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Seix investment advisors llc citywire multi-sector ars 06.14.12

  1. 1. Seix Investment Advisors LLC Multi-Sector Absolute Return Strategy June 14th & 15th, 2012Representing Seix Investment Advisors LLC: Jim Keegan, Chief Investment Officer & Chief Executive Officer
  2. 2. Multi-Sector Absolute Return Strategy CONTENTS  Organizational Review  Multi-Sector Absolute Return Strategy  Credit Environment  Seix Multi-Sector Absolute Return Fund L.P.  AppendixSeix Investment Advisors LLC 1
  3. 3. ORGANIZATIONAL REVIEWSeix Investment Advisors LLC 2
  4. 4. Firm Profile Founded: 1992 Location: Upper Saddle River, New Jersey Firm Assets: Total Assets $26.9 Billion (5-31-12) ‒ Investment Grade: $13.1 Billion ‒ High Yield: $13.8 Billion Key Organizational  Institutional Fixed Income Boutique Characteristics:  Performance-Oriented Culture  Seasoned Fixed Income Professionals  Clearly Defined and Well Executed Investment Style Strategies:  Traditional Investment Grade and High Yield Fixed Income  Specialized Credit Funds Ownership: SEC Registered Investment Adviser Indirectly Owned by SunTrust Banks, Inc. Strong Operating Agreement Ensures Complete Independence and Investment and Business Autonomy.  Key Investment Professionals Participate in an Equity Ownership Plan Designed to Align Client and Business Interests.Seix Investment Advisors LLC 3
  5. 5. Investment Strategies High Yield Strategies Investment Grade Strategies  Flagship High Yield (BB & B Only)  Core Bond Management  High Yield Unconstrained  Core Plus (Plus basket can include HY Bonds, HY Loans, EMD & Non-Dollar)  High Yield Bank Loans  Corporate Bond Management  CLO Collateral Management – (Mountain View, Baker Street, Grand Horn)  Intermediate Bond Management  Credit Opportunities Fund  Long Duration Management  Multi-Sector Absolute Return Strategy (Active Credit Strategy with Dynamic Allocation Among Credit Sectors – Investment Grade, High Yield & Bank Loans) The Cornerstone of All Seix Portfolio Strategies is Rigorous Fundamental Credit Research, Conducted by a Seasoned Team of Bottom-Up Specialists.Seix Investment Advisors LLC 4
  6. 6. MULTI-SECTOR ABSOLUTE RETURN STRATEGYSeix Investment Advisors LLC 5
  7. 7. Potential Problems For Fixed Income Investors in a Low Interest Rate Environment Difficult to Reach Investment & Spending Targets (i.e. Low Expected Returns) Solution: Invest in Higher Yielding Sectors While Controlling Risk  Higher Yields Generate More Income  However, Higher Yields Accompanied by Increasing Risk Levels Fixed Income’s Role as Portfolio Stabilizer and Principal Protector is Challenged if Interest Rates Rise (i.e. Price Risk) Solution: Shorter Duration, Floating Rate Sectors or Increase Yield  Shorter Duration Typically Reduces Yield  High Yield Bank Loans Provide Excess Yield, with Limited Interest Rate Risk  Higher Yields From Investment Grade and High Yield Corporates Cushion Price Declines Due to Rising Rates  Higher Yield Spreads Tend to Tighten in Rising Rate PeriodsSeix Investment Advisors LLC 6
  8. 8. Multi-Sector Absolute Return Strategy Multi-Sector Absolute Return Strategy Active Response and Solution For Investing in a Low Yield EnvironmentSeix Investment Advisors LLC 7
  9. 9. Multi-Sector Absolute Return Approach  Allows Manager Flexibility To Actively Use and Rotate Among Sectors, Taking Advantage of Relative Value to Enhance Portfolio Yield, While Avoiding Risks Associated with Using Only One Sector  Ability to Actively and Opportunistically Manage Risk Among Sectors Such as High Yield, Investment Grade and Bank Loans  By Substantially Avoiding Government Sectors (Treasuries, Agencies & MBS), Direct Exposure to the Most Interest Sensitive Sectors Is Avoided  Primarily a Credit Driven Strategy with Duration FlexibilitySeix Investment Advisors LLC 8
