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Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
Gam niall gallagher   citywire d 2013
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Gam niall gallagher citywire d 2013

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  • 1. This document is confidential and intended solely for the use of the person to whom it is given or sentand may not be reproduced, copied or given, in whole or in part, to any other person.European Equities – Beyond the Veil of PessimismJune 2013Niall GallagherInvestment DirectorGAM
  • 2. Introduction● 15 years experience investing in equities● Highly active, unconstrained approach– Concentrated– Bottom-up, Research down– No index constraintStrategy managed Dates managedBlackRock European Dynamic Fund Sep 03 – Oct 06BlackRock European Growth Fund May 05 – Oct 06T. Rowe Price Europe ex UK Fund Mar 07 – Apr 09T. Rowe Price European Fund Mar 07 – Apr 09GAM European Equities Since Nov 09GAM StarContinentalEurope EquityEUR 504.6mGAM StarEuropeanEquityEUR 61.6mGAM European Equities: EUR 566.2mGAM AuM:Source: GAM as at 31 May 2013 2
  • 3. -10 %0 %10 %20 %30 %40 %50 %60 %2010 2011 2012 2013SimplePerf.%Ann.Perf.%Ann.Std.Dev.GAM StarContinentalEuropean Equity –EUR56.2 13.5 13.9MSCI Europe ex UKIndex in EUR32.6 8.3 13.9GAM Star Continental European Equity – EURMSCI Europe ex UK Index in EURGAM Star Continental European Equity – EURPerformance from 30 Nov 2009 to 12 Jun 2013Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.Past performance is not indicative of future performance. Performance is provided net of fees.Source: GAM, MSCI 33
  • 4. 0 %10 %20 %30 %40 %50 %2010 2011 2012 2013SimplePerf.%Ann.Perf.%Ann.Std.Dev.GAM Star EuropeanEquity – EUR45.6 11.2 13.0MSCI Europe Indexin EUR ex-DEM37.7 9.5 12.5GAM Star European Equity – EURMSCI Europe Index in EUR ex-DEMGAM Star European Equity – EURPerformance from 30 Nov 2009 to 12 Jun 2013Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.Past performance is not indicative of future performance. Performance is provided net of fees.Source: GAM, MSCI 4
  • 5. Process overview● Bottom up unconstrained approach– Primarily large cap investor with some exposure to mid and small caps● Aim for detailed understanding of each position– High conviction research driven stock selection– Focussed portfolio of 30 – 50 stocks– Long-term (3 – 5 year) investment horizon● Absolute, cash-flow based valuation approach augmented by a range ofmultiples incorporating entire capital structure– Free Cash Flow Equity / Enterprise Value %– EV/Sales– EV/CE– EV/EBIT– Analysis of all metrics vs long-term historical range● Returns ‘bias’– Preference for High Return on Capital Employed businesses– Preference for strong Free Cash Flow generation– Requirement for robust balance sheets– No preference for structural or defensive over cyclical● Portfolio construction techniques aim to maximise risk-adjusted returns andreduce risk concentrationsReturn target (net) Benchmark + 300 – 400bps paTypical tracking error 4 – 6% paImplied informationratio0.75Active Share >85%Peer group comparison Achieve first quartile ranking5High conviction, fundamentally driven investingSource: GAMThere is no guarantee that targets will be achieved.Allocations and holdings are subject to change.
