The 20 Rising Stars of Hedge Funds 2008

always believed there will be a convergence between traditional asset management and hedge fund management firms,” he said.“What goes on inside hedge funds is not some secret. In addition, it is clear to me that the large institutional money pools have higher concerns for operational issues, which already are forcing even the largest hedge fund firms to develop a more corporate look and feel.” At Aurarian, consistent quality of research is a factor in achieving high returns, Gold said. Over the next 10 years, he plans to grow the firm’s assets and possibly move beyond its U.S. focus, noting that he expects to continue to follow the firm’s current investment strategy as the climate for hedge funds gets more competitive. “The ones that survive will be differentiated in some way,” he added. 8. JASON GOLD Founder and Chief Executive Officer Aurarian Capital Management, New York Age: 33 Education: University of Virginia (B.S. in Commerce) Mentors: Daniel Benton, Chairman and Chief Executive Officer, Andor Capital Management; Steven Cohen, Founder and Manager, SAC Capital Advisors; Art Sandberg, Chairman, Pequot Capital Management Gold launched Aurarian Capital, a nontraditional long/short equity hedge fund with approximately $50 million in assets under management, in 2004 at the age of 28. Although starting the fund was hard work, he said he was successful as a result of the resume he built working for some of the best firms in the industry. Prior to Aurarian, Gold was a director of technology research at SAC Capital Advisors, beginning in 2003. At SAC Capital, he hired an international team of research analysts and oversaw all aspects of technology investing within the firm’s portfolio. Before that, he was a v.p. and participating partner at Andor Capital Management, maintaining final authority for all portfolio recommendations related to his group of stocks. From 1999 to 2001, he worked as an analyst at Pequot Capital MAY 2008 9. JASON HSU Management, after having begun his career in equity research at Morgan Stanley in 1998. Aurarian Capital focuses on fundamental-driven long/short activist investing in the small- to micro-cap arena—a strategy Gold described as unique and attributable to the fund’s success. Indeed, the fund has grown from just $1.6 million in assets and returned 40.3% net last year.“The only thing that I could do is perform, as performance is our best marketing tool,” he said, adding that the only way to get the investment strategy noticed was to make it yield results. “I needed to prove that to people by actually doing it.” In general, Gold most admires innovation in companies and pointed to Raser Technologies, a geothermal electric company currently in the development stage, as an example. Raser’s new way of generating energy positions the company to disrupt its industry, he said. In addition to technology companies, the metallurgy companies in which the fund invests are prime examples of innovation, he noted, adding that they may be separating chemicals to more effectively mine for copper and nickel or manufacturing widgets to remove pollutants. 9. JASON HSU Principal and Managing Director, Research and Investment Management Research Affiliates, Pasadena, Calif. Age: 34 Education: California Institute of Technology (B.S. in Physics and Economics); University of California at Los Angeles (Ph.D. in Finance) Mentor: Rob Arnott, Chairman and Chief Investment Officer, First Quadrant Hsu oversees the research and investment management areas at Research Affiliates, where he has been a founding principal since 2004. With responsibility for $35 billion of the firm’s sub-advisory and hedge fund businesses, he directs research on asset allocation models that drive the firm’s global macro and global tactical asset allocation products, as well as equity strategies that underpin its Fundamental Index concept. Hsu said co-developing the Fundamental Index strategy with his mentor, Rob Arnott, was a big challenge because it is a new way of investing in equities. The strategy involves using trade indexing that is based on company fundamentals, such as cash flow and book value, instead of market capitalization, he explained, adding that the result is a more diversified and higher-performing index fund. HEDGE FUND RISING STARS 25

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The 20 Rising Stars of Hedge Funds 2008 Contents Looking Great for 2008 A Matter of Supply and Demand Return Performance Highlights Challenging Period 20 Rising Stars of Hedge Funds Mentors' Page

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