business plan july 2012...business plan july 2012 confidential – not for distribution odin capital...
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BUSINESS PLAN
July 2012
Confidential – Not for distribution
Odin Capital Management Ltd, One Crown Square, Woking, Surrey GU21 6HR, United Kingdom
Phone: +44 1483 721 191, Fax +44 207 979 0255 [email protected] www.odincm.com
This document is issued by Odin Capital Management Ltd. which is authorised and regulated by the
Financial Services Authority. This document is only made available to Professional Clients.
Information contained in this document is provided on a strictly confidential basis only and does not
constitute an offer to sell or a solicitation of an offer to buy any security, nor is it advice or a
recommendation to enter into any transaction. Any offer to sell or a solicitation of an offer to buy or
sell shall be made solely by a Confidential Offering Memorandum. This document is being circulated
on a confidential basis only and may not be distributed to unauthorized parties and is subject to
modification, updating, validation and amending. All investments involve a risk of loss of capital and
no guarantee or representation can be made that an investment will generate profits or that an
investment will not incur loss of invested capital.
Disclaimer
Odin Capital Management Ltd - Strictly confidential
Odin Capital Management Ltd - Strictly confidential
Executive Summary 4
Strategy outline 5
Structure 6
Organisational chart 7
Partner Bios 8/9
Service providers 10
Odin Trading Ltd 11
Performance and risk 12
Our edge 13/14
Capacity 15
Marketing strategy 16
Terms 17
Offshore Directors bios 18/19
Contents
Positive 6-yr track record: 23.68% net return p.a, Sharpe ratio 2+
Successful operating history, partners from Credit Suisse & Goldman Sachs
Top fund service providers: Newedge, JP Morgan, KPMG
Low or negative correlations to equity and hedge fund indices
Scalable cross-asset strategy on world’s most liquid markets – capacity $1bn
Unique feature of discretionary execution supported by quant models
Managed accounts till present. Now also investable through offshore fund
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Odin Capital Management Ltd - Strictly confidential
Executive Summary
CIO Patrick Moerth started working on strategy in 2002. PhD and
exposure to world’s most successful hedge funds at Credit Suisse key to
outlining model characteristics and implementation
Futures cross asset model driven by fundamental and technical data
Quant models for directional bias and timing
Discretionary execution for consideration of market themes & agenda
Intra-day trading for exploiting short term market inefficiencies
Risk management: active position management and few positions for
strong trade selection
Limited overnight & liquidity risk
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Strategy outline
Best of breed selection
UK investment management firm founded in 2006 & registered
with the FSA since 2008
Fully functional offices in Surrey, near London, with a robust and
efficient technology personnel & infrastructure
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Structure
A mature structure
Odin Financial Ltd
BVI Offshore fund
Odin Capital Management Ltd
UK investment manager
Management
Qualified investors
IT
CIO COO
PM Macro quant
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Organisational chart
Patrick Moerth, CIO
2006-now: Odin Capital
2002-2006: Credit Suisse, Global Macro quant strat
2001-2002: Feri Alternative, HF analyst
PhD Economics from Univ. St Gallen
CFA, CAIA, FRM
Tigrane Kibarian, COO
2008-now: Odin Capital
2004-2008: Goldman Sachs, portfolio restructuring
2001-2004: General Electric, corporate finance
2000-2001: Arthur Andersen, Audit
MBA from ESSEC – French Grande Ecole
Deepak G.C., Information Technology
2009-now: Odin Capital
MSc Computing
TBA, Portfolio manager
2012: Odin Trading
2009-2011: Family office trader
2006-2008: Absolute Capital, portfolio manager
2005-2006: Barep (SocGen HF), risk manager
French Engineer
TBA, Macro quant strategist
2009-now: Odin Trading
2004-2008: Project manager, Travelsky Group, China
MBA from Oxford, Msc Computer Science in Beijing
1st prize of China Physics competition - CFA, FRM, IMC
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Bio – Patrick Moerth, Founder & CIO
Patrick Moerth is the founder and Chief Investment Officer of Odin
Capital Management Ltd. He has more than 11 years professional trading
and investment experience in the hedge fund industry. Prior to founding
Odin Capital Management he was responsible for Global Macro and
quantitative strategies in the hedge fund group of Credit Suisse in Zurich.
He entered the industry as a hedge fund analyst at FERI Alternative
Assets. He holds a PhD in Economics from the University of St. Gallen,
a European Masters of Business Sciences and a Masters of International
Business from the University of Vienna. He qualified in all three levels of
the CFA and both levels of the CAIA programmes as well as the GARP
FRM examination. He is the author of several hedge fund specific
publications in recognised scientific journals and specialised books.