  • 6. High conviction focused portfolio6GAMStar ContinentalEuropeanEquityActiveShareTracking ErrorLowHighLowHigh00Diversifiedstock picksClosetindexingFactorBetsConcentratedstock picksPure indexingAn active style:• Bottom up focus and totallyunconstrained approach• Fundamentally driven stock selectionwith a high emphasis ondiversification• Produces a highly active,concentrated but diversified portfolioMediumMedium
  • 7. 7Investment teamManaging Pan European and Continental European long-only strategiesJames DavidsonHead of InvestmentAdministration– 23 years’ experience– Joined GAM in 1997John Paul Hodder-WilliamsHead Dealer– 11 years’ experience– Joined GAM in 2004Supported by two additional members of the dealing teamTrading and AdministrationNiall GallagherInvestment Director– 15 years’ experience– Joined GAM in 2009– Responsible for all portfolio decisionsJames WigleyInvestment Analyst– 11 years’ experience– Joined GAM in 2010Source: GAM as at 31 Mar 2013Swetha RamachandranInvestment Analyst– 13 years’experience– Joined GAMin 2012
  • 8. This document is confidential and intended solely for the use of the person to whom it is given or sentand may not be reproduced, copied or given, in whole or in part, to any other person.The Case for Europe
  • 9. 9Some ‘older’ common views on European equities● Low economic growth prospects for European economies● Significant sovereign and financial sector stresses● Weak policymaking infrastructure● Unquantifiable tail risksEuropean equities are uninvestable
  • 10. 102012 confounded expectations● Eurozone did not fall apart● Policymakers were not useless● Banks did not go bust● Significant bounce in European equitiesIs the asset class still investable?Have we missed the rally?
  • 11. 11Valuation● Normalised valuation metrics are much cheaper● Shiller / CAPE ratio of 13.2x versus 32 year average of 17.5x● Very large discount to US equities on normalized metrics– 40% discount on CAPE vs. a 32 year average of 14% discount● Trend PE ratio analysis shows same valuation discounts of Europe vs. US– Applies to “market ex- financials” as wellSource: Morgan Stanley (European Strategy Team) as at 31 Dec 2012
  • 12. 101520253035404581 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11-40 %-20 %0 %20 %40 %81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11USUS averageEuropeEurope averagePremium / DiscountShiller PEFrom 30 Nov 1979 to 6 Jun 2013Note: European inflation data is based on market cap weighted aggregation of constituent country inflation ratesPast performance is not indicative of future performance.Source: MSCI, OECD, various national sources, Haver, Morgan Stanley Research - European Strategy Team, Source: MSCI, OECD, various national sources, Haver, Morgan Stanley Research -European Strategy Team12Shiller PE Europe vs US12
  • 13. 13Some perspective on European equities● European equities are global not local– 50% of revenues are from outside of Europe– 30% of revenues are from emerging markets– Significantly less exposure to € currency than assumed● European equity market is not homogeneous– Significant divergences in ‘geographic exposures’ within the market– Some sectors / stocks are almost completely global– Some sectors / stocks are almost completely local● In many industries European companies are the global leadersEurope is not a good proxy for European equities
  • 14. 14Revenue composition for EuropeSource: Redburn Securities0%10%20%30%40%50%60%70%80%90%100%1990 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 2015EuropeJapanUSA and CanadaOther AmericasAsia ex JapanRest of World
  • 15. 15Economic context in which we invest● Global economic growth forecast by IMF and other forecasters at 3–3.5%● Broadly, in line with long-term averages although subject to frequent revision● Significant regional divergences– Global growth primarily led by emerging economies– Emerging economies strong(er)– Developed economies weak(er)– US economy somewhere in between
