Fund & Asset Manager Rating Group 

Full Rating Report 
                                                 Olympia Capital M...
Fund & Asset Manager Rating Group

Manager Profile
Olympia Capital Management
Olympia Capital Management SA (OCM) constitu...
Fund & Asset Manager Rating Group

 Olympia Capital Management
                                                           ...
Fund & Asset Manager Rating Group

Technology                                                                             ...
Fund & Asset Manager Rating Group

                             Company and Staffing 
                             Shareho...
Fund & Asset Manager Rating Group

                             The agency notes that the firm benefits from a complete in...
Fund & Asset Manager Rating Group

                             Hedge Fund/Manager Selection 
                            ...
Fund & Asset Manager Rating Group

                             procedure results in an in‐depth and detailed report (20‐3...
Fund & Asset Manager Rating Group

                             refined thanks to enhancers such as the Copula model appli...
Fund & Asset Manager Rating Group

                             receives contract notes from underlying funds as an “inter...
Fund & Asset Manager Rating Group

                             Appendix 1 
                             Key People

     ...
Fund & Asset Manager Rating Group

                             Appendix 2 

                             Main Funds
     ...
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  1. 1. Fund & Asset Manager Rating Group  Full Rating Report  Olympia Capital Management  Summary  Fitch Ratings has assigned an ‘FoHF M2’ (Strong) rating to the Paris‐based investment management firm Olympia Capital Management (OCM), for its Fund of Hedge Funds management activities. The rating reflects the considerable experience the firm acquired in fund of hedge funds management since its debut in 1989, the high profile of senior management and the strong processes in place for hedge fund selection, portfolio construction and risk management. The rating nevertheless also recognises the relative newness Rating Criteria of the current investment team, which was largely put together in 2005 and 2006, Company Company  and thus the need to foster stability and demonstrate longer‐term adherence to the staffing& & staffing  process. Hedge Hedge fund /  fund/manager manager select.  In terms of the shareholding structure, Fitch notes a leveraged management buy‐ Portfolio & risk Portfolio & risk  out operation was completed in 2006, which saw a Canadian private equity fund management management  take an effective 53% voting rights stake in the holding structure alongside Investment Investment  employees, whom are now almost all invested in the group, and the founder, still a administration administration  large shareholder (with 36 % of capital). This new paradigm will inevitably require Technology that strategic decisions be made to choose the appropriate corporate structure 5 4 3 2 1 once the private equity deal ends, in principle in 2010. Source: Fitch  The process for selecting hedge funds is facilitated and optimised by having analysts ‘FoHF M2’ ­ Strong  directly located in the markets where most of hedge fund managers are based, that Managers in this group have earned high is, New York, London and Hong Kong. A three‐pillar process ensures quantitative scores in most areas of assessment. Such organisations are generally stable, well‐ analysis, qualitative due diligence and operational due diligence get the most capitalised companies with a good track dedicated attention through three distinct and focused teams. Portfolio record. Organisations at this rating level are run by highly experienced, tenured construction, significantly led by the high‐profile Co‐CIO, is directly linked to risk management teams supported by management concerns and aims to determine the most optimised asset allocation, experienced staff. The organisation has based on rigorous and advanced quantitative measures of risk, performance, strong portfolio construction practices, which include clear articulation of objectives diversification and sensitivity analyses. Fitch notes the single team in charge of and means. Organisational infrastructure both quantitative research and risk management, combining the two expertises in a includes a strong risk management and internal control environment, which is way we estimate coherent with OCM’s philosophy. Operations are conducted in a integrated into the day‐to‐day fund and manner that is safe and with an adequate degree of automation (“Straight‐Through‐ manager selection and portfolio management processes. Fund and manager selection Processing”). The interaction with several different providers of fund include thorough manager due diligence administration and custody services has however necessitated a relatively large practices and portfolio management team of Middle Office operators and emphasised the need to complete the processes are consistently applied and supported with frequent investment analysis implementation of a new integrated software package, which should improve the and monitoring, forming a disciplined automation of flows in the back office. approach for making buy, sell and hold decisions. At this rating level, organisations will have strong investment administration The rating is attributed to Olympia Capital Management (OCM), excluding the other capabilities, as reflected in the level of entities that form part of the larger Paris‐based Olympia Group of Companies (OGC) investor services and quality, and the transparency of investor reporting. All core holding. The firm began its operations in 1989 and has always concentrated on processes are supported with integrated managing multi‐strategy and single‐strategy fund of hedge funds. The investment technology resources, complemented by universe is global and spans the whole spectrum of alternative strategies. As of end‐ good analytical and decision‐support tools.  