“Hot desking” in Funds Management? Recently I met an old friend working for a prominent Australian Multi Manager. We met at a coffee shop, which was part of the brand new, state-of-the-art bank headquarters in a newly developed area just south of Sydney’s CBD. I was quite amazed at a number of things. First, the office was a “hot desk” set up. Basically, the investment team has a designated area, but no designated desks. In the morning, first in, best dressed. You hook your laptop up and log in. A large screen is attached to your laptop and the log in recreates your phone numbers and desktop configuration on the network. At the end of the day, you log off, clean off the desk (i.e. no papers, nothing), go and lock your laptop into a locker, and go home. Depending on how early you get in, you might get the same desk, but you might not! And there is nothing on the desk. No family photos, Wallaby signed footballs, nothing. ANZ Bank has a large new building in Pitt Street Sydney and I hear that this is also a “hot desk” arrangement. I looked up this concept of “hot desking” and it’s claimed that it saves 30% of building space. The theory is that with holidays, sick days and travel, not all of the desks are being used and therefore a more efficient use of space. I did stop and wonder how it affects people and team interaction. From what I can gather, even senior execs are “hot desking”. I think about my desk. It’s a bit of a mess. Bills to be paid. Presentations and reports to read. Family photos. iPads, Macbook Air, screen, Mac mini and a variety of iPods, iPhones and earphones. I couldn’t contemplate “hot desking” but maybe that’s just what the doctor ordered. I have been thinking about going paperless. Every piece of paper scanned onto my Mac mini Server. I also think that this prompts people to get out of the office. Equity managers visiting companies. Marketers going around visiting clients. I guess that works if those that you are visiting are in sync and don’t prefer to sit in an office. The second thing that hit me was the use of Apple Airbooks by the bank and fund management staff. Everybody was sitting around in the cafes with 11 inch Airs. I enquired about this and that was the computer of choice for one of the biggest banks in the country, but get this, they were all running Windows! I guess Bootcamp versions of Windows. I

think they were all running Version 7 versus 8. I was pretty amazed as I used to work for the same group. In the early 2000’s half the staff didn’t have email. I used to communicate, in some cases, by fax only! This is a massive technology turnaround. I actually bank with this bank and their net access is fabulous. I guess I’m just fascinated about this sort of stuff. Other people find it boring but I’m a creature of change and innovation. All of this is part of a changing world in which we do business. I love it that large organisations become creative and innovative. I hope the days of still using Windows XP are long gone and that corporate IT Professionals get to push the envelope. I remember one corporate IT Manager telling me in 1993 that Windows was a passing fad. Well, he certainly got that wrong. “hot desking” is part of this innovation and I see this as a growing trend. It will certainly help me be a lot more disciplined around my desk. Top 100 Alternatives Managers top $3 trillion – Towers survey Total assets managed by the Top 100 global alternative investment managers (by AUM size) reached $3.1 trillion in 2012, according to research by Towers Watson and published in conjunction with the Financial Times. The 97-page Global Alternatives Survey covered seven asset classes (see below) with real estate accounting for a third of AUM. Hedge funds, both direct and via fund of hedge funds, accounted for 26%. !Asset Class $ billion held

by top 100 IM’s

% of total

Real estate 1,000+ 34 Direct private equity 717 23 Direct hedge funds 612 20 Private equity funds of funds

315 10

Funds of hedge funds 176 6 Infrastructure 128 4 Commodities 118 4 Total 3,066 100 Source: Towers Watson. % does not add due to rounding

AUSTRALIAN HEDGE AUGUST 2013 NEWSLETTER

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TRIPLE A PARTNERS 2

The report notes several key trends within the hedge fund sector. They include: • Institutional investors want their hedge fund

allocations to offer low correlation to traditional markets, greater transparency, appropriate liquidity, alignment and appropriate fees.

• While larger hedge fund managers are generally perceived to be safer from a business risk perspective, investors are increasingly allocating to more modestly sized managers that have proven alpha generation.

• Only a small number of FOHFs offer credible capacity so further consolidation is expected. FOHFs are increasingly working with investors in a customised matter.

Data from Towers’ broader survey shows that total global alternative AUM is now $5.1 trillion and is split between the asset classes in similar proportions to the Top 100 alternative investment managers, with the exception of real estate which falls to 26% and direct hedge funds which increases to 26% of the total. The research included a diverse range of institutional investors. Pension fund investors represent over a third (36%) of the Top 100 alternative managers’ assets, followed by wealth managers (19%), insurance companies (9%), sovereign wealth funds (6%), banks (5%), funds of funds (3%), and endowments & foundations (2%). !Bennelong to launch new wealth advisory, AUM tops $5 billion Bennelong Group is creating a new wealth management advisory business targeting high- and ultra-high-net-worth investors. The unit will be headed by Fiona Rowland (ex-UBS) and will operate independently of Bennelong’s funds management and private equity businesses. A controlling stake in Melbourne-based wealth management and advisory firm Carnbrea &! Co. is being acquired as part of the build-out. Meanwhile, Bennelong Funds Management has reached $5 billion in AUM via its boutique asset management teams including Avoca, Bennelong Australian Equity Partners, Bennelong Long Short Equity Management, and Kardinia Capital. ASIC in cooperation arrangements with EU on AIFMD ASIC has entered into 29 supervisory cooperation arrangements with European Union (EU) securities

regulators, agreeing to help each other supervise fund managers operating across borders. The cooperation is required to allow Australian fund managers to manage and market Alternative Investment Funds (AIFs) in the EU under the rules of the Alternative Investment Fund Managers - Directive (AIFM-D). An AIF includes hedge funds, private equity funds and real estate funds, among others. AIFM-D was implemented into law on 22 July 2013, and requires higher levels of reporting, risk management, depository and portfolio management functions. New AIFMs are now required to comply while existing AIFMs have until 22 July 2014 to comply. Preqin’s July Hedge Fund Spotlight newsletter noted that 65% of North American hedge fund managers felt they will be affected by the AIFMD. Hedge Fund Week, Sydney, September 2013 1. Monday 9th September - Australian Hedge Fund

Education Forum (lunch). Guest speaker is Chris Baker from Mercer discussing Investment Due Diligence. www.opsforum.com.au

2. Tuesday 10th September - AIMA Hedge Fund

Conference (full day) www.aima-australia.org/Events.html

3. Wednesday 11th September - Australian

Investment Managers Directory launch ceremony & cocktail party (evening) - Basis Point Consulting info@basispoint.com.au

4. Thursday 12th September - Global futures

industry seminar (lunch) - Basis Point Consulting info@basispoint.com.au

5. Thursday 12th September - Hedge Fund Rocks

and Australian Hedge Fund Awards Dinner (evening) http://hedgefundsrock.com.au/

!Finalists for the Australian Hedge Fund Awards 2013 announced The finalists are: Australian Hedge Fund of the Year

! BlackRock Multi Opportunity Fund ! Laminar Credit Opportunities Fund ! Whitehaven SPC Correlation Fund

Best Emerging Manager ! MST Capital ! Quiris Capital ! Whitecove Capital

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Best Long Short Fund ! Australian Leaders Fund ! LHC Capital Australia High Conviction Fund ! PM Capital Absolute Performance Fund

AUD Best Market Neutral Fund

! Bennelong Long Short Equity Fund ! BlackRock 32 Capital Master (USD) ! Macquarie Asian Alpha Fund

Best Global Macro/ Futures Fund ! GMO Systematic Global Macro Trust -

Class B ! MST Capital Global Fund ! Whitehaven SPC Correlation Fund

Best Multi Strategy Fund ! BlackRock Multi Opportunity Fund ! Perpetual Growth Opportunities Fund ! Pine River Fund (USD)

Best Offshore Manager operating in Australia ! AQR ! BlackRock ! K2 Advisors

Best Fixed income & Credit Fund ! BlackRock Fixed Income GlobalAlpha Fund

(USD) ! Laminar Credit Opportunities Fund ! Spectrum Wholesale Enhanced Income

Fund

Best Investor supporting Australian Managers, Contribution to the Australian Hedge Fund Industry, and the “Hedgie” Award (best film clip) will be announced on the night. Thorney to manage funds via listed entity Thorney Investment Group has formally proposed to ASX-listed cash box Wentworth Holdings Limited for a recapitalisation and conversion into an absolute return-focussed investment firm. If the proposal is implemented, WWM will: • Undertake a capital raising of around $50 million,

with Thorney aiming to increase its shareholding in WWM to at least 30% (currently 26%).

• Appoint Thorney as WWM’s investment manager pursuant to a management agreement. WWM will adopt a broader investment strategy and pursue absolute returns.

• Appoint Alex Waislitz (Thorney’s Founder) as WWM Executive Chairman and Chief Investment Officer.

Thorney is owned by Waislitz and his wife, Heloise, who is one of the heirs to the Pratt family fortune.

