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BIENVILLE CAPITAL MANAGEMENT, LLCDecember 2010
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OUTLINE OF CONTENTS
I. INTRODUCTION
Bienville Capital Management, LLC 4
Bienville Capital Partners, LP 5
II WHYMACRO? 6
III. INVESTMENT PHILOSOPHY& PROCESS 9
Global Macro Research & Analysis 10
Strategy Allocation 11
Manager Selection 12
Portfolio Construction & Overlay 13
IV. INVESTMENT OUTLOOK 22
V. APPENDICES
Biographies 50
Firm and Contact Information 51
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INTRODUCTION
The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
William Arthur Ward
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INTRODUCTION
Investment Philosophy
& Process
Bienville Capital
Management, LLC
Investment Themes &
Outlook
Bienville Capital
Partners, LP
Why Macro?
SEC-registered, research-intensive, independent investment advisory firm
Founded in 2008 during the height of the global financial crisis
Clients include high-net-worth individuals and single-family offices
The Bienville team has over 100 years of collective experience in investment management
Significant experience in alternative investments, portfolio construction and overlay management
Extensive experience in manager selection across asset classes and strategies
Performance-driven culture
Passionate about investing
Focus on aligning interests with all investors
Emphasis is on investment risk, not business risk. Our benchmark is risk-adjusted returns
Preference for value and fundamentally-oriented managers versus quantitative strategies Flexible, adaptive investment mandate
Extensive network of contacts and resources throughout the investment industry
Investments in independent research
Offices in New York, NY and Mobile, AL
THE FIRM
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INTRODUCTION
Bienville Capital
Partners, LP
Why Macro?
Adaptive and flexible strategy
Access to a select number of exceptionally talented underlying investment managers
Uncorrelated strategies that contribute to an investors overall portfolio diversification
Concentrated approach with a core set of underlying managers
Focused managers who concentrate capital in their highest conviction ideas
Flexibility via a tactical overlay providing the ability to adapt during volatile markets
Intense focus on risk-adjusted returns and capital preservation
Preference for value and fundamentally-oriented managers versus quantitative strategies
Consensus is often wrong
In-depth top-down research process drives strategic allocation across underlying managers
Rigorous manager selection process that seeks to identify highly-skilled managers
Portfolio construction that combines qualitative understanding with quantitative analysis
Periodic reviews of underlying managers, their underlying exposures and holdings
Independent administrator
Bienville Capital
Management, LLC
THE PARTNERSHIP
Investment Philosophy
& Process
Investment Themes &
Outlook
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WHYMACRO?
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WHYMACRO?
Why Macro?
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC There are inflection points in history. This is one of them
Macro is fundamental. The imbalances that exist today are fundamental in nature
Until the imbalances are resolved, the macroeconomic environment will be the driver of volatility
The consensus is often wrong. It is important to always challenge conventional wisdom
Outlier events occur more frequently than forecasters anticipate. As a result, insurance is necessary
Understanding the environment from a qualitative perspective helps to manage turbulence
Nearly all assets are priced off of the risk-free rate. Yet the risk-free rate is a by-product of central
bankers and macroeconomic policy globally
Policymakers respond to probability distributions whereas are markets are behavioral, reliant on
confidence
Not being able to predict whensomething will happen doesnt mean you should act is if it wont
Getting the big picture right is critical
WHYMACRO?
Investment Philosophy
& Process
Investment Themes &
Outlook
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WHYMACRO?
Why Macro?
Bienville Capital
Partners, LP
Bienville Capital
Management, LLCAt the May 2005 Ira Sohn Investment Research Conference in New York, I recommended MDC
Holdings, a homebuilder, at $67 per share. Two months later MDC reached $89 a share, a nice quick
return if you timed your sale perfectly. Then the stock collapsed with the rest of the sector. Some of myMDC analysis was correct: it was less risky than its peers and would hold up better in a down cycle
because it had less leverage and held less land. But this just meant that almost half a decade later, anyone
who listened to me would have lost about 40% of his investment, instead of the 70% that the
homebuilding sector lost.
The lesson that I have learned is that it isnt reasonable to be agnostic about the big picture. For years I
had believed that I didnt need to take a view on the market or the economy because I considered myselfto be a bottom-up investor. Having my eyes open to the big picture doesnt mean abandoning stock
picking, but it does mean managing the long-short exposure ratio more actively, worrying about what may
be brewing in certain industries.
