CHAIR WELCOME REMARKS

Maya A. Z. Rodriguez, AZR Capital Ltd

Charities / Achievements 2014

• Over 900 women referred to our services this year • Provided over 4000 counseling sessions since April 2014 • Provided 29 self-development workshops for 435 women and 13 support groups with 104 women • Obtained British Association for Counseling & Psychotherapy (BACP) accreditation as well as Women’s Aid Quality Standards stage 1 • Trained 30 volunteer counselors to become domestic violence specialists

• The Mapere Primary School Building Project has been approved by the government and is underway • A new Komani Learning Centre has been set up to teach computing basics. It also has a fully capable library with reading benches and stools • The new Komani creche has opened its door and now receive a constant supply of fresh farm products • Are working on a “Reach for a dream” project, which takes 300 orphans to the cinema every fortnight • Hosted a Christmas Party for 2,000 orphans and vulnerable children

1. Be prompt

2. Fire

3. Fancy pads

4. Sweeties

5. Feedback forms

6. Competition

0%

5%

10%

15%

20%

25%

30%

35%

Traditional diversification

(Modern Portfolio Theory –

Markowitz)

De-levering/highcash levels

Direct overlayhedges

Hedge funds(macro, CTAs etc.)

Investing involatility / tail risk

Other

33%

17% 11%

19%

8% 11%

How do investors manage extreme risk?

Source: London Volatility Investing event, March 2014

Investors’ concerns with volatility strategies

• High degree of complexity vs. traditional hedging

• Cost (fees) + negative carry

• Capital preservation in low volatility markets

• Poor long term performance (theta / lack of convexity)

• Non-linear payoff

• Complex to monitor

… So what are the top challenges for volatility managers

1. Greed is back! Greed is right!

Test question

2. Rethinking the value proposition

NewEdge VTI Index vs. MSCI World

40

50

60

70

80

90

100

110

120

1/1/08 7/1/09 1/1/11 7/1/12 1/1/14

MSCI World

NewEdgeVTI Index

3. Performance

VIX Index

Source: Bloomberg

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Man

age

me

nt

+ P

erfo

rman

ce f

ees

Mgm

t fe

es o

nly

Pe

rf. F

ees

on

ly

2%

1%

Less

th

an 1

%

20

%

20

% o

ver

a h

urd

le a

chie

ved

Tier

ed

fee

sch

ed

ule

Mu

lti A

sse

t

Equ

ity

On

ly

Oth

er

Lon

g d

ate

d

Me

diu

m d

ate

d

Sho

rt D

ated

Acc

epta

ble

No

t ac

cep

tab

le

Inev

itab

le

Dir

ect

ove

rlay

to

po

rtfo

lio

Dir

ect

& p

roxy

hed

gin

g

Aga

inst

eq

uit

y p

ort

folio

In h

ed

ge f

un

d b

uck

et

Oth

er

Cost Structure Management Fee Performance Fee Asset classexposure

Duration ofPortfolio

Theta bleed Hedgingexposure

Investment Type

39%

48%

13% 10%

52%

38%

7%

47% 47%

83%

17%

0%

43%

30% 26%

20% 20%

60%

47% 53%

44%

50%

6%

4. Pricing strategy

Source: London Volatility Investing event, March 2014

Theory of fractals

(Benoit Mandelbrot, 1963)

5. Tail risks are assumed away