Tel: 01753 863578 Mob: 07977 445496 E-mail simon.kerr001@gmail.

com ________________________________________________________________________________________________

In alternative investments there are many service providers for outsourced activities. There are available experts on whom to draw when a marketing campaign needs to be conducted, and when a new offshore structure or tax advice is required. Enhance Consulting addresses the less well-covered business problems related to the investment processes of hedge funds. Sometimes there can challenges related to team working. Sometimes the research process is seen to be very good but somehow the returns dont reflect it. How do managers relate the depth of research and conviction to position sizing? What should an investment advisor do when the outcomes have been outside their own expectations, or have been too lumpy or volatile? These are familiar questions to Enhance Consulting, and ones that have been successfully tackled for new and established hedge fund managers.

Introduction

Philosophy

Each alternative investment manager has some edge or insight on markets. The investment process should be designed to drive returns from this edge. The risk management framework should be the best fit with the investment process that delivers the return series that matches investors expectations.

Experience

Simon Kerr has a wide range of experience in financial markets and commodities for over twenty years. He has worked for a commodity broker, a merchant bank, a pension fund, an insurance company, and a family office as well as his own consultancy in alternatives. He has been a portfolio manager, a risk manager and a recognised authority in the use of derivatives. In terms of markets he has run portfolios of long-only equities, hedged and semi-hedged funds and been involved in asset allocation, quantitative approaches and bond markets/Treasury. Since he left Clerical Medical Investments in 1998 he has concentrated on hedge funds, firstly by consulting and writing the definitive work on the local industry European Hedge Funds (publ. Informa 1999). He has experienced hedge funds from the investor perspective as a hedge fund selector and analyst for a fund-of-funds, and has worked at single manager hedge funds.

Discovery Phase - Analysis and Comparison Phase Feedback Phase Presentation by client, manager letters, pitch-book, written material, risk reports, website. Observe and assess current approach, analyse trades, identify edge, determine suitability of alternative risk approaches for edge. Structured interviews used to work on specific issues raised. Introduce and discuss best practise tactics and concepts from successful funds. Identify an appropriate risk/return profile. Exploration of different approaches to Portfolio Construction and Money Management (sizing). Written reports. Presentation. Implementation.

The Process

If not in incubation then the fund has been trading for more than a year, made positive returns overall with only a few losing months. Some great calls made but also some losses that hurt more than they should have. Manager discovered that shorting is more difficult than expected, dynamic nature of correlations has presented a challenge. Has been right on a medium-term view (strategy), but timing of entry/exit points (tactics) have not been ideal. Sizing of positions through time has been a problem. There has been insufficient/too much market risk taken for the market environment actually experienced.

Typical Profile of Clients

Projects on Team Working

Relationships World-view conflicts Communication issues Clarity of responsibility Personal style mis-matches Conceptual differences

Specialities
Trader Training Shorting Risk Management

Clients Have Included

L/S Equity Japan, US and UK An Equity Volatility Fund Pan-Asian Equity Fund Bond (Non-arb.) Hedge Fund Sector Specialist Equity Funds Global Macro

Strategic Consulting for Hedge Fund Management Companies Business Reviews, Identifying Opportunities and Ways of Implementation (diversification, specific product positioning and launches), Risk Management Projects

OTHER SERVICES