HFS Overview - Activist Investing Research

8/8/2019 HFS Overview - Activist Investing Research

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Catalyst Investment Research

Confidential Not For Circulation

A Portfolio of Activist Investing Research


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About Hedge Fund Solutions, LLC

Activist Investing Specialists

Consulting

Investment Research

EducationInstitutional Investors | Public Companies


Institutional Investors | Public Companies



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Shareholder Activism & Market Returns

Activism generates average cumulative returns in the range of5% to 7% for the 20-day window around the campaign

announcement. The highest abnormal returns (17% within 20days) occurred when activism prompted a strategic alternatives

analysis. (Authors: Brav, Jiang, Partnoy, Thomas)

Stock prices of companies targeted by activist investors earn

10.2% average returns during the period surrounding anactivists ownership disclosure and an additional 11.4%abnormal return during the following 12 months.(Authors: Klien & Zur)

Companies in which activists gained board seats outperformedpeers by 1660 basis points (16.6%) from the date of the contestthrough a year after election date. (IRRC Institute and Proxy Governance)

Journal of Finance:Duke University Fuqua School of Business

Columbia Business School

University of San Diego School of Law

Vanderbilt University School of Law

Journal of Finance:Stern School of Business,

New York University

IRRC Study:



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Why Activist Investing Works

Activist investing works on both alpha and residual r Alpha through security selection

Implementation tries to create unexpected good newsto make [r] positive

Causes market to focus on what activist sees incompany

Raises possibility of value realization

Results in market re-rating as possible value realizationbecomes investment thesis

ALPHA + RESIDUAL



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Research uncovers fundamentally solid companies witha value investment catalyst driven by activist investors


Exclusively offered to no more than 50 subscribers, Catalyst Investment Researchsingles out companieswith extraordinary value potential where activist investors have taken sizeable investment positions and are

pressing management to unlock hidden pockets of value.

Catalyst Investment Research closely monitors the investments of over one hundred event-driven activist

investors and finds the best of these investment opportunities with a near-term catalyst for value improvement

With Daily Emails, Weekly Summaries, In-depth Company Analyses, Quarterly Buying & Selling Updates,and Special Research Reports, subscribers identify undervalued companies with the potential to generateoutsized returns. In addition, subscribers receive a copy ofThe Shareholder Activism Report(a 400+ pagecomprehensive report on activist investing) and gain access to The Shareholder Activism Resource Portaland

ourNetwork of Specialists - including our research analysts and consultants, research professionals and theactivist investors themselves - through one-on-one meetings, conference calls, regularly scheduled luncheons

and annual conferences.


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Catalyst Investment ResearchPortfolio of Activist Investing Research

Daily RoundupMorning Email Alerts

FREE Weekly Activist ResearchCatalyst Equity Research Report

Company Specific: Deep Value + Activist CatalystCatalyst Investment Research Report

Special ReportsUncovering Hidden Value

Quarterly Buying AnalysisTop 50 Activists

The Shareholder Activism Report &Shareholder Activism Resource Portal


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Catalyst Investment ResearchPortfolio of Activist Investing Research

Daily RoundupMorning Email Alerts

FREE Weekly Activist ResearchCatalyst Equity Research Report

Company Specific: Deep Value + Activist CatalystCatalyst Investment Research Report

Special Reports

Uncovering Hidden Value

Quarterly Buying Analysis

Top 50 Activists

The Shareholder Activism Report &

Shareholder Activism Resource Portal

Daily analysis of investments

made by shareholder activists

Weekly report with detailed

commentary analyzing every activist

investment made during the past week

In-depth analysis of company-specific

activist situations. Each report examines

the activists investment thesis, the

timeline for a catalyst event to potentiallyoccur, the activists track record for

success in previous interventions, and

the likelihood that the activist will be

instrumental in boosting value in a short

period of time

We analyze the change in ownership

of the top performing activist

investors, examine the fundamental

value characteristics of each company

theyre invested with, and discuss

what we believe to be the top

companies with the most compelling

investment opportunities

Previously featured in The Wall

Street Journal, our special reportsidentify timely investment ideas

involving activist investors

The Shareholder Activism Report, a 400+

page comprehensive publication and the

related resource portal provides one

reliable source of information covering all

aspects of activist investing, including:

top 50 activist investor profiles and

investment strategies, activist tactics,

proxy contest case studies and hundredsof fight letters and presentations

available to download

For the past nine years we have advised activist investors, traditionally passive institutional investors, pension funds, labor unions, CEOs and Board

members on many of the critical issues relating to shareholder activism and value enhancement. As a result, our knowledge runs deep and our network isextensive. Subscribers tap into this knowledge base through one-on-one meetings, conference calls, luncheon presentations, and annual conferences.

