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November, 2019
Prosperously navigating
unexpected events
with great skill and agility
2
AGENDA
Investment Methodology
- Top 10 Strategic Tech Trends for 2019-2020
- Current Opportunities and Investment Pipeline
- Diversification
- Risk Management
Performance
Automous driving
Summary
3
DISCLAIMER: The information and opinions expressed herein are current as of this document date and Black Swan Dexteritas Inc. assumes no obligation to provide updates or
advise on further developments. Any reference should not be considered as investment advice or a recommendation to buy or sell nor should it be considered as any indication of the
portfolio of any Black Swan Dexteritas investment fund or how it will be invested. Commissions, trailing commissions, management fees and expenses may all be associated with fund
investments. Please read the prospectus before investing.
Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
4
INVESTMENT METHODOLOGY
SECTOR ASSESSMENT
• Life Cycle: Sectors in introduction and growth stages with
high Total Addressable Market (TAM)
• Competition: High barrier of entry with differentiated products
and services within the sector
COMPANY ANALYSIS
• Business Model: Public ccompanies with high recurring revenue,
easily able to leverage network effects, strong negotiating power
with suppliers and customers, and strong corporate governance
• Size: Target small (500M+) to large cap public companies with
established track record of executing the business.
• Growth: Public companies with high and/or consistent revenue
growth
• Valuation: Determine if opportunities exist based on our fair
value expectation of stocks versus current stock prices
PORTFOLIO CONSTRUCTION
• Weightings: Determine % of portfolio allocated to holdings
based on risk-reward expectations
• Diversification: Well-diversified across 35 to 40 holdings to
maximize risk-adjusted returns
• Hedging: Utilize derivatives and fixed income products to
minimize drawdowns and generate alpha
IDEATION
• BSD Investment Advisory Committee: seek out global
growth themes and trends to overweight and underweight
various subsectors
• Experienced investment team sourcing trade ideas and
discussing vital macro economical forces in play
• Draw on sector experiences from members of the committee and
discuss emerging technology from the private and public space
• Deep dive into industry verticals to identify beneficiaries in other
primary, secondary, and tertiary markets
PORTFOLIO CONSTRUCTION
IDEATION
SECTOR
ASSESSMENT
COMPANYANALYSIS
PUBLIC COMPANIES
TOP 10 STRATEGIC TECH TRENDS FOR 2019-2020
5
CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE
• DIGITALIZATION & ELECTRIFICATION
The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD 1.5
trillion market in 2030
• 5G DEPLOYMENT
The 5G market will grow to $1.23 trillion by 2026, according to a new report by Ericsson announced at the
Mobile World Congress
• DIGITAL TWINS
The digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023
• BIG DATA
Worldwide Big Data market revenues for software and services are projected to increase from $42B in
2018 to $103B in 2027, attaining a CAGR of 10.48%.
• AUTOMATION & ROBOTIZATION
After growing at a compound rate of 17 per cent a year, the robot market will be worth $135bn by 2019,
according to IDC
• OLED – Organic Light Emitting Diode
The OLED market is expected to be valued at USD 48.81 Billion by 2023, growing at a CAGR of
15.2% between 2017 and 2023
• GAMING
Gaming market to grow at a CAGR of +6.2% toward 2020 to reach $128.5 billion
Source: Statista, Gartner, Ericson, Newzoo
6
INVESTMENT METHODOLOGY DIVERSIFICATION
BSD seeks out high potential technology sectors with promising unit sales projections and revenue
projections and minimizes exposure to low potential sectors
PORTFOLIO BY MARKET CAP PORTFOLIO BY TECH SUBSECTOR
$5B to $10B
5.0%
Over $10B
91.0%
As of October 31, 2019
BSD is well-diversified across 10 technology subsectors
across 30 to 35 holdings with minimal correlation.
Under $5B
4.0%
7
1.99%
3.63%
3.69%
3.95%
4.05%
7.13%
8.90%
13.42%
13.79%
Consumer Electronics
Technology Real Estate
Automation
Cyber Security
Consumer Services
Fintech
Communication Equipment
Semiconductors
Internet Software
PERFORMANCE
PERFORMANCE METRICS* FUND RETURNS
FUND S&P 500
Return Since Inception
YTD Return
60 Day Return
20 Day Return
Daily Standard Dev.