  10. 10. Potential Fixed Income Sectors Where to Look For Yield in Fixed Income Barclays US Treasury Index 0.9% Barclays Intermediate Govt/Credit Index 1.3% Barclays Aggregate Index 2.0% Barclays Corporate Index 3.3% CS Institutional Lev Loan Index 5.2% BofA Merrill High Yield Index 7.9% Seix Multi-Sector Absolute Return Strategy 4.9% Yields as of 5/31/12 Data Source: Barclays Capital, BofA Merrill Lynch, Credit SuisseSeix Investment Advisors LLC 9
  11. 11. Corporate Bonds Act As A Cushion To Interest Rate Movement 7.0 U.S. Corporate Bond Index Spread 10-Year Treasury Yield 6.5 6.0 5.5 5.0 4.5Percent (%) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Average 1-Year Trailing Correlation Coefficient 0.5 -0.35 0.0 Jul-11 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jan-02 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Data Source: Barclays CapitalSeix Investment Advisors LLC 10
  12. 12. CREDIT ENVIRONMENTSeix Investment Advisors LLC 11
  13. 13. Investment Opportunity In the Aftermath of the 2008-2009 Global Credit Crisis, Attractive Opportunities Remain for Investment Managers with Proven Credit Research Capabilities  Current Credit Spreads Provide Attractive Relative Value  Despite Significant Rally, Investment Grade and High Yield Spreads Remain Above Historic Average  Companies Have Been Able to Issue Bonds to Lower Financing Costs and Extend Maturities  Bank Loans Provide Unique Opportunity to Take Advantage of Attractive Spreads at the Senior Part of the Capital Structure in a Floating Rate InvestmentSeix Investment Advisors LLC 12
  14. 14. Investment Environment RELATIVE VALUE ACROSS SECTORS Index Comparisons OAS Since Index Inception* OAS Averages as of 5/31/12 5 Year 10 Year Average Since High Low 5/31/12 Average Average Inception Corporate Bond 607 bps 51 bps 209 bps 240 bps 176 bps 133 bps High Yield 1833 bps 235 bps 671 bps 745 bps 596 bps 529 bps BB High Yield 1278 bps 130 bps 502 bps 541 bps 421 bps 355 bps B High Yield 1742 bps 228 bps 658 bps 708 bps 569 bps 528 bps Bank Loans ** 767 bps 238 bps 542 bps 469 bps 379 bps 350 bps *Barclays Capital Indexes were used for all of the above except for Bank Loans which is represented by the CS Institutional Leveraged Loan Index. High Yield Index, BB Index, and B Index OAS data from 1/31/94, Bank Loan Index Inception 1/31/92, Corporate Index Inception 6/30/89, ** Bank Loan Discount Margin to Maturity Spread vs. TSY for all others Data Source: Barclays Capital, Credit SuisseSeix Investment Advisors LLC 13
  15. 15. Investment Grade Corporate Environment  Outlook for Corporate Issuers Remains Favorable Although Clouds Are on the Horizon ‒ Expect Spreads to Stay Volatile as Global and Domestic Considerations Weigh on Valuations ‒ Fundamentals Remain Good Although the Peak in Credit Quality Has Likely Already Passed ‒ Technicals Are Still Strong as Corporates Remain the Primary Place to Get Long Maturity Spread ‒ Idiosyncratic Risk Is Increasing Although It Has Primarily Been in the More Benign Form of Stock Buybacks and Dividend Increases as Opposed to LBOs ‒ Continue to Think Money Center Banks Are Uniquely Exposed to European Contagion  Strategy Remains Focused on Companies with Defensive Revenue Streams that Offer Attractive Risk Adjusted Returns ‒ We Will Attempt to Capitalize on Market Volatility by Purchasing Select Credits that Come with a Large Concession in the New Issue Market ‒ Overweight in Technology, Pipelines and Gold Miners; Underweight in Banking, Electric Utilities and Pharmaceuticals ‒ Have Gone Down in Capital Structure to Buy Several Attractive New Issue PreferredsSeix Investment Advisors LLC 14
