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Executive Summary _Quantum - Quantum Stride Singapore Pte Ltd

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Executive Summary _Quantum  - Quantum Stride Singapore Pte Ltd Powered By Docstoc
					      Quantum Stride Ltd.
      World’s Very First GUBICTM Fund
      Strategy: Long Equity, Opportunistic, Absolute
      Return




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                                     Restricted Distribution

 This document contains critical information about Quantum Stride Ltd. (Quantum), the Fund.

 The document can not be distributed to anyone without the approval of the Directors of The
  Fund.

 All data and information contained in or disclosed by this document is confidential and
  proprietary information of Quantum Stride Ltd and all rights therein are expressly reserved.

 By accepting this material the recipient agrees that this material and the information contained
  therein is to be held in confidence and in trust and will not be used, copied, reproduced in
  whole or in part, nor its contents revealed in any manner to others without the express written
  permission of Quantum.




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                  About Quantum Stride Ltd. (Quantum)

Introduction :

 Quantum is a British Virgin Islands (BVI) domiciled Professional Fund focused on long
  equity investment in GCC, USA, Brazil, India and China (GUBICTM) Small & Mid-Cap.
  stocks. The Fund is expected to be launched in 2009 with $20 million under Management.

 The Fund is able to invest in both Western markets and Middle Eastern & Asian stocks and is
  run by partners who have over 30 years combined experience in these markets. All of the
  founders worked together at leading firms and have developed their own Fundamental
  Value/GARP stock picking strategy as well as investment screening and risk management
  tools.




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                  About Quantum Stride Ltd. (Quantum)

This document explains the following:
 Distinguishing features of the Fund – what separates “Quantum” from the crowd?
 Transparency to the investors
 How does Quantum monitor and manage risk?
 Why should we invest in Small & Mid Cap stocks?
 Why should we invest in an Absolute Return Fund?
 Why should we use the Quantum Stride Ltd.?
 How does Quantum invest?
 What is the investment style?
 What is the investment process?
 How will the portfolio be constructed?
 Who are the founders and what are their experiences?
 Who are the Administrator, Investment Manager, Sub-Manager, Investment Advisor,
   Custodian, Shari’a Advisor, Auditors and what are their experiences?
 Fund particulars
 Frequently asked questions

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 Distinguishing Features of the Fund- What Separates
            “Quantum” from the Crowd?
 World’s very first GUBICTM fund, providing unmatched geographical diversification with
  investments in GCC, USA, Brazil, India and China.

 Capital Protection for Investors: Quantum’s philosophy is to extract alpha using more
  conservative exposure than directional funds and has designed hedging techniques to
  minimise systematic risks including the use of disaster scenario Portfolio Insurance.

 Usage of Shari’a Compliant Stocks for Better Diversification: Shari’a Compliant Stocks by
  their nature are in conservative businesses and have much lesser risk on their balance sheets
  (by limiting the debt/equity ratio) as compared to non-shari’a compliant stocks. This is why
  we believe Shari’a Compliant Stocks can provide an excellent way of further diversifying the
  portfolio. Notably, we are the first fund to understand this and apply this in practice.

 Specialist Advisor/Manager for each market




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 Distinguishing Features of the Fund- What Separates
            “Quantum” from the Crowd?

 The Fund will experience a significant return enhancement and a portfolio volatility much
  lesser and less kurtotic than that experienced by investors using traditional diversification
  techniques or those who are using little diversification at all. This is particularly true for the
  investors who are using more than one investment companies as their vehicles.

 Nimbleness: The Fund will invest in ten markets, it would have availability of enough stocks
  picks that it can move into and out of the positions without having any problem.

 Investments in Mid & Small Cap stocks to provide maximum growth potential to the portfolio

 The Fund offers a vehicle of transparent valuation and strategy, and consistent management.




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 Distinguishing Features of the Fund- What Separates
            “Quantum” from the Crowd?
 Superior Risk Management Methodology: Quantum’s risk management methodology is
  designed specifically to address Small and Mid Cap investing. It adjusts to reflect changing
  market conditions and emphasises common sense- capital preservation and liquidity are the
  key priorities.

 100% hedging with Put Options and other derivatives, hence very little downside, which will
  be equal to the cost of the derivatives (expected to be <7% of the Assets Under Management).

 The performance objective of the Fund is to produce pre-incentive returns between 20%-25%
  per annum to its investors irrespective of movement of the other asset classes.

 Thus, it would give high Reward/Risk Ratio (>3.5) to the Investors (This is much better than
  the optimal ratio, which is around ‘2’ for most of the funds), it means the Fund would make
  about 75% more profit as compared to many other funds for the same amount of risk taken.

