Quatrain™ Presentation - Strategic Capital Allocation Group

Translating Instinct Into Action - A Practical Framework
- Dynamic Allocation with Embedded Risk Management -
“Rethinking Risk”
Quatrain
No Prophecy, Just Vision
This presentation may not be duplicated, copied, distributed or used as a template electronically or in print format without contacting the author and obtaining explicit written permission
detailing the conditions of use. Strategic Capital Network LLC US Patent US-7653449 B2
This presentation is for informational purposes only and is not intended to be an offer, solicitation or recommendation with respect to the purchase or sale of any security or a recommendation of the services
supplied by any investment adviser or money management organization. No client or prospective client should assume that any information presented herein serves as the receipt of, or a substitute for,
personalized individual advice from the adviser or any other investment professional. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.
©2012 SCA Group LLC
Strategic Capital Allocation Group LLC
Contact:
Brian Hunter (bhunter@scagrp.com)
Ashish Kulkarni (akulkarni@scagrp.com)
800 Boylston St., 24th Floor, Boston MA 02199
Tel: 617-450-9300 Fax: 617-450-9399
Web: www.scagrp.com
©2012 SCA Group LLC
The 14-Year Road-Tested Quatrain Mandate
- Dynamic Allocation With Embedded Risk Management and Containment -
Increased cross correlations have made efficient diversification tougher to achieve. What was once
perceived as the only free lunch in investing has proven to be one of the toughest challenges in asset
management.
In order to materially improve upside potential while containing downside beyond what can be achieved by
diversification, an embedded risk management discipline must be actively integrated into a dynamic asset
allocation framework. Then, one can nimbly target opportunities and hedge risks across the entire portfolio
- well in advance of severe market stress.
Herein we impart a practical next step beyond conventional wisdom.
©2012 SCA Group LLC
3
What Factors Into Ongoing Risk-Intelligent Dynamic Asset Allocation ?
To what extent should asset allocation lead expectations (relative future value vs. relative value)?
How can we navigate the risks of moving too soon or too late?
Where do we have the most conviction?
What information or signal would we need that would increase our conviction level?
If we decide to change allocation, how should we size up exposures?
And over what period of time?
What structures would be appropriate for further allocation?
©2012 SCA Group LLC
4
Quatrain: No Prophecy, Just Vision
Tangible Insights That Have Driven Billions of Prestigious Institutional Assets…
Investments do not follow convenient bell-shaped return curves. In fact,
extreme outcomes occur much more often than theorized, assumed or can be
tolerated.
A Reliable
Indicator of
Relative Value
versus
Relative Risk
Volatility is not risk. It has two personalities – the good of upside
potential and the bad of downside peril.
Correlations are not static. They can increase materially beyond historical
ranges and erode diversification benefits, especially when needed most.
Quatrain’s uniquely practical, dynamic framework assimilates this asymmetric
reality and prescribes a reliable portfolio of uncorrelated, yet compatible
investments.
The
Enduring
Results
A continuous risk-managed asset allocation
generating persistent upside and dispersed downside.
* Quatrain - Resource Allocation Technique, US Patent #7653449
©2012 SCA Group LLC
Navigating Risk
- Releasing Upside Optionality while Mitigating Correlated Downside Building portfolios as reliable as commercial airplanes using the science of Reliability…
Equity
Fixed Income
Hedge Funds
Real Assets
Lift
Cash
Embedded Risk Management
(Upside Optionality)
Capture the “good cholesterol” of
Uncertainty over Time via incremental
positive skew with low kurtosis
Reliability
•
•
•
Investments with Durable, Uncorrelated Downside
Stretching Mean Time Between Failure across all Portfolio Components (Asset Classes/Strategies)
Ensure dynamic correlations among investments are stable over time especially during “turbulence”
The Allocator should simultaneously address:
Gradual reallocation across dynamically evolving asymmetries in relative value vs. absolute risk with an
objective to capture as much upside optionality (incremental positive skew) from the risk budget.
