Hedge.funds World Asia 2002

Alternative Investment Management Association - Asia
Long Investment Management HK, Managing Director,

OPENING ADDRESS

Michael Sofaer has been the Managing Director and Principal of Sofaer Capital Inc (SCI) since its inception in March 1986. He founded First Pacific Fund Management in Hong Kong in 1983 where he pioneered hedged investing in Asia, firstly in global funds and then by forming the first Asian hedge fund in March 1989. In this session, Michael will look at how the industry has evolved over the last 13 years and what we can expect in the future of Asian Hedge Funds

Hedge funds are here to stay and entering the mainstream
- a global overview:

Mini-Presentations & panel discussion
This session provides an update and a future prediction of where the global alternative investment industry is heading. In particular what are the likely implications for Asia and Asian managers? In particular the session will:

• Examine what are the dynamics driving the growth of the global hedge fund industry - buy, build or partner?
• Who are the new and up-and-coming players?
• What are the new products and distribution channels?
• How is this changing in both a global and local level?
• The issue of capacity surrounding the entrance of institutions into hedge funds and what are the likely implications for Asia

European overview and session moderator
Hans-Willem van Tuyll, Chairman,
Alternative Investment Management Association, Vice President
Cargill Investor Services, Switzerland

SPECIAL ADDRESS

The Securities and Futures Commission (SFC), Hong Kong's market regulator, has begun discussions last summer on whether to allow retail investors to buy into hedge funds. This session will discuss:

• What process did the SFC implement to discuss the release of Hedge Funds to the retail market?
• What was the response of the industry and the public?
• How will the SFC consolidate the response into its guidelines?
• An analysis of those guidelines and how it may change in the future
• What products will the SFC allow to the retail market of Hong Kong?

AHL DIVERSIFIED FUTURES: A case study of the only hedge fund currently authorised by the Hong Kong SFC

CASE STUDY:

AHL Diversified Futures is arguably the first and (at the time of print) currently the only hedge fund to be authorised by the Hong Kong SFC, for sale to retail investors. This case study is an examination of the processes undertaken in getting the fund authorised and the lessons learnt. In particular how might this process change in light of the recommendations and new guidelines made by the SFC regarding the authorization of hedge funds. The session will explore:

• What obstacles were faced when getting the fund authorised?
• What were the concerns that the regulator had to overcome before approval could be granted?
• What were the reasons that this fund was successful in receiving approval where others had failed?
• How has this fund been distributed: distribution of this fund in the market place
• What was has been the response from the investing public?

The Role Risk Management Plays within a Fund of Funds Portfolio Management

CASE STUDY:

This session will analyse the role risk plays within any given portfolio and how proper management can both reduce exposure to risk while maximising absolute returns. The session will specifically examine:

• Where are the risks in a fund of funds?
• Risk management in manager selection
• Strategy diversification
• Transparency

LUNCH

for sponsors, speakers and delegates:

hosted by Fortis Fund Services:

www.fortisbank.com

WHAT WE WANT!

Panel Discussion:

Life insurance companies, banks, other institutional investors and high net worth individuals are all increasing their investments in hedge funds. This panel consists of a family office, an insurance company and an asset advisor and a broker who have all invested in hedge funds. They will discuss the following issues:

• What are the constraints many investors face from investing in alternative investments? Is it liquidity? High fees? Poor image? Lack of transparency? LTCM? Leverage? High risk?
• Where is demand coming from? How does it differ across the globe?
• How do investors categorise hedge funds in their overall portfolio?
• Some investors are interested in spin-offs from large established hedge funds. How are these managers different from other new managers?

Session Moderated by:
Peter H. Fletcher, General Manager,
Parly Company S.A, Switzerland

Peter is the General Manager of the Parly Family Office of Switzerland. A family office with assets under management in alternative investments such as hedge funds amongst other alternatives.

Panellists include:
Kenji Kodama, Deputy Manager, Alternative Investment Group,
The Tokio Marine and Fire Insurance, Japan

Tokio Marine and Fire Insurance has around 2 Trillion Yen in capital from its insurance policies, which it invests in a broad range of investments. They invest a substantial amount of this money into alternatives (Private Equity and Hedge Funds) and have specifically invested in 16 Hedge Funds as at 2001.