BNP Paribas IP to distribute for global alternatives manager Permal BNP Paribas Investment Partners Australia (BNPP IP) will exclusively distribute alternative investment offerings of the Permal Group in Australia. Permal is a global alternative asset manager with $23 billion in AUM of which $7 billion is within its customizable managed accounts platform. It acquired BNPP IP’s Fauchier Partners, rebranded ‘Jubilee Advisers’, in March 2013. Permal is part of the Legg Mason Group of Companies. BNPP IP is also the distributor in Australia for Antin Infrastructure Partners (European infrastructure), Arnhem Investment Management (Australian equities), Carnegie Asset Management (global equities), Fischer Francis Trees & Watts (global fixed income), Hamilton Lane (private equity), Impax Asset Management (resource scarcity). It also distributes the internal capabilities of BNP Paribas Asset Management. !Other developments • A new alternatives advisory firm, ZG Advisors,

has been established in Melbourne by Daniel Liptak and Swiss-based fund-of-hedge-fund Gottex Fund Management. Liptak was previously head of alternatives research at Zenith Investment Partners.

• Zenith’s co-founder David Smythe will also have

an equity stake in the new firm, which will offer its services to institutional investors. Gottex has AUM of $7 billion and expanded into Asia last year via its purchase of Penjing Asset Management in Hong Kong.

• Preqin’s June Hedge Fund spotlight newsletter

noted that the $22 billion Construction and Building Industries Superfund was seeking to invest in comingled direct hedge funds over the next 12 months to gain exposure to developed markets. The superfund has existing investments in two co-mingled direct hedge funds focussed on pure alpha and long/short strategies. Click here (page 15)

• Local Government Super has switched a $780

million Australian equities index mandate with State Street to an Australian equities quant strategy with the same manager, according to theinstoreport. LGS also awarded $90 million in an Australian equities mandate to Ubique Asset Management.

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• Christian Super has awarded a $4.5 million mandate to LeapFrog Investments, according to the Sustainability Report. South-Africa headquartered Leapfrog manages a $135 million global fund that invests in businesses which offer insurance and financial services to low income people.

• Montreal-based Presima, a boutique REIT fund

manager partner of nabInvest, has been awarded a mandate by Zurich Financial Services Australia to invest in global REITs. It is the second mandate win following an MLC allocation last month.

!People on the move PM Capital has appointed Simon Rutherford as Portfolio Manager covering Australian shares. He was previously an Executive Director at Northward Capital. Market Vectors ETFs has appointed Mathew McKinnon, (ex Perpetual) as Intermediary and Institutional Director. The firm has also hired Russel Chesler, (ex Sunstone Partners) as Investments and Portfolio Strategy Director. Market Vectors Australia was launched last year by US based Van Eck Global which has AUM of US$29.6 billion. The Australian operation is headed by Arian Neiron, Managing Director. Russell Investment’s Seattle-based CIO Peter Gunning will return to Australia as CEO of the firm’s Asia Pacific business. He replaces Alan Schoenheimer, who will transition to a non-executive advisory role. Russell has also appointed Jodie Hampshire as Head of Institutional Business in Australia. She was previously Asia Pacific COO – Investments (Pacific) at Mercer. Ibbotson Associates Australia has appointed Scott McIennan as Senior Relationship Manager, reporting to Ibbotson’s Head of Distribution, Matthew Esler. Mclennan was previously National Director – Capital Markets Investor Sales & Distribution for Westpac Institutional Bank. Hannah Goodwin, Citigroup’s Head of Asia Pacific Prime Brokerage, will retire at the end of October after eight years with the U.S. bank, according to Reuters. Treasury Group has appointed Andrew Howard as CIO, based in Melbourne. He is ex-CIO Asia Pacific for Mercer Australia, and will lead the development of Treasury Group’s portfolio of investment products for its partner boutiques, as well as being involved in the identification of new boutique managers.

Acorn Capital has appointed Paul Quah as a Portfolio Manager/Analyst for its Acorn Capital Asia Small Cap Fund. Quah was previously at Hong Kong-based broker CLSA Asia-Pacific, where he was Head of Regional Small Mid Cap Research for the last six years. !Basis Point Consulting’s Australian Investment Managers Directory 2013 will be launched on 11 September. The 76-page hard-copy directory profiles 209 investment management firms that are either fully or partly owned by their executives; as well as listed investment companies and specialist alternative investment managers including hedge funds. These firms have combined AUM of $279 billion. There are 148 independently-owned managers (most are deploying long-only, benchmark-unaware strategies), and 61 hedge fund firms. Directory sponsors include: Gold - Moore Stephens, TMF FundServices, and NYSE Liffe; Silver - Advent Software, Alceda, Australian Fund Monitors, Bloomberg, One Investment Group, Saxo Capital Markets, TripleA Partners & UBS. For details of the launch cocktail party (buy-side managers and institutional investors only) or to purchase copies, please contact Clinton D'Silva at cdsilva@basispoint.com.au

!

!!

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Bijak’s Macroeconomic Digest The forum to show your work to 7,000 professionals* George Bijak www.cpgli.com

The World Bank’s global outlook: less volatile but slower growth The world economy appears to be getting back on its feet as risks from advanced economies ease. Growth in the developing world will remain solid, albeit slower than the frenetic growth rates seen during the pre-crisis boom period, as developing countries grapple with home-grown challenges brought on by capacity constraints in many middle income countries, says the World Bank’s latest 2013 Global Economic Prospects. The full report is available at: http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1322593305595/8287139-1371060762480/GEP2013b_full_report.pdf Global GDP is expected to expand about 2.2% in this year and strengthen to 3.0% and 3.3% in 2014 and 2015. Developing-country GDP is now projected to be around 5.1% in 2013, strengthening to 5.6% and 5.7% in 2014 and 2015, respectively, with growth in Brazil, Russia, India and South Africa projected to remain weak. Looking at broader region-wide trends, the East Asia & Pacific region is expected to grow by 7.3% this year; Europe & Central Asia by 2.8%; Latin America & the Caribbean by 3.3%; Middle East & North Africa by 2.5%; South Asia by 5.2%; and Sub-Saharan Africa by 4.9%. For high-income countries, fiscal consolidation, high unemployment and still weak consumer and business confidence will keep growth this year to a

modest 1.2%, firming to 2.0% in 2014 and 2.3% by 2015. Economic contraction in the Euro Area is estimated to be 0.6% for 2013, compared with the previous projection of 0.1%. Euro Area growth is expected to be a modest 0.9% in 2014 and 1.5% in 2015.

Global trade, after contracting for several months, is expanding once again, but trade is expected to expand only 4.0% in 2013, well off the pre-crisis pace of 7.3%. Part of the resilience of global trade, despite the weakness in high-income economies, has been due to rapid expansion in South-South trade. More than 50% of developing country exports now go to other developing countries. Even when China is excluded, South-South trade has been growing at an average rate of 17.5% a year over the past decade, with manufacturing trade expanding as rapidly as commodities trade. Regional Highlights Growth outlooks, including forecasts for each country, are available in the full report at: www.worldbank.org/globaloutlook Growth in the East Asia & the Pacific region was robust in the first quarter of 2013, but slower than last year. Overall, the regional economy is projected to expand by around 7.3% in 2013, before accelerating to 7.5% in 2014 and 2015. The weakness in 2013 partly reflects weak 7.7% growth in China, which is expected to strengthen to 8.0% and 7.9% in 2014 and 2015 respectively. Regional growth, excluding China, will slow in 2013 to 5.7%, partly due to fiscal policy tightening, but then firm on solid growth in Indonesia, Malaysia, Philippines and Thailand. Risks to the region include those surrounding the gradual reduction in Chinese investment, Japanese quantitative easing, rapidly expanding credit, and rising asset prices. After slowing sharply in 2012, GDP growth in

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Europe & Central Asia in 2013 will be supported by improved agricultural performance, reduced deleveraging pressures, and strengthening external demand. The rebound will, nevertheless, be constrained by weak carry-over growth due to slow growth in the last quarter of 2012, ongoing fiscal adjustments by the region’s economies, high unemployment, and still weak export demand. The region’s growth is expected to reach 2.8% in 2013 and 4.2% by 2015. Medium-term prospects for the region will critically depend on progress in addressing structural bottlenecks to economic growth, including capacity constraints, high unemployment and lack of competitiveness.