 Transparency to the Investors: please see ahead


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                             Transparency to the Investors
 Clarity About the Magnitude and Timings of Fees and Expenses:
  We are clear about every fee and expense that would be charged to the Fund (Please refer to
  “FEES AND EXPENSES” section of the Prospectus for details).
 No Uncertainty About the Way the Portfolio will be Constructed:
  We are clear about the way the portfolio will be constructed (Please refer to “PORTFOLIO
  CONSTRUCTION” in this document or “INVESTMENT APPROACH OF THE
  INVESTMENT MANAGEMENT COMPANY” section in the Prospectus).
 Disclosure of Stocks Holding and Portfolio Allocation:
  The Fund will disclose ten stocks positions held by it and its portfolio allocation on
  percentage basis in a given month. This is unlike any other “Absolute Return Fund” or a
  “Hedge Fund” that make its best effort to hide its stocks positions. .
 Well Defined Valuation Policies and Procedures:
  We have well defined and easy to understand method of calculating the NAV: “Series of
  Shares and Consolidation Method”. Besides this the Fund intends to invest 100% of its assets
  in liquid, listed securities that leaves no scope for the uncertain valuation methodology.




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             Quantum: Risk Monitoring & Management
•       We define risk as: “the risk of permanent loss of capital in nominal terms”
•       First rule of investing: “don’t lose money”;
•       Second rule of investing: “don’t forget the first rule” – Warren Buffet

    Risk Sources in Small/Mid Caps                  Managed By

    • Market risk                                  Put options, other derivatives and gearing v cash


    • Thematic risk
                                                   Mitigated by appropriate diversification
    • Stocks specific risk
                                                   (Geographical & Sectorial)
    • Liquidity risk

    It is important to understand that all these sources of risk, if properly managed, can also be
    exploited to achieve superior portfolio returns on a risk adjusted basis

         Thematic risk:       Cluster analysis report / factor analysis report
         Liquidity:           Daily liquidity monitoring report and single-stock liquidity limits
         Specific risk:       Single stock concentration / liquidity limits / stop-loss limits
         Market risk:         Daily VAR report / stop-loss limits / gearing limit
         Monitoring:          Experienced risk-management team
                                                                                                       9
              Quantum: Risk Monitoring & Management
 Diversification
    30-40 primary positions in well researched stocks achieve diversification and liquidity
      while delivering superior returns
    Geographical diversification: investments in 10 stock markets- GCC, USA, Brazil, India
      and China (GUBICTM)
    Max % of fund invested in any single stock: 6% long
    Regular factor and cluster analysis to identify and prevent unintended thematic/market
      risk in portfolio
    Macro risks (currency, economic, political) mitigated by country limits matrix
 Stop Loss (All Trigger Levels Based from High Water Mark)
    Review any position that falls 15% (for longs) for non-GCC markets and falls 20% (for
      longs) for GCC markets or impacts Fund NAV by 0.9%
    Close any position that falls (longs) 35% or negatively impacts Fund NAV by 2.0%
    Convene immediate investment committee meeting if Fund NAV has 4.5% drawdown
 Liquidity Control
    Use liquidity analysis software to manage liquidity at the portfolio and stock levels
    Stock Liquidity - Max. Investment: 10% of the free float of the underlying listed
      investment
    Portfolio Liquidity - in volatile periods gross exposure will be appropriately scaled down




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              Quantum: Risk Monitoring & Management

 Volatility Controls
    Monitor daily portfolio VAR (not to exceed 2.5% of 5 day VAR at 95% confidence
      interval)

 Market Exposure
    Leverage is unnecessary for our strategy to work successfully
    Net market exposure is typically <10% (managed by put options and other derivatives)
    Portfolio Insurance - in market stress scenarios correlations on all securities tend to
     converge, allowing for effective proxy hedging

 Strategy is Alpha-Driven
    Our Small Cap stock picking strategy is driven predominantly by company specific,
      unsystematic factors – it is naturally uncorrelated with market movement




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     Why should We Invest in Small & Mid Cap Stocks
The overwhelming reason for investing in Small and Mid Cap market stocks is that there is a
genuine advantage accruing to the smaller stocks that is not available to the large cap stocks. In
addition the marketplace for smaller stocks is under researched and still offers miss-pricing
opportunities. We list below the major advantages of investing in this area:

 Small and Mid Caps are Under Researched
  There is only 10-15% analyst coverage by the major sell side houses. There are also far fewer
  buy-side analysts.

 Huge Investment Opportunities
  There is a universe of 10,000+ stocks which provides ample scope to find 30-40 suitable
  stocks for our portfolios in all market conditions.

 High Alpha/Low Beta
  The price of Small Cap stocks is driven much more by stock specific news- hence an
  inherently low correlation to the broad market. This is confirmed by market history.



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     Why should We Invest in Small & Mid Cap Stocks

 Higher Growth Potential
  Small and Mid Caps are much more nimble in growing sales and EPS. They also have a
  leaner corporate hierarchy and have greater flexibility of operations. Small and Mid Caps are
  also much more likely to be bid targets for private equity partnerships and large cap
  companies especially in a lower growth environment.

 Inherent Market Benefits
  Trading and technical anomalies often work more strongly and consistently for Small and
  Mid Caps. Such effects as EPS surprises, Stock momentum, Mean reversion and Low
  Price/Book effects are all more obvious in this sector

 Inherent Market Protection
  By virtue of their size and contribution to larger fund portfolios these stocks offer genuine
  protection from some market forces. They are very often excluded from Program trades and
  are less affected by forced equity sell downs such as occurred after 9/11.




