DESCRIPTOR v-2

The WHY, WHAT & HOW of

Company Summary - Sherpa Funds Technology (SFT)

ORS creates a framework for decision making. It allows portfolio managers to express the constraints and

targets of all stakeholders in a consistent manner and then calculates the Optimal Portfolio. ORS aims to

become an industry standard benchmark used across funds, advisors and the retail investor universe

Enhanced returns, Improved investor relations & Help with raising assets

LONG ONLY: Asset Managers, Pension Funds,

Insurance Companies, Sovereign wealth

Better Control

Alignment with Goals

Front-office Footprint

HEDGE FUNDS: Long/Short, FX, Commodities, Equities

WEALTH MANAGERS: Private Banks, Financial

Advisors

ALLOCATORSFund of Funds, Fund Platforms

RETAIL TRADERSSelf Managed Pension, Active Traders

TECHNOLOGY PARTNERSCore IT Providers, Market Data Suppliers

SFT builds Software as a Service (SaaS) analytics that improvedecision making processes in asset management

SFT has developed and patented OPTIMAL RISK SIZING (ORS),a product that has global appeal to a vast market of clients & partners

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The Problem

6 MILLION WAYSto create this portfolio

THE ASSET MANAGER'S AREA OF EXPERTISE THE FINAL RESULTTHE CHALLENGE

ANALYSE

Buy, Sell,Do nothing

GOAL SETTING

Defined or Undefined

Data, Mandate

LIST OF POSITIONS

CALCULATE

CalculatePosition

Weighings

PORTFOLIO

GOOGAAPLMSFTIBM

+1

-1

+1

-1

GOOGAAPLMSFTIBM

+15%

-25%

+11%

-35%

Asset Managers need to create a portfolio, not just compile a list of assets

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500 decisions to make in stage

#1 if you are looking at 500 of the biggest stocks in the US

Unlocking the Perfect PortfolioThe best combination of assets involves many competing inputs, including unhealthy ones -

The Optimal portfolio requires consistent application of the positives and filtering out the unhealthy choices

Page | 4OPTIMALPORTFOLIO

Benefits of ORS

Fact 1: Better Returns Fact 2: Better Investor Links Fact 3: Better Process

Example of a fund running ORS in parallelover a 3 month period (April - July 2015)

Investors prefer managers who have aframework that aligns them to theirinvestment goals, risk tolerances &targets

A proven process which makes you moreinvestable and allows focus on key assetselection responsibilities

This feeds directly into growing the

business by growing the AUM.

ORS helped a client raise USD 300m+ in

one competitive pitch for a pension

mandate.

Allocators are looking for process,

longevity and immunisation from personal

biases and inconsistencies. Portfolio

Managers are looking to focus on asset

decisions, and achieve consistent returns.

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3/17/2015 4/6/2015 4/26/2015 5/16/2015 6/5/2015 6/25/2015 7/15/2015

Original Portfolio Sherpa ORS Sized

Portfolio Cumulative P&L

01 April 2015 - 03 July 2015

Original Portfolio & ORS Size portfolio,live parallel run

With this fund, the PM had good asset and conviction calls over 3 months and ran an ORS portfolio in parallel.

The ORS portfolio outperformed by an annualised 6%

BETTER RETURNS

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Two Points of View - One Solution!ORS provides a framework that unites the very different views of the PM & the CIO

ASSET SELECTION

CONVICTION

RISK LIMITS

GROSS EXPOSURE LIMITS

SECTOR EXPOSURES

FACTOR EXPOSURES

PortfolioManager

View

CIO/InvestorView

The PM's decisions and convictions are traded consistently with therequirements defined by the Investor/CIO

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Why Now?

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Neither are airplane 'Wingtips’: The theory was developed in the 1900’s, but

they only appeared in the 1980s and now are on every commercial airliner.

Only now, with the progress of technology, can Wingtips - just like ORS -

make you more money!

Portfolio Optimisation is not new in concept: Markowitz won the 1990Nobel Prize for work carried out on this topic.

1. Access to Computer Power

Cloud Computing makes intensive computation SaaS possible

2. Consolidating Industry with pressure on margins

ORS retools active managers against the competition from Robo-Advisor products

Transparency and aligned interest: ORS aligns managers with the interests of investors. There are too many tales of managers changing investment style for personal gain

3. "Process is Progress" - This applies to investment decisions, not just operations

Moneyball: Process defines successToyota: Continual Process improvement 'Kaizen'Warren Buffet: "We enjoy the process far more than the proceeds"

Reasons why NOW is the right time for this 3

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So What is the ORS Calculation?

