Asset Management Inc.
SMART VALUE FUND©
www.tw-am.com Asset Management Inc.
“The question is no longer about
Mutual vs Hedge Value vs Growth
Emerging vs Traditional Markets Long vs Short
but about SMART or DOGMATIC investing. The team of TWELVE prefers the SMART way.“ Markus Schuller TWELVE Managing Director
TWELVE Smart Value Fund©
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Updated 14.07.2008 www.tw-am.com Asset Management Inc.
01 TWELVE TEAM
04 TWELVE SYSTEM TESTS
02 TWELVE STORY
05 TWELVE Smart Value Fund ©
03 TWELVE SYSTEM
06 TWELVE Contact
This presentation supersedes any presentation or information which may have been previously issued to anyone in relation to TWELVE Smart Value Fund ©. The contents of this presentation, including the terms of the fund, are preliminary and subject to change without notice. This is not an offer of interests or a solicitation of an offer to sell securities or an interest in TWELVE Smart Value Fund ©. or in any investment vehicle. This presentation is only intended for preliminary information purposes, is for the addressee only, is the property of TWELVE Asset Management Inc (“TWELVE”) in any media, and may not be disclosed to any third party in part or in whole without the written consent of TWELVE. Neither TWELVE nor the Advisor, nor any of the parties mentioned herein including their subsidiaries, affiliates, shareholders, directors or employees, nor any persons or professional firms directly or indirectly involved in any aspect of TWELVE Smart Value Fund ©. , guarantee the accuracy or completeness of this presentation; neither are they making any representation or providing any guarantee whatsoever as to the future economic performance of TWELVE Smart Value Fund ©. or as to whether TAM Smart Value Fund ©. will at any time in the future produce any return or other benefits to any potential participant or investor. Anyone contemplating a participation or investment in TWELVE Smart Value Fund ©. or a similar vehicle should refer to the private placement memorandum (which shall supersede and cancel this presentation), and should understand that participating in TWELVE Smart Value Fund ©. constitutes a risky investment in an emerging market, and are invited to conduct their own due diligence. The name of “TWELVE Smart Value Fund” is the property of TWELVE and is subject to change without notice. This document shall be superseded by the PPM when available.
OVERVIEW
TWELVE Smart Value Fund©
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TWELVE is led by an experienced team of successful investment professionals. Mag. Markus
Schuller, MBA, MScFE, FRSA 6 years of investment banking (IB) experience Professional Background Senior Analyst Monaco Capital Partners Ltd. Equity-/ Options-Trader VKB Bank Private Banker Hypo Landesbank AG
Education Master (Business Admin) at Kepler University (A) & University of Pittsburgh)
Person X, CFP *
Andreas Edtbauer, CPM, MBA
17 years of banking and IB
14 years of banking and IB
Professional Background
Professional Background
Head of Private Banking (Regional Bank)
Senior Private Banker Meinl Bank
Senior Private Banker (Regional Bank)
Senior Private Banker OÖ Landesbank AG
Senior Private Banker (Private Bank)
Equity Trader OÖ Landesbank AG
Private Banker (Private Bank)
Education Certified Portfolio Manager (CPM)
MBA | International University of Monaco
Education
TRIGON OE-Werkstatt
Certified Financial Planner (CFP)
MBA in Finance | Kepler Universität (A)
Trader & Market Maker Licenses MScFE | International University of Monaco
*Identity can be uncovered after Oct 1st
01 TWELVE TEAM
TWELVE Smart Value Fund©
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Relativity
Smart Value Investing The Alternative Investment industry is going through a period of fast growth and isochronously indicates in these days the first signs of a consolidation. Many Leverage & Arbitrage strategies are fighting for their right of existence. Although the industry records new money inflow highs, the selection process has started. Our response to this selection is simple: We count on the power of quality. In the last six centuries, the financial market has derived four basal views of itself.
Fundamental View
Technical View
Behavioural View
Quantitative View
We invest in top quality companies and surround them with a 24/7 carefree airbag. Based on a smart assembling of the 4 basal views, TWELVE structures automatic systems which enable the selected companies to unhurriedly follow their operational growth path and show their superior qualities to the financial community. The result of TWELVE´s credo is an Equity Exposure Substitute, called Smart Value Investing.
02 TWELVE STORY
TWELVE´s systemic approach incorporates the “von Forster´s“ guiding idea of unfinished systems. As a consequence we are continuously tracing for improvement opportunities. This is best demonstrated by our co-operation with the MFIN Program of the International University of Monaco – a leading program in Europe. Our approach is superior, because we are undogmatically assembling strategies and analysis methods in accordance with the best of breed principle.