Sharpe Ratio
Sortino Ratio
Correlation
56.08%
11.81%
-1.66%
-0.98%
0.80%
0.57
0.79
-
79.75%
20.57%
2.34%
2.05%
0.84%
0.74
0.92
0.96
* Management fees and expenses may be associated with investments. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.
October 1, 2013 to October 31, 2019
8
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD S&P 500 YTD
GLOBAL TECH FUND MONTHLY PERFORMANCE SINCE INCEPTION
BSD has outperformed our portfolio benchmark with lower risks through active diversification across various subsectors
2013 1.32% 0.35% 2.82% 4.55% 9.60%
2014 -2.08% 3.63% -2.07% -4.39% 2.38% 2.80% 2.21% 3.53% -1.64% 4.95% 2.89% -1.51% 10.69% 11.43%
2015 0.53% 5.39% -0.16% 2.98% 0.90% -0.91% 0.43% -6.67% -1.48% 9.68% 0.63% -0.76% 10.16% 0.47%
2016 7.41% -2.78% 5.31% -0.02% 2.33% -0.29% 3.66% 0.65% 1.63% 0.38% -3.75% -0.71% -1.63% 9.50%
2017 4.97% 2.14% 2.99% 2.08% 3.85% -2.55% 2.68% 2.12% 0.51% 3.41% 0.11% -0.20% 24.49% 19.42%
2018 2.89% 0.63% -0.62% -1.57% 4.11% -1.63% 0.63% 1.72% -2.18% -7.87% 2.70% -7.41% -10.01% -6.55%
2019 7.09% 1.55% -0.91% 1.86% 0.44% 0.70% 1.83% -0.27% -0.13% -1.43% 11.81% 20.57%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
9/30/13 9/30/14 9/30/15 9/30/16 9/30/17 9/30/18 9/30/19
BSD S&P 500
9
HOW BSD COMPARES TO OTHER HEDGE FUNDS
HEDGE FUND STRATEGIES* 2014 RETURN 2015 RETURN 2016 RETURN 2017 RETURN 2018 RETURN
PERFORMANCE
BSD Global Technology Hedge Fund
Absolute Return
Multi-Region
Equal Weighted Strategies
Relative Value Arbitrage
Macro/CTA
Fixed Income - Credit
Global Hedge Fund
Equity Hedge
North America
Emerging Markets Composite
Market Directional
Event Driven
10.69%
0.67%
1.71%
-0.56%
-3.06%
5.09%
-1.86%
-0.60%
1.37%
-4.13%
-8.03%
5.13%
-4.06%
Our outperformance relative to other funds are indicative of our core competency in
generating outsized returns and navigating a challenging market environment
* Hedge fund index data is provided by Hedge Fund Research Index (HFRI) as of January 2018.
