Kevin barker citywire lake garda - l&c & formatted

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Kevin barker citywire lake garda - l&c & formatted

  1. 1. For Professional Clients only Strictly confidentialUBS European Opportunity Unconstrained FundKevin BarkerSenior Equity StrategistOctober 2012
  2. 2. FOR PROFESSIONAL CLIENTS ONLYKey points European economies remain challenged with further bad news to come Valuations attractive in Europe, with wide stock selection opportunities Europe boasts many strong businesses with global franchises and access to growth Limited shorting increases active share and ability to generate returns 5 star European Opportunity Unconstrained Fund well placed to perform strongly in volatile markets 1
  3. 3. FOR PROFESSIONAL CLIENTS ONLYOutlook for European EquitiesHurdles remain, but opportunity set is excellent Policy response has supported risk assets, but underlying economic issues remain Southern Europe lacks competitiveness and is heavily indebted ‘Core’ Europe growth prospects stronger Bias to industry leaders with access to growth, wary of earnings risk Equities attractively valued, despite rally in 2012 YTD Valuation spreads extremely wide in Europe 2
  4. 4. FOR PROFESSIONAL CLIENTS ONLYCentral banks providing unprecedented stimulusEuropean intervention continues 300 ECB balance sheet 250 200 150 100 50 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12Source: Citigroup (Index, 01.01.2007 = 100). As at August 2012. “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough…” Mario Draghi, ECB President. July 2012 3
  5. 5. FOR PROFESSIONAL CLIENTS ONLYSouthern Europe remains extremely uncompetitiveThe periphery faces significant headwinds to growth Little progress has been made in achieving Little progress has been made with fiscal savings fiscal savings Target ed savings – Restructuring will take time (% of GDP) f or year Achieved Short f all Greece 2.1 1.7 -0.4 Port ugal 3.0 0.0 -3.0 Ireland 0.7 0.9 +0.2 Southern Europe is heavily indebted, with high Spain 2.6 -0.2 -2.8 It aly 2.2 0.6 -1.6 labour costs and inflexible job markets Source: National Financial Statistics and Stability Programmes, Commerzbank Research. 31 August 2012. Growth outlook has worsened in Southern Europe Few indications of economic recovery 2012 GDP growth estimates as at: – Austerity to act as a break on growth in the medium term Source: Citigroup. September 2012. 4
  6. 6. FOR PROFESSIONAL CLIENTS ONLYNorthern Europe better placed to navigate the crisisStronger growth prospects, lower debt levels Growth prospects notably stronger in northern Overweight northern Europe, significantly underweight the Europe’s economies periphery 96.4% of your portfolio Lower levels of debt and unemployment, stronger budgetary positions Favoured names include Unilever, Swedbank, Telenor, SAP, Sampo 3.6% of your portfolio ‘Core’ Europe (91% of MSCI Europe) Peripheral Europe (9% of MSCI Europe)Source: UBS Global Asset Management. 30 September 2012 5
  7. 7. FOR PROFESSIONAL CLIENTS ONLYGlobal businesses based in Europe able to prosperLong-term winners trading at attractive prices Many long-term winners with established The Euro has been weak… 36 month performance against: international franchises listed in Europe JPY USD GBP CNY KRW Half of your portfolio’s sales from outside Europe -23.8% -11.5% -12.7% -18.6% -17.1% Source: Datastream. 30 September 2012 Overseas earners benefitting from weaker Euro Your portfolio’s sales exposure 50% outside Europe Portfolio sales exposure (%) by major region Favoured names include Prudential, Schneider, SAP, BASF US 22% 50% 25% Europe EM Source: UBS Global Asset Management. 30 September 2012 6
  8. 8. FOR PROFESSIONAL CLIENTS ONLYEurope’s valuation case is attractiveCompelling vs. other regions and bondsP/E ratio: Europe cheap vs. US market Yield: European equities cheap vs. bonds60 MSCI Europe MSCI Europe Average (1979 - present ) 7 S&P 500 S&P Avg (1881 - present )50 6 European dividend yield 540 430 3 220 110 0 European real bond yield 0 -1Nov-79 Nov-85 Nov-91 Nov-97 Nov-03 Nov-09 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012Source: Datastream, IBES consensus. Data as at 30 September 2012. Source: UBS Investment Bank. Data as at 30 September 2012 7