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     Why should We Invest in Small & Mid Cap Stocks


 Over the last century, the smallest 10 per cent of quoted companies have on average delivered
  31.6% return per year. Companies in the largest 10 percent of the market could only deliver
  13% during the same period (Source: London Business School)

 Whilst we cannot predict that the Small and Mid Cap asset class as a whole will always
  outperform large caps, in any year, it is highly probable that the returns from a portfolio of the
  top performing 50 Small and Mid Cap stocks will substantially outperform returns from a
  portfolio of the 50 top performing large cap stocks.




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     Why should We Invest in an Absolute Return Fund

The main benefits of investing in an Absolute Return Fund are:

   Absolute Return (Mid to long-term) i.e. positive return irrespective of market direction
   Reasonable Volatility (Comparable to benchmark equity index)
   Low Correlation (With benchmark equity index)
   Following are figures as at Sep-08

                                                          Performance                                 Correlation
 Index                           One Month (%) YTD (%)      2007(%)   Annualized(%) Volatility (%)    DJW 5000 DJCBI
 DJHFSB (Event Driven)                   -0.01    -2.13          5.67           5.97          4.86             0.85 0.03
 DJHFSB (Merger Arbitrage)                0.99     1.51         16.12           5.87          4.48             0.34 0.05
 DJHFSB (Distressed Securities)          -0.79    -7.43          0.15           7.63            5.2            0.66 -0.11
 DJHFSB (Convertible Arbitrage)          -0.75    -8.42          2.63            4.8          4.28              0.1 0.16
 DJHFSB (Long/Short)                     -0.63    -2.36         19.79           7.91          9.13             0.64 -0.12
 DJ Wilshire 5000 (DJW 5000)              1.57    -10.3          5.62           6.33         10.72                1 0.05
 DJ Corporate Bond Index (DJCBI)          0.79     0.38          5.24           2.98          3.59             0.05     1




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     Why should We Invest in an Absolute Return Fund


  DJHFSB Returns (%) January 30, 2009 (final)
          Strategy        1 Month 3 Months 12 Months 2007    2006 2005 2004      2003 2002 Cumulative Annualized   Inception
  Distressed Securities    -3.66   -16.58   -36.98   0.15    15.59 6.73 15.46 23.07 0.48       7.25       0.99     12/31/2001
  Equity Long/Short        1.56    -4.75    -11.78   19.79    8.3   3     N/A    N/A   N/A     13.64      3.05     10/29/2004
  Equity Market Neutral    -0.17   -4.94    -7.47    1.54     7.12 1.72   0.79   N/A   N/A     1.14       0.2      6/30/2003
  Event Driven             1.23     -10     -25.55   5.67    12.65 6.52 10.36 17.92 -9.26       9.6       1.3      12/31/2001
  Merger Arbitrage         1.62    2.88     -4.83    16.12    9.28 2.87   3.67   7.63 -1.07    35.12      4.34     12/31/2001




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    Why should We Invest in an Absolute Return Fund:
     Absolute Return Funds- Friends of the Markets
Market Benefits of Absolute Return funds

 It is accepted that Absolute Return funds contribute positively to global financial markets.
  They can provide portfolio diversification for investors since their returns are often less
  correlated with those of traditional investment funds.
 Absolute Return funds contribute to innovation in financial instruments.
 Absolute Return funds also improve liquidity in otherwise low liquid market segments, and
  therefore enhance the efficiency of financial markets. They assist counterparties to reduce or
  manage their own risks.
 They often are activist shareholders who are quick to call for necessary business restructuring,
  improved shareholder value, and better corporate governance.
 Last but not the least, they offer investors greater investment choice through introducing a
  new asset class and are important clients and counterparts for the financial services industry.
 In summary, Absolute Return funds are not the one that are destroying/have destroyed the
  markets; they are the forces that are shaping the markets for better future.
 To gain broader understanding on the issue, please also refer to the Article: “the Case for
  Absolute Return Investing”, provided along with.




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                Why should We Use Quantum Stride Ltd.

 All the three directors between them speak four languages and have a wide array of corporate
  and ultra high net worth individuals contacts. They have hired the investment managers and
  advisor with demonstrable track record of delivering absolute returns.
 Quantum offers one of the most consistent and sustainable ‘Alpha Absolute Return’ fund
  strategies. The bottom-up fundamental Small and Mid Cap stock selection from a huge
  universe of 10,000+ stocks allows the fund to exploit inefficiencies at the company specific
  level (Alpha) and is least dependent on general stock market conditions (Beta).
 Quantum is not confined to GCC or Asian stocks, it gives investors exposure to much more
  deeper and liquid US stocks.
 It is not enough to choose a successful strategy and investment team. Recent experience has
  shown that loss of capital has the most devastating impact on portfolios and this has seen the
  rise of Absolute Return funds dedicated to Absolute returns. Quantum is run specifically to
  avoid the damaging effect of capital losses and uses techniques to hedge market risk and
  maintain exposure to stock specific returns.




