Institutional Investor’s 2nd Annual Sub-Advisory Roundtable
Building Better Products for Investors

Will the investment ma...
Preliminary Program as of July 12, 2007

Advisory Board (to date)

Tommy Huie                                    Alex Hsia...
Moderator:
                   Kenneth B. Beitler
                   Director of Investments
                   Northstar F...
Cohen & Steers Capital Management

Over the past several years, the global real estate securities markets have
been experi...
product set through "short extension" – sometimes referred to as "130/30"
or "120/20" – strategies. Relaxing the long-only...
Moderator:
                    Alex Hsiao
                    Chief Investment Officer
                    Progress Invest...
2:45-3:15 pm        Presentation: Alternative Investments: Don’t Forget
                    about Risk
                   ...
Long-short or 130/30 strategies are all the rage these days, offering the
possibility of higher returns from active manage...
Investors’ demand for the latest products is significant and represents an
enormous pool of potential business for some fi...
Library

6:45 pm            Evening free for private functions


Wednesday, July 18

8:00-8:45 am       Continental Breakf...
Jeffry A. Sutton, CFA
                   Director of Manager Research
                   UBS Global Asset Management

Incr...
10:30-10:45 am     Coffee Break
                   Library

10:45-11:15 am     Presentation: Fixed Income for Today’s Inve...
Director, Corporate and Retirement Services
                   Charles Schwab