  9. 9. FOR PROFESSIONAL CLIENTS ONLYStock selection opportunities are highEurope Composite Valuation Dispersion Very high High Normal Low Very lowSource: Bernstein. 30 September 2012. Valuation dispersion measure is based on Book/Price, Sales/Price, Cash Flow/Price and Dividend yield metrics. 8
  10. 10. FOR PROFESSIONAL CLIENTS ONLYOur conclusions Markets will see bouts of volatility as unresolved Volatility Index (VIX) issues flare up from time to time 90 80 Great stock selection opportunities due to poor 70 sentiment and good valuations 60 An active approach is essential to avoid problem 50 areas 40 30 An approach with limited shorting provides greater flexibility to capture volatility 20 10 0 2007 2009 2011 Source: Datastream. Data as at 30 September 2012 9
  11. 11. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained FundEquity SICAV with multiple share classesInvestment goals Seek to outperform MSCI Europe Index by 300 – 500 basis points pa over a market cycleHow we aim to achieve this goal: Typical active risk: Up to 15% (average 7.3% since inception) Number of equity holdings: Approximately 50 to 100 stocks Normal exposures: 100 – 150% long, 0 – 50% short Typical M ax posit ions Individual st ock weight s Longs 1.0 – 4.0% 10% over benchmark Short s 0.5 – 1.5% 3% (absolut e) Bet a policy 0.8 – 1.2Note: Please note that historical active risk is not a guide to the future. Active risk levels will vary according to market conditions and our views ; typical active risk data is indicative only. Active risk is anex-ante forecast calculated using BARRA or other suitable system based on the final valuations of the last working day of each month. Active risk levels are reported to clients on a quarterly basis. 10
  12. 12. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained Fund: Key factsA different approach… Actively managed equity fund invested mainly in shares of European countries – Including stocks of small/medium sized capitalized companies Largely unconstrained portfolio, which can fully exploit the market opportunities – Can use investment strategies which allow us to take advantage of declining stock prices (short selling) – Benchmark agnostic Typically 70 – 130% market exposure with 50 – 100 stocks Aim is to have significantly better performance than equity indices over time and not significantly correlated to core equities strategies 11
  13. 13. FOR PROFESSIONAL CLIENTS ONLYDifference between our Fund and hedge fundsEquity unconstrained strategy Hedge fund strategies Clearly part of an investor’s equity allocation  Objective is provide absolute returns with clear goal of capital preservation and returns While some managers may have goal of limited uncorrelated with other major asset classes losses during major market sell-offs, the aim is to provide better than equity index returns over  Generally not benchmarked or may be time benchmarked to cash returns Investors should expect volatility that is similar  Method can include use of shorting, leverage to equity indices, which will result in substantial and use of derivatives losses when equity markets fall Method can include use of shorting, leverage and use of derivatives The overriding aim of equity unconstrained strategies is to provide substantially better than equity index returns over time 12
  14. 14. FOR PROFESSIONAL CLIENTS ONLYPerformance of Fund since inceptionRelative performance as at 30 September 2012European Opportunity Unconstrained vs. MSCI Europe M SCI EUR UBS Europe (net % return Global Asset dividends145 (to Sept 2012) M anagement reinvested) Difference Unconst rained vs. MSCI Europe 3 months 12.2 7.2 +5.0140 1 year 35.6 22.3 +13.3135 3 years 13.9 6.4 +7.6 5 years 2.9 -3.9 +6.8130 Since Inception 1 2.2 -4.3 +6.6125 Source: UBS Global Asset Management Note: Past performance is not a guide to the future. Figures gross of fees120 1 Since inception 1 June 2007115110 Since inception105  Active risk: 7.3%100  Standard deviation: 95 – Fund: 17.9% Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 – Benchmark: 18.2%Source: UBS Global Asset Management. Data to 30 September 2012Note: Please note that historical active risk is not a guide to the future. Active risk levels will varyaccording to market conditions and our views. 13
