A Arm Presentation Nov 2010

8/8/2019 A Arm Presentation Nov 2010

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AARM CorporationAlternative Asset Risk Management

www.AARMcorp.com

10/15/2010

“6 Ways to Improve your Private Equity Returns using AARM”

By: Dr. Gitanjali Swamy



www.AARMcorp.com:

Investors Rely on Alternatives for Alpha

• Lower returns

• Fixed Income = small returns• Stocks = volatile

• Cash = no longer holds value

• Higher risk higher reward products; Alternative Assets

• Problems:• Lack of transparency

• History of malfeasance

1Confidential to The AARM Corporation www.aarmcorp.com. Please do not distribute.



Scandals are eroding investor faith in PE S e gm

en t _1

S e gm

en t _1

Family Office

& HighNetworth

Family Office

& HighNetworth

S e gm

en t _2

S e gm

en t _2

Private

WealthManagement

Private

WealthManagement

S e gm

en t _ 3

S e gm

en t _ 3

Endowments

& PensionsFunds

Endowments

& PensionsFunds

We can’t afford to rely on plausible deniability!

Confidential to The AARM Corporation www.aarmcorp.com. Please do not distribute. 2




• AARM is the dashboard, introducing the idea of Insight on Demand ™ for alternative assetinvestors

AARM Provides Unbiased Risk Assessment




• AARM is the ideal partner to streamline

private equity investment process andmaximize value of a portfolio

Introducing AARM Corporation

• AARM’s revolutionary interactive platformcombines

• Insight of Consulting +

• Transparency of unbiased, data-driven analysis

• All delivered Cost-effectively and On-demand.




TODAY’S REALITYConsultingCompany

Fund of Funds Internal

Analyst

AARM

Hamilton Lane

CambridgeAssoc.

Grove Street

Flag VenturePartners

The AARM Corp

Product/Service Service Service Product + Service Product + Service

Pricing & Revenue Pay per Management fee

Pay an analyst Pay per

o e

$500,000/yr

- ee, carry

$3,000,000 Mil/year $50,000-$100,000/yr $5000/year

Affordability Low Low Low High

Ability to providecustom solution

Medium Low Medium High

Refresh-ability &Relevance in 3-12months

Low Low High High

Available On-demand

Low Low High High

Value to Family

offices, High Nets

Low Low Medium High




Functions as multiple analysts.

Manage risk/reward profile.

•Insight on Demand™

•Portfolio Management

AARM Provides Direct Financial Benefits

Prevent poor investments.

Manage CASH better.

Fees justified with betterreturns = more money


•Better Diligence

•Cash Risk Management

•Identify high performingFoF with justifiable fees



LP requirements:AARM Corp provides investment tools for Risk Management

Risk Management ToolsData Analytics

Due Diligence Tools

Manager Search

Occasionally

Every Newfund


Industry Insights

Dry Powder Analysis

AARM-FOIA Benchmarks™

Portfolio Management

My Portfolio Tool

Portfolio Dashboard

Accounting & Control

Cash Risk Management

EveryQtr

EveryMonth

Every

Week



• Better Portfolio Management: Lower Risk

Confidential to The AARM Corporation www.aarmcorp.com.. Please do not distribute. 8

1. KNOW YOUR BASELINE1. KNOW YOUR BASELINE

• e er epor ng: ower os s



www.AARMcorp.com:

1. Know Your Baseline

•Understand your portfolio

•Baseline and track it:

Industry Insights

Copyright© The AARM Corporation www.aarmcorp.com. 9

• Better portfoliomanagement: lower risk• Better reporting: lowercosts

Dry Powder

AnalysisAARM-FOIA

Benchmarks™

Due DiligenceTools

Manager Search

Comparator

Risk Management

Tools

Data Analytics

PortfolioManagement

My Portfolio Tool

Portfolio

Dashboard



www.AARMcorp.com:www.AARMcorp.com:

Portfolio Reporting


Standard portfolioreports can beautomatically

generatedWithin AARM on-demand



www.AARMcorp.com:USE AARM MARKET INSIGHT REPORTS

& MODEL PORTFOLIOSLow Risk Model Portfolio




• Better Portfolio Management: Lower Risk


1. KNOW YOUR BASELINE2. BENCHMARK AGAINSTMEANINGFUL METRICS

• Better Reporting: Lower Costs



www.AARMcorp.com:

2. Benchmark Against Meaningful Metrics

• Benchmark musts:

• Transparent• Know the components of the Benchmark

• E.g. SP500, DOWJONES IA, Nasdaq composite etc.

• Frame-able


• Understandable in performance we are comparing

• E.g. Top largest 500 firms, Largest market cap on the NYSE etc.

• Before AARM Corp

• Benchmarks neither Transparent nor Frame-able

• what’s in it?

• why is it there!?



Solution:

AARM-FOIA Benchmarks™

Fully Transparent


completely Frame-able



• Better Diversification & Portfolio Management:

3. Optimize exposure


ower s



www.AARMcorp.com:

3. Optimize Exposure

• Risk Factors:

• Vintage

• Industry

Identify Exposure

Understand Performance

DecisionPeriod


• Product• Geography

• Peers:

• Similar funds (with same risk factors)

• Portfolio Scenarios:

• Exposure under different allocations

• Warning Indicators:

• portfolio funds underperform peers




Portfolio Demonstration





Portfolio Demonstration.





Aggregated Portfolio Comparison

In this Portfolio

• The best fund isBlackstone IV at 95Percentile.

• The worst isWarburg Pincus X at40 percentile.

• The 1999 & 2000AARM Benchmarkswere both to


Quartile in this

Comparison (> 75Percentile).

• The Top 3 fundsin this comparisongroup wereClearstone I-B,

Morgan Stanley III,And Endevour III



• Better Diligence & Selection: Higher Returns

4. Better fund diligence





4. Better Fund Diligence

Identify Exposures

DecisionPeriod


• AARM-FOIA Benchmarks™


, ,

• Peer set Comparison

• Automatic peer generation

• Comparison of • Fund vs. peer Funds

• Fund vs. Fund of Funds




Assessment Demonstration

AARM can tell you the Qualityand percentile of each fund in

relation to its peers





Comparison Against Peers: for a fund




• Active Portfolio & Cash Management: Lower

5. Actively Manage Portfolio


s an ower os




5. Actively Manage Portfolio


Identify exposures

DecisionPeriod

• Identify Gaps• Exposure


• Decision on what to invest• Secondary position in fund

• Secondary fund

• Primary fund – new manager

• Primary fund – existing manager

• Diligence




Diligence Demonstration

26 Confidential to The AARM Corporation www.aarmcorp.com. Please do not distribute.

AARM enables detailed exploration

and diligence leads for a manager



• Better Negotiation of Terms and Structures:

6. Negotiate Better Deals


g er e urns, ower os s



www.AARMcorp.com:

6. Negotiate Better Deals

• Justify the fee structure in• Fund fees

• Fund of funds extra fee justification

Copyright© The AARM Corporation www.aarmcorp.com. 28

• Use quantitative analysis to negotiatebetter terms

• Use quantitative analysis to justifyvaluations



www.AARMcorp.com:

Simple Factor Analysis for Fund Pricing &

Risk Management

Decrease FundFees 0.3% fora 300Mil increaseIn Fund size

AARM allows you to assessthe right fee and risk levels




www.AARMcorp.com:

AARM Corp

Informed investments

Better Terms

On-demand analysis=

Better Returns, Lower Risks & Lower Costs


sign-up for a FREE trial at

www.AARMcorp.com

A Arm Presentation Nov 2010

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