Ethics The market shows daily how imprudent contenders invoice hidden or horrendous costs for their hedge fund management services. Even worse, together with the branch success, black sheep have slipped into the industry, not maintaining the quality of risk management and commercial due diligence. TWELVE guarantees a simple and fair cost structure of its products. We feel constrained to the AIMA code of conduct and take a leading position in corporate governance for hedge funds.
Quality We demand highest quality from ourselves. We expect the same from our partners. Therefore we only work with the best of the service industry. Reputation Generates Business.
Transparency Naturally our developed strategies are our most important property. Divulging strategies and the more common irrational decline of transparency are poles apart. We claim to provide highest possible transparency to our investors, enabling them to closely monitor their investments.
TWELVE Smart Value Fund©
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We offer alternative investment innovations. simple. fair. effective. The TWELVE Smart Value Fund © innovates, how Hedge Fund Strategy and Mutual Fund Structure can
be combined – to the advantage of our investors. how a Long/Short Equity strategy can be merged with the virtue of a semi-quant approach. how an intelligent system (TWELVE System) substitutes and
outperformes the instable gut instinct of a human asset manager.
The TWELVE Smart Value Fund © is a novelty. A novelty of how to invest in global equity.
how a pragmatically assembled composition of trading strategies and asset classes can be turned into a smoothly balanced approach of how to invest in global equity. how retail investors can benefit safe and sound from alternative investment innovations.
02 TWELVE STORY
TWELVE Smart Value Fund©
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The TWELVE System is assembled by 4 phases. Phase I
Phase II
Worldwide universe of more than 12.000 listed
The allocation of all filtered stocks in accordance
stocks is screened fully automated on a daily base.
with several cycle theories is managed in phase II.
The system is aligned to filter “operationally
Main focus is on using industry momentum as
healthy“ companies.
additional portfolio driver.
unleveraged < 75% Equity
< 25% Derivatives semi-quantitative
Phase III
Phase IV
Equity and currency hedges arrange for an Alpha
Phase IV is called the “Trading Phase“. Here the
bias of the TWELVE Smart Value Fund ©.
system responds to short term market movements. On
Derivative strategies are exclusively adjusted to
the one hand it allows single portfolio positions to have
hedge the portfolio.
individual volatility ranges. On the other hand it protects the portfolio against excessive market correlation.
03 TWELVE SYSTEM
TWELVE Smart Value Fund©
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R&D
The TWELVE | Smart Value Fund © Phase I 11 parameters are analyzing the operational strength of a company. These diverse views allow a comprehensive picture of a security´s fundamental
core.
Estimates
and
analyst
recommendations (= best guesses) are not taken into account. A universe of more than 12.000 single stocks can
only
be
diligently
analyzed
with
an
extraordinary fundamental database. In co-
we are truly emphasizing on keeping the source
state of the art.
03 TWELVE SYSTEM
Flexibility
operation with our partners Rimes and Reuters,
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SYSTEM TESTS (Gross Performance)
The TWELVE System was academically and empirically put to
36,21%
40,00%
the acid test. It ran through all characteristic ideal test phases of a
35,14%
35,00%
quantitative system:
30,00%
2001 – 2003:
Backtest
2004 – 2005:
Paper Live Test
2006 – 2007:
Real Money Test
2008 – YTD:
Paper Live Test
22,96%
25,00%
15,00%
19,33%
18,90%
20,00%
16,56% 11,05%
10,02%
Additionally the system was modified and financial-theoretically
10,00%
rounded in the course of a master thesis for a MScFE degree at
5,00%
the International University of Monaco in 2005.
0,00%
2001
2002
Backtest
2003
2004
2005
Papertest
2006
2007
2008 (YTD)
Real Money Papertest Test
04 TWELVE SYSTEM TESTS
The system has shown superior success in all tested phases and has confirmend its basal hypotheses.
TWELVE Smart Value Fund©
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Update 14.07.2008 www.tw-am.com Asset Management Inc.
