Maximizing returns subject to assuring a minimum floor.

John OBrien Miguel Palacios Matthew Lockard Ajit Patankar Tapan Samaddar

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The Challenge

How to capture gains when equity markets rise

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The Challenge

...while getting protection when they fall ?

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The current approach

The current approach involves allocating an investors assets between safe assets (typically bonds) and risky assets (typically equities).

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Shortcomings of the current approach

There is no predefined limit to potential losses. Bond/Stock allocations are typically based on past

performance, from which future performance could diverge wildly.

If equities fall over a long period of time,

rebalancing to maintain a fixed bond/stock allocation will compound losses. than you can stay solvent.

Markets may crash and remain irrational longer

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Introducing A&P

A&P Capital (Accumulate and Preserve) Strategy solves these existing problems.

A&P suits individuals saving for retirement, college, home purchases and other life events, who not only require capital appreciation but also require that loss of capital must be limited.

A&P is not a market beating strategy. Instead, A&P is an engineered, protective asset allocation strategy, focusing on maximizing long-term returns subject to maintaining a minimum floor.
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A&P Essential Features

Uses available derivatives-based hedging to put a fixed floor under potential losses over a given period of time.
For example, a put position is purchased to protect the risky assets against declines of more than 10% over the next 18 months.

Periodically rebalances to lock in gains.

For example, if the portfolio gains 10% relative to its value when protection was purchased, the existing put position is liquidated and a new one, with a higher strike price, is purchased, thereby ratcheting up the net value of the protected assets

Doesnt need access to the actual account holding your assets.

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How A&P works: Customers View

Step 1: Client chooses the minimum protection level and the protection duration for his/her assets: this determines the protection cost, from the 3x3 matrix below.
Protection Duration Minimum Asset Protection Level 1year 18months 2year 90% 3.1% 4.6% 6.5% 85% 2.6% 3.9% 5.7% 80% 1.7% 2.8% 3.7% Above data was correct at market close on 1/10/2014. The data changes dynamically with the Market conditions.

Protection Cost

Step 2: Client opens a new managed IRA / Roth IRA / Brokerage account with Charles Schwab and fund that account with only the following amount: Protection cost % from the table above X Amount of assets they want protected. Step 3: A&P will make the necessary transactions in the Client's account and separately monitor the account.

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A&P Capital Strategy Simulation and Actual results.

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A&P: Back-testing results, 1990-2013 (cost of protection included)

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A&P: Back-testing results, 2000-2012 (cost of protection included)

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A real-life application: 1987-1999, Merrill Lynch

Growth and Guarantee Fund ($250M AUM)
Growth and Guarantee Fund features:
Automatically rolled over every 18 months or

upon a 10% appreciation relative to NAV at prior rollover point. 10% between rollover points.

Used options to limit losses to a maximum of The guaranteed minimum NAV was further

backed by an Aetna-sponsored insurance policy (which never needed to be exercised).

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Merrill Lynch Growth and Guarantee Fund was advised by current a A&P managing partner

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A real-life application: 1987-1999, ML Growth and

Guarantee Fund ($250M AUM)
Growth & Guarantee Fund audited performance results, 1987-1997

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Merrill Lynch Growth and Guarantee Fund was advised by current a A&P managing partner

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A&P Capital Strategy About Us

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Contact Us
Contact us to learn how A&P Strategies can bring LEIS and other innovative asset allocation strategies to your clients.
John OBrien, Managing Partner
John@AandPCapital.com 917-690-0117

Miguel Palacios, Senior Principal

Miguel@AandPCapital.com 510-717-6453

Tapan Samaddar, Senior Principal

Tapan@AandPCapital.com 408-480-3704

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A&P Strategies Team Member Profiles

John OBrien, co-founder of A&P Strategies LLC, is the Executive Director of the Masters in Financial Engineering (MFE) program at UC Berkeley, Haas School of Business. He assisted in developing the MFE program, and became its first Executive Director in July 2000. Mr. OBrien is also an adjunct professor of finance at Haas, and created and teaches the MFE course in financial innovation. John was formerly a Managing Director of Credit Suisse Asset Management (CASM) where he created and managed the risk management function, the client service function and the e-commerce effort. Prior to CSAM, for fifteen years, Mr. OBrien was Chairman and CEO of Leland OBrien Rubinstein (LOR) Associates, and Chairman of the Capital Market Fund, and the S&P 500 SuperTrust the first exchange traded fund (ETF). LOR is credited with a series of financial market innovations and product offerings. Earlier, John co-founded Wilshire Associates (originally named O'Brien Associates), and co-developed the Wilshire 5000 common stock index (originally known as the O'Brien 5000). Mr. O'Brien was named among Fortune Magazine's "Businessmen of the Year" in 1987. John holds a S.B. in economics from MIT, and an M.S. in operations research from UCLA.

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A&P Strategies Team Member Profiles

In addition, we have an exceptional team focused on Strategy, Research and Product Development.

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Thank You

www.AandPCapital.com

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