2011/2012 annual report - kenan-flagler.unc.edu grad school... · ending march 31st, 2012, the gpf...
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Table of contents
Letter from the Portfolio Manager 1
Letter from Faculty Advisors 3
Performance Overview 4
Risk Management 8
Highlights: A Year in Review 9
Macroeconomic Outlook 14
Sector Outlooks 16
Appendix - Portfolio Holdings 21
2011-2012 Bios 24
2012-2013 Bios 26
Letter from the portfoLio manager
for the fiscal year ending march 31, 2012, the gpf returned -3.96%, below our benchmark return by
6.17%. the fund’s net asset Value was at $1.78m, which is net of $100k distribution to the Kenan-
flagler Business School foundation. Underperformance in the portfolio was largely driven by poor
security selection in the equity portfolio, the lack of a special situations portfolio and poor overall
asset class selection. three tactical rebalances had significant positive contributions: overweighting
more defensive sectors, shifting the real assets to reits versus commodities and overweighting high
yield and emerging market debt in the fixed income portfolio. each of these was part of a broader
macro-economic analysis conducted by our market and fixed income strategist in September.
Starting in august 2011, the gpf began a transfer from interactive
Brokers to merlin pB. this transfer was part of our effort to improve
access to performance and risk metrics available on the merlin system.
Unfortunately the transfer took more time than anticipated and locked up
our trading capabilities for nearly two months. most of our drawdown
(-6% versus benchmark) occurred during this period.
the three key initiatives brought online by the class of 2012 were a removal of all etfs from the
equity portfolio, a robust asset class and sector level attribution analysis and the full implementation
of alpha theory into our portfolio management. going forward the class should be able to better
balance and optimize their tracking risk with alpha generating opportunities and see how these
decisions have directly impacted the overall portfolio returns. although our class wasn’t able to fully
benefit from these new tools from a returns perspective, we believe that each of these initiatives is
critical in improving the educational value and management of the portfolio.
the class of 2013 is focused on portfolio structure, portfolio monitoring and process discipline with
the ultimate objective of allocating to the best possible investment ideas. the team has already
begun to decrease and limit total fund positions, encourage alpha generation through greater short
exposure and maintain a high level of accountability through weekly, in-class portfolio reviews.
Significant macroeconomic risks continue to threaten global markets and yet implied volatility
remains at the bottom of its three year range. With that in mind, the new class plans to be prudent
in targeting risk and will manage portfolio hedges accordingly.
Sincerely,
preetesh Kantak
Scott Simonton
Letter from the Portfolio Manager
We are pleased to present the Annual Report for the Global Perspectives Fund (gpf) for
fiscal year end march 31, 2012. During this period, some of the fears that were building during
much of 2010 finally came to head. fears of a european contagion spread through the global
markets during the summer and fall of 2011; the worries were further flamed by a failed debt
negotiation between the White house and Congress. although the markets recovered in Q4 2011
and Q1 2012, the clouds of uncertainty – europe & Bush tax Cuts – still linger. to add to this is
economic uncertainty, asia and Latin america, which have thus far been the primary stabilizers
of global growth, are showing signs of a slowdown due to high rates and slowing fiscal stimulus.
as a class, since last year we have taken a more defensive stance in gpf, but have maintained a
long bias as we expect the recovery to continue, albeit slowly.
Scott Simonton (left) and Preetesh Kantak (right)
1 2011 / 2012 annUaL report 2
Since the Global Perspectives Fund was formed in August of 2008, it has returned 4.49% on an an-
nualized basis, topping our annualized benchmark by 0.06%. as noted earlier, for the most recent fiscal year
ending march 31st, 2012, the gpf returned -3.96%, compared to our benchmark performance of 2.20%.
our performance is best illustrated graphically. the chart above shows gpf performance versus the
policy benchmark and excess return. the numbers indicate key events that materially affected our
performance over the year.
1. In late April 2011, the class removed nearly 70% of ETF exposure in the equity portfolio.
We also gave full authority to the sector analysts to invest proceeds in individual securities, providing
them with the “investable” universe of all securities in the mSCi all Country World index. We
believe this move was necessary to address both aspects of the funds objective. first, by moving
to single stocks and allowing analysts to bear some of the portfolio return risk, we hoped to
remove any “closet” indexing. Second, we hoped that greater tracking risk would allow us to
position the portfolio in a more nuanced and long-term alpha generating way.
Performance Overview PreeteshKantakandScottSimonton
performanCe oVerVieW
But that has not been the case throughout the
year. Since march 2010 the ViX index has started
from a level close to the present and risen to a
level three times as high before falling back again.
our students have not had the opportunity to
relax. the choice between safety and opportunity
has been a constant theme over the past twelve
months. the macroeconomic perspective and
asset allocation effort were critical and at times
they overshadowed security selection.
the transition from interactive brokers to merlin did not proceed
as smoothly as anticipated, demonstrating the importance of fund
infrastructure and process to portfolio performance.
as faculty advisors, financial education through experience and
teaching students to be team-playing self-starters are our primary
goals. We continue to stress the global reach of the fund and
to encourage students to seek opportunity around the world.
We maintain an emphasis on investment strategies beyond long
domestic equities to include foreign firms, commodities, foreign
exchange, yield curves, financial futures and special situations.
We are proud of the accomplishments of the class of 2012 and
expect even more of the class of 2013. While increased market risk
may be just around the corner, we are convinced that rigorous analysis,
individual initiative and peer review will continue to advance the
twin fund objectives, return and education, over the coming year.
as always, we appreciate and are grateful for your support.
Sincerely,
alexander arapoglou
mustafa gültekin
Chip Snively, Cfa
It is our pleasure to introduce the annual report for the Global
Perspectives Fund (GPF) for the year ending March 31, 2012.
although the year 2011 saw continued recovery from the first
domestic banking panic since the great depression, the news on the
international front has been more downbeat as the sovereign debt
crisis continues without respite. intermittent stopgap measures to
restore confidence in europe’s periphery have led global markets to
vacillate between risk on and risk off. meanwhile the inability of the
european Union to come to a consensus on a sustainable policy that
balances growth, austerity, full employment and labor market reform
has undermined public trust in european sovereign debt and financial
institutions, particularly after the failure of the greek restructuring.
emerging markets have suffered from reduced growth prospects as a
consequence of contagion. political turmoil in egypt, Libya and Syria
has combined with the threats to world peace from nuclear programs
in iran and north Korea. to an uncertain degree the US seems san-
guine about these events; the ViX index is flirting with five year lows.