Growth in Latin America & the Caribbean is expected to strengthen marginally to 3.3% in 2013, from 3.0% in 2012, as lower commodity prices and subdued global activity will weigh on growth. Growth will firm somewhat in Argentina and Brazil from a very weak pace, while slowing down in most commodity exporters. In Venezuela, the reversal of highly expansionary policies will cause a sharp deceleration in GDP growth to 1.4% in 2013. Improvements in terms of trade will support growth in Central America, while growth in the Caribbean will be held back by financing constraints and necessary fiscal adjustments. Over the medium term, the regional economy is expected to grow just under 4% annually, supported by stronger capital flows (notably FDI), recovering external demand and structural reforms. Growth in the Middle East & North Africa region is projected to slow to 2.5% in 2013, from 3.5% in 2012, reflecting a second year of recession in Iran, subdued growth in Egypt and a modest pickup in Algeria. Political tensions remain high on account of upcoming elections and referendums, and security risks are dragging down activity and investment. Rising fiscal and external account imbalances

among oil importers are exacerbating funding pressures in the face of sharply lower private capital inflows since 2010. Medium-term prospects for the region hinge on the resolution of political tensions and security risks; and on the implementation of reforms to place the region’s economies on a more sustainable footing and to boost investment, jobs and growth. Regional GDP growth is projected at 3.5% in 2014 and 4.2% in 2015, as tensions ease and reforms are undertaken. GDP growth in South Asia slipped to 4.8% in 2012, mainly reflecting a continued deceleration in India, slower growth in Sri Lanka and Bangladesh, and sluggish growth in Pakistan and Nepal. Regional GDP growth is projected to pick up to 5.2% in 2013, before accelerating to 6.0% and 6.4% in 2014 and 2015, in line with strengthening external demand, normal monsoons, and a gradual pickup in investment spending. Growth in India is projected to rise to 5.7% in the 2013 fiscal year, and firm to 6.5% and 6.7% in FY2014 and FY2015, respectively. Continued progress in fiscal consolidation and in reducing structural constraints will determine the pace of recovery. Domestic risks dominate, including a possible derailing of reforms, and weaker than expected monsoon rains. Growth in Sub-Saharan Africa has remained robust due to resilient domestic demand and still relatively high commodity prices. These factors, along with projected strengthening of external demand, are expected to underpin a pick-up of growth over the 2013-2015 period to about 5.2% (excluding, South Africa, growth in the region will average some 6.2%). Nonetheless, a weaker than expected recovery in high-income countries or a sharper than expected decline in commodity prices could derail the region’s robust growth prospects and cause fiscal and current account balances to deteriorate. Domestic risks for some countries in the region include: overheating in economies operating close to capacity; adverse weather conditions; and political unrest. More information at: http://www.worldbank.org/en/news/feature/2013/06/12/Developing-world-faces-domestic-challenges-as-global-economy-stabilizes * We are inviting investment strategists, macroeconomists and researchers to show your best work to our 7,000 subscribers. Submit via email gb@cpgli.com your papers, presentations, research notes on the macroeconomic/strategic investment themes for a potential inclusion in this column.

AUSTRALIAN HEDGE Friday, September 6, 2013

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Damo’s Gadget Corner Apple iPhone Update Don’t go buying an iPhone in the next few weeks. Apple is to hold a media event where they will announce the next generation iPhone 5S and a cheaper version, iPhone 5C. The media event is rumoured to be scheduled for the 10th September. The rumour mill has been running hot but this seems to be the consensus. Apple will announce an upgraded spec iPhone 5, which will be the 5S. The phone will come with an upgraded chip called the A7 and it will be 30% faster. It will possibly have motion tracking, which allow additional user interactivity. It will supposedly be available in 3 colours: black, white, and a gold offering.

The iPhone 5C is a low-cost plastic model, which will come in 5 colours. It’s rumoured to be offered in white, blue, red, yellow, and green. The edges look to be rounded. In addition to the iPhone offerings, Apple may make additional announcements, which could include a price cut to the iPad mini plus a few surprises, which is the usual routine. So, watch the news releases around the 10th September for a few new Apple products!

In addition, some people are saying that IOS 7 will be released on the 10th. I’ve been running it on my iPhone and iPad and it’s definitely worth the upgrade. It has very flat icons and bright colours and some very subtle enhancements.

Tom Tom GPS Sports Watch I got this a couple of weeks ago and I am quite impressed. My preferred fitness regime includes the Jawbone UP coupled with the Tom Tom GPS Sports watch. You can add the Whitings WiFi Scale and Whitings iPhone Blood Pressure Monitor and away you go!!!! A lot of the Apps are inter-linking so that you monitor running, walking, biking, and swimming (which is what I do) with weight, sleep and blood pressure data, which are effectively saved in the one place.

I previously had the Nike GPS watch, which was a collaboration with Tom Tom. The problem that I had with this was that it was sloppily constructed and it didn’t monitor swimming. It said water-resistant but I had two become water logged after using them in the shower!!!

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!

Damien Hatfield Triple A Partners Ph: +61-2-92340072 M: +61 400 560 240 E: damien@aaapartners.com.au W: www.aaapartners.com.au CONTRIBUTORS David Chin is the consulting editor for the Australian Hedge newsletter. He is also the managing director of Basis Point Consulting, a research and news syndication firm focused on the Australian and Asia-Pacific hedge funds, financial markets, and derivatives industries. Contact: dchin@basispoint.com.au George Bijak is a director and investment strategist of GB Capital Pty Ltd. A provider of corporate profits outlook – macroeconomic research for global dynamic multi asset allocation investment strategies www.cpgli.com Contact: gb@cpgli.com DISCLAIMER The information in this newsletter is based on data collected from sources within the market and believed to be accurate at the time of compilation. The publishers have taken every care to ensure the information contained herein is accurate, but take no responsibility for any errors. This report has been prepared with all reasonable care by Mona Vale Financial Services Pty Ltd. trading as Triple A Partners (ACN 158485128). It is provided for information purposes only and should not be construed as an offer or solicitation. It should not be relied upon as the sole basis for making an investment decision, nor should a decision be made until the risks of the investment are fully understood. Triple A Partners assumes no responsibilities for errors, inaccuracies or omissions in this summary. The information is provided without warranty of any kind. Past performance is not indicative of future performance. Investors may not get back the full amount originally invested. Triple A Partners is the trading name of Mona Vale Financial Services Pty Ltd ABN 701 584 851 28 AR: 426046. Copyright 2009 Triple A Partners. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, photocopying or otherwise without prior consent of Triple A Partners.

HEDGE FUNDS: 2 STRATEGIES WORKING IN 2013 - PAGE 1 OF 3 Australian Fund Monitors Pty Limited A.C.N. 122 226 724

Suite 431, 5 Lime Street, Sydney NSW 2000 ∞   PO Box R1904, Royal Exchange, NSW 1225 Phone +61 2 8007 6611 www.fundmonitors.com

HEDGE FUNDS: 2 STRATEGIES WORKING IN 2013 Just as the various sectors of the stock market are subject to different performances over time, so fund strategies and styles of portfolio management   differ   over   the   investment   cycle.   This   makes   an   investor’s  selection of managed funds, and particularly actively managed and alternative funds, vital to their portfolio performance.

The  table  below  shows  the  performance  of  each  strategy   in  AFM’s database over the past seven years, and highlights the inconsistency of performances, and as investors know well, that of financial markets in general.

There are a number of clear messages to take from this table, in addition to the obvious one that the performance of the market itself is subject to extreme swings. Firstly, when the market performed strongly (’07,   ’09  and  2012)   it  outperformed most alternative or active strategies. However, when the market fell or performed badly, such as in 2008, 2010 and 2011,

nearly all alternative and actively managed strategies performed better than the market.

This is both logical and to be expected. Generally non equity assets and markets are not correlated to the share   market   (although   this   didn’t   hold   completely  true   during   the   GFC)   and   the   “short”   side   of   many  hedge fund portfolios acts much like an insurance policy: When the market goes up and the short

HEDGE FUNDS: 2 STRATEGIES WORKING IN 2013 - PAGE 2 OF 3 Australian Fund Monitors Pty Limited A.C.N. 122 226 724

Suite 431, 5 Lime Street, Sydney NSW 2000 ∞   PO Box R1904, Royal Exchange, NSW 1225 Phone +61 2 8007 6611 www.fundmonitors.com

positions   underperform,   you   don’t   need   insurance  even though you have paid for it, but when the market goes down the insurance  “pays”  for  itself.

It’s   not   as   simple   as   that   of   course,   as   the   ability   of  many fund managers to reduce their overall market exposure by moving to cash in negative markets also provides a significant opportunity to avoid risk.

Equally, different funds within each strategy provide wide ranging performances depending on the skill and implementation of their respective portfolio managers. The chart below shows the performance range of individual funds over the past 12 months, with performances ranging from -50% to +75%.

Best Performing Strategies:

Over the past 12 months to July 2013 strategy performances have been wide ranging, as can be seen from the chart below:

Only two strategies outperformed the strongly rising ASX200, but all the top performing strategies were equity based:

Over the past 12 months one strategy that has performed strongly is Equity Long, with an average fund return of 26.37% benefitting from the broadly rising  market.   Some  might  question  why   “long  only”  funds   are   included   in   AFM’s   tables,   but   these funds generally have very concentrated, high conviction portfolios, some with only 15 or 20 positions, and many are able to adjust overall market exposure by holding significant cash exposure.

Equity 130/30 has performed even better with a performance over 12 months of +29.62%. Why? Because in equity 130/30 the manager short sells 30% of the portfolio by value, and uses the proceeds to increase their long exposure to 130%. Providing the stock selection is on target, the overweight long positions outperform the market, and the short positions either provide some protection, or add to performance if those stocks fall in value.

