BUYSIDE RESEARCH Case Studies

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BUY-SIDE RESEARCH Case Studies
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Sample Buy Side Clients Across Asset Classes
Adventitys global client base of over 100 spans
some of the largest banks and asset managers
through to dozens of boutique mid market
specialists. A sample of our prominent clients
includes,

• 50 billion investment management corporation
  specializing in high yield securities and
  distressed debt
• 100 billion UK based fund manager with
  investments in equities, bonds and properties
• 14 billion multi-strategy, multi-asset class
  hedge fund with investments and offices in US,
  Europe and Asia
• Multi-billion dollar proprietary fund of US based
  bulge bracket investment bank with investment
  strategies including investment grade, high
  yields, converts etc
• European CLO manger with 1 billion of leveraged
  loan assets under management
• Multi-billion dollar multi-strategy hedge fund
  with offices in New York, London and Singapore
• 7 billion distressed/event driven hedge fund
  client with offices in New York and London
• 30 billion global fund of PE/VC funds
• Multi-billion dollar US based activist hedge fund
• 2.5 billion multi stage award winning Silicon
  Valley VC firm

Adventitys delivery model is flexible enough to
deliver high quality analysis to our clients
regardless of strategy, geography or size.
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Case Study Credit Hedge Fund
As our 3B client expanded its Credit Markets
Investing, Trading and Research coverage to
Europe and the Middle East, Adventity was
selected to provide the complete research
functionality for the expansion.
Adventity-generated research is used to support
our Clients Funds credit, volatility, equity
directional and relative value trading activities.
Range of analysis includes

• Complete historical and projected financial
  analysis including
• Financial statement analysis
• Liquidity analysis
• Credit solvency ratios
• Comprehensive qualitative, SWOT, industry-wide
  and macroeconomic analysis
• Legal structure and covenants of all securities
  (especially convertibles) prospectuses
  indentures
• Complementary comprehensive equity valuation of
  all issuers
• Preparation of timetable and analysis of
  corporate events (earnings releases, product
  launches, competitor news, regulatory events
  etc.) upon equity and debt security valuations

• Future funding requirements and alternatives
• Examination of comparables
• Generation of shadow ratings

Recruitment and training of highly qualified
post-graduate analysts

• Top quality analysts with hard-to-find credit and
  equity analysis capabilities
• Dedicated analyst team flown to clients U.S.
  headquarters for 1-month training and integration

Adventity enabled our client to quickly expand
their global operations while maintaining high
quality analysis, coverage and insight, and
containing overhead commitments.
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Case Study Hedge Fund (Investment Grade Debt)

• Our client is a US-based multi-billion dollar
  hedge fund focused primarily on Investment Grade
  debt. Adventity conducts fundamental research and
  provides investment recommendations to the
  clients portfolio managers and analysts. Our
  analysts interact with the clients portfolio
  managers on a daily basis to discuss investment
  opportunities and current developments.

Range of analysis includes

• Fundamental company analysis Analyzing business
  models, operating and financial parameters, and
  expected ratings outlook
• Industry analysis Understanding industry
  dynamics, competitive landscape, current issues
  and future trends
• Investment decision making Investment
  recommendations based on expected ratings,
  industry trends and relative valuation
• Portfolio monitoring Close to 100 companies
  across different sectors - financials, utilities,
  energy, telecom, and retail

Generating investment ideas

• Bottom-up investment research
• Identification of investment opportunities based
  on analyses of market news, earnings reports,
  company filings, conference calls, sell-side
  research reports, etc.
• In-depth company analyses supplemented by
  industry research, spread analysis, expected
  ratings, industry trends, and relative valuation

Adventitys analysts provide our client timely,
high quality analysis and actively participate in
generating investment ideas across different
sectors, driving returns
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Case Study Global Equity Long / Short Hedge Fund

• Our 2B Global Equity Long / Short Hedge Fund
  client partnered with Adventity seeking support
  for its in-house research department. Our
  full-time dedicated analysts collaborate with the
  client research team and portfolio managers to
  perform critical but time-intensive tasks in a
  cost efficient, timely and structured manner.

Summary Of Engagement

• Adventity provides detailed financial modeling
  and valuation support as our client seeks out
  equity long / short investment opportunities
  around the globe including
• Industry analysis - macro-trend analysis,
  demand / supply analysis, overview and
  description of industry, competitive matrices,
  investment perspective
• Company analysis - key financial and operating
  metrics, strategy, SWOT, peer group comparison,
  investment considerations
• DCF valuation and investment argument - a high
  level model analysis at the initial stage and
  detailed modeling towards the pre- finalization
  stage
• Primary research - calling company under
  review, its competitors and/or its customers to
  obtain insights to investment relevant
  information like new product success, pricing
  trends, restructuring / merger impact, impact of
  change in regulations etc. This information is
  then incorporated into our broader analysis
• Asian and European non-English analysis -
  primary and secondary research

Adventitys Range of Work
Adventity enabled our client to expand their
research coverage universe while maintaining high
quality analysis with no commensurate increase in
headcount
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Case Study Distressed / Event Driven Fund
Our 6B Distressed / Event Driven Hedge Fund
Client with offices in New York and London sought
to increase its analytical capabilities without
expanding in-house head count. Adventity
established a core team of well qualified
Analysts to interact directly with our Clients
Research Analysts in the development and periodic
maintenance of comprehensive credit models.
Range of analysis includes