2007, OCM was managing about USD6.0bn of assets, of which 90% in FoHFs, with a Analysts  client base that was mostly institutional and globally diversified. At the same date, Olivier Fines the firm employed 77 persons, of which 19 were alternative investment managers +33 1 44299275 or analysts. olivier.fines@fitchratings.com Aymeric Poizot, CFA, CAIA +33 1 44299276 aymeric.poizot@fitchratings.com www.fitchratings.com  3 April 2008 
  2. 2. Fund & Asset Manager Rating Group Manager Profile Olympia Capital Management Olympia Capital Management SA (OCM) constitutes the main subsidiary The company is physically present in Paris, London, New York, Hong of a Paris‐based financial group – the Olympia Group of Companies ‐ Kong and Zürich through local subsidiaries and continues to specialise in which is involved in fund of hedge funds (FoHF) management, FoHF, with a client base that is largely institutional and global. Though traditional fund of funds as well as private wealth management. 63 of the 77 strong staff are concentrated in Paris, research analysts are Created in 1989 and registered with the AMF, the FSA and the SEC, at mainly located in overseas offices, facilitating a global reach of end‐2007 the firm managed approximately USD6.0bn in assets, of underlying managers. which 90% was FoHFs. Address 25 rue Balzac – 75008 Paris – France Ownership Olympia Group Mgt and emp. = 47% (voting rights) Private equity fund = 53% Company contact Florence Picon CEO and CIO Marc L. Landeau Website www.olympiagroup.com Chairman of the group (holding) Jacques Darmon Type of organisation Investment management firm Co‐CIO Kostas Iordanidis, Ph. D. Year founded 1989 Deputy‐CIO (risk mgt/quant) Guido Bolliger, Ph. D. Domicile, place of incorporation France CFO Arnaud Beyssen Reg.registration(s)/jurisdiction(s) AMF general agreement (1997), # of portfolio managers and analysts 19 FSA UK (2001), SEC US (2004) (alternative investments) # of employees 77 Assets Under Management AUM Growth AUM Breakdown by Client Type  (USDm) A s at Dec 2007  Private mandates Traditional fund of funds Other  Fund of hedge funds Structuring  7%  banks  7,000 4%  6,000 P rivate banks  Financial  5,000 15%  institutio ns  4,000 44%  3,000 Retirement  2,000 schemes  1,000 30%  0 2002 2003 2004 2005 2006 2007 Source: OCM  Source: OCM  AUM Breakdown by Investor Location  Breakdown of AUM by Product Line A s at Dec 2007  As at Dec 2007, in USDm Multimanager traditional Multimanager Other  So uth Africa  FoFs theme‐based 7%  3%  166 FoHFs UK  3% 157 5%  Mandates 3% France  469 37%  8% US  Multimanager 24%  diversified FoHFs 5,059 Switzerland  86% 24%  Source: OCM  Source: OCM Olympia Capital Management April 2008  2 
  3. 3. Fund & Asset Manager Rating Group Olympia Capital Management Rating Key Rating Drivers FoHF M2 Strengths · Long‐standing specialisation in fund of hedge funds management, since 1991. · Highly experienced and qualified senior management, including Co‐CIO appointed in 2005. · Global coverage with research analysts located in New York, London and Hong Kong. · Strong risk management, portfolio construction and allocation processes. · Comprehensive hedge fund selection process with distinct quantitative, qualitative and operational due diligence contributions. Challenges · Following 2006 LBO operation, firm now at a turning point to ensure long term stability and viability. · Current investment team put together rather recently; needs to demonstrate stability and adherence to process. Score Company & Staffing 2.75 · Private equity fund Sagard holds 53% of voting rights with employees/senior management holding the rest. · Uncertainty regarding the status of the firm when the private equity deal ends (planned in 2010). · 17 year track record in the FoHF business. · USD6.0bn AUM at end‐2007 with regular progress over years ‐ strong and stable financial results. · Potential for more independent directors at company or funds’ boards. · Experienced and qualified senior management (including founder CEO and CIO, prominent industry specialist and ultimate owner of the investment process). · Current investment team largely renewed and put together since 2005. · Staff generally well experienced and qualified, strong quantitative and technical bias with several trading/hedge fund backgrounds (six analysts, three operational due diligence analysts, seven risk managers and quantitative analysts). · Head of Sales and Marketing to be recruited. Hedge Funds/Manager Selection 2.00 · Proximity