Sciens Fund of Funds Management Holdings LTD

Fund & Asset Manager Rating Group
Fund of Hedge Fund Managers / Caymans
Sciens Fund of Funds Management Holdings Ltd

Full Rating Report
Asset Manager Rating
Key Rating Drivers

Solid Adaptability, Staff Turnover: Sciens Fund of Funds Management Holdings Ltd (Sciens) has continued to expand and diversify its managed accounts offering, which is at the centre of its growth strategy. Operating profitability has increased in 2012 from the 2011 low levels. Sciens demonstrates an overall solid organisational structure and governance mechanisms, with adequate separation of businesses and functions. The continued staffing turnover and attrition over the past 12 months has led to the current low levels of staff relative to business size. Hiring is in progress to support senior staff. Sound Control Environment: Control functions consist of a dedicated risk team within a separate affiliate and compliance officers. Solid investment risk management and compliance monitoring are supported by solid data management, risk analytics and reporting capabilities. Operational risk management is well embedded throughout the organisation and benefits from automated workflows, documented procedures and system-based controls. Disciplined Formalised Process: The investment process is well documented based on a robust blend of fundamental and quantitative analysis . The competitive advantage of the funds research and portfolio construction stems from deep access to underlying hedge fund data and risk analysis capabilities. Strong Administration Capabilities: Sciens's operations platform is robust, enabling a controlled, fully automated implementation of workflows with a variety of service providers. Funds of hedge funds (FoHF) investment administration is handled by Sigma Asset Management (Guernsey) Limited (Sigma), the manager of the funds. Leading IT Platform: A proprietary integrated technological platform, risk analytics and centralised in-house data management capabilities are the companys key strengths. Sciens also makes available to investors an interactive look-through application that allows them to perform in-depth analysis of managed accounts.
Sciens Funds of Funds Management rating was converted to High Standards, Stable Outlook from M2on 22 April 2013. The rating was affirmed on 24 June 2013.
Outlook
Stable
Profile
Asset under management (end 2012) Operating EBITA 2012 Date of creation Domiciliation USD5.2bn Undisclosed 1988 Cayman Islands (Sciens) UK (SCL) John Rigas (71.5%), other Sciens affiliates (28.5%) 100 (around 40 for Sciens FoF Management Ltd) 7 (for FoHF)
Ownership
Total staff
Investment professionals
Category Scores
Good Standards Company Controls Investments Operations Technology
Source: Fitch
High Standards
Highest Standards
Profile
Analysts
Manuel Arrive, CFA +33 1 44 29 91 77 manuel.arrive@fitchratings.com Alastair Sewell +44 20 3530 1147 alastair.sewell@fitchratings.com
Alternative Asset Manager: Sciens Capital Management LLC (SCM) and its predecessor firms were founded in 1988 and began alternative asset management activities in 1994. Sciens is owned by John Rigas (71.5%). As of 30 June 2013, the group managed and advised on about USD5.6bn of assets. Assets under management (AUM) of FoHF and managed accounts were USD3.4bn (both in direct investments and advisory). Around forty of SCMs 100 -plus employees are dedicated to the FoHF and managed account platform (MAP).
www.fitchratings.com
22 August 2013

AUM Breakdowns
By Asset Type
FoHF (USDm) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2007 Source: Sciens 2008 2009 2010 2011 2012 Managed accounts FoHF advisory Private equity
By Investor Location
(% of total FoHF AUM (including Advisory) As at December 2012)
Americas 0.2% Other 11.5%
Asia & Middle East 28.5%
Europe 59.8%
Source: Sciens
By Strategy (Managed Accounts)

(As at December 2012)
Fund of managed accounts 10.7% Alternative beta 10.7% Managed futures Global macro 0.5% 0.7% Equity 38.7%
By Strategy (FoHF)
(As at December 2012)
Thematic FofHF 10%
Multo-Strategy 90%
Relative value 19.3% Source: Sciens Opportunistic 19.3%
Source: Sciens
Company Structure
Sciens Fund of Fund Management Holdings Group at 31 March 2013
Sciens FOF Offshore Holdings Ltd. Cayman 28.5% Sciens Fund of Funds Management Holdings Ltd. Cayman John Rigas
71.5%
Sciens Group Fund Services Limited Guernsey
Sciens Fund of Funds Management Ltd. Cayman
Sciens Group Risk Services Limited England
Sciens Investment Management LLC Delaware
Sciens Capital Limited England
Sigma Asset Management (Guernsey) Limited Guernsey
Sciens FOF Consulting Group Ltd. Cayman
Sciens Offshore Management Ltd. Cayman
Sciens CFO I Management Ltd. Cayman
Ownership 100% Unless Stated Dormant and Liquidating Companies Omitted