While accounting for potential downside correlations and evolving plausible downside.
©2012 SCA Group LLC
* Quatrain - Resource Allocation Technique, US Patent #7653449
6
Quatrain Embraces Reality As a Practical Guide
- Seeing the full spectrum of possibilities as they are forming new opportunities Embrace Reality of Asset Returns –
Not “Normality” Fiction of MPT
Correlations are Dynamic and Non-Linear
Downside Correlation Envelope
Risk Asset Return Distribution
Actual Return Distribution
Normal Distribution
Fat-tails and skewed returns distributions are the
reality.
Risk is Downside – Not Volatility
Rolling Correlation
Correlation Band
Evolving correlation trends within the context of dynamic historical
correlations should be accounted for in the risk allocation.
Possibility of negative co-skew and co-kurtosis (“joint” negative
returns and volatility clustering) under extreme conditions is
material in joint return distributions.
Strategy Returns Exhibit Serial Correlation
Risk Asset Return Distribution
RISK
OPPORTUNITY
Decoupling Uncertainty from Risk
Upside opportunity is the good cholesterol while
potential absolute downside is the bad cholesterol.
©2012 SCA Group LLC
Returns over time are not independent and identically distributed.
Material serial correlation can exist (esp. in less liquid strategies) causing
under-estimation of risk & over-estimation of risk-adjusted returns.
Autocorrelation trends and their effect on evolving
risk-return tradeoffs should be identified.
7
The Quatrain Risk-On/Risk-Off Signal Map
Quatrain Delivers:
•Conviction in strategy and investment selection, sizing and timing decisions
•Results that can reinforce ongoing decision-making and conviction
•Sufficiently long lead times for reallocation to support good governance
Downside
Correlation
Diverging
Decelerating
Volatilities
Decreasing
Positive Asymmetry
Add to Positive Asymmetry
Changes in Quatrain Allocations/Sizing
Quiet
Downside
Correlation
Volatilities
© SCA Group LLC
Risk On
Intense
Converging
Accelerating
Increasing
Negative Asymmetry
Note: Changes in Quatrain recommended allocations may be non-linear – the linear nature of the above chart is
for illustrative purposes only
Risk Off
Ensure Downside
Correlation Remains
Curtailed
8
The Counterintuitive Quatrain Vision
- Understanding the Pace, Character and Impact of Quatrain Reallocations Quatrain targets beneficial asymmetry through a portfolio allocation that maximizes upside optionality while
preserving capital by curtailing correlated downside.
•
•
Quatrain extracts more useful information from periodic returns by analyzing them in a higher dimension
The path of returns as well as the rate of change and pattern of returns across strategies/assets contain a richer
array of insights than the naive returns alone.
Quatrain forensically recognizes and contains the impact of uncharacteristic losses and correlation breakdown.
•
What affects the pace of Quatrain reallocations?
Investment Horizon
Strategic Signals: Longer time horizon
Tactical Signals: Shorter time horizon
True diversification
A more realistically diversified investment mix reflects more stable correlations and
gradual, controlled reallocations.
Impact
Strategic and Tactical signals with comfortable lead times that encourage and reward
a prudent governance process
©2012 SCA Group LLC
less frequent reallocations.
higher reallocation frequency
9
Quatrain Focuses on Attenuating Losses Rather than Minimizing Volatility
Incremental reallocation that simultaneously enhances “true” diversification and releases upside return potential…
Quatrain Returns Distribution
Mitigate potential downside tail risk by
capturing dynamic correlation trends
Manage downside correlation signaled by
co-skew, co-kurtosis, volatility
autocorrelation and cross-volatility under
extreme conditions
Release Upside Potential of the Portfolio
By capturing positive optionality from
asymmetric risk-return trade-offs - not
shying away from investments with
“positive tails”,
Dynamic perception of potential downside correlations allows the risk allocator to actively dictate the relative
attractiveness of assets
Active tail risk management enhances portfolio reliability not just over but also within the investment horizon
Integrating liquidity, leverage, factor, sector and other policy-dictated constraints within the optimization
process allows for a holistic asset allocation discipline – in keeping with policies and objectives.