That’s   great   in   a   rising  market,  but   the  opposite   can  occur if the market declines and the manager is locked into an overweight long exposure. This is clear when looking back over the seven year strategy performance table at the start of this article. Generally when the market falls, Equity 130/30 funds suffer more than the index and other equity funds as the leverage they provide magnifies the extent of the downside risk.

It is worth noting that there are variations to Equity 130/30 which AFM includes in the overall strategy category, such as 120/20 and 150/50. The logic and implementation tend to be the same, with the difference being the extent of the leverage or market exposure. Effectively these strategies all have fixed net exposures (calculated as their total long positions minus their shorts) of 100%, but with gross exposure (long plus short) of 140, 160 or 200%.

HEDGE FUNDS: 2 STRATEGIES WORKING IN 2013 - PAGE 3 OF 3 Australian Fund Monitors Pty Limited A.C.N. 122 226 724

Suite 431, 5 Lime Street, Sydney NSW 2000 ∞   PO Box R1904, Royal Exchange, NSW 1225 Phone +61 2 8007 6611 www.fundmonitors.com

Critics of the 130/30 style argue that being locked into a fixed market exposure in all market conditions doesn’t   provide   sufficient   flexibility   to   dial   the  portfolio’s  risk  levels  either  up  or  down  as  conditions  change. However the strategy is gaining new followers amongst both fund managers and investors, particularly amongst previously long only advocates who are trying to find some risk mitigation in falling markets. Others argue that the leverage created by the gross exposure increases returns, but like all leverage also increases risk.

The alternative to Equity 130/30 is simply Equity Long/Short, which implies that the level of long, short, gross and net market exposure adjusts in line with   the   fund   manager’s   view   of   the   prevailing  market and specific stocks. Normally these funds have a bias to the long side of the portfolio, but performances are governed by both their stock selection and overall market exposure. These funds

make   up   the   majority   of   the   “actively   managed”  universe, both in Australia and overseas.

This in turn does create some bias in these performance tables as they are not adjusted for the weight of funds under management. Equally in those strategies with fewer funds the potential for statistical   risk   is   greater.   As   always   there’s   no  substitute for research, and understanding each fund’s  investment  strategy.

Chris Gosselin, Australian Fund Monitors ©

2 September 2013

Ph: 612+ 8007 6611

This article was written for the Eureka Report and published with permission on 2 September 2013

AFM permits the reproduction of its material in full or in part by the Media provided the source credit is clearly shown or attributed to Australian Fund Monitors Pty Ltd., or in the case of data tables or fund performance rankings, www.fundmonitors.com. See more at: http://www.fundmonitors.com/republishing

Disclaimer: The information contained herein is general in its nature only and does not and cannot take into account an investor’s  financial  position  or  requirements.  Investors  should  therefore seek appropriate advice prior to making any decisions to invest in any product contained herein. Australian Fund Monitors Pty Ltd is not, and will not be held responsible for investment decisions made by investors, and is not responsible for the performance of any investment made by any investor, not withstanding that it may be providing information and or monitoring services to that investor. This information is collated from a variety of sources and we cannot be held responsible for any errors or omissions. Australian Fund Monitors Pty Ltd, A.C.N. 122 226 724. AFS Licence number 324476.

Fund NameLatest

ReportingMonth %

LastReporting

Month

AnnualisedReturn

AnnualisedStandardDeviation

2009 2010 2011 2012YTD2013

FundInception

DateCashPM CAPITAL Enhanced Yield Fund 0.60% Jul-13 6.82% 2.26% 10.91 7.54 4.2 6.59 3.34 Mar-02Event DrivenPengana Asia Special Events (Offshore) Fund (AUD) 1.00% Jul-13 10.73% 6.38% 13.9 8.45 7.79 3.52 6.23 Jul-08Pengana Asia Special Events (Offshore) Fund (USD) 0.70% Jul-13 6.97% 4.90% 14.37 5.82 5.89 0.86 3.42 Jul-08Pengana Asia Special Events (Onshore) Fund 1.09% Jul-13 11.97% 6.44% 15.35 9.44 8.76 4.21 6.5 Sep-10Sandon Capital Activist Fund 6.90% Jul-13 12.85% 7.52% 5.06 14.52 7.71 11.25 11.38 Sep-09Fixed Income / CreditAltius Bond Fund 0.82% Jul-13 6.04% 1.97% 0 0 1.78 8.08 1.22 Jun-11Apostle Loomis Sayles Credit Opportunities Fund -0.86% Jun-13 5.97% 10.07% 40.93 15.36 6.37 14.33 2.49 Dec-05Apostle Loomis Sayles Senior Loan Fund 1.15% Jul-13 6.72% 10.21% 38.82 12.9 7.38 12.11 4.71 Nov-07Ardea Wholesale Australian Inflation Linked Bond Fund 1.03% Jul-13 9.38% 6.33% 0 3.79 19.69 10.06 -0.65 Mar-10Bentham Wholesale Global Income Fund 0.50% Jul-13 8.07% 9.33% 58.37 16.5 1.92 19.46 7.52 Sep-03Bentham Wholesale Syndicated Loan Fund 1.10% Jul-13 8.86% 8.52% 55.86 15.19 7.52 14.13 5.97 Aug-04Blue Fin Capital Managed FX Account -1.03% Jun-13 6.60% 10.68% 5.14 4.5 3.2 1.19 -3.14 Jan-02DDH Global Fixed Interest Alpha Fund 0.85% Jul-13 6.24% 7.17% 14.74 0.62 -7.23 11.52 3.76 Jul-05Elstree Australian Enhanced Income Fund 0.67% Jul-13 1.79% 10.63% 36.24 9.9 0.84 8.1 3.03 Oct-06Elstree Enhanced Income Fund 0.74% Jul-13 4.50% 9.66% 40.59 10.18 2.16 9.11 3.14 Aug-03GAM Absolute Return Bond Fund (AU) -1.51% Jun-13 9.26% 4.16% 25.22 5.76 6.12 13.63 0.72 Aug-06HCAP Diversified Fund (AUD Class) -0.91% Jul-13 7.39% 10.94% 0.69 17.05 -2.34 14.75 -1.68 Nov-09HCAP Diversified Fund (US$ Class) -1.11% Jul-13 4.34% 10.78% 0.37 13.57 -4.38 10.91 -3.35 Nov-09Kapstream Absolute Return Income Fund 0.68% Jul-13 6.30% 0.98% 7.38 6.05 5.74 8.52 2.36 May-07Pimco EQT Wholesale Global Bond Fund 0.38% Jul-13 7.96% 4.37% 20 15.84 8.57 14.27 -1.11 Jul-98PIMCO Wholesale Diversified Fixed Interest Fund 0.58% Jul-13 7.28% 3.21% 14.61 12.32 9.8 11.57 0.03 May-99Pimco Wholesale Emerging Markets Bond Fund 0.45% Jul-13 9.41% 9.76% 35.14 20.24 8.12 19.75 -6.01 Oct-03Pimco Wholesale Global Credit Fund 0.65% Jul-13 8.55% 3.46% 17.78 13.27 8.87 12.14 0.48 Dec-01Pimco Wholesale Global Real Return Fund 0.83% Jul-13 8.86% 6.19% 17.54 11.34 17.06 12.54 1.07 Dec-03QIC Global Fixed Interest Alpha Fund 0.86% Jul-13 7.25% 5.94% 13.59 1.53 -7.16 12.9 4.04 Jul-05Spectrum Wholesale Enhanced Income Fund 1.01% Jul-13 0.51% 6.35% 13.99 11.47 5.65 7.75 2.09 Apr-03Supervised High Yield Fund 0.61% Jun-13 11.72% 2.35% 8.69 15.92 8.19 13.04 3.95 Apr-09Visium Credit Opportunities Fund -3.14% Jul-13 13.33% 5.67% 19.91 31.67 0.68 6.31 -0.33 May-09Equity IncomeAlpha Beta Growth and Income 6.42% Jul-13 24.53% 8.32% 0 0 0 17.63 9.81 Jun-12

ABSOLUTE RETURN & HEDGE FUND PERFORMANCE SURVEY DATAPROVIDED BY AUSTRALIAN FUND MONITORS PTY LTD

For full details and Profiles of Funds listed in these tables visitwww.fundmonitors.com