Source: Transaction documents
Rating Scope
Related Criteria
Asset Manager Rating Criteria (April 2013)
Sciens Fund of Funds Management Holdings Ltd August 2013

Company
Key Findings
Well-established, specialist, privately owned, alternative asset manager, hedge fund investor since 1994. Consolidator of the industry between 2008 and 2010, now focusing on organic growth (through MAP). Low albeit improving profitability of FoHF and MAP business at current AUM levels (accelerating growth of MAP in 2013). Structural independence of firm and its affiliates (hosting separate businesses and functions), complemented by appropriate governance practices. Staff turnover and attrition since 2011 allowed a reduction of personnel costs but increased key person dependency and individual workload. Senior staff is in place with hiring being in progress to support them further. Sciens has a concentrated client base.
High Standards
Shareholding and Financial Standing

SCM is an independent New York-based alternative asset manager established in 1994, originally focused on private equity. The predecessor firms of SCM, however, trace their roots back to 1988. Privately owned alternative asset manager The founder and ultimate owner of SCM is John Rigas. He is now chairman and chief executive officer of SCM. John Rigas has overall responsibility for the firm and its management. As at 30 June 2013, the group managed assets in private equity, venture capital, structured finance, real estate, aviation and FoHF for a total of USD5.6bn. The FoHF business is hosted by the dedicated affiliate, Sciens, incorporated in the Cayman Islands. Sciens Group Fund Services Limited (SGFS) is a managed account services provider and the manager of Sciens Group Alternative Strategies PCC Limited, a Guernsey-based managed account platform. Both these entities were acquired from Partners Group AG (and rebranded) in April 2010. Activities segregated in separate affiliates Sciens Capital Limited (SCL) serves as investment advisor to Sigma, its affiliated offshore fund of funds investment manager, incorporated in Guernsey. Sigma is dedicated to management, operations, compliance with the funds policies and legal due diligence on the underlying hedge funds for the FoHF business. Sciens Group Risk Services Limited (SGRS) provides risk management services. Sciens Management LLC is the dedicated private equity affiliate of the group. Fitch has reviewed the consolidated audited financial statements of Sciens. Fitch did not review the financial statements of SCM and other affiliates. Based on the information provided, Fitch concluded that the financial condition of Sciens is adequate. Low profitability, AUM growth in 2013 The FoHF and MAP business show a low profitability and cash flow generation at current AUM levels. However, operational profitability has increased in 2012, largely due to lower costs. In 2013, AUM growth (driven by MAP AUM increasing from USD504m to over USD763m as at end of June), and performance fees increasing should contribute to higher revenues. Despite the positive momentum in AUM growth in the year to date, a major challenge for the company is to accelerate fund raising to increase the revenue base and profitability.

Company (continued)
Experience
FoHF activities started in 2003 at Sciens and in 1994 at Atlas, a London-based FoHF advisor, acquired by Sciens in September 2008. Through Atlas, Sciens has a 19-year track record. After 2008, Sciens has defined and executed in a timely and appropriate manner its external growth strategy to adapt to structural changes in the industry. One of the key drivers of the acquisition of Atlas in 2008 was the companys technological an d operational platform. Subsequently, Sciens was appointed in April 2009 as sub-advisor of the residual FoHF activities of Fairfield Greenwich Group, which totalled USD2.4bn at the time. In April 2010, Sciens acquired the managed account platform of Partners Group AG. Sciens management swiftly restructured the firm around the core Atlas legacy platform and MAP. In Fitchs view, Sciens has demonstrated its ability to consolidate teams and platforms. Sciens has diversified the managed accounts it offers, which, along with a focused, rationalised range of liquid traditional FoHFs, is at the centre of its growth strategy. Sciens investor base consists of around 120 clients (mostly global institutions), as at June 2013. It is diversified by region and by client type (see charts on page 2), but shows some concentration, as the five largest clients accounted for about 75% of AUM as of 30 June 2013. Diversification of investor base in progress The largest FoHF client represents about 30% of FoHF AUM. The MAP has 38 institutional investors as at June 2013. The largest MAP investor represents 40% of AUM. Sciens has gained three and 26 new clients for FoHF (including advisory) and MAP, in the year to June 2013.
High Standards
FoHF manager since 1994, MAP since 2010
Governance and Independence