©2012 SCA Group LLC
10
Correlations Matter
- Especially Covariance Patterns at Times When Diversification is Needed Most -
Stage 1
©2012 SCA Group LLC
Stage 2
Stage 3
Stage 4
Stage 1
Correlations bottoming. Autocorrelations decay materially.
Gradual Reallocation towards Risk-Off environment
Stage 2
Markets enter stress period, correlations start to rise sharply.
Reconcile risk budgets and pinpoint attractiveness of evolving risk-return tradeoffs
Stage 3
Correlations peaking.
Stand ready to “re-risk” towards attractive asymmetric
Stage 4
Markets recover, assets decouple and overall correlations relax.
Manage autocorrelation and cross volatilities.
11
Multiple Long Lead Time Strategic Signals Enable Sound Governance
- The Fate of 2H’2008 Was Pre-determined Many Quarters in Advance - The Benefits of Sufficiently Long Lead Times to Support Good Decision-Making Managers
Quatrain Allocation –
Bold Black Box
shows a manager
allocated by Quatrain
in that investment
period
Allocated
Managers fared
better and proved
more diversified in
2H’2008 under
Market Stress
Lead Times
Liquidity
1H' 05
2H' 05
1H' 06
1 Yr
6m
< 6m
2H' 06
1H' 07
2H' 07
1H' 08
2H' 08
2H' 09
1H' 10
-38.41%
14.38%
30.53%
-10.95%
-21.43%
-17.33%
38.25%
10.58%
16.76%
-60.45%
24.55%
23.89%
-4.75%
1.49%
2.77%
-1.65%
-1.71%
4.40%
3.14%
14.85%
-1.67%
1.77%
1.70%
4.75%
0.78%
1.67%
-0.86%
15.58%
-1.98%
-4.30%
-4.14%
-25.38%
8.95%
13.19%
6.49%
7.93%
-9.36%
14.23%
11.77%
5.23%
-5.24%
-22.06%
21.07%
11.76%
-1.38%
-14.96%
16.47%
12.54%
5.14%
5.50%
9.92%
13.08%
11.77%
-4.38%
Private Equity Emg Mkts Mgr 1
A+
18.49%
248.47%
59.12%
-11.13%
17.79%
41.65%
11.92%
S
15.48%
20.42%
12.40%
2.71%
14.39%
4.78%
A+
10.70%
-0.55%
5.14%
8.02%
15.38%
S
3.10%
10.99%
4.67%
7.96%
5.22%
Long/Short Manager 2
M
0.99%
4.34%
1.35%
10.03%
9.93%
2.23%
Multi-Strategy Manager 1
M
6.54%
10.90%
9.32%
7.32%
6.61%
-0.65%
Multi-Strategy Manager 2
S
4.51%
7.90%
9.66%
6.60%
15.35%
14.40%
Multi-Strategy Manager 3
S
5.56%
7.08%
7.27%
15.33%
10.01%
-0.20%
Multi-Strategy Manager 4
A
5.75%
5.57%
9.40%
12.14%
11.05%
39.92%
0.72%
Energy Manager 1
Private Equity Commodity Mgr 1
Long/Short Manager 1
Investment Period
1H' 09
S
Event-Driven Manager 1
Q
4.45%
4.89%
8.99%
8.85%
8.51%
-0.51%
-0.36%
-8.93%
8.28%
9.96%
4.32%
Multi-Strategy Manager 5
A
6.67%
9.63%
8.73%
16.93%
11.43%
-7.04%
-7.92%
-29.63%
13.13%
29.63%
4.40%
Long/Short Manager 3
Q
4.00%
2.85%
1.36%
4.23%
6.20%
11.69%
5.05%
12.73%
-12.28%
-1.31%
-4.22%