- David Einhorn (Greenlight Capital), Value Investing Congress (2009)
If people looked at sovereign balance sheets the way value investors look at company balance
sheetsas weve donethe enormity of the debt problem in several European and Eastern Europeancountries becomes clear. We expect to see serial defaults on sovereign debt, as countries hit their
Keynesian end-point, in which theyre no longer able to postpone their fiscal and economic problems with
more debt and more cross-guarantees from desperate central bankers. They will literally see their debt
service exceed government revenues and they will have no choice but to default and restructure.
Kyle Bass (Hayman Advisors), Value Investor Insight (2010)
WHYMACRO?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
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INVESTMENT PHILOSOPHY& PROCESS
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
GLOBAL MACRO RESEARCH & ANALYSIS
Intense research process to assess opportunities and risks across asset classes and geographies
Fundamental in nature
Focus on foreseeable events (i.e. grey swans)
ASSETALLOCATION
Determine the risk-reward opportunities and optimal allocation among asset classes and
fundamentally-oriented investment strategies Avoid over-valued asset classes
MANAGERSELECTION PHILOSOPHY& PROCESS
Select a concentrated group of managers with superior investment skill after conducting an intense
review of their investment strategy, process, philosophy and organization
Focus on managers who concentrate their best ideas and align interests with investors
Avoid large institutions , as well as quantitative, arbitrage, relative value, multi-strategy and other
strategies reliant on leverage or multiple portfolio managers
PORTFOLIO CONSTRUCTION
Develop a deep understanding of each managers style, philosophy, volatility, market correlation and
cross correlation to determine optimal allocation
Overlay hedging in order to efficiently alter risk exposures
Cheap insurance
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
GLOBAL MACRO RESEARCH & ANALYSIS
Serves as the foundation for portfolio construction
Rigorous assessment of the macroeconomic landscape and geopolitical environment
Focus on global imbalances and potential sources of volatility
Development of long-term, structural themes coupled with short-term, tactical views
Utilize extensive network of industry professionals, economists and strategists for idea generation
STRATEGYALLOCATION
Long-Short Equity: Focus on value-oriented managers who concentrate their long portfolio in
securities believed to be trading at a discount to intrinsic value while shorting fundamentally-flawed
securities perceived to be overvalued. The short book provides an additional source of return while
reducing overall market risk
Credit & Distressed: Event-driven, value-oriented strategy focusing on complex situations around
corporate capital structures
Fundamental Macro: Independent thinkers employing rigorous fundamental macroeconomic researchin attempt to identify asymmetric return opportunities in periods of volatility and dislocation, thereby
providing valuable portfolio diversification benefits
Tactical Overlay: Utilized when necessary to hedge overall portfolio risk or to tactically adjust
exposures
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
MANAGERSELECTION PHILOSOPHY
Alignment of Interests - Ensure managers have meaningful financial commitments in their respective
funds, thereby aligning interests with all investors
Investment Strategy and Philosophy Definable and repeatable strategy combined with a
fundamental, value investing philosophy
Investment Process - Evaluate whether the managers investment process is repeatable and based on
both superior research skills and analytical ability
People & Organization - Interview key decision makers and assess the infrastructure, policies and
procedures of the underlying managers organization
Performance - History of superior performance consistent with objectives. Focus on quality of
returns, downside protection and correlation, as well positioning in various market environments
MANAGERSELECTION PROCESS
Initial Call or Meeting - Discussion of strategy, process, performance history, team dynamics, risk
management, current opportunities and positioning
Initial Internal Review - Thorough review of notes, marketing materials, website, due diligence
questionnaires, previous investor letters in order to determine whether an on-site visit is warranted
On-Site Due Diligence Visit - Perform an onsite review of all aspects of the firm, including
personnel, investment process, performance, compliance, trading and terms of the partnership
Full Review with Investment Committee - Investment Strategy Memorandum and Due Diligence
Review reports are completed and reviewed by all members of the investment committee
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
PORTFOLIO CONSTRUCTION & OVERLAY
Detailed quantitative analysis is combined with qualitative knowledge attained from in-depth
discussions and analysis
Manager philosophy, style, sector or capitalization preference are considered relative to each other
Correlations, cross-correlations and contribution to portfolio risk are assessed
MONITORING & RISKANALYSIS
Internal models to assess quantitative factors in conjunction with our fundamental and qualitative
understanding of manager positions
Assessment of individual themes, as well as holdings for underlying managers where position-level
detail is essential
Review aggregate portfolio exposures to ensure they are consistent with stated objectives
Analysis of returns, correlations and cross-correlations among managers
Concentrated nature of the partnership allows for intense focus on managers selected
Balance liquidity with opportunity
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
PORTFOLIO CONSTRUCTION
Diversification across asset classes in paramount, however, due to increased correlations, focus should
also be on the best fundamental opportunities while avoiding unattractive and overvalued asset classes...