SGFS is regulated by the Guernsey Financial Service Commission (GFSC) in Guernsey and by the Commodities and Futures Trading Commission (CFTC) in the US. SCL is regulated by the Financial Conduct Authority (FCA), the Securities & Exchange Commission (SEC) and the CFTC. Sigma is regulated by the GFSC, the SEC and the CFTC. None of the FCA, the SEC or the CFTC has inspected the relevant FoHF companies of the group which fall under their jurisdiction. The GFSC visited the MAP while it was owned by Partners Group in 2009. No major issues were raised. There is no independent board director on the board of Sciens, SCL or SGFS. Sigma has two independent directors. There are also two independent directors on the board of SGAS and on each of Sigmas ongoing funds. Deloitte (Cayman) is the auditor of Sciens. KPMG Channel Islands Ltd is the appointed auditor for the MAP. Deloitte LLP (Guernsey) is the auditor for Sigma and its funds. Intra-group service level agreements govern the relationship between the Sciens affiliates which have outsourced certain functions to other affiliates of the Sciens group. SCL provides management, legal, marketing and investor relations support to SGFS. SGRS provides risk management services to SGFS and Sigma. Most FoHF operations are delegated to Sigma. Well formalised intragroup relationships In general, the FoHF business and the MAP are segregated to prevent FoHF business from obtaining detailed information about the portfolio construction of the underlying managed accounts unless specific mandates allow this. A separate risk management affiliate SGRS is in charge of monitoring the FoHF and MAP investment activities, thereby reinforcing the independence of the risk management function.
Appropriate company supervision

Company (continued) High Standards
Sound investment vehicle governance
Funds are domiciled in the Cayman Islands or Guernsey. Some funds are listed on the Channel Islands and Irish stock exchanges. The majority of Sigma FoHF has two independent board members. Board meetings are generally held every six months at a minimum. The MAP consists of Guernsey-based protected cell company structures. MAP assets are held by the various custodian and sub-custodians. The MAP is separated from trading advisors for all governance and controls issues.
Staffing
Sciens has a good organisational structure, with an adequate separation of businesses and functions, often through separate companies. Clear organisational structure, staff turnover Sciens has experienced staffing turnover and attrition since 2011, which has led to the current low levels of staff relative to business size. In Fitchs view, this tends to increase key person dependency and individual workload, particularly for MAP personnel, legal and FoHF portfolio management. Stavros Siokos, who joined in 2011 is based in London and heads the FoHF and MAP business. He provides leadership for the whole platform, thereby reducing the historic reliance on John Rigas, who retains an overall responsibility for the firm and its management. Notable new hires are Alex Allen, who joined in 2011 as senior portfolio manager (PM), and in 2012, Tim Wilkinson who is responsible for global business development and distribution. In 2012-13, the head of MAP and the head of MAP operations left. The head of MAP operations was replaced by a former holder of that position who rejoined the company and Stavros Siokos has taken over as head of MAP. Sciens is in the process of adding junior to medium level staff to support the senior staff in place. Sciens employees have a market competitive base salary and a discretionary bonus, which is not directly linked to fund performance for PMs. A bonus is paid in three tranches per year. Employees may invest in the FoHF products, subject to the approval of the CEO and compliance officers. A longterm incentive plan for senior managers has recently been implemented. Funds typically have a 10% Performance fee, no hurdle rate with high water mark.
High calibre, renewed senior staff
Good alignment of interest
Structure Diagram
John Rigas Chairman Group CEO Christopher Meyering General Counsel Dr. Stavros Siokos, Ph.D CEO Tim Wilkinson President
Legal, Compliance Support (3)a
Accounting, Treasury, Tax & IT (4)
Sciens Group Risk Services (SGRS) (5)
Sciens Managed Account Platform (Map) Dr. Stavros Siokos, Ph.D.
Sciens Investment Services Tim Wilkinson (9)b
Sciens Fund of Hedge Funds John Rigas - CIO
Sciens Advisory Solutions Roberto Botero (2)
Map Legal (3)

a b
Map Operations (4)
Operations & Due Diligence (8)
Investment Research, Data (8)
Share their roles with other teams in the chart Including 4 external third party marketers Source: Transaction documents