Armytage Australian Equity Income Fund 4.87% Jul-13 2.91% 13.66% 28.95 -3.77 -8.71 21.19 11.15 Aug-07Armytage Strategic Opportunities - Retail Class 5.33% Jul-13 -1.76% 15.10% 24.64 -1.1 -8.64 17.3 11.25 Aug-07AUI Wingate Global Equity Fund 3.69% Jun-13 6.97% 11.56% 9.95 -4.34 4.62 15.9 20.15 Oct-05Aurora Dividend Income Trust 3.70% Jul-13 8.04% 7.14% -2.47 1.15 0.78 16.66 9.77 Nov-05Aurora Global Income Trust -1.00% Jul-13 3.65% 7.14% 7.53 7.02 -2.54 6.43 4.64 Dec-07Aurora Property Buy-Write Income Trust 0.35% Jul-13 0.27% 11.46% 19.34 9.2 1.12 19.07 4.42 Jul-07Colonial First State Wholesale Equity Income 4.16% Jul-13 5.79% 10.65% 30.65 2.56 -5.09 16.4 8.95 May-08Denning Pryce Equity Income Fund 4.69% Jul-13 6.15% 11.27% 36.85 2.66 -4.9 17.06 7.42 May-06Investors Mutual Equity Income 2.60% Jul-13 10.46% 6.93% 0 0 2.92 20.25 4.48 Jan-11Northward Equity Income -0.47% Jun-13 5.32% 5.88% 0 0 -0.95 20.74 4.58 Mar-11Plato Australian Shares Market Neutral Fund -0.26% May-13 4.82% 5.01% -4.95 6.55 10.43 5.5 5.03 Jul-07Zurich Global Equity Income Fund 2.08% Jul-13 10.43% 6.22% 0 3.05 2.48 11.66 14.19 Aug-10Equity Long OnlyAberdeen Asian Opportunities Fund 2.64% Jul-13 11.07% 12.92% 31.23 13.38 -12.7 25.01 13.7 Oct-03Aberdeen Emerging Opportunities Fund 1.25% Jul-13 12.46% 14.05% 40.96 13.01 -11.49 24.71 5.06 Jul-04Allard Growth Fund -0.30% Jul-13 12.01% 12.91% 49.38 19.98 -6.41 14.45 -3.53 Dec-95Allard Investment Fund 1.00% Jul-13 9.05% 8.08% 51.97 17.99 -13.19 27.23 18.95 Jul-03Arnhem Australian Equity Fund 5.18% Jul-13 8.60% 11.83% 0 0 -9.95 17.34 17.13 Aug-00Arnhem Concentrated Australian Equity Fund 3.11% Jul-13 7.86% 11.83% 0 0 -11.41 18.44 15.89 Dec-05Aubrey Global Conviction Fund 4.97% Jul-13 9.43% 11.52% 0 4.56 -11.61 19.16 19.87 Jul-10Ausbil Australian Active Equity Fund 5.98% Jul-13 10.33% 14.01% 40.8 -2.32 -11.34 18.32 14.16 Jul-97Avenir Value Fund 3.29% Jul-13 16.20% 12.21% 0 0 -3.5 13.27 23.54 Aug-11Baker Steel Gold 15.01% Jul-13 4.52% 31.87% 96.93 53.93 -26.95 -17.2 -48.63 Apr-03Bennelong Australian Equities Fund 5.28% Jul-13 17.43% 14.32% 46.25 7.05 -9.83 22.58 19.07 Jan-09Bennelong Avoca Emerging Leaders Fund 3.11% Jul-13 2.32% 15.83% 0 0 -13.78 18.1 3.01 Jun-11Bennelong Concentrated Australian Equities Fund 5.04% Jul-13 18.90% 14.84% 47.62 8.12 -8.17 24.18 19.73 Jan-09Bennelong ex-20 Australian Equities Fund 3.92% Jul-13 13.13% 14.32% 14.02 28.73 -15.29 45.26 29.19 Nov-09Blackrock International Gold Fund (Class D) -14.21% Jun-13 -0.39% 28.74% 21.7 23.84 -21.61 -10.87 -37.66 Dec-04Clime Australian Value Fund -2.60% Jun-13 7.71% 13.78% 61.48 6.21 0.63 19.21 0.13 Aug-06EIM Emerging Resources Company Share Fund 4.88% Jul-13 -16.81% 36.18% 121.99 28.67 -38.14 -1.32 -45.95 Apr-06Grant Samuel Epoch Global Equity Shareholder Yield 4.90% Jul-13 7.77% 12.86% 19.07 16.07 10.51 11.63 18.05 May-08Grant Samuel Epoch Global Equity Shareholder Yield 6.77% Jul-13 6.14% 10.82% -5.16 -1.63 5.77 8.6 32.07 May-08Insync Global Titans Fund 3.87% Jul-13 10.42% 8.37% 2.94 -7.65 16.85 32.82 37.37 Oct-09Intelligent Investor Value Fund 10.45% Jul-13 14.04% 14.18% 1.81 1.19 -8.55 31.2 32.43 Oct-09Katana Australian Equities Fund 8.89% Jul-13 2.53% 15.09% 0 0 -9.61 10.86 5.12 Mar-11Katana Capital Ltd 7.37% Jul-13 9.28% 16.40% 70.78 8.98 -2.29 11.9 0.86 Sep-05Legg Mason Australian Real Income Fund 1.80% Jul-13 19.36% 7.59% 0 2.87 13.12 26.16 9.19 Dec-10Magellan Global Fund 5.45% Jul-13 10.18% 12.10% 6.6 2.43 9.8 18.32 36.05 Jul-07Microequities Deep Value Microcap Fund 3.63% Jul-13 29.62% 16.18% 89.62 11.88 -2.94 35.44 12.76 Mar-09NovaPort Smaller Companies 7.37% Jul-13 15.11% 10.54% 0 0 0 12.39 6.08 Mar-05OC Dynamic Equity Fund 9.70% Jul-13 12.01% 19.29% 82.79 16.04 -16.98 43.07 11.76 Dec-00OC Premium Equity Fund 9.50% Jul-13 10.50% 17.81% 73.9 14.9 -14.78 42.55 10 Dec-00Optimal Japan Absolute Long Fund 0.45% Jul-13 3.81% 15.51% 0.39 16.65 -9.86 3.25 23.08 Sep-04Pengana Australian Equities Fund 2.00% Jul-13 13.10% 10.52% 40.86 8.76 0.85 23.87 11.72 Jul-08Pengana Emerging Companies Fund 4.50% Jul-13 13.69% 18.57% 70 15.88 -14.57 26.11 13.42 Nov-04Perpetual Global Resources Fund - Class B 8.86% Jul-13 8.74% 18.50% 51.81 17.38 -13.91 -5.47 1.22 Dec-08Perpetual Wholesale Industrial Fund 4.02% Jul-13 14.00% 11.67% 75.38 -3 -5.28 52.51 34.17 Sep-96Peters Macgregor Global Fund 4.41% Jul-13 6.83% 14.25% 32.62 17.95 -5.72 18.39 25.45 Sep-04Platinum Unhedged Fund 5.59% Jul-13 10.56% 12.71% 30.77 8.05 -11.26 13.88 29.88 Jan-05Plato Australian Shares Core Fund 5.80% Jul-13 3.85% 15.92% 34.95 2.69 -9.7 19.63 13.53 Oct-06Platypus Australian Equity Fund 6.90% Jul-13 13.82% 15.85% 46.51 0.01 -12.8 21.98 20.16 Dec-98

Disclaimer: This table is provided as an information source only and should not be relied on when making investment decisions.