Access to Specialists &Activist Investors


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5%05%115/18/20102.462.355/7/2010PFIN

5%04.8%65/13/2010196.00187.005/7/2010KEWL.PK

3%03.4%456/21/20102.102.035/7/2010DVD

1%00.6%55/12/20107.797.745/7/2010BITS

8%08%154/6/20103.953.673/22/2010DENN

65%065.3%924/15/201028.5517.271/13/2010RRGB

42%0.1837.7%2012/22/20095.844.2412/2/2009JTX

2%01.6%39/14/20099.979.819/11/2009NLCI

500%0500.0%509/8/20090.300.057/20/2009RONC.PK

233%0233.3%2684/14/20101.200.367/20/2009DGTC.OB

365%0365.0%288/17/20090.930.207/20/2009PBSO.PK

122%0122.2%2754/21/201018.008.107/20/2009CUO

222%0221.9%2704/16/20104.991.557/20/2009WXCO

142%0141.7%3366/21/201013.445.567/20/2009SLI

24%024.3%12111/18/200915.0512.117/20/2009NATH

326%0326.1%12611/23/20098.992.117/20/2009GY

44%043.7%15612/23/20093.522.457/20/2009ADPT

249%0249.5%8710/15/20096.851.967/20/2009CNO

30%029.6%3586/25/20107.275.617/2/2009LGF

50%050.3%3836/28/201011.457.626/10/2009ENZN

77%077.3%3314/23/20103.742.115/27/2009PPCO

45%0.5443.7%4066/18/201058.2740.565/8/2009CHE

103%0103.3%3835/12/201015.457.604/24/2009TECUA

50%0.1549.0%1689/23/200943.2529.034/8/2009CTO

Sold to MediciNova June 25, 200910%09.7%936/25/20091.241.133/24/2009AVGN

78%077.6%21910/9/20098.905.013/4/2009TIER

Total GainDividend

Payments

Equity

Gain

# Days to

High

Recent High

Date

High Share Price

After Research

Issue Date

Share Price

Research

Issue Date

Company

Ticker

NotesCatalyst Investment Research Portfolio

164Avg # Days:

108%Avg. Return:

Special ReportActivist Fund

Redemptions

Special Report

MicroCapActivist Situations

Catalyst Investment Research Performance


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Opportune Time For Activist Investing

Economic Recovery: Despite Dow 10,000+: Strong corporate balance sheets and accessible

credit markets will drive activist efforts to return cash, boost dividend

payouts and examine strategic alternatives

Political Environment: Mid-term elections; Financial Reform Bill; and the perception of corporate

greed and malfeasance will continue to encourage activism

Regulatory Landscape:SEC is continuing to shift the balance of power out of the boardroom and

toward shareholders

Enhanced disclosure requirements on risk, compensation, director

qualifications & voting results Proxy Access (SEC ruling expected summer 2010)

Director Elections: Rule 452 broker vote + majority vote; combined

short slate solicitations

Shareholder Proposals: CEO Succession and Risk Management



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About US

Damien J. Park

Managing Partner

Tel: (215) 325-0514

E-mail: [email protected]

Jonathan Heller, CFAPartner

Tel: (610) 937-2359

E-mail: [email protected]

Address

40 W. Evergreen Ave

Suite 100

Philadelphia, Pa 19118

Office: (215) 325-0514Fax: (215) 392-4633

Website

www.hedgerelations.com

CONTACT INFORMATIONPublications Recently Featuring

Hedge Fund Solutions

Accolades for Catalyst Investment Research

Damien and Jon deliver a very compelling research product. Nobody does a better job of analyzing solidcompanies with a very real and quantifiable catalyst for value improvement.

- Timothy Brog,Locksmith Capital; Chairman, Peerless Systems Inc.

Accolades for The Shareholder Activism Report

Given the dramatic changes taking place in the corporate governance landscape, this is a timely publicationworthy of the attention of directors, officers, and investors.

James C. MorphyManaging Partner, Sullivan & Cromwell LLP

Catalyst Investment Research not only finds where the hidden gems are buried, but also brings along theexcavation equipment to help dig up the value.

-Ron Orol,MarketWatch; Author of Extreme Value Hedging: How Activist Investors are Taking on the World

A very comprehensive set of resources, including battle-tested recommendations that will prove invaluable for

both companies and investors. Arthur CrozierCo-Chairman, Innisfree M&A Incorporated

HFS Overview - Activist Investing Research

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