FRM - Landing Page - Who is FRM

History

Since our firm’s founding in 1989 we have remained committed to the pursuit of consistently adding value to our clients' portfolios above their stated benchmarks. As our founder first put it, “no alpha, no business,” a motto that has since evolved to "alpha first." Our quantitative investment offerings have grown from a single US equity strategy to include long-only, active extension and long-short equity and fixed

income strategies across geographic regions, investment styles and capitalization strata. In September 2014, we were acquired by Man Group plc and became a wholly owned subsidiary. Man Numeric has grown from a few billion dollars in assets and a handful of employees in the 1990’s to more than $30B in total assets and more than 50 dedicated investment professionals today in addition to our extensive

employee network within the Man Group infrastructure. Under our senior leadership, which averages 20 years at Numeric, we remain committed to ongoing innovation as we continue to invest in research and development, incorporating new data science techniques as well as new data sources, and remain devoted to partnering with our clients as well as delivering growth opportunities for our employees.

Important milestones in our development

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Investment Process

A partnership approach Our only business is helping clients invest in and maximise the benefits they receive from hedge funds by making our resources available to clients in ways that fit their specific needs. Flexible and Collaborative As a large institutional investor ourselves, our flexible approach has been developed to address and solve the same key issues our clients face when investing in hedge funds – how to increase transparency and control, decrease costs, understand hedge fund data and access differentiated, high quality hedge fund return streams. Our primary goal is to develop our solutions capabilities and partnership approach for our clients. We work closely and collaboratively with each of our

client partnerships to offer a broad array of support and services – not just constrained to fund investments. Our iterative and constantly evolving approach allows clients to make use of our advice and benefit from our scale and experience in managing alternative investments. Our overall philosophy is based upon five areas of expertise: Deep Knowledge of Hedge Funds We understand the complexities of the extensive universe of hedge funds both as a hedge fund investor and as a researcher. Our 28 years’ experience combined with our thorough and detailed investment and operational risk due diligence helps ensure we can continue to identify what we believe to be high quality hedge funds for our investors to access.

Partnership Approach with Clients No two investors or solutions are the same. We work closely with our clients to select and examine the combination of hedge funds which aim to best complement their existing allocations to other asset classes and which meet their objectives for their hedge fund portfolio. Detailed Understanding of Risks As a hedge fund investor, we have a detailed and thorough understanding of all risks at both an investment and operational perspective. Each of our approved managers is subjected to a stringent due diligence process while demonstrating an ability to provide an investment return in line with their own investment process and risk levels employed.

Technology

We truly believe that a state-of the-art technology platform is crucial to the success of our business. Our institutional risk management framework underpins every aspect of our organisation. This is further supported by our cutting edge reporting and analytics, providing enhanced insight into the performance and risks of investors’ portfolios.

While computers have revolutionized the investment industry, we believe it is the combination of people and technology that produces the best results. We take a problem-driven approach to design and development by letting the problem drive the tools and technologies we use. We continually invest in technology as we strive to stay ahead of the curve.

Having a common programming language and unified codebase promotes collaborative and stimulating working practices, where researchers and technologists naturally exchange ideas in an open environment. Our best-of-breed hardware, tools and software engineering practices ensure high levels of productivity, quality and the necessary agility to quickly meet the needs of a dynamic business. It all starts with data. Lots of it. We source vast amounts of data from numerous vendors to feed our research and portfolio management processes. This poses constant technological challenges. We are continuously improving our data ingestion by innovating the methods used for data storage solutions and building a next-generation research platform for data science.

Go beyond the models. Our proprietary trading system gives portfolio managers and traders inventive and highly flexible ways to monitor and direct order flow. This allows us to tailor customized strategies for our clients to help meet their specific needs. Technology is evolving. And so are we.

TECHNOLOGY AT MAN GROUP

Commingled Strategies

A Range of Solutions From our origins as a hedge fund research consultancy in 1991, FRM’s only business is developing solutions to assist clients to invest in and maximise the benefits they receive from hedge fund investing. Since the launch of our first flagship commingled portfolio in 1997, FRM has built upon this heritage to extend the range of solutions available to our clients. Differentiated Investment Strategies Each of our investment strategies aims to capitalise on defined market opportunities and a disciplined approach in manager selection and are broadly classified as follows:

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CREDIT FOCUSED

DIVERSIFYING

EQUITY AND GROWTH FOCUSED

MULTI-STRATEGY

MULTI-STRATEGY May employ one or more of the above strategies and are therefore may be suitable initial investment vehicle for early adopters of alternatives.

WANT TO LEARN MORE? Click on any of the buttons on the left to learn more about each of our Differentiated Investment Strategies.

CREDIT FOCUSED Seek stability and consistency of return.

Generally attempt to provide more consistent return profile. May offer income in some cases. Tend to focus on fixed income, relative value equities and other approaches, while generally maintaining less directional market exposure than growth orientated strategies. May apply leverage and depend on less liquid securities and strategies.

DIVERSIFYING May provide portfolio diversification benefits due to historically low correlation to traditional equity and fixed income investments, and/or hedge against inflation.

Some trading strategies have historically exhibited low long-term correlation to traditional equity and bond investments. Other strategies may act as a store of value, potentially limiting the impact of inflation over longer time horizons. Some strategies can employ discretionary and systematic trading approaches across a wide range of markets and instruments. May use leverage and can be volatile. Less liquid strategies generally have longer capital lock-ups and leverage risk.

