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Executive Summary Noctua Partners (the “Firm”) was established in March 2009, is an independent, privately-owned asset management and investment advisory firm, committed to creating exceptional value for our clients. The firm offers a complete array of services through portfolio management, structuring, advisory, risk management and monitoring services with superior execution capabilities through our strong institutional relationships and global presence. The senior team has been involved in the development of the emerging market asset class over the past few decades by actively investing, interacting with regulators and policymakers and completing transactions in the region Noctua has the team that combines the appropriate expertise to manage capital in a highly volatile environment and successfully profit from market dislocations Noctua Partners focuses on providing dedicated managed accounts to its institutional client base * Noctua will enhance risk adjusted returns through the use of more effective management strategies and tools. The tools we have at our disposal to execute this model include quantitative and qualitative analysis, macroeconomic models, technical and correlation analysis, among others.
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* We provide investors with a flexible investment approach through managed accounts. These accounts are tailor made investment strategies defined by the risk profile and constraints of each client. This approach allows for heightened levels of transparency, a clear asset allocation, and client control of the assets.
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Co-Founder & CEO:
Fernando Iribarne, COO:
Marcelo Dicugno
Head of Consulting & Adviosry:
Prior to joining Noctua Asset Management, Mr.Di Cugno was country and Latin America Regional CFO for Zurich Financial Services, where he was also responsible for the Portfolio Management of country and regional portfolios overseeing up to $6Bn portfolio. Previously, he served as CFO, Financial Manager, Structured Finance VP, and Financial Planning Manager in companies like Zurich, Carrefour, and Cargill among others. Along his career he was responsible for Strategic Planning, Business Monitoring, Expense Re-engineering and Control, as well as Business Model elaboration and execution. His background includes interacting and leading multiple cultures (US, LA and Europe). His credentials include a Masters in Corporate Finance and a Certified Public Accountant from Buenos Aires University.
Samuel Covert Senior Analyst
Prior to joining Noctua Asset Management, Mr Covert was a Senior Vice President at Guggenheim Partners, responsible for all European based portfolios. In this capacity, Mr Covert was the head of the portfolio management group in the European office, based in Switzerland. Mr Covert began his career at Guggenheim as an analyst in the Investment Advisory Group. Mr Covert graduated from the Universty of Miami with a BsC in Computer Engineering.
Rodrigo Godoy Senior Analyst
Prior to joining Noctua Asset Management, Mr. Godoy was an Equity Analyst for the Emerging Markets Group at Stark Investments, primarily responsible for all analysis and trading in Latin American equities. Previously he worked at JP Morgan’s Investment Bank in New York for the Latin American Advisory Group. Mr. Godoy graduated Phi Beta Kappa from Vanderbilt University with a BA in Economics.
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Prior to joining Noctua Asset Management, Mr. Iribarne was the Director of Strategic Planning, Quality and Processes of Standard Bank Argentina. Previously, Mr. Iribarne worked at BankBoston Argentina and served as senior relationship officer for the Corporate Division and as Strategic Planning, Quality and Processes Director for the bank. Mr. Iribane received a bachelor’s degree in accounting from Universidad de Buenos Aires.
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Team Bios
Martin Guyot Prior to joining Noctua Asset Management, Mr. Guyot was the Director of Emerging Markets Trading at Stark Investments. Previously Mr. Guyot served as a senior Managing Director at Guggenheim Partners, responsible for building and managing the International Multi Family Office Product and Service Department. Mr. Guyot began his career as equity and fixed-income trader at Cargill in Buenos Aires before becoming head of Latin American, Asian and Eastern European Fixed-Income and Equity Trading at Cargill Financial Services in Minneapolis and London. Mr. Guyot received a bachelor's degree in Business Administration from the Universidad de Buenos Aires and a master's degree in Finance from Centro de Estudios Macroeconomicos de Argentina.
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Noctua Partners
platform enables efficient communication,
execution and portfolio management capabilities
Noctua Partners Asset Management
SPV I
Portfolio Client #1
Portfolio Client #2
Portfolio Client #3
Portfolio Client #4
EM / Macro Managed Accounts
SPV III
High Net Worth Individuals Direct acces to capital and transaction sponsors (HNWI´S)
• Information Flow • Investment Opportunities
Institutional Accounts Information Flow Key players Portfolios
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SPV II
Street and Market
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Noctua Partners has an efficient and transparent managed account platform that enables for diligent execution • Noctua Partners has established partnership with ACP Securities that allows access to a competitive global securities trading platform for fixed income and equity securities. • Investment and Risk Management Strategy will be defined and managed by Noctua according to its market views and fully aligned with the institutions requirements.