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
Cash, 5.0% Investment GradeBonds, 10.0%
Enhanced FixedIncome, 7.0%
TIPS,3.0%
Public Equities,
25.0%Gold , 15.0%
Foreign Currency,10.0%
Hedge Funds,25.0%
SAMPLE PORTFOLIO
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INVESTMENT PHILOSOPHY& PROCESS
PORTFOLIO CONSTRUCTION
Throughout 2010, tactical adjustments have largely been focused on three assets classes: foreign
currency, gold and enhanced fixed income
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
Cash, 5.0%Investment Grade
Bonds, 10.0%
Enhanced FixedIncome, 7.0%
TIPS, 3.0%
Public Equities,
25.0%Gold , 15.0%
ForeignCurrency, 10.0%
Hedge Funds,25.0%
TACTICAL PORTFOLIO
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INVESTMENT PHILOSOPHY& PROCESS
PORTFOLIO CONSTRUCTION
Focus on long volatility assets and strategies. High quality fixed income and cash can serve as portfolio
stabilizers while hedge funds and foreign currency may be used to capitalize on dislocations
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
Cash, 5.0%
Investment GradeBonds, 10.0%
Enhanced FixedIncome, 7.0%
TIPS,3.0%
Public Equities,
25.0%Gold , 15.0%
ForeignCurrency, 10.0%
Hedge Funds,25.0%
VOLATILITYREDUCTION
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INVESTMENT PHILOSOPHY& PROCESS
PORTFOLIO CONSTRUCTION
In a deleveraging scenario, deflationary pressures are intense. Cash, bonds and gold typically perform
well. Tactical use of foreign currency can assist in protecting against a strong US dollar rally
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
Cash, 5.0%Investment Grade
Bonds, 10.0%
Enhanced FixedIncome, 7.0%
TIPS, 3.0%
Public Equities,
25.0%Gold , 15.0%
ForeignCurrency, 10.0%
Hedge Funds,25.0%
DEFLATION PROTECTION
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INVESTMENT PHILOSOPHY& PROCESS
PORTFOLIO CONSTRUCTION
Bienville focuses on strategies that are fundamental in nature where intense research can unlock
opportunities. Long-short equity, macro and event-driven strategies have outperformed
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
Risk / ReturnJanuary 1991 - October 2010 (Single Computation)
Return
0%
2%
4%
6%
8%
10%
12%
14%
16%
Standard De viation
0% 5% 10% 15% 20% 25%
HFRI Event-Driven (Total) In dex
HFRI Equity Hedge (Total) I ndex
HFRI Macro (Total) Index
MSCI EAFE
MSCI EM (EMERGING MARKETS)
S&P GSCI
Barclays Capital U .S. A ggregate
BofA Merrill Lynch Municipals, 3-7yr
Market Benchmark:S&P 500
Equity Hedge, Event-Driven and Macro have
delivered higher returns with less volatility
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
PORTFOLIO CONSTRUCTION
In volatile markets, protecting capital is essential for wealth preservation and accumulation
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
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INVESTMENT PHILOSOPHY& PROCESS
Bienville Capital
Partners, LP
Bienville Capital
Management, LLC
THE BIENVILLE MACROVIEWBroad assessment of global opportunities, imbalances and risks across asset classes and geographies
Goldman SachsJP Morgan
Societe Generale
Deutsche Bank
CLSA
Jefferies
Financial Times
Wall Street Journal
New York Times
The Economist
Capital EconomicsISI
Strategas
The Gartman Letter
Ed Yardeni
Grants
David Rosenberg
Ned Davis Research
Lombard Street Research
Bloomberg
Trim Tabs Research
Manager Proprietary Research
Federal ReserveCongressional Budget Office (CBO)
International Monetary Fund (IMF)
U.S. Bureau of Economic Analysis (BEA)
Bank of International Settlements (BIS)
OECD
News & Periodicals
Wall Street Research Independent Research Proprietary, Internal Research
GDP, Inflation, Interest Rates, CommodityPrices, Credit Spreads, CDS, Political & Social
Factors, Fiscal & Monetary Policy, Currency,Money Supply & Credit Creation, Equity
Prices, PE Multiples, Psychology, Volatility
Proprietary, Internal Research
Investment Philosophy
& Process
Why Macro?
