FIXEDINCOME OUTSOURCING SOLUTIONS FOR PRIVATE ASSET MANAGERS

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FIXED-INCOME OUTSOURCING SOLUTIONS FOR PRIVATE
ASSET MANAGERS
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Introducing Axios Advisors, LLC

• Axios Advisors, LLC is a Registered Investment
  Advisor specializing in corporate and municipal
  bond investments. We offer outsourcing solutions
  to the private asset management industry,
  including independent credit research and
  customized fixed-income management in a
  sub-advisory capacity.

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Our Objective

• Provide financial advisors and private asset
  managers (including private banks and trust
  departments) access to an income-maximizing
  fixed-income strategy on a cost-effective
  outsourcing basis.
• Based on current market conditions, we believe
  this strategy can generate at least 50 basis
  points annually in additional yield over a AAA
  portfolio , while maintaining an average BBB
  (investment-grade) quality

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Who May Benefit From Our Services ?

• Equity-oriented asset managers looking to
  diversify into fixed-income products
• Investment advisors and trust fiduciaries looking
  to maximize their clients income stream while
  reducing market volatility
• Fixed-income advisors looking to enhance their
  performance benchmark and potentially earn higher
  fees
• Small-to-medium size asset managers looking to
  complement their credit research efforts,
  particularly in the very specialized lower grade
  corporate and municipal sectors

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What Constitutes a Credit-Driven Strategy ?

• A fixed-income investment strategy designed to
  generate excess returns from improving credit
  trends for an individual security or for a
  particular sector, not from anticipating changes
  in general interest rate levels.
• It is also a strategy designed to maximize the
  investors income stream while reducing exposure
  to market volatility

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Key Components of A Credit-Driven Strategy

• Accurate, timely credit research by experienced
  professionals who have witnessed previous credit
  cycles and have the necessary historical
  perspective
• Accurate relative value assessments based on
  market trading levels.
• Emphasis on securities with relatively good
  liquidity and strong financial disclosure
• Access to the trading flows and the informal
  information network of all the key market makers
• Effective trade execution resulting in
  transaction cost savings
• Constant credit monitoring and surveillance

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Advantages to Private Asset Managers

• Ability to offer clients a more stable investment
  style with higher performance expectations, thus
  allowing for potentially higher fees.
• Access to the expertise of some of the leading
  credit experts in the municipal and corporate
  credit arena without the need for internal
  staffing
• Access to a centralized credit research pool on a
  cost-effective basis
• Transaction cost savings, compared to the normal
  full retail markups
• Market differentiation within a very fragmented
  and competitive industry

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What Makes Our Research Different

• It is objective and independent, unlike
  broker-dealer and rating agency research (a
  critical distinction in the wake of the Enron
  crisis)
• It is timely, whereas agency ratings tend to be a
  lagging indicator
• It is actionable you get clear buy/sell/hold
  recommendations based on our assessment of
  current trading levels and relative values
• It covers both corporate and municipal bonds in a
  single product. We have access to a database of
  12,000 corporate credits and 2,500 municipal
  credits through our partnership with
  Investortools, Inc., one of the leading providers
  of fixed-income management systems
• It is of institutional quality. Our analysts
  average some 22 years of investment experience at
  major institutions and have access to the credit
  data bases of all the leading vendors
• It can be integrated into any third party trading
  system you choose (We have relationships with
  most major technology vendors)

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Sub-Advisory Services

• Formulate an income-maximizing, credit-driven
  strategy customized to the accounts risk and
  compliance parameters. We will also strive to
  ensure consistency with your firms overall
  market outlook and risk tolerance.
• Thoroughly research all potential bond purchases
• Initiate and execute all trading activities
• Maintain all credit records as required by
  regulatory authorities
• Provide monthly and quarterly performance and
  strategy reports as required by the account
• Work with your marketing staff to formulate a
  marketing effort for this active strategy

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Proposed Fees

• Research subscriptions are available for 1,375
  per quarter per firm (first 4 users are free, a
  charge of 200 applies to each additional user)
  Subscriber firm gets 100 research reports a year,
  including a monthly newsletter, The Axios Income
  Investor.
• Fully customized research services available
  through our partners at ETrade Financial
  (pricing available upon request)
• Fees for full sub-advisory services (including
  research and portfolio management) range from 10
  to 20 basis points, depending on level of
  services and size of account.