TWELVE comparison (in EUR)
PAPER.TEST | 2008 Performance 15,00%
10,00%
5,00%
TAM Total (YTD)
+11,05%
S&P 500 (YTD)
-21,35%
DJI (YTD)
-21,45%
DAX (YTD)
-22,00%
MSCI World (YTD)
-21,22%
NIKKEI 225 (YTD)
-15,57%
Performance (mtl
0,00%
-5,00%
-10,00%
-15,00%
-20,00%
in %)
2009
Equity
Total
Jan
-1,04
+3,4
Feb
+1,96
+2,76
Mar
-4,21
-0,20
Apr
+7,05
+4,08
May
+3,93
+2,39
Jun
-3,14
-1,57
Jul
-0,23
+0,19
+4,32
+11,05
Total -25,00%
TAM %
S&P EUR %
DAX %
DJI EUR %
MSCI World EUR %
04 TWELVE SYSTEM TESTS
N225 EUR %
Sharpe Ratio
Up Weeks
MaxD
1,73
57 %
-2,29 %
TWELVE Smart Value Fund©
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Update 14.07.2008 www.tw-am.com Asset Management Inc.
TWELVE 08 | monthly returns
in %
5
4
TOP 5 Industries (current holdings) No
Industry
TOP Countries (current holdings)
%
No
Currency
%
1
Comunications Equipment
25,24
1
USA
61,42
2
Healthcare/ Pharma
17,99
2
Canada
14,71
3
Chemicals
15,29
3
Oman
13,60
4
Media
11,49
4
Saudi Arabia
7,85
5
Construction
10,15
5
Australia
2,41
3
TOP 5 Performer (current holdings)
2 1 0 -1 -2
Jan08
Feb.08
Mar08
Apr.08
May08
Jun.08
Jul.08
TOP 5 Holdings
No
Company
%
No
1
Saudi Arabian Fert
+16,84
1
Oman Telecommunications
2
Oman Telecom
+16,39
2
Gen-Probe Inc
3
Meridian Biosc.
+6,49
3
II-VI Inc
4
Gen-Probe
+4,35
4
Raytheon Corp
5
Aditya Birla
+2,38
5
Research in Motion
04 TWELVE SYSTEM TESTS
Company
TWELVE Smart Value FundŠ
Diversification
PAPER.TEST | 2008 Performance
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SYSTEM.REAL.TEST | Real Money Performance TWELVE Comparison (in EUR)
Feb2007
Jul2007
Nov2007
Asian Shakeout
Credit Crunch
Recession Worries
60% 50% 40% 30% 20% 10% 0% -10%
TAM %
S&P EUR %
DAX %
DJI EUR %
MSCI World EUR %
The TWELVE System shows adjoining its qualities during the Real Money Test. Intended to become an equity exposure substitute, the system outperformed all benchmarks in performance and volatility measures. It passed all upwards, sidewards and downwards market trends with flying colours.
04 TWELVE SYSTEM TESTS
TWELVE Smart Value FundŠ
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www.tw-am.com Asset Management Inc. The TWELVE system provides
SYSTEM.REAL.TEST
Performance sources? 57 %
43 %
Realized profits
convincing performance and risk
1. Research in Motion 55,53
parameters. 68% up-weeks and a
2. Telefonica
31,52
Sharpe Ratio of 1,47 are idealy
3. Severfield Roven
29,71
taylormade for
4. North West
26,63
5. Sonova
20,81
a sophisticated
equity investor, who wants to see
Non-realized profits
his
asset
exposure
smartly
allocated.
TOP 5 Holdings 1. Telefonica
Hedge
Equity
TOP 5 Performer (%)
2. Sonova
Performance
contribution Index
Equity
Geographical Asset Allocation
FX
Nordamerika
Europa
Asien
3. Novo Nordisk 4. Rogers Comm 5. CDI Corp
52,68 %
52,68 %
TOP 10 Equity Performers % contribution
WORST 10 Equity Performers % contribution
31 %
62 %
+11,01 %
TWELVE Statistics
7%
Sharpe Ratio
1,47
Up Weeks
68 %
MaxD (week)
-1,2 %
-5,74 %
04 TWELVE SYSTEM TESTS
TWELVE Smart Value FundŠ
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www.tw-am.com Asset Management Inc.
TWELVE Smart Value Fund ©
Specifications
TWELVE Smart Value Fund ©
Specifications
Fund Currency
EUR
Performance Fee Cap
High Water Mark
Fund Domicile/ Structure
Germany / UCITS III
Performance Fee
20 %
Fund Volume (final closing)
EUR 100 millions
TAM Commitment
1 % of final closing
Fund Volume (first closing)
EUR 10 millions
Fund Target Groups
Minimum Investment
EUR 250.000
European HNWI, Institutional Investors, Family Offices , Endowments
NAV (Net Asset Value)
Daily
Fund Strategy
Long/Short Global Equity
Subscription | Redemption
Daily
Fund Profits
Retained
Redemption Fee
No
Fund Taxation (AUT)
White Fund
Lock Up
No Fund Reporting
TAM Smart Value Fund informs investors via weekly updates and monthly reports.
