Next Generation Alternative Strategies May 2014 Private and Confidential

1. Next Generation Alternative Strategies May 2014 Private and Confidential Investing in novel, innovative and unconventional strategies

2. Why seek Next Generation Alternative Strategies? Diversification is the closest thing to a “free lunch” DIVERSIFICATION + Returns = “VALUE” Why do we diversify? – to manage risk The world is risky - we don’t put all your eggs in one basket Or do we? Orthogonal Partners LLP 2

3. Err……… Over time our allocations are becoming MORE correlated – they are riskier! Orthogonal Partners LLP 3

4. Unexpected Financial Shocks 1987 1990 1992 1994 1996 1997 1998 1999 2000 2001 2002 2003 2008 2014 1987 Stock Market Crash 1994 US Interest Rate Hike 1997 Asian Crisis 2000 Tech Meltdown 2014 Ukraine? 2003 Fannie Mae Fannie Mac 1990 Nikkei Crash 2001 Tech Meltdown 1994-96 Mexican Peso Crisis 1998 Russian Crisis Blackout of 2003 Next Bubble? 1990 High Yield Tumbles 9/11 Terrorist Attacks 1998 LTCM 1996 Latin American Crisis 1999 Brazil Crisis 1992 European Currency Crisis 2002 Bubble Bursts 2008 Global Financial Crisis Orthogonal Partners LLP 4

5. Houston we have a problem • Declining attractiveness of traditional PE/HF strategies • No surprise -$3 Trillion in HF /$3 Trillion in PE • Issues around access, alignment of interest, fees, succession in established brands • You better hope things work out well • But as we know “hope is not a good strategy” • What should we do? Orthogonal Partners LLP 5

6. Go where others can’t or won’t go (Yet) • Invest in misunderstood, under-researched, niche strategies • Inefficiencies due to scarcityof institutional capital • Return drivers independent of traditional financial markets The “brand names” of today were the “next generation” of yesterday Orthogonal Partners LLP 6

7. Next generation alternatives – example characteristics • Novel, innovative and unconventional • Misunderstood, under-researched, niche strategies • Inefficiencies due to scarcity of capital • Returns which behave differently in times of stress to anything else in your portfolio • Return drivers independent of traditional financial markets • Entrepreneurial solutions to market problems Orthogonal Partners LLP 7

8. Attractions of investing in next generation alternatives • New sources of return are undercapitalised and inefficient • New ways of creating assets and adding value • Low correlation with existing investments • Often targeting generating absolute return • Opportunity for enhanced economics - significant influence on terms, structure, transparency Orthogonal Partners LLP 8

9. Examples of next generation alternatives • Weather • Electricity • Intellectual property rights / music / film / video games / photography • Aircraft part-out • Litigation strategies • Niche direct lending and trade finance obligations Orthogonal Partners LLP 9

10. Barriers to entry - Investing in next generation alternatives • Where to find the ideas? Not in databases, unknown to consultants, may not have track records • Next generation strategies may have: • Sophisticated strategies • Complexity • Start up and operational risk • Need active support with structuring and governance • Never have managed third party money • Due diligence requires dedicated resources, experience and expertise • Very limited pool of experience May need to outsource this activity Orthogonal Partners LLP 10

11. Summary – Benefit from Orthogonal returns DIVERSIFICATION + Returns = “VALUE” • Investors need new sources of return • Adding “next generation” strategies can reduce risk and increase returns • Difficult to successfully execute strategy without help • May be cost effective to outsource such an activity Orthogonal Partners LLP 11

12. Any Questions? Orthogonal Partners LLP

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14. Contact information Orthogonal Partners LLP 9 Queen Anne Street London W1G 9HW Tel: +44 (0)20 7436 9462 Fax:+44 (0)20 7436 9428 info@orthogonalpartners.com Orthogonal Partners LLP 14