Pied Piper, Inc is a large international multi-conglomerate, headed out by CEO Richard Hendrix. The company was faulted with a leak in their chemical plant 2 years ago and was obligated to pay for the ongoing expenses of 28% of their workforce to supplement earnings and medical care. In order to pay for these ongoing expenses, the company formed a fund.

After using Farralon LLC as the manager of the fund since inception, Mr. Hendrix has chosen you to take over the funds management. In doing so he provides you some background on Pied Piper, Inc. The following is some highlights of that information:

Pied Piper, Inc is a large international multi-conglomerate, headed out by CEO Richard Hendrix. The company was faulted with a leak in their chemical plant 2 years ago and was obligated to pay for the ongoing expenses of 28% of their workforce to supplement earnings and medical care. In order to pay for these ongoing expenses, the company formed a fund.

After using Farralon LLC as the manager of the fund since inception, Mr. Hendrix has chosen you to take over the funds management. In doing so he provides you some background on Pied Piper, Inc. The following is some highlights of that information:

• Pied Piper has annual sales of $34.5 bn
• Our current payroll has been at $3.25 bn and has grown with inflation
• Net Income is at $12.1 bn with a 10.5% 5 yr CAGR
• The average age of the people affected by the leak are 65
• The average age of our remaining workforce is 32
• The liabilities for the accident have a present value of $1.5 bn while we have allocated $6.75 bn in assets for the portfolio
• We applied an 8.9% discount rate to the liabilities
• In the past five years, Farralon LLC has generated a return of 9.1% for us

Hendrix specifies that for the next year they need to generate $435 mm to meet expected expenses. However, in the allocation process, they would like to maintain 15% for cash and alternatives. Their capital gains tax rate is 22%. Pied Piper has annual sales of $34.5 bn

• Our current payroll has been at $3.25 bn and has grown with inflation
• Net Income is at $12.1 bn with a 10.5% 5 yr CAGR
• The average age of the people affected by the leak are 65
• The average age of our remaining workforce is 32
• The liabilities for the accident have a present value of $1.5 bn while we have allocated $6.75 bn in assets for the portfolio
• We applied an 8.9% discount rate to the liabilities
• In the past five years, Farralon LLC has generated a return of 9.1% for us

Hendrix specifies that for the next year they need to generate $435 mm to meet expected expenses. However, in the allocation process, they would like to maintain 15% for cash and alternatives. Their capital gains tax rate is 22%.

Return Objective?

Risk Tolerance?

Time Horizion?