Raymond Wong, Managing Director,
Cheetah Investment Management, Hong Kong

As director of Cheetah Investment Management, Raymond has a hands on approach to making investment allocations to hedge funds.

Christophe Lee, Chief Executive Officer,
Sun Hung Kai Financial Management

SHK Financial Group is one of the top local stock brokers in Hong Kong. In addition, they have been very active in providing alternative investment advisory services to their clients and represent a number of US and European based hedge funds.

The National Association of Investment Fiduciaries (NAIF)
- Institutional investors roundtable

Panel Discussion:

U.S. Institutional investors from diverse segments of the investment community share insights, exchange ideas, and debate the merits of emerging fiduciary issues in alternative investing and the potential implication of current investment trends and events.

• New ideas, directions and best practices: what's next in the minds of pioneering thinkers and leading innovators
• Practical advice on how to get the most out of your own alternative investment program
• The quest for alpha and its challenges: real life experiences of successes and failures

This panel is organised by:

Moderator:
Qui T. Vuong, Founding Member - Chairman,
The National Association of Investment Fiduciaries (NAIF), USA
Former trustee, Houston Police Officers' Pension System

Afternoon refreshments

Insight into how managers can both raise and maintain capital for their hedge funds

• An examination of structures: Retail, Wholesale and Fund of Hedge Funds
• The role of distribution channels:
  • Direct
  • Wholesale
  • Third Party
• Barriers, what are they and how to overcome them? Examining the roles of Regulations, Gatekeepers and Track Record/Time

Scott MacDonald, Managing Director,
MacDonald Asset Consulting, AUS

CHINA ENTERS THE WORLD TRADE ORGANISATION: Examining New opportunities for Hedge Fund Managers and investors

• Summary of China's environment for fund management regulatory issues surrounding alternative choices and investors' protection
• WTO implications
• What is the impact on Hong Kong and Asian hedge fund managers and advisors likely to be?
• Examining the challenges and opportunities going forward

Hedge funds - consideration of the legal issues

Panel Discussion:

• What are the current and likely future developments in hedge fund regulation in Asia?
• What legal implications will there be if the Hong Kong SFC decides to make Hedge Funds available for retail investors?
• For investors wishing to invest in offshore vehicles - consideration of offshore vehicles from a legal perspective
• What regulatory differences are there between marketing Offshore and Retail Funds within Hong Kong and the rest of Asia?

Session moderated by:
David Leahy, Counsel Asia-Pacific,
CITCO Fund Services, HK

Panellists include:
Mark Shipman, Partner,
Clifford Chance, HK

Jill Wong, Consultant,
Allen & Overy, HK

COCKTAIL RECEPTION

for sponsors, speakers and delegates:

hosted by Bank of Bermuda:

www.bankofbermuda.com

The success traits of market wizards

Market Wizards - Interviews with Top Traders is regarded as one of the most fascinating books ever written about Wall Street. In this session, Mr Schwager will discuss the common traits and themes that he found consistent within the traders and managers the interviewed for his three Market Wizard books

Jack D. Schwager, Principal,
Market Wizards Funds,
And Author of Market Wizards, USA

Mr. Schwager is currently a member of the board and senior advisor to Global Fund Analysis., a fund research and consulting firm headquartered in London. He serves as a co-advisor, along with Global Fund Analysis, to the Market Wizards Fund, a share class of Multi-Manager Fund. Mr. Schwager is perhaps best known as the author of the best-selling Market Wizards (1989), and the equally popular The New Market Wizards (1992). A third volume in this series, Stock Market Wizards, was released in early 2001.

Using convertible arbitrage to reduce risk and achieve greater ALPHA

• Year-to-date performance for the strategy
• Changes in the convertible universe
• Credit protection: How often is this used and how effective is it?
• Volatility: How has it been this year, recent past, and what is the outlook?
• Convertible Arbitrage Manager Alpha: Is there a difference amongst managers

Managers' strategies and styles - what is the "flavour of the month"?

Panel Discussion:
This panel will consist of an assortment of established managers that will discuss the trades and strategies they employ to achieve absolute returns, as well as provide a detailed explanation of specific alternative investment categories.