• Capital structure and debt distribution (by
  maturity) analysis including detailed covenant
  and call schedule analysis for selected
  securities
• Asset coverage globally and at subsidiary
  levels
• Liquidity analysis
• Corporate structure in situations of complex
  structures with multiple OpCo / HoldCo issuers
• Historical and quarterly financials with related
  ratios and pro forma adjustments for material
  post-filing corporate events
• Distressed / Chapter 11 cashflow modeling and
  equity valuation
• Industry specific metrics (airlines, oil gas
  exploration, power, etc)
• Company specific analysis e.g. contingent
  liabilities (asbestos, guarantees, pension
  liabilities)
• Monthly maintenance of in house credit models for
  bank deal investments

Our analyst team is now actively involved in not
only analyzing credits, but recommending
investment opportunities on weekly calls with
portfolio managers in London and New York
Adventity has enabled our client to significantly
expand their coverage of distressed credits with
quick turnaround, and high quality analysis
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Case Study Leveraged Loans Monitoring System
Application
The Client and its Requirements

• UK-based hedge fund and an existing client of
  Adventity
• The client engaged Adventity to develop an
  application to provide easy access to portfolio
  information

Adventity's Solution

• After a detailed discussion with the client on
  the requirements of the application, Adventity
  decided to develop the application using Visual
  Basic as the front-end and MS Access as the
  back-end
• The application enables the CLO portfolio manager
  and other research analysts to get quick and easy
  access to all portfolio information like prices,
  spread, invested amount, financial information,
  etc
• The application serves as an important decision
  tool for the portfolio manager enabling them to
  add or cut position in a credit on the basis of
  recent performance and also serves as a marketing
  tool to convince potential investors
• The portfolio manager can use the application for
  rebalancing the portfolio based on
  industry/country/rating exposure
• The standardized MS Excel templates are used as
  input which contains details such as facility
  type, spread, amount invested, bid/offer price
  and selected financials of the company
• Facilitates efficient search on various
  parameters including industry, ratings, revenue,
  EV, EBITDA, leverage, sponsors, analysts, etc
• The application can also be used to generate
  various reports for portfolio allocation,
  performance comparison, financial charts, etc
• Application allows the client better control over
  the investments in CLO, especially in todays
  turbulent markets. It is also being used as a
  marketing tool to generate additional revenue for
  the client

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Leveraged Loans Monitoring System Application
(Snapshot of Portfolio Investments)

• The application provides a snapshot of the
  important details of all invested assets
  including amount invested, facility, spread,
  industry, etc
• The information can be filtered by running
  queries on industry, analyst, country, leverage,
  etc
• The results, thus, generated can then be exported
  to Excel

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Leveraged Loans Monitoring System (Reports for
Portfolio Evaluation)

• The application can be used to generate various
  reports for portfolio allocation (based on
  industry, rating, analyst, etc.), performance
  comparison, financial charts, etc.

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Leveraged Loan Monitoring System (Example of
Reports Country-wise Allocation)
Reports showing the country-wise portfolio
allocation and the no. of issuers by country can
be generated. Snapshots of the investments in a
particular country can also be extracted
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Leveraged Loan Monitoring System (Example of
Reports Portfolio Review)
The application can generate snapshots of each
investment that includes exposure, industry,
ratings, latest financials, YTD performance and
outlook comments, among other fields
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Case Study Tracking New HY Issuances
The Client and its Requirements
Adventity's Solution

• Adventitys customized application enabled the
  client analysts to track HY issuances from
  announcement through pricing for more than 6,500
  North American high-yield issues since 1991 with
  screens to track leverage, pricing, covenants and
  other details
• The application provides key bond terms such as
  coupon rate, maturity, price, ratings,
  underwriters, announcement date, road show dates,
  number of book runners and sponsors
• It provides search screens to track leverage,
  pricing, covenants and other details
• Ability to analyze arrangers by providing a tool
  to generate flexible IB League tables based on
  any parameter such as number of deals, deal
  value, sector, etc
• Earlier the client used to maintain a large
  number of Excel files to maintain this
  information. Some of the problems faced were a)
  complex file management, b) file corruption, c)
  regular backups, d) difficulty in historical
  analysis, e) full-time resource engagement etc.
  The application helped the client overcome all
  these problems and effectively monitor the deal
  without manual intervention, thus saving cost and
  time

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Application Tracking New HY Issuances (Facility
to View / Search Deals Priced, Deals On-road

• The application provides a summary/dashboard
  information on all HY deals, in the European, US,
  and global markets, in the past 4 years
• It provides the facility to search deals based on
  issuer, sector, country, ratings, etc

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Application Tracking New HY Issuances (Facility
to Query Using Multiple and Flexible Criteria)

• The application provides an efficient search on
  parameters such as coupon, maturity, YTM, road
  show dates, proceeds, ratings, etc
• The result/output can be sorted in ascending and
  descending order and can be exported to Excel for
  further number crunching

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Application Tracking New HY Issuances (Provides
League Table with Flexible Filter Criteria)

• The application has the ability to compile league
  table reports showing value and percentage share
  of deals done by different investment banks
  (IBs). It also provides the ranking of IBs based
  on the above parameters
• The set can be filtered based on parameters such
  as sector, currency, date, proceeds, ratings,
  EBITDA, etc