The Momentum Group Alternative Investment Specialists

The Momentum Group

Alternative Investment Specialists

Group History

• 1986 - Group Founded

• Offices in London, Bermuda, Hong Kong, Australia and Israel

• Offer a proven range of funds with defined strategies, risk/return and correlation profiles

Group History (Cont.)

• Products included:-– First guaranteed derivative / hedge fund (1986)– First Japanese guaranteed hedge fund (1988)– First guaranteed currency hedge fund (1989)

Group Product Strategy

• 1991 Momentum fund range launched using:– pre-defined return targets– pre-defined volatility targets

• 1991 to 2000 Momentum develops complementary range of 20 funds covering the risk:reward spectrum

Current Products

AllWeatherOasis

AssetMasterSandalwoodDebtMaster

DebtMaster ExcelAllWeather Excel

Merger Opportunities

RainbowUniversal Hedge

US SpecialistMacroMasterStockMaster

USMasterValueMaster

Low Volatility

10%-15% pa Target Return

Limited Capital Market Exposure

Market volatility

20%-25% pa Target Return

Hedged Capital Market Exposure

MomentumThe Present Day

• US$ 750 million under management

• 20 Fund of Funds

• 2 Excel Funds

Hedge funds come in various guises. They can be aggressive or they can be conservative, matching the profile of the investor.

ALLWEATHER

For All Markets

Objectives

• 10 - 15% per Annum

• Consistent Growth

• Minimal Losses

• Low correlation to capital markets

Consistency

• AllWeather’s investment managers have been combined to create a portfolio with the best chance of making money in all market conditions

• AllWeather has shown only three losing months since inception in May 1995

AllWeather

• Is insulated from market fluctuations

• Is risk averse

• Is straightforward

• Is designed for absolute returns

AllWeather - The Strategies

• Momentum AssetMaster

• Momentum USMaster

• Momentum Sandalwood

• Momentum DebtMaster

• Momentum Oasis

• Momentum Merger Opportunities

Momentum AssetMaster

• Highly consistent returns

• Volatility arbitrage• 5 losing months in 8

years• Short term futures

trading 100

150

200

250

300

350

June-91

June-93

June-95

June-97

June-99

Momentum USMaster

• Long / Short US Equities– General

– Sector Specialists

• Actively Hedged

100

120

140

160

180

200

220

240

260

280

300

320

340

Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00

Momentum DebtMaster

• Asset-backed Lending• Limited Market Risk• Highly Collateralised• Highly Consistent

100

110

120

130

140

150

Apr-96

Oct-96

Apr-97

Oct-97

Apr-98

Oct-98

Apr-99

Oct-99

Apr-00

Momentum Sandalwood

• Event Driven Strategies– Bankruptcies

– Workouts

– Mergers

– Bids

• Low Market Correlation 100

110

120

130

140

150

160

170

Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00

Momentum Oasis

• Arbitrage Strategies• Low market risk• Exploiting mispricing

80

90

100

110

120

Oct-97

Feb-98

Jun-98

Oct-98

Feb-99

Jun-99

Oct-99

Feb-00

Merger Opportunities

• Merger Arbitrage• Market Independent • Deal Orientated• Low Market Volatility

100

101

102

103

104

105

106

107

108

Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00

AllWeather…...Putting it all together

Momentum AllWeather Fund

100

110

120

130

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180

Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00

• Three Losing Months

since May 1995• Annualised return

• 11.31%

• Volatility• 4.00%

• Sharpe Ratio• 1. 578

• Strategies: 6

AllWeather Offers Investors

• An investment independent to a traditional portfolio

• Highly consistent returns

• A high level of comfort

• An alternative asset class

• Access to a diversified group of the world’s finest investment managers

Strategic Highlights

• Momentum structures range of diversified macro-economic and specialist equity hedge funds

• Momentum is unique in its development of a range of hedged products specifically targeting low volatility, absolute returns

Why hedge funds?

• Markets go both up and down– Stocks can be bought or sold short

• Markets can be volatile– Hedge instruments can trade volatility

• Markets can be flat– Many instruments are not market dependent

Alternative Investment Strategies

• Tailored absolute return targets

• Manager skill - not market driven

• New asset class– Greater portfolio diversification– Reduce portfolio volatility– Protection during market crises

“If you start at the right time, buying and holding is great.

If you start at the wrong time, it is hell”

Michael Goldman

Excel

For Extra Returns

Concept

• Application of moderate leverage

• Return enhanced to target 15 - 20 % p.a.

• Maintains low volatility

Comparison

AllWeather vs. AllWeather Excel

100

110

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200

Apr-95Jul-95

Oct-95

Jan-96

Apr-96Jul-96

Oct-96Jan-97

Apr-97Jul-97

Oct-97

Jan-98

Apr-98Jul-98

Oct-98

Jan-99

Apr-99Jul-99

Oct-99

Jan-00

Apr-00

AllWeather ExcelAllWeather

Risk/ReturnAnnualised

ReturnVolatility

Sharpe Ratio

Diversified: ConservativeMomentum AllWeather Fund** 11.31% 4.00% 1.58 Momentum Sandalwood Fund 9.58% 4.64% 0.99 Concentrated: ConservativeMomentum AssetMaster Fund ** 15.04% 4.23% 2.37 Momentum DebtMaster Fund 8.69% 2.49% 1.48 Momentum USMaster Fund 21.44% 15.68% 1.05 Diversified: More AggressiveMomentum Rainbow Fund** 9.24% 9.48% 0.45 Momentum Universal Hedge Fund 6.26% 14.46% 0.09 Concentrated: More AggressiveMomentum MacroMaster Fund ** 0.61% 23.01% (0.19) Momentum StockMaster Fund ** 11.71% 16.95% 0.40 Momentum ValueMaster Fund 16.32% 16.77% 0.68

Dealing

In order to invest into the Momentum range of funds, application forms and cleared monies must be received 3 working days prior to month end.