Incorporating Hedge Funds into a Traditional Institutional Portfolio

• Examining the characteristics of hedge funds - risk/reward and correlation's
• Asset-Liability modeling - incorporating hedge funds into long term strategic benchmarks
• How many hedge funds should an institution invest in?
• Capturing hedge fund performance and increasing alpha
• Ongoing monitoring of hedge fund investments.

Strategic asset allocation in a fund of hedge funds

Panel Discussion:
This exciting panel comprises managers from all corners of the globe. As Fund of Hedge Funds become increasingly popular this panel will give insight into how allocation occurs in the UK, the US, Australia, Singapore and of course Hong Kong. Specifically the session will examine:

• How does allocation in a fund of funds differ from a straight hedge fund?
• Choosing the appropriate balance of assets
• Absolute vs. relative return

Investment Liquidity and Capacity

Capacity is an issue that affects everyone and varies from one opinion to another. It is a serious issue however and it affects funds and fund managers world-wide. This session will examine:

• The redemption and re-investment of funds and the implications for the remaining investors
• Are hedge funds reaching capacity?
• What is the limit and what effect will capacity have on funds and fund of funds?
• How to use liquidity analysis to enhance investment performance?

LUNCH

for sponsors, speakers and delegates:

á

hosted by Cargill Investor Services

http://www.cis.cargill.com/

Is this the beginning or the end of the boutique hedge fund?

Panel Discussion:
Are Hedge Fund managers returning to the big institutions? What impact will there be within the industry if this is the case? This session will examine the latest trends and implications within the potential institutionalisation of hedge funds managers.
Panel will include managers who have left boutique firms to join institutions and vice versa. What will be the impact in terms of capacity?

Panellists include:
Hugh Simon, Chief Executive Officer,
Hamon Investment Group, HK

Scobie Ward, Director and Chief Investment Officer,
Ward Ferry Management, HK

Giampaolo G. Guarnieri, Managing Director & CIO,
Phoenix Research, HK

A walk through the due diligence process - achieving best practice

This session will review methods to conduct due diligence on hedge fund managers and provide viewpoints on what constitutes reasonable transparency. Issues will include :

• Determining the extent to which an explicit methodology exists and is followed
• Assessing familiarity with portfolio holdings such as core business, financials, management and competitors
• Listening for an unusual depth of knowledge such as industry markets, market psychology, trading and hedging

Implications on Tax for Hong Kong Hedge Fund Managers

This session will examine the tax environment and implications for hedge funds within Hong Kong. In particular it will discuss:

• A highlight of the current tax law and practices
• Some of the most common structuring issues and what they imply
• What can the Hong Kong government do to further its tax competitiveness

The impact of electronic order routing and the Internet on alternative investments

The demand for higher return is the cornerstone of the alternative investments community. With the information readily available, advisors and managers recognise no country borders, no geographical restraints in their quest for better yield. This session will discuss the shift from a traditional investment environment to online trading and the benefits gained.

• Operational efficiency: Front to back end solutions
• Transparency and portfolio reporting
• How can a fund manager use the web to disseminate information about his fund? And FOF managers? (as FOFs must abide by the restrictions for both US and offshore funds)

HEDGE FUND INDICES: Investment performance measurement and benchmarking

Hedge fund indices are playing an increasing role in both benchmarking and measuring performance. This session examines one of the more established indices in existence and will discuss their various pros and cons. In particular this session will examine:

• Hedge Fund Indices and how they operate
• Selecting the appropriate benchmark
• Interpreting performance results

Mini Presentations:

The concluding session of the conference is a series of 3 x 10 minute mini presentations relating to the world of other Alternative Investments. This will immediately be followed by a combined Q&A.

Hedge Funds vs Other Alternatives

• What are the alternative alternatives?
• How do hedge funds compare with other types of alternative investments?
• How should investors allocate between the different types of alternative investment asset classes?
• Private Equity as an alternative
• Property as an alternative

Structured Products

• What are the pros and cons of investing in structured products and what do they offer Asian investors? How does this differ from them in the US and Europe?
• Why utilise structured products in allocating to hedge funds and other alternatives and what are the risk/return characteristics?
• How are structured products an excellent source of alpha?

Capital Guaranteed products linked to Alternative Investments. Accessing hedge funds through capital guaranteed products.

• A safe way to invest in alternative investments
• How to structure such investments
• What is available in the market?
• What are the advantages and drawbacks?