Long/Short Manager 4
A
2.33%
10.33%
5.32%
4.97%
21.37%
14.99%
-0.52%
-6.71%
0.80%
4.38%
2.90%
International Fixed Income Mgr 1
D
-1.98%
-0.61%
3.21%
2.95%
1.49%
9.34%
2.50%
-7.99%
6.87%
10.02%
2.71%
A
2.61%
2.84%
3.75%
5.31%
7.50%
2.69%
5.60%
-11.79%
14.13%
11.22%
1.97%
A+
0.09%
6.79%
3.41%
5.80%
3.85%
5.83%
2.88%
-8.10%
-9.23%
21.40%
5.73%
Private Equity Credit Manager 1
Q
0.43%
5.28%
5.82%
5.20%
6.77%
-10.61%
-8.93%
-58.50%
4.98%
41.76%
6.76%
Event-Driven Manager 2
Q
4.01%
6.15%
6.16%
10.56%
11.00%
5.71%
3.08%
-0.69%
8.99%
11.05%
1.77%
Money Market 1
D
2.09%
1.90%
2.38%
3.04%
2.88%
2.82%
1.65%
1.14%
0.36%
0.13%
0.07%
Domestic Equity Growth Mgr 1
Domestic Equity Growth Mgr 2
Domestic Equity Growth Mgr 3
Domestic Equity Manager 1
Domestic Equity Manager 2
Domestic Equity Manager 3
International Equity Manager 1
International Equity Manager 2
International Equity Manager 3
International Equity Manager 4
International Long/Short Mgr 2
Emerging Markets Equity Mgr 1
Emerging Markets Equity Mgr 2
Emerging Markets Equity Mgr 3
Emerging Markets Equity Mgr 4
Emerging Markets Equity Mgr 5
Private Equity Domestic Mgr 1
Private Equity Fgn Dev Mgr 1
Small Cap Energy Manager 1
Energy Manager 2
Natural Resources Manager 1
Natural Resources Manager 2
Gold ETF 1
Commodities Manager 1
Agriculture Manager 1
Private Equity Energy Manager 1
Long/Short Manager 5
Equity Long-Only Manager 1
Multi-Strategy Manager 6
Long-Hold Long/Short Eq Mgr 1
Credit Manager 2
D
D
D
D
D
Q
M
M
M
D
M
D
D
Q
A
A
A+
A+
Q
A
D
A
D
D
A+
A+
M
Q
A
A+
Q
-2.06%
-6.40%
-0.50%
8.94%
14.33%
-0.02%
-1.14%
8.38%
0.99%
0.99%
1.07%
3.17%
7.75%
3.38%
9.60%
6.49%
18.64%
20.79%
9.20%
7.88%
8.28%
29.33%
24.40%
0.22%
1.32%
4.52%
3.66%
15.32%
4.93%
8.57%
5.66%
10.00%
7.75%
-1.06%
7.24%
7.17%
12.52%
13.70%
3.99%
-2.40%
-0.34%
14.78%
10.45%
12.37%
14.06%
14.63%
-4.29%
21.84%
21.96%
8.30%
-6.39%
21.31%
3.72%
16.98%
37.46%
18.52%
4.75%
-24.65%
31.34%
23.72%
25.46%
10.54%
0.76%
2.49%
395.53%
12.20%
-1.46%
15.91%
18.14%
34.44%
6.10%
-31.78%
-7.27%
-5.24%
5.02%
4.50%
3.21%
9.65%
12.89%
23.32%
8.92%
6.43%
14.08%
9.59%
12.73%
-0.32%
20.15%
20.71%
9.36%
-7.02%
23.04%
19.24%
4.11%
13.93%
16.46%
21.88%
1.54%
0.70%
4.79%
23.02%
45.52%
2.55%
5.17%
-2.91%
0.07%
2.93%
17.20%
13.79%
10.96%
19.89%
10.40%
55.78%
11.62%
-7.74%
17.84%
-0.06%
16.01%
-11.81%
-11.06%
-15.54%
-1.53%
17.09%
-12.30%
-5.56%
-9.97%
-8.52%
-14.32%
21.36%
-12.16%
-9.18%
7.78%
-4.33%
-44.74%
6.46%
-1.68%
48.88%
16.84%