Controls
Key Findings
Risks are actively overseen by management, investment committee and risk committee. Control functions consist of a dedicated investment risk team within a separate affiliate, SGRS and compliance officers. Sciens has a demonstrated ability to oversee and control a large number of service providers. System-based controls and automated workflows contribute to embedding risk management in the processes. Underlying hedge fund and portfolio surveillance is well framed through numerous formal risk triggers. Risk and statistical analysis and reporting, supported by solid data management and risk analytics with central IT platform. High quality investment risk reporting packs.
High Standards
Overall Risk Control Framework

The investment committee (IC) reviews market and liquidity risks of the portfolios. A risk committee has been put in place to review the risk books and raise specific concerns to the IC on a monthly basis. Sigma, which is the entity in charge of FoHF investment administration, has an operational risk committee, with the minutes reviewed by the Sigma board. The MAP does not have a risk committee. Enterprise-wide risk oversight by management SGRS, the dedicated risk management affiliate of five focuses on risk and statistical analysis. Its main duties are to screen and monitor hedge fund managers as well as to monitor, measure and report portfolio risks. This function is also responsible for data management, including the consolidation and clean-up of hedge fund and portfolio data, monitoring risk triggers and exposures and other quantitative modelling. Sciens has a chief compliance officer reporting to John Rigas. Sciens does not have an internal audit function, providing a third line of defence. The good automated workflows and interfaces with third parties contribute to mitigating operational risk. FoHF order management is automated between SCL and Sigma. Instructions are then sent by Sigma using Scienss core system to the fund administrator and/or custodian as appropriate. The MAP benefits from direct feeds from prime brokers and counterparties, thereby avoiding reliance on trading advisors. Embedded, system-based operational risk control Sciens has set up comprehensive risk controls parameters in its systems. For instance, the company tracks daily several thousand risk limits, soft limits and warning limits. Risk tools automatically write the error status into an SQL error log database. Procedures are documented, up to date and centralised. Escalation procedures are effective with a rapid notification to the Board facilitated by the small size of the company. Sciens encountered just one material error, which was almost fully compensated by the third parties involved. Sciens expects to recover the full amount shortly.
Controls (continued)
High Standards
FoHF administration is conducted independently by a number of administrators and custodians. The main administrators Kleinwort Benson Fund Services (since 1994). The main custodians have been ABN AMRO Guernsey since 2002 and UBP, Geneva since 2010. Service level agreements are in place with FoHF service providers and the performance of these is monitored by Sigma through key indicators and annual on-site reviews. SEI Investments Global Funds Services Limited and SS&C Technologies Inc provide subadministrators services to SGFS (NAV determinations, trade reconciliations and reporting). All newly launched cells are now sub-administered by SEI. In July 2013, Sciens replaced HSBC Securities Services (Guernsey) Limited with ABN AMRO (Guernsey) Limited for the custody, transfer agency and registrar functions for the MAP, following HSBCs decision to discontinue these services in Guernsey. Sciens follows a rigorous on-boarding procedure to select trading advisors for the MAP and the relationship is formalised in an Service Level Agreement. Prime brokerage terms are agreed on cell by cell basis. MAP service providers produce a monthly report to SGFS, which has been tailored by SGFS. The reporting is then discussed during a bi-monthly oversight call with the service provider.
Strong third party oversight
Control Framework
Sigma and SGFS - at least quarterly. SCL - as required SCL Board consists of J Rigas, C Meyering, S Siokos Sigma Board consists of J Rigas, C Meyering, J Sebire, M de Haaff and R Adair (last two independent) SGFS Board consists of S Siokos, S Bougourd and C Marley Oversight of reputation and business risks, assessment of control environment
Board Meeting
Sciens Risk Committee
Meets as required Consists of A Allen, S Siokos, Risk Managers\ Review of investment risks at fund and manager level
Sigma Operational Risk Committee
Monthly Consists of relevant Sigma, SCL and SGRS staff Discusses all operational, legal and investment risk issues of Sigma's funds
Investment Committee
Weekly Consists of J Rigas, A Allen, S Siokos, F Mehregani and R Botero Review of portfolio investment and liquidity risk, approval of new funds (FoHF) and Trading Advisers (MAP)
Fund Boards (Sigma and MAP)
Sigma funds - at least six monthly; MAP at least quarterly Sigma funds generally have two independent directors; MAP has two independent directors
Source: Sciens, Fitch