  16. 16. High Yield Environment  The Fundamentals of High Yield Issuers Remain Solid ‒ High Yield New Issuance Is on Pace to Register Another Exceptional Year ‒ The Majority of the Proceeds Are Being Used to Refinance Shorter Maturity Debt ‒ Issuers Continue to Be Prudent; They Are Controlling Costs and Reining in M&A Activity that Might Increase Leverage ‒ Balance Sheets Are Still Improving, Leverage Ratios Are Falling and Rating Agency Upgrades Are Exceeding Downgrades for the Third Straight Year  Given the Strengthening of Balance Sheets, Default Rates Are Expected to Remain Low ‒ After Peaking at Double Digit Rates in 2009, Most Forecasts for Defaults Are 3% or Below for the Next Two Years ‒ Compared to Treasuries, Current Interest Rates More than Compensate High Yield Investors for the Low Level of Expected DefaultsSeix Investment Advisors LLC 15
  17. 17. Yield Percent (%) 0 5 10 15 20 25 -5 -15 -10 -20 3.0 3.5 4.0 4.5 5.0 5.5 6.5 7.0 7.5 8.0 6.0 Mar-03 Mar-03 Sep-03 Sep-03 Mar-04 Mar-04 Sep-04 Sep-04 Mar-05 Mar-05 Sep-05 Sep-05 Mar-06 Mar-06 Sep-06 Sep-06 S&P 500 Free Cash Flow Yield Trailing 12 Months-Year/Year Mar-07 Mar-07 Sep-07 Trailing 12 Months-Quarter/Quarter Sep-07 Mar-08 Mar-08 Sep-08 Sep-08 STRONG CASH FLOW Mar-09 Mar-09 STEADY REVENUE GROWTH Sep-09 Seix Investment Advisors LLC Sep-09 Mar-10 Mar-10 Sep-10 Sep-10 Mar-11 Mar-11 Sep-11 Sep-11 Mar-12 Mar-12 Ratio Percent (%) 1.0 1.5 1.8 2.0 2.3 2.5 2.8 3.0 1.3 5.0 6.0 7.0 8.0 9.0 10.0 Mar-03 Mar-03 Sep-03 Sep-03 Mar-04 Mar-04 Sep-04 Sep-04 Mar-05 Mar-05 Trailing 3 Months Sep-05 Sep-05 Trailing 12 Months Mar-06 Mar-06 Corporate Credit Outlook for S&P 500 Companies Is Solid Sep-06 Sep-06 Mar-07 Mar-07 Sep-07 Sep-07 Mar-08 Mar-08 RECORD MARGINS LOWER LEVERAGE Sep-08 Sep-08 Mar-09 Debt / EBITDA Mar-09 Sep-09 Sep-09 Mar-10 Mar-10 Sep-10 Sep-10 Mar-11 Mar-11 Sep-11 Sep-11 Net Debt / EBITDA Mar-12 Mar-12 Data Source: Bloomberg16
  18. 18. Declining Debt Issuance INVESTMENT GRADE CORPORATES NET DEBT ISSUANCE 950 New Issues 900 Redemptions 850 Net 800 750 700 650 600US $ billion 550 500 450 400 350 300 250 200 150 100 50 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E Data Source: Bloomberg Seix Investment Advisors LLC 17
  19. 19. High Yield Environment CHANGE IN BOND AND LOAN MATURITY SCHEDULE OVER THE LAST 38 MONTHS 12/31/08 – 2/29/12 Issuers Have Been Aggressively Pushing Out Maturities $300 $251 $256 $231 $200 Total = -$636 Billion $100 $126 $161 $ Billions $0 -$100 -$167 -$200 -$222 -$247 -$300 2012 2013 2014 2015 2016 2017 2018 2019 2020 or later Data Source: JP MorganSeix Investment Advisors LLC 18
  20. 20. High Yield Environment HIGH YIELD SPREADS VS. DEFAULT RATE 12/31/86 – 5/31/12 Spreads Imply Default Rate Equal to JP Morgan’s Worst Case Forecast 16% 2000 Default Rate High Yield Spreads 14% 12% 1500 6.9% * Spread To Worst 10% Implied Default Rate Default Rate 8% 5/31/12 1000 25 Year 22 Year 720 Bps 5.5% Avg = 4.3% Avg = 583 Bps Recession 6% Forecast 4% 500 YE13 2% Default Rate Forecast 2% 0% 0 Dec-86 Dec-88 Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 * Actual Spread - Excess Spread = Implied Default Loss / Recovery Rate = Implied Default Rate 720 307 413 (100-40)% 6.9% Data Source: J.P. MorganSeix Investment Advisors LLC 19
  21. 21. Bank Loan Environment BANK LOAN DISCOUNTED SPREADS VS. DEFAULT RATES 12/31/99 – 5/31/12 Spreads More Than Compensate for Low Default Rate 2400 12.0% Institutional Bank Loan 4 Yr. Discounted Spread 2200 (Left Axis) Lagging 12 Month Bank Loan Default Rate 2000 10.0% (Right Axis) 1800Bank Loan 4 Yr Discounted Spread (bp) Lagging 12 Month Default Rate (% par) 1600 8.0% 1400 1200 6.0% 1000 800 4.0% Average Spread 448 bps 600 603bp 400 2.0% 200 1.05% 0 0.0% Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Data Source: Standard & Poor’s LCDSeix Investment Advisors LLC 20