14.17%
-13.86%
-14.68%
-25.41%
-46.34%
-48.23%
-28.80%
-27.66%
-36.58%
-17.15%
-34.80%
-21.60%
-48.89%
-52.20%
-46.45%
-78.54%
-25.84%
-3.92%
-19.67%
-70.58%
-74.30%
-56.50%
0.58%
0.82%
14.67%
-3.99%
-6.41%
13.68%
11.57%
19.92%
7.29%
17.60%
2.93%
29.48%
47.27%
-0.34%
51.96%
20.50%
-14.59%
-23.40%
11.51%
25.64%
23.58%
19.21%
21.67%
22.39%
24.96%
17.98%
24.30%
17.93%
16.41%
17.42%
27.87%
28.90%
31.90%
36.86%
15.72%
37.96%
16.16%
-0.48%
8.86%
41.67%
40.96%
29.48%
-0.82%
1.62%
18.74%
17.72%
18.71%
19.19%
3.23%
2.16%
1.68%
7.46%
28.30%
8.70%
-8.57%
3.40%
-3.28%
7.88%
-1.32%
5.37%
-9.59%
2.31%
3.34%
20.66%
0.15%
16.05%
-0.64%
10.84%
20.61%
-4.48%
11.63%
-1.81%
-3.74%
0.65%
0.28%
2.86%
-5.34%
-49.72%
-1.29%
8.63%
-25.37%
-11.31%
3.69%
-7.41%
-24.21%
5.38%
13.16%
-4.07%
-16.57%
17.69%
15.96%
0.38%
13.70%
30.11%
17.69%
19.39%
-2.96%
-2.54%
17.22%
7.14%
4.83%
39.89%
23.50%
-11.43%
-6.92%
3.43%
-10.49%
-16.79%
-6.52%
-5.60%
-6.70%
-2.86%
-7.25%
-5.49%
-7.52%
-9.61%
-9.64%
5.02%
0.51%
6.92%
5.99%
-15.33%
-21.41%
-14.13%
-8.04%
13.39%
-3.65%
-2.88%
8.66%
6.74%
-5.08%
1.43%
6.50%
10.34%
Private Equity Debt Manager 1
©2012 SCA Group LLC
2 Yrs
International Long/Short Mgr 1
Credit Manager 1
Un-allocated
Managers suffered
higher downside and
were much more
correlated on the
downside in 2H’2008
under Market Stress
3.5 Yrs
8.05%
3.40%
7.50%
-5.21%
Performance Heat Map
For Cumulative Subsequent
6-Month Performance
Following Each “ex-ante”
Reallocation
100% < -10%
0% -10% ~ -5%
123456789
11
-5% ~ 5% 10
-100%
5% ~ 10%
> 10%
In 2H’2008, Anchor
Managers (Violet Box)
fared better than other
allocated managers
Liquidity Legend
D Daily
M Monthly
Q Quarterly
S Semi-Annual
A Annual
A+ Longer Term
12
Quatrain Perceived and Captured Reliable Correlation Patterns of Allocated Managers
As They were Evolving in Advance of Market Stress
Manager Correlations - Inception to December 2008
More Reliable Correlations
among Allocated Managers
even under Market Stress
Correlations of Anchor
Managers were More Robust
than correlations of other
Allocated Managers in 2H’2008
Substantial Degeneration in
Correlations among Unallocated Managers during
Market Stress
©2012 SCA Group LLC
Disclaimer : Past performance is no guarantee of future returns. All the risk-return figures are targeted and not the actual figures for the managed portfolio in this report. The
risk-return metrics are computed from historic information deemed to be reliable but not guaranteed.