Controls (continued)
Compliance and Controls
FoHF pre- and post-trade compliance checks, including fair allocation rules, a re automated in Scienss proprietary front office system where all limits are coded. Exposure versus regulatory, legal or internal limits are monitored as part of proprietary quantitative risk report on a monthly and quarterly basis for FoHF. Key controls well embedded The execution of the FoHF investment decisions is undertaken by Sigma, which has the latitude to veto any of SCLs recommendations. Sigma reviews recommendations for consistency with strategy, clarity, liquidity impact, holding restrictions, the funds prospectus and due diligence, independently of Sciens IC. Pre-trade compliance controls versus risk limits for the MAP are performed by the trading advisor. Post trade compliance is monitored by Scienss risk function as part of their daily processes. 500 metrics are calculated and monitored on a daily basis for the MAP.
High Standards
Investment Risk Management

FoHF portfolio market risk is assessed quantitatively, based on the net asset value (NAV) of the underlying funds. Risk indicators, such as volatility, beta, risk contribution and value at risk (VAR), are calculated and monitored by the risk team using proprietary analytics. Sensitivity analysis and other quantitative analyses are carried out and reported periodically. Invested funds are closely monitored using formal risk triggers to identify material changes in AUM, style drift and abnormal fund performance, including performance against historical returns and versus peer funds, as represented by strategy indices. Alongside the return-based analysis, Scienss analysts also consolidate information gathered on the underlying funds via monthly risk reports adapted to each strategy. All risk indicators are summarised in a risk book. This document is produced by the data and risk team systematically for each portfolio on a monthly basis and is made available to relevant PMs. It is formally reviewed by the risk committee and the IC. Market risk management of MAP is based on position-based VAR, sensitivities market parameters. Stress test and scenario analysis are also conducted. Margin requirements, capital and risk concentrations, exposure by asset class and sectors are also closely monitored. In total, more than 500 metrics are calculated and monitored on a daily basis. The liquidity of underlying hedge funds is monitored monthly and reported to the IC on an aggregated basis to ensure it is consistent with liquidity offered to investors, given redemption forecasts. Good control of liquidity risk Simulations are conducted to estimate the cost of a rapid liquidation and the fraction of the portfolio which could be liquidated within a certain timeframe. The proprietary MAP generally offers daily, weekly or monthly liquidity, depending on the manager, and daily NAV.
Advanced quantitative market risk management
Counterparty Risk Management

Trading advisors of the MAP have to deal with counterparties that have been agreed by Sciens. Sciens monitors counterparties daily through rating changes, CDS spreads and equity returns (where possible). Counterparty exposure is monitored around agreed limits. Over-the-counter (OTC) credit exposure is calculated based on the current market value and risk-based add-on. Margin requirements and excess cash are monitored daily. Some of the MAP excess cash is unitised into a money market cell managed by JPMorgan.
Appropriate counterparty risk management