Letter from Faculty Advisors
Portfolio Performance and Key Events (3/31/11 - 3/31/12)
n Excess Return n Fund n Policy BM
3/31/11
11/31/
11
4/30/11
12/30/115/31
/111/3
1/12
6/30/11
2/29/12
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
26
7/31/11
8/31/11
9/30/11
10/31
/11
5
4
1
3
3 2011 / 2012 annUaL report 4
ToP NEGATIvE CoNTRIbuToRS
Ticker Contribution Total Return
ipCm (the hospitalist Company) -0.96% -31.14%
arCo (arco Dorados) -0.57% -22.04%
ViV (Vivendi) -0.80% -32.79%
tSCo (tesco pLC) -0.95% -22.10%
tne (telenorte Leste partipacoes) -1.23% -41.03%
ToP PoSITIvE CoNTRIbuToRS
Ticker Contribution Total Return
LVS (Las Vegas Sands) 0.82% 32.5%
hgSi (human genome Science) 0.65% 38.8%
mSft (microsoft) 0.96% 30.0%
Deo (Diageo pLC) 0.72% 29.4%
DVn (Devon energy Corp.) 0.49% 30.7%
2. The second major event was the euro crisis flare-up and uS debt negotiations. although we
took some precautions before the debt negotiations failed by shifting out of some of our equity
exposure into long-dated treasuries, we spent most of the summer with significant beta (63%
equity, 21% fixed income and 16% real assets) exposure versus the benchmark (55%, 25% and
10%, respectively). as the “risk” market fell, we suffered due to this bias.
3. unfortunately, it was during this same time that we began the ill-timed transfer and lockup
of assets between Interactive brokers and Merlin Pb. our partial shift from equity to long dated
treasuries provided some cushion, but we were still unable to react aggressively to changing
market conditions. it was, however, during this time that our market and fixed income strategist,
Chad Cross and mario Castro, developed a robust macro and microeconomic framework for
thinking about the economic climate.
4. This perpetuated a decision to change our tactical allocations when trading on our portfolio
resumed at the end of September. We shifted to approximately 59% equity, 27% fixed income
and 14% real assets. We also went overweight what we thought were either cheap (information
technology) or defensive (healthcare, consumer staples, utilities) sectors. additionally, the greater
assets allocated to fixed were used to purchase high yield and emerging market debt. this aided
significantly in the fixed income portfolio’s outperformance.
5. At the end of November, after the october relief rally, the Euro zones debt issues came
front and center again. as we were entering winter break, and due to our long bias, we though it
smart to purchase some downside protection. our rolling portfolio beta had been approximately
1.2-1.3x; as we saw a fairly binary outcome in a short period of time – either the benchmark
would rally 10-15% or the euro crisis would take us substantially lower –we purchased about
1.4% of aUm in S&p puts. We also felt the timing appropriate because the ViX had come off
substantially since the summer months.
6. This binary scenario analysis, however, supposed a couple of critical points. first, the extent
of each scenario was not fully priced in the market; with where the ViX was, we believed it hadn’t
been. Second, that our portfolio would maintain the beta historically demonstrated; with the analysis
of tracking risk done by the analysts and our long risk bias, we felt comfortable that our estimates
would play out both on the up- and downside. in early January, the equity and high yield markets
rallied due to strong year-end earnings and macroeconomic readings. Unfortunately, our portfolio did
not follow, which lead to the second “drawdown” versus our benchmark returns. the poor earnings
of a few names (e.g. tesco, the hospitalist Company, arco Dorados) lead our portfolio to severely
underperform as our hedge, which was referencing our “unconditional” beta, expired worthless.
PerformanceOverviewcontinued
5 2011 / 2012 annUaL report
over the course of the year, the risk management team has vigilantly monitored our daily
historical vaR at the portfolio, asset class and sector level. over the course of the year, the
risk management team has vigilantly monitored our daily historical Var at the portfolio, asset class
and sector level. increasing the granularity of our approach has allowed us to provide guidance
to the portfolio and asset class mangers on the risk composition of our portfolio, adding risk as a
component in asset class and sector allocation decisions.
although we have generally maintained a higher level of risk than our
benchmark, approximately 120% of benchmark Var, we have remained
well within the limit of 150% of benchmark Var set forth in our ipS.
in addition to increasing the sophistication of our quantitative risk measures, we have taken strides in
process management in an effort to reduce our operational risk. the management team identified
a weakness in sector analyst awareness of the process used to request portfolio actions, and in response
we have formalized and made available procedures for submitting portfolio change requests to the
investment Committee and communicating the results of those requests to the class. as our sector
analysts take on a more active role within the fund, these processes should provide them the tools
necessary to effectively manage their responsibilities and improve overall fund performance.
the risk management team is pleased with the progress we have made over the year and look
forward to elevating the sophistication of our risk management processes in the coming fiscal year.
1 Year 3 Year
1 Month vaR 95% 97.50% 99% 95% 97.50% 99%
portfolio 7.55% 9.68% 13.10% 6.31% 8.36% 10.91%
Benchmark 6.01% 7.66% 11.31% 5.63% 6.99% 8.11%
Relative 125.50% 126.40% 115.80% 112.10% 119.60% 134.60%
Risk Management JaehoonPark,MichaelGloverandBenScully
our attribution analysis bears out this same “story.” as the asset class analysis shows, our overweight
equities and underweight fixed income, especially earlier in the year, was a contributor to our poor
returns versus the benchmark. this however, was self-corrected in the latter half of the year. Security
selection, especially due to the January year-end earnings drawdown as, was the single biggest
contributor to our poor performance. the special situations bucket represents our S&p insurance
that expired worthless. the equity portfolio specific sector attribution also illustrates the drawdown
due to security selection, but on a sector-by-sector basis. this correlates well with the sectors of the
individual securities which lost the largest amounts over the course of the year.
PerformanceOverviewcontinued
Equity Portfolio - Sector Attribution
n Allocation n Selection n Interaction
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
-12.0%Total Consumer
DiscretionaryConsumer Staples Energy Financials Health Care Industrials Information
TechnologyMaterials Telecom Utilities ETP
Attribution Analysis - Asset Class Level1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
-3.0%
Allocat
ion
Allocat
ion
Allocat
ion
Allocat
ion
Selec
tion T
otal
Selec
tion F
ixed I
ncom
e
Selec
tion T
otal
Selet
ion Re
al Asse
ts
Intera
ction
Intera
ction
Intera
ction
Intera
ction
Total
Sists
riSK management7 2011 / 2012 annUaL report 8
Highlights: A Year In Review
EquitiesEricLupton
in fY2011, our class spent the first couple of months weaning off much
of the etf exposure we carried throughout fY2010.