Investment Themes &
Outlook
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INVESTMENTTHEMES & OUTLOOK
I have yet to see any problem, however complicated, which, when looked at the right way did not become still more complicated.
- Poul Anderson, author
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INVESTMENT OUTLOOK
Investment Themes &
Outlook
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
CORE INVESTMENTTHEMES
Unraveling of the multi-decade credit bubble
Secular deleveraging of the private sector in developed economies resulting from excessive
debt
Sovereign discredit
Oscillating volatility paradigm, increased correlation across asset classes
High-quality versus low-quality equities
Global fiscal and monetary policy divergence, protectionism
Monetary instabilityWhy Macro?
Investment Philosophy
& Process
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
UNRAVELING OF THE CREDIT BUBBLE
Unchartered territory. As Irving Fisher explained, major disturbances in economic cyclesoccur from too much debt relative to GDP
Source: Hoisington
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
UNRAVELING OF THE CREDIT BUBBLE
Shuffling the deck chairs aroundHouseholds are beginning the necessary deleveragingwhile the government ramped up to socialize losses
Source: Federal Reserve Flow of Funds
Rapid accumulation of debt
Early stages of deleveraging Transfer of bad private debts to the public sector
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
SOVEREIGN CREDIT
Sovereign credit will remain a critical issueand one of insolvency, not liquidity
Source: GMO
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
DELEVERAGING & GLOBAL REBALANCING
The sum of financial flows in an economy must equal zero. Therefore, one sectors financialbalance cannot be viewed in isolation as its effects will be felt elsewhere
Sectoral financial balancesthat is, how much a sector borrows or savesrepresents aflow over time. Contrarily, balances show how much a sector owes (or is owed) andrepresents a stock at a moment in time. For example, the US government gross debt-to-GDP is ~85%. This is the stock of debt
Because the public sector is currently in deficit, the private sector and the foreign capitalaccount must, by definition, be in surplus. They are providing the funding to the public sector
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
PUBLIC SECTOR + PRIVATE SECTOR + CURRENTACCOUNT = 0
Source: Lombard Street Research; Bloomberg, Bienville Capital Management, LLC,
-10.0% + 7.0% + 3.0% = 0
HOUSEHOLDS
2.0%BUSINESSES
5.0%
CURRENT US SECTORAL FINANCIAL BALANCE
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
DELEVERAGING & GLOBAL REBALANCING
By analyzing sectoral balances, it is clear that it is a mathematical impossibility for both thepublic and private sector to delever without the trade deficit swinging towards balance
Since the government sector debt-to-GDP will soon reach 100%, in order to stabilize theratio, the annual budget deficit cannot exceed nominal GDP growth, which is estimated tobe 3.0%. In fact, budget deficits are being targeted to 3.0% (see CBO projections)
Normal private sector surpluses are 4.0% (3.0% for households and 1.0% for businesses).For that to occur, the current account needs to be in balance. This natural tendencytowards equilibrium is in contrast with Chinas policy and the currency regime in place
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
PUBLIC SECTOR + PRIVATE SECTOR + CURRENTACCOUNT = 0
Source: Lombard Street Research; Bloomberg, Bienville Capital Management, LLC,
-3.0% + 4.0% + -1.0% = 0
HOUSEHOLDS
3.0%BUSINESSES
1.0%
SUSTAINABLE US SECTORAL FINANCIAL BALANCE
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
DELEVERAGING & GLOBAL REBALANCING
When looking at the flows between sectors, imbalances become obvious
For the Government sector to reduce its annual deficits, the Foreign account must falltowards zero. However, the Chinese yuan peg is preventing it from occurring
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
Source: Lombard Street Research; Bloomberg, Bienville Capital Management, LLC,
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
JAPAN WHEN, NOT IF
Equity and land prices burst over 20 years ago and remain at substantially lower levels.
Why Macro?
Investment Philosophy
& Process
Investment Themes &
OutlookSource: Capital Economics
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
JAPAN WHEN, NOT IF
Rather than restructuring private debts, losses were socialized. Debt-to-GDP is now higherthan any country in the developed world.