  22. 22. Diversification Benefits TOTAL RETURN CORRELATIONS (1/1/92 – 3/31/12) Barclays Barclays Barclays CS Inst’l Russell Barclays 10 YearIndex High Yield U.S Corporate Lev Loan S&P 500 2000 REITs Gov’t TreasuryBarclays High Yield 1.000Barclays U.S. Corporate 0.537 1.000CS Institutional Lev Loan 0.681 0.369 1.000S&P 500 0.593 0.264 0.413 1.000Russell 2000 0.624 0.185 0.442 0.780 1.000REITs 0.601 0.305 0.479 0.533 0.640 1.000Barclays Government -0.074 0.694 -0.153 -0.118 -0.217 -0.040 1.000Barclays 10 Yr Treasury -0.119 0.663 -0.185 -0.142 -0.239 -0.062 0.980 1.000 Given Imperfect Correlation between High Yield and Other Major Asset Classes, Adding High Yield to Asset Allocation Can Increase Return per Unit of Risk. Source: Barclays Capital, S&P 500 , Russell, Bloomberg Seix Investment Advisors LLC 21
  23. 23. Investment Universe Risk vs. Reward 20¼ Years Ending 3/31/12* 11.0% 10.0% BB High Yield Russell 2000 9.0% BC High Yield Russell 3000 NASDAQReturn (Annualized) 8.0% S&P 500 BBB Corporate BC Corporate B High Yield 7.0% CCC High Yield BC Aggregate 6.0% CS Inst’l Lev Loan 5.0% 4.0% T-Bills (3 month) 3.0% 0% 5% 10% 15% 20% 25% 30% Risk (Annualized Standard Deviation) * Since inception of the CS Institutional Leveraged Loan Index. High Yield quality indices are subcomponents of the Barclays High Yield Index. Data Source: Barclays Capital, Bloomberg, CSSeix Investment Advisors LLC 22
  24. 24. Corporate Credit Investment Philosophy Seix’s Objective in Corporate Credit Investing is to Deliver an Attractive Long Term Spread Above the Benchmark by:  Capturing the Majority of the Upside  Avoiding the Negative Impact of Credit Events  Reducing Risk in Speculative MarketsSeix Investment Advisors LLC 23
  25. 25. Seix Corporate Bond Management vs. Corporate Bond Universe 10.0% 8.0% 1.00 9.0% 5.0% 1.00  9.0% 0.74 8.4% 0.78 6.25% 4.0%   8.0% 0.48 7.8% 0.56  4.5% 3.0%  7.0% 0.22 7.2% 0.34 2.75% 2.0% 6.0%  -0.04 6.6%   0.12 5.0% 1.0% -0.30 6.0% 1.0% -0.10 5-Year Periods Ending 3/31/12 10-Year Periods Ending 3/31/12 Tracking Information Tracking Information Returns Error Ratio Returns Error Ratio 5th Percentile 9.67% 7.40% 0.96 8.70% 4.72% 0.97 25th Percentile 8.36 4.71 0.60 7.88 3.12 0.61 Median 7.84 3.01 0.35 7.31 2.18 0.33 75th Percentile 7.03 2.09 0.03 6.89 1.53 0.15 95th Percentile 5.10 1.11 -0.26 6.42 1.03 -0.08Seix Corporate Bond  8.71% 2.09% 0.85 7.65% 1.53% 0.68 %Tile Ranking 18 74 13 33 74 22 Barclays Corporate %Tile Ranking  6.94% 77 6.58% 91 Performance is shown gross of investment advisory fees. Please see the Composite Performance Full Disclosure Presentation in the appendix for more information. Past performance is not indicative of future results. Data Source: eVestment Alliance Seix Advisors 24
  26. 26. Investment Results UP / DOWN MARKET CAPTURE (1/1/02 – 3/31/12) Goal: Capture Majority Of The Upside And Avoid Credit Events 6% Seix High Grade Corporate Bond Strategy Barclays Index* 4% 3.23% 3.08% 1.84% 1.60% 2% Average Down Market Quarter (13 Quarters) 0% Average Up Average Market Quarter Quarterly Return (28 Quarters) (41 Quarters) -1.16% -2% -1.58% -4% Up Capture (105%) Down Capture (73%) Total* Barclays U.S. Credit Index from inception to 12/31/04. Barclays U.S. Corporate Investment Grade Index thereafter. Performance is shown gross of investment advisory fees. Past performance is not indicative of future results. The above information is shown as supplemental information only and complements the fully compliant presentations. Data Source: Barclays Capital Seix Advisors 25
  27. 27. Seix High Yield Strategies vs. Peer Group Universe Since Inception Ending March 31, 2012 10.0% 10.0% 0.60 9.5% 8.5% 0.60  8.2%  0.42 0.40 8.5% 8.75%  7.0% 6.4% 0.20 7.5% 0.24  7.5% 5.5% 4.6% 0.00 6.5%  0.06  6.25% 4.0% 2.8% 5.5% -0.12 -0.20 5.0% 1.0% -0.40 4.5% 2.5% -0.30 High Yield Unconstrained Flagship High Yield (10/1/04-3/31/12) (7/1/97-3/31/12) Return Tracking Error Information Ratio Return Tracking Error Information Ratio 5th %Tile 9.83% 9.61% 0.54 9.01% 8.13% 0.56 25th %Tile 8.79 5.59 0.21 8.13 4.72 0.25 Median 7.98 3.99 -0.02 7.58 3.78 0.14 75th %Tile 7.22 2.83 -0.14 6.68 3.20 -0.08 95th %Tile 5.92 1.93 -0.38 5.44 2.52 -0.28 Seix 9.73% 3.64% 0.46 8.14% 5.02% 0.22 %Tile Rank 7 58 7 24 21 29Performance is shown gross of investment advisory fees. The above information is shown as supplemental information only and complements the fully compliant presentations. Past performance is not indicative of future results. Data Source: eVestment AllianceSeix Investment Advisors LLC 26
