INVESTOR PRESENTATION
Q2 2012

Petrarca Capital Management, LLC
Global Financials Sector Fund
Strictly Confidential. | Not...
PETRARCA OVERVIEW
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

MANAGING PARTNER...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
IDEA GENERATION
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
PETRARCA OVERVIEW

INVESTMENT PROCESS

IDEA GENERATION

PORTFOLIO CONSTRUCTION

RISK MANAGEMENT

SUMMARY

FUND INFORMATION...
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Petrarca capital test pla

  1. 1. INVESTOR PRESENTATION Q2 2012 Petrarca Capital Management, LLC Global Financials Sector Fund Strictly Confidential. | Not For Distribution to the General Public.
  2. 2. PETRARCA OVERVIEW
  3. 3. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION INTRODUCTION TO PETRARCA CAPITAL Strategy STRATEGY Managing Partners financials sector Investment Process Portfolio Characteristics Alignment of Interests Page #
  4. 4. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION INTRODUCTION TO PETRARCA CAPITAL Strategy MANAGING PARTNERS Managing Partners Investment Process Portfolio Characteristics Alignment of Interests Page # Robert Lacoursière, former Partner and Head of Global Banks at Paulson & Co. and James Fotheringham, former Senior Vice President at Paulson & Co. Managing Partners have four decades of aggregate experience analyzing financial securities up and down the capital structure, across countries and continents, over economic cycles and during financial crises Managing partners were responsible for ~$10bn in as many as 70 financials sector positions in each of their four years at Paulson & Co. (2008-2012)
  5. 5. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION INTRODUCTION TO PETRARCA CAPITAL Strategy INVESTMENT PROCESS Managing Partners Investment Process Portfolio Characteristics Alignment of Interests Page # idea generation, portfolio construction, risk management and ongoing portfolio rebalancing
  6. 6. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION INTRODUCTION TO PETRARCA CAPITAL Strategy PORTFOLIO CHARACTERISTICS Managing Partners Investment Process Asian, as well as North American financials securities invest higher in the capital structure Portfolio Characteristics gross exposure) Alignment of Interests ealthy mix of investment themes (macro, sector, months) Page #
  7. 7. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION INTRODUCTION TO PETRARCA CAPITAL Strategy ALIGNMENT OF INTERESTS Managing Partners Investment Process Portfolio Characteristics Alignment of Interests Page # net worth invested in the fund
  8. 8. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION MANAGING PARTNER BIOGRAPHIES Placeholder ROBERT LACOURSIÈRE Managing Partner, Chief Investment Officer and Coportfolio Manager Prior to co-founding Petrarca, Robert was a partner at Paul son & Company where he was Head of the Global Banks Team. Robert has over years experience in the global financials sector. Prior to joining Paulson in 2008, Robert covered US Mortgage and Specialty Finance as a widely-respected sell-side research analyst at Banc of America Securities. Prior to that Robert was Head of Financial Strategy at Capital One, and covered US mid-cap banks at Lehman Brothers where he had also been the Director of Latin American uity Research. Robert headed the Latin American Financial Institutions Research Group at Bear Stearns from New York as well as at Santander Securities from Mexico City. Before his time on the sell side, Robert worked at the Bank of Nova Scotia in Toronto as a Manager of Latin American Investments. Robert has an M.B.A. from I.E.S.E. in Spain and a B.A. from the University of Western Ontario in Canada. Robert has been married 21 years and has two daughters, aged and Page #
  9. 9. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION MANAGING PARTNER BIOGRAPHIES dent at Paulson & Company covering the global financials sector from 2008 to 2012. Placeholder JAMES FOTHERINGHAM Managing Partner and Co-Portfolio Manager Page # gage and Specialty Finance from New York and European banks from London. Kingdom, as well as M.Sc. and B.Sc.H. degrees from Queen’s University in Canada nine and seven.