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
Source: Capital Economics
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
JAPAN WHEN, NOT IF
When credit grows faster than the economy, trouble always ensues.
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
FY 2010 (Initial) in Yen
Tax Revenues 37,396
Social Security Expenditures (27,269)
Interest Expense* (9,800)
Surplus to Fund other Budget Items 327
Source: Japan Ministry of Finance
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
CHINA THE NEXT CREDIT CRISIS?
Net capital inflows have been expanded into the money supply through bank loans
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
Source: Independent Strategy
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
CHINA THE NEXT CREDIT CRISIS?
The bank loans have driven enormous investments into capacity, much of it unnecessary
Despite widespread belief, investment in fixed assets drives economic growth
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
CHINA THE NEXT CREDIT CRISIS?
What distinguishes China from other emerging markets is the intensity and duration of itsfixed asset investment cycle. No country has maintained a ratio over 35% of GDP for as long
However, the trend is unsustainable as efficiency of investment deteriorates
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
CHINA THE NEXT CREDIT CRISIS?
When credit grows faster than the economy, capital is grossly misallocated. Trouble alwaysensues
Booms can quickly turn to busts
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
(in RMB) (in USD)
M1 24,100 3,601 1,757 205%
M2 67,400 10,072 8,704 116%
GDP 34,051 5,088 14,579 35%
M1 / GDP 71% 12% 587%
M2 / GDP 198% 60% 332%
Source: Bloomberg
China as % of
US
China United States
(in USD)
CHINA THE NEXT CREDIT CRISIS?
Net capital inflows have been expanded into the money supply through bank loans
Despite Chinas economy being a third of the size of the US, its money supply is nearly 20%larger
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
OSCILLATINGVOLATILITY
Excessive debt globally has lead to a new volatility regime
Source: Bienville Capital Management, Bloomberg
0
10
20
30
40
50
60
70
80
90
Jun-04 Jan-05 Aug-05 Mar-06 Oct-06 May-07 Dec-07 Jul-08 Feb-09 Sep-09 Apr-10
VIX Index
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
OSCILLATINGVOLATILITY
Weve seen this movie beforea lot of volatility but no gains
Source: Bienville Capital Management, Bloomberg
500
600
700
800
900
1,000
1,100
Dec-67 Nov-69 Nov-71 Nov-73 Nov-75 Nov-77 Nov-79 Nov-81
Dow Jones Industrial Average (1967 -1982)
-30%
-15%
-40%
-26%
-15%
+37%
+23%+65% +35%
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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CONFIDENTIAL
-14%
INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
OSCILLATINGVOLATILITY
There has to be a better way
Source: Bienville Capital Management, Bloomberg
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
600
800
1,000
1,200
1,400
1,600
Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10
S&P 500 (Trailing 10 Years)
+83%
-47%
+95%
-57%
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP Attractive uncorrelated spread to be captured via
long high-quality, short low-quality
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
OSCILLATINGVOLATILITY
Stay hedged, focusing on high quality versus low quality
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Source: Bienville Capital Management, Bloomberg
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
US Government 10-Year Yield
Penn Square Bank Failure
Continental Illinois Failure
87 Crash
S&L Crisis / Gulf War I
Mexican Peso Crisis
Russia Default / LTCM Failure
Dot.com Bust
9-11 Subprime Credit Crisis
POLICYRESPONSE
US Treasury yields have been falling for nearly 30 years as policymakers respondedasymmetrically to financial market crises
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Source: Bienville Capital Management, Bloomberg
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
94 97 00 03 06 09
Federal Reserve Bank Total Assets
POLICYRESPONSE
With no more room to cut rates, the Fed is targeting its balance sheet. How far will they go?
