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Hedge Funds: Love ‘Em or Leave ‘Em? March 17, 2005 Lori Barker Padon Director of Investor Relations

Hedge Funds: Love ‘Em or Leave ‘Em? March 17, 2005 Lori Barker Padon Director of Investor Relations. What is a Hedge Fund?. A fund betting against my company A fund that shorts stocks Funds for the Rich Funds that don’t have to disclose their holdings A pain in the a##. Multiple Choice

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Hedge Funds: Love ‘Em or Leave ‘Em? March 17, 2005 Lori Barker Padon Director of Investor Relations

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  1. Hedge Funds: Love ‘Em or Leave ‘Em? March 17, 2005Lori Barker PadonDirector of Investor Relations

  2. What is a Hedge Fund? • A fund betting against my company • A fund that shorts stocks • Funds for the Rich • Funds that don’t have to disclose their holdings • A pain in the a## Multiple Choice • A fund that shorts stocks • All of the above • None of the Above

  3. Name the Hedge Fund? • Alliance • Andor • American Express • Citadel • BlackRock • Invesco • SAC • Wellington • Whitman Capital Multiple Choice • Andor, Citadel, SAC, Whitman Cap • Alliance, Andor, Citadel, SAC, Whitman Cap • All of the Above

  4. How Big are they?How Fast are they growing? Multiple Choice • $600 billion/ ~2% of Capital Markets • $5 trillion/~15% Capital Markets • $1 trillion/~6% Capital Markets Multiple Choice • ~ 20% in 5 Years • ~180% in 5 Years • ~260% in 5 Years

  5. NASDAQ Day-to-Day Change (1) VIX (2) % of days in which the NASDAQ moved +/- 2% or more % Why Excess Returns are Declining • Lower Volatility • Large Inflows of Capital • Difficult Capital Market Conditions • Increased Market efficiency

  6. How do they make Money? “The whole idea of running a hedge fund is like a lottery ticket,” said Andrew Kaplan former Fidelity mutual fund manager who shut down his $400 million hedge fund, Grange Park. “It’s a great paying job that could become a windfall.”

  7. Hedge Funds-Why do I care? • $1 trillion sector and growing • Hedge Fund Profits have driven some of the best talent out of mutual funds-they may know your story well • Some of them are famous thought and trend setters • Incremental buyers will provide liquidity • Explain why they shouldn’t short……

  8. Store Your World in OursTM

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