  28. 28. Seix Bank Loan Fund vs. Lipper Loan Participation Universe Periods Ending March 31, 2012 4.5% 5.0% 5.0%   3.7% 3.0% 3.0%  2.9% 1.0% 1.0% 2.1% -1.0% -1.0% 1.3% -3.0% -3.0% 0.5% -5.0% -5.0% 1-Year 5-Years Since Inception (3/31/11-3/31/12) (3/31/07-3/31/12) (3/1/06-3/31/12) Return Return Return 5th %Tile 4.03% 4.08% 4.72% 25th %Tile 3.58 3.37 4.03 Median 3.13 2.83 3.37 75th %Tile 2.44 2.17 2.79 95th %Tile 0.97 -4.72 -2.99 Seix 3.31% (Net) 3.86% (Net) 4.39% (Net) %Tile Rank 40 8 7 Past performance is not indicative of future results. Data Source: Lipper Analytical ServicesSeix Investment Advisors LLC 27
  29. 29. Investment Results UP / DOWN MARKET CAPTURE 14¾ Years Ending 3/31/12 (Since Inception) Proven Ability To Truncate Downside Risk 4.06% Seix Flagship High Yield BofA ML High Yield Cash Pay Index 3.42% 3% 2.04% 1.86% Average Down 1% Market Quarter (16 Quarters) Average Up Average -1% Market Quarter Quarterly Return (43 Quarters) (59 Quarters) -1.68% -3% -4.05% -5% Up Capture (84%) Down Capture (41%) Total Performance is shown gross of investment advisory fees. Past performance is not indicative of future results. The above information is shown as supplemental information only and complements the fully compliant presentations. Data Source: Merrill LynchSeix Investment Advisors LLC 28
  30. 30. SEIX MULTI-SECTOR ABSOLUTE RETURN FUND L.P.Seix Investment Advisors LLC 29
  31. 31. Seix Multi-Sector Absolute Return Fund L.P. Background: In March 2009, Seix Launched the CDF Series II to Capture the Dislocation in Credit Through Bottom-Up Research and Active Rotation Between Investment Grade & High Yield Credit Current Objective: The Seix Multi-Sector Absolute Return Fund’s Objective is to Provide Enhanced Returns by Actively Rotating Between Investment Grade, High Yield and Bank Loans Through Dedicated Exposure to the Credit Markets  Absolute Return Focus  Invest in Corporate Bonds and Loans that Meet our Rigorous Credit Criteria  Portfolio Turnover Driven by Credit Deterioration or Relative Value Assessments  No Leverage, Derivatives or Short Sales  Available in a Limited Partnership or Separately Managed Account* * LP minimum is $1mm, SMA minimum is $50 millionSeix Investment Advisors LLC 30
  32. 32. Investment Policy Group (IPG) TOP DOWN PROCESS Macro Themes Model Portfolio  Broad Economic Trends  Yield Curve Position (Moderate Except at Extremes)  Target Sector Weights  Business/Credit Cycle Analysis  Treasuries, Agencies & TIPS  MBS, CMBS & ABS  Federal Reserve Policy  Investment Grade Corporate Bonds Primary  High Yield Corporate Bonds and Loans Focus  Interest Rates/Inflation  Emerging Market Debt  Non USD Sovereign Debt The IPG Meets Weekly To Discuss Broad Macro Themes & Determine Model Portfolio Structure.Seix Investment Advisors LLC 31
  33. 33. Investment Policy Group (IPG) BOTTOM UP PROCESS Micro Themes Model Portfolio  Sector Trends  Sector Allocation  Industry Dynamics  Industry Focus  Quality Spreads  Quality Breakdown  Supply/Demand  Senior vs. Subordinate  Volatility/Liquidity  Liquidity Preference Determination of Relative Value and Risk Drive Allocation Decisions to Optimize Yield While Controlling RiskSeix Investment Advisors LLC 32
  34. 34. Multi-Sector Allocation Ranges  Investment Grade Bonds 40% to 80%  High Yield Bonds & Loans 20% to 60%  CCC Rated Securities Maximum 20%Seix Investment Advisors LLC 33
  35. 35. Seix Multi-Sector Absolute Return Fund, L.P. Active Sector Allocation, While Maintaining a Quality Bias 85 Investment Grade High Yield Bank Loans Cash 80 75 70 65 60 55 50Percent (%) 45 40 35 30 25 20 15 10 5 0 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Seix Investment Advisors LLC 34