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
Contraction
Cycle Peak Cycle Trough in GDP Length Monetary Fiscal Total
August 1929 March 1933 -27.0% 43 3.4% 4.9% 8.3%
May 1937 June 1938 -3.4% 13 0.0% 2.2% 2.2%November 1948 October 1949 -1.7% 11 -2.2% 5.5% 3.3%
July 1953 May 1954 -2.7% 10 - -1.4% -1.4%
August 1957 April 1958 -3.2% 8 - 3.2% 3.2%
April 1960 February 1961 -1.0% 10 0.7% 1.0% 1.7%
December 1969 November 1970 -0.2% 11 0.3% 2.4% 2.7%
November 1973 March 1975 -3.1% 16 0.9% 3.1% 4.0%
January 1980 July 1980 -2.2% 6 0.4% 1.1% 1.5%
July 1981 November 1982 -2.6% 16 0.3% 3.5% 3.8%July 1990 March 1991 -1.3% 8 1.0% 1.8% 2.8%
March 2001 November 2001 -0.2% 8 1.3% 5.9% 7.2%
December 2007 June 2009 -4.1% 18 22.1% 11.9% 31.0%
Stimulus as % of GDP
Source: Blackstone; Alan S. Blinder; Mark Zandi; The National Bureau of Economic Research; Lombard Street Research;Bienville Capital Management, LLC estimates
POLICYRESPONSE
By all measures, the policy reaction to the Great Recession was inconceivablydisproportionate, currently running at an estimated 30% of GDP
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
MONETARYINSTABILITY
Gold is telling us something about the viability of the current monetary framework
Source: Bienville Capital Management, Bloomberg
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook0
200
400
600
800
1,000
1,200
1,400
1,600
01 02 03 04 05 06 07 08 09 10
Gold (in USD)
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INVESTMENT OUTLOOK
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
MONETARYINSTABILITY
Faced with these confusing and competing considerations, Von Havenstein decided to play fortime, supplying the government with whatever money it needed. Contrary to popular myth, hewas perfectly aware that printing money to finance the deficit would bring inflation. But hehoped that it would be modest, and that in the meantime, something would turn up to inducethe Allies to lower their demands or at least agree to a moratorium on actual payments, givingGermany some breathing space.
It was a total miscalculation. Von Havenstein failed to recognize that experimenting with thecurrency was like a knife-edge. A moderate degree of inflation does not remain moderate forlong. At some point the public loses confidence in the authoritys power to maintain the valueof money, and deserts the currency in panic. Germany passed this tipping point in the middleof 1921.
Instead of admitting that he had made a terrible mistake, Von Havenstein, with his doggedPrussian sense of duty, dug in his heels, refusing to change any of his policies and continuingto print as much money as the government needed.
- Liaquat Ahamed, Lords of Finance
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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INVESTMENT OUTLOOK
Hedged equity exposure exploiting the attractive spread between high-quality and low-
quality securities while reducing correlation to broad indices
Event-driven and special situations in credit and distressed debt markets
Thematic macro exposure to capitalize on oscillations in volatility and battle between
intensifying deflationary pressures and reflationary policy response
Physical gold and gold-related equities, foreign currency to protect from monetary
instability
Protection against a sovereign credit crises focused on Europe and Japan
Flexibility!
Bienville Capital
Management, LLC
Bienville Capital
Partners, LP
SUMMARY AND POSITIONING
Why Macro?
Investment Philosophy
& Process
Investment Themes &
Outlook
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APPENDICES
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BIOGRAPHIES
M. Cullen Thompson, CFA
Managing Partner, CIO
Co-Founder, Bienville Capital Management, LLC
Previously:
Director of Investments, RR Advisory Group, LLC
Senior Research Analyst, Citigroup Private Bank
Senior Portfolio Analyst, Lehman Brothers Trust Co.
Associate , Arthur Anderson LLP
BA University of Alabama
Donald Stoltz III
Partner
Director of Trading & COO, Bienville Capital Management,
LLCPreviously:
Proprietary Trader, First New York Securities, LLC
Vice President, JPMorgan Chase & Co.
BA Pennsylvania State University
William H. Stimpson II
Managing Partner, CEO
Co-Founder, Bienville Capital Management, LLC
Previously:
Managing Director , Bay Crest Securities, LLCExecutive Director, JPMorgan Chase & Co.
Vice President, Deutsche Bank
BA Vanderbilt University
Shruti Bansal, CFA
Director
Manager Due Diligence, Bienville Capital Management, LLC
Previously:
Head of Research, SCS FinancialVice President, Atlantic Trust
Senior Analyst, Muirfield Capital Management
Portfolio Manager, Lehman Brothers
BA Montclair State University
Ralph F. Reynolds
Partner, Senior Advisor
Co-Founder, Bienville Capital Management, LLC
Previously:
Founder and CIO, Carlyle Blue Wave
Managing Director, Deutsche Bank
President & CEO, NatWest
Managing Director, Morgan Stanley
Principal, OConnor and Associates
MBA University of Chicago
BA University of Pennsylvania
Edward B. Meyercord
Senior Advisor
Senior Advisor, Bienville Capital Management, LLC
Previously:
Director, Stralem & Company
Partner, Eagle Capital Management
Executive, Hillcrest Partners
Executive, Altiva Financial Corporation
Executive, Mclean Securities
Executive, XM Partners
BA Birmingham Southern College
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FIRM AND CONTACT INFORMATION
Bienville Capital Management, LLC is an SEC-registered, independent investment advisory firm offering sophisticated and customized
investment solutions to high-net-worth and institutional investors.