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                Why should We Use Quantum Stride Ltd.

 Capital Protection for Investors: Quantum’s philosophy is to extract alpha using more
  conservative exposure than Directional Funds and has designed hedging techniques to
  minimise systematic risks including the use of disaster scenario Portfolio Insurance.

 Superior Risk Management Methodology: Quantum’s risk management methodology is
  designed specifically to address Small and Mid Cap investing. It adjusts to reflect changing
  market conditions and emphasises common sense- capital preservation and liquidity are the
  key priority.

 Finally it is well worth bearing in mind that this is a niche high-return strategy and due to
  capacity constraints Quantum itself will close to new investors once it reaches $500 million.




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                    Strengths of the Quantum’s Approach

 The partners in Quantum believe that the main barrier to entry into this sector is- large funds
  cannot access the Small Cap/Mid Cap stocks due to size and liquidity constraints.

 It is also important to understand the nature of returns in this field. Investing in Small and Mid
  Cap stocks has something in common with private equity investing in that out of every ten
  investments five or six may well have very modest returns, one or two may go seriously
  wrong but one or two have a tremendous effect on the overall performance. There is however
  one very important and positive difference from Private Equity. Given that all the investments
  are listed and that the fund will maintain strict risk control policies the one or two disasters
  will not impact the overall performance as much as in a Private Equity portfolio.




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          How would Quantum Invest: Investment Style

 Core Portfolio of 30-40 Long Positions
    30-40 stocks = <0.4% of investable universe makes it to the live portfolio
    Each portfolio manager’s brief is to find 40 stocks with a min. return expectation of 20 –
      30% over next 12 months
    Investable universe: market cap >$250mn. Our sweet-spot would be $500mn - $2,000mn

 Fundamentally Driven Bottom-Up Stock Pickers
    Fundamentals assessed on mid/long-term horizon with catalysts to crystallise intrinsic
     value within 12-24 months
    Technical analysis used where appropriate to optimise entry/exit points




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          How would Quantum Invest: Investment Style
 Risk-Oriented and Volatility Controlled
    Protection of capital through rigorous risk management is at all times uppermost in our
      mind
    Combination of Alpha (stock) and Beta (portfolio insurance) longs to control risk

 Value-Oriented
    Free cash flow, ROIC, management quality, business model and very basics such as P/E
      and PEG Ratios

 Opportunistic
    Focus on segments (stocks, sectors, countries) where we have an informational
     advantage

 Disciplined
    We stick strictly to the founders/Investment Manager’s specific areas of
       expertise

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       How would Quantum Invest: Investment Process
                                                                       Risk Assessment:
                   Knowing Management,
                      Customers and                                Operational, Financial,
                        Suppliers                                   Valuation, Liquidity




                                                 Fundamental

   Technical Analysis-                           Qualitative &
                                                                                    Franchise Assessment:
Bar Chart, MA, MFI and other                     Quantitative
 Parameters to time the entry                                                       SWOT, Porter 5 Forces
                                                 Stock picking




                    Historical Financial                                Understand Value-
                     Performance and                                     Added: Products,
                      future potential                                 Services, Distribution
                          position                                           Channels

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       How would Quantum Invest: Investment Process
 Proprietary Screens
       We are developing our own screening software that uses over 20 fundamental valuation,
          operational, technical, liquidity and credit-scoring parameters per company to create a
          forensic footprint for each stock we investigate. We have limited the number of
          parameters to around 20 as more just adds to complexity and creates more whiplash
 Personal Contacts
       Over the past years we have developed a valuable network of professional contacts
       Local and specialist brokers and analysts who have proven themselves to be reliable
          sources
       Industry sources and consultants
 Specialist Sector Magazines
 Company and Industry Conferences, Trade Shows, Exhibitions
 Local Press, Company and Investor Websites
       A great deal of information is only available in the local language;
          we speak both Arabic and English fluently
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    How would Quantum Invest: Portfolio Construction
 Structured and Disciplined Investment and Risk Management Process
 Highest Conviction Ideas Go into the Portfolio
 Geographical Diversification:
    Investment in GCC, USA, Brazil, India and China (GUBICTM)
 Specialist on Each Market:
    For USA, Brazil, India: Global Emerging Growth Capital
    For China: Gemini Asset Management Limited
    For GCC: Quantum Stride Investment Management Company
 Benefit of three portfolio managers – ideas are double-checked – both Investment
  Manager/Sub-Manager & Investment Advisor must agree
 Snapshot of Expected Portfolio
    30 to 40 individual stock position
    Ten countries
    Average portfolio beta 0.6 to 0.8
    30% to 50% of stocks investments will go into Shari’a Compliant Stocks
    Liquidity: 95% of positions should be capable of being liquidated within
      one day, the remainder in less than three days

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        How would Quantum Invest: The Long Decision

 Longs

       Highly free cash flow generative:           Can finance growth without reliance on
                                                    external funding
       Proven management:                          Track record of creating shareholder value
       Strong balance sheet:                       Net cash/low gearing/good tangible asset
                                                    backing
       High return on operating assets:            Generates ROA > COC or turnaround situation
       Strong business franchise:                  High barriers to entry, niche or monopoly

