Credit Union Investment Advisory Services Firm Overview

ASSET MANAGEMENT
Credit Union Investment Advisory Services
Firm Overview
MEMBERS Capital Advisors
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Table of Contents
CUNA Mutual Group Overview
MEMBERS Capital Advisors Overview
Investment Advisory Services
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CUNA Mutual Group Profile
 The world’s leading provider of services
to credit unions and their members
 $3.1 billion in annual revenues*
 World headquarters in Madison, WI,
operations in Waverly, IA and Fort Worth, TX
 International Division serves Great Britain,
Ireland, the Caribbean Region and Puerto
Rico
 4,100 employees worldwide as of 12/31/2012
*Total revenues are based on preliminary, unaudited GAAP financial statements as of 12/31/2012
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MEMBERS Capital Advisors (MCA) Firm History
SEC Registered Investment Advisor
Founded in 1982
Wholly owned affiliate of the CUNA Mutual Group
(wholly owned by credit unions and members)
Investment responsibility for…



CUNA Mutual assets supporting insurance obligations
Institutional separate accounts
Credit Union Investment Advisory Services
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MCA Assets Under Management
$12.7 Billion as of December 31, 2012
Account Type
Asset Class
(amounts in $ billions)
(amounts in $ billions)
Defined Benefit
$.6
Investment
Advisory
$1.1
Cash/Short Term
$0.4
Alternative
Assets
$1.9
General Account
$11
MEMBERS CAPITAL ADVISORS
Equities
$.1
Fixed Income
$10.3
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MCA Senior Leadership
David P. Marks, CFA
• 2005-present President
Scott R. Powell, CFA
• 2012-present Sr. Managing Director
General Account – Private Investments
• 2005-present Executive Vice President
and Chief Investment Officer for CUNA
Mutual Group in Madison, Wisconsin and
the CUNA Mutual Life Insurance
Company in Waverly, Iowa
• 2009-2012 Managing Director General
Account
• 2002-2005 Chief Investment Officer
CIGNA / Citigroup Insurance Investments
• 2007 – 2008 Managing Director, Managed
Account Services and Mutual Funds
• 2001-2002 Partner, Green Mountain
Partners
• 2006-2007 Director, Managed Account
Services
• 1991-2001 President and Chief
Investment Officer, Allianz of America
• 2003-2006 Partner, Virchow Krause LP
• Prior to 1991 Senior Vice PresidentPrivate Placements, Connecticut General
• Dartmouth College, Executive MBA
• University of Connecticut, BA, MBA
• 2008 - 2009 Managing Director, Common
Stock & Managed Account Investments
John R. Fields
Kurt Y. Lin
• 2012-present Sr. Managing Director
General Account – Public Investments
• 2006 – present Managing Director,
Quantitative & Derivatives Group
• 1991 – 2011 Sr. Portfolio Manager, Allianz
of America, Inc.
• 2003 – 2006 Senior Portfolio Manager,
Citigroup Asset Management
• 1989 – 1991 Managing Director
• 1997 – 2003 Portfolio Manager, Citigroup
Insurance Investments
• 1985 – 1989 Associate Director/Limited
Partner
• 1984 – 1985 Vice President-Fixed Income
Trading and Research Bearn Stearns & Co.
Inc.
• 2001-2003 Vice President-Investments,
Jacobus Wealth Management, Inc.,
• 1981 – 1984 Vice President, Mortgage
Investment Analyst Reilly Mortgage Group,
Inc.
• 1999-2000 Sr. Vice President, Heartland
Advisors
• Gordon College, BA
• 1994 – 1997 Vice President, Smith Barney
Derivatives Products Group
• 1991 – 1993 Bank of Montreal
• 1986 – 1991 Trader, Citibank Derivatives
Desk
• Stern School of Business - (NYU), MBA
• New York University, BS
• 1997-1999 Vice President-Investments,
CIMCO
• 1996-1997 Vice President, T. Rowe Price
Associates
• 1989-1996 Investment Officer, CIMCO and
the CUNA Mutual Group
• University of Wisconsin-Madison, BA, MBA
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Investment Advisory Services Portfolio Management
Edward Meier, Director, Portfolio Manager, Fixed Income
•
Edward Meier is a Portfolio Manager in the Fixed Income Division of MEMBERS Capital Advisors (MCA) in
Madison, Wisconsin. Edward is responsible for the Investment Advisory Portfolios and Agency Mortgage
holdings of CUNA Mutual Group.
•
Edward has been managing fixed-income assets since he began his investment career in 1992. He possesses a
broad base of experience in most fixed-income sectors.