We gave sector analysts full authority to invest proceeds in individual securities and this
resulted in a much more concentrated equity portfolio. our long risk bias going into the summer
proved to hurt our performance in comparison to the benchmark. Due to conflicts with our broker, we
were unable to implement any trades for nearly two months and thus could not exit our losing trades.
in terms of sector allocation, our portfolio hovered closely around the benchmark weightings in energy,
consumer staples, and telecommunications. We were underweight financials, materials, and industrials
due to a long term trend of deleveraging we felt was changing the business model of many financial
institutions. We were overweight healthcare, information technology, and utilities. We felt confident that
cost reduction trends in healthcare would continue long into the future, and allocated funds in companies
with a proven track record at doing so. the fund also believed that under spending by corporations in
information technology would need to reverse, and thus we took a large position in microsoft. We
thought utilities were very attractive given their favorable valuation along with the strong dividend yields.
aSSet CLaSS highLightS
Region Breakdown - Total Equity Portfolio vs. Benchmark
n Portfolio n Benchmark
60%
50%
40%
30%
20%
10%
0%
$607,020
$276,848
$133,120
Domestic Developed Emerging
Consumer Discretionary/Consumer StaplesDaltonHsu
Performance in the consumers book has been twofold, results of which attributed mostly to
security selection. We had outperforming names such as Las Vegas Sands (LVS), up over 50% over
the year, making it the best performing stock in the fund; and mcDonald’s and Diageo, both of
which appreciated around 25%. on the flip side, Vivendi (ViV) and tesco (tSCo) were among
the worst performers in the fund, down 35% and 25%, respectively, due to the effects of woes
in europe and increasing affordable competition. Last month, we have closed a short position,
officemax, yielding 8% in a holding span of six months.
IndustrialsSiddarthBhat
The industrials sector maintained a neutral weight during the year. our main holdings were
ge, Lockheed martin, Siemens, all nippon airways. During 2011, the focus was on international
diversification of the industrials book and that led to positions in Siemens, all nippon airways
and asciano. however, with the financial crisis in europe lingering on and a slowdown in China we
moved our focus in 2012 to increasing our positions in US industrials and exiting overseas names.
the industrials portfolio outperformed the industrials SpDr etf (XLi) by 50 bps in april 2012.
UtilitiesChadCross
The utilities sector currently consists of Entergy (NYSE: ETR) and Enersis S.A. (NYSE: ENI).
Both holdings underperformed the Utilities Select SpDr benchmark (XLU), which was up for the year.
enersis finished in negative territory in 2011 largely due to drought conditions in Chile, where they oper-
ate hydroelectric plants. We expect a strong rebound for enersis in 2012 assuming weather patterns
return to normal. entergy finished slightly up for the year but faces headwinds in 2012 associated
with the mild winter in north america. Both enersis and entergy provide an attractive dividend.
EnergyChadCross
The energy sector followed a strong 2010 with another positive year in 2011. Super-majors
Chevron (nYSe: CVX) and exxonmobil (nYSe: Xom) were the top performers, benefitting from
rising oil prices. Devon (nYSe: DVn) and peabody (nYSe: BtU) underperformed, while Valero
(nYSe: VLo) and noble (nYSe: ne) were roughly in-line with the energy Select SpDr benchmark
(XLe). our positions in 2012 include the mLp’s Kinder morgan (nYSe: Kmp) and enterprise products
partners (nYSe: epD) as we anticipate significant infrastructure build out in america in order to
accommodate the abundance of shale gas resources.
9 2011 / 2012 annUaL report
Health Care RecapAlexVarner
Health care underperformed this year. as it is considered a defensive industry, this underperformance
is not a huge surprise with the economy appearing to gain positive momentum. our biggest holdings are
teVa pharmaceuticals and novartis ag. teVa represents our view of increased generic pharmaceutical
production as several blockbuster drugs are slated to come off of patent this year and rising medicare
and medicaid costs will push doctors to prescribe generics. nVS reflects our opinion that the health
care sector is trending towards consolidation, as it has multiple branches across eye care (alcon),
pharmaceuticals (Sandoz), and consumer health.
MaterialsSiddarthBhat
The materials sector maintained an under/neutral weight during the year. our main holdings
were Bhp, freeport mcmoran, allegheny technologies and Sigma aldrich. at the onset, we chose com-
panies that positioned us to have a portfolio similar to the materials SpDr etf (XLB). however, most of
these trades were put in before we left for the summer and most of our positions suffered a drawdown
of up to 25% in July due to financial market volatility. for most of 2011, we had been playing catch up
and since 2012 we have been tracking the XLB and even outperformed it by 90bps in april 2012.
IT/TelecomSharonLin
overweight IT/Telecom sector during the year delivered favorable rewards. Since inception, the
fund focused on names in software and semiconductor industries after excluding etf exposure. to protect
the downside, we selected stocks with the balanced advantage of solid growth and high yield, such as
microsoft (mSft), and tSmC (tSm), both providing capital gains of 15%+ so far. earlier this year, to well
into 2012, we added to Qualcomm (QCom), Spreadtrum (SprD) and ezchip (eZCh) by taking profits
(20%+) from intel (intC) and teradata (tDC) to reflect our cautious views on computing and enterprise
spending. though there are pullbacks from QCom and SprD recently, our optimistic tone on the field
of communicating remains intact. We also maintain the overweight on mSft for the big story of Win8
later this year. on the other hand, our name in telecom sector is Vodafone (VoD) after trimming China
telecom (827hK) due to the foreseeable profit deterioration.
highLightS: a Year in reVieW
FinancialsJungsangPyo
2011-12 has been a challenging year for the financial sector due to the European crisis. to coun-
teract such market change, we reduced financial sector exposure from 13.50% to 12.45%. Big financial
institutions, such as Bank of america (nYSe: BaC), goldman Sachs (nYSe: gS) and morgan Stanley (nYSe:
mS), were especially vulnerable because of their exposure to international financial market. on the other
hand, regional banks have done relatively well as can be seen in huntington Bancshares (naSDaQ: hBan,
16.3%) and US Bancorp (nYSe: USB, 12.0%). in the process of repositioning, we cut losses on Bank of
america (nYSe: BaC, 60.5%) and Chicago mercantile exchange (naSDaQ: Cme, 18.9%). We also added
itau Unibanco holding (BoVeSpa: itUB), a Brazilian diversified bank, to gain geographical diversification.
Fixed IncomeJaehoonPark
With high levels of volatility in the equity markets, nearly all fixed income sectors posted positive
returns in 2011. When we took over the fund, fixed income represented 24% of the net value of the
fund. the fixed income sector has outperformed its benchmark by 295 basis points. the primary drivers
of superior returns were safety and long maturities. higher quality government bonds outperformed
credit sensitive sectors; while returns on longer maturity bonds dwarfed those on short- and medium-
term bonds. the brightest spots for the year included long-term U.S. treasury (Barclays 20+ years) and
emerging market treasury (iShares Jpmorgan USD emerging markets) which earned 22% and 21%,
respectively. additionally, in our ongoing attempt to learn about different markets, we purchased
peruvian global treasury, which was undervalued in the middle end of curve.
