Redhedge ICAV RV Corporate Bonds Fund April 2018 1 | For - - PowerPoint PPT Presentation

1 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

April 2018

Redhedge ICAV RV Corporate Bonds Fund

2 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

Contents

Company and Fund History Strategy Overview Strategy – A closer look Risk Management Investment Team Summary Fund Facts, Performance & Ratios ICAV Structure

3 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

• Redhedge is an Irish ICAV structure managed by Triple AM LLP, an investment manager headquartered in

London.

• Founded in late 2014 with the purpose of managing its founders/partners money.
• Redhedge’s primary objective is achieving steady growth without undue risk; capital preservation is a

strong focus.

• In early 2015 Redhedge launched their first fund, a long/short relative value strategy on fixed income

credit, managing money for the founders and partners.

• In September 2016, with the strategy generating excellent risk/returns, an Irish ICAV structure was

launched (RV Corporate Bonds Fund) and opened to public investment. The co-founders remain major investors.

December 2014

RedHedge Founded

February 2018

SICAV Relative Value Launched

March 2015 September 2016

ICAV RV Corporate Bonds Launched Strategy testing Credit L/S Relative Value 1 year 7 months Objectives Identification: Capital Preservation Steady Returns Low Volatility

Company and Fund History

Founders Inception Capital – Closed Fund Strategy objectives achieved ICAV and SICAV Credit L/S Relative Value Strategy continue to meet objectives 1 year 5 months Founders Inception Capital - Open Fund

4 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

Strategy Overview

RV Corporate Bonds has been designed to perform in any market conditions. Our relative value strategy, with nearly three years of certified track record is proving to be a successful approach in order to identify value and deliver market neutral returns: Strategy in principle Our strategy is founded on the fact that, in credit markets, short term price volatility can temporarily lead to relative mispricing of bonds. Our model enables us to incorporate long term dislocations into a traditional yield curve approach. These “structural factors” are persistent characteristics of a bond that can throw-off a more naïve RV strategy. The distinction between short-term and long-lasting price influences is critical for a successful RV strategy. Our sector specialists identify the reasoning behind price mis-alignments; and search for those likely to correct in the short/medium term. Using a long/short approach, we aim to capture the differential between bond spreads (within the same bond curve or sector) generated by temporary imbalances; and profit once the factors that cause this mis- pricing dissipate. Our Universe : Our portfolio managers focus on sector specific activity in the credit bond market; we restrict ourselves to high liquidity issues.

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Strategy – A closer look

100 200 300 400 500 600

• 75
• 50
• 25

25 50 75 01-Sep 01-Nov 01-Jan 01-Mar 01-May 01-Jul 01-Sep

DELTA Z-SPREAD TOTAL 2 1/4 12/29/49 TOTAL 2 5/8 12/29/49

1) Quantitative model sends signal highlighting that the spread differential has moved from ~8bp positive to ~25bp positive 2) PM analyse reasons behind mis-alignment with a bottom-up

• approach. ( Bonds

structure and covenants, supply and demand, liquidity etc.) 3) Should the bottom-up analysis determine that temporary technical or fundamental factors are behind the mis-pricing, than the PM would start monitoring the spread and identify the next best entry point. 4) Bonds spread differential moves back to ~50bp

• positive. PM buys

the cheap and sells short the expensive. 5) Spread differential moves to ~25 negative. PM captures ~75bp movement. Trade Highlights

• Credit Risk Neutral

(Long/Short on same credit, similar bond structure)

• Cash Premium Neutral

(similar coupon / cash price)

• Limited Outright Rates

Exposure Trade Example Buy Total 2.25% Perp. (Call 2/21) VS Sell Total 2.625% Perp. (Call 2/25)

Source: Bloomberg

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Risk Management

Any relative value strategy needs to measure the risk associated with both long and short positions; and the evaluation of the netting effect is crucial. Our proprietary risk management system combines traditional measures of interest rate and credit exposure with

• ur own internally calculated beta weightings. These sector specific weightings and correlation measures allow
• ur portfolio managers to correctly size and distribute our holdings to control our exposure to the market. This is

useful both from a risk control perspective and for the minimizing of PnL volatility. As a firm that invests partners money alongside external investments we hold very high standards for our risk

• controls. In addition to risk management presence amongst traders throughout market hours, risk exposures are

formally assessed on a daily, weekly and monthly basis.

