Presentation to students re: Hedge Fund Industry and Tips for transition from academia to the working world.

1. Fordham University
April 23, 2012

2. Today’s Discussion
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

3. What is a Hedge Fund?
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.

4. What is Prime Brokerage?
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.

5. The Spectrum of Hedge Fund Investors

6. The Four Stages of Fund Development

7. In the Zone: Three Types of Fund Operating Models

8. Why Are Hedge Funds Doing This?
The AUM / Performance Map
Fund Fee Revenues Under Various
Performance and AUM Scenarios

9. The Merlin Solution
Merlin has built a Merlin creates tailored solutions for each client that
platform with a suite combines the relevant products and services needed,
of products and enabling our clients to focus on what they do best,
services that:
generating alpha for their investors.
• Integrate seamlessly
Workflow Analytics
from front to back
• Multi-prime aggregation • Performance statistics and
office, to provide a
attribution
holistic solution that is • Account and trade reconciliation
• Risk decomposition
intuitive and efficient • Managed account oversight
• Compass real-time
• Order Management Systems
(OMS) • Investor reporting
• Is highly configurable
to meet the needs of
each fund to enable
you to evolve
Trading Services
• Electronic trading • Account management
• Global desk • Client services
• Outsourced trading • Capital development
• Stock loan
• Merlin Institutional Group (MIG)

10. Workflow | Analytics | Trading | Services
Workflow Solution – Open Architecture
Highlights: Streamlining workflow is one of the most important and least understood elements
to creating a sustainable and growing business. Merlin’s focus on optimizing
• Flexible trading flows
accommodate many trading workflow, operations, and administrative services spans all our products, services,
models and platforms and tools.
• Open OMS platform for Analytics Allocations for away trades (Export from Merlin OMS)
trade monitoring,
Trading
allocations, rebalancing,
and end of day reporting Portfolio Manager
EMS/ Route Away
EMS/ Desks
OMS Desks Trades Away
• Analytics and reports OMS
Brokers
Merlin Portfolio Analytics
Merlin Portfolio Analytics Trade Flexible Trading Solutions
aggregate positions and Entry
transactions across all Attribution Compass and
Attribution Compass FIX Drop Trade Reporting Trade
counterparties and Upload
Copy and Clearing Reporting
custodians Performance P&L and
Performance P&L
Clearing
• Integration, data flow, and Operations Risk
Operations Risk Merlin OMS
reconciliation with all trading
Intraday Merlin OMS
partners and custodians Positions
Positions Transactions
Transactions Activity Allocations Merlin Custodians
Allocations
• Merlin’s operational support Reporting
teams act as an extension Trade Reporting
Client Accounts
of your team Merlin Portfolio Accounting
Merlin Portfolio Accounting Posting
Allocations
Recon and Other Custodians
Break Fix Merlin Custodians
Transaction Transactions
All Client Accounts Client Accounts
All Client Accounts Posting Custodial and Positions Client Accounts
Custodial
Aggregated positions and Recon
Recon
Merlin Operations Aggregated positions and Prime Brokers
transactions across all primes
transactions across all primes Positions and
Transactions
Admin /
Transactions and Position Exports if Requested 3rd Parties

11. YOU
Know Your Story and Deliver Your Messages
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

12. YOU (CONT’D): Your Work Experience and…
“Pepper...and Salt”
February 1, 2012

13. 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

14. 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

15. QUESTIONS & ANSWERS
Ron Suber
Senior Partner, Merlin Securities
Mobile: (847) 544-8362
Email: rsuber@merlinsecurities.com