Highlights:AYearinReviewcontinued
Fixed Income Performance
n Fixed Income n Benchmark
4/1/2011 4/1/20121/1/201210/1/20117/1/2011
112
110
108
106
104
102
100
98
11 2011 / 2012 annUaL report 12
Real Assets RobStekson
The past year set out various goals for the real assets book in order to align it more with
the needs of the Global Perspectives Fund. first, within the commodity book, all equity names
were removed, in favor of keeping only commodity specific etf’s and futures for the allocation. this
was done to remove any systematic risk that could adversely affect the performance. additionally,
within the reit space additional attention was paid to moving away from broader sector based etf’s,
and focusing on the best individual names within each sector.
in our commodity book, we maintained our highest overweight to the energy sector, despite a 7%
underweight in natural gas relative to the benchmark, one of the strongest performing allocations in
the book. our precious metals allocation was the second highest allocation, as we viewed currency
debasement, european macroeconomic concerns, and fear of additional monetary stimulus as favorable
to the book. fearing weakening economic data in various international markets, we maintained a heavy
overweight to the base metal sector, which was a rather poor performing sector. We maintained close
to an equal weight within the agriculture and livestock sector, and selectively over weighted com-
modities such as corn and soybeans, in which we saw favorable supply / demand dynamics occurring.
Despite suffering from liquidity concerns during the late summer and early fall of 2010, reit’s
delivered strong performance and attractive dividend yields to the fund. While for the most part
maintaining weightings close to the benchmark in various sectors, we maintained a heavy under-
weight to the retail sector, as disappointing data on consumer spending arose during the year.
Despite that, our allocation to Simon property group was a tremendous performer, and helped to
demonstrate our attention to focusing on best names in the space. additionally, american Campus
Communities had a strong year as their favorable collegiate rental property delivered strong returns to
shareholders. in the mortgage space, we added two harbors investment Corp, a hybrid agency and
non-agency reit that traded at a favorable discount upon purchase, and liquidated other names in
the sector that had strayed from their original investment rationale.
Special Situations RecapAlexVarner
We recently implemented two trades in the special situations book. We bought tyco international
because in December 2011, it announced it is going to break up into three public companies, aDt resi-
dential, flow Control, and Commercial fire & Security. We think that tyco is currently trading at a discount
to the sum of these parts and that we will see a convergence (the stock price will rise to meet the sum of
the parts valuation) as the beak-up date nears. We also implemented a bull call spread to capitalize on the
binary outcome of Diamond foods stock. Despite recent negative events, the stock remains fundamentally
attractive because it owns a portfolio of valuable brands. the trade allows us to participate in the upside
potential of the stock but also limits losses to $3.30 in the unlikely case of liquidation or bankruptcy.
Highlights:AYearinReviewcontinued
International Market OutlookRobFrear
over the last year we have seen several forces inflect fear and thus volatility into global markets fur-
ther propelling the flight to quality. Looking ahead we see both areas of opportunity and threats globally.
the eurozone continues to prop up markets with monetary injections to address fiscal policy concerns and
fend off a deep recession. the effect of these efforts had some success within the last year but will need
to be on a much larger scale if Spain and italy end up following in the footsteps of greece. We remain
cautious of the situation developing in the eurozone. We are forecasting a mild recession in the region
as the result of significant austerity. We are also closely monitoring Spanish and italian bond yields as a
measure of the potential depth of the recession and key indicator of fear in european markets in general.
While growth in emerging markets has slowed from historically high levels specifically in BriC countries
(Brazil, russia, india, China) we are forecasting significant growth to continue in these regions over
a near term horizon primarily fueled by intra-country expansion. for our fixed income holdings we
believe this represents an opportunity to capture yield. We also are looking to increase our exposure
to emerging market equities in this environment. this move is futher supported by relative valuations.
on a price-to-earnings basis, spreads relative to develop countries have closed from a year ago making
investing in emerging market equity that much more compelling. as a result of both of these effects
we are targeting overweight emerging market positions in both fixed income and equities.
Macroeconomic Outlook
maCroeConomiC oUtLooK 14
Consumer Discretionary/Staples:GrahamSavage
With Consumer Discretionary stocks trading at nearly 18x
trailing earnings and near the valuation highs over the last year,
the market has clearly come around to the view that consumers
are opening up their wallets again. however, there are still select
opportunities available within the discretionary space, both in terms
of growth and value stocks. Some industries that bear watching are
homebuilders, which have benefited from talk of a housing recovery,
and education companies, which have experienced significant down-
drafts over the last year due to ongoing regulatory concerns. going
forward, i expect to increase exposure in the fund to stocks in these
areas only insofar as i believe there are valuation opportunities that do
not depend on any particular macroeconomic scenario coming true.
on the other side of the coin, Consumer Staples
are also trading at a relatively rich valuation –
nearly 17x trailing earnings – the highest levels
of the last year. this dynamic of Staples and
Discretionary stocks both showing valuation
strength indicates to me that investors are
becoming more willing to take on risk in the
Discretionary space, but are not yet ready to
give up on defensive Staples holdings in spite
of strong price momentum.
again, the focus from a portfolio standpoint will be on eliminating
Staples positions that are fully valued and finding opportunities
that are more attractive. i expect to keep a core position in procter &
gamble, and to build opportunistically around it. the portfolio will
ideally trade less as a beta play on the overall market and more as
a diversified set of undervalued positions.
Domestic Strategy OutlookRobFrear
We believe the outlook in the US has several clear trends that we expect to continue through the next
year. We are taking on tactical positions in the portfolio to capitalize on several of these themes:
n Private investment growth: Corporate balance sheets are riddled with cash. the feD has taken a dovish
monetary policy, keeping rates low through 2014. We believe the actions of the feD reduces risk for corpo-
rations in two ways. first, through defined low interest rates on capital projects. Second, through reducing
uncertainty about the feDs actions in the future by increasing visibility to the thought process. We believe
that both of these actions provide an accommodative environment for strong private investment in the
US economy. to capitalize on this trend we are increasing exposure in the business-to-business segment.
n Government spending decline: the US fiscal deficit remains near all-time highs. given that 2012
is an election year, we anticipate little to no consolidated effort from Washington to address the fiscal
concerns in the near term. however, we also expect in early 2013 there will be significant pressure to
reduce government expenditures and get the national budget in line. thus we are looking to reduce
exposure in securities heavily reliant on government contracts and support.
n Moderate consumer participation: We anticipate moderate growth within the consumer spending
segment. We believe this will be primarily due to some mild improvements in unemployment over the
next year. in the short term, we our monitoring consumer expenditures by various product categories
(from the low-end to the high-end) as an indicator of the financial health and physiology of consumers.