       Low valuation:                              FCF yield, PE, BV, Div. yield,
                                                    EV/EBITDA, PEG
       Catalysts:                                  Identifiable catalyst to trigger revaluation




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    How would Quantum Invest: Opportunistic Trading

 Opportunistic Trading

       High Volume Shares:                         High enough volume is traded, so that trades can
                                                    be entered and exited with ease
       Informational Advantage:                    Focus on segments (stocks, sectors, countries)
                                                    where we have an informational advantage

       Usage of Put Options/Derivatives:           To take advantage of bearish market or to
                                                    provide gearing when required

       Trending Stocks:                            Stocks with well defined trend (as shown by
                                                    technical analysis) will be chosen
       Catalysts:                                  Identifiable catalysts to trigger an up/down move




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                                                     Directors

•       Dr Sandeep Gupta has more than seven years of experience in equity research, private equity
        and investments, besides this he has an MBA from number one Business School in Asia
        Pacific (Melbourne Business School). He also has pursued a ‘Hedge Fund Programme’ from
        London Business School. Dr Sandeep has worked in capacity of a Financial Analyst with
        Research Group at Global Investment House, which is a leading investment company in the
        ME region. He has diverse geographical experience having worked in Mumbai (India),
        Melbourne (Australia) and Kuwait. He is also working as a Chairman and MD of Quantum
        Stride Singapore Pte. Ltd. a company engaged in corporate finance and private equity
        advisory. By virtue of his MBA and working in various countries, Dr Sandeep has developed
        an extensive amount of networking contacts spreaded over Australasia, South East Asia and
        Middle East. He brings with him vision of the company.




    Turning Millionaires into Super-MillionairesTM     Quantum StrideSM                          28
                                                 Directors

 Arvind Desai has more than 15 years of experience in equity research and analysis. He has
  worked in capacity of Senior Financial Analyst at Global Investment House. He has vast
  experience of more than 10 years in technical analysis. Besides this, he set up a research
  division for ICP Securities Ltd. and worked there as head of research for about five years. He
  also established International Business Division for A&A Advisory resulting in multifold
  growth for the company. His experience in technical & fundamental analysis makes him
  astute to pick stocks in line with Quantum Stride’s strategy.
 Manvinder Singh brings along with him a vast experience of over 13 years in corporate
  finance with expertise in debt capital markets, Islamic finance and private equity. Manvinder
  has headed the corporate finance practice at AFG Capital, Singapore and also held an advisory
  position of Associate Director at Tanmiyat Capital. His credentials include a B-Tech from
  Indian Institute of Technology, Kanpur followed by a dual Masters with an MBA in Finance
  from Melbourne Business School & Masters of Science from National University of
  Singapore. His expertise and networks in GCC and Asia are well regarded and will be useful
  for the Fund.




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       Placement Agent: Quantum Stride Singapore Pte.
                           Ltd.
 Quantum Stride Singapore Pte. Ltd. will act as a Placement Agent to the Fund.

 Quantum Stride Singapore Pte. Ltd is an advisory firm offering advice to corporates and high
  net worth individuals to meet their financial goals at competitive terms in full confidentiality.

 Placement Agent excels in all corporate finance transactions - including domestic and cross
  border mergers & acquisitions, IPO advisory, private equity, distressed assets, corporate &
  capital restructuring.

 Its strategic alliance with Gulf banks and PE players, offer the company the unique advantage
  of offering corporate access to funds from opulent Middle East region to finance their growth.

 The company via its representatives will act as an additional point of contact to the
  investors in the Fund.




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           Fund Administrator: Apex Fund Services Ltd.

    Privately owned parent company, registered in Bermuda (regulated by the Bermuda
     Monetary Authority (BMA)).
    Globally located offices in Bahrain, Bermuda, China, Cyprus, Dubai, Hong Kong, Ireland,
     Isle of Man, Malta, Mauritius, Singapore and USA.
    120 staff worldwide.
    140 funds administered by Apex Group Companies.
    Over $8.0bn Assets Under Administration.
    Fully integrated systems combined with web-based reporting.
    A truly independent Administrator with no ties to other third party service providers.
    2008 Hedge Funds World Awards, Middle East – Best Fund Administrator.




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             Custodian: Bermuda Commercial Bank Ltd.

 The Bank was established more than 40 years ago in 1969. The Bank follows a conservative
  risk management policy. It has established a policy of minimizing its own corporate risk by
  following an extremely conservative policy in balance sheet management.
 The Bank has 71% tier 1 capital adequacy (as at year-end 2008) compared to the
  international standard of 10%. The Bank does not take risk positions on its own account and
  runs a matched-book policy with its deposits.
 Ownership: The Central Bank of Netherland Antilles (CBNA) has got controlling stake
  (~50%) in the Bank, which guarantees stability of the Bank and safeguard to the funds of its
  customers.
 Listing: The Bank is a listed entity on the Bermuda Stock Exchange.
 The Bank uses platform of State Street, NY, (http://www.statestreet.com) which ensures
  efficient and effective provision of services. Notably, State Street is one of the members of
  group of top 10 Global Custodians.