  • 16. 16Growing convergence within Europe?● Northern and Central Europe are heavily exposed to global trends– Strong export sectors and core competitive advantage– Stronger fiscal positions● Virtuous feedback loops– Record levels of employment → decent wage growth– Decent wage growth → strong domestic demand– Strong domestic demand → improving fiscal positions● Monetary policy is increasingly set for peripheral Europe– Interest rates too low for northern Europe– Exchange rate very competitive for northern Europe● BUT, very significant improvement in current account positions of peripheral Europe
  • 17. 17Focus on the current account – % of GDPSource: Citigroup March 2013 Global Economic Outlook and Strategy2012 2013 2014US -3.0 -2.7 -3.0UK -3.6 -4.5 -4.4Euro area 1.2 2.6 2.5Strong EuropeGermany 7.0 6.8 5.7Switzerland 12.8 12.8 12.0Sweden 7.2 7.3 6.9Denmark 5.3 4.7 4.0Netherlands 9.9 9.9 9.0Weak EuropeFrance -2.4 -1.7 -0.9Italy -0.6 -0.3 -0.2Spain -0.8 2.3 3.7Portugal -3.5 -0.3 1.7Greece -4.3 -3.3 2.1Ireland 4.5 5.8 6.7
  • 18. 18How to think about investing in this environment● In a developed world characterised by low growth focus on companies that possess– Good revenue growth prospects, ideally indexed to Global Nominal GDP– High Return on Capital Employed (ROCE)– High Free Cash Flow conversion– Strong balance sheets
  • 19. 19How to find growth?● Geographic positioning of companies– Presence in growth markets vs no growth markets– Total geographic composition of revenues● Industry / technological positioning– Innovation and evolution– Market leadership– Barriers to entry● Structural vs cyclical growth– Growth does not just imply defensiveness– Many attractive global growth companies have embedded cyclicality
  • 20. This document is confidential and intended solely for the use of the person to whom it is given or sentand may not be reproduced, copied or given, in whole or in part, to any other person.GAM Star European Equity
  • 21. 21GAM Star European Equity InvestmentsTop 10 holdings (of 40) as at 31 May 2013Source: GAMAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.21
  • 22. GAM Star European Equity InvestmentsStock % OverweightPaddy Power 4.6Schindler Holding 4.4Henkel 3.8Gas Natural 3.8Wirecard 3.7Ryanair 3.7Kone Oyj-B 3.6Swatch 3.3Fresenius Se 3.2BG Group 3.12222Stock % UnderweightNestle -2.8HSBC Holdings -2.7Vodafone Group -1.9Bp -1.8Glaxosmithkline -1.7SANOFI -1.7Royal Dutch Shell A -1.7Total Sa -1.4Royal Dutch Shell B -1.2Bayer -1.2Most overweight and underweight stocks versus MSCI Europe as at 31 May 2013Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  • 23. 23GAM Star European Equity InvestmentsSector % OverweightConsumer Durables & Apparel 9.8Capital Goods 7.0Health Care Equipment & Services 5.7Software & Services 5.5Consumer Services 3.8Automobiles & Components 2.8Transportation 2.6Household & Personal Products 2.2Retailing 1.4Technology Hardware & Equipment 0.723Most overweight and underweight sectors versus MSCI Europe as at 31 May 2013Sector % UnderweightBanks -7.7Pharmaceuticals, Biotechnology & LifeSciences-6.8Insurance -5.6Materials -5.0Telecommunication Services -4.1Food, Beverage & Tobacco -2.6Media -1.8Diversified Financials -1.8Food & Staples Retailing -1.7Commercial & Professional Services -1.4Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  • 24. 24GAM Star European Equity InvestmentsIndustry Analysis as at 31 May 2013Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source.Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.24
  • 25. 25GAM Star European Equity InvestmentsGeographic Analysis as at 31 May 2013Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source.Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.25
  • 26. 26GAM Star European Equity Investments26GAM Star European EquityMSCI Europe IndexMarket cap quintile as at 31 May 2013Source: GAM/FactSetPresented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  • 27. 27GAM Star European Equity Investments27Style analysis as at 31 May 2013Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.Styleweights
  • 28. This document is confidential and intended solely for the use of the person to whom it is given or sentand may not be reproduced, copied or given, in whole or in part, to any other person.GAM Star Continental European Equity
  • 29. 29GAM Star Continental European Equity InvestmentsTop 10 holdings (of 39) as at 31 May 2013Source: GAMAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.29