7 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

Investment Team

Andrea Seminara CIO / PM- Corporate Hybrids Dante Rossi PM - Derivatives Stephen Brett PM - Sub Insurance Neill Keaney PM – High Yield Marcello Cazzaniga PM - Sub Financials

Investment management at Redhedge is largely divided down sector lines. This specialization allows greater focus not just on the companies we invest in, but also on the nature of the markets in which we trade. Our Portfolio Managers interact with the market both directly, and through a range of counterparties, this proximity to the market helps us to establish an information advantage; reduces the cost of trading; and gives valuable insights into market liquidity.

8 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

Summary - The Redhedge Advantage

• Reasonably priced

transparent fee structure with no subscription fee and redemption fee. (1% management – 25% performance)

• Weekly Liquidity

with 3 days notice

• Alignment of interest

we are investors in all our strategies

• Market Neutral

a long/short strategy decorrelated to wider market movements

• Actively Managed

five portfolio managers each dedicated to a specific market sector

• Prudent Objectives

Capital preservation – Low volatility – Steady returns

• Low Risk/Reward ratio
• 0.138% worst drawdown VS +6% net return (last 12 months)

9 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

Fund Facts, Performance & Ratios (as of 10th April 2018)

Key Numbers

Sharpe Ratio (1y)* 5.62

• Std. Dev. Of Returns 1.14

YTD Returns 1.47% Return since Inception 7.52% 1 Year Roll 6.07%

• Max. Drawdown (Weekly) -0.14%

Positive Months Since Incep. 18 Negative Months Since Incep. 0 * RFR 3 months Eurib -0.328%

• ISIN IE00BD1R9143

Bloomberg Code RRCVBAE ID Inception Date 23rd Sept. 2016 Fund AUM EUR 58.2mm Management Fee 1% Performance Fee 25% Subscription Fee NIL Redemption Fee NIL Redemption Weekly

• Min. Subscription EUR 100,000

Fund Manager Andrea Seminara

Source: Bloomberg / Internal data

Histogram of Weekly Returns (82 weeks)

0.5 1 Oil Estoxx 50 MSCI W. Itrx XO 5Y Gold Itrx M. 5Y Itrx S.F. 5Y

Low Medium High

Correlation vs other markets

Source: Internal Data Source: Bloomberg

NAV Cumulative Performance Since Inception (Weekly NAV)

99 100 101 102 103 104 105 106 107 108 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18

Source: Internal Data

10 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

ICAV Structure

Board of Directors

General Directorship AIFM Investment manager ICAV

RV Corporate Bonds Fund Synergy Total Return Fund

Auditor Depositary & Administration Legal Advisory

11 | For Professional Clients / Qualified Investors Only – Not for Retail Use or Distribution

Disclaimer

This information is being communicated by Triple AM LLP, which is authorised and regulated by the Financial Conduct

• Authority. This material is for information only and does not constitute an offer or recommendation to buy or sell any

investment, or subscribe to any investment management or advisory service. It is only directed and may only be distributed to persons who are Professional Clients or Eligible Counterparties and is not, under any circumstances, intended for distribution to the general public. With investment, your capital is at risk and the value of an investment and the income from it can go up as well as down, it may be affected by exchange rate variations and you may not get back the amount invested. Past performance is not necessarily a guide to future performance and where past performance is quoted gross then investment management charges as well as transaction charges should be taken into consideration, as these will affect your returns. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation, which is subject to change. We do not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. Opinions expressed herein reflect the opinion of Triple AM LLP and are subject to change without

• notice. No part of this document may be reproduced in any manner without the written permission of Triple AM LLP,

however recipients may pass on this document but only to others falling within this category. This information should be read in conjunction with the relevant fund documentation which may include the fund’s prospectus, simplified prospectus

• r supplement documentation and if you are unsure if any of the products and portfolios featured are the right choice for

you, please seek independent financial advice provided by regulated third parties.

RedHedge 1 Knightsbridge Green London SW1X 7QA United Kingdom www.redhedge.uk info@redhedge.uk tel +442030342005