  10. 10. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY MANAGING PARTNER BIOGRAPHIES EXPERIENCE Paulson & Company 2008-2012 The global financials sector Placeholder JAMES FOTHERINGHAM Managing Partner and Co-Portfolio Manager Goldman Sachs US Mortgage and Specialty Finance Oxford University in the United Kingdom Queen’s University in Canada FAMILY LIFE Page # FUND INFORMATION
  11. 11. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION MANAGING PARTNER EXPERIENCE Placeholder FINANCIALS SECTOR GLOBAL EVENTS TIMELINE Placeholder ROBERT LACOURSIÈRE JAMES FOTHERINGHAM Managing Partner, Chief Investment Officer & Co-Portfolio Manager Managing Partner, Co-Portfolio Manager Canada Europe 1988 1990 1992 1994 BRADY BOND PLAN MEXICAN BANK PRIVATIZATIONS IESE MBA TEQUILA CRISIS BANK OF NOVA SCOTIA Manager, Latin America Invesments SANTAN 1996 1998 2000 BANK OF NOVA SCOTIA Manager RUSSIAN DEFAULT BEAR STEARNS D Phil ASIAN CRISIS LEHMAN BROTHER 2002 2004 EMERGING MARKET FINANCIALLIBERALIZATION 2006 US SUBPRIME BUBBLE CAPITAL ONE Head Financial Strategy BANK OF AMERICA SECURITIES Principal, U.S. Mortgage, Consumer & 2008 GREAT FINANCIAL CRISIS 2010 2012 Page # BANK BAILOUTS PIIGS SOVEREIGN CRISIS Partner, Head of Global Banks SVP, Global Banks Latin America U.S. Global
  12. 12. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION PROPOSED ORGANIZATION Robert Lacoursière James Fotheringham Managing Partner2 Chief Investment Officer (CIO) Manager Chief Operating Officer (COO) Managing Partner2 Manager Trader Analyst Service Providers PRIME BROKERS Financial Controller 1 Organizational structure will broaden to support anticipated growth in assets under management 2 Managing partners share portfolio responsibility; CIO has ultimate portfolio discretion Page # Office Manager Goldman, Sachs & Co. Credit Suisse LEGAL COUNSEL Seward & Kissel LLP (U.S.) Ogier (Cayman) AUDITOR TBD ADMINISTRATOR TBD BANK TBD
  13. 13. IDEA GENERATION
  14. 14. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION GEOGRAPHICAL MONITOR (illustrative, from Q4’11) Thailand Financials are a levered play on economic cycles We focus on countries levered to changes in global growth, and financials securities most sensitive to their domestic economies We time investments according to macro inflection signals and expected policy responses HIGH OPPORTUNITY MODERATE OPPORTUNITY LOCAL MACRO CONVICTION REQUIRED Financials Price Relationship to Domestic Economy2 80 Australia Philippines South Korea USA Canada Chile Singapore Spain Sweden Hong Kong China 60 Turkey Netherlands Peru Germany France India Argentina Poland UK Italy Russia Colombia Mexico Hungary Czech Republic Norway Japan 40 Switzerland Denmark -1x 0x 1x 2x x Bubbles sized in proportion to market capitalization 4x x Country Sensitivity to Global Economic Growth1 1. Conse uent change in each country’s annual growth in nominal GDP in USD from a 100bps change in annual growth in nominal GDP in USD of the G7 countries plus China. Bloomberg. 2. Relationship (R2) between uarterly share price performance of financials stocks versus annual growth in nominal domestic GDP. Sour Page # Brazil 70 MODERATE OPPORTUNITY GLOBAL MACRO CONVICTION REQUIRED LOW OPPORTUNITY Malaysia Taiwan 6x 7x 8x
  15. 15. PETRARCA OVERVIEW INVESTMENT PROCESS IDEA GENERATION PORTFOLIO CONSTRUCTION RISK MANAGEMENT SUMMARY FUND INFORMATION CAPITAL ADEQUACY MONITOR (illustrative, from Q4’11) x 28x Capital is an important input into our sector analysis framework We gauge capital by gross tangible assets (US GAAP) to tangible common Relative leverage allows us to contextualize existing and potential regulatory forbearance Leverage differs among regions, as well as among companies within regions Financial Companies’ Leverage1 TA (US GAAP) TCE x SHORT ABOVE THE LINE Risk of share dilution or weaker growth 26x LEVERAGE THRESHOLD 20x 18x x BUY BELOW THE LINE Expectation for capital return or stronger growth 14x 12x 10x x 0x Canada Europe 1. Leverage calculated as tangible assets under US GAAP over tangible common e uity; tangible assets are estimated wherever US GAAP e uivalents are not disclosed. Sour Company reports, Petrarca estimates. Page # Asia LatAm USA

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