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Odin Capital Management Ltd - Strictly confidential
Bio – Tigrane Kibarian, COO
Tigrane Kibarian is Chief Operating Officer with over 9 years of markets
experience. He started his capital markets career at Goldman Sachs in
London on the equity trading floor in 2003. Primarily in charge of equity
business strategy, he was promoted to VP in the portfolio transition
management team responsible for large institutional 1bn+ cross-asset
portfolio restructurings. Risk management and operational excellence
were critical to his success in the role. Based on that experience, Tigrane
started trading his own proprietary portfolio, active across foreign
exchange, bonds and equity indices futures. Prior to capital markets,
Tigrane worked as an auditor for Arthur Andersen and as a corporate
financial professional at General Electric in both France and Italy.
Tigrane graduated from leading French Business School ESSEC.
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Odin Capital Management Ltd - Strictly confidential
Fund Service providers
• JP Morgan Custodian
• Newedge Group Clearing broker
• KPMG Fund Auditor
• DMS -Don W. Ebanks & Ronan Guilfoyle Independent offshore
directors
• Charter Group Fund Administration Administrator
• Kaye Scholer (onshore) & Harneys (offshore) Legal Counsel
• Rees Pollock (London) Investment manager
auditor
Independent and segregated business with no access to client information or positions
10+ in-house traders active on US and European equity indices, bonds, currency and
commodity futures
Manager with 25 years experience runs operations, letting Odin Capital staff dedicated to
client fund management
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Odin Capital Management Ltd - Strictly confidential
Odin Trading Ltd
Discussions
between PM’s and
traders about
market structure
Ability to assess
traders & engage
top performers for
Odin Capital
Implementation of
quant strategies
based on market
observations
ODIN TRADING Ltd
SYNERGIES WITH ODIN CAPITAL
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Odin Capital Management Ltd - Strictly confidential
Net Performance & risk
Performance exhibits net returns since inception accounting for 1% management fee and 25%
performance fee subject to a high watermark as well as operational and trading costs.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2006 1,82% 1,98% 2,70% 6,44% -0,02% -1,81% 4,37% 16,28%
2007 2,18% 2,60% 5,22% 0,01% 0,70% 5,28% 4,83% 11,27% 1,94% 3,19% 2,09% 7,03% 56,83%
2008 9,71% 4,40% 10,84% 0,21% 1,48% 4,61% 1,21% 6,49% 1,82% 7,01% 3,27% 3,36% 69,31%
2009 0,29% -0,01% 1,63% -6,49% -0,42% 0,26% 0,11% 0,16% -0,25% -0,01% -0,01% -0,13% -4,98%
2010 0,50% -0,96% 1,13% 0,87% 5,41% 2,04% 0,49% 0,26% 3,47% 0,73% -1,36% 1,88% 15,24%
2011 1,91% 1,55% 2,82% -1,31% -6,04% 3,49% 1,65% 0,36% 3,70% 0,49% -0,97% 1,23% 8,83%
2012 2,50% 0,24% -4,15% 0,96% -2,53% 2,16% -0,99%
Return p.a 23,68%
Standard dev. p.a 10,88%
Sharpe ratio 2,02
Positive months 78,08%
Upside potential ratio 1,68
Omega 5,5
Maximum drawdown -7,28%
Modified VaR -3,82% -8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Jun-0
6
Aug-0
6
Oct-06
Dec-
06
Feb
-07
Apr-
07
Jun-0
7
Aug-0
7
Oct-07
Dec-
07
Feb
-08
Apr-
08
Jun-0
8
Aug-0
8
Oct-08
Dec-
08
Feb
-09
Apr-
09
Jun-0
9
Aug-0
9
Oct-09
Dec-
09
Feb
-10
Apr-
10
Jun-1
0
Aug-1
0
Oct-10
Dec-
10
Feb
-11
Apr-
11
Jun-1
1
Aug-1
1
Oct-11
Dec-
11
Feb
-12
Apr-
12
Jun-1
2
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Our Edge – Process and performance
• Robust investment process
Consistently positive track record through different
economic environments & cycles
• Correlations
Low or negative correlation to EQ and HF strategies
Year
Jun/Dec
20062007 2008 2009 2010 2011
June 2012
YTD
Odin CM
correlation
Odin Capital
Management 16,28% 56,83% 69,31% -4,98% 15,24% 8,83% -0,99%
DJ/CS Hedge Fund
Index 7,02% 12,56% -19,07% 18,57% 10,95% -2,52% 2,61% -0,31
DJ/CS Global Macro
Hedge Fund Index 5,00% 17,36% -4,62% 11,55% 13,47% 6,44% 1,53% -0,05
DJ/CS Managed
Futures Index3,65% 6,01% 18,33% -6,57% 12,22% -4,19% 2,14% 0,07
S&P500 total return -
incl. dividends11,66% 5,49% -37,00% 26,46% 15,06% 2,11% 8,31% -0,29
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Odin Capital Management Ltd - Strictly confidential
Our Edge – Skill and structure
• Access to talented traders
We have the ability to select traders with good
performance metrics and scalable strategies from Odin
Trading Ltd, which acts as an incubator for the Fund.