13
Integrating Macroeconomic Themes into the Governance and Investment Discipline
To Support Meaningful Discussion of Goals and Risks
The confluence of US-EU pressures, the RDE Information Gap, and the Imperative Pursuit for Resources lays the
foundation for SCA’s Macroeconomic Tradewind Themes.
US-EU Pressures
RDE Information Gap
Imperative Pursuit for Resources
Financial Repression
EM is More than 40% of Global GDP
BRIC/EM Consumption Continues
Tepid Recovery / EU Concerns
Resilient Fundamentals
China/Asia Inflationary Impact
US Export Competitiveness
Overlooked Enterprises
New Inroads in Energy
Volatility
Middle Class Effect
Aging Infrastructure
M3 Issue
Stronger LCD
Human Capital
Concerns Persist Around US-EU
Growth and Long-Term Inflation, and
Pressure on the Dollar-Euro
RDE (Rapidly Developing Economies)
and Emerging Market Fundamentals
remain Selectively Strong and Investor
Advantage Derives
from the Information Gap
Globally, Companies/Countries
will Compete for
Scarcer Resources towards
“Sustainable Financial Productivity”
SCA’s strategic perspectives distill from pertinent macroeconomic themes
and associated inflection points/tactical drivers.
14
© 2012 SCA Group, LLC
Strategic Capital Allocation Group LLC, www.scagrp.com Email: bhunter@scagrp.com Tel: 617-450-9300
Dynamic Allocation Roadmap
- Tactical Deployment of Cash as a Strategic Asset Class Catalysts
High Volatility
Of Volatility
Definitive Guidance
from Washington
Strong Trends
Clearly Defined
Macro Themes
Credit Spreads
Earnings
Multiples
& Revenues
Housing Stabilizes
Deleveraging
Subsides
Increasing M&A
Inflation
Natural Resources
Demand
Asset Classes
Macro
Managed Futures
Volatility
Corporate Bonds
Municipal Bonds
Mortgages
Sovereign Debt
Local Currency Debt
After a tepid 2012, market conditions for Macro are favorable in 2013
Volatility itself is volatile and at times mispriced – smart volatility positioning and arbitrage could benefit.
Fed Tapering Raises
the Yield Curve
Financial Repression
Potential Growth Scare
Duration management will be paramount
Inv. Grade and High Yield spreads are relatively tight;
Floating Rate Bank loans, mortgages and munis remain relatively attractive.
Target spread-widening points of entry on a duration and risk-controlled basis
Select Sovereign EM Bonds Might Offer Attractive
Entry Points In the Coming Quarters
Select EM Local Currency Corporate Debt Still
Offers Yield Opportunities
EU situation
deteriorates again
US Stocks
International Stocks
Credit Spreads Widen
Earnings Hit Ceiling
Emerging Market
Long/Short Equity
Absolute Return
Inflation Protection
© 2012 SCA Group, LLC
EM Growth Recedes
Volatility and Dispersion
Shifts Continue to
Pose Challenges
Select long/short hedge funds with productive
leverage, longer term track record of relative
consistency & emphasis on absolute return
Renewed Recession Concerns
Equities Attractive as Credit Spreads Narrow
Emphasis on Dividend Growth and Secular Growth
European Equities with int’l exposure attractive
Japanese Equities will benefit from Abenomics
Emerging Markets that do not have twin deficits and
emphasize domestic consumption will continue to
benefit from increased middle class consumer demand.
Select Directional Managers with rigorous risk
management, consistent with broad economic
recovery patterns
Prospects for renewed inflation are more prescient.