  • 30. 30GAM Star Continental European Equity InvestmentsStocks % OverweightPaddy Power 4.5Schindler Holding-Part Cert 4.2Gas Natural 3.7Ryanair 3.7Kone 3.7Wirecard 3.4Continental 3.2Swatch 3.1Fresenius 3.0Publicis Groupe 2.7Most overweight and underweight stocks versus MSCI Europe ex UK as at 31 May 2013Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.Stocks % UnderweightNestle -4.3SANOFI -2.6Total Sa -2.1Bayer -1.8Siemens -1.8Banco Santander Sa -1.5Allianz -1.4Novartis -1.4Unilever -1.3Novo Nordisk -1.3
  • 31. GAM Star Continental European Equity InvestmentsSectors % OverweightConsumer Durables & Apparel 6.6Capital Goods 6.0Health Care Equipment & Services 5.3Software & Services 5.0Consumer Services 4.2Media 2.6Automobiles & Components 2.4Household & Personal Products 2.4Transportation 2.0Technology Hardware & Equipment 0.73131Most overweight and underweight sectors versus MSCI Europe ex UK as at 31 May 2013Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.Sectors % UnderweightPharmaceuticals, Biotechnology & LifeSciences-8.2Banks -6.1Insurance -6.0Food, Beverage & Tobacco -5.0Diversified Financials -3.1Materials -3.0Telecommunication Services -2.4Energy -1.5Food & Staples Retailing -1.3Real Estate -0.9
  • 32. 32GAM Star Continental European Equity InvestmentsIndustry Analysis as at 31 May 2013Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source.Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.32
  • 33. 33GAM Star Continental European Equity InvestmentsGeographic Analysis as at 31 May 2013Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source.Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.33
  • 34. 34GAM Star Continental European Equity Investments34Market cap quintile as at 31 May 2013GAM Star Continental European EquityMSCI Europe ex UK IndexSource: GAM, FactSetAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.
  • 35. 35GAM Star Continental European Equity Investments35Source: GAM, UBS/PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.Style analysis as at 31 May 2013
  • 36. This document is confidential and intended solely for the use of the person to whom it is given or sentand may not be reproduced, copied or given, in whole or in part, to any other person.Stock Ideas
  • 37. 10152025303504 05 06 07 08 09 10 11 12Gas Natural30 May 2003 to 31 May 2013Gas NaturalSpanish UtilityReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Quasi regulated electric/gas assets in Spain & Latam Regulatory risk under control Growth prospects in LNG supply & Latam networks Strong balance sheet Outstanding free cash flow generation Decent returns 11% ROE, 10% ROIC Valuation— 10x PE, 7.5% FCFE/EV, 15% FCFE 2014— Dividend yield 6.2%, >2x covered— Leverage 3x— Market Cap / EV only 45%Extraordinary value opportunity for long–term oriented investors37
  • 38. 382040608010004 05 06 07 08 09 10 11 12Continental30 May 2003 to 31 May 2013ContinentalAutomotives Tyres and PartsReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Excellent tyre business – replacement tyres have controlleddistribution & strong pricing power. Well positioned in auto parts – strong growth & marginpotential in powertrain. High pre-tax ROIC c.20% despite goodwill burden – tangiblereturns substantially higher. Strong reinvestment opportunities to drive growth. Balance sheet getting stronger after heavy debt burdenfollowing 2007 acquisition Potential to reduce interest costs substantially over next fewyears as refinance & deleverage. Significant shareholder overhang creates value opportunity. Valuation— 8x PE 2014— 7% FCFE/EV 2014Significant value opportunity for long–term oriented investors
  • 39. 39102030405004 05 06 07 08 09 10 11 12Duerr30 May 2003 to 31 May 2013DuerrAutomotive Paint Shop SystemsReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Global #1 for automotive paint shop systems Dominant player in Chinese market Emerging market auto penetration drives growth Prepayments and low capex lead to high ROIC Significant opportunity from monetising installed base Net cash balance sheet Outstanding free cash flow generation Excellent returns 39% ROIC 2011 Valuation— 10% FCFE/EV 2014— Dividend yield 2.8%.Extraordinary wealth creation for long–term oriented investors