While we have conviction in our views, market dynamics are fluid. We are committed to closely
monitoring both international and domestic market drivers over the coming year and will make
adjustments where necessary.
Sector Outlooks
Equities OutlookAdamSues
the ongoing sovereign debt crisis in Europe and potential
slowdown in China will likely contribute to further volatility in the
global equity markets. the U.S. stock market started 2012 with a
sustained rally, driven by the expansion of corporate profit margins
to an all-time high. this market optimism has continued despite
a sluggish recovery in the U.S. labor market, as millions of workers
struggle to find work. market valuations, especially in the domestic
market, appear stretched when compared to long-term averages,
making it even more important to understand potential downside
levels. as a 2013 class, we will move towards greater diversification
across market capitalizations and styles, while allocating capital to
our best ideas. historically, periods of such uncertainty have provided
opportunities, and we continue to believe that stocks will outperform
fixed income on a risk-adjusted basis over the next several years.
TelecomShuaiqiGu
We expect to see a fast-growing demand for 3G/smartphone
in the emerging markets. though the promotions would hurt
profitability to certain extent, the upside revenue potential for the
telecom operators by tapping into the 3g/smartphone market is
extremely high. thus, we would cherry-pick some with better risk/
reward profiles for our portfolio. in addition, we will look into carrier
names with substantial spectrum control and strong 4g positioning
in the US and european markets.
MacroeconomicOutlookcontinued
SeCtor oUtLooKS 16
SeCtor oUtLooKS
EnergySidharthBhagavatula
We remain bullish on energy and continue to be overweight
in MLPs. Being overweight in mLps reduces our direct exposure
to fluctuating commodity prices. We are positive about the
upstream e&p plays, which have reported strong profits in the
last quarter and expected to perform over the next 12 months
supported by strong oil prices. We plan to increase our allocation
to upstream plays in the future. We also see a lot of growth po-
tential in the services and equipment sector with most of the e&p
companies ramping up their capital expenditures. going forward
we expect oil prices increase based on geopolitical tensions and
strong demand from Japan and emerging economies. natural
gas prices are expected to be low however companies halting
production will provide some price support. We have a number
of names in each of these sectors, which we continuously keep
track of. We are closely monitoring the alternate energy space
but currently remain bearish on the sector. We believe that most
of the stocks in this sector are over-valued and have too much
dependence on government subsidies.
Materials SectorToddCobb
Mining and basic materials have bearish indicators through the
rest of this year while chemicals have a more bullish outlook.
many miners have revised estimates downward due to falling
prices and social unrest in regions of the world with large reserves,
such as South africa and indonesia. the chemical industry has a
more bearish outlook thanks to growing demand for chemicals in
fracking, record low natural gas prices, and consistent demand.
Both industries are vulnerable to an economic problems in China,
the US, and europe. pulp and paper companies look bullish for the
rest of this year as prices begin to recover from lows earlier this
year and inventories begin to decrease.
Information TechnologyShuaiqiGu
In 2012, the semiconductor industry is expected to experience
a recovery thanks to the increased demand from the end market.
Strong growths in communicating and mobile computing could
lead to better than expected sales in low-power computing and
3g/4g communication iCs and flash memory chips for solid-state
drive (SSD). We are also optimistic on the growth in the software
and internet service industry based on our view of stellar enterprise
spending on networking and database storage. Despite the
concerns on valuation, we intend to partially shift our spotlight
to some cloud-computing names this year to ride the wave of
internet-based/social media boom by using the long/short strategy.
UtilitiesApurvaGoel
The utilities sector is expected to remain under pressure in the
short term. from a purely valuation perspective the sector looks
expensive as compared to its historical averages and S&p 500 but
dividend yields remain on the higher side.
there is some uncertainty in the electrical utilities regarding the
extension of deadlines of implementation of the epa rules and the
industry is well under way to close or convert significant amount
of coal based power generation capacity in the next few years
even as the overall capacity continues to grow. the capital heavy
investment required for conversion is forcing companies to look
closely at the cost-benefit analysis. even in the face of these head
winds, there are several positive trends for the industry. perhaps
the most visible of which is that the lower price of natural gas is
expected to prevail for some period and this will help keep power
generation prices contained. if the recent pickup in industrial
production holds it will boost demand from the industrial sector
which will help the bottom line. the low cost of debt is also helping
utility companies with several raising capital at extremely low yields.
overall the fund will do well to tread this sector carefully.
Healthcare SectorWilliamMills
uncertainty surrounds the healthcare sector in 2012. the pend-
ing Supreme Court decision regarding mandating health coverage,
the looming presidential election, and continually rising costs make
the healthcare industry a challenging environment at the moment.
however, there are opportunities in the sector and companies that
can help reduce costs stand to profit. these potentially include medical
device makers and it systems companies that improve efficiencies.
We also believe that further consolidation in the healthcare space is
likely as strong companies look to grow and increase market share.
this is essential for many facility providers as utilization has declined
while costs have continued to rise. We will also monitor managed
healthcare and insurance companies as they stand to be affected
by the Supreme Court’s decision. We believe that the uncertainty
surrounding this verdict has depressed valuations and increased
volatility in the sector and that there is the potential for a rebound
in the valuations of strong companies once there is a resolution.
IndustrialToddCobb
The uS industrial sector shows bullish signs of strength and
recovery through the rest of this year while the global outlook
is less certain. US auto-sales and consumer spending have helped
drive growth through the first part of this year, and may continue if
the US economy continues to show signs of growth and improving
employment figures. risks in the US come from unstable commodity
prices and a cooling or reversal of the positive trends in employment
observed earlier this year. the impending US elections and seques-
tration at the end of 2012 could also have a strong impact on the
industrial sector, especially for defense industries. globally, the recession
in europe and slowing economic growth in China create a drag for
demand in emerging economies, slowing industrial sector growth
for the near term internationally.
SectorOutlookscontinued
17 2011 / 2012 annUaL report 18
FinancialsAlexandraNormile
In the first half of April, we liquidated our Goldman Sachs hold-
ing in order to profit from increased price, and to decrease our
concentration in Diversified financials. as bulge banks face continued
slow going in investment Banking, we see asset management and
Wealth management as areas of continued growth into the future.
We are considering adding holdings in firms that specialize in asset
management and Wealth management.
We are also watching our international holding and the economic
factors in Brazil. government-mandated lower interest rates are
putting pressure on bank profits, but we could be seeing a bottom-
ing out of stock prices. equities under consideration for purchase in
the fall include international stocks and regional banks.
