The Momentum Group
Alternative Investment Specialists
Group History
• 1986 - Group Founded
• Offices in London, Bermuda, Hong Kong, Australia and Israel
• Offer a proven range of funds with defined strategies, risk/return and correlation profiles
Group History (Cont.)
• Products included:-– First guaranteed derivative / hedge fund (1986)– First Japanese guaranteed hedge fund (1988)– First guaranteed currency hedge fund (1989)
Group Product Strategy
• 1991 Momentum fund range launched using:– pre-defined return targets– pre-defined volatility targets
• 1991 to 2000 Momentum develops complementary range of 20 funds covering the risk:reward spectrum
Current Products
AllWeatherOasis
AssetMasterSandalwoodDebtMaster
DebtMaster ExcelAllWeather Excel
Merger Opportunities
RainbowUniversal Hedge
US SpecialistMacroMasterStockMaster
USMasterValueMaster
Low Volatility
10%-15% pa Target Return
Limited Capital Market Exposure
Market volatility
20%-25% pa Target Return
Hedged Capital Market Exposure
MomentumThe Present Day
• US$ 750 million under management
• 20 Fund of Funds
• 2 Excel Funds
Hedge funds come in various guises. They can be aggressive or they can be conservative, matching the profile of the investor.
ALLWEATHER
For All Markets
Objectives
• 10 - 15% per Annum
• Consistent Growth
• Minimal Losses
• Low correlation to capital markets
Consistency
• AllWeather’s investment managers have been combined to create a portfolio with the best chance of making money in all market conditions
• AllWeather has shown only three losing months since inception in May 1995
AllWeather
• Is insulated from market fluctuations
• Is risk averse
• Is straightforward
• Is designed for absolute returns
AllWeather - The Strategies
• Momentum AssetMaster
• Momentum USMaster
• Momentum Sandalwood
• Momentum DebtMaster
• Momentum Oasis
• Momentum Merger Opportunities
Momentum AssetMaster
• Highly consistent returns
• Volatility arbitrage• 5 losing months in 8
years• Short term futures
trading 100
150
200
250
300
350
June-91
June-93
June-95
June-97
June-99
Momentum USMaster
• Long / Short US Equities– General
– Sector Specialists
• Actively Hedged
100
120
140
160
180
200
220
240
260
280
300
320
340
Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00
Momentum DebtMaster
• Asset-backed Lending• Limited Market Risk• Highly Collateralised• Highly Consistent
100
110
120
130
140
150
Apr-96
Oct-96
Apr-97
Oct-97
Apr-98
Oct-98
Apr-99
Oct-99
Apr-00
Momentum Sandalwood
• Event Driven Strategies– Bankruptcies
– Workouts
– Mergers
– Bids
• Low Market Correlation 100
110
120
130
140
150
160
170
Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00
Momentum Oasis
• Arbitrage Strategies• Low market risk• Exploiting mispricing
80
90
100
110
120
Oct-97
Feb-98
Jun-98
Oct-98
Feb-99
Jun-99
Oct-99
Feb-00
Merger Opportunities
• Merger Arbitrage• Market Independent • Deal Orientated• Low Market Volatility
100
101
102
103
104
105
106
107
108
Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00
AllWeather…...Putting it all together
Momentum AllWeather Fund
100
110
120
130
140
150
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170
180
Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00
• Three Losing Months
since May 1995• Annualised return
• 11.31%
• Volatility• 4.00%
• Sharpe Ratio• 1. 578
• Strategies: 6
AllWeather Offers Investors
• An investment independent to a traditional portfolio
• Highly consistent returns
• A high level of comfort
• An alternative asset class
• Access to a diversified group of the world’s finest investment managers
Strategic Highlights
• Momentum structures range of diversified macro-economic and specialist equity hedge funds
• Momentum is unique in its development of a range of hedged products specifically targeting low volatility, absolute returns
Why hedge funds?
• Markets go both up and down– Stocks can be bought or sold short
• Markets can be volatile– Hedge instruments can trade volatility
• Markets can be flat– Many instruments are not market dependent
Alternative Investment Strategies
• Tailored absolute return targets
• Manager skill - not market driven
• New asset class– Greater portfolio diversification– Reduce portfolio volatility– Protection during market crises
“If you start at the right time, buying and holding is great.
If you start at the wrong time, it is hell”
Michael Goldman
Excel
For Extra Returns
Concept
• Application of moderate leverage
• Return enhanced to target 15 - 20 % p.a.
• Maintains low volatility
Comparison
AllWeather vs. AllWeather Excel
100
110
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Apr-95Jul-95
Oct-95
Jan-96
Apr-96Jul-96
Oct-96Jan-97
Apr-97Jul-97
Oct-97
Jan-98
Apr-98Jul-98
Oct-98
Jan-99
Apr-99Jul-99
Oct-99
Jan-00
Apr-00
AllWeather ExcelAllWeather
Risk/ReturnAnnualised
ReturnVolatility
Sharpe Ratio
Diversified: ConservativeMomentum AllWeather Fund** 11.31% 4.00% 1.58 Momentum Sandalwood Fund 9.58% 4.64% 0.99 Concentrated: ConservativeMomentum AssetMaster Fund ** 15.04% 4.23% 2.37 Momentum DebtMaster Fund 8.69% 2.49% 1.48 Momentum USMaster Fund 21.44% 15.68% 1.05 Diversified: More AggressiveMomentum Rainbow Fund** 9.24% 9.48% 0.45 Momentum Universal Hedge Fund 6.26% 14.46% 0.09 Concentrated: More AggressiveMomentum MacroMaster Fund ** 0.61% 23.01% (0.19) Momentum StockMaster Fund ** 11.71% 16.95% 0.40 Momentum ValueMaster Fund 16.32% 16.77% 0.68
Dealing
In order to invest into the Momentum range of funds, application forms and cleared monies must be received 3 working days prior to month end.