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The President's Working Group on Financial Markets

The President's Working Group on Financial Markets. Managed Funds Association, Network 2008 February 12, 2008. PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS. HIGHLIGHTS OF RECOMMENDATIONS. Russell Read, Ph.D., C.F.A. Chairman, PWG Investors ’ Committee

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The President's Working Group on Financial Markets

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  1. The President's Working Group on Financial Markets Managed Funds Association, Network 2008 February 12, 2008 PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS HIGHLIGHTS OF RECOMMENDATIONS Russell Read, Ph.D., C.F.A. Chairman, PWG Investors’ Committee Chief Investment Officer, CalPERS PWG Investors’ Committee

  2. The President's Working Group on Financial Markets PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS • What is the Concern about Hedge Funds? • (2) The President's Working Group and Recently Created Committees • Measures of Success for the Investors' Committee • Highlights of Report: Principles and Practices for Hedge Fund Investors • (5) Looking Forward

  3. The President's Working Group on Financial Markets What is the Concern about Hedge Funds? Long-Term Capital Management

  4. The President's Working Group on Financial Markets PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS • (2) The President's Working Group and Recently Created Committees • (a) Purpose of PWG • (b) PWG statements on hedge fund investments from 1999 and 2007 • (c) Sir Andrew Large's Hedge Fund Working Group • (d) Asset Managers' Committee and Investors' Committee • (e) Intended audience for each committee's report

  5. The President's Working Group on Financial Markets Background of PWG

  6. The President's Working Group on Financial Markets Background of PWG

  7. The President's Working Group on Financial Markets Background of PWG: 1999 Findings on Hedge Fund Regulation

  8. The President's Working Group on Financial Markets Background of PWG: 2007 Findings on Hedge Fund Regulation

  9. The President's Working Group on Financial Markets

  10. The President's Working Group on Financial Markets Composition of PWG Committees Asset Managers’ Committee Eric Mindich, CEO of Eton Park Capital Management “…comprised of representatives from a broad array of asset managers. Its purpose is to facilitate an exchange of information between the alternative asset management community and the agencies comprising the…PWG.” Investors’ Committee Russell Read, CIO of CalPERS “…comprised of representatives from a broad array of investors and investor advocates…from labor organizations, endowments, foundations, corporate and public pension funds, investment consultants, and other U.S. and non-U.S. investors.”

  11. The President's Working Group on Financial Markets Intended Audience of PWG Asset Managers’ Committee

  12. The President's Working Group on Financial Markets Intended Audience of PWG Investors’ Committee

  13. The President's Working Group on Financial Markets PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS (3) Measures of Success for the Investors' Committee (a) Best Practices (b) Accepted Practices (c) Common Practices (d) Healthier and more successful use of hedge funds by investors

  14. The President's Working Group on Financial Markets (4) Highlights of Investors’ Committee Report: Principles and Practices for Hedge Fund Investors Structure of the Report 1. Introduction 2. Fiduciary’s Guide 3. Investor’s Guide

  15. The President's Working Group on Financial Markets Investors’ Committee--Highlights of the Fiduciary's Guide • No fiduciary should feel forced to invest in hedge funds • Potential Roles • Appropriateness • Expertise

  16. The President's Working Group on Financial Markets Investors’ Committee--Highlights of the Investor's Guide • Detailed Investment Policy • 2. Due Diligence • 3. Risk Measurement / Management • 4. Expertise

  17. The President's Working Group on Financial Markets PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS • (5) Looking Forward • (a) both committees will be standing committees • -- will not dissolve after the publication of the reports • -- will continue to address areas of concern to the hedge fund industry and investors as they arise • -- three year renewable terms among members • (b) Intended to foster a healthy long-term environment for the hedge fund industry and investors

  18. The President's Working Group on Financial Markets NAPPA Winter Section Meeting, February 8, 2008 PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS Russell Read, Ph.D., C.F.A. Chairman, PWG Investors’ Committee Chief Investment Officer, CalPERS PWG Investors’ Committee

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