The President's Working Group on Financial Markets

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The President's Working Group on Financial
Markets
Managed Funds Association, Network 2008 February
12, 2008
PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS
HIGHLIGHTS OF RECOMMENDATIONS
Russell Read, Ph.D., C.F.A. Chairman, PWG
Investors Committee Chief Investment Officer,
CalPERS
PWG Investors Committee
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The President's Working Group on Financial
Markets
PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS

• What is the Concern about Hedge Funds?
• (2) The President's Working Group and Recently
  Created Committees
• Measures of Success for the Investors' Committee
• Highlights of Report Principles and Practices
  for Hedge Fund Investors
• (5) Looking Forward

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The President's Working Group on Financial
Markets
What is the Concern about Hedge Funds?
Long-Term Capital Management
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The President's Working Group on Financial
Markets
PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS
(2) The President's Working Group and Recently
Created Committees (a) Purpose of PWG
(b) PWG statements on hedge fund investments
from 1999 and 2007 (c) Sir Andrew Large's
Hedge Fund Working Group (d) Asset
Managers' Committee and Investors' Committee
(e) Intended audience for each committee's
report
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The President's Working Group on Financial
Markets
Background of PWG
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The President's Working Group on Financial
Markets
Background of PWG
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The President's Working Group on Financial
Markets
Background of PWG 1999 Findings on Hedge Fund
Regulation
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The President's Working Group on Financial
Markets
Background of PWG 2007 Findings on Hedge Fund
Regulation
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The President's Working Group on Financial
Markets
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The President's Working Group on Financial
Markets
Composition of PWG Committees
Asset Managers Committee
Eric Mindich, CEO of Eton Park Capital Management
comprised of representatives from a broad array
of asset managers. Its purpose is to facilitate
an exchange of information between the
alternative asset management community and the
agencies comprising thePWG.
Investors Committee
Russell Read, CIO of CalPERS
comprised of representatives from a broad array
of investors and investor advocatesfrom labor
organizations, endowments, foundations,
corporate and public pension funds, investment
consultants, and other U.S. and non-U.S.
investors.
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The President's Working Group on Financial
Markets
Intended Audience of PWG Asset Managers Committee
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The President's Working Group on Financial
Markets
Intended Audience of PWG Investors Committee
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The President's Working Group on Financial
Markets
PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS
(3) Measures of Success for the Investors'
Committee (a) Best Practices (b)
Accepted Practices (c) Common Practices
(d) Healthier and more successful use of
hedge funds by investors
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The President's Working Group on Financial
Markets
(4) Highlights of Investors Committee Report
Principles and Practices for Hedge Fund Investors
Structure of the Report
1. Introduction 2. Fiduciarys Guide 3.
Investors Guide
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The President's Working Group on Financial
Markets
Investors Committee--Highlights of the
Fiduciary's Guide

1. No fiduciary should feel forced to invest in
   hedge funds
2. Potential Roles
3. Appropriateness
4. Expertise

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The President's Working Group on Financial
Markets
Investors Committee--Highlights of the
Investor's Guide

• Detailed Investment Policy
• 2. Due Diligence
• 3. Risk Measurement / Management
• 4. Expertise

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The President's Working Group on Financial
Markets
PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS
(5) Looking Forward (a) both
committees will be standing committees
-- will not dissolve after the publication
of the reports -- will continue
to address areas of concern to the hedge
fund industry and investors as they arise
-- three year renewable terms among
members (b) Intended to foster a healthy
long-term environment for the hedge fund
industry and investors
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The President's Working Group on Financial
Markets
NAPPA Winter Section Meeting, February 8, 2008
PRINCIPLES AND PRACTICES FOR HEDGE FUND INVESTORS
Russell Read, Ph.D., C.F.A. Chairman, PWG
Investors Committee Chief Investment Officer,
CalPERS
PWG Investors Committee