of research analysts to key markets in New York, London and Hong Kong. · Wide sourcing capabilities thanks to analysts’ market presence and CIO and Co‐CIO’s extensive connections worldwide. · In‐house rating system for hedge funds, with quantitative, strategic and operational inputs from dedicated independent teams. · High level of documentation of selection process. · Quantitative input for HF selection incorporating alpha generation evidences and diversification effect, thanks to sophisticated factor models. · Quantitative tools and systems for style/performance/risk analysis of very good quality and improving further. · Operational due diligence of good quality with three dedicated analysts based in New York and London. Portfolio and Risk Management 2.25 · Process significantly redesigned and improved in recent years emphasising quantitative techniques and stronger top‐down views. · Portfolio construction and allocation process using a recognised approach (Black‐Litterman). · Portfolio construction, monitoring and risk management benefit from seven dedicated quantitative staff. · Quantitative tools expected to progress with further model developments (factor‐based VaR for example). · Specific monthly committee set up to decide on allocation decisions, involving all investment professionals. · Quarterly top‐down strategic meeting – top‐down inputs very much originated from HF managers. · Important role of the Co‐CIO in ultimate decision‐making. · Comprehensive hedge fund monitoring based on return‐based analysis (factor model), market sensitivity analysis and holdings (via recognised VaR engine). · Hedge fund internal rating procedure impacts fund monitoring depth and frequency, but link with position sizing and portfolio construction not obvious. · Adequate liquidity management and rather conservative redemption terms of FoHF. Investment Administration 2.50 · Adequate level of transparency for client reporting with good quality of information disclosed. · Large number of middle office operators (7) as compared to firm size, given numerous third parties and not fully integrated technology. · Dual weekly NAV calculation with full internal and independent countercheck. · Numerous and thoroughly documented operational procedures. · Implementation of new system expected in near future; will facilitate NAV calculation and STP of operations. Olympia Capital Management April 2008  3 
  4. 4. Fund & Asset Manager Rating Group Technology 2.50 · Good general quality of IT systems in place; several internally developed tools for specific use. · Front‐ to middle‐office position monitoring and order management system efficient, safe and useful. · Decision‐making tools for risk analysis and allocation optimisation powerful and scalable. · Implementation of new middle‐ and back‐office application (Omega) which should improve STP and automation. · Potential for greater integration of systems. Olympia Capital Management April 2008  4 
  5. 5. Fund & Asset Manager Rating Group Company and Staffing  Shareholder and Financial Standing Olympia Capital Management (OCM) constitutes the main subsidiary of the Paris‐ based financial group Olympia Group of Companies (OGC), involved in fund of hedge funds management, traditional fund of funds as well as an array of financial services for wealthy individuals and some life insurance brokerage. Fitch rates only the activities of OCM entity and, specifically, fund of hedge funds management. One of the oldest active firms in the field of fund of hedge funds, OCM was founded in 1989 and its founder is still a major shareholder in the holding structure. A leveraged management buy‐out operation (LMBO) was completed in 2006, which resulted in a Canadian private equity fund taking a large stake in the holding (53% of voting rights), with the founder still retaining 36% of the capital, the rest being split among almost all employees of the group. The private equity deal was originally meant to end in 2010 and no definite decision was made yet as to the route OCM should choose. Options are still open for OCM, that is, if it decides to remain independent or prefers a direct tie to a large financial institution. In any case, Fitch shall closely watch the implications on the staff and processes. OCM and the holding structure have been and remain fairly profitable enterprises. OCM and its fund of funds activity represent about 90% of the group’s revenues and a bit less in terms of its operational result (EBITDA). For fiscal year 2007, results have proven in line with budget and on the rise. The proportion of strictly performance‐related fees appears reasonable. In terms of client concentration, the first five client firms gathered about 46% of AUM; however, the first client, an important overseas pension fund, had 22% of assets for about 5% of revenues. These clients have proved stable investors, are often bank distribution networks, and thus Fitch does not deem the current client mix as risky. Indeed, the client base is truly diverse and global (see diagrams page 2). The capital structure seems reasonable and adequate given the 2006 LMBO operation; the debt burden remains manageable and benefits from a clear repayment schedule. Experience in the AM Industry OCM started its operations in 1989 in Paris. The