Fund Broker & Custodian
Hauck & Aufhäuser
Fund Administrator
Universal Investment
Fund Auditor
KPMG
Initial Fee
Max. 5%
Management Fee
2%
Performance Hurdle Rate
10 %
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An investment vehicle is as good as its execution. The TWELVE Smart Value Fund © is operationally embedded in a “Culture of Excellence“.
Operational Excellence
Operational Excellence Fully automated sytem phases I, II and IV, and a semi-automated phase III allow efficient and non-emotional trading. The system is securely backed up and therefore fully functional at any time.
Risk Management Excellence The co-operative structure with our service partners enables us to generate intraday updated risk profiles of all portfolio postitions. We use state of the art portfolio risk management tools. As a consequence we have a constant ability to respond to any upcoming market condition.
Risk Management Excellence
Service Excellence
Service Excellence Investors of the TWELVE Smart Value Fund © are weekly and monthly updated about their investments via online and offline reporting tools. Additionally the TWELVE team will meet each investor individually for an annual talk, underscoring our intense communication culture.
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www.tw-am.com Asset Management Inc.
The TWELVE Smart Value Fund © sets the highest standards. Top Quality
• Top Tier Partner • Semi-Quant Model • Highest Testing Standards
Global
• Centuries & Intraday at a glance • Worldwide Equity Coverage • Emerging Market Value Investing
Value & Growth Investorfriendly
• Equity Substitute for „Global Equity“ • Low Volatility • Transparency
• Top Service Quality • NO Redemption Fee • UCITS III – safe & simple
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Top Tier Partner
Semi-Quant Model
Highest Testing Standards
The TWELVE system phases I, II and IV are fully automized. Phase III is kept in semi-automized mode to promptly adjust derivative hedging strategies depending on the market conditions. The high degree of automatization guarantees analysis, selection and execution on a permanet top quality level and protects the portfolio from behavioural finance effects.
The TWELVE system succesfully mastered the ideal sequence of - backtest - real time paper test - real money test All 3 phases have shown over a period of 7 years that the system succeeds in upwards, downwards and sidewards market trends.
Centuries at a glance
Worldwide Coverage
EM Value Investing
The TWELVE Smart Value Fund Š draws a 4-phase bow, beginning with macro- and meso-economic analysis with century horizon, ending with processing intraday impulses on the micro-level.
The covered universe has a worldwide span. From Brasil to England. From South Korea to Canada. More than 12.000 single stocks are screened, selected, allocated and traded. We count on quality. We find it worldwide.
As a consequence of undogmatically analyzing listed companies globally, we can find value stocks with growth potential even in Emerging Markets.
05 TWELVE Smart Value Fund Š
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Equity Substitute
Low Volatility
Transparency
Investors are used to investing in equities. But mutual funds are naturally exposed to a very high market correlation. Even some hedge fund strategies do not convince investors any more. Our “Smart Value Investing“ concept is convincing. It is perfectly suitable to substitute the Equity exposure of a portfolio.
All testing phases identify the TWELVE System as vol-reduced version of a pure equity investment. A Sharpe Ratio of 1,47 and a standard deviation of 2.2 % (figures of the “Real Money Test“) prove the system is an attractive portfolio allocation.
The TWELVE Smart Value Fund © reports weekly via electronic newsletter about fund activities. A daily calculated NAV (tradeable) allows real-time monitoring of an investment. The monthly report adds a comprehensive perspective on fund and fund context matters.
Top Service Quality
NO Redemption Fee
UCITS III – safe & simple
The TWELVE Team is guided by a „Service Excellence“ strategy and counts on long-lasting and trustworthy investor relationships.
Investors do not pay “penalty“ fees when they redeem their fund investments. We are convinced that investors are trusting us on basis of provided quality.
The product parameters of the TWELVE Smart Value Fund © are assembled under the premisse of structuring a hedge fund investment as simple, transparent and traceable as a mutual fund investment. We consider our UCITS III structure as trend-setting for the upcoming merge of hedge and mutual worlds.
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TWELVE Asset Management Inc. Mag. Markus
Schuller, MBA, MScFE, FRSA
Stockerhof Dreikönigsstraße 31 A CH - 8002 Zürich
t. +41 (0) 44 208 3248 f. +41 (0) 44 208 3500 m. +33 (0) 674 274 986 e. mschuller@tw-am.com w. www.tw-am.com
06 TWELVE CONTACT
TWELVE Smart Value Fund©
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