Investment Management Agreement
Noctua Partners Asset Management
Monthly Position reports Performance report Daily Execution Trade Tickets & Rebalancing
EM / Macro Managed Accounts
Daily Position Reports
Clearing and Custody of Securities SECURITIES
Custodian Bank
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Broker Dealer
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Experience
• The senior members of the EM team have been active investing and completing transactions in the region since the early 90s, and had first hand exposure to all developments in the asset class over the past 15 years. •
Given the unstable nature of EM, the experience gained in each crisis bring unique insights into the investment process.
• This historical perspective is largely absent from the current EM investor base and is an important differentiating factor.
Analysis
• Deeply rooted and rigorous analytical process encompassing:
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Noctua Partners combines experience, relationships and analytical capabilities to navigate current market conditions
* Extensive analysis on business cycles, government intervention, political and macroeconomic factors that affect exchange rates and interest rates in order to identify opportunities. * Top down macroeconomic and market analysis. * Technical analysis. • Regular investment meetings and committees to formalize and monitor investment recommendations
• Extensive senior level relationships throughout the region: * Access to unique local investment insights * Access to opportunities
differentiated
investment
• Partnerships that facilitate investors to navigate the different phases of the EM investment cycle
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Relationships
Well structured team with diverse and complimentary backgrounds, solid investment process with clear accountability
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Investment team combines economic, fundamental, technical and market positioning analysis to construct portfolio Economics/Valuation
Technical's Technical indicators:
Macroeconomic view:
•The process of analyzing market action and using past data on charts to attempt to forecast the highest likely outcome of future trends
• Analyze global trends through macroeconomic indicators and policy actions world wide. • Focus on evaluating historical macroeconomic data as well as forward looking projections across regions.
•Technical analysis is used to identify new trends, adding timing and discipline to portfolio execution.
Market Positioning Market positioning: • Analyzing current market sentiment across markets globally • Evaluating the fear/greed emotions that induce selling when markets are falling and buying when are markets are reaching new highs
Investment Themes Analysis of these themes dictates portfolio construction
Portfolio Construction
• Latin American High Yielding • Latin American Investment Grade
Emerging Market FX Portfolio • Latin American Currencies • Eastern European Currencies • Asian Currencies
Global Macro Portfolio • Fixed Income • FX • Equities • Commodities
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Emerging Market Fixed Income Portfolio
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Managed Accounts gives complete transparency, mitigating significant investor risks
Increased in liquidity with Reduction in Asset concentration
Pre-defined terms and risk parameters that are actively monitored Enhanced risk management
More reliable and frequent liquidity
Assets segregated from managers with independent custodians
Liquidity
Control
Managed Account Structure Transparency
Independence
Independent Valuation and methodology Independent governance framework
Transparency with position level data Enhanced transparency to better implement overlays and hedges
Mitigation of operational risks
Devoid of costly sales/tax loads, distribution fees and marketing fees
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Actively managed liquidity
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Noctua follows a stringent
Investment Process
to effectively construct the portfolio
• Presence and strong networks in Latin America, Europe and US. • Sell Side Research and Analytics • Internal Analytical tools • External proprietary market research.
