Bal est r a Capi t al Par t ner s

Manages a global macro hedge fund in MLCs low correlation strategy

(since 2012).

Did you know that Balestra
Capitals founder, J ames
Melcher, was a member of
the1972 U.S. Olympic
fencing team, competed in
six World Championships
and was a two-time U.S.
National Champion in Epe
fencing?
Balestra Capital was founded in 1979 and has been SEC registered
since 1987.

Balestra Capital manages approximately $2.2 billion at 31 December,
2012.

The firm and its principals are based in New York.


Why MLC has c hosen Bal est r a Capi t al
Balestra Capital is a risk averse global macro hedge fund manager that aims to generate returns by
taking contrarian views on macro themes (they can be long or short shares, bonds, currencies etc). A
core part of their process is to buy cheap options with asymmetric return characteristics significant
upside and limited downside. They have successfully used this process to deliver strong returns with a
negative correlation to shares over many years, including the GFC.
We believe Balestra will play an important part in assisting our Low Correlation Strategy to deliver
returns that are uncorrelated with share markets.
Phi l osophy on i nvest i ng

James L. Melcher
Chief Investment Officer
The fund primarily invests by developing an independent view
around global macroeconomic fundamentals in the context of
mispricings in broad asset classes across global markets. The
fund can be positioned net long or net short based on market
and economic conditions and seeks to create a portfolio with
an asymmetric risk/reward profile and downside protection.
The fund attempts to take advantage of inefficiencies and
mispricings that consistently occur across global markets and
asset classes through fully liquid securities and assets
including shares, bonds, currencies, commodities, options,
futures, swaps and other derivatives. The portfolio is built to
create upside leverage when their views come to fruition but
limited downside when they are wrong or early.
I nvest ment pr oc ess
Balestra Capitals investment strategy begins with the formation of an independent view of economic
fundamentals around the globe. They then narrow the focus to large-scale dislocations between these
fundamentals and market prices to identify a group of investable themes.
As a top-down global macroeconomic manager, the focus of all investment/trade decision making is
how the firm's big-picture viewpoint can be most efficiently implemented into individual positions that

meet portfolio construction filters. These filters include:
liquidity: the position must have the ability to be sold or reversed easily
profile: asymmetric risk/reward profile
size: 3% of assets under management individual security guideline, and
risk: aggregate risk in the portfolio is low
The number of positions in the portfolio may vary substantially depending on how many top-down
themes are in place, and whether these themes are being implemented with individual securities or
baskets of similar securities. Typically, the portfolio will consist of 100 to 200 line items.
Balestra Capital believe the asymmetric nature of their core positions allows them to hold positions for
months and years until market pricing ultimately correlates to economic fundamentals. These positions
are dynamically managed in an attempt to establish an optimal risk/return profile. Positions may be
hedged to the upside and downside based on technical factors. The firm focuses first on capital
preservation and then on generating absolute returns.
I nvest ment peopl e
Bi ogr aphi es
James L. Melcher Founder and Partner Chief Investment Officer
J ames Melcher founded Balestra Capital, Ltd. in 1979, and has spent over 40 years as a hedge fund
manager, private wealth advisor and venture capitalist. He has extensive experience in a variety of
investment areas, including global securities and currencies, commodities, precious metals, leveraged
buyouts, private placements, corporate finance, and hedge funds. For the past 12 years he has
focused on the investment management of Balestra Capital Partners, L.P. and Balestra Spectrum
Partners, LLC.
Mr. Melcher began his career as a stockbroker at A.G. Becker & Co., a Wall Street investment firm,
which was acquired by Merrill Lynch in 1984. He subsequently formed and managed First Venture
Fund, a venture capital fund.
Mr. Melcher was a member of the 1972 US Olympic team, has competed in six World Championships,
two Pan American Games and was a two-time U.S. National Champion in Epe fencing. From 1974 to
1982 he was also a member of the United States Olympic Committee's Investment Committee.
J ames Melcher received his Bachelor of Arts degree from Columbia University.
Norman J. Cerk Partner & Portfolio Manager
Mr. Cerk joined Balestra Capital in 1997 and is a Co-Portfolio Manager and Partner of the firm. He co-
founded Balestra Capital Partners in 1999 and remains as the funds Head Trader. Mr. Cerk is
responsible for researching and optimizing the firms implementation of its global macro themes and
tactical hedging. As head trader, he is also responsible for trading of all asset classes and instruments
including futures, equities, options, fixed income, currencies, commodities, precious metals and credit
derivatives.
Previously, Mr. Cerk was a trader and Portfolio Manager with Hollis Capital, a long-short hedge fund,
as well as an analyst and trader at Svarna Capital Offshore Fund, a long-short hedge fund.
Norman Cerk received a Bachelor of Science degree in Political Science with a focus on International
Relations from the University of Wisconsin.
Matthew Luckett - Partner & Portfolio Manager
Matthew Luckett joined Balestra Capital in 2004 and is a Co-Portfolio Manager and Partner of the firm.
Mr. Luckett is responsible for portfolio strategy, research and portfolio risk supervision for Balestra
Capital Partners.
Mr. Luckett began his career as an industry analyst at Gartner Group, where he helped launch several
research practices, advising Fortune 500 enterprises on software licensing and pricing issues, as well
as tracking emerging software companies.
Mr. Luckett was a Principal and Senior Research Analyst at SoundView Technology Group (NASDAQ:
SNDV), where he was responsible for research coverage of software, internet and business services