•
Prior to joining MEMBERS Capital Advisors, Edward managed the Mortgage-and Asset-Backed Portfolios for
AEGON U.S.A. Investment Management Co., based in Louisville, Kentucky. In this role, he was responsible for
managing $5 billion in mortgage-backed securities and $3 billion in asset-backed securities.
•
Edward holds a Bachelor’s Degree in economics from Indiana University. He earned a Master of Business
Administration (MBA) Degree from DePaul University.
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Investment Advisory Services Sales Specialist
Jeffrey Weber, Investment Sales Specialist
•
Jeffrey Weber is an Investment Sales Specialist for MEMBERS Capital Advisors. He is responsible for the sales
and marketing of investment products and services to credit unions throughout the United States. He also works
closely with Account Consultants to ensure a professional approach along with superior service.
•
Jeffrey has over twenty years experience in the securities industry. He has developed a broad understanding of the
equity and fixed income markets and how they are impacted by economic and political events. During his career on
Wall Street, Jeff developed new contacts and expanded existing relationships in the brokerage community while
covering large institutional asset managers.
•
Prior to joining MEMBERS Capital Advisors, Jeffrey served as Managing Director of Equity Trading for Allianz of
America where he was responsible for managing a Standard and Poor’s 500 Index Fund with over six hundred
million dollars in assets.
•
Jeffrey earned his Bachelor’s Degree in Economics from the University of Maryland. He is an Investment Advisor
Representative of MEMBERS Capital Advisors.
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MCA Firm Philosophy
MEMBERS Capital Advisors is dedicated to providing premier investment services to
credit unions and their members. To achieve this, MCA:
Seeks consistently
competitive performance (at
or above market benchmark
returns), which produces
very competitive long-term
results
Provides unequaled access
to our investment
professionals, which allows
our investment advisor
clients to be more
productive and of greater
value to their credit union
This results in a breadth and depth of services that distinguishes MCA in the investment
management arena and helps assure the investment success of its clients
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Fixed Income Investment
Philosophy Strategy & Objectives
Our Belief
• Incremental value can be added through both security and sector selection
Our Objective
• To produce predictable and consistent excess returns while strictly controlling risk
Our Strategy
• In-depth analysis of the balance sheet
• Multiple disciplined approaches
• Employ active management that incorporates
multiple fixed income sectors
• Focus on risk management
• Utilize qualitative and quantitative methods
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MEMBERS Capital Advisors Fixed Income Overview
Structured
Product
24%
• $8.1 billion in assets under
management*
• Disciplined investment
management process
High Yield
2%
• Experienced in multiple
fixed income sectors
International
1%
Corporates
52%
• State-of-the-art quantitative
systems
Governments
10%
Municipals
11%
*Represents all public fixed income securities
managed by MCA as of 12/31/2012
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MEMBERS Capital Advisors
• Experienced back-office operations
–
–
–
–
–
–
–
19 staff – Investment Accounting, Information Technology and Back Office
Advisor compliance requirements and reporting
Security trade operations
Investment performance measurement
Performance reporting
Investment technology
Investment accounting
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MCA Processes and Resources
Disciplined Processes with Top Tier Resources
• Fundamental and valuation
screening tools
• Objective analysis to validate
screened investment opportunities
• Quantitative Team
– Stress test portfolios
– Attribution analysis
– Expertise in derivatives
• Subjective analysis
– Earnings quality
– Competitive position
– Peer comparisons
– Outlook
• Financial forecasts
• Macro overlay
– Consensus and “what-if”
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Institutional Analytic Tools Used by MCA
• MCA spends over $2.8 million on analytics
• Nearly $100,000 per investment professional
Tool
Purpose
The Yield Book
Premier Fixed Income analytical system for portfolio analysis and benchmark comparison.
Bloomberg
Preeminent tool for gathering new, economic data and security data.
Market Axess & TradeWeb
Two main electronic trading platforms for determining current prices and evaluation trade ideas.
Trepp
The industry leading tool for analyzing Commercial Mortgage Backed Securities
Intex
The gold standard tool for analyzing Asset Backed Securities, Whole Loan Residential Mortgage
Securities, and Collateralized Mortgage Securities.
BondHub
An internet-based system for accessing broker-dealer research, data, fixed income indices, and
analytical tools.
Internal Quantitative Tools
An array of tools and people for creating benchmarks, quantitatively assessing relative value,
reviewing risks, etc.
Private i
®
A platform of Portfolio management tools for Limited Partnership.
