inception (January 2007 August 2009) Comparative Statistics Annualized Standard Deviation Miles Howland Deep Value Fund HFRI Fund of Funds Composite Index S&P 500 DRI Annualized Return (net of fees) -7.39% -2.45% -9.59% 11.26% 7.98% 20.20% Sharpe Ratio (5%) (1.06) (0.88) (0.63) Correlation to S&P 500 Monthly Statistics Number of Months Number of months Miles Howland Outperformed Benchmark N/A Number of Positive Months Worst Month % -6.54% % Best Month 4.71% 3.33% 9.57% Maximum Drawdown 34.69% 22.14% 50.94% 1 This presentation is not to be relied upon in substitution for the exercise of independent judgment. Past performance in not indicative of future results. Returns are net of all manager fees and estimated fund fees. Please see pages 18 and 19 for additional important disclosures, definitions of benchmarks and descriptions of certain risks of investing in the Fund. UBPAM has not verified the accuracy of any information in this Presentation, and UBPAM makes no guarantee or warranty as to the correctness or completeness of any information contained herein. 7

9 Annualized Return Miles Howland Deep Value Managers Fund, L.P. Monthly Performance Since Inception Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD % -2.37% 0.39% 4.71% 3.30% 0.17% 3.61% 2.14% 11.38% % 0.34% -1.37% 1.55% 2.28% -3.34% -4.34% 0.22% -8.23% % -4.58% -4.05% % % 0.82% 1.18% 1.32% 2.74% -0.70% -0.87% -2.40% 0.06% 2.82% -2.49% 0.15% 4.62% The Miles Howland Deep Value Managers Fund provides qualified investors a diversified way to invest in the best performing deep value, activist and distressed hedge fund managers. The Fund provides access to proven managers with long term industry leading track records, many of whom are otherwise closed to new investors. The Fund will achieve diversification across up to 15 funds in the overall portfolio to balance the relative concentration in each underlying fund portfolio. 5% 0% -5% -10% -15% -20% -25% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% Annualized Standard Deviation Miles Howland Deep Value (Net Proforma) HFRI Fund of Funds Composite Index S&P 500 DRI This presentation is not to be relied upon in substitution for the exercise of independent judgment. Returns are net of all manager fees and estimated fund fees. The Fund launched January 1, The most recent month is still an estimate. Past performance is not indicative of future results. Please see pages 18 and 19 for additional important disclosures. 8

10 Miles Howland Deep Value Portfolio Net Returns By Manager Name of Manager Fund Start Date Aug Cevian Capital II 3 Jul % N/A N/A N/A N/A 31.72% 16.83% % 25.98% Icahn Partners L.P. Nov % N/A N/A 3.95% 11.63% 27.19% 6.26% % 17.57% JANA Partners, L.P. Jan % 10.35% 45.97% 25.98% 11.31% 16.12% 7.86% % 13.00% Marathon Special Opportunity Fund 2 May % 20.17% 33.95% 28.81% 14.09% 13.26% 4.02% % 16.45% Pershing Square, L.P. Jan % N/A N/A 42.60% 40.09% 22.33% 22.20% % 17.92% Scoggin Capital Management LP II Jan % -2.86% 28.00% 23.99% 11.33% 12.69% 10.85% % 22.13% Stark Investments L.P. Oct % 5.18% 16.37% 9.19% 6.68% 14.97% 3.53% % 1.65% Steel Partners II L.P. 1 Oct % 10.16% 17.63% 29.84% -1.15% 16.47% -0.56% % -5.15% Third Point Offshore Fund Dec % -7.64% 52.93% 29.07% 19.76% 13.86% 17.78% % 4.59% Miles Howland Deep Value Managers Fund % N/A N/A N/A N/A N/A 4.62% % 11.38% S&P 500 Index 3.61% % 28.67% 10.86% 4.91% 15.78% 5.49% % 14.97% HFRI Fund of Funds Composite Index 0.97% 1.02% 11.61% 6.86% 7.49% 10.39% 10.25% % 7.87% Please see pages 18 and 19 for additional important disclosures. 9