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          Investment Advisor: Global Emerging Growth
                       Capital (GEGC)

    A holding company that has operations in various financial activities

    Since 1980, the Advisor has on average doubled client money approximately every 4 to 5
     years

    Long proven record with savvy to pick big winners on a risk-adjusted basis

    Leading performer among competitors

    Cutting edge investment discipline.




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                                Investment Advisor: GEGC

 GEGC is managed by V. John Palicka, CFA, CMT who is a Chartered Financial Analyst and
  has an MBA from Columbia University.

 Mr. Palicka also managed over $1.5-billion in growth stock accounts, mostly in smaller-cap
  stocks in his 11 years (12/31/79-1/31/91) at The Prudential Insurance Co. During his tenure ,
  Prudential's Small-Cap funds showed a premium of about 600 basis points per annum over the
  Russell 2000, and also a good premium over the competition as follows: Pru accounts 18.4%
  p.a.; Russell 2000 12.5% p.a.; and, Lipper Small Cap funds 14.0% p.a.




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                            34
                                Investment Advisor: GEGC
                                          Picking Up the High Growth Stocks

Low Growth Rates




High Growth Rates


                   Creative Judgment Required             Massive Data Required



Turning Millionaires into Super-MillionairesTM           Quantum StrideSM         35
       Investment Manager: Quantum Stride Investment
                   Management Company

 It’s the management company promoted by the Directors of the Fund.

 A Specialist Fund Manager.

 Manages alternative instruments, particularly Absolute Return Funds.

 Main clients will be - high net worth individuals and institutional investors in Middle East,
  Asia, Europe and USA.




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                            36
Team @ Quantum Stride Investment                                    Management
Company




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM            37
               Sub-Manager: Gemini Asset Management
                             Limited
 It’s a private limited company based out of Hong Kong. The Sub-Manager is in business since
  2005.

 Despite a bad 2008 (-27.2%), it has had impressive returns of >700% over last four and a half
  years (a compound return of 59.9% p.a.).

 Its objective is to obtain long term capital appreciation in both bull & bear markets with focus
  on the Greater China markets, including H Shares, A-Shares, B-Shares and any related China
  markets stocks listed on international stock exchanges.

 Excellent stock-picking skills and rigorous risk management control are applied
  simultaneously to arrive at intelligently sound investment decision.




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                               38
               Sub-Manager: Gemini Asset Management
                  Limited - Snapshot of Performance

                                               Monthly Return                                   Since
      Jan     Feb   Mar    Apr    May Jun      Jul    Aug     Sep    Oct    Nov   Dec   YTD     Inception
2005** 6.62% 9.43% 2.01% 2.96% -2.25% 1.56% 2.32% 4.15% 3.42% -3.80% 4.01% 1.89% 36.70% 36.69%
2006** 13.80% 2.63% 1.59% 7.17% 5.26% 5.49% -1.99% 1.15% 5.34% 4.54% 12.38% 11.33% 92.85% 163.61%
2007** 18.33% 10.06% 5.38% 20.44% 13.38% 2.28% 9.07% 10.69% 11.59% 8.90% -3.89% 1.89% 175.39% 625.95%
  2008 -0.30% 2.91% -6.73% 5.54% -0.10% -4.89% -1.74% -6.25% -14.53% -16.11% 4.82% 9.63% -27.16% 428.78%
  2009 -2.25% 0.70% 15.90% 11.55% 15.43% 6.36%                                            56.23% 726.13%
** Trading with proprietary capital




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                                       39
               Sub-Manager: Gemini Asset Management
                  Limited - Snapshot of Performance




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM   40
           Shari’a Advisor & Auditors: Shariyah Review
                          Bureau (SRB)
   The first specialized independent entity providing Shari’a review services
   Incorporated under the laws and regulations of the Kingdom of Bahrain and licensed by the
    Central Bank of Bahrain. Guided by a Shari'a Board and consultants including: From Saudi
    Arabia: Sheikh Abdullah Al Maniya, Dr. Abdullah Al Musleh and Dr. Mohammed Al Gari,
    Prof. Mohammad Al Jarf, Dr. Salah Al Shalhub, From Bahrain: Shekh Osama Bahar, Shekh
    Waleed Al Mahmood, Dr. Naji Al Arabi, Shekh Mohsen Al Asfour, Dr. Ibrahem Al Merakhi,
    From Egypt: Dr. Yusuf Qassim, Dr. Mhammad Baltaji, From Sudan: Dr. Hammad Mohammad
    Ahmad, and Shekh Ibraheem Ahmad Al Dareer, From UAE: Dr. Ahmed Al Haddad.
    An associated member of the Accounting and Auditing Organization for Islamic Financial
    Institutions (AAOIFI)
    Member of the General Council for Islamic Banks and Financial Institutions




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                          41
           Shari’a Advisor & Auditors: Shariyah Review
                     Bureau (SRB) - Clients