  • 40. 401020304050607004 05 06 07 08 09 10 11 12Paddy Power30 May 2003 to 31 May 2013Paddy PowerTraditional sports bookmakerReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Betting shops in Ireland and UK Expansion into online sports bookmakingand online gaming— Acquired largest online sports bookmakers inAustralia Online now 80% of profits Mobile internet and expansion into Italy Canada and Australia offer huge growth potential Financial metrics— 53% Return on Capital Employed in 2011— Net cash of EUR 136m at end of 2011— 10 year EPS compound annual average growthrate of 18%— Share price performance of almost 27x in 12 yearsExtraordinary wealth creation for long–term oriented investors
  • 41. 2040608010012014004 05 06 07 08 09 10 11 12Schindler30 May 2003 to 31 May 2013SchindlerGlobal Elevator Installed BaseReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters 2nd largest installed base of elevators globally Installed base provides highly stable earnings Emerging market urbanisation drives growth Prepayments ensure high ROIC Significant long term margin upside Over CHF2bn of net cash for acquisitions available Outstanding free cash flow generation Excellent returns >100% ROIC Valuation— 7.5% FCFE/EV 2014— Dividend yield 1.5%— 20% discount to peer KoneExtraordinary wealth creation for long–term oriented investors41
  • 42. 422040608010004 05 06 07 08 09 10 11 12Elekta30 May 2003 to 31 May 2013ElektaRadiation Therapy EquipmentReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Global duopoly in radiation therapy equipment Significant barriers to entry due to high switching costs Installed base provides stable recurring revenue base Demographic tailwind of aging population Very low penetration rates today in emerging markets Outstanding growth opportunities Excellent returns >30% ROIC Valuation— 5% FCFE/EV 2014— Dividend yield 1.3%Extraordinary wealth creation for long–term oriented investors
  • 43. 43203040506004 05 06 07 08 09 10 11 12Henkel30 May 2003 to 31 May 2013HenkelGerman HPC and AdesivesReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Global adhesive market leader – adhesives is a GDP plusgrowth industry Strong consumer brands e.g. Schwarzkopf, Persil – steadygrowth Long term restructuring – margins have doubled over 10years – and still rising Working capital focus has reduced capital intensity – moregains to go for. High ROIC and should continue to grow with furtherrestructuring Rising capex indicates high level of re-investmentopportunities within the business Rapidly deleveraging with balance sheet capacity to makeacquisitions – strong track record Valuation attractive 2014 – unleveraged PE of 15.4x,7% FCFE/EV. Ords at 15% discount to Prefs.Extraordinary wealth creation for long–term oriented investors
  • 44. 442040608010004 05 06 07 08 09 10 11 12Inditex30 May 2003 to 31 May 2013InditexLargest clothing retailer in the worldReference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters Key brands:— Zara, Zara Home, Massimo Dutti, Pull & Bear,Bershka, Oysho, Stradivarius, Uterque Significant global expansion over last 10 years— Spain was 46% of revenues in 2003 and 27% ofrevenues in 2012— Growth in fast growing countries Financial metrics— 28% Return on Capital Employed (lease adjusted)— 10 year compound growth of 16%— 5 year compound sales growth of 11%— €3.5bn net cash on balance sheet as of lastreporting period— Shares up 7x since IPO in 2001Extraordinary wealth creation for long–term oriented investors
  • 45. This document is confidential and intended solely for the use of the person to whom it is given or sentand may not be reproduced, copied or given, in whole or in part, to any other person.Appendix
  • 46. 46Niall GallagherInvestment DirectorNiall Gallagher is an Investment Director responsible for European markets. Prior to joiningGAM in November 2009, Niall worked as a portfolio manager managing Pan-European equitiesand Continental European equities at T. Rowe Price for two years. Before that, he was atBlackRock for nine years, where he worked as an investment analyst before managing bothcontinental European and pan-European equity strategies. He began his career as aneconomist at the Bank of England. Niall holds a BA in Economics from ManchesterMetropolitan University and an MSc in Economics and Finance from Warwick University, and isa CFA Charterholder. He is based in London.