Fixed IncomeBillSchramm
The uncertainty in the global financial markets and the slow
growth rate of the uS economy continue to be the primary
drivers of our fixed-income outlook. the federal reserve intends
to leave rates stable as long as inflation remains in check, with no
rate hikes expected till 2014. We also expect the slowly recovering
US economy to grow at about 2% over the next few years due to
high unemployment and cautious consumer sentiment.
it is difficult to predict the timing of a reversal in the flight to quality,
but investors will likely continue to hold quality assets over the next
few quarters due to the sovereign debt situation in europe. While
additional dollars may shift into treasuries as developments in europe
surface, it is hard to imagine a scenario where the US treasury market
experiences a significant, sustained rally, given the current low interest
rate levels. on the other hand, a rally in US treasuries is possible if
countries like Spain and italy are unable to resolve their financial
problems, and we experience another global flight to quality.
SectorOutlookscontinued
Commodities: We continue to be bullish on precious metals as
gold is primarily driven by US monetary policy rather than pure
fundamentals. Base metals will face a difficult environment over
the next year as Chinese growth and a US recovery challenge the
substantial inventory build, which will likely cap the gains. We are
neutral on energy as a result of a lack of conviction. high prices
that have been supported by supply outages and geopolitical
concerns are likely to slow demand. it appears that the upside is
limited from the current levels and most of the risks are skewed
to the downside. We are neutral to bullish on livestock. Lean hogs
will outperform cattle as a result of the current price spread causing
trade-down demand from beef to pork. a reduction in supply is
bullish for cattle, but poor feeding margins and slowing slaughter
rates may pressure demand.
Special SituationsMichelePanzeri
The coming year will provide exciting opportunities for the
Special Situations book. our strategy is to identify trades that have
a clear short-term catalyst, low correlation with the macro picture and
a high probability of success with calculated downside risk.
We will focus heavily on corporate actions such as spinoffs and break-
ups because these are great channels for companies to unlock share-
holder value. this year, there are about 20-25 spinoffs in the pipeline
and we think 4-5 are attractive investment opportunities.
not only we want to invest in companies before and after the
actual spinoff, but also identify conglomerates that can potentially
disinvest a subsidiary in the near term as these opportunities will
provide the greatest alpha.
the last two areas of focus are pair trades and capital structure
arbitrage trade (if liquidity on the fixed income side permits).
as the underlying drivers of our fixed income outlook remain
uncertain, we plan to stay close to our benchmark targets over
the next year, while employing several tactical allocations. We will
continue to under allocate our holdings in europe, as we feel there
is more downside risk than opportunity at this time. Despite the
historically tight credit spreads in US investment grade and high yield
bonds, which initially tightened as a result of investors seeking yield
in a low interest rate environment, we believe there is opportunity
for further spread tightening in good companies that continue to
improve their financial strength and credit profiles. While emerging
market debt can provide a high current yield, and there is potential
for currency appreciation and spread tightening in an improving
global economy scenario, we are cautious in the international
fixed income space, given the uncertainty in the global economy.
Real AssetsAdamWiklund
REITS: most of the major commercial real estate sectors are see-
ing improved fundamentals. Sustained job creation is benefiting
commercial real estate sectors by increasing demand for space.
nar’s chief economist said, “Vacancy rates
are steadily falling. Leasing is on the rise and
rents are showing signs of strengthening,
especially in the apartment market where
rents are rising the fastest.”
nar forecasts commercial vacancy rates over the next year to decline
0.4 percentage points in the office sector, 0.8 point in industrial real
estate, 0.9 point in the retail sector and 0.2 percentage points in
the multifamily rental market. Construction activity is still low, with
95 percent of experts reporting it is below normal, and 83 percent
said it is a buyers’ market for development acquisitions; prices are
below construction costs in 78 percent of markets.
SeCtor oUtLooKS19 2011 / 2012 annUaL report 20
Name Market value %Class %Fund
uS Equity
allegheny tech $ 11,239 1.10% 0.64%
Coventry health $ 35,570 3.47% 2.04%
Chevron Corp $ 28,411 2.77% 1.63%
enterpriSe proDUCtS partnerS $ 15,141 1.48% 0.87%
entergY Corp $ 23,117 2.26% 1.33%
freeport-mcmoran Copper $ 24,916 2.43% 1.43%
general electric $ 29,242 2.86% 1.68%
goLDman SaChS groUp inC $ 27,735 2.71% 1.59%
hUntington BanCShareS inC $ 28,429 2.78% 1.63%
Jp morgan Chase $ 30,669 2.99% 1.76%
Kinder morgan partners $ 32,521 3.18% 1.86%
Lockheed martin $ 13,479 1.32% 0.77%
LaS VegaS SanDS Corp $ 42,084 4.11% 2.41%
maSimo Corporation $ 20,761 2.03% 1.19%
mCDonaLD’S Corp $ 18,541 1.81% 1.06%
morgan Stanley $ 15,712 1.53% 0.90%
miCroSoft Corp $ 44,770 4.37% 2.57%
noBLe Corp $ 31,775 3.10% 1.82%
office max $ (11,440) (1.12%) (0.66%)
oraCLe Corp $ 23,765 2.32% 1.36%
proCter & gamBLe Co/the $ 33,605 3.28% 1.93%
prudential financial $ 26,243 2.56% 1.50%
QUaLComm inC $ 33,145 3.24% 1.90%
Sigma-aldrich $ 16,073 1.57% 0.92%
exxon mobile Corp $ 10,147 0.99% 0.58%
Total - u.S. Equity $ 605,650 59.14% 34.05%
Foreign Equity
all nippon airway (ana) $ 22,711 2.22% 1.30%
asciano Ltd. $ 25,381 2.48% 1.46%
Bhp Billiton - aDr $ 22,589 2.21% 1.30%