  36. 36. Seix Multi-Sector Absolute Return Fund L.P. – Investor Breakdown  Fund Launched on March 2, 2009  Fund Breakdown (as of June 1, 2012): - AUM: $151 million - Investors: 22 - Investor Types: Endowments/Foundations: 62% Public Funds: 28% HNW/Family Trusts: 10%Seix Investment Advisors LLC 35
  37. 37. Investment Results Annualized Periods Ending 3/31/12 Seix Multi-Sector Absolute Barclays Return Fund L.P. (net) Corporate Index 1 Year 6.1% 9.5% 2 Years 9.3 8.5 3 Years 13.0 13.3 Since Inception (3/2/09) 12.9 12.8 Calendar Year Returns Seix Multi-Sector Absolute Barclays Return Fund L.P. (net) Corporate Index 2009 (Partial from 3/2) 17.7% 20.5% 2010 13.1 9.0 2011 5.2 8.1 2012 (3/31) 3.9 2.1 Past performance is not indicative of future results. The above information is shown as supplemental information only and complements the fully compliant presentations.Seix Investment Advisors LLC 36
  38. 38. Corporate Credit Investment Process I. Industry Relative Strength  Industry Specific  Credit Cycle AnalysisVII. Target Spread & Sell Discipline II. Business Risk Analysis  Price Target & Downside Tolerance  Management Team  Price Performance vs. Peers  Competitive Position  Red Flags INVESTMENT VI. Capital Structure Analysis PROCESS III. Financial Risk Assessment  Senior vs. Subordinate  Liquidity  Holding Cos. vs. Operating Cos.  Cash Flow Generation  Leverage Ratios V. Investment Thesis IV. Proprietary Debt Ratings  Expectations  Relative Credit Worthiness  Catalysts  Use Agencies for Information  Exit Strategy Seix Investment Advisors LLC 37
  39. 39. Investment Grade Composite Performance Summary Periods Ending 3/31/12 1 3 5 10 Since Year Years Years Years Incept. Inception: 10/1/95 Corporate Bond 10.28% 12.96% 8.71% 7.65% 7.25% Barclays Corporate Index 9.46% 13.35% 6.94% 6.58% 6.66% Difference 0.82% -0.39% 1.77% 1.07% 0.59% Inception: 4/1/96 Core Plus Bond 9.48% 8.16% 7.52% 6.57% 6.83% Barclays Aggregate Index 7.72% 6.84% 6.25% 5.80% 6.29% Difference 1.76% 1.32% 1.27% 0.77% 0.54% Inception: 1/1/93 Core Bond 8.77% 7.77% 7.25% 6.32% 6.76% Barclays Aggregate Index 7.72% 6.84% 6.25% 5.80% 6.39% Difference 1.05% 0.94% 1.00% 0.52% 0.37% Inception: 10/1/95 Intermediate Bond 6.89% 5.95% 6.65% 5.78% 6.22% Barclays Int. G/C Index 6.08% 5.88% 5.67% 5.29% 5.80% Difference 0.81% 0.07% 0.98% 0.49% 0.42% Periods greater than one year are annualized. Performance is gross of management fees. Past performance is not indicative of future results. The above information is shown as supplemental information only and complements the fully compliant presentations.Seix Investment Advisors LLC 38
  40. 40. High Yield Composite Performance Summary Periods Ending 3/31/12 1 3 5 Since Year Years Years Incept. Inception: 10/1/04 High Yield Unconstrained 4.77% 25.10% 9.15% 9.73% BofA ML HY Cash Pay Index 5.71% 23.38% 7.74% 8.05% Difference -0.94% 1.72% 1.41% 1.68% Inception: 7/1/06 Bank Loan 4.02% 13.09% 4.44% 5.17% CSFB Instl Lev Loan Index 3.58% 7.70% 1.46% 2.31% Difference 0.44% 5.39% 2.98% 2.86% Inception: 7/1/97 Flagship High Yield 5.56% 17.30% 7.16% 8.14% BofA ML HY Cash Pay Index 5.71% 23.38% 7.74% 7.06% Difference -0.15% -6.08% -0.58% 1.08% Periods greater than one year are annualized. Performance is gross of management fees. Past performance is not indicative of future results. The above information is shown as supplemental information only and complements the fully compliant presentations.Seix Investment Advisors LLC 39
  41. 41. APPENDIXSeix Investment Advisors LLC 40