  • 47. 47GIPS Supplemental InformationAll GAMs discretionary assets have been allocated to appropriate GIPScomposites. GAMs funds often are structured as investment pools withunderlying currency classes and it is at the investment pool level that GIPScomposite allocations have been made. Supplemental information shown inGAMs materials, including performance, geographic/industrial assetallocations, attribution details and other statistical analyses are based on asample account of the relevant composite that represents the managementstyle. Other accounts in the composite may have slightly different portfoliocharacteristics. In some cases sample accounts have history that pre-datesGAMs compliance with GIPS of 30 June 1996. Indices other than thebenchmark are sometimes used in presentations for illustrative purposes.Please refer to the relevant GIPS compliant report.
  • 48. 48GAM Continental European Equity Composite (G026)Composite Performance 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTDComposite Returns % 11.24 18.92 34.23 20.67 10.20 -35.98 26.80 16.34 -10.66 35.87 7.76Benchmark Returns* % 19.49 13.60 28.30 22.00 5.94 -42.20 29.77 9.56 -11.63 20.66 8.45Composite Standard Dev 3Yr % 16.35 13.82 10.13 8.74 9.68 14.96 17.74 18.75 16.36 14.53 13.73Benchmark Standard Dev 3Yr % 22.68 20.06 12.73 8.52 9.35 16.89 21.25 22.08 18.71 14.57 13.89Number of Portfolios in Composite < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6High Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/ALow Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/AComposite Asset value (DEXm) 12 14 84 77 124 75 67 192 232 343 480Total Firm Assets (DEXm) 21,464 27,844 46,881 51,702 51,833 28,205 34,412 42,284 36,395 38,443 39,9871: Established in 1983, GAM delivers active investment management to private clients, institutions and intermediaries. All GAMs assets are included in the GIPS definition of the firm, except for clients who set up separately-managed accounts which are administered by an independent third party for their fixed income hedge strategy and/or currency hedge strategy.2: GAM claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. GAM has been independently verified from 1 January1996 through 31 December 2011. In May 2009, GAM acquired Augustus Asset Managers Limited (Augustus) and subsequently claims compliance for a single firm representing the combined business. Having determinedthat the GIPS portability criteria were satisfied, the pre and post acquisition performance records of Augustus are linked. Augustus has been subject to independent verification testing from 1 January 2000, the date from whichAugustus performance results are first displayed. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPSstandards on a firm-wide basis and (2) the firms policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specificcomposite presentation.3: The composite consists of actively managed portfolios of European equities (excluding the United Kingdom). Mid to large capitalisation stocks are selected from attractive sectors based on existence of or potential for aboveaverage Cash Flow Return on Investment.4: Derivatives may be used in the portfolios to gain market exposure as well as for hedging purposes. Further details are available on request in the relevant product documentation.5: Composite results are presented gross of investment management fees and net of trading expenses and net of withholding taxes on dividends, capital gains and interest. Benchmarks are gross of withholding taxes ondividends.6: The composite was created in Nov 2002 and applied retrospectively.7: The maximum investment management fee for accounts is 1.5% per annum. Management fees may vary by product and jurisdiction.8: High and low returns (for those constituents present in the composite throughout each period) are presented above to demonstrate dispersion within the composite. Dispersion information is only required by GIPS where thereare 6 or more portfolios in the composite.9: From 01 Dec 2009 Niall Gallagher took over as manager from John Bennett.10: The benchmark shown is MSCI Europe ex UK Index.11: DEX - The reporting currency for this composite is EUR. Prior to Dec 1998, this composite was denominated in DEM.12: Policies for valuing portfolios, calculating performance and preparing compliant presentations are available on request.13: In 2005 GAM changed its methodology for calculating its Total Firm Assets (TFA) to follow the principles and guidelines of FINMA, resulting in TFA as of Nov 2005 increasing by 38%. In May 2009, GAM acquired Augustusresulting in an increase of 22% in TFA and a change in the Firm definition to incorporate an exclusion of certain assets as detailed above. GAMs TFA before these exclusions were $53,251m. GAM discloses its TFA on aquarterly basis. Current data is as at 31 Dec 2012.14: FX rates used for valuation of funds and portfolios within the composite are those at 23:00 hours GMT. FX rates for benchmark and composition calculation are those at 16:00 hours GMT.GAM has prepared and presented this reportin compliance with the Global InvestmentPerformance Standards (GIPS®). Acomplete list and description of composites isavailable on request.Source: GAM as at 30 Apr 2013* The benchmark shown is for comparativepurposes only. The composite is notmanaged to a specific benchmark.There is no guarantee that targets will beachieved.
  • 49. 49GAM European Equity Composite (G025)Composite Performance 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTDComposite Returns % 13.72 16.76 28.56 20.56 6.60 -38.85 26.94 11.26 -9.71 30.76 6.93Benchmark Returns* % 15.76 12.65 26.68 20.18 3.17 -43.29 32.55 11.75 -7.51 18.09 7.48Composite Standard Dev 3Yr % 16.81 15.20 10.92 7.90 9.22 15.21 18.20 18.91 15.91 13.69 12.98Benchmark Standard Dev 3Yr % 20.15 17.85 11.31 7.37 8.73 16.22 20.21 20.84 16.98 13.00 12.28Number of Portfolios in Composite < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6High Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/ALow Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/AComposite Asset value (DEXm) 581 647 874 1,255 1,412 718 406 277 190 52 60Total Firm Assets (DEXm) 21,464 27,844 46,881 51,702 51,833 28,205 34,412 42,284 36,395 38,443 39,9871: Established in 1983, GAM delivers active investment management to private clients, institutions and intermediaries. All GAMs assets are included in the GIPS definition of the firm, except for clients who set up separately-managed accounts which are administered by an independent third party for their fixed income hedge strategy and/or currency hedge strategy.2: GAM claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. GAM has been independently verified from 1 January1996 through 31 December 2011. In May 2009, GAM acquired Augustus Asset Managers Limited (Augustus) and subsequently claims compliance for a single firm representing the combined business. Having determinedthat the GIPS portability criteria were satisfied, the pre and post acquisition performance records of Augustus are linked. Augustus has been subject to independent verification testing from 1 January 2000, the date from whichAugustus performance results are first displayed. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPSstandards on a firm-wide basis and (2) the firms policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specificcomposite presentation.3: The composite consists of actively managed portfolios of European equities (including the United Kingdom). Stocks are selected from attractive sectors primarily on a cash-flow based valuation approach and the fundamentallong- term growth prospects of the business.4: Derivatives may be used in the portfolios within the composite to gain market exposure as well as for hedging purposes. Please note that further detail is available on request.5: Composite results are presented gross of investment management fees and net of trading expenses and net of withholding taxes on dividends, capital gains and interest. Benchmarks are gross of withholding taxes ondividends.6: The maximum investment management fee for accounts is 1.5% per annum. Management fees may vary by product and jurisdiction.7: The composite was created in Nov 2002 and applied retrospectively.8: High and low returns (for those constituents present in the composite throughout each period) are presented above to demonstrate dispersion within the composite. Dispersion information is only required by GIPS where thereare 6 or more portfolios in the composite.9: From 01 Dec 2009 Niall Gallagher took over as manager from John Bennett.10: The benchmark shown is MSCI Europe Index.11: DEX - The reporting currency for this composite is EUR. Prior to Dec 1998, this composite was denominated in DEM.12: Policies for valuing portfolios, calculating performance and preparing compliant presentations are available on request.13: In 2005 GAM changed its methodology for calculating its Total Firm Assets (TFA) to follow the principles and guidelines of FINMA, resulting in TFA as of Nov 2005 increasing by 38%. In May 2009, GAM acquired Augustusresulting in an increase of 22% in TFA and a change in the Firm definition to incorporate an exclusion of certain assets as detailed above. GAMs TFA before these exclusions were $53,251m. GAM discloses its TFA on aquarterly basis. Current data is as at 31 Dec 2012.14: FX rates used for valuation of funds and portfolios within the composite are those at 23:00 hours GMT. FX rates for benchmark and composition calculation are those at 16:00 hours GMT.GAM has prepared and presented this reportin compliance with the Global InvestmentPerformance Standards (GIPS®). Acomplete list and description of composites isavailable on request.Source: GAM as at 30 Apr 2013* The benchmark shown is for comparativepurposes only. The composite is notmanaged to a specific benchmark.There is no guarantee that targets will beachieved.