oldest currently active fund of hedge funds (OCM’s flagship vehicle Olympia Star) was launched in 1991 and thus has today a proven continuous track record of 17 years. Over time, the firm successively gained authorisation and registration to conduct investment activities in France (AMF‐registered) in 1997, the UK (FSA) in 2001 and finally in the US (SEC) in 2004. Total assets under management reached USD6.0bn end‐2007. The product range has progressively expanded from the original multi‐manager and multi‐ strategy fund of funds to more specific and single‐strategy products (global macro, market neutral, long/short equity and commodity themes). The vast majority of assets are still held in off‐shore investment vehicles but the firm continues to develop a France‐registered line of funds. Worth noting is the growing relationship the firm has been having with banks to tailor structured‐product solutions (CPPI forms and one CFO) as well as the capacity to manage large institutional mandates. These sorts of mandates do feature “deleveraging” risks, but for a proportion of total AUM around 15%. The firm is physically present in several locations around the globe and Fitch highlights the fact that analytical staffs are located in major markets such as New York, London and Hong Kong. Corporate Independence and Governance The 2006 private equity deal was certainly a major change in OCM’s corporate structure and governance, not least because of the introduction of a significant portion of debt. However, Fitch found that the firm has not lost in terms of operational independence and remains free to define its medium/long‐term strategy. Next, the fact that employees are now almost all invested in the group will help foster longer‐term stability of staff. Olympia Capital Management April 2008  5 
  6. 6. Fund & Asset Manager Rating Group The agency notes that the firm benefits from a complete independence in the way it chooses its third‐party service providers (fund administrators, custodians, data providers), which procedure includes quality checks and frequent reviews. In the case of dedicated mandates, OCM may accept to work with imposed third parties, which, in turn, justifies the relatively important size of its Middle and Back Office teams. Nevertheless, corporate governance could be improved. The agency has found no evidence of any truly independent directors on the off‐shore investment vehicles’ boards. Fitch notes however the existence of one independent member on OCM/OGC board, whom also participates in the Audit and Compliance Committee, headed by the group’s Chairman. Staffing Total Olympia Group staff reached 77 at end‐2007, of which 68 were dedicated to the fund of hedge funds activity. Of that total, 19 were specifically FoHF investment professionals, that is, analysts, portfolio managers and risk managers. The agency positively notes the location of analysts in the most relevant markets around the world. OCM has been through a major reshuffling of its key investment staff in 2005 onwards following the departure of the former head of Investments department, along with several staff members. As a result, about 15 individuals have tenure at OCM equal to, or less than, three years. Nevertheless, the teams are today properly staffed and show a high degree of industry experience (nine years on average) and qualification in general. Noteworthy, six individuals have been in the hedge fund industry for more than ten years. Profiles are often highly quantitative in nature with prior experience as investment professionals or traders in hedge fund firms. The 2006 change to corporate structure has resulted in most employees now owning shares in the group, which should help foster medium/long‐term commitment. OCM Staff (Most relevant figures; as at end‐2007) Location Departments NY London Paris HK Zürich Investments 5 3 4 1 Risk/Quant 6 MO and BO 7 Other 2 46 3 Source: OCM The quality of senior management is significant. The CEO/CIO and founder has been with the firm since start and continues to show a strong commitment. Fitch notes the very high profile of the Co‐CIO (12 years’ hedge fund experience, Ph.D. in Physics) who, in practice, has the largest influence on investment decisions, and the Deputy CIO heading Quantitative Research and Risk Management (12 years in the industry, Ph.D. in Finance), hired respectively in May 2005 and January 2006. Fitch furthermore recognises the strong presence these individuals have in the industry, their relations network and thus how they facilitate and enhance the sourcing of hedge funds. It is interesting to stress that the CIO and Co‐CIO actually head the entire Investments department, which gathers Portfolio Management and the three teams in charge of Due Diligence analysis: Strategic Analysts, Operational Analysts and Risk/Quant Analysts. Olympia Capital Management April 2008  6 