                   Lori Crosley
           ...
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  1. 1. Institutional Investor’s 2nd Annual Sub-Advisory Roundtable Building Better Products for Investors Will the investment management industry be able to meet the needs of investors who are demanding more of their managers? Will managers be able to develop the increasingly complex products and the broader range of strategies needed to satisfy their clients? Unlikely in most cases, unless firms focus on their areas of comparative advantage and essentially buy in the strategies and products that they cannot cost-effectively and successfully develop for themselves. Many firms are simply unable to successfully develop and distribute products such as derivatives in an insurance wrapper or portable alpha within a lifecycle fund or customized liability-driven and objective-driven investments – the types of instruments and strategies that are being demanded increasingly by the market. How can managers build better products for investors while maintaining both performance and profitability objectives? How can sub-advisors and their clients manage the demands of Legal and Compliance while developing ever- more sophisticated and esoteric products? Will manager selection and monitoring methods be able to adapt? The 2nd Annual Sub-Advisory Roundtable will examine the ways that correctly designed sub-advisory relationships can help organizations focus on their core competencies while improving their products offerings in order to build better products for investors. Sponsoring Organizations: Bear Stearns Asset Management Cohen & Steers Capital Management Credit Suisse Dimensional Fund Advisors JanusINTECH MFC Global Investment Management (U.S.), LLC Old Mutual Asset Management Principal Global Investors Quantitative Management Associates State Street Global Advisors T. Rowe Price Associates, Inc. Supporting Organization: Regulatory Compliance Association ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 2 of 14
  2. 2. Preliminary Program as of July 12, 2007 Advisory Board (to date) Tommy Huie Alex Hsiao President and Chief Investment Chief Investment Officer Officer Progress Investment Marshall & Ilsley Wealth Management Company Management Ronald G. Albahary, CFA Lynnett Berger Managing Director, Private Client Chief Operating Officer, Business Portfolio Management Manager SEI MTB Investment Advisors David Spangler, CFA Howard Hirakawa Director, Investment Products Vice President, Investment Thrivent Financial Advisory Oversight Pacific Life Insurance Company Jeffrey A. Sutton, CFA Director of Manager Research UBS Global Asset Management Tuesday, July 17 7:30-8:15 am Registration and Continental Breakfast Library (Second Floor) 8:15-8:20 am Opening Remarks and Introductions Lincoln Hall (Second Floor) Steven Olson Executive Director Institutional Investor Conferences Moderator: Charles Krusen Chief Investment Officer Krusen Family Partners 8:20-9:00 am Panel Session: A Broad Review of the Sub-Advisory Relationship – Ensuring Compliance Lincoln Hall ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 3 of 14
  3. 3. Moderator: Kenneth B. Beitler Director of Investments Northstar Financial Services (Bermuda) Ltd. Panelists: Joe Paolo Deputy Chief Compliance Officer AXA Equitable Life Insurance Company Andrew Baldauf Director of Investment Advisory & International Compliance Citi Smith Barney Stephen McCaffrey Legal Counsel KeySpan Insurance Company This panel session will offer a wide-ranging review of the issues that are critical to a successful, compliance sub-advisory relationship, including fee structures, revenue sharing, and other crucial factors. 9:00-9:30 am Presentation: 5 Myths in Long-Short Investing Lincoln Hall Presented by: Margaret Stumpp Chief Investment Officer Quantitative Management Associates Acceptance of the theory behind portfolio extension strategies has been widespread. Now it is time to look beyond the theory and start to address some of the more specific practical concerns that can arise around implementation. This discussion will begin by addressing some of the common misconceptions surrounding implementation of 130/30-type strategies. 9:30-10:00 am Presentation: Overview of Global Real Estate Securities Lincoln Hall Presented by: Scott Crowe Senior Vice President ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 4 of 14
  4. 4. Cohen & Steers Capital Management Over the past several years, the global real estate securities markets have been experiencing tremendous growth and change. We believe global real estate securities offer attractive risk-return characteristics and the opportunity to generate alpha based on the following factors: growing adoption of REIT structures and securitization in many countries; variations in regional economic, property sector and securitization cycles; the diversity of business models; scarcity of sell-side and buy-side research coverage; and the lack of uniform reporting and disclosure standards. 10:00-10:30 am Presentation: Portfolio Risk Management: Providing a Framework for Consistent Performance Lincoln Hall Presented by: Dan Scherman, CFA Senior Vice President, Risk Management & Trading Janus Capital Management Effective manager selection and oversight lies at the heart of the sponsor's advisory duties. At the very least, most sponsors want to ensure that subadvisors are successfully fulfilling their mandate, generating results through skill rather than luck. Others - depending upon their goals - will also be interested in how the subadvisor is fulfilling its role within a multi- manager platform or portfolio, whether that be a certain style, performance profile, or objective. Advisory sponsors can enhance their results by delving further into the risk management attitudes and practices of their subadvisors and by employing a risk management framework at the platform level. This session will provide thoughts on such a framework and the tools and policies which may be used to implement it 10:30-10:45 am Coffee Break Library 10:45-11:15 am Presentation: Short Extension Strategies Lincoln Hall Presented by: Adele Kohler Senior Managing Director State Street Global Advisors As investors grow more attuned to the challenges of realizing consistent alpha, product sponsors have an opportunity to enhance their traditional ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 5 of 14