  • 50. 50DisclaimerSource: GAM unless otherwise stated. (Unless otherwise noted, where shown, performance is shown net of fees, on a NAV to NAV basis).This material is confidential and is intended solely for the use of the person or persons to whom it is given or sent and may not be reproduced, copied or given, in whole or inpart, to any other person. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. Itis not an invitation to subscribe and is by way of information only.The fund is a sub-fund of GAM Star Fund plc. GAM Star Fund plc is an Irish umbrella fund with segregated liability between sub-funds. GAM Star Fund plc is authorised as aUCITS pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No.352 of 2011) and is a recognisedscheme in the UK under the Financial Services and Markets Act 2000. The fund is managed by GAM Fund Management Limited which is regulated by the Central Bank ofIreland.Subscriptions will only be received and shares or units (‘Shares’) issued on the basis of the current prospectus for the fund. Copies of the fund’s prospectus, Key InvestorInformation Documents (KIID) and financial statements can be obtained free of charge from GAM Fund Management Limited, George’s Court, 54-62 Townsend Street, Dublin2, from the centralising agent for France, BNP Paribas Securities Services, 66 rue de la Victoire, 75009 Paris, from its representative in Switzerland GAM Anlagefonds AG,Klausstrasse 10, CH - 8034 Zurich, from the information agent in Germany Bank Julius Baer Europe AG, An der Welle 1, D-60322 Frankfurt am Main ,from the informationagent in Austria, UniCredit Bank Austria, Schottengasse 6 - 8, A-1010 Vienna. Paying Agent in Switzerland is State Street Bank GmbH, Zurich Branch, Beethovenstrasse 19,CH-8027 Zurich. Shares are not available for sale in any state or jurisdiction in which such sale would be prohibited.The Shares of the fund have not been registered under the US Securities Act of 1933, as amended (the “Securities Act”), and the fund is not registered under the USInvestment Company Act of 1940, as amended (the “Company Act”). Accordingly, unless an exemption is available, such shares may not be offered, sold or distributed in theUnited States or to US persons. However, pursuant to an exemption from registration under the Securities Act and the Company Act, the shares may be sold or resold in theUnited States or to certain qualified US investors in transactions that do not constitute a public offering.The views expressed herein are those of the manager at the time and are subject to changes. The price of Shares may go down as well as up and the price will dependon fluctuations in financial markets outside GAMs control, as a result an investor may not get back the amount invested. Past performance is not indicative offuture performance and reference to a security is not a recommendation to buy or sell that security. Prices quoted refer to accumulation Shares unless otherwise stated.Historic data may be subject to restatement from time to time.In the United Kingdom, this material has been issued and approved by GAM London Ltd, 12 St Jamess Place, London SW1A 1NX, authorised and regulated by the FinancialConduct Authority.

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