Sustainable US growth will likely result in an upward bias in breakeven inflation
Potential Catalyst-Driven Horizon
15
A Practical Guide for Tactical Allocation Adjustments Around An Evolving Strategic Vision
- Enabling Decisions with Conviction “Peeling the Onion”
- Crafting Quatrain Scenarios toward Decisions and Actions Update Portfolio Vision
Overlay of Constraints
Recommendations
Identify
Clarify relative risk and relative
value
Impact of Constraints and
Policy
Conviction in risk-on, risk-off
or neutral positioning
Size
Allocation preferences for each
risk budget
Adjustments necessary to meet
constraints
Sizing of specific allocation
actions
Preview
Propensity for risk-on, risk-off
and neutral positioning
Cost/benefit details of risk-on,
risk-off and neutral positioning
Policy recommendations
Quatrain enables you to:
Incorporate tactical views, information asymmetries and management directives into a holistic asset and
manager allocation risk palette over the short, intermediate and long term
Explicitly size risk in real time, taking into account policy, risk budgets, liquidity and leverage constraints
Quantify alpha of dynamic reallocation at both the asset class and manager level
Build a risk management autopilot, keeping tail risk hedging to an efficient minimum
Incorporate sizing and structuring of tail risk hedges into the asset allocation
16
© 2012 SCA Group, LLC
The Tangible Quatrain Edge
Dynamic Asset Allocation and Risk Management
To Confront An Increasingly Complex World
Maximize
Upside
Optionality
Timely Strategic and
Tactical Risk-On/Risk-Off
Signals
Embedded
Risk Management
Managing in Real Time the Reality Linking…
Investment Selection, Dynamic Asset Allocation and Embedded Risk Management
A Continuous Strategic Process
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Target Absolute Return Benchmark and Ensure Portfolio Reliability to Achieve Absolute Risk-Attenuated Target
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Robust Asset Allocation and Selection of a Diversified Portfolio of investments over Strategic and Tactical
Investment Horizons
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Dynamic Portfolio Construction With Embedded Risk Management
©2012 SCA Group LLC
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Professional Profiles
©2012 SCA Group LLC
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Professional Profiles
Brian Hunter
Managing Director
Mr. Hunter is currently the Managing Director of Strategic Capital Allocation Group LLC (“SCA”), a firm he founded on October 1, 2001.
Previously, Mr. Hunter was with Prudential Securities, Morgan Stanley and Smith Barney. Throughout these affiliations, he has built a unique
corporate and institutional consulting practice that concentrates on achieving maximum capability for risk-controlled assets.
Mr. Hunter has consulted on over $11 billion in SCA client assets with a goal of enhancing those assets towards improved levels of efficiency. His
clients have included a renowned hospital system encompassing endowment, ERISA pension plan and funded depreciation account portfolios,
foundations, trusts, and ultra high net worth individuals.
Prior to his tenure at Smith Barney, Mr. Hunter's experience includes his own consulting firms for derivative portfolio management and
international relocation policies and systems on behalf of multinational companies and professional service firms. Clients included McKinsey &
Company and Northrop. Mr. Hunter’s initial consulting experience was in competitive strategy assignments while at the Boston Consulting Group
and Bain & Company. He focused on market segmentation and merger and acquisition issues for maximizing shareholder value.
Mr. Hunter holds a B.S.E. degree in Aerospace and Mechanical Sciences from Princeton University. At Princeton, Mr. Hunter designed and
initiated the Program for Science, Technology and Environment that combined curricula from the Woodrow Wilson School for Public and
International Affairs and the Engineering School. Mr. Hunter received his M.S. in Urban and Policy Sciences from the State University of New
York at Stony Brook where he was instrumental in developing and implementing systems solutions to complex public policy problems for New
York City and the Nassau/Suffolk County Planning Commissions.
Mr. Hunter serves as a Patron Councillor to The Atlantic Council of the United States. He is also actively involved with alumni affairs for
Princeton University. Mr. Hunter is also a CIMA-designated member of the Investment Management Consultants Association.
©2012 SCA Group LLC
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Professional Profiles
Ashish S. Kulkarni, CFA
Director
Mr. Kulkarni focuses on global investment strategy as well as development of investment analysis and risk management systems for SCA.