  5. 5. product set through "short extension" – sometimes referred to as "130/30" or "120/20" – strategies. Relaxing the long-only constraint on the sub- advisor can improve a fund's performance opportunity, thereby better capitalizing on the manager's skill, capturing alpha from both positive and negative views on companies, while in many cases maintaining similar portfolio characteristics 11:15-11:45 am Presentation: Best of Both Worlds: Maximizing the Value of Quantitative and Qualitative Research Lincoln Hall Presented by: Jeffrey A. Schwarte, CFA, CPA Portfolio Manager Principal Global Investors In this session, we will explore innovations in global equity research and portfolio management. The speaker will specifically highlight the benefits of combining the best attributes of quantitative and traditional/qualitative research techniques in the selection of stocks in markets around the world. He will provide an overview of the strengths and weaknesses of quantitative and traditional fundamental research, as well as how successfully integrating both methods of evaluating stocks can create significant and measurable performance advantages, particularly on a risk-adjusted basis. 11:45-12:15 pm Presentation: Employing Volatility Overlay Strategies Lincoln Hall Presented by: Rick Selvala Director Credit Suisse How can investors harvest excess returns from existing equity assets? This presentation will address how mutual fund and multi-manager programs can monetize volatility through the implementation of an overlay strategy. Through these strategies, it is possible to generate incremental returns on existing equity exposure, while significantly reducing the risk of the overall fund or fund-of-funds structure. The presentation will not only focus on the investment strategies but also on how to successfully implement these overlay programs inside of a registered mutual fund. 12:15-1:00 pm Panel Session: Extended Equity Products Lincoln Hall ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 6 of 14
  6. 6. Moderator: Alex Hsiao Chief Investment Officer Progress Investment Management Company Panelists: Joseph Cherian, Ph.D. Managing Director Credit Suisse Margaret Stumpp Chief Investment Officer Quantitative Management Associates James D. Martielli Senior Portfolio Manager SEI Investments 130/30 and 120/20 strategies are hugely in demand from investors. What other news strategy are long-only managers developing in order to offer hedge fund-like products to meet this need? The proliferation of these products could further blur the lines between buckets of assets in institutional portfolios. What will be the ramifications for the industry and what opportunities does this offer to sub-advisors? 1:00-2:15 pm Lunch Mary Murray Room 2:15-2:45 pm Presentation: Generating Alpha in a Challenging Global Equity Environment Lincoln Hall Presented by: Kurt Umbarger Vice President T. Rowe Price Associates, Inc. Historically, global equity mandates have not been a staple for US Institutional investors; however, the trend of integrating global equities into traditional manager structures is increasing. US plan sponsors and institutional advisory firms are realizing that a distinct, but separate, allocation to a fully integrated global equity mandate offers the opportunity to enhance returns beyond a traditional U.S. and non-U.S. equity program. This session will discuss how firms and their clients can benefit from these opportunities. ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 7 of 14
  7. 7. 2:45-3:15 pm Presentation: Alternative Investments: Don’t Forget about Risk Lincoln Hall Presented by: James J. Barrett Senior Managing Director Bear Stearns Asset Management Alternative investments are here to stay. Hedge funds in particular offer compelling investment attributes including portfolio diversification, lower volatility, and higher returns. As of yet, sub-advisors have not been able to capitalize on these attributes because of regulatory hurdles. Sub-advisors who are able to “crack the code” and integrate hedge funds into their products stand to reach a broader audience and seize market share. But don’t forget about risk! 3:15-4:00 pm Concurrent Breakout/Discussion Groups Refreshments will be served in each room Discussion Group: Dividend Growth Stocks Lincoln Hall (Second Floor) Discussion Leader: Rick Helm Portfolio Manager, Large Cap Value Strategy Cohen & Steers Capital Management This session will discuss the characteristics of dividend growth stocks and why a portfolio of large cap companies with sustainable cash flow and strong dividend growth offers the potential for attractive returns with lower volatility than other equity strategies. Participants will review research that shows that stocks paying dividends have outperformed those that do not and stocks demonstrating strong dividend growth have generated superior returns. Discussion Group: Adding Alpha through Long-Short Fixed Income Investing Grill Room (Third Floor) Presented by: David Kilborn Co-Chief Investment Officer Dwight Asset Management Company ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 8 of 14
  8. 8. Long-short or 130/30 strategies are all the rage these days, offering the possibility of higher returns from active management—all at lower fee levels than hedge funds. What about fixed income? Are long-short or “130-30-type” strategies possible with fixed income? In this discussion group, the speaker will explore how long-short strategies applied to fixed income portfolios can provide alternative absolute return solutions. 4:00-4:45 pm Concurrent Breakout/Discussion Groups Refreshments will be served in each room Discussion Group: Does Timing the Value Premium Earn Abnormal Returns? Lincoln Hall (Second Floor) Workshop Leader: James L. Davis, Ph.D. Vice President Dimensional Fund Advisors Existing studies show that the value premium is partially predictable. Does this imply that investors can earn abnormal returns by timing the value premium? The profitability of various timing models is explored using a long sample of US data. Attempts to time asset class return differentials incur costs. Investors and their advisors must decide if the expected benefit justifies the associated costs. This study provides long-term evidence on whether such costs are justified. Discussion Group: The “New-New” Products in the Sub-Advisory Space Grill Room (Third Floor) Presented by: Jeffry P. Brown Senior Managing Director Bear Stearns Asset Management Jeffery A. Hammer Senior Managing Director Bear Stearns Asset Management Gregory P. Brousseau Chief Executive Officer Central Park Group ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 9 of 14