Investments
Key Findings
Small team of seven investment professionals and two operational due diligence analysts. Deep access to underlying hedge fund data and risk analysis capabilities. Standard research process, based on a blend of quantitative and qualitative analysis, well formalised and effectively implemented. Well documented hedge fund operational due diligence is conducted in an independent manner by Sigma. Most decisions are taken at the five-person IC. Portfolio construction is a risk-based, research-driven process, aiming at building more concentrated portfolios (by source of uncorrelated alpha) but more diversified (by risk factors).
Highest Standards
Investment Resources
John Rigas is the chief investment officer and has 26 years experience in the finance industry. Alex Allen, with 15 years industry experience, is the head of research for Sciens FoHF. He is supported by two research analysts in London. A senior PM left and the former head of research retired in 2012. The small size of the investment team increases reliance on key persons such as John Rigas and Alex Allen, in Fitchs opinion. IC consists of the most senior investment professionals of the firm: J. Rigas, S. Siokos, A. Allen, F. Mehregani and R. Botero. Small investment team The head of research is responsible for the execution of asset allocations and manager selection, while overseeing the risk management of portfolios. He has sufficient leeway in portfolio construction but investment decisions are made on the basis of allocation and selection decisions reached by the IC. Research analysts are responsible for manager due diligence and making recommendations to the IC. As head of research, the PM is well involved in the research process, beyond his typical role of sourcing and managing relationships with managers. Operational due diligence is the responsibility of two people one in Sigma and one in New York with support from the legal/risk teams and from third-parties where specific expertise is required. Superior access to quality fund data and markets feeds the proprietary research process and allows advanced quantitative risk analysis and reporting in FoHF. The MAP set up enables access to position-level information, provided from prime brokers and custodians in T+1.
Very good access to information
Investments (continued)
Investment Discipline
Highest Standards
Sciens implements a standard, iterative investment process, combining top-down tactical allocations with bottom-up manager selection, as described in the diagram below. The process emphasises the maximisation of manager selection alpha (through more concentrated portfolios by number of managers) and the maximisation of downside protection (through more diversified and uncorrelated sources of risks/returns). Decisions are taken at the weekly IC meetings. The responsibilities of the IC are to set guideline limits for strategic and tactical asset allocations, to provide final approval for manager-recommended lists and to continuously review portfolio risk exposures. Disciplined, flexible investment process Operational and legal due diligence, conducted both for the fund of funds and the MAP, covers all key risks and is documented in an appropriate manner. The process includes the review of a compulsory operational risk questionnaire, as well as a number of other requested documents and an on-site review. There are currently more than 100 funds approved for FoHF investments, including 34 funds from 31 managers approved on the MAP. The trading advisors used on the MAP are subject to a comprehensive due diligence review conducted by Scienss risk, legal, operations and business development teams, prior to the appointment to the platform. The selection is documented in an on-boarding procedure report.
Investment Process
Asset Allocation

Fundamental Hedge Fund Monitoring
Determine Strategic outlook Consider Managers for Final due Diligence or Approval Review Monthly Portfolio Allocation Analyze Monthly Risk Reports Review Recent Performance
Regular Manager Contact Formal Evaluation Watch List Procedure Annual operational Due Diligence
Marco-Economic Outlook/Scenarios Strategy Review & Ranking Recommends
Investment Committee Oversight
Portfolio Construction
Risk/Return Expectations Portfolio Construction Parameters
Due Dilligen Preliminary Approval Separate Operational Due Dilligence Monitoring Initial review
Quantitative Portfolio Risk Monitoring
Identification of Unexpected or Undesirations or Sensitivity to Risk Factors Stress Testing Marginal VAR of Each Manager Quantitative Risk Oversight Liquidity Monitoring
Manager Approval/ Selection

10

Operations
Key Findings
Scalable, flexible, global operations platform both for the MAP and FoHF. Straight through processing and effective control points exist between Sciens and service providers for the MAP and FoHF. Recognised in-house risk reporting capabilities support investor communication and client services. High quality of administrative processes and connectivity with external service providers both for MAP and FoHF. Focused operations and legal team for the MAP.
High Standards
Operational Procedures
Most FoHF operations are delegated to Sigma, including cash management, relationship management with underlying fund registrars, reconciliations and currency hedging. In this regard, Sigma appears well equipped, with four full time staff with access to SIMS and a cash management system, IT2. Small operations teams Three operations staff are in charge of MAP operations (relationship with trading advisors and subadministrators, payment execution, distribution of documentation.) and three are in charge of legal (fund structuring, negotiation of legal documentation). A good level of STP between SCL and Sigma supports the fund administration workflows. SCL automatically submits recommendations to Sigma, which instructs administrators and/or custodians. Once due-diligence status, cash and overall consistency have been checked, an instruction is forwarded by Sigma using SIMS to the fund administrator and/or custodian as appropriate. All residual cash positions are either placed on deposit with the custodian or in money market funds by Sigma, which monitors and forecasts cash levels for up to three months, via the IT2 application. Currency management is the responsibility of Sigma, which prepares instructions on each valuation date. All active funds are systematically hedged against their base currency. The MAP operating model is described in the diagram below. SGFS is the official manager and administrator for each cell, but most administration activities are outsourced to third parties through agreements. Trading advisors are responsible for trade confirmation. Sub-administrators are responsible for trade reconciliation and NAV calculation. The operations team and sub-administrators instruct cash movements using restricted templates and dual sign-off.
Road tested FoHF administration capabilities
Strong MAP operating workflows
Communication and Client Servicing