Diageo pLC-SponSoreD aDr $ 45,645 4.46% 2.62%
eZChip SemiConDUCtor LtD $ 8,883 0.87% 0.51%
novartis ag-aDr $ 34,687 3.39% 1.99%
teva pharmaceuticals $ 39,157 3.82% 2.25%
tesco $ 26,168 2.56% 1.50%
ViVenDi $ 16,492 1.61% 0.95%
VoDafone groUp pLC-Sp aDr $ 35,971 3.51% 2.06%
Total - Foreign Equity $ 277,682 27.11% 15.61%
Name Market value %Class %Fund
Emerging Markets
arco Dorados holdings $ 20,695 2.02% 1.19%
enerSiS S.a. -SponS aDr $ 29,538 2.88% 1.69%
itaU UniBanCo hLDng-pref aDr $ 34,081 3.33% 1.95%
SpreaDtrUm CommUniCati-aDr $ 22,836 2.23% 1.31%
taiwan Semiconductor aDr $ 33,616 3.28% 1.93%
Total - Emerging Markets $ 140,766 13.75% 7.91%
Total Equity $ 1,024,099 57.58%
uS Fixed Income
iShares Barclays intermediate Credit Bond $ 50,071 16.66% 2.87%
iShares Lehman 1-3 Year Credit Bond $ 75,665 25.18% 4.34%
iShares iBoxx $ high Yield Corporate Bond fund $ 99,337 33.05% 5.70%
iShares trust Lehman mBS fixed-rate Bond $ 55,055 18.32% 3.16%
teSoro Corp $ 20,394 6.79% 1.17%
Total - u.S. Fixed Income $ 300,521 70.88% 16.90%
Foreign Fixed Income
peru 8 3/8 5/16 Soverign $ 29,910 9.95% 1.72%
iShares Jpmorgan USD emerging markets Bond fund $ 93,549 31.13% 5.36%
Total - Foreign Fixed Income $ 123,459 29.12% 6.94%
Total - Fixed Income $ 423,980 23.84%
Commodities
mini Corn fUtUre may12 na na na
mini SoYBean fUt may12 na na na
Wheat fUtUre(CBt) may12 na na na
SpDr goLD trUSt $ 19,454 7.51% 1.12%
poWerShareS DB agriCULtUre f $ 15,877 6.13% 0.91%
poWerShareS DB BaSe metaLS f $ 4,822 1.86% 0.28%
poWerShareS DB energY fUnD $ 46,728 18.04% 2.68%
ipath DJ-UBS Copper SUBinDX $ 11,531 4.45% 0.66%
etfS phYSiCaL paLLaDiUm Shar $ 2,579 1.00% 0.15%
etfS SoYBeanS oiL $ 4,030 1.56% 0.23%
UniteD StateS oiL fUnD Lp $ 7,061 2.73% 0.40%
Total - Commodities $ 112,082 6.30%
Appendix
Portfolio Holdings (As of 3/31/2012)
portfoLio hoLDingS21 2011 / 2012 annUaL report 22
2011-2012 BioS
Name Market value %Class %Fund
REITs
ameriCan CampUS CommUnitieS $ 9,168 3.54% 0.53%
Dupont fabros technology inc. $ 16,382 6.32% 0.94%
iShareS ftSe nareit reaL eSt $ 7,636 2.95% 0.44%
iShares ftSe nareit industrial/office index fund $ 24,442 9.44% 1.40%
hCp inC $ 10,654 4.11% 0.61%
annaLY CapitaL management in $ 4,746 0.46% 0.27%
peBBLeBrooK hoteL trUSt $ 11,290 4.36% 0.65%
iShares ftSe nareit residential index fund $ 26,918 10.39% 1.54%
rayonier inc. $ 9,259 3.57% 0.53%
iShareS SiLVer trUSt $ 3,138 1.21% 0.18%
Simon propertY groUp inC $ 14,568 5.62% 0.84%
two harbors $ 8,720 3.37% 0.50%
Total - REITs $ 146,920 8.26%
Total - Real Assets $ 259,003 14.56%
Special Situations
tyco $ 34,832 13.45% 2.00%
January 13 Calls on DmnD US $ 4,340 1.68% 0.25%
January 13 Calls on DmnD US $ (1,540) (0.59%) (0.09%)
Total - Spec Sits $ 37,632 2.12%
Cash & Equivalents
Cash, accrued interest and Dividends $ 33,989 100.00% 1.91%
Total Cash & Equiv $ 33,989 1.91%
Fund Total $ 1,778,702 100.00%
Front row (left to right): Alexander Arapoglou, Jaehoon Park, Michael Glover, Sharon Lin, Mario Castro, Jungsang Pyo, Mustafa Gültekin
Back Row (left to right): Peter Panos, Michael Ives, Dalton Hsu, Siddarth Bhat, Gregory Brown, Preetesh Kantak, Chip Snively
Not Pictured: Chad Cross, Paul Chhoy, Eric Lupton, Rob Stekson, Alex Varner
Applied Investment Management
2011-2012 Bios
Chad CrossUndergraduate Degree: University of Virginia, B.A. Economics; Prior
Experience: Sr. Investment Analyst, Cambridge Associates - Arlington, VA;
Summer 2011: Associate, Private Wealth Management, Goldman, Sachs & Co.;
Post-Graduation: Financial Analyst, ExxonMobil – Houston, TX
Paul ChhoyUndergraduate Degree: Fordham University - Business Administration;
Prior Experience: Trader’s Assistant, Morgan Stanley - New York, New York;
Summer 2011: American Express - Finance Group; Post-Graduation:
Senior Consultant, Ernst & Young - Charlotte, NC
Siddarth BhatUndergraduate Degree: University of Pune - Engineering in Electronics &
Telecommunication; Prior Experience: Project Manager, OTB Solar, New
Delhi, India; Summer 2011: Associate, Sales & Trading, Citibank - London, UK;
Post-Graduation: Associate, Fixed Income Sales, Citibank - London, UK
Mario CastroUndergraduate Degree: Universidad de los Andes – Economics (Bogota,
Colombia); Prior Experience: Macroeconomic Analyst – National Association
of Financial Institutions (Bogota, Colombia); Summer 2011: Nomura Securities –
Latin America Strategy Group; Post-Graduation: Nomura Securities – Latin
America Strategy Group
23 2011 / 2012 annUaL report 24
Grier BuchananUndergraduate Degree: Vanderbilt University, B.A., Economics;
Prior Experience: Financial Analyst, JBG Rosenfeld Retail – Chevy Chase, MD;
Summer 2012: Intern, Portfolio Management – Hatteras Funds – Raleigh, NC
Todd CobbUndergraduate Degree: Duke University, BSE in Environmental Engineering;
Prior Experience: One year civil engineering and three years IT sales experience,
Raleigh, NC; Summer 2012: Commercial Leadership Development Program,
Eastman Chemical, TN
Richard AndersonUndergraduate Degree: Virginia Tech, Industrial and Systems Engineering;
Prior Experience: Management Consulting, Grant Thornton LLP;
Summer 2012: Commercial Banking, Wells Fargo
Sidharth Bhagavatula
Undergraduate Degree: NIT Warangal – Bachelor of Technology;
Electronics Engineering & Prior Experience: Application Developer,
Oracle Corporation; Summer 2012: Product Strategy, Amazon
2012-2013 BioS
Sharon LinUndergraduate Degree: National Cheng Chi University - Finance;
Prior Experience: Sell-Side Equity Research, Yuanta Securities - Taipei,
Taiwan; Post-Graduation: Treasury; Taiwan Semiconductor Manufacturing
Company - Hsinchu, Taiwan
Eric LuptonUndergraduate Degree: Union college, B.S. Economics;
Prior Experience: Equity research analyst, Chilton Investment Company;
Summer 2011: toys r’ us, corporate finance
Jaehoon ParkUndergraduate Degree: Pohang Univ. of Science & Technology, B.S. in
Material Science & Eng; Prior Experience: Senior Analyst, KIS Pricing, Inc.