• In-house programming expertise
Market observations can be analysed and translated
into systematic strategies. Once these have been
tested and traded successfully for a period of time,
clients will be given the opportunity to participate
• Fee structure
1.5%/25% structure fully aligns interest of investor with
that of Odin Capital Management
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Odin Capital Management Ltd - Strictly confidential
Capacity
80%
5%
5%
5% 5%
Strategies for $40MM AUM
Global Macro
Quant strategiesequity indices
Quant strategiesbonds
Quant strategiescurrencies
Quant strategiescommodities
60%
10%
10%
10%
10%
Strategies for $1bn AUM
Global macro
Quant strategiesequity indices
Quant strategiesbonds
Quant strategiescurrencies
Quant strategiescommodities
• Global Macro strategy executed with highly liquid futures and scalable up to $1bn
• We have the team, infrastructure & strategies to perform with significant inflows
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Marketing strategy
• Launch offshore fund vehicle & establish operational robustness
• Increase visibility through HF events, HF databases & press articles
• Establish strategic relationships with cap intro agents in US, Asia & Switz.
2Q 2012 - Set-up & Visibility
• Launch US onshore fund in 4Q
• Road show in Asia, US and Switzerland in 3Q & 4Q
• Keep building managed accounts & be investable across client spectrum
3Q/4Q 2012 - Investor meetings
• Maintain momentum & high visibility profile to get on FoHF’s radar
• Introduce quant strategies to offering
• Attract sophisticated “brand” investors
2013
USD and EUR share classes, 2x leveraged share class
Subscriptions and redemptions at month end
Minimum subscription 100,000USD or EUR equivalent
Redemptions free of charge with 30 days notice
0.5% charge for shorter notice redemptions
High-water mark applies
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Odin Capital Management Ltd - Strictly confidential
Terms
No gate or lock-up period
Monthly liquidity terms
1.5% management fee
25% performance fee
Investors subscribing from first dealing date will profit from a 1%
discounted management fee on all investments made in first 6 months
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Odin Capital Management Ltd - Strictly confidential
Offshore Director Bio – Don W. Ebanks
Don Ebanks is a Director and Global Head of Compliance of DMS Management Ltd. He boasts
extensive experience in the financial services sector from multiple perspectives, i.e. private banking,
investment management, financial products, regulatory matters and distressed/restructuring scenarios.
Previously, Don was employed as the Executive Director of the Secretariat of the Portfolio of Finance &
Economics within the Cayman Islands Government, providing policy advice to the Financial Secretary
and Cabinet Ministers. He routinely participated in or led consultative committees and working groups
considering legislative amendments and other significant matters.
Prior to his work with the Secretariat, Don was the Managing Director of the insolvency and
restructuring practice of Ernst & Young in the Cayman Islands, and also worked in its London office.
Before joining Ernst & Young, Don was employed as the Deputy Head of the Investment Services
Division of the Cayman Islands Monetary Authority (CIMA), the independent government agency
responsible for the regulation of the financial services industry, where he created and became the first
Head of the Compliance Division. Here he managed all enforcement matters for CIMA and was
responsible for the case management of complex distressed fund matters, engaging insolvency
practitioners where required and managing the resolution of cases across various firms, regulatory
agencies and jurisdictions.
Don began his career with Coutts & Co. serving as a portfolio manager, and then moved to Barclays
Private Bank to take up an asset management role, where he was also a Trustee of the Barclays Bank
Pension Scheme in the Cayman Islands. Don has also been involved in the management and
development of family real estate interests. Don is a member of the Cayman Islands Compliance
Association, and holds a Master of Arts degree in Economics from the University of Western Ontario.
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Odin Capital Management Ltd - Strictly confidential
Offshore Director Bio – Ronan Guilfoyle
Ronan Guilfoyle is a Managing Director of DMS Management Ltd. Formerly, Ronan was employed as a
Group Manager at Admiral Administration Ltd., an independent mutual fund administration firm based in
the Cayman Islands, where he oversaw more than 50 hedge funds with assets in excess of US$5
billion. During his tenure at Admiral Administration, he was instrumental in building and managing
strategic relationships for large hedge fund clients. In this role, he led a group that was responsible for
the accurate and timely delivery of full fund administration services to a variety of convertible, private
equity, hedge and fund-of-fund clients. In addition to core administrative services, much of his time was
devoted to working with investment managers to help them address the cultural challenges of advising
an offshore hedge fund, including working in an appropriate manner with the board of directors.
He began his career with Ernst & Young, Ireland, where he was responsible for supervising audit
teams on large global audits in excess of US$3 billion, as well as training staff in audit methodologies.
Ronan is the Treasurer and a Director of Cayman Crime Stoppers as well as a board member of Hedge
Funds Care Cayman. In addition, he is also a member of the Cayman Islands Directors Association and
the Cayman Islands Society of Professional Accountants. He is a Chartered Accountant and holds a
Bachelor of Science degree in Accounting from University College Cork, Ireland.