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM   42
                                  Auditors: Ernst & Young

 A truly global organization with 144,000 people in 140 countries, committed to quality.
 A Selection of Awards
• Teleos
  Most Admired Knowledge Enterprise Award (Global, 2008)
• Trendence
  European Student Barometer Top 5 European Employer (Germany, 2008)
• FORTUNE Magazine
  100 Best Companies to Work For (USA, 2009)
• LexisNexis Taxation Awards
  Best Big 4 Tax Firm (UK, 2008)
• The Sunday Times
  Best 20 Big Companies to Work For (UK, 2008)
• Equal Opportunity for Women in the Workplace Agency
  Australian Employer of Choice for Women (2008)
• Financial Times & Mergermarket M&A Award 2008
  Financial Advisor of the Year – India 2008


Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                           43
                                  Auditors: Ernst & Young

 One of the big four auditors:


                     Firm                  Revenues         Employees         Fiscal Year
             Deloitte Touche
                                                 $27.4bn            165,000            2008
             Tohmatsu
             Pricewaterhouse
                                                 $26.2bn            163,000            2009
             Coopers
             Ernst & Young                       $24.5bn            135,000            2008
             KPMG                                $22.7bn            135,000            2008




Turning Millionaires into Super-MillionairesTM        Quantum StrideSM                        44
                                                 Listing Plan

      The Directors plan to list the Fund at Cayman Stock Exchange (CSX) in 2011. However,
       such listing will be subject to the regulatory approval.

      Benefits of Listing:

       1. Increased Liquidity:
           A. Investors can trade their shares in the Fund at CSX directly, little waiting period.

             B. CSX has approved organization status by the London Stock Exchange (the LSE).
             This means that securities listed on the CSX are eligible for trading in the LSE's
             international equity market and for quotation on the SEAQ (Stock Exchange
             Automatic Quotation) international trading system.

       2. Increased Transparency:
           Quotes are directly available from stock exchange, Fund’s operations are closely
           scrutinized by Cayman’s authority.




Turning Millionaires into Super-MillionairesTM      Quantum StrideSM                                 45
                                            Fund Particulars
 Professional fund incorporated as a business company in BVI; recognized by BVI Financial
  Services Commission
 Stand alone fund
 Open ended fund
 Subscription: The “minimum initial subscription” to the Fund is US$500,000 or such other
  amount, as the Directors may determine from time to time being not less than US$100,000.
  The minimum incremental subscription to the Fund is US$100,000.
 Lockup: one and a half year to two and a half years, depending on month of subscription
 Liquidity: quarterly (Two months notice period)
 Reporting and disclosure: performance (NAV)will be reported every month;
  ten stock positions and portfolio allocation on percentage basis will be disclosed with
  percentage gain/loss for the period defined (last month)
 Number of shares: 50,000,000 of $10 each
 Fees:
        Management fee: 2% of NAV; (To be charged every month)
        Performance fee: 20% of the profit above the hurdle rate (5% p.a.); (To be charged every
        quarter)
 Number of investors at launch: 20 to 40
 Fund size (Expected)
     At launch: $20 million
     In a year: $50 to 100 million
Turning Millionaires into Super-MillionairesTM    Quantum StrideSM                            46
                                   Channels of Distribution

 Directors: The Directors themselves have been involved in function of corporate finance and
  have experience of raising money to the extent of $50 to100mn for certain projects.

 Placement Agents:
        A. Quantum Stride Singapore Pte. Ltd.
        B. Individuals: The Fund is hiring 10 placement agents for the purpose. These are
        young professionals working in leading companies in the region and are themselves
        from affluent background and well connected in the GCC region.

 3PM      Firms:    Based     out     of    NY     and      London;     Claude     Shannon
  (http://www.claudeshannon.co.uk) is already engaged for the purpose.

 Banks and Broking Houses: We will contact banks and broking houses mainly in Kuwait,
  Qatar, Bahrain, Dubai and Abu Dhabi to help us in marketing the Fund, within the regulatory
  limits.




Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                          47
                               Frequently Asked Questions

1. Why the Fund (Quantum Stride Ltd.) is GUBICTM; Why It’s Not a Global Fund?
    It’s because GUBIC i.e. GCC, USA, Brazil, India and China already provide substantial
    geographical diversification; adding more countries would add to the operational costs and the
    additional costs are likely to exceed the additional benefit from whatever extra diversification
    may come by adding the additional countries.

2. How is Quantum Stride Ltd. Different/Better from the Rest?
    This is covered in detail in slide no. 5 to 8. A few of them are as follows:
 World’s very first GUBICTM fund, providing unmatched geographical diversification with
    investments in GCC, USA, Brazil, India and China.
 Capital Protection for Investors
 100% hedging with Put Options and other derivatives, hence very little downside, which will
    be equal to the cost of the derivatives (expected to be <7% of the Assets under Management).
 Usage of Shari’a Compliant Stocks for Better Diversification:
 High Reward/Risk Ratio (>3.5) to the Investors
 Investments in Mid & Small Cap stocks to provide maximum growth potential to the portfolio
 Specialist Advisor/Manager for each market
 The Fund offers a vehicle of transparent valuation and strategy, and consistent
    management.


Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                                 48
                               Frequently Asked Questions
3. The Fund is Long Only; Wouldn’t It Lose Opportunity to Reap Profit in a Bear (Falling)
     Market?
     No, it’s not so. The Fund is free to buy Put Options that allows it to reap benefit from the
     bearish market (without the risk of unlimited losses as might occur with shorting of
     securities).
4. The Lock-up Period is 1.5 to 2.5 Years, isn’t It on High Side?
     Yes, it is. It’s mainly to safeguard investor’s interest. We have introduced a long lock-up
     period to prevent panic withdrawal on fund that is possible when market would tumble again.
     We don't want all the investors to get hurt because of a few panicky one (as we know we'll be
     safe because of 100% hedging we will undertake; though, this point can be difficult to explain
     to a few individual investors when market start coming down thick and fast). Nevertheless,
     lock-up can always be shortened depending on stature and quality of investor.
5. Do You Have Front Load?
     No, we don’t.
6. Is the Fund Open/Close ended?
     It’s open ended.

 For further clarifications/queries, please contact Dr. Sandeep Gupta –
  sgupta@quantumstride.com.sg



 Turning Millionaires into Super-MillionairesTM   Quantum StrideSM                                49
                                                 Glossary

 GUBIC: It’s an acronym that stands for “GCC Countries, USA, Brazil, India and China”; it
  refers to a niche diversification strategy used by Quantum Stride (first time ever by any fund).
 3 PM Firms: Third Party Marketing Firms, engaged in marketing of funds to the investors.
 Absolute Return Fund: It encompasses all funds that are not benchmarked against any index
  such as S&P 500, FTSE 100 etc. It’s also a commonly used term to describe ‘Hedge Funds’.
 Beta of a Stock: It’s the measure of how the expected return of a stock/portfolio is correlated
  to the return of whole stock market(s). It measures sensitivity of the stock price to the market
  movements.
 Alpha of a Stock: A measure of performance on a risk-adjusted basis. Alpha takes the
  volatility of a stock/portfolio and compares its risk-adjusted performance to a benchmark
  index. The excess return of the stock relative to the return of the benchmark index is a stock's
  alpha.
 P/E of a Stock: It’s a ratio of price of the stock/earnings per share.
 PEG: It’s a ratio of P/E of the stock to growth in earnings (in %) on annual basis.
 ROIC: Return on Invested Capital



Turning Millionaires into Super-MillionairesTM     Quantum StrideSM                             50
                                                 Glossary

 Volatility: It’s measured as Standard Deviation for a given period ranging from days to years;
  usually one year to five years period. It’s also a way to quantify the risk in a portfolio.
 Correlation: Statistically, it indicates the strength and direction of a linear relationship
  between two variables. For investor’s purpose, it’s a measure of dependence of price of one
  asset class on the price of the other asset class; though, a lower correlation among the asset
  class or stocks in the portfolio is considered a favourable characteristics in terms of riskiness
  of the portfolio.
 GCC: Gulf Co-operation Council, consisting of six countries, namely: UAE, Saudi Arabia,
  Kuwait, Qatar, Bahrain and Oman.
 Mid Cap Stocks: Stocks with Market Capitalization of US$ 1 billion to 5 billion.
 Small Cap Stocks: Stocks with Market Capitalization of US$ 0.25 billion to 1 billion




Turning Millionaires into Super-MillionairesTM     Quantum StrideSM                              51
                                           Important Notices
   This document has been written for illustrative purposes and as such is neither a recommendation with
   respect to the purchase or sale of any securities nor does it contain the necessary information to form the
   basis of a decision to invest in any investment product (this document should be read in conjunction
   with ‘Prospectus’ of the Fund). Quantum Stride, its affiliates, their respective officers, directors, agents
   nor employees recommend any investment to readers of this document. The material contained herein is
   based upon proprietary information and is provided purely for reference and as such is confidential and
   intended solely for those to whom it has been provided by Quantum Stride. Quantum Stride has not had
   the information contained herein independently verified, nor does it represent it as necessarily accurate
   or complete. Quantum Stride makes no warranty, express or implied, regarding this information and
   shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy,
   completeness or use for any purpose. Readers should not rely upon this document to make any
   investment decisions, and should note that past performance is not an indication of future performance.
   The material contained herein is for private use only. Its text, statistical data and graphs or any portion
   thereof may not be stored in a computer, published, rewritten for broadcast or publication or
   redistributed in any medium, except with the express written permission of Quantum Stride. Quantum
   Stride will not be liable for any inaccuracies, errors or omissions in the material or in the transmission or
   delivery of all or any part thereof or for any damage arising from any of the foregoing.

    For further details, please contact:
    Dr. Sandeep Gupta,
    Chairman,
    sgupta@quantumstride.com.sg
Turning Millionaires into Super-MillionairesTM     Quantum StrideSM                                          52
Sunday, July 22, 2012   Quantum StrideTM 2008   54

				
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