  7. 7. Fund & Asset Manager Rating Group Hedge Fund/Manager Selection  Sourcing Sourcing of hedge funds at OCM has its roots in the extensive market experience and network of contacts brought and maintained by senior managers. The CIO was personally at the origin of the seeding of several funds and the Co‐CIO has notably improved global reach through its prior experience in the US and ties with overseas industry specialists. More generally, all analysts are expected to participate in conferences and maintain strong relationships with local intermediaries, including prime brokers and capital introduction agents. Sourcing follows a generic three‐step process, from the initial and ongoing qualitative researching by analysts worldwide, followed by mandatory in‐depth quantitative analysis conducted by a dedicated team in Paris which will lead eventually to an Introduction Report being presented during the weekly Pipeline Committee. This committee is formally the instance when decisions are made as to whether a sub‐fund requires a full‐blown due diligence procedure prior to eventual investment. It gathers all members of the Investments department. Worth noting, reports of rejected funds are also maintained for later review. Fitch highlights the fact that analysts are physically located in the most relevant locations in the world for researching and approaching hedge funds, that is, New York, London and Hong Kong. In 2007, the firm had investments in about 100 vehicles for about 85 authorised investment firms. The distribution of sub‐funds invested in terms of length of track record is fairly comparable to the figures found in the HFR Industry Report for 2007. About 23% of all funds invested had over seven years of history and 15% had less than two years. Hedge Fund Selection The quality of hedge fund selection and portfolio construction is at the core of the value chain in OCM’s investment process. As aforementioned, sourcing is very much relying on senior managers’ and analysts’ market experience and on a rigorous process for determining appropriate new additions to the investment universe. The backbone of the process consists of a proprietary rating scale for the three dimensions of the review; qualitative/strategic, quantitative and operational. Funds are thus either rejected or assigned a quality rating of A, AA or AAA. Fitch notes generally the incremental improvements brought to the process over time and notably since the new investment team has been put in place in 2005. Once the Introduction Report written by analysts confirms specific interest in the proposed sub‐fund, a formal quantitative due diligence is launched by the relevant department in Paris. The objective is two‐fold: 1) to assess whether the subject fund does generate excess return; and 2) to determine to what extent the subject fund adds diversification to the portfolio. The study is done using highly advanced IT systems and models developed in a MatLab‐based environment. A specific proprietary tool, called Aggregated Risk Tool (ART) is used to breakdown returns and risks in order to understand in greater detail the sensitivities to an array of pre‐ specified factors, providing a better understanding of how β (bêta) and α (alpha) are present in each fund. The model notably incorporates enhancers such as the Kalman Filter to correct the distribution for typical errors (erroneous observations) in the collected data. Should the quantitative due diligence prove successful, then the process moves on to the qualitative/strategic due diligence and the operational due diligence (see next section). The on‐site strategic due diligence, with at least one analyst, follows a detailed Q&A questionnaire and reviews in detail the investment process, risk management, capacity issues, liquidity concerns and provides a qualitative assessment of the experience and edge the sub‐manager may demonstrate. Each Olympia Capital Management April 2008  7 
  8. 8. Fund & Asset Manager Rating Group procedure results in an in‐depth and detailed report (20‐30 pages long), rather standardised, and in which the analyst is required to give a formal opinion as to the pros and cons of the manager under review and, ultimately, provide a rating. All reports and documentation on managers and funds are stored in the historical proprietary database, called MRPS. Operational Due Diligence The operational due diligence is led by three dedicated analysts, located in New York and London. They focus their attention on sub‐managers’ business sustainability and quality of the organisation as well as assess of the funds’ legal structure and administration. Again, the analysts first review the answers to a preliminary questionnaire which, among other elements, also endeavours to ascertain that the manager has sane relationships with external service providers such as fund administrators, prime brokers, custodians and legal counsels. The on‐ site visit usually involves two analysts and, as is the case for the strategic DD, results in a rather standardised report (20 pages) and a specific rating. Fitch notes that the operational analysts hold a veto right on any proposed fund/manager – though the CIO and Co‐CIO theoretically may override any such decision, but Fitch has not found any evidence that this ever occurred in the past. As discussed also later, complete reviews are initiated two or three times a year for each sub‐ manager.  