  15. 15. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained FundPerformance: value added on both longs and shorts Excess Ret urn Cont ribut ion (% ) 40 Short Long Tot al 35 31.6 30 28.0 26.6 25 21.5 20 14.2 15 10 7.1 7.1 6.5 5.0 5 0 1Y 3Y 5Y Since inception1: +6.5% contribution from shorts (23% of total) +21.5% contribution from longs (77% of total) Shorts contributed more in proportion to allocation in portfolio (average 19%)Source: WilshireNotes: Data to 31 May 2012. Returns not annualized. Returns relative to MSCI Europe.1 31 May 2007 14
  16. 16. FOR PROFESSIONAL CLIENTS ONLYStrong performance in “up” and “down” marketsProtecting on the downside while keeping with benchmark in up markets 110 UBS European Opport unit y Unconst rained MSCI Europe (net ) 100 90 80 70 60 50 +13.0% value +7.2% value added +10.1% value added in down in down market added in up market market 40 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11Source: UBS Global Asset Management. Data to 31 May 2012Note: Please note that historical standard deviation is not a guide to the future.Past performance is no guarantee of future results. Performance figures are gross of fees. Please see attached disclosure information.1 Data to 31 May 2012. Inception date European Opportunity Unconstrained 31/05/07. The returns shown above are based on currently available information and are subject to revision. 15
  17. 17. FOR PROFESSIONAL CLIENTS ONLYProduct leverages off long-term successA strong team delivering performance for 8 yearsPan Europe Concentrated/MSCI Europe wealth relative European Opp. Unconstrained/MSCI Europe wealth relative140 145135 Value added since inception1 = +4.0%pa 140 Value added since inception2 = +6.6%pa130 135125 130120 125115 120110 115105 110100 105 Pan Europe Conc. vs. MSCI Europe Uncons vs. MSCI Europe 95 100 90 95 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Sep-07 Dec-07 Mar-08 Sep-08 Dec-08 Mar-09 Sep-09 Dec-09 Mar-10 Sep-10 Dec-10 Mar-11 Sep-11 Dec-11 Mar-12 Sep-12 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 May-04 May-05 May-06 May-07 May-08 May-09 May-10 May-11 May-12 Consistent track record in different environments Down Market Source: UBS Global Asset Management. Data to 30 September 2012. Past performance is not a guarantee of future results. Down market defined as period from a relative peak to trough.1 31 May 2004. In EUR. 2 31 May 2007. In EUR 16
  18. 18. FOR PROFESSIONAL CLIENTS ONLYExperienced team that delivers resultsThe Concentrated Alpha Equities team Portfolio Equity Technical Support/ Management Strategists Execution Team Max Anderl Kevin Barker Rob Howard Jeremy Leung Alison Charles David Legg Legal & Risk Trading Compliance Management Leveraging UBS’s Global resources Distribution Company Access Independent Financial Individual industry External resources research data sources contactsSource: UBS Global Asset Management. October 2012 17
  19. 19. FOR PROFESSIONAL CLIENTS ONLYConcentrated Alpha: Investment ProcessIdea Generation Research Portfolio ConstructionConstant communication with our selected Potential ideas are placed Once an idea has passed through the 3-information sources flag potential investment themes through the rigorous assessment circle process, we compare against ourand ideas of the three circles existing holdings and adjust our holdings if there is an opportunityProven individualcontacts114,000 companies Stock ideascovered by HOLT Portfolio Client • Company A • Risk aware Fundamental4,500 quantitative 100-130 stocksprofiles from five • Company B • High active share Portfolio (long-short)quantitative models Qualitative Quantitative • Company C • Benchmark agnostic1,800 internalvaluations byanalysts globally8,000 corporategovernance Disciplined review process everyprofiles 3 – 6 months for each holding 1 Proven individual contacts (strategists, analysts, fixed income investors, asset allocators) 18
  20. 20. FOR PROFESSIONAL CLIENTS ONLYThe Concentrated Alpha investment process  Diverse range of independent information sources including: Fundamental research – Global fundamental analysis (eg internal & external – Global quantitative analysis recommendations, discounted cash flow model, company – Corporate governance management visits) – Corporate activists – Global strategists  Disciplined and simple approach but not dogmatic – must be open to Portfolio admitting mistakes and to new ideas Concentration  Team based but not committee driven Qualitative Quantitative research research  Investment thesis for every decision (e.g. strategists, (eg multi-factor reviewed by “independent eye” corporate activists, models) corporate governance) Aiming to protect the downside 19
