For more information contact: emailus@marcusevans.com An interview with: Shachi Shah of Barclays Capital Fund Solutions, a sponsor at the marcus evans Alternative Investments Europe Summit 2010 and European Pensions & Investments Summit 2011 discusses generating alpha in alternatives. Join the 2015 Summit along with leading regional pension investors and global asset managers in an intimate environment for a focused discussion of key new drivers shaping institutional investment strategies today. For more information contact: emailus@marcusevans.com

1. Barclays Capital Fund Solutions:
Generating Alpha in Alternatives
Shachi Shah of Barclays Capital Fund Solutions, a sponsor at the marcus evans Alternative
Investments Europe Summit 2010 and European Pensions & Investments Summit 2011, on
generating alpha in alternatives.
Interview with: Shachi Shah, Chief Executive Officer, Barclays Capital Fund Solutions
FOR IMMEDIATE RELEASE real challenge is for investors to diversify their investments away from
equity-driven alpha and select managers who invest in broader,
“The dependence on equity as the source of alpha in the alternatives principle-based liquid alpha sources.
asset class has to change”, says Shachi Shah, Chief Executive Officer of
Barclays Capital Fund Solutions. Diversification and shifting from one Where are the untapped opportunities within this asset class?
investment strategy or asset class was what saved many investors
during the 2008 crisis. From an asset management company sponsoring Shachi Shah: Leveraging the knowledge and understanding of cross
the marcus evans Alternative Investments Europe Summit 2010 asset and investment style allocation is now key to generating alpha
and European Pensions & Investments Summit 2011, Shah in this new volatility regime. Managing this mix is an area of
discusses the importance of manager flexibility and how skilled expertise which is relatively under-developed. We believe non-
interpretation of non-tangible information generates hidden alpha. correlated alpha can be captured by tactical investment across
multiple asset classes and investment styles. In fact as managers
How should investors approach the alternatives space? become more flexible, we expect the traditional single investment
styles like equity longshort, event driven, managed futures, global
Shachi Shah: Recent events like the liquidity squeeze in August 2007, macro, etc to become less relevant. Thus the concept of sticking to
the credit crisis of 2008 followed by the European credit crisis in May one style is already being questioned by seasoned professionals.
2010 have exposed the dependency that alternative managers have This is likely to result in a major move to managers who are more
on equities to generate alpha. We could conclude that even within flexible at shifting their style based on the business cycle and
the alternative investment space most managers are predominantly economic environment.
skewed towards equities, with the ability to source alpha coming
from this one asset class only. What developments will influence the alternative class
of investments?
These recent events have had a major impact both on investors and
regulators. Volatility across the markets and asset classes has jumped Shachi Shah: The last decade has been characterised by managers
as there is increasing uncertainty on the likely outcome of quantitative chasing unexplainably high returns using leverage and carry tools.
easing. We therefore believe higher volatility is here to stay. Thus alpha Events that unfolded during 2007 and 2008 reduced investor
generation needs to take into account this new volatility regime and appetite for alternative strategies. Managers in alternative asset
the dependency on equity as the main source of alpha has to change. classes are now not only battling to gain back the trust of these
investors but are having to face a changing regulatory landscape and
As markets are evolving, there is a real need for skilled managers who an ageing population. I would expect to see changing demographics
can spot investment opportunities across liquid asset classes, having a much bigger impact on investment in alternatives in the
particularly commodities, foreign exchange and fixed income. The longer term than either regulation changes or politics.
www.aie-summit.com and www.epi-summit.com

2. The change in demographic is likely to lead investors to finance their to us that it is important to understand how it can affect the direction
lifestyles by drawing on their investments. As a result, they will seek of asset classes. In many asset classes there is influence and impact
stable absolute returns year-on-year as opposed to investing in higher from information with no obvious relevance to that asset class.
risk alternatives.
Managers who digest this will allocate across investment styles and
What long-term strategies would you recommend? asset classes to pick up on trends more quickly. We would
recommend investing in these managers that are able to translate
Shachi Shah: Hidden alpha that can be generated by better intangible information into tangible asset allocation decisions and
interpreting non-obvious information. There is so much data available predict changes in business cycles in order to generate alpha.
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About Barclays Capital Fund Solutions
Barclays Capital Fund Solutions is the asset management business of Barclays Capital, the investment banking division of Barclays Bank PLC,
offering investors a full range of standard and tailor-made investments. Barclays Capital Fund Solutions provides investors with truly value-
added investment solutions by combining the strengths of asset management and investment banking.
For more information: www.barcap.com
www.aie-summit.com and www.epi-summit.com