Investor relations are managed by two dedicated client services staff located in New York and London. Monthly and quarterly investor reports are generated automatically from SIMS, which is also used as a customer relationship management (CRM) tool. Monthly factsheet reports are sent out to investors between the 15th and 20th day of the following month. Scienss investor website is available to FoHF and MAP clients. MAP investors have the ability to perform in-depth analysis of all cells, portfolio of client holdings in individual cells within MAP and portfolio simulation using SMART Sciens Managed Account Risk Technologies. Bespoke risk analysis is also available upon request.
Standard, transparent reporting
11

Sciens MAP Operating Model
Investors
Reporting (via SMART Portal) Client Invests in One or Several Funds/Accounts in the Platform
SEI, SS&C (Fund SubAdministrator)
Trade Reconciliation Fund Grants a SubManagement Agreement to MAC Operator
HF Firm Sends Trade Details to Administrator
Cell/Account
Sciens (SGFS, MAP Operator)
MAP Grants a Trading Advisory Agreement (TAA)
Trading Advisor (Underlying HF Investment Firm)
Reconciliation and Controls Fund Assets are Deposited at Custodian Bank
Reports on Matching and Positions Updates
Execution on Behalf of Sciens
ABN Amro (Custodian bank)
Prime Broker (Cell-Specific)
Market Counterparties
Reports on Positions
Source: Fitch Sciens
12

Technology
Key Findings
SIMS Scienss proprietary web-based tool integrates all critical fund research, portfolio risk management and front-office operations on the same platform. SMART is an interactive look-through engine allowing investors to perform in-depth portfolio analysis. Numerous automated interfaces exist between SCL, Sigma and its service providers. Centralised SQL database is fed by market data, hedge fund prices, portfolio valuations and cash flows. RiskMetrics is complemented by various add-ons and SIMS for MAP risk analysis.
High Standards
IT Resources
In-house small IT team Scienss in-house team consists of two IT professionals in charge of system maintenance and development. Data management and data integrity is the responsibility of the risk team.
Systems
SIMS is a proprietary integrated web-based application, customised to Scienss needs in the areas of research, portfolio management and front office operational management. Risk analytics and portfolio management tools are all centralised in SIMS. State of the art, proprietary IT platform As an enterprise-wide solution, SIMS supports MAP risk analysis functionalities, workflow management, underlying fund monitoring, portfolio management, reporting and risk control. Sciens uses RiskMetrics as an enterprise-wide risk analytics. Salesforce is the main CRM system. SMART is an interactive look-through engine allowing investors to perform in-depth analysis of all cells on MAP, portfolio of client holdings in individual cells within MAP and portfolio simulation. Data is centralised on a SQL database, which is fed by market data (automatically for Bloomberg, HFR, Morningstar), hedge fund prices (semi-automatically), portfolio valuations and cash flows (through STP). Superior data centralisation and system interface It consolidates the groups portfolio positions, NAVs and other information (due-diligence questionnaires, call reports and e-mail copies, for example) on hedge funds. Data collection, analysis and reporting are therefore facilitated by the central database. RiskMetrics, which is complemented by various add-ons, is also linked with SIMS. Sciens benefits from a full integration, due to a centralised infrastructure and an enterprise-wide, frontto-back office system.
IT Security
Effective disaster recovery plan Sciens has comprehensive, tested disaster recovery and business continuity plans, with daily back-up procedures and alternative emergency sites.
13

IT Map
Risk Engine Risk Metrics
Core Front to Back System Proprietary System SIMS
Vendor Solution Central Database
SMART Client Interface
Bloomberg, HFR, Morningstar Market Data

Administrator/ Prime Broker System Portfolio Data
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The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
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The information in this report is provided as is without any representation or warranty of any kind. A Fitch rating is an opinion as to th e creditworthiness of a security. This opinion is based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assi gnment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers.
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Fund of Hedge Fund Managers / Caymans