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OUR TEAM Triet M. Nguyen, President
Portfolio Manager Triet Nguyen has more
than 22 years of experience in the fixed income
markets, where he specialized in municipal bonds
and corporate high yield securities. Besides his
extensive credit research background, Triet has
also had a successful track record of designing,
marketing and managing a wide variety of mutual
fund portfolios. As Director of
Information Services at eBondUSA, Mr Nguyen was
the primary architect of the information portal
strategy adopted by this online bond trading
firm. He managed a real-time bond evaluation
system, developed complete specifications for
various price discovery tools and maintained
relationships with key information vendors and
strategic partners. He has also been a vocal
advocate with the SEC in matters relating to
retail investor participation in online bond
trading. Before joining eBondUSA, Mr
Nguyen managed and researched high yield
corporate assets at John Hancock Investments,
specializing in the Media, Broadcasting and
Technology sectors. Before that, he spent 13
years as Senior Portfolio Manager at Putnam
Investments. His portfolio responsibilities
encompassed many Four and Five Star Funds (as
rated by Morningstar). When the Commonwealth of
Massachusetts went through a severe fiscal crisis
in the early 90's, Triet was regularly consulted
by State government officials as a public finance
expert. He started his municipal bond
career as a Senior Credit Analyst at the Harris
Trust in Chicago and then at Cigna Investments in
Hartford, CT. He holds an MBA Degree in Finance
and Accounting and a BA in Economics from the
University of Chicago.
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• Frank Plumley, Director of Corporate Bond
  Research
• Frank Plumley has had more than
  22 years of corporate financial analysis and
  corporate bond rating experience. His areas of
  concentration include telecommunications,
  utilities, oil and gas exploration and
  development, paper and chemicals, among others.
• From 1998 to 2000, as Head of
  Financial Planning for Citizens Communications,
  Frank was responsible for all budgeting,
  financial modeling and investor relations
  activities. Frank was a key member of the
  integration team responsible for evaluating
  acquisition opportunities and completing the
  purchase of certain assets by Citizens from GTE
  and U.S. West.
• Prior to joining Citizens, Frank
  spent 13 years as Director of the
  Telecommunications Ratings Group at Standard
  Poors (SP). In this capacity, he became the
  leading SP spokesman on major industry trends
  and developments, such as the Telecommunications
  Act of 1996. He also held the distinction of
  being the only rating agency telecom analyst to
  be recognized by Institutional Investor magazine.
• In January 1983, Mr Plumley was
  named SPs very first full-time telecom equity
  analyst in anticipation of the seminal event of
  that period the breakup of ATT. Between 1979
  and 1983, Frank covered various equity sectors at
  SP, including paper and forest products.
• Mr Plumley graduated cum laude
  in Finance from Pace University in 1979.

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• EXAMPLES OF PAST CREDIT STRATEGIES
• Most of these credit plays were executed during
  Triet Nguyens tenure at Putnam and John Hancock
• In 1992, Triet and his analysts structured a
  unique 40MM tax-exempt deal for the
  then-floundering Chrysler Corp. The proceeds went
  to start up the first plant for the Jeep Grand
  Cherokee, which turned the Companys financial
  fortune around and marked the resurgence of the
  American auto industry
• In the late 80s, Triet was among the first
  analysts to apply a discounted cash flow model to
  the defaulted Single-Family Housing issues in
  Texas following the oil bust and subsequent real
  estate slump. Putnam bought close to 50MM bonds
  and made an average of 10 points on the position,
  without having to hold it to maturity..
• Throughout the 90s, Triet was one of the most
  active traders of airport and airline bonds,
  including close to 500MM in Denver Airport bonds
  which we rode to insured and pre-refunded status.
  It is, of course, very relevant that those same
  sectors have come full circle and are now under
  pressure again.
• Other major credit plays in the 90s with a
  regional flavor include Massachusetts G.O.s
  during the Prop 2 crisis, New York City before
  the upgrade to A and Philadelphia G.Os.
• Triet was also very active in other IDB sectors,
  such as Steel and Paper, often swapping large
  10-20MM blocks based on relative spreads and
  cyclical outlook.
• In 1998, Triet was one of the few buyers of
  corporate high yield bonds to question the
  infinite demand for fiber capacity assumed by
  most telecom issuers at the time. This skepticism
  was of course borne out by the telecom meltdown
  over the last 18 months.

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Summary

• Access to a specialized bond investment strategy
  which maximizes your clients income stream and
  allows you to earn higher fees while retaining
  control over your account relationships
• Access to independent, objective credit research
  opinions in the wake of the Enron debacle
• Transaction cost savings
• Limited internal resource commitment
• Market differentiation in an increasingly crowded
  private asset management field

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Contact Information

• Axios Advisors, LLC
• 40 Speen Street, Suite 201
• Framingham, MA 01701
• [phone] (Office)
• [phone] (Fax)
• www.axiosadvisors.com
• info_at_axiosadvisors.com