  21. 21. FOR PROFESSIONAL CLIENTS ONLYLong example: Sage  Cheap in HOLT, high alpha versus the market  Good corporate governance with share buybacks Fundamental research Portfolio holding Qualitative Quantitative research research Unleveraged, stable, non extended returns High percentage of recurring revenues Potential take over target  Positive momentum and quality with Expansion into EM average value Source: UBS Global Asset Management 20
  22. 22. FOR PROFESSIONAL CLIENTS ONLY“Short” Investing; adding further value European economies will remain challenged presenting opportunities to capitalise on weak companies with poor business models Shorts are selected through the same proven investment process – we have shown added value in shorting over a long period since inception Shorts can grow in size when they go against you – we integrate into our daily checks a stop loss provision that flags up negative contributors which are reviewed by the team daily Shorts have liquidity risks – we regularly monitor the market for short interest and supply to borrow and have never been squeezed 21
  23. 23. FOR PROFESSIONAL CLIENTS ONLYShort example: Company A  Below cost of capital returns  Declining asset turnover and margin pressure Fundamental research Portfolio holding Qualitative Quantitative research research High pension deficit  Poor momentum and quality Increasing competition from Chinese players  Above average value Source: UBS Global Asset Management 22
  24. 24. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained FundMonthly net gross exposure data to end August 2012 200 Sum of Long Sum of Short Sum of Gross Sum of Net 180 160 140 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012Source: UBS Global Asset Management 23
  25. 25. FOR PROFESSIONAL CLIENTS ONLYHow we deal with risk… Risk parameters Results Risk systems  Taking risk when rewarded for it  Awareness of low volatility and leverage Price paid  Active risk of UBS European Opportunity Unconstrained 7.3% since inception1 to 30 September Corporate Governance 2012  Active share with index 117% as at 30 September Leverage and industry structure 2012 Use of uncorrelated information sourcesSource: UBS Global Asset ManagementNote: Please note that historical active risk is not a guide to the future. Active risk levels will vary according to market conditions and our views.1 31 May 2007 …a holistic approach 24
  26. 26. FOR PROFESSIONAL CLIENTS ONLYHow we view your portfolio onlineEuropean Opportunity Unconstrained Fund, 30 September 2012 Further analysis drills deeper into the portfolioHeadline active risk:8.2%(key risk measure)Beta: 0.8 (sensitivity tomarket) Major contributors to risk using stock level, sectoral and risk model factorsRisk analysis using ourinternal risk model Exposures to market cap weighted sectors/countries/size factor portfoliosSource: UBS Global Asset Management/GEVSNote: Please note that historical active risk is not a guide to the future. Active risk levels will vary according to market conditions and our views. 25
  27. 27. FOR PROFESSIONAL CLIENTS ONLYEuropean Opportunity Unconstrained Fund: Current views30 September 2012 Overweight strong franchises with valuation Sect or posit ions % Insurance +7.8 support and financial flexibility Pharma, Bio & Lif e Sciences +7.4 – Unilever, GlaxoSmithKline Sof t w are & Services +6.3 Household & Personal +2.9 Underweight compromised defensives Comms & Pro Services Capit al Goods +2.9 -4.1 – Utilities M at erials -5.3 Energy -5.7 Favouring asset-light over capital-intensive Ut ilit ies -6.8 Banks -8.3 companies – Real cost of capital to remain high Stock positions Posit ive (overw eight ) % Underweight companies where profitability is GlaxoSmit hKline 3.4 extended and expensive Qinet iq 2.9 Sampo 2.8 – Materials, Capital Goods Sage 2.7 Legal & General 2.6 Focusing on areas where capacity is Negat ive (underw eight ) consolidating or leaving the market Banco Sant ander -2.0 Vodaf one -2.1 HSBC -2.5 Ast razeneca -2.7 Nest le -3.1 Source: UBS Global Asset Management 26