Fund NameLatest

ReportingMonth %

LastReporting

Month

AnnualisedReturn

AnnualisedStandardDeviation

2009 2010 2011 2012YTD2013

FundInception

DatePM Capital Emerging Asia Fund 6.00% Jul-13 20.36% 14.64% 40.15 2.06 -6.83 15.7 25.04 Jul-08Premier Global Select Fund 5.63% Jul-13 5.09% 8.46% 13.4 -4.64 -11.01 7.71 15.82 Oct-01Prime Value Growth Fund 4.60% Jul-13 13.70% 16.44% 31.18 3.43 -8.01 13.99 7.09 Apr-98Prime Value Imputation Fund 3.70% Jul-13 12.41% 14.52% 34.66 1.33 -8.01 14.65 6.65 Dec-01Principal Global Opportunities Equity Fund 1.78% Jun-13 24.68% 8.35% 0 0 0 15.28 20.77 Jan-12Samuel Terry Absolute Return Fund 6.87% Jul-13 10.42% 12.52% 24.24 38.46 11.84 10.62 19.26 Nov-03Schroders Australian Smaller Companies Fund -5.80% Jun-13 -0.37% 18.09% 40.09 13.78 -15.64 26.8 -5.35 Dec-07Schroders Global Active Value Fund 9.08% May-13 3.48% 12.49% 14.33 1.96 -9.83 12.43 20.96 Jul-05SGH 20 3.85% Jul-13 10.94% 17.49% 75.58 7 -24.22 33.18 -1.69 Oct-04SGH ICE 2.95% Jul-13 10.66% 17.08% 77.59 3.48 -7.01 33.55 11.81 Feb-06Solaris Core Australian Equity Fund (Performance Fee 5.76% Jul-13 10.51% 13.43% 25.88 4.29 -9.32 15.94 12.64 Mar-09T Rowe Price Asia Ex-Japan Fund 2.72% Jul-13 4.72% 19.04% 60.75 5.24 -12.39 20.33 9.84 Mar-08T Rowe Price Australian Equity 4.74% Jul-13 20.32% 11.95% 0 0 0 11.1 13.43 Apr-12T Rowe Price Global Equity Fund 6.37% Jul-13 -0.64% 14.79% 11.7 -2.02 -11.61 16.36 25.28 Sep-06The Supervised Fund -4.02% Jun-13 4.11% 9.23% 28.29 4.96 -7.47 12.77 1.78 Dec-07Tribeca Australian Smaller Companies Fund 7.41% Jul-13 5.66% 16.69% 0 19.99 -13.96 17.01 -2.35 Aug-10WAM Research Ltd 5.40% Jul-13 6.44% 10.87% 29.28 2.02 -1.93 19.46 16.39 Aug-03Wilson HTM Priority Core Fund 6.98% Jul-13 14.39% 13.01% 0 14.77 -9.86 24.83 18.52 Jun-10Wilson HTM Priority Growth Fund 10.25% Jul-13 18.07% 23.33% 104.22 17.82 -21.77 9.56 6.97 Jul-05Equity Long Short36ONE Fund 2.28% Jul-13 19.99% 4.21% 30.44 15.76 13.37 19.82 12.41 Dec-0836ONE Hedge Fund 2.98% Jul-13 21.16% 9.16% 32.71 14.81 19.16 25.01 15.92 Apr-0636ONE Offshore Portfolio 2.36% Jul-13 18.06% 4.48% 26.52 15.63 10.61 15.21 8.98 May-088IP Asia Pacific Partners Fund 10.23% Jul-13 -1.75% 26.41% 0 23.78 -37.06 3.45 16.65 Feb-10AFM Prism Active Equity Fund 0.09% Jun-13 3.82% 2.39% 0 0 0 2.06 0.78 Oct-12Agora Absolute Return Fund II 6.66% Jul-13 10.07% 25.37% 22.12 -3.41 24.91 31.6 3.23 Dec-07Alpha Beta Asian Fund 2.60% Jul-13 7.02% 6.23% 0 0 0 3.93 4.14 Jun-12Antares High Growth Shares Fund 3.90% Jul-13 11.38% 13.46% 43.1 2.01 -12.75 23.22 9.15 Dec-99ANZ Discovery Asia Fund -0.31% Jun-13 -1.32% 7.83% -1.96 6.49 12.9 6.62 0.67 Jun-08Apostle Aurora Hedged Equity Offshore Fund - USD Class -0.17% Jun-13 3.68% 8.22% 21.2 6.52 -8.51 7.53 5.9 Jun-04Apostle Global Small-Mid Cap Fund 2.89% Jun-13 9.15% 12.60% 5.74 4.76 -6.6 18.88 27.45 Aug-08Arnhem Long Short Australian Equity Fund 4.58% Jul-13 9.70% 14.69% 51.49 -1.44 -10.35 18.16 16.31 May-05Ausbil Active Extension Fund - Retail 7.28% Jul-13 9.39% 13.91% 0 9.35 -10.45 16.55 15.54 Jul-10Ausbil Active Extension Fund - Wholesale -3.08% Jun-13 6.84% 15.50% 17.53 -3.4 -10.08 16.93 7.94 Jul-10Auscap Long Short Australian Equities Fund 8.32% Jun-13 36.11% 15.34% 0 0 0 1.35 18.11 Dec-12Australian Leaders Fund 3.81% Jul-13 15.68% 15.44% 96.93 6.41 -8.56 32.39 18.54 Jul-07AWJ Global Sustainable Offshore Fund 3.90% Jul-13 -0.33% 5.52% 0 0.9 -7.25 -1.54 7.31 Mar-10Bellwether Partners Offshore Strategies Fund 3.92% Jul-13 0.47% 15.81% 29.02 -4.46 -20.7 11.59 7.78 Jul-05Bennelong Kardinia Absolute Return Fund 1.31% Jul-13 14.13% 7.93% 25.47 9.33 2.42 13.52 8.87 May-06Blackrock Equitised Long Short Fund 6.79% Jul-13 14.09% 15.16% 52.98 -1.15 2.91 25.43 11.82 Dec-01Cadence Capital Limited 2.26% Jul-13 15.84% 15.81% 45.37 24.9 24.91 15.1 8.06 Oct-05Evergreen Australian Equities Return Fund -12.00% Jun-13 2.71% 14.31% 0 32.13 17.99 -1.32 -29.25 May-10First State Global Resources Long Short Fund -0.98% May-13 8.99% 16.28% 26.07 47.11 -22.49 4.56 -17.87 Aug-04Jaguar Australian Leaders Long Short Unit Trust 0.25% Jul-13 2.55% 18.09% 82.39 -28.94 3.33 6.36 -1.17 Mar-03Jaguar Australian Leaders Long Short Unit Trust 0.25% Jul-13 2.55% 18.09% 82.39 -28.94 3.33 6.36 -1.17 Mar-03JBS Investments International Advantage Fund 5.70% Jul-13 29.65% 28.42% 0 0 37.41 -1.68 19.15 Sep-11K2 Asian Absolute Return Fund 2.40% Jul-13 10.94% 15.91% 40.78 3.46 -20.82 22.42 11.02 Sep-99K2 Australian Absolute Return Fund 3.27% Jul-13 12.87% 12.54% 41.06 4.07 -12.22 15.77 