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ORS considers practical limits imposed by trading costs andmarket liquidity to create a:

Practical Optimal Portfolio, “The POP”, as well as a

Benchmark Optimal Portfolio “The BOP”.

ORS takes inputs regardingwhat the Portfolio is trying toachieve

Portfolio Risk Tolerance andPortfolio Goals

+

ORS takes constraints andconviction information onthree levels: the Portfolio, SubPortfolios and Assets

Portfolio Net & Gross Limits, Risk andFactor Exposures.

+

Sub Portfolio Net and Gross Limits+

Asset constraints (min/max size) andconviction levels

+

ORS takes at a portfolio orAsset level a measure of thequality of the decision making

This is similar to considering thehistorical Sharpe ratio of the PM

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ORS takes inputs from the PMthat change as the assetdecisions are changed

T h e P o s i t i o n s y o u w a n t t obuy/hold/sell. The PM’s skill is inmaking and timing these decisions

Market Data

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+

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How does the ORS do this Calculation?

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We build a risk model to compute these returns bytaking the historical data, and adjusting it for individualasset convictions and any forward looking estimates asgiven by the user and Assets

Note for a portfolio of 10 assets, each of which canbe between 5% & 15%, there are 10bn possiblecombinations, just looking at whole number %. Ifthe Portfolio has to be exactly 100% invested, thenumber is about half that.

+

ORS takes all the inputs, andrepresents them mathematically.

ORS then searches for the Portfolio thathas the ‘Best' weighting of assets.

‘Best’ means the one that gives thehighest ‘Utility’ of returns.

‘Utility’ is defined by measuring thereturns against Input #1 “What I amtrying to Achieve?”

+

+

ORS searches the possible combinations of assets using a combination ofdimension reduction, Monte-Carlo and multi-generational optimiser techniques.These are well established techniques in academic, engineering, science andfinance.

There are practical considerations w.r.t the stability of solutions foundby such techniques in general, so please note that we at SFT have over20 years experience dealing with multi-variate optimisers in Finance,and indeed as traders were the original developers of many techniquesthat are in use today in banks to manage these problems.

+

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Before and after ORS - Snapshot of reshaping a real portfolio of 64 assets

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So What are you paying, What do you have to do & What do you get

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ORS Pricing ORS Requirements ORS Deliverables

ORS is billed per Portfolio, and is‘softable’ being portfolio specificpre-trade analytics.

A 200m USD Portfolio will pay USD 4k permonth. Typical return improvementspay the Manager back in under 6 weeks.

ORS Extras

SFT can work with you to integrate ORS, allowing you to call the API direct from your own systems.

SFT can help you differentiate your Fund when raising AUM by providing sales support, demonstrating how ORSaligns you with your investors.

ORS is delivered as a cloud-hosted SaaS. It is simply accessed through Excel andweb browsers.

Your account also gives you access to theweb-interface to create personalisedrisk tolerances and portfolio

ORS lands on your desktop on day 1 as aset of Excel functions, which require onlyAdmin rights to install as an xll.

ORS can create automated messagingwith commentary from PMs to CIOs andeven Investors giving completetransparency and pre-P&L indications ofnon-optimal positions.

That’s it, there’s no more to it.

ORS : Milestones to Date

100 +ORS has been tested on over 100portfolios from commodity, FX,and equity funds, as well as fund-of-funds/master-funds. ORSconsistently generates betterreturns.

2015ORS SaaS product

has been operational since

April 2015

2014SherpaFundsTechnology

ORS was used by our first client as the cornerstone of asuccessful pitch for a large Government Pension Mandate

ORS is fully operational in multi-billion USD funds as anintegral part of their position management

ORS is ‘Softable’, as it is portfolio-specific pre-trade analysis

Pilots in place with several large asset managers, wealthmanagers and private banks

SFT’s business model is to deliver ascalable (easily configurable) productand a simple pricing model withminimal IT overhead to FundManagement decision makers. Weare partnering with Prime Brokers,Administrators and Technologyinnovators to offer this service to theirInstitutional Client base, as well asbuilding a ‘free app’ version aimed atthe Retail market.