  42. 42. Personnel Resources (75)Investment Management (11) Investment Research (25) Client Service & Marketing (11) Operations (24)Portfolio Managers Investment Grade Patrick Mc Nelis George WayJim Keegan Carlos Catoya Director of Sales, Marketing & Client COO & CFOCIO & CEO Leo Goldstein Service John Murphy Scott Kupchinsky, CFAInvestment Grade Mark Meyer, CFA Kimberly Galletta David SchwartzmanPerry Troisi – Liquid Markets Michelle Gallo Portfolio Admin & Trade Support Elena Fyodorova Sharon Moran Gerard LeenAdrien Webb, CFA – Corporate Credit Jon Yozzo Lisa Milos Soo KimMichael Rieger – Securitized Assets William Davis, CFA Christopher Marlin Paul RoweSeth Antiles – Global Jeannell Anthony Julie Vinar Alvin Fletcher Tom Lennon, CFAHigh Yield Rebecca Ehrhart Beth Dizon Michael MacDevette Chris DeGaetano Debbie Crespo-SuGeorge Goudelias – Bank Loans Robert Guy Karen Ormiston Sal ToledoBrian Nold – HY Bonds High Yield Susan Shannon Dara KotzkerMichael Kirkpatrick – HY Bonds Biron Lim, CFA Paula Madonna Vince Flanagan, CFA Megan O’SheaInvestment Managers Ray Kramer, CFA Legal & Compliance (4)Ellen Welsh, CFA Marc Thomson Ania Wacht, CFA Laurel ConnerTom Winters Brian Reid, CFA Deirdre Dillon, CCO & CounselCharlie Leonard, CFA Andrea Pagnozzi Cynthia Panebianco Enterprise Data Management James FitzPatrick, CFA Stephen Gavlick Stacy Culver Eric Guevara Joseph Carucci Laura Linnartz David Chou Tony Capone Atul Sibal Andrea Dapolito Daman Singh Christina Milisits Norm Kopack Technology Bryan Trowbridge Nat King Ambuj Chaudhary Robert Stampfl Armando Alorro Timir Patel Seix Investment Advisors LLC 41
  43. 43. Seix Corporate Bond Composite Composite Seix Investment Advisors LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has Total Firm Assets Annual Performance and Standard Deviation prepared and presented this report in compliance with the GIPS standards. Seix Investment Advisors LLC has been independently verified for the periods January 1, 2004 through June 30, 2011 by Ashland Partners & Company LLP Barclays US and January 1, 1993 through December 31, 2003 by prior verifiers. Number Gross Composite Corporate IndexYear Assets US$ of Composite 3-Year Investment 3-Year Composite Verification assesses whether (1) the firm has complied with all the composite construction requirements of theEnd ($ mil) ($ mil) Accounts Return Std. Dev. Grade Index Std. Dev. Dispersion GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Corporate Bond Composite has been examined for the2011 26,128 833 12 9.73% 5.02% 8.15% 5.17% 0.2% periods January 1, 2004 through June 30, 2011 by Ashland Partners & Company LLP and October 1, 1995 through2010 25,855 749 11 8.85% 8.99% 0.2% December 31, 2003 by prior verifiers. The verification and performance examination reports are available upon request.2009 24,338 1,847 15 20.64% 18.68% N.A. Results are based on fully discretionary accounts under management, including those accounts no longer with the2008 17,375 196 5 or Fewer -0.51% -4.94% N.A. firm. Returns include the effect of foreign currency exchange rates and are net of foreign withholding taxes which2007 21,534 206 5 or Fewer 6.41% 4.56% N.A. may vary according to the investor’s domicile. Composite policy requires the temporary removal of any portfolio incurring a client initiated significant cash inflow or outflow of 25% or greater of portfolio assets. The temporary2006 21,122 1,030 19 4.28% 4.30% 0.3% removal of such an account occurs at the beginning of the month in which the significant cash flow occurs and the account re-enters the composite the month after the cash flow. Additional information regarding the treatment of2005 24,230 1,042 27 2.16% 1.68% 0.1% significant cash flows is available upon request. Credit Default Swaps (CDS) may be used to either buy or sell2004 21,913 1,137 57 5.57% 5.24% 0.1% protection on a single issuer and may hedge it with a swap on an index. Futures on treasuries and/or options on treasury futures may also be used to hedge an existing position or gain exposure to treasury securities. Forward2003 15,277 1,365 63 9.05% 7.70% 0.4% foreign exchange contracts are also used to gain exposure to foreign currencies. Total return swaps may also be used to gain exposure to foreign currencies and foreign bond market