The members of the Bienville team have broad and complementary expertise in the investment business, including over 100 years of
collective experience in private wealth management, institutional investment management, trading, investment banking and private
equity. We have established a performance-driven culture focused on delivering exceptional advice and service to a select number of
investors. We communicate candidly and frequently with our clients in order to articulate our views.
Our clients include high-net-worth families and single family offices with complex needs.
Bienville Capital Management has offices in New York, NY and Mobile, AL.
New York Bienville Capital Management, LLC
32 Avenue of the Americas, Ste 2100
New York, NY 10013
Phone: 212.226.7348
Alabama Bienville Capital Management, LLC
64 North Royal Street
Mobile, AL 36602
Phone: 251.445.8139
Email Cullen Thompson
Donald Stoltz
www.bienvillecapital.com
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CONFIDENTIAL
DISCLAIMER
Bienville Capital Partners, LP (the Fund) is offered in reliance upon an exemption from registration under the U.S. Securities Act of 1933, as amended, foroffers and sales of securities that do not involve a public offering. This document is not intended to be, nor should it be construed or used as, an offer to sell ora solicitation of any offer to buy securities of the Fund. No offer or solicitation may be made prior to the delivery of the Confidential Private OfferingMemorandum of the Fund (the Memorandum). Securities of the Fund shall not be offered or sold in any jurisdiction in which such offer, solicitation or sale
would be unlawful until the requirements of the laws of such jurisdiction have been satisfied. No public or other market is available or is likely to develop forsecurities of the Fund. Furthermore, securities of the Fund have limited withdrawal rights and are not transferable without the prior written consent ofBienville Capital GP, LLC (the "General Partner"). Accordingly, an investment in the Fund is a relatively illiquid investment.
This document is confidential, intended only for the person to whom it has been provided, and under no circumstance may be shown, transmitted or otherwiseprovided to any person other than the authorized recipient. While all information in this document is believed to be accurate, the General Partner makes noexpress warranty as to its completeness or accuracy and is not responsible for errors in the document. Furthermore, the information is furnished as of the dateshown or cited, and the General Partner does not undertake any responsibility for updating the information herein. This document is provided forinformational purposes only, does not contain all material information about the Fund is subject to change without notice. Furthermore, estimates, investment
strategies and views expressed in this document are based upon current market conditions and/or may be based on information provided by unaffiliated thirdparties.
In making an investment decision, investors must rely on their own examination of the Fund and the terms of the offering, including, but not limited to, themerits and risks involved. The interests of the Fund have not been recommended by any federal or state securities commission or regulatory authority.Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this presentation. Any representation to the contrary isa criminal offense.
The information contained herein does not take into account the particular objectives or circumstances of any specific prospective investor and should not beconstrued as accounting, legal, tax or investment advice. Prospective investors should consult their tax, legal, accounting or other advisors about the mattersdiscussed herein. An investment in the Fund may not be suitable for all investors and eligibility criteria will apply. No person has been authorized to give any
information or to make any representation, warranty, statement or assurance not contained in the Memorandum and any such information may not be reliedupon.
This document contains information about the Funds investment objective, programs, guidelines and restrictions. Material economic conditions, market forces,and other factors may cause the Fund to adjust such objective, programs, guidelines and restrictions as necessary. No guarantee or representation is made thatthe Funds investment programs, including, without limitation, its investment objectives, diversification strategies or risk management goals, will be successful,and investment results may vary substantially over time.
AN INVESTMENT IN THE FUND IS A SPECULATIVE INVESTMENT, INVOLVES SIGNIFICANT RISKS AND IS SUITABLE ONLY FORTHOSE PERSONS WHO CAN BEAR THE ECONOMIC RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT AND WHO HAVE A LIMITEDNEED FOR LIQUIDITY. THERE CAN BE NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
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