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Who are We

Richard Waddington

Mathematics & Business CEO

20+ years experience as a Derivatives Trader and sell-side Global Trading Business Head.

“Most bad stories from risk taking revolve around people getting emotionally attached to trades and the act of trading. Good decisions are so often compromised by bad emotions.”

Craig McGee

Business Development & Strategy

20+ yrs experience in Financial Markets, Head of Trading for several Global Investment Banks. PrivateEquity Investor, highly connected in the Fund Manager and Brokercommunities.

“By offering disruptive pre-trade portfolio management analytics, SFT is set up to help Investors and Fund Managers grow in a win-win manner. ”

Ben Wark

Marketing

Experienced Regional Sales Manager for large global Software companies, building capabilities covering B2B, B2C and Partner Channels.

“Creating a Market Presencemeans offering real differenceto your clients. Maintaining that difference takes discipline and process.”

Sinan Tunalioglu & Tolga Sezer

R&D and Technology

Experienced Finance Technologists with PhD level backgrounds in Financial Mathematics and Computer Science.

”It is fascinating to see the interplay between mathematics and trading behaviour, and to resolve these behavioural dilemmas in this innovative way.”

Advisory Board

Dr. Catalin Burlacu, PhD

Adjunct Professor at SMU & Fund Manager.Advises on Mathematics.

David Rundell

IT professional. 20+ yrs running IT teams and projects in global investment banks.Supervises IT.

Eric Wong

Fund Manager and Innovator in the fields of DMA & market-making. Advises on Strategy and Markets.

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Is ORS suitable for all types of assets and clients?ORS works very well for single assets where historical pricedata is continuous. Equities, FX, Commodities and I.G. Fixedincome work well. High Yield bonds, convertibles, andstructured products will become available in 2016.

How many portfolios have you run through the Optimizerduring testing?We have run c. 100 different portfolios through the ORSsystem and see improved returns in over 90% of them.

How does ORS sit on the desktop?This can be customized for user needs –Excel is still the mostcommonly used tool for PMs and ORS is directly accessiblethrough Excel. ORS typically takes 10 seconds to returnboth the Benchmark and Practical Optimal Portfolios.

How safe is client data?The API transmits, via secured SSL, only the directions andprice histories. There need be nothing that identifies theassets themselves, the portfolio, the AUM or the client.Clients may also host ORS internally on any Java enabledserver.

How have you addressed concerns about the usabilityand stability of Optimizers?We have over 20 years experience building and runningmulti-variate optimisers in finance. There have been many lessons learned and these are implemented in ORS.

What are the steps if a client is interested in trying ORS?Typically after one meeting, SFT will look at a client'shistorical data and then we present the results online. SFTcan then enable a parallel run and the client can see ORSworking for them on their own desktop. Subscription thenfollows.

FAQ

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Better Returns | Better Investor Links | Better Process

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Please address any enquiries to:

[email protected]

[email protected]

Sherpa Funds Technology12 Eu Tong Sen Street, #07-171

Singapore 059819

THE WAY FORWARD

Negotiate Challenging Conditions with an Expert by Your Side

Appendix

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7/30/2014 8/29/2014 9/28/2014 10/28/2014 11/27/2014 12/27/2014 1/26/2015 2/25/2015 3/27/2015/ / / / / / / / / / / / / / / / / /

Low 25% Lev. Med 55% Lev. High 85% Lev. Even Weighted 50% Lev

Performance of 3 Optimally sized Portfolioswith different risk tolerances & evenly weighted (50% leveraged) Reference Portfolio

High Risk,Same Gross/Net

Better weightsSame Risk

Example 1: Private Client Portfolio with/without ORS

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113%

115%

118%

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128%

130%

98%

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105%

108%

110%

CumulativeP&L With ORS Low Risk CumulativeP&L With ORS High Risk

CumulativeP&L With ORS Med Risk CumulativeP&L Without ORS

Better weightsSame Risk

Fund Manager 'X' s Portfolio with and without ORS, for three different Risk Tolerances

High Risk,Same Gross/Net

Example 2: Hedge Fund Portfolio with/without ORS

Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12 Wk 13 Wk 14 Wk 15 Wk 16 Wk 17 Wk 18

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