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Presentation to students re: Hedge Fund Industry and Tips for transition from academia to the working world.
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QUESTIONS ANY TIME!
1. Who is in the spectrum of hedge fund investors?
2. What are the four stages of fund development?
3. What are the hedge fund operating models?
4. Why are hedge funds doing this?
5. MERLIN
6. YOU
Today’s Discussion
1. A hedge fund is an investment fund that can undertake a wider range of investment and trading activities than other investment vehicles.
2. Hedge funds are only open for investment from particular types of investors specified by regulators including institutions, such as pension funds, university endowments and foundations, or high net worth individuals.
3. As a class, hedge funds invest in a diverse range of assets, but they most commonly trade liquid securities on public markets. Hedge funds also employ a wide variety of investment strategies, and make use of techniques such as short selling and leverage.
4. Hedge funds are typically open-ended, meaning that investors can invest and withdraw money at regular, specified intervals.
What is a Hedge Fund?
1. Prime brokerage is the generic name for a bundled package of services offered by investment banks and securities firms to hedge funds and other professional investors needing the ability to borrow securities and cash to be able to invest on a netted basis and achieve an absolute return.
2. Prime brokerage services include custody, transaction clearing and settlement, trade execution, account servicing, reporting and analytics, stock loan, and capital introduction among others.
3. The prime broker provides a centralized securities clearing facility for the hedge fund so the hedge fund's collateral requirements are netted across all deals handled by the prime broker.
4. The prime broker benefits by earning fees ("spreads") on financing the client's margined long and short cash and security positions, and by charging fees for commissions, clearing and/or other services.
What is Prime Brokerage?
Why Are Hedge Funds Doing This?
Fund Fee Revenues Under VariousPerformance and AUM Scenarios
The AUM / Performance Map
Trading
• Electronic trading
• Global desk
• Outsourced trading
• Stock loan
• Merlin Institutional Group (MIG)
Merlin has built a platform with a suite
of products and services that:
• Integrate seamlessly from front to back office, to provide a holistic solution that is intuitive and efficient
• Is highly configurable to meet the needs of each fund to enable you to evolve
Merlin creates tailored solutions for each client that combines the relevant products and services needed, enabling our clients to focus on what they do best, generating alpha for their investors.
The Merlin Solution
Services
• Account management
• Client services
• Capital development
Analytics
• Performance statistics and attribution
• Risk decomposition
• Compass real-time
• Investor reporting
Workflow
• Multi-prime aggregation
• Account and trade reconciliation
• Managed account oversight
• Order Management Systems (OMS)
Merlin Portfolio Analytics
Attribution Compass
Performance P&L
Operations Risk
Positions Transactions
CustodialRecon
Merlin OMS
Allocations
Reporting
Merlin Custodians
Client Accounts
EMS/OMS
DesksPortfolio Manager
Admin / 3rd Parties
Analytics
Trading
Allocations for away trades (Export from Merlin OMS)
Route Away Trades
FIX Drop Copy
Trade Reporting and Clearing
Intraday Activity
Trade Posting
Transaction Posting
Positions and Transactions
Transactionsand Positions
Transactions and Position Exports if Requested
Prime Brokers
Allocations
Trade Reporting
and Clearing
Recon and Break Fix
Merlin Operations
Highlights:• Flexible trading flows
accommodate many trading models and platforms
• Open OMS platform for trade monitoring, allocations, rebalancing, and end of day reporting
• Analytics and reports aggregate positions and transactions across all counterparties and custodians
• Integration, data flow, and reconciliation with all trading partners and custodians
• Merlin’s operational support teams act as an extension of your team
Streamlining workflow is one of the most important and least understood elements to creating a sustainable and growing business. Merlin’s focus on optimizing workflow, operations, and administrative services spans all our products, services, and tools.
Workflow | Analytics | Trading | Services
EMS/OMS
Desks
Flexible Trading Solutions
CustodialRecon
Merlin Custodians
Other Custodians
Merlin OMS
Reporting
Allocations
Attribution Compass
Performance P&L
Operations Risk
Positions Transactions
Merlin Portfolio Analytics
Client Accounts
Client Accounts
Merlin Portfolio Accounting
All Client Accounts
Aggregated positions and transactions across all primes
Merlin Portfolio Accounting
All Client Accounts
Aggregated positions and transactions across all primes
Away Brokers
Trade Entry and
Upload
Workflow Solution – Open Architecture
YOU
When meeting a new contact, you have 60 seconds to explain:
• Who you are
• What you do
• How you do it
• Why you are better or different
• Why the person should believe you
• Harmonize
Know your offering and value proposition, then get to the point clearly and quickly
Know Your Story and Deliver Your Messages
YOU (CONT’D)
What is your edge? What truly differentiates you?
• UMM I MEAN YA KNOW LIKE
• R.I.M. (Elevator Pitch)
• Know the equation for success = IQ + EQ
• Your “INTENTION”
• Take action — Call, connect, email and LinkedIn those people you said you would
YOU (CONT’D)
A: Hunter, Revenue Producer, Business Originator, Sales Person, Rain Maker, Profit Generator
B: Keep Revenue, Get Larger Portion of Wallet, Manage Relationships, Serve Clients
C: Commodity, Expense, Replaceable
Ron SuberSenior Partner, Merlin Securities
Mobile: (847) 544-8362Email: [email protected]
QUESTIONS & ANSWERS