performance. Past performance is not2002 11,465 1,972 71 9.75% 10.52% 0.6% indicative of future results.2001 9,175 2,051 72 7.83% 10.40% 0.4% The U.S. Dollar is the currency used to express performance. Returns are presented gross of management fees and2000 7,413 1,515 57 9.35% 9.40% 1.0% include the reinvestment of all income. Actual returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. The collection of fees produces a compounding1999 4,663 504 6 -0.89% -1.96% N.A effect on the total rate of return net of management fees. As an example, the effect of investment management1998 3,373 221 5 or Fewer 6.35% 8.57% N.A fees on the total value of a client’s portfolio assuming (a) quarterly fee assessment, (b) $1,000,000 investment, (c) portfolio return of 8% a year, and (d) 1.00% annual investment advisory fee would be $10,416 in the first year, and1997 1,797 58 5 or Fewer 11.12% 10.23% N.A cumulative effects of $59,816 over five years and $143,430 over ten years. The annual composite dispersion1996 630 22 5 or Fewer 5.13% 3.28% N.A presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Policies for valuing policies, calculating performance, and preparing compliant presentations are available upon1995* 336 14 5 or Fewer 5.31% 4.94% N.A request. N.A. - Information is not statistically meaningful due to an insufficient number of portfolios in the The investment management fee schedule for the composite is 0.30% on the first $100 million; 0.25% on the next composite for the entire year. $100 million; 0.20% on the next $200 million; fees are negotiable thereafter; $10,000 minimum annual fee. Actual *Results shown for the year 1995 represent partial period performance from October 1, 1995 investment advisory fees incurred by clients may vary. through December 31, 1995. The Corporate Bond Composite was created October 1, 1995. Performance presented prior to May 29, 2004Corporate Bond Composite contains fully discretionary corporate bond management Fixed Income occurred at Seix Investment Advisors, Inc. ("SIA") before being acquired by SunTrust Banks, Inc. and its nameaccounts. Prior to April 1, 2007, the composite was named the Corporate Bond Management Fixed changed to Seix Advisors ("Seix"). SIA was formerly registered as an investment adviser with the SEC. PerformanceIncome Composite. For comparison purposes, the composite is measured against the Barclays presented prior to March 31, 2008 occurred while the Portfolio Management Team was a part of Seix Advisors, theCapital U.S. Corporate Investment Grade Index. Prior to January 1, 2005 the composite was Fixed Income division of Trusco Capital Management, Inc. (“Trusco”), the predecessor of Seix Investment Advisorsmeasured against the Barclays Capital U.S. Credit Index, which was changed to more accurately LLC. Effective as of March 31, 2008, Seix Advisors began operating as a separate legal entity, named Seix Investmentrepresent the composite strategy. As of June 1, 2007, the minimum account size for inclusion in the Advisors LLC (“Seix”), an SEC- registered investment adviser. Also, effective as of March 31, 2008, Trusco wascomposite is $1,000,000. Prior to June 1, 2007, the minimum account size was $15,000,000. renamed as RidgeWorth Capital Management, Inc. (“RidgeWorth”). RidgeWorth is an SEC-registered investment adviser and a majority owned subsidiary of SunTrust Banks, Inc. Seix is a wholly owned subsidiary of RidgeWorth.Seix Investment Advisors LLC is an SEC-registered investment adviser. The firm maintains a Seix has retained the identical investment style since the inception of the composite. Seix also maintainscomplete list and description of composites, which is available upon request. the records necessary to support the performance of all composites and will provide these records upon request. Seix Advisors Advisors LLC Investment 42

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