  28. 28. FOR PROFESSIONAL CLIENTS ONLYSummary Highly active portfolio, shorting helping increase active share and capitalise on volatility Investment process (“Three Circle” approach) helps to deliver consistent returns through use of uncorrelated sources Successful approach that has worked in varied market conditions 27
  29. 29. APPENDIXAdditional information
  30. 30. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained FundTechnical detailsFund name: UBS (Lux) Equity SICAV – Europ. Opportunity Unconstrained (EUR) P-AccFund type: SICAV, part IFund domicile: LuxembourgCustodian: UBS (Luxembourg) S.A.Currency of account: EURBenchmark MSCI Europe (net div. reinv.)Accounting year ends: 31 MayShare class inception: June 14, 2012Subscriptions / redemptions: Daily / dailyDistribution: reinvestmentFlat fee: 2.04%Issue commission: 1%EU savings tax: Not affectedSwing pricing: YesSecurities no. / ISIN: 14543379 / LU0723564463Data as of 12.06.12 29
  31. 31. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained Fund3 year performance vs. peers 20 15 10 Ret urn % 5 0 -5 -10 -15 0 5 10 15 20 25 30 Risk % st d dev Peers UBS European Opport unit y Unconst rained P-acc EUR MSCI EuropeSource: Morningstar, data as of 30 September 2012Note: Based on Morningstar European Equity Large Blend Universe. Net of fees using P share class. Past performance is no guarantee of future results. 30
  32. 32. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained FundReturns in aggregate: shorts consistently underperformed 60% Longs Short s Universe 49.7% 50% 40% 30% 27.6% 22.4% 20% 10% 0% -10% -4.9% -11.0% -11.9% -20% -30% -27.1% -27.4% -34.2% -40% 1 year 3 years 5 years (since incept ion)Source: UBS Global Asset Management. Since inception date 31 May 2007.Data to 31 May 2012 31
  33. 33. FOR PROFESSIONAL CLIENTS ONLYTaking opportunities across the spectrumMonitor all three circles… Less exposure 2006/2010  Valuation spreads low Increased exposure 2008/2009  Valuation spreads wide and falling Fundamental research (e.g. internal recommendations, corporate governance, company management visits) Portfolio Concentration Qualitative Quantitative research research (e.g. venture (e.g. multi-factor capital contacts, models) strategists) Private equity / strategists warn on high leverage and low valuation spreads in 2007 Signaling capitulation in February 2009 Less exposure in 2007/2008 Free cash flow yield and dividend yield versus 10y bond  Leverage high, valuation spreads low yield points to M+A and stable dividend growers in Increased exposure 2009+ 2011/2012  Leveraged buy-outs models attractive …but selectively weight according to the environment 32
  34. 34. FOR PROFESSIONAL CLIENTS ONLYGlobal and multi-faceted approachDiverse information sources are necessary…  More than 14,000 companies in Holt  Selective internal & external analysts Fundamental Portfolio Qualitative Quantitative More than 8,000 companies covered by Governance Metrics and ISS; more than 300,000 individuals covered by Boardex Contacts with global, US, Asian and European specific strategists  More than 4,000 quantitative profiles of Contacts with bond strategists and global companies, biweekly refreshed asset allocators and corporate activists data Exchange of information with buy side investors  From 5 different data providersSource: UBS Global Asset Management. September 2012 …but specific targeting is key 33
  35. 35. FOR PROFESSIONAL CLIENTS ONLYUBS European Opportunity Unconstrained FundPerformance of longs and shorts: As of May 31, 2012 (in EUR) 25.0 21.5 Short Long 20.0 18.6 Added value (bps) 15.0 10.0 7.1 7.1 6.1 5.0 1.8 2.2 2.5 1.5 0.0 -1.2 -2.2 -5.0 -5.2 -10.0 M ay-07 t o M ay-08 t o M ay-09 t o M ay-10 t o M ay-11 t o Since Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 incept ion 1 1 Short s in aggregat e (100% ) -14.1% -37.4% 37.0% 21.8% -27.1% -34.2% Longs in aggregat e (100% ) -15.4% -30.5% 35.2% 16.6% -4.9% -11.9% M SCI Europe -15.5% -32.7% 21.2% 18.3% -11.0% -27.4%Source: UBS Global Asset Management, WilshireThe returns shown above are relative to MSCI Europe and based on currently available information and are subject to revision. Past performance is not indicative of future results. Performancefigures are gross of fees. Please see attached disclosure information.1 Inception as of May 31, 2007 34
  36. 36. FOR PROFESSIONAL CLIENTS ONLYSpain remains an area for concernEurozone’s 4th largest economy poised for a bail out Outlook for economic growth poