From: David Stern Sent: Friday, January 18, 2019 6:12 AM To: Jeffrey Epstein Subject: Bond Fund Can you check if this is of interest to Rothschild? Discussing it now with Pictet and Julius Baer. I can start this with US$ 50m (ICM, Taiwan family) and feel confident =ther families will follow us quickly. Thanks David The problem - Large family offices are increasingly managing their own wealth. - Chinese family office wealth is largely first generational. - Do not trust outside parties much and want direct control of their =ssets - Do not understand that institutionalized asset management cannot turn =n a dime and move in and out. - Do not like funds because assets locked up, no visibility, and no real =ontrol once funds have been deployed. - Do not like paying fees. - Want steady return through bonds but do not want to give up =lexibility, control and transparency. The solution - Create a bond fund at Rotschild that large family offices could assign =und managers specific for their pool of capital. Rotschild would get the fund managers along with the client to make =ure they are up to par. - Family office would get the benefit of Rotschild funding, trading =latform and bond access. - Family office would have visibility into the bonds and some control on =und manager. - As the bond fund would be essentially a Rotschild product under =otschild risk guidelines and management, should be leveragable. This is =mportant because it means the cash isn't stuck and can be =everaged against as the family office needs and thus preserves =lexibility. This isn't super different from existing bond fund =hich are also leveragble. The key difference is that the fund manager =s assigned over by family office and the transparency, mandate, risk =evel is clear to the family office. Basically, incentive of family =ffice is more aligned. - As this bond fund is a Rotschild product, other families should be =ble to subscribe to the bond fund as well. What is t