As Of 12/31/12
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Investment Advisory Process
• Understanding your risk / return philosophy
• Building and customizing your Investment Policy Statement
• Assess your current position
• Bringing you ideas for portfolio structure
• Individual security selection upon your approval
• Performance and analytical reporting
• Ongoing dialog and adjustment
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Investment Advisory Client Profiles
• 11 Credit Unions totaling over $6.4 Billion in Assets*
• $1,164 million investments under management as of 12/31/12
• Fixed Income asset sectors: Treasuries, Agencies, Agency MBS, Agency
ABS, Passthroughs/CMO’s, Investment Grade Corporate Credit,
Commercial Mortgage Backed Securities
• Portfolio duration: 1.5 - 5.0 years
• Portfolio credit quality AAA/AA• Advise State and Federally chartered Credit Unions
*As
of 12/31/2012
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The MEMBERS Capital Advisors Difference
• MEMBERS Capital Advisors goals are uniquely aligned with Credit
Union goals
• Unbiased, objective investment advice
• Holistic balance sheet management approach
• Understanding of credit union regulatory and compliance environment
• Depth of resources and expertise across all sectors
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Credit Union Advisory Account Reference List
Consumers Credit Union
Waukegan, IL 60079
Total Assets: $574 Million
Contact: Sean Rathjen, CEO
Phone: (847) 265-5520
Email: seanr@myconsumers.org
Merced School Employees FCU
Merced, CA 95341
Total Assets: $381 Million
Contact: Nancy Deavours, CEO
Phone: (209) 383-5550 x100
Email: nancy.deavours@mercedschoolcu.org
Rivers Edge Community Credit Union
Allen Park, MI 48101-2040
Total Assets: $88 Million
Contact: Thomas H. Fisher, President
Phone: (734) 671-6280
Email: tfisher@reccu.org
Decatur Earthmovers Credit Union
Decatur, IL 62525
Total Assets: $260 Million
Contact: Barry Schmidt, CEO
Phone: (217) 875-2301
Email: bschmidt@decu.com
Montgomery County Employees FCU
Germantown, MD 20874
Total Assets: $90 Million
Contact: Jim Norris, CEO
(301)279-1964 ext. 3546
Email: jnorris@mcefcu.org
Security Credit Union
Flint, MI 48505
Total Assets: $371 Million
Contact: Linda Hrcka, VP Finance
Phone: (810) 235-2322 x1185
Email: hrckal@securitycu.org
Flint Area School Employees Credit Union
Flint, MI 48532
Total Assets: $335 Million
Contact: Patrick Hagedorn, CFO
Phone: (810) 720-8373
Email: phagedorn@FASECU.ORG
Municipal Credit Union
New York, NY
Total Assets: $1,808 Million
Contact: Norman Kohn, SVP
Phone: (212)238-3376
Email: nkohn@nycmcu.org
Wildfire Credit Union
Saginaw, MI 48605
Total Assets: $676 Million
Contact: Bob Trumble. VP of Finance
Phone: (989) 249-8284
Email: rtrumble@wildfirecu.org
Lake Trust Credit Union
Lansing,MI 48933
Total Assets: $1,582 Million
Contact: Brian McVeigh, SVP/CFO
Phone: (517) 267-7218
Email: bmcveigh@laketrust.org
Piedmont Advantage Credit Union
Winston Salem, NC 27105-3911
Total Assets: $221 Million
Contact: Judy Tharp, CEO/President
Phone: (336) 744-8500
Email: jtharp@pacu.com
This listing includes all CUNA Mutual Group Investment Advisory Services Clients who have been with the program for at least one quarterly reporting cycle.
CUNA Mutual Group does not know whether this list of clients approve MEMBERS Capital Advisors, Inc. or its services.
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Contact Information
Edward Meier 800-356-2644 x 7184
edward.meier@cunamutual.com
Jeffrey Weber 800-356-2644 x 8179
jeff.weber@cunamutual.com
This presentation is intended only for the exclusive benefit and use of the MEMBERS Capital Advisors, Inc. ("MCA") clients and prospects to whom it is addressed. This presentation
does not carry any right of publication or disclosure. Neither this presentation nor any of its contents may be used for any purpose without the prior written consent of MCA. The
information in this presentation reflects prevailing market conditions and MCA's judgment as of this date, which are subject to change. In preparing this presentation, MCA has relied
upon and assumed without independent verification, the accuracy and completeness of all information available from public sources. MCA considers the information in this update to
be accurate, but does not represent that it is complete or should be relied upon as the sole source of performance or suitability for investment. Past performance is not indicative of
future results. No representation or warranty is made as to the efficacy of any particular strategy or the actual returns that may be achieved. An investment is not a deposit and is not
insured by the Federal Deposit Insurance Corporation or any other government agency or by MCA or any of its affiliates.
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