11 Miles Howland Deep Value Portfolio Fund Key Principal Firm AUM Deep Value/Activist Strategy Cevian Capital Christer Gardell $ 3,000,000,000 Shareholder Value Icahn Fund Carl Icahn $ 4,900,000,000 Shareholder Value JANA Offshore Partners Barry Rosenstein $ 2,500,000,000 Shareholder Value Marathon Special Opportunity Fund Bruce Richards $ 10,000,000,000 Special Situations Pershing Square International William Ackman $ 4,300,000,000 Shareholder Value Scoggin Overseas Fund Craig Effron $ 1,200,000,000 Distressed Stark Investments L.P. Brian Stark & Michael Roth $ 8,600,000,000 Multi-Strategy Steel Partners Warren Lichtenstein $ 4,000,000,000 Shareholder Value Third Point Fund Daniel S. Loeb $ 2,300,000,000 Shareholder Value 10

12 Summary of Terms Domestic (L.P.) Offshore (Ltd.) Structure: Delaware Limited Partnership Cayman Islands Minimum Investment: $1,000,000 $1,000,000 Management Fee: 1.00% 1.00% Performance Fee: 10% 10% High Water Mark Yes Yes Administrator: Citi Hedge Fund Services, Ltd. Citi Hedge Fund Services, Ltd. Auditor: Ernst & Young Ernst & Young Legal Counsel: Bingham McCutchen, LLP Maples and Calder Subscriptions: Monthly Monthly Redemptions: Quarterly 95 day notice 1 Year hard Lock up, 4% penalty in Year 2 Quarterly 95 day notice 1 Year hard Lock up, 4% penalty in Year 2 11

13 The Due Diligence and Manager Selection Process Senior Professionals Meet All Investment Managers Face-to-face Meetings in Managers Offices Detailed Review of Documents Quantitative Review Background Checks Risk Profile Back Office Review Qualitative Analysis 12

14 Hedge Fund Manager Universe Miles Howland Deep Value Managers Fund, L.P. UBPAM (Sub- Advisor) Investment Process Overview Investment Process Structural Risk Analysis Team Research Team Bottom-Up Analysis Operational / Business Risk Investment Risk Management Team Approved List Approx. 85 managers Portfolio Management Team Top-Down Analysis Investment Risk Checks and Balances 13

15 UBPAM (Sub-Advisor) Bottom-up Manager Research Manager sourcing for Approved List Primary communication with managers / ongoing monitoring Qualitative review Strategy teams with proven areas of expertise Depth of team allows for concentrated manager coverage All information stored in centralized, proprietary database 14

16 UBPAM (Sub-Advisor) Risk Management: Factors in Recommending Underlying Managers Structural Risk Analysis Team Independent Structural Risk Analysis ( SRA ) team since 1997 SRA Team focuses on non-investment related risks Areas of focus include: - Safeguarding of assets - Pricing / valuation of assets - Service providers (Administration, Custodian, etc.) SRA utilizes a comprehensive proprietary evaluation methodology for hedge fund managers Investment Risk Analysis Team Risk analysis conducted both at the manager level and the portfolio level Will seek to manage portfolios to a risk budget Factor and exposure analysis is assessed Opportunistic use of active hedge overlays will seek to create additional alpha and/or hedging for the portfolios Independent from Portfolio Management Head of SRA has Veto Power 15

17 Background of Reid R. Miles Founder and CEO of Miles Howland and Co. LLC, a New York based investment management firm. Over 20 years of experience in executive management and investment management. He has been active as a professional investor for over ten years. Over the course of his career, he has invested in over 30 private equity transactions and managed numerous fund of funds investments. Currently a Director of the following companies: CreditSights ( an independent financial research firm Majestic Research ( an independent research firm Tachyon Networks ( a broadband telecommunications firm Prior to launching Miles Howland & Co., he was a Managing Director and Partner of BV Group Ventures LLC, a diversified investment management firm focused on private equity, real estate and hedge fund investing. 16

18 Contact Information Reid R. Miles Chief Executive Officer Miles Howland & Co. LLC 1270 Avenue of the Americas Suite 1900 New York, NY (212)