Portfolio Construction
Investment Ideas And Portfolio Construction • Macro trading perspective from a top down Analysis • Market dislocations within Emerging Markets due to Global events • Analysis of the business cycle, government intervention, political and macroeconomic factors that affect exchange rates and interest rates
Implementation • Noctua implementation of trade ideas through most effective and liquid asset • Top execution prices • Optimal trades sizes • Target profit
• Investment opportunities across the region • Selection of most attractive opportunities with favorable risk/reward profile • The team looks to shift the weightings of the portfolio to benefit from the implications of the thematic insights
Risk Management • Risk Management systems that include Bloomberg analytics • Key sensitivities and stress tests are closely monitored
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Platform Resources
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Noctua Partners
Emerging Market Managed Accounts Emerging Market Investment Objective • Noctua seeks to deliver an actively managed and risk-controlled portfolio of Emerging Market sovereign fixed income securities • Identify the most attractive opportunities in global Emerging Market Fixed Income • Disciplined investment process which considers all EM markets in a global context in order to opportunistically invest in the most attractive markets to build a diversified portfolio providing effective risk-adjusted returns • Local presence and strong networks in Latin America allows a unique understanding of developments in the region
Fundamental Analysis
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• Noctua heavily analyzes the business cycle, government intervention, political and macroeconomic factors that affect exchange rates and interest rates in Emerging Markets in order to identify opportunities where the positive fundamentals of the country are not fully reflected in the relative value of the credit • The team also conducts a bottom-up strategy in selecting the most attractive opportunity by fundamental research on each security where we carefully determine if the risk adjusted cash flows of the particular security merit such an investment • The Portfolio will be constantly analyzed in order to determine if the portfolio of securities may be sold to take advantage of a better investment opportunity because the current allocation no longer represents an attractive risk/reward profile as there may be a perceived deterioration in the credit fundamentals of the issuer • Analyze local currency fixed income instruments where FX can also be treated as a separate asset class in order to help manage the overall risk profile and to enhance returns
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Disclaimer
And Important Information The financial information contained in this report is hypothetical and do not represent the results of actual investments. All information provided in this material is for informational purposes only and is not intended to be, nor should it be considered to be an advertisement or an offer or a solicitation of an offer to buy or sell any securities. The opinions provided herein have been based, or have been obtained from sources believed to be reliable. No representations expressed or implied or guarantees can be made as to the accuracy, timeliness or completeness for such information and opinions. Past performance should not be taken as an indicator or guarantee of future performance, and no representation or warrantee is made regarding future performance. Performance information does not reflect market factors that might have had an impact of Noctua’s decision making when using the strategy to manage actual client accounts. Past performance of indices, benchmarks or market indicators of asset classes does not represent actual returns or volatility of actual accounts, and should not be viewed as indicative of future results. This information includes statements that are not purely historical in nature but are “forward-looking statements.” These statements may include, among other items, projections, forecasts, estimates of income, yield of return, future performance targets, anticipated portfolio composition and specific investment strategies. These forward-looking statements are based upon certain assumptions and are necessarily speculative in nature. The assumptions upon which forward-looking statements are based may not be stated herein. Actual events are difficult to predict, are beyond Noctua’s control, and may differ from those assumed. In particular, the Investment Advisor may modify the portfolio investment strategy described herein to respond to changing market conditions. All forward-looking statements included are based on information available on the date hereof, and Noctua and its affiliates do not assume any duty to update any forward-looking statement Certain valuations are derived from proprietary models based upon well-recognized financial principles and reasonable estimates about relevant future market conditions. Valuations based on other models or different assumptions may yield different results. Noctua expressly disclaims any responsibility for (i) the accuracy of the models or estimates used in deriving the valuations, (ii) any errors or omissions in computing or disseminating the valuations and (ii) any reliance on or uses which the valuations are put. Note that performing the calculations of the present value cash flows for some instruments, it may be necessary to make estimates about future market conditions. All Noctua research is subject to a disclaimer included in all research. Any materials excerpt or summarized from a full research report are subject to the terms of the disclaimer. The information in this report, including research, is not intended for distribution to, or use by, any person or entity in any jurisdiction or country contrary to local law or regulation.
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The investment discussed may fluctuate in price or value. Investors may get back less than they invested. Changes in rates of exchange may have an adverse effect on results. Different assumptions may yield different results. Noctua expressly disclaims any responsibility for (i) the accuracy of the models or estimates used in deriving the valuations, (ii) any errors or omissions in effect on the value of investments. Index descriptions shown within the report can be provided upon request This information is confidential and proprietary to Noctua and its affiliates and accordingly, is not to be reproduced in whole or in part or used for any other purpose, except as authorized by Noctua. By accepting delivery of this information, the recipient agrees that it will treat this information as strictly confidential and will not distribute or provide this information to any person outside its organization other than its accountants and attorneys (so long as such persons are advised of the highly confidential nature of this information and do not distribute this information outside their organization). By accepting delivery of this information, the recipient also agrees to destroy this information upon request by Noctua.