10.16%
2.86%
-1.19%
-1.54%
-3.10%
-1.96%
-4.38%
-3.64%
-2.33%
-9.35%
-5.26%
-8.58%
-6.94%
-1.63%
0.31%
1.95%
3.78%
1.03%
-2.93%
4.97%
2.50%
5.49%
4.14%
6.77%
9.86%
10.50%
24.99%
3.91%
6.58%
6.10%
4.28%
7.43%
4.55%
8.04%
12.78%
6.25%
8.99%
4.68%
7.22%
-10.02%
-0.49%
-5.90%
-5.35%
-1.17%
-3.25%
-2.55%
-6.72%
-9.42%
-7.62%
-7.55%
-12.54%
-11.68%
10
AUTONOMOUS DRIVING UPDATE
AUTONOMUS DRIVING
AUTONOMOUS DRIVING ECOSYSTEM
11
Automakers
Suppliers
Semiconductors &
Communications
Software
Shared Mobility Services
Source: Frost & Sullivan
The Global
Autonomous Driving
Market is Expected
Grow up to
$173.15 Bby 2030
AUTONOMUS DRIVING
GRADATION OF AUTOMATED DRIVING
12
AUTONOMUS DRIVING
13
20 LEADING AUTOMATED DRIVING SYSTEMS COMPANIES
Source: Navigant Research
AUTONOMUS DRIVING
14
20 LEADING AUTOMATED DRIVING SYSTEMS COMPANIES
Source: Navigant Research
2018 2019
1 GM-Cruise Waymo
2 Waymo GM-Cruise
3 Daimler-Bosch Ford AV
4 Ford AV Aptiv
5 Volkswagen Group Intel-Mobieye
6 BMW-Intel-FCA Volkswagen Group
7 Aptiv Daimler-Bosch
8 Renault-Nissan-Mitsubishi-Aliance Baidu
9 Volvo-Veoneer-Ericsson-Zenuity Toyota
10 PSA Renault-Nissan-Mitsubishi-Aliance
11 Jaguar Land Rover BMW-Intel-FCA
12 Toyota Volvo-Veoneer-Ericsson-Zenuity
13 NAVYA Zoox
14 Baidu May Mobility
15 Hyundai Motors Group Hyundai Motors Group
16 Honda Uber
17 Uber NAVYA
18 Apple Voyage
19 Tesla Tesla
20 Apple
Leaders Contenders Challengers
AUTONOMUS DRIVING
15
Autonomous vehicle technology, or "self-driving“, refers to vehicles
that use sensory data of the surrounding environment to navigate
without the use of human drivers.
SENSOR FUSION FOR AUTOMATED DRIVING
AUTONOMUS DRIVING
16
• Three main groups of sensor systems: camera-, radar-, and lidar-
based systems.
• Mono and stereo cameras in conjunction with radar systems provide
a precise evaluation of speed and distance as well as the outlines of
obstacles and moving objects.
Camera - today’s camera systems use CMOS image sensors - HD with 1 to 2
megapixels. Video images provide most of the details for the human driver but are
also suitable as an input parameter for highly automated driving.
RADAR - stands for Radio Detection And Ranging, which means the detection and
localization of objects using radio waves.
LIDAR - stands for Light Detection And Ranging and is a laser-based system. Used
primarily to measure distances to stationary as well as moving objects.
GPS - stands for Global Positioning System and is a satellite-based radionavigation
system owned by the United States government. It is a global navigation satellite
system that provides geolocation and time information to a GPS receiver anywhere
on Earth
SENSOR FUSION FOR AUTOMATED DRIVING
AUTONOMUS DRIVING
17
THE SELF-DRIVING CAR COMPANIES GOING THE DISTANCE
Source: Statista
AUTONOMUS DRIVING
18
PAST PICKS VS NEW PTCKS
2016 – Suppliers &
Semiconductors 2019 – Software,
Semiconductors &
Communications
AUTONOMUS DRIVING
AUTONOMOUS DRIVING ECOSYSTEM
19
Automakers
Suppliers
Semiconductors &
Communications
Software
Shared Mobility Services
Source: Frost & Sullivan
The Global
Autonomous Driving
Market is Expected
Grow up to
$173.15 Bby 2030
AUTONOMUS DRIVING
20
GLIMPSE TO THE FUTURE
Waymo tells riders that ‘completely driverless’
vehicles are on the way
21
SUMMARY
• We bring unique, proven strengths
• Principal with 30 years of portfolio management experience
• Dynamic stock selection methodology
• Disciplined risk management process
• Our expertise in technology is unparalleled
• Team consisting of seasoned entrepreneurs that have co-founded billion dollar companies
• Global networks of advisors and analysts examining tech vendors and tech end-users
• Significant out-performance in risk-adjusted returns
• The BSD Global Tech Hedge Fund returned 54.98% since inception versus S&P 500 index
return of 74.94%
• Exhibited only 83% of the benchmark volatility
• Hedging strategy acts as an “insurance policy” in anticipation of adverse market events,
by limiting drawdowns and often generating alpha
* Management fees and expenses may be associated with investments. Investment funds are not guaranteed, their values change frequently and past performance may not be
repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.