19 Footnotes/Disclosures The Indices shown do not reflect fees and expenses associated with the active management of a hedge fund portfolio. Investors cannot invest directly inindices or averages, and their performance does not represent the performance of any fund or underlying fund mention inthis report. Index performance is being provided as a point of reference only. The fund and the underlying funds may invest indifferent securities and engage in different trading strategies from the index. In addition, it should be noted that the sector, industry, stock and country exposures, volatility and risk characteristics of the fund and underlying funds may differ materially from those of the index. Returns for the indices are from the HFR Database. The HFRI Fund of Funds Composite Index consists of funds that invest in multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The Fund of Funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a Fund of Funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers. The Standard & Poor s 500 Index ("S&P 500") is a widely recognized, unmanaged index of market activity based upon the aggregate performance of a selected portfolio of publicly traded common stocks including monthly adjustments to reflect the reinvestment of dividends and other distributions. The S&P 500 reflects the total return of securities comprising the index, including changes in market prices as well as accrued investment income, which is presumed to be reinvested. These results are shown to give a perspective of the historical performance of the U.S. equity market. No information provided in this Miles Howland ( Report ) shall constitute, or be construed as, an offer tosell or a solicitation of an offer to acquire any security, investment product or service, nor shall any such security, product or service be offered or sold in any jurisdiction where such offer or solicitation is prohibited by law or regulation. This Report is not intended to be, and shall not be construed as, investment, financial or other professional or expert advice. Readers of this Report are urged to seek professional advice with respect to any such matters. Performance data supplied herein is based solely on the information provided tothe Fund by third parties. Information and opinions presented in this presentation have been obtained or derived from sources believed by Miles Howland & Co. LLC. to be reliable, but they make no representation as to their accuracy or completeness and accept no liability for loss arising from the use of the material presented in this presentation unless such liability arises under specific statutes or regulations. This presentation is not to be relied upon in substitution for the exercise of independent judgment. Miles Howland & Co. LLC. may have issued other presentations that are inconsistent with, and reach different conclusions from, the information presented in this presentation. Those presentations reflect the different assumptions, views and analytical methods of the analysts who prepared them. The results above are net of all fees and estimated expenses. The most recent month is still an estimate. The information contained herein is not intended for or available tocertain investors in certain jurisdictions and are only available tocertain accredited investors or qualified purchasers. UBPAM has not prepared this Presentation nor verified the accuracy or completeness of any information in this Presentation, concerning the Fund or Miles Howland & Co. LLC and UBPAM disclaims responsibility for and makes no guarantee or warranty as to the correctness or completeness of any information contained herein. 18

20 Risk Factors Please see the Fund s private placement memorandum for a more detailed discussion of risks, conflicts of interest and tax consequences associated with an investment in the Fund. Prospective investors should carefully consider, among other factors, the matters described below, each of which could have an adverse effect on the value of an investment in the Fund. As a result of these factors, as well as other risks inherent in any investment, there can be no assurance that the Fund will meet its investment objectives or otherwise be able to carry out its investment program successfully. The Fund s returns may be unpredictable and accordingly, the Fund s investment program is not suitable as the sole investment vehicle for an investor. An investor should only invest in the Fund as part of an overall investment strategy. Based on, among others, the factors described below, the possibility of partial or total loss of capital will exist and investors should not subscribe unless they can bear the consequences of such loss. Past Performance. The Fund s prior investment performance is not indicative of future results. On any given investment, total loss of the investment is possible. Projections/Opinions. Statements contained herein that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Miles Howland & Co. LLC ( MHC ) or UBP Asset Management LLC ( UBPAM ) as the case may be. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No assurances can be given that actual results will achieve the Fund s stated objectives. Restrictions on Transfer and Withdrawal; Lack of Liquidity. The Fund s shares have not been registered under the Securities Act or any other applicable securities laws. There will be no public or private market for the Fund s shares and none is expected to develop. In addition, the Fund shares described herein are not transferable except as permitted under the Fund s memorandum and articles and private placement memorandum of the Fund. Dependence on Key Personnel. The success of the Fund depends in substantial part upon the skill and expertise of the management team of the Fund. There can be no assurance that these individuals will continue to be members of or employed by MHC. The loss of service to the Fund of one or more of such individuals could have a material adverse effect. 19