In his current role at SCA, his primary responsibility is that of providing global investment strategy, as well as directing the development of SCA’s
investment analysis and risk management platform. Mr. Kulkarni also assists in evaluation of alternative investments and oversees related
investment analysis. Mr. Kulkarni joined SCA in August 2003. His prior experience includes consulting for Hoffmann-La Roche.
Mr. Kulkarni received a Master of Engineering degree in Information Systems from the Massachusetts Institute of Technology with graduate
research in Engineering Systems, Dept. of Technology Policy at the MIT-Sloan School of Management. He has been an active contributor to the
‘Industry Systems Study Group’ at MIT-Sloan, developing information solutions for socio-economic optimization of the automobile industry value
chain, as a part of the MIT-Ford alliance. Mr. Kulkarni also holds an M.S. from Pennsylvania State University with research in Statistical
Molecular Physics. He completed undergraduate work in Chemical Engineering at the Indian Institute of Technology, Madras, India with
concentration in Control Systems.
Mr. Kulkarni is a CFA charter holder, a member of the Boston Security Analysts Society and holds the FRM designation.
©2012 SCA Group LLC
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Professional Profiles
Laurent Laskowski, CFA
Vice President
Mr. Laskowski joined Strategic Capital Allocation Group full-time in 2007 as Senior Associate. He primarily focuses on investment strategy, risk
management and investment analytics for SCA Group.
Mr. Laskowski received his M.S. in Engineering Management Systems at Columbia University in 2007 with graduate research in dynamic pricing
and revenue optimization at Columbia Business School. He holds a Diplôme d'ingénieur in Applied Mathematics from Ecole Centrale de Paris.
Mr. Laskowski is a CFA charter holder.
©2012 SCA Group LLC
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Professional Profiles
Ryan W. Spagnolo
Consulting Associate
Mr. Spagnolo joined Strategic Capital Allocation Group June 2013. His primary role involves Alternative Investment allocation assessment and
implementation strategy analysis as well as fund performance reporting and due diligence.
Mr. Spagnolo received his B.S. in Business Management with a concentration in Global Business Strategy from Babson College in 2009 while also
attending Sophia University in Tokyo, Japan. His experience encompasses 3 years of cross asset class investment analysis and Alternative
Investment business consulting for Bloomberg L.P. in New York City. Mr. Spagnolo is also actively progressing through the CFA curriculum and
is a CFA Level II candidate.
©2012 SCA Group LLC
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Professional Profiles
Dr. Soulaymane Kachani
Chief Strategy Advisor
Dr. Kachani focuses on strategy and risk management for SCA.
Dr. Kachani is the Vice Dean for Academic Programs at the Fu Foundation School of Engineering and Applied Sciences at Columbia University, a
faculty member in the Department of Industrial Engineering and Operations Research, Center for Financial Engineering and the Computational
Optimization Research Center. Dr. Kachani is the current Chairman of the Financial Services Demand Optimization Council, a non-profit
consortium of financial industry professionals, consultants, academics, and technology providers dedicated to advancing research, insights, and use
of optimization science to improve the competitiveness of financial services companies. He is also the current President of the Revenue
Management & Pricing (RM&P) Society of Institute for Operations Research and the Management Sciences (INFORMS). Dr. Kachani is Editor
of the Journal of Pricing and Revenue Management and of the International Journal of Services Operations and Informatics. He is also an
Associate Editor of the Networks and Spatial Economics Journal and of the Production and Operations Management Journal.
Dr. Kachani holds a Master of Science and a Ph.D. in Operations Research from MIT’s Sloan School of Management, and a Diplôme d'Ingénieur
in Applied Mathematics from Ecole Centrale Paris. Prior to joining Columbia, he served as senior consultant in the Boston office of McKinsey &
Co. He continues to consult to McKinsey & Co. on issues revolving around pricing, corporate finance and operations management.
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