november 2018 - wordpress.com · 2018-12-19 · how bsd compares to other hedge funds hedge fund...
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November 2018
Prosperously navigating
unexpected events
with great skill and agility
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AGENDA
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Who We Are
Investment Methodology
Performance
Current Opportunity and Investment pipeline – BIG DATA AND AI
Summary
WHO WE ARE
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BLACK SWAN
DEXTERITAS
(“BSD”)
TECHNOLOGY EXPERTISE
• Unique insight
from entrepreneurs leading
international tech development
based on needs creation
• Advisory Committee of tech leaders
who determine the global adoption
and success of new technologies
• Representation in all BSD-invested
tech sectors and sub-sectors, for
unrivalled expertise
• Portfolio Manager with 30 years of
portfolio management experience
across various asset classes at
asset management companies (LGT,
TAL, CIBC Asset Management), and
a pension (British Petroleum)
• Exceptional research team with a
wide breadth of knowledge in
research, finance, and engineering
• Intense due diligence process for our
stock selection process
• Unique risk management overlay
to minimize drawdowns and volatility
PORTFOLIO MANAGEMENT
EXPERIENCE
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INVESTMENT METHODOLOGY
SECTOR ASSESSMENT
• Life Cycle: Sectors in introduction and growth stages with
high Total Addressable Market (TAM)
• Competition: High barrier of entry with differentiated products
and services within the sector
COMPANY ANALYSIS
• Business Model: Public ccompanies with high recurring revenue,
easily able to leverage network effects, strong negotiating power
with suppliers and customers, and strong corporate governance
• Size: Target small (500M+) to large cap public companies with
established track record of executing the business.
• Growth: Public companies with high and/or consistent revenue
growth
• Valuation: Determine if opportunities exist based on our fair
value expectation of stocks versus current stock prices
PORTFOLIO CONSTRUCTION
• Weightings: Determine % of portfolio allocated to holdings
based on risk-reward expectations
• Diversification: Well-diversified across 35 to 40 holdings to
maximize risk-adjusted returns
• Hedging: Utilize derivatives and fixed income products to
minimize drawdowns and generate alpha
IDEATION
• BSD Investment Advisory Committee: seek out global
growth themes and trends to overweight and underweight
various subsectors
• Experienced investment team sourcing trade ideas and
discussing vital macro economical forces in play
• Draw on sector experiences from members of the committee and
discuss emerging technology from the private and public space
• Deep dive into industry verticals to identify beneficiaries in other
primary, secondary, and tertiary markets
PORTFOLIO CONSTRUCTION
IDEATION
SECTOR
ASSESSMENT
COMPANYANALYSIS
PUBLIC COMPANIES
PERFORMANCE
PERFORMANCE METRICS* FUND RETURNS
FUND S&P 500
Return Since Inception
YTD Return
60 Day Return
20 Day Return
Daily Standard Dev.
Sharpe Ratio
Sortino Ratio
Correlation
46.39%
-5.63%
-10.22%
-9.00%
0.76%
0.61
0.84
-
61.26%
0.90%
-5.13%
-7.31%
0.79%
0.75
1.04
0.97
* Management fees and expenses may be associated with investments. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.
October 1, 2013 to October 31, 2018
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD S&P 500 YTD
-2.08% 3.63% -2.07% -4.39% 2.38% 2.80% 2.21% 3.53% -1.64% 4.95% 2.89% -1.51% 10.69% 11.43%2014
2013
GLOBAL TECH FUND MONTHLY PERFORMANCE SINCE INCEPTION
BSD has outperformed our portfolio benchmark with lower risks through active diversification across various subsectors
1.32% 0.35% 2.82% 4.55% 9.60%
0.53% 5.39% -0.16% 2.98% 0.90% -0.91% 0.43% -6.67% -1.48% 9.68% 0.63% -0.76% 10.16% 0.47%2015
-7.41% -2.78% 5.31% -0.02% 2.33% -0.29% 3.66% 0.65% 1.63% 0.38% -3.75% -0.71% -1.63% 9.50%2016
4.97% 2.14% 2.99% 2.08% 3.85% -2.55% 2.68% 2.12% 0.51% 3.41% 0.11% -0.20% 24.49% 19.42%2017
2.89% 0.63% -0.62% -1.57% 4.11% -1.63% 0.63% 1.72% -2.18% -7.87% -5.63% 0.90%2018
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
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BSD S&P 500
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HOW BSD COMPARES TO OTHER HEDGE FUNDS
HEDGE FUND STRATEGIES* 2014 RETURN 2015 RETURN 2016 RETURN 2017 RETURN
PERFORMANCE
BSD Global Technology Hedge Fund
Absolute Return
Multi-Region
Equal Weighted Strategies
Relative Value Arbitrage
Macro/CTA
Fixed Income - Credit
Global Hedge Fund
Equity Hedge
North America
Emerging Markets Composite
Market Directional
Event Driven
10.69%
0.67%
1.71%
-0.56%
-3.06%
5.09%
-1.86%
-0.60%
1.37%
-4.13%
-8.03%
5.13%
-4.06%
Our outperformance relative to other funds are indicative of our core competency in
generating outsized returns and navigating a challenging market environment
* Hedge fund index data is provided by Hedge Fund Research Index (HFRI) as of January 2018.
10.16%
2.86%
-1.19%
-1.54%
-3.10%
-1.96%
-4.38%
-3.64%
-2.33%
-9.35%
-5.26%
-8.58%
-6.94%
-1.63%
0.31%
1.95%
3.78%
1.03%
-2.93%
4.97%
2.50%
5.49%
4.14%
6.77%
9.86%
10.50%
24.99%
3.91%
6.58%
6.10%
4.28%
7.43%
4.55%
8.04%
12.78%
6.25%
8.99%
4.68%
7.22%
TOP 10 STRATEGIC TECH TRENDS FOR 2018-2020
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CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE
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BIG DATA
• Worldwide Big Data market revenues for software and
services are projected to increase from $42B in 2018 to
$103B in 2027, attaining a CAGR of 10.48%.
• Big Data applications and analytics is projected to grow
from $5.3B in 2018 to $19.4B in 2026, attaining a CAGR of
15.49%.
• The software segment is projected to increase the fastest of
all categories, increasing from $14B in 2018 to $46B in
2027 attaining a CAGR of 12.6%.
• The Chinese market is predicted to be one of the fastest
growing globally, growing at a CAGR of 31.72% in 2014 to
2020.
BIG DATA AND AI
Data Sources
Hardware
Security
Data Analytics
Users (Reporting & Visualization)
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BIG DATA ECOSYSTEM
Source: Statista
2018
Expected
$166B+11%
YoY
BIG DATA AND AI
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BIG DATA AND ANALYTICS MARKET SIZE
Source: Statista
Revenue from big data and business analytics worldwide from
2015 to 2022 (in billion U.S. dollars)
0
50
100
150
200
250
300
2015 2016 2017 2018 2019 2020 2021 2022
In 2018 the revenue from big data and business analytics
expected to reach $166B
BIG DATA AND AI
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THE PROCESS
Big data is primarily about managing data infrastructure, but
business analytics is primary about using data.
So what is the difference between Big data & Data analytics?
BIG DATA AND AI
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BIG DATA
Big data is data that contains greater variety arriving in
increasing volumes and with ever-higher velocity. This is known
as the three Vs. Other concepts later attributed with big data are
veracity (i.e., how much noise is in the data) and value.
BIG DATA AND AI
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BIG DATA
The Three Vs of Big Data: 1.Volume, 2.Velocity, 3.Variety
BIG DATA AND AI
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This is what
happens in an
internet in 60
seconds
DATA SOURCES
BIG DATA AND AI
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Servers CPUs/GPUs FPGA RAM
IBM
HP
Dell
Oracle
Cray
IBM
Intel
Nvidia
AMD
Intel
Xilinx
Samsung
Micron
SK hynix
HARDWARE
HARDWARE VENDORS
BIG DATA AND AI
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SECURITY
Company Cybersecurity Sector
Cisco Threat Protection & Network Security
Juniper Networks Threat Intelligence & Network Security
Microsoft Datacenter to Endpoint Protection
Amazon Web Services Cloud-Powered Security
Akamai Technologies Secure Cloud & Mobile Computing
VMware Mobile, Data Center & Cloud Security
Symantec Endpoint, Cloud & Mobile Security
Check Point Software Unified Threat Management
Palo Alto Networks Threat Detection & Prevention
Splunk Big Data Security
CYBERSECURITY LEADERS
BIG DATA AND AI
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BIG DATA MARKET SIZE
Source: Statista
Forecast of Big Data market size, based on revenue, from
2011 to 2027 (in billion U.S. dollars)
0
20
40
60
80
100
120
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Worldwide Big Data market revenues for
software and services are projected to
increase from $42B in 2018 to $103B in
2027, attaining a CAGR of 10.48%
BIG DATA AND AI
19Source: Statista
Big data revenue worldwide from 2016 to 2027, by major
segment (in billion U.S. dollars)
0
20
40
60
80
100
120
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Sofware Hardware Services
The software segment is projected to increase
the fastest of all categories, increasing from
$14B in 2018 to $46B in 2027 attaining a
CAGR of 12.6%.
BIG DATA MARKET SIZE
BIG DATA AND AI
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DATA ANALYTICS
Data analytics (DA) is the process of examining data sets in
order to draw conclusions about the information they contain,
increasingly with the aid of specialized systems and software.
BIG DATA AND AI
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Big data analytics helps organizations harness their data and
use it to identify new opportunities. That, in turn, leads to
smarter business moves, more efficient operations, higher
profits and happier customers.
So why is big data analytics important?
DATA ANALYTICS & VISUALIZATION
Data & Analytics Vendors:
Amazon
IBM
Microsoft
Oracle
Salesforce
Adobe
SAP
Tableau Software
BIG DATA AND AI
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AI AND MACHINE LEARNING
BIG DATA AND AI
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AI AND MACHINE LEARNING
Machine Learning examples:
BIG DATA AND AI
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Benefits of Big Data and Data Analytics
USERS
• Big data makes it possible for you to gain more complete answers
because you have more information.
• More complete answers mean more confidence in the data—which
means a completely different approach to tackling problems.
BIG DATA AND AI
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Benefits of Big Data and Data Analytics – Example:
USERS
BIG DATA AND AI
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USERS
Benefits of Big Data and Data Analytics – Example:
BIG DATA AND AI
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USERS
Benefits of Big Data and Data Analytics – Example:
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SUMMARY
• We bring unique, proven strengths
• Principal with 30 years of portfolio management experience
• Dynamic stock selection methodology
• Disciplined risk management process
• Our expertise in technology is unparalleled
• Team consisting of seasoned entrepreneurs that have co-founded billion dollar companies
• Global networks of advisors and analysts examining tech vendors and tech end-users
• Significant out-performance in risk-adjusted returns
• The BSD Global Tech Hedge Fund returned 60.87% since inception versus S&P 500 index
return of 61.54%
• Exhibited only 58% of the S&P 500 index volatility in 2017
• Hedging strategy acts as an “insurance policy” in anticipation of adverse market events,
by limiting drawdowns and often generating alpha
* Management fees and expenses may be associated with investments. Investment funds are not guaranteed, their values change frequently and past performance may not be
repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.