companies. He became a venture capitalist and senior operating executive for three years, upon sale
of his firm to Wit Capital and subsequently to Charles Schwab. In 2000, he was named in the Wall
Street J ournals Best on the Street analyst team.
Matthew Luckett was a George F. Baker Scholar at Georgetown University where he graduated cum
laude. He holds a Bachelor of Arts degree in American Studies with a minor in J apanese.
Karen Pham Van - Director of Risk Management
Ms. Pham Van joined Balestra Capital in 2010. Previously, Ms. Pham Van was at Socit Generale
from 2000 through December 2009, as a Vice President and Senior Quantitative Analyst. In this role,
Ms. Pham Van was responsible for modeling Credit VaR (replacement risk) for all exotic derivatives
traded in the AMER platform, including: equity (complex options, swaps, repos & other non-vanilla)
interest rates, (locks, swaps, complex options, etc.) FX, commodities (swaptions, forward strips,
physical trading, etc.) credit products (first to default, CDSs, CDOs) and all structured transactions
involving cross-over between all areas. Previously, Ms. Pham Van was a Vice President & Senior
Portfolio Analyst in Socit Generales Credit Risk Department.
Ms. Pham Van is fluent in French, Spanish, and Vietnamese and holds a Masters in Management from
EDHEC Business School in France and a Masters of Arts in Mathematics of Finance from Columbia
University.
Rebecca Cheong - Director of Quantitative Research
Ms. Cheong is the Director of Quantitative Research at Balestra Capital. Previously, Ms. Cheong was
at Socit Generale as a Managing Director and the Head of US Advisory in the Global Equity Flow
Division. In this role, she was responsible for providing tail risk hedging strategies to both global macro
hedge funds and pension funds through the use of options and derivatives. She and her team
developed a series of models to evaluate the global economy and identify investment opportunities that
were attractive on a risk adjusted basis through quantitative framework. Ms. Cheong published
research covering cross-asset trade ideas, efficient derivative strategies, and equity market flow. Prior
to joining Socit Generale, Ms. Cheong worked at Goldman Sachs for over 14 years, where she was
most recently Co-Head of the Equity Derivatives Strategy team. She began her career at Goldman
Sachs as a trader.
Ms. Cheong received Bachelor of Arts degrees in both Computer Science and Economics from
Wellesley College where she graduated magna cum laude. She also holds a Master of Science in
Financial Engineering from the New York Universitys Stern School of Business.
David A. Boyum - Managing Director
Mr. Boyum is Managing Director at Balestra Capital, Ltd., with responsibility for fundamental research.
He was previously director of research at Aquiline Advisors LLC, an investment advisor to endowments
and foundations. David has worked as a consultant to major corporations, leading law firms,
government agencies, and private investors. He has taught economics and statistics at Harvard and
was a Robert Wood J ohnson Foundation Scholar in Health Policy Research at Yale. He is the co-
author of two books: What the Numbers Say: A Field Guide to Mastering Our Numerical World and An
Analytic Assessment of US Drug Policy.
Mr. Boyum holds an AB in applied mathematics from Harvard, and a PhD in Public Policy from
Harvards J ohn F. Kennedy School of Government.
Ryan Atkinson - Senior Market Analyst
Prior to joining Balestra Capital in 2005, Mr. Atkinson was a lead market-maker for exchange listed
equity opinions contracts on the American Stock Exchange for Letco Specialists, LLC from 1998 to
2002. From 2002 to 2004 he worked in the same capacity for TD Equity Options, an affiliate of Toronto
Dominion Bank.
Mr. Atkinson earned a FRM (Financial Risk Manager) designation in November 2004, which is
awarded by the Global Association of Risk Professionals. Mr. Atkinson received a Bachelor of Science
and a Master of Arts in Economics, both from the University of South Carolina.



Or gani sat i on c har t (as of Dec ember 2012)

I nvest ment i dea

This above positions may no longer be included in Balestra Capitals portfolio as their view may have changed
since this document was prepared.



Disclaimer:
The information contained in this material has been provided to you by MLC Limited (ABN 90 000 000 402) and MLC
Investments Limited (ABN 30 002 641 661) and is intended as general information only for residents of Australia. It is not
intended to be a solicitation from Balestra Capital to invest in any of its products directly, or to engage Balestra Capital directly.
The information is current as at 7 March 2013, unless otherwise stated. It has not been prepared to take into account individual
investment objectives, financial situation or investment needs. Prior to making an investment decision, you should assess
whether the information in this material is appropriate to your particular investment objectives, financial situation or investment
needs. It is recommended that you obtain financial advice specific to your situation before making any financial investment or
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None of MLC Limited or MLC Investments Limited or other member companies in the National Group of companies, or
appointed managers guarantee the capital value or performance of any specific investments selected by investors except where
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