  9. 9. Investors’ demand for the latest products is significant and represents an enormous pool of potential business for some firms. In fact we are seeing retail investors demanding and utilizing some of the innovative investment ideas that have become the norm at institutional plans. Those firms that can meet the needs of the "instividual" investor can differentiate themselves in an increasingly "me-too" environment. What are some of the ideas that investors are embracing and what does this mean for the average firm that lags in the development or incorporation of these leading edge offerings? 4:45-5:30 pm Facilitated Discussion Groups: Asset Allocation Revisited as Managers Respond to Their Clients Lincoln Hall (Second Floor) Presented by: Barry Evans President & Chief Fixed Income Officer MFC Global Investment Management (U.S.), LLC The challenge going forward is how managers will respond successfully to the changing needs of their clients. What products and strategies be in demand? Where are clients tilting their portfolios in the search for alpha and other considerations: toward alternatives, more in fixed income? What drives selection processes and what product line-ups? Answering these questions will help determine a major factor in the sub-advisory market’s trajectory. 5:30-6:00 pm Workshop: When It Comes to Compliance, Who’s Responsible for What in a Sub-Advisory Relationship? Lincoln Hall Workshop Leader: John M. Loder Partner Ropes & Gray LLP There are typically at least four entities involved in any one sub-advisory relationship: the advisor, the sub-advisor, the client, and contractors which provide administrative or custodial support. Such structures offer considerable potential for confusion as to who is responsible for what when it comes to ensuring compliance. This interactive workshop will dissect this four-way structure and attempt to provide illumination into who should be responsible for what aspects of the all-important compliance function. 6:00-6:45 pm Cocktail Reception ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 10 of 14
  10. 10. Library 6:45 pm Evening free for private functions Wednesday, July 18 8:00-8:45 am Continental Breakfast with Facilitated Workshop: Working Effectively with Your Fund Board in the Post-Spitzer Era Library Facilitator: Michael Dalis Managing Director State Street Global Advisors The degree of involvement by many funds’ boards has changed dramatically in this post-Spitzer era and following the SEC’s timing initiatives, Boards are requiring enormously more amounts of information. When do Boards become too involved? What expertise can delegates share to make the process easier? 8:45-9:30 am Panel Session: Making Money from Both Alpha and Beta Lincoln Hall Moderator: Tom Munsell Vice President & Managing Director, Financial Institutions Group JanusINTECH Panelists: Dennis Bein Chief Investment Officer Analytic Investors Paul Goldwhite, CFA Director, Research First Quadrant Michael Eldredge Vice President ING ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 11 of 14
  11. 11. Jeffry A. Sutton, CFA Director of Manager Research UBS Global Asset Management Increasingly and in pretty much a return to their origins in some ways, investors are realizing there are low-cost gains to be made from beta as they hurtle forward in their search for alpha. These leading practitioners will discuss their experience with building the perfect portable alpha model, one that makes money from both alpha and beta. 9:30-10:00 am Presentation: Internationally Diversified Portfolios and Value Tilts Lincoln Hall Presented by: James L. Davis, Ph.D. Vice President Dimensional Fund Advisors If international markets become more integrated, the expected benefit of international diversification should decline. This study analyzes the return distributions of internationally diversified portfolios to look for evidence of reduced diversification benefits. Market-like portfolios are compared to portfolios with value tilts to see if asset class tilts affect the degree of diversification benefit. The results have important implications for advisors and sub-advisors who may be considering whether to tilt internationally diversified portfolios away from market cap proportions. 10:00-10:30 am Presentation: How Will Fundamental Managers Deal with Active Extension? Lincoln Hall Presented by: Brett Hawkins, CFA, CPA Portfolio Manager Thompson, Siegel & Walmsley, Inc. Investors are seeking increased alpha from all available sources and are increasingly considering active extension, beta-one (120/20, 130/30, etc.) strategies. It seems the current asset gathering leaders in the active extension fundraising derby are quantitative managers. However, given that fundamental managers have long been the masters in the long/short world, why would it be any different for active extension mandates? ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 12 of 14
  12. 12. 10:30-10:45 am Coffee Break Library 10:45-11:15 am Presentation: Fixed Income for Today’s Investment Portfolio Lincoln Hall Presented by: Howard C. Greene, CFA Senior Vice President MFC Global Investment Management (U.S.), LLC In today’s lower return environment, fixed income has returned as an important and competitive part of the overall asset allocation decision. Whether it’s the asset/liability focus of large pension funds, the income generation concerns of the baby boom retirement set or basic diversification goals, investors are taking a new look at fixed income and discovering it isn’t the same old asset class. In this presentation, the speaker will discuss the broad array of fixed income instruments portfolio managers are using to add value to today’s fixed income portfolios, including derivatives, emerging markets, structured products and high yield. 11:15-11:45 am Presentation: Why Invest in Mid Cap? Lincoln Hall Presented by: Keith Gustafson, CFA Partner and Managing Director, Quantitative Research Chicago Equity Partners This session presents the portfolio case for including mid cap as a separate and distinct asset class within a portfolio. The speaker will also provide insight into the general mid cap market and the opportunities therein. 11:45-12:30 pm Panel Session: Our World is Moving from DB to DC: Taking Advantage of the PPA and Other Seminal Changes Lincoln Hall Moderator: Carol E. Waddell Vice President T. Rowe Price Associates, Inc. Panelists: Jake M. Gilliam, AIF ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 13 of 14
  13. 13. Director, Corporate and Retirement Services Charles Schwab Lori Crosley Principal Greenwich Research Associates Mary “Bebe” Wilkinson Head of Strategic Relationships ING James Dunham Managing Director - Institutional Advisory Services Principal Global Investors We are seeing an accelerating shift in this country from defined benefit systems to various sorts of defined contribution schemes. This trend threatens to diminish demand for many “traditional” product lines on offer by managers. How will firms, specifically money managers and mutual fund companies, respond? Will more managers use outside advisors? Build it themselves? Which product lines will be in demand and which will be in over supply? 12:30-2:00 pm Lunch Mary Murray Room 2:00 pm Roundtable Concludes ____________________________________________ Institutional Investor’s 2nd Annual U.S. Sub-Advisory Roundtable Building Better Products for Investors July 17-18, 2007 ~ The Union League Club, New York Page 14 of 14

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