(Moody’s Korea) - Seoul, Korea; Summer 2011: Research Analyst, Samsung
Securities - Seoul, Korea; Post-Graduation: Associate, Product Management
Division, KB Kookmin Bank - Seoul, Korea
Jungsang PyoUndergraduate Degree: Pohang Univ. of Science & Technology;
Prior Experience: Project Manager, Mando Corp - Wonju, Korea;
Summer 2011: Sales & Distribution Intern, Citibank Korea - Seoul, Korea
Rob Stekson, CAIAUndergraduate Degree: Drew University, B.A. Economics.; Prior
Experience: Institutional Sales and Marketing, New York Life Investments,
New York, NY; Summer 2011: Hedge Fund of Funds, Franklin Street Partners,
Chapel Hill, NC; Post-Graduation: TBD
Michael GloverUndergraduate Degree: North Carolina State University, B.S., Computer
Science; Prior Experience: Application Designer, CSC – Raleigh, NC;
Summer 2011: Analyst, Morehead Capital Management, LLC – Raleigh, NC;
Post-Graduation: TBD
Dalton HsuUndergraduate Degree: National Chung Cheng University, Business
Administration; Prior Experience: Prudential Financial; Summer 2011:
Morgan Creek, Chapel Hill; Post-Graduation: TBD
Michael Ives, CFA, CPAUndergraduate Degree: Duke University, B.A., Economics;
Prior Experience: Manager, PricewaterhouseCoopers LLP – Charlotte, NC;
Summer 2011: Equity Research, Credit Suisse – New York, NY;
Post-Graduation: VP of Finance, Prometheus Group – Raleigh, NC
Preetesh Kantak, CFAUndergraduate Degree: Princeton University, B.S.E Chemical Engineering
& Engineering Biology; Prior Experience: Convertible bond and option
portfolio manager, Platinum Grove Asset Management, Rye Brook, NY;
Summer 2011: Volatility Research Specialist, Silverback Asset Management,
Chapel Hill, NC; Post-Graduation: Ph.D. Finance, UNC
Alex VarnerUndergraduate Degree: Davidson College, French; Prior Experience:
Operations Associate, Lateef Investment Management, Larkspur, CA;
Summer 2011: Research Analyst, Main Management, San Francisco, CA;
Post-Graduation: Research Analyst, Main Management, San Francisco, CA
2011-2012Bioscontinued
Applied Investment Management
2012-2013 Bios
Front row (left to right): Alexander Arapoglou, Sidharth Bhagavatula, Adam Sues, Adam Wiklund, Josh Wilkes, Richard Anderson, William Mills, Graham Savage, Mustafa Gültekin
Back Row (left to right): Gregory Brown, Peter Panos, Scott Simonton, Ben Scully, Michele Panzeri, Grier Buchanan, Rob Frear III, Bill Schramm, Chip Snively
Not Pictured: Todd Cobb, Apurva Goel, Shuaiqi Gu, Alexandra Normile
25 2011 / 2012 annUaL report 26
Robert Frear IIIUndergraduate Degree: Michigan State University, B.S. Applied Engineering
Sciences; Prior Experience: Senior Strategy & Transformation Consultant,
IBM Global Business Services - Charlotte, NC; Summer 2012: Associate,
Private Wealth Management, Goldman, Sachs & Co - Chicago, IL
Apurva GoelUndergraduate Degree: University of Mumbai, B.E. Computer Engineering;
Prior Experience: Financial Modeling, Front office Systems, Wachovia
Securities, Charlotte, NC; Summer 2012: E&Y- Financial Services Office,
Risk Management, Charlotte, NC ;
Shuaiqi GuUndergraduate Degree: East China Normal University, B.S. Electrical
Engineering.; Graduate Degree: University of Wisconsin - Madison, M.S.
Electrical Engineering.; Prior Experience: Manager, Research and Development
Department, AMD inc., Sunnyvale, CA; Summer 2012: Summer associate,
Investment Banking Department, Bank of China, Hong Kong.
William Mills, CFAUndergraduate Degree: Washington and Lee University – Business Admin-
istration/Accounting and American History; Prior Experience: Agency MBS
Assistant Portfolio Manager and Trader, AIG Asset Management Group - New York,
NY; Summer 2012: Private Equity Summer Intern, Ridgemont Equity Partners
Alexandra NormileUndergraduate Degree: University of Virginia – Music and International
Relations; Prior Experience: Program Analyst, STG International Dept. of
Homeland Security contract; Summer 2012: Eton Advisors, Chapel Hill
Michele Panzeri, CFAUndergraduate Degree: Tennessee Technological University – Finance;
Prior Experience: Sales & Trading, Banca IMI Securities – New York, NY;
Wealth Management, Citi Smith Barney – New York, NY; Summer 2012:
Equity Research, TIAA-CREF, Charlotte
Graham SavageUndergraduate Degree: College of William and Mary, BA, Music
and American Studies; Prior Experience: Associate Analyst & Market
Intelligence, Legg Mason Capital Management; Summer 2012: Piedmont
Community Bank Holdings, Raleigh, NC
Bill SchrammUndergraduate Degree: St. Cloud State University, B.S. Finance, B.A.
Economics; Prior Experience: Fixed Income Analyst, RBC Global Asset
Management, (US) Inc. - Minneapolis, MN; Summer 2012: Summer Intern,
FX Desk, Ford Motor Co. - Detroit, Michigan
Scott SimontonUndergraduate Degree: University of North Carolina at Chapel Hill, BA
Journalism & Mass Communication; Prior Experience: Trader/Analyst,
BlackHawk Capital Management, Charlotte, NC; Summer 2012: Barclays
Capital – Sales & Trading Summer Associate
Ben ScullyUndergraduate Degree: Cornell University, B.S. Operations Research
Engineering.; Prior Experience: Project Manager for enterprise wide
implementation of cloud-based workflow management system at American
International Group (AIG). New York, NY; Summer 2012: Market Research
for Proprietary Trading Firm, Trillium Trading. New York, NY
Adam SuesUndergraduate Degree: Mount Union College, BA in Business Administration;
Prior Experience: Business Analyst, rPath, Raleigh, NC; Summer 2012:
Equity Research, Fidelity Investments, Boston, MA
Adam Wiklund, CFAUndergraduate Degree: University of Wisconsin-Madison - Finance, Investments,
and Banking and Management and Human Resources; Prior Experience:
Investment Analyst, Wisconsin Alumni Research Foundation; Summer 2012:
Morgan Creek Capital Management
Josh WilkesUndergraduate Degree: UNC Chapel Hill, B.S. Psychology; Prior
Experience: Retirement Consultant, Lincoln Financial Group – Charlotte, NC;
Summer 2012: Associate, Institutional Clients Group, Citi – New York, NY;
2012-2013Bioscontinued
27 2011 / 2012 annUaL report
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