Portfolio and Risk Management  Portfolio Construction The task of constructing and managing portfolios is mostly in the hands of the Co‐ CIO, along with the CIO and a senior portfolio manager. The team of three have responsibility over allocation decisions and the main body where such decisions are made is the Strategic Asset Allocation Committee (SAAC). The SAAC meets monthly and gathers all investment and risk management staff. The emphasis is clearly set on the formal and exhaustive review of all current investments, from a bottom‐up perspective. Indeed, a specific and in‐depth report (20‐30 pages) is systematically produced, synthesising the conclusions, observations and analysis components of the meeting, along with the investment decisions that resulted. From a practical point of view, Fitch observes that a great degree of accountability is required from the Co‐CIO whom, in effect, drives the final investment decisions. The SAAC is also interested in defining a strategic asset allocation from a top‐down standpoint, though with relatively less scrutiny. All hedge fund strategies or alternative segments are reviewed and provided with an analysis and conclusion, which takes the form of a general positioning on each of the strategy (bear, bull, neutral). This strategy and sector analysis is complemented by a purely fundamental review of markets, which benefits from the input of an external macroeconomic advisor and the existence of a quarterly Top‐Down Committee where strategies and positioning are reviewed. Generally and in a cohesive manner throughout portfolios, Fitch observes a high degree of discipline in the way OCM purchases and sells underlying funds. The SAAC remains the most official and streamlined process for suggesting the purchase or disposal of a fund, however, any analyst or portfolio manager can request a meeting of the Sell‐List Committee if it is estimated that specific events affecting a particular fund may warrant immediate disposal (such as a shift in style, management change, etc.), with necessary prior approval of CIO or Co‐CIO. Historically, turnover of sub‐funds in OCM fund of funds has remained at relatively low levels, that is, between 10% and 20% on an annual basis. OCM uses a portfolio optimisation tool developed by the Risk/Quant team, called “O2‐Optimizer”, notably during meetings of the SAAC, to help get a rapid (immediate) view of best theoretical portfolios, from a risk‐adjusted return perspective (efficient frontier, with risk captured via VaR). Again, the system is Olympia Capital Management April 2008  8 
  9. 9. Fund & Asset Manager Rating Group refined thanks to enhancers such as the Copula model applied to the t‐distribution and an application of the principles of Black Litterman to bring an additional layer of qualitative judgment on data series (with analysts). Risk Monitoring Risk monitoring at OCM is exercised at multiple levels within the organisation and, as such, is embedded in the broader investment process. First, fund analysts on the strategic/qualitative side are organised by strategy and are assigned a specific coverage perimeter (on average, about 10 to 15 funds per analyst). A very rigorous process for reviewing invested funds and managers has been in place since the reshuffling of the team and process in the course of 2005 and 2006. Indeed, Fitch could substantiate from two to three annual reviews per year for each fund, with the same depth as the initial due diligence. A similar observation was made for the operational analysts’ review process. Ultimately, analysts focus their attention on disruptive events or changes, which could alter OCM’s appraisal of a fund’s appropriateness in the fund of funds. The Sell‐List Committee serves as a useful implementation organ if a rapid reaction is needed. Second, a specific department, located in Paris, is in charge of Risk Management and gathers as well all quantitative research capacities under the single direction of the Deputy CIO. The seven analysts overall contribute upstream and downstream the investment process. From a bottom‐up perspective, market risks are constantly under review, both during the quantitative due diligence process and also after investments, at meetings of the SAAC, in order to assess of the risk factors at play and how funds are reacting (using the ART risk tool). From a top‐down perspective, the SAAC puts to light the necessary changes to asset allocation given current market conditions and also according to the FoHFs risk/return profiles (using the O2 – Optimizer tool). The general technology at hand for research is of great quality, with a clear emphasis set on in‐house development (three dedicated IT engineers). Nevertheless, for the funds providing monthly full transparency (exclusively long/short equity), OCM uses the RiskManager application of RiskMetrics. Worth noting is also an internally‐developed system (OSYRIS) used to extract the recurrent information elements from monthly reports as provided by underlying managers, thus facilitating the reading of key risk and performance indicators and the tracking of such figures. Finally, liquidity risks are assessed monthly at the SAAC and monitored through the publication of liquidity curves for each portfolio, providing a clear picture of the time frame necessary to unwind positions.  