Fordham UniversityApril 23, 2012

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?

The Spectrum of Hedge Fund Investors

The Four Stages of Fund Development

In the Zone: Three Types of Fund Operating Models

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): Your Work Experience and…

“Pepper...and Salt”February 1, 2012

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: rsuber@merlinsecurities.com

QUESTIONS & ANSWERS