13.25 Oct-99K2 Select International Absolute Return Fund 3.93% Jul-13 11.29% 11.70% 31.89 8.93 -12.28 17.94 16.24 Jan-05Kentgrove Capital Fund 7.66% Jul-13 15.90% 26.55% 0 67.65 8.03 12.81 -19.97 Apr-10Kima Capital Pan Asian Fund (AUD Class) 1.12% Jul-13 8.58% 8.10% 14.23 14.67 -2.32 1.78 7.49 Jul-09Kima Capital Pan Asian Fund (USD Class) 1.35% May-13 6.35% 8.49% 12.45 11.77 -5.39 -1.59 8.74 Jul-09KIS Asia Long Short Cayman Fund 1.59% Jul-13 8.37% 4.07% 0 0 0 3.2 5.71 Jul-12KIS Asia Long Short Fund 1.89% Jul-13 18.20% 5.97% 11.4 25.66 12.6 11.41 8.1 Oct-09LHC Capital Australia High Conviction Fund 9.70% Jul-13 21.89% 9.58% 0 0 4.92 21.46 22.51 May-11Macquarie Alpha Opportunities Fund 5.40% Jul-13 5.77% 15.80% 38.71 1.44 -14.39 15 8.89 Jun-05Macquarie Asian Alpha Fund (Australian Fund) -0.84% Jul-13 12.56% 6.66% 18.01 16.02 13.26 7.45 8.38 Oct-05Macquarie Asian Alpha Fund (Cayman) - Class A USD -0.85% Jul-13 10.20% 6.37% 14.17 10.29 9.07 4.42 7.44 Oct-05Mathews Velocity Fund 9.33% Jul-13 5.67% 34.04% 62.29 37.98 -19.17 -47.65 -37.47 Jul-06Monash Absolute Investment Fund 5.60% Jul-13 23.08% 6.76% 0 0 0 12.02 36.25 May-12Morphic Global Opportunities Fund 7.71% Jul-13 41.16% 8.40% 0 0 0 10.45 27.8 Aug-12Nanuk Clean Energy fund -3.10% Jul-13 -0.25% 10.51% 0 0 -8.96 4.69 4.34 Jun-11NAOS Emerging Companies Long Short Equities Fund -0.98% Jun-13 10.65% 28.02% 174.85 56.5 -26.08 3.26 1.32 Jan-05NAOS Long Short Equities Fund 0.31% Jun-13 3.80% 19.43% 20.32 19.48 -37.78 22.23 33.16 Jan-05OC Concentrated Equity Fund 14.20% Jul-13 10.43% 21.86% 155.87 31.92 -20.22 -0.48 9.53 Nov-03Optimal Australia Absolute Fund AUD 0.31% Jul-13 3.44% 2.32% 0 0 4.41 3.69 -0.05 Sep-08Optimal Australia Absolute Fund USD 0.06% Jul-13 0.72% 2.55% 0 0 1.37 1.71 -1.43 Sep-08Optimal Australia Absolute Trust 0.35% Jul-13 11.11% 3.66% 23.81 13.64 8.07 4.55 0.58 Sep-08Pengana Global Resources Fund 8.10% Jul-13 8.05% 19.69% 53.06 30.07 -12.78 0.25 -5.69 Jan-07Perpetual Industrial Share Fund 3.91% Jul-13 29.05% 10.49% 0 0 0 8.52 16.42 Dec-96Perpetual Pure Equity Alpha Fund 1.56% Jul-13 11.88% 3.64% 0 0 0 5.07 9.51 Mar-12Perpetual Wholesale SHARE-PLUS Long-Short Fund 4.94% Jul-13 13.15% 12.90% 71.95 19.17 -9 55.96 33.65 Mar-03Platinum Asia Fund 1.46% Jul-13 15.79% 14.57% 79.95 8.68 -39.22 49.91 23.44 Mar-03Platinum European Fund 8.29% Jul-13 12.17% 16.94% 56.29 18.24 -27.2 66.63 52.46 Jun-98Platinum International Brands Fund 8.06% Jul-13 13.63% 10.99% 63.3 31.93 -18.19 52.18 45.72 May-00Platinum International Fund 4.43% Jul-13 13.13% 11.63% 39.29 -9.76 -24.03 34.44 59.26 Apr-95Platinum International Health Care Fund 8.46% Jul-13 7.33% 12.38% 7.66 6.65 7.72 19.65 32.14 Nov-03Platinum International Technology Fund 4.28% Jul-13 8.03% 17.85% 61.9 -6.78 -14.08 10.87 54.37 May-00Platinum Japan Fund - AUD 3.22% Jul-13 15.71% 17.41% 18.11 25.71 -23.67 33.57 101.14 Jun-98Plato Australian Shares 130/30 Fund 5.32% Jul-13 -1.36% 16.45% 28.61 1.54 -6.96 18.32 11.51 Dec-07PM CAPITAL Absolute Performance Fund AUD 6.80% Jul-13 7.59% 20.50% 32.03 -0.67 -19.68 41.63 39.5 Oct-98PM CAPITAL Australian Opportunities Fund AUD 4.50% Jul-13 10.91% 15.56% 60.68 8.32 -15.24 21.61 21.7 Jan-00QAM Global Equities Fund -5.73% Jul-13 8.75% 18.59% 6.4 17.04 -23.46 -6.12 -7.22 Apr-04Regal Asian Pearl Fund 0.69% Jun-13 2.44% 6.59% 0 0 -2.18 1.49 6.55 Mar-11Regal Asian Quantitative Fund 4.52% Jul-13 8.17% 12.08% 7.38 12 -17.49 21.94 13.15 Aug-09Regal Atlantic Absolute Return Fund 13.45% Jul-13 36.91% 38.88% 191.66 106.74 -14.81 2.31 0.65 Apr-04Regal Australian Long Short Equity Fund 6.42% Jul-13 19.95% 14.30% 31.39 18.01 2.59 18.95 9.4 Aug-09Regal Natural Resources Fund 1.47% Jun-13 -12.90% 21.02% 0 0 -24.69 12.27 -9.23 Aug-11SGH Absolute Return Trust (Retail) -5.51% May-13 3.93% 12.93% -5.88 -3.71 -20.08 16.34 2.06 Oct-01SGH Absolute Return Trust (Wholesale) 3.31% Jul-13 5.63% 12.68% -5.47 -3.17 -16.94 18.08 4.05 Oct-01Smallco Investment Fund 6.67% Jul-13 14.15% 18.94% 54.07 10.61 -5.99 67.66 24.83 Oct-00Totus Alpha Fund -3.50% Jul-13 19.14% 12.08% 0 0 0 4.17 21.25 Apr-12Trafalgar Copley Fund 10.76% May-13 14.26% 19.58% -13.26 3.55 55.82 -7.92 7.8 Apr-07Trafalgar Copley Fund 10.76% May-13 14.26% 19.58% -13.26 3.55 55.82 -7.92 7.8 Apr-07Tribeca Alpha Plus Fund - Class A 8.42% Jul-13 5.86% 17.08% 55.97 2.95 -16.39 13.92 8.75 Jul-06Visium Institutional Partners Fund -0.24% Jul-13 5.93% 6.12% 0 -1.61 1.28 5.73 13.92 Jun-10WAM Active Ltd 2.60% Jul-13 10.77% 10.17% 61.05 6.25 -0.31 6.89 7.44 Jan-08

Disclaimer: This table is provided as an information source only and should not be relied on when making investment decisions.

Fund NameLatest

ReportingMonth %

LastReporting

Month

AnnualisedReturn

AnnualisedStandardDeviation

2009 2010 2011 2012YTD2013

FundInception

DateWAM Capital Ltd 3.80% Jul-13 17.42% 11.13% 50.82 16.43 -1.44 12.38 11.7 Aug-99WaveStone Australian Equity Long/Short Fund 2.71% Jul-13 13.07% 10.91% 27.46 -0.67 -6.59 21.67 14.75 Jul-09WaveStone Capital Absolute Return Fund 2.77% Jul-13 11.58% 11.25% 37.19 1.13 -5.5 21.72 14.46 Sep-06Market Neutral EquityAurora Fortitude Absolute Return Fund 1.13% Jul-13 8.29% 2.81% 6.01 4.33 3.83 4.23 5.18 Feb-05Bennelong Long Short Equity Fund 3.52% Jul-13 21.18% 12.19% 23.64 12.71 20.6 9.2 15.6 Jan-03BlackRock Australian Equity Market Neutral Fund 1.92% Jul-13 12.23% 5.71% 15.68 1.6 23.91 11.91 2.69 Aug-01First State Global Equity Market Neutral Fund -3.76% Jul-13 2.25% 5.64% 0 0 10.86 -1.69 -3.36 Apr-11Merricks Capital Long Short Equity Strategy 2.25% Jul-13 8.45% 6.03% 8 12.35 7.19 6.52 3.87 Jan-08Pengana Australian Equities Market Neutral Fund -0.50% Jul-13 8.94% 7.98% 6.8 12.6 17.11 -5.9 11.22 Sep-08Regal Amazon Market Neutral Fund 2.33% Jul-13 17.28% 12.22% 38.61 21.87 11.71 1.76 -0.3 Jun-05Regal Tasman Market Neutral Fund 1.16% Jul-13 20.03% 13.13% 50.65 33.23 29.28 1.76 1.51 May-07Trafalgar Trading Fund Inc 6.47% May-13 15.97% 10.27% 11.32 1.87 -0.83 -14.16 32.03 -Watermark Market Neutral Fund Ltd 1.32% Jul-13 17.04% 0.00% 0 0 0 0 1.32 Aug-08Global90 West Global Basic Material Fund 9.59% Jul-13 7.93% 23.21% 49.03 73.09 -27.62 4.48 -14.26 Jul-08Apeiron Global Macro Fund - Class A -1.20% Jul-13 7.29% 10.95% -1.7 5.03 2.6 1.6 -5.07 Feb-06Apeiron Global Macro Fund - Class B -12.26% Jun-13 7.44% 22.03% -4.56 8.41 -0.8 -2.11 -9.84 Feb-06AQR Wholesale Managed Futures Fund -2.05% Jun-13 5.00% 14.56% 0 0 -5.3 7.71 9.41 Apr-11Blackrock Global Allocation Fund (Class D) 1.20% Jun-13 8.50% 9.64% 46.86 23.88 -1.68 27.4 21.32 Jul-05Blue Fin Compact Omega Program 0.26% Jun-13 19.41% 24.56% 20.32 70.9 1 -5.98 1.1 Sep-09BT Total Return Fund 0.32% Jul-13 4.82% 2.97% 9.84 3.12 1.91 1.46 1.94 Jan-01CORALS Commodities Fund 1.60% May-13 1.79% 14.65% 3.41 5.03 -10.64 -8.3 2.27 Jul-08CSAG Long Only Program 0.15% Jul-13 7.75% 13.13% 27.04 7.34 -6.79 -0.69 -3.9 Nov-99CSAG Long/Short Program 0.02% Jul-13 6.81% 18.08% 22.21 5.26 -10.82 1.06 -3.95 Sep-07CSAM Enhanced Commodity Fund 4.72% Jul-13 -5.54% 26.99% 16.66 9.08 -0.35 0.62 0.01 Oct-06Everest Alternative Investment Trust 2.50% Jun-13 -0.23% 11.38% 6.18 5.67 -1.41 3.31 11.1 Apr-05FRM Sigma Fund Limited - Class A -6.02% Jun-13 6.85% 14.70% -10.2 17.58 -5.26 -6.04 -1.54 Nov-05GMO Systematic Global Macro Trust 5.52% Jul-13 9.75% 10.76% 8.35 15.11 11.17 3.04 13.81 Nov-02H3 Global Commodities Fund 0.97% Jul-13 2.42% 12.69% 13.35 7.33 -14.25 -5.22 -5.1 Nov-05H3 Global Strategies Fund -0.93% Jul-13 -0.51% 6.98% -4.2 -4.89 3.43 -1.97 -1.33 May-08HCAP Global Diversified Fund 0.02% Jul-13 9.70% 9.95% 1.71 8.9 26.63 0.66 0.22 Nov-09Ironbark Global Diversified Alternatives Fund 1.82% Jul-13 4.06% 5.64% 8.58 3.64 -0.39 -0.55 4.19 Nov-99Kaiser Trading Fund 0.33% Jul-13 4.60% 6.23% -4.32 4.66 -5.83 -1.34 6.12 Apr-04Kaiser Trading Fund 2x 0.65% Jul-13 5.18% 11.13% -7.78 9.84 -9.6 -2.85 13.47 Oct-06Kohinoor Series Three Fund -2.90% Jul-13 9.86% 11.87% -1.85 0.44 4.66 -7.33 -2.15 Jul-05Liongate Multi-Strategy Fund - Class A (USD) -1.60% Jun-13 6.20% 5.91% 8.48 4.94 -7.89 0.95 -0.49 Apr-04Magellan Infrastructure Fund 4.05% Jul-13 5.16% 14.20% 24.19 11.76 11.23 15.12 12.94 Jul-07Merricks Soft Commodity Fund -0.24% Jul-13 9.29% 6.53% 20.35 16.09 1.85 4.98 1.74 Jan-08Merricks Soft Commodity Master Fund USD -0.20% Jul-13 0.96% 4.64% 0 0 -2.23 2.92 1.38 Jan-08MGH Investment Fund Limited 2.70% Jul-13 1.10% 22.61% 16.61 16.22 -3.96 7.05 9.76 Jan-03Quiris Currency Fund Ltd -3.00% Jul-13 13.03% 13.34% 36.56 22.59 16.05 4.89 -8.85 Sep-06Schroders Real Return Fund -0.93% Jun-13 7.19% 6.36% 20.94 6.58 3.9 12.03 3.82 Jul-10TGM Global Macro AUD 0.17% May-13 9.07% 6.05% 2.42 12.83 1.45 9.82 9.91 May-09TGM Global Macro AUD 0.17% May-13 9.07% 6.05% 2.42 12.83 1.45 9.82 9.91 May-09The 36 South Cullinan Fund (EUR) -2.39% Jul-13 -7.66% 22.24% -5.69 2.32 6.55 -29.72 -0.71 Jun-09The 36 South Cullinan Fund (USD) -2.19% Jul-13 -13.89% 23.14% 0 0 1.91 -30.32 0.59 May-11Whitehaven SPC Correlation Fund 1.38% Jul-13 23.25% 4.74% 0 0 15.21 21.34 6.78 Sep-11Real EstateSGH Wholesale Property Income Fund 1.00% Jul-13 -2.94% 27.95% 48.64 -2 9.4 29.68 7.38 12/05Fund of Hedge FundsEquity Long ShortAFM Prism Active Equity Fund 0.09% Jun-13 3.82% 2.39% 0 0 0 2.06 0.78 Oct-12ANZ Discovery Asia Fund -0.31% Jun-13 -1.32% 7.83% -1.96 6.49 12.9 6.62 0.67 Jun-08HFA Octane 5 Fund 0.70% May-13 1.10% 5.43% 0.63 1.95 -2.14 1.47 5.02 Jun-08HFA Octane Global Asia Fund -0.38% Jun-13 -0.51% 10.28% 3.8 2.7 5.65 10.27 2.1 Jun-07HFA Octane Global Europe Fund -0.39% Jun-13 -0.09% 7.95% 1.48 7.71 9.47 10.27 2.09 Jun-07HFA Octane Global US Fund -0.31% Jun-13 -0.59% 8.22% 0.98 7.16 6.77 10.14 2.11 Jun-07LHP Global Long/Short Fund (Retail) 1.03% Jun-13 6.45% 4.96% 6.81 7.77 1.08 8.62 10.34 Apr-01LHP Diversified Investments Fund (Wholesale) 0.51% May-13 4.95% 6.36% 19.12 6.41 2.28 10.8 4.88 Apr-01Global/Commodities/FXBT Total Return Fund 0.32% Jul-13 4.82% 2.97% 9.84 3.12 1.91 1.46 1.94 Jan-01Everest Alternative Investment Trust 2.50% Jun-13 -0.23% 11.38% 6.18 5.67 -1.41 3.31 11.1 Apr-05Ironbark Global Diversified Alternatives Fund 1.82% Jul-13 4.06% 5.64% 8.58 3.64 -0.39 -0.55 4.19 Nov-99Liongate Multi-Strategy Fund - Class A (USD) -1.60% Jun-13 6.20% 5.91% 8.48 4.94 -7.89 0.95 -0.49 Apr-04MGH Investment Fund Limited 2.70% Jul-13 1.10% 22.61% 16.61 16.22 -3.96 7.05 9.76 Jan-03Quiris Currency Fund Ltd -3.00% Jul-13 13.03% 13.34% 36.56 22.59 16.05 4.89 -8.85 Sep-06Signature Capital Investments 2.76% Jul-13 -7.03% 22.32% 35.57 -5.28 -5.91 4.1 8.69 Dec-05TGM Global Macro AUD 0.17% May-13 9.07% 6.05% 2.42 12.83 1.45 9.82 9.91 May-09Multi StrategyAccess SRA Fund - SRA 16 Portfolio -2.65% Jun-13 14.42% 18.04% 7.87 14.75 18.5 -13.86 10.84 Nov-07Access SRA Fund - SRA 4 Portfolio -1.34% Jun-13 4.91% 4.04% 6.17 8.62 7.72 -1.59 0.56 Nov-07Access SRA Fund - SRA 9 Portfolio -2.97% Jun-13 6.23% 4.88% 16.62 10.26 1.15 5.75 4.07 Nov-07AQR Wholesale DELTA Fund 0.40% Jul-13 5.68% 2.93% 0.47 9.63 2.51 5.53 2.31 Sep-09BlackRock Multi Opportunity Fund 0.10% Jun-13 8.91% 4.21% 11.67 12.4 15.47 12.11 3.7 Jul-04Dexia Alpha Dynamic Fund -1.05% Jun-13 5.92% 3.32% 0 2.56 2.65 5.2 5.26 Nov-10Fauchier Partners Absolute Return Trust 2.62% May-13 4.92% 6.00% 17.53 5.95 -1.29 7.61 9.55 Sep-07FRM Sigma Fund Limited - Class A -6.02% Jun-13 6.85% 14.70% -10.2 17.58 -5.26 -6.04 -1.54 Nov-05GMO Multi Strategy Trust 0.27% Jul-13 4.82% 4.73% -1.57 1.76 11.71 8.54 0.17 Nov-02HFA Octane Asia Fund 0.14% Jun-13 0.10% 9.04% 1.45 7.93 8.23 9.42 1.9 Jul-06HFA Octane Fund Series 2 0.21% Jun-13 -0.31% 8.32% 2.27 6.58 8.53 4.48 1.38 Jul-05Ibbotson Global Trading Strategies Trust -1.20% May-13 2.13% 6.17% 5.94 11.91 8.11 4.34 2.4 Apr-07LHP Diversified Investments Fund (Retail) 0.49% May-13 4.79% 6.44% 18.75 6.04 2.06 10.49 4.75 Apr-01LHP Diversified Investments Fund (Wholesale) 0.51% May-13 4.95% 6.36% 19.12 6.41 2.28 10.8 4.88 Apr-01Liongate Multi-Strategy Fund - Class A (USD) -1.60% Jun-13 6.20% 5.91% 8.48 4.94 -7.89 0.95 -0.49 Apr-04Macquarie Winton Global Alpha Fund -0.98% Jul-13 9.14% 8.51% -3.51 15.89 10.32 -0.2 4.09 Dec-05Man AHL Diversified (AUD) -2.39% Jul-13 3.56% 14.34% -15.06 17.6 -2.9 -3.59 -4.25 Jul-07MCG K2 Alternative Investment Fund -0.87% Jun-13 8.02% 3.19% 0 0 0 1.64 4.92 Sep-12MCG Multi-Asset Endowment Fund 0.97% May-13 5.22% 6.97% 18.06 8.92 0.02 9.88 5.98 Sep-12NWQ Diversified Fund 0.29% Jun-13 3.85% 6.55% 0 4.83 13.3 -6.05 1.94 Jan-10Select Alternatives Portfolio 0.65% Jul-13 5.71% 7.20% 12.72 11.75 -3.6 2.32 -1.15 Jul-03Select Defensive Portfolios 2.94% Jul-13 6.07% 5.78% 13.26 8.94 -2.16 7.75 0.88 Dec-02Select Growth 4.50% Jul-13 7.08% 8.86% 25.29 13.59 -6.87 7.86 1.47 Dec-02Select Growth 4.50% Jul-13 7.08% 8.86% 25.29 13.59 -6.87 7.86 1.47 Dec-02Select Listed Investments 7.52% Jul-13 5.44% 17.78% 43.63 7.55 -0.56 13.38 7.7 Apr-05Van Eyk Blueprint Alternatives Plus -1.88% Jun-13 2.36% 8.65% 17.77 8.2 2.4 5.13 -3.4 Nov-06

Disclaimer: This table is provided as an information source only and should not be relied on when making investment decisions.

Fund NameLatest

ReportingMonth %

LastReporting

Month

AnnualisedReturn

AnnualisedStandardDeviation

2009 2010 2011 2012YTD2013

FundInception

Date

LHP Global Long/Short Fund (Wholesale) 1.05% Jun-13 6.52% 4.93% 8.17 8.1 1.34 8.93 10.44 Apr-01The information in these tables is provided by Australian Fund Monitors Pty Limited from sources believed to becorrect at the time of publication. For up to date details of all Funds visit www.fundmonitors.com

Disclaimer: This table is provided as an information source only and should not be relied on when making investment decisions.