Investment Administration  Reporting Fitch notes a good overall level of communication and transparency toward investors. Investment reporting is of good quality, including weekly NAV report and monthly reporting with detailed analysis of risk and performance attribution accompanied by a detailed investment commentary. OCM can also tailor specific reports under certain circumstances. Overall, the team of 15 in charge of sales and marketing (including one in London and two in Zurich) provides adequate client servicing. Unlike some competitors, OCM does not provide investors with factsheets or systematic information packages on underlying hedge funds. Administration Any monthly SAAC meeting results in decisions being made relative to the asset allocation in fund of funds. As a consequence, an order sheet is generated detailing the complete set of information needed by custodians and administrators to operate the orders. Such a document is automatically produced by ProgMan, which is the main Front Office application used for position monitoring. With certain custodians, the procedure for subscriptions and redemptions in the underlying funds with the registrars is completely outsourced, while others may require specific forms to be prepared by OCM and then dealt with by the sub‐custodian. OCM Olympia Capital Management April 2008  9 
  10. 10. Fund & Asset Manager Rating Group receives contract notes from underlying funds as an “interested party” for control purposes. Net Asset Value (NAV) calculation is outsourced to external administrators (CACEIS, FastNet, HSBC, BFT) but all NAVs are internally cross‐checked. NAVs are provided generally on a monthly basis for subscriptions and redemptions (weekly estimated NAVs are also sent out, but purely for information purposes). Worth noting, the flagship investment vehicle, Olympia Star I, allows for weekly subscriptions and redemptions in the USD share class, but for smaller amounts than the usual monthly operations. Reconciliation with administrators and custodians is undertaken monthly. Fitch notes manual interventions for reconciliation or equalisation factors and fee calculations, which justifies a staff of seven operators in Middle and Back Office. Finally, currency management follows a rigorous procedure whereby FX exposures are fully hedged with weekly adjustments. FX orders are handled by Middle Office or the trading desk of Olympia Capital Gestion in Paris and dealt with bank counterparties.  Technology  Front Office Most of the systems used by OCM’s Investments team have been internally developed. ProgMan is the main Front to Middle‐Office system, used for portfolio monitoring and order generation. It is sufficiently flexible, well designed for FoHF management and provides numerous reporting features (liquidity, allocation). Other front‐office tools include quantitative and risk management applications developed by the quant team, namely ART (Aggregated Risk Tool) for return‐based statistical analysis of hedge funds and FoHF, OSYRIS, to extract and monitor indicators from underlying funds’ reports and O2 for allocation optimisation. The external software RiskMetrics is also used marginally to analyse funds that provide full details of their positions. Overall, very few spreadsheets are used by analysts and portfolio managers, who therefore benefit from an efficient and secure platform. Next steps will increase integration between the various applications (for example to use the factor analysis of ART in O2, the optimisation engine). Middle and Back Office The valuation (for mirror NAV) and booking systems have also been internally developed with first developments in years 1990. While adequate for the current volumes, the Aramis application does not provide a high degree of flexibility and efficiency. A project is underway to implement Omega PM, an external application, as a replacement for the back‐office system. Beyond the enhanced flexibility, the new software package will facilitate reconciliation, cash and currency management. Data Management All research reports, documentation and NAV on underlying funds are stored in the historical proprietary database, called MRPS while FoHF’s positions are stored in a dedicated database feeding both the O2 optimiser and ProgMan. Administrative information on underlying funds is essentially stored in Aramis, the back‐office system, for use in the payment and settlement process. Overall, Fitch notes potential for greater centralisation of data. Integration The overall degree of IT integration is adequate but still exhibits some fragmentation notably between risk management tools and between front and midlle/back office tools. The implementation of the new back‐office system is expected to lead to enhanced integration. Olympia Capital Management April 2008  10 
  11. 11. Fund & Asset Manager Rating Group Appendix 1  Key People Marc Landeau M. Landeau holds a BA degree in Economics from the CEO and CIO (founder) University of Geneva in Switzerland and an MBA from Columbia Founded OCM in 1989 University in New York. Involved in financial industry since 1968 M. Landeau was Assistant Vice President in the Private Management Division of Banque de Paris et des Pays‐Bas in Paris from 1968 to 1970, then was CEO of Club Français du Livre from 1970 to 1979 and, before founding OCM in 1989, was Managing Director of Drexel Burnham Lambert SARL in Paris from 1981 to 1989. He was formerly Vice Chairman of AIMA. Jacques Darmon M. Darmon is a graduate from Ecole polytechnique in Paris, Executive Chairman of Olympia Capital from Ecole nationale d’administration in Paris and from Ecole Holding nationale de la statistique et de l’administration economique Joined OCM in 2003 (ENSAE) in Paris. Involved in financial industry since 1987 M. Darmon has held various executive positions at Thomson‐ CSF industrial and technology group from 1980 to 1986, then was Chairman and CEO of Banque de Financement et de Trésorerie in Paris from 1987 to 2003. He joined OCM in 2003 and today chairs the board of directors of Olympia holding structure. Kostas Iordanidis, Ph.D. M. Iordanidis holds a graduate degree in Physics from Co‐CIO Aristotelian University of Thessaloniki (Greece), a MS degree in Joined OCM in 2005 Physics from Georgia Institute of Technology (USA), a MS Involved in asset management since degree in Quantitative Finance from University of Wisconsin‐ 1994 Madison (USA) and a Ph. D in Elementary Particle Physics from the University of Wisconsin‐Madison (USA). M. Iordanidis has held various positions in Physics academic research in different universities in the US from 1988 to 1995. In 1994, he was Principal Portfolio Manager and Fixed Income Research Analyst at Lincoln Capital Management in Chicago, USA, until 1998. He was co‐founder and a managing member of hedge fund ZI Investments LLC in Chicago from 1999 to 2002 before being Vice President and Head of Asset Allocation at Julius Baer Asset Management in Zürich from 2003 to 2005. He joined OCM in 2005 to take on a predominant role as Co‐CIO and main actor of the SAAC asset allocation decision‐making committee. Guido Bolliger, Ph.D. M. Bolliger holds a BS degree in Management Science from the Deputy CIO University of Neuchatel in Switzerland, a MS degree in Head of Risk Management and Economics and Finance from the University of Geneva in Quantitative Research Switzerland. He has been through the Doctoral Program in Joined OCM in 2006 Finance of the International Center FAME in Switzerland Involved in asset management since before obtaining his Ph.D. in Finance from the University of 1995 Neuchatel. M. Bolliger has been a Mutual Fund Manager at Banque Cantonale Vaudoise in Lausanne, Switzerland, in 1995, then was a Index Fund Manager and Quantitative Analyst at Synchony SA in Geneva from 1996 to 1998. Since 2003 onwards, he has been assistant and then Invited Professor of Finance at the University of Neuchatel in Switzerland. From 2004 to 2006, he was also Senior Quantitative Analyst at Julius Baer Investment Fund Services in Zürich. He joined OCM in January 2006 and today heads the Quantitative Research department as well as Risk Management with the title of Deputy CIO. Arnaud Beyssen M. Beyssen is a Certified Public Accountant (CPA) and holds an CFO advanced degree in accounting and finance (DESCF) from Joined OCM in 2001 Institut Supérieur de Commerce de Paris (France). Involved in financial industry since 1999 Prior to joining OCM in 2001, M. Beyssen had been an auditor at F.G.S.C. in Paris from 1996 to 1999 and then Senior Auditor at Deloitte Touche Tohmatsu in Paris until 2001. Source: OCM Olympia Capital Management April 2008  11 
  12. 12. Fund & Asset Manager Rating Group Appendix 2  Main Funds Historical volatility since Target Fund AUM inception return (Dec 2007) Registration Inception (USDm) Profile (annualised) (%)a (in %, p.a.) Olympia star I Off‐shore Jan 1991 1,733 Diversified FoHF 6 LIBOR + 3‐5 Olympia star II Off‐shore Aug 1995 955 Diversified FoHF 6 LIBOR + 3‐5 Olympia Off‐shore Aug 2001 137 Diversified FoHF 5 LIBOR + 3‐5 Diversified Strategies Fund Olympia Special Off‐shore Mar 2006 164 Diversified 6 10‐15 Opportunities concentrated FoHF Olympia France Feb 2005 118 Diversified FoHF 5 EONIA + 4 Stratégies Diversifiées Olympia Global Off‐shore Jan 2007 45 Theme FoHF 5 LIBOR + 5‐8 Macro Fund Olympia Market Off‐shore Jan 2007 72 Theme FoHF 4 LIBOR + 3‐4 Neutral Fund Olympia Off‐shore Jan 2007 40 Theme FoHF 4 LIBOR + 6‐9 Long/Short Equity Fund a Historical volatility figures are ex‐post monthly data provided by the asset management company The performance measures noted in the above chart represent historical measures. Readers are reminded that past performance is no guarantee of future performance Source: OCM Copyright © 2008 by Fitch, Inc., Fitch Ratings Ltd. and its subsidiaries. One State Street Plaza, NY, NY 10004.Telephone: 1‐800‐753‐4824, (212) 908‐0500. Fax: (212) 480‐4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. All of the information contained herein is based on information obtained from issuers, other obligors, underwriters, and other sources which Fitch believes to be reliable. Fitch does not audit or verify the truth or accuracy of any such information. As a result, the information in this report is provided "as is" without any representation or warranty of any kind. A Fitch rating is an opinion as to the creditworthiness of a security. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed, suspended, or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax‐exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of Great Britain, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. Olympia Capital Management April 2008  12 

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