EQUITY AND GROWTH FOCUSED Seek growth and capital appreciation.

May pursue a range of non-traditional investment techniques (e.g. concentration, hedging, shortselling, leverage, and derivatives). May employ value-added approaches using public equities, private equities, credit, and other instruments, with the goal of enhancing returns, and in certain cases, mitigating on the downside. In some cases, may be more volatile than traditional equity strategies.

TECHNOLOGY AT MAN GROUP

Partnership Solutions

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Every Client Is Unique We have been designing, implementing and working in partnership with our clients since 1997 to develop investment solutions that aim to address their specific hedge fund investment and risk management needs. With our origins as a hedge fund consultant, we have always been, and continue to be, fully committed to offering and developing a broad array of support and services to our clients. We view our highly experienced teams as extensions of our clients’ teams. We aim to provide full investment operational and infrastructure support to supplement our clients’ oversight, experience and operational capabilities in managing their alternative investments.

Working with our clients, we build a detailed investor profile in order to develop a solution that best meets a client’s needs:

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Manager Research We devote extensive global resources to sourcing, researching, negotiating with and approving hedge fund managers that we have investment conviction in. A key part of our approach is ensuring we cover the entire investable hedge fund universe globally, including managers who are harder to identify due to their size, location or recent entry to the industry. Each member of our investment team is a specialist in their sector and based in key financial centres, giving them an understanding of local markets. Although we invest across all hedge fund manager sizes, we particularly focus on smaller managers whom we believe have the nimbleness to pursue opportunities not available to large managers, and who are more flexible on fees, terms and structures.

Risk Management A key distinguishing aspect throughout our investment and implementation processes is our continued focus on risk management. Before any hedge fund manager is approved for investment, we perform extensive operational and investment due diligence on each proposed manager. Our risk management function is supported by a comprehensive and sophisticated set of systems to ensure the ongoing and detailed monitoring of all managers. If we do not fully understand the risks associated with that manager and do not have the investment conviction to invest with that manager ourselves, we will not recommend them to our clients. We strongly believe that good risk management ultimately leads to superior performance relative to our peers.

Portfolio Construction Our portfolio construction process is largely driven by our detailed understanding of hedge fund managers, their return characteristics and our forward looking view of the opportunity set for each manager and hedge fund strategy. The intimate knowledge of managers, their strategies and their behavior in different market environments is the key to building a successful portfolio. When building portfolios for our clients, we believe it is important to follow a partnership approach with our clients. Our 19 years of experience in delivering successful portfolios has demonstrated that the portfolio construction process is dynamic, continuous and on-going, and we seek to closely involve our clients at all stages of the process.

Risk / Return Objectives and Parameters Beta Considerations Strategy Preferences Manager Preferences Client Involvement Transparency & Liquidity Requirements Tailored Fee Structure Reporting & Communication Requirements Operational / Structural Considerations

Flexible Approach Our only business is helping clients invest in and maximise the benefits they receive from hedge fund investing. We work alongside our clients to develop and implement a hedge fund solution that addresses their specific requirements. Over 70% of our assets are represented by customised solutions with partners who are broadly diversified by client type, requirement, sophistication and geographic location. Our experience, combined with the breadth and depth of our hedge fund platform and capabilities, enables us to construct hedge fund solutions that seek to conform to our clients’ fiduciary standards, while still accounting for their unique requirements.

Managed Account Platform

An Integrated Platform With our heritage as a hedge fund consultant and as a large institutional investor ourselves, our approach to hedge fund investing has been developed to solve the very same issues faced by other hedge fund investors – how to increase transparency and control, decrease costs, understand and aggregate manager data, and gain access to differentiated, high quality hedge fund return streams. To address these needs, we launched our managed account platform in 1998 as an alternative way of investing in hedge funds for the portfolios we managed. We have used our accumulated experience to refine our approach by investing heavily in our platform and

its capabilities. This approach has led us to become one of the largest buy-side, hedge fund managed account platforms in the world at US$ 20.0bn* in total assets, with over 450* managed accounts launched. Managed Accounts Principles

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PORTFOLIO CONSTRUCTION

PORTFOLIO CONSTRUCTION Managed accounts provide investors with additional tools which are designed to increase the performance and value of their hedge fund investments. These tools can help tailor the hedge fund selection to complement an entire investment portfolio, and over time dynamically adjust the allocations as market conditions and the investor’s portfolio evolves.

IMPROVED TRANSPARENCY

IMPROVED TRANSPARENCY Managed accounts provide investors with additional tools which are designed to increase the performance and value of their hedge fund investments. These tools can help tailor the hedge fund selection to complement an entire investment portfolio, and over time dynamically adjust the allocations as market conditions and the investor’s portfolio evolves.

GREATER CONTROL OF ASSETS

GREATER CONTROL OF ASSETS The control of the structure transfers to that of the investor who is able to customise the terms of the managed account to meet their investment requirements. This flexibility includes the selection of service providers and the ability to dictate key terms such as the legal structure, jurisdiction, liquidity and risk limits.

COST CONTAINMENT

COST CONTAINMENT Investors can access hedge fund managers who have improved terms at all levels of the managed account structure versus their commingled vehicles. These improved terms are not only limited to fees but include liquidity, governance, structural items and improved service provider fees negotiated through global rate cards.

WHY MANAGED ACCOUNTS? Our managed account platform is built on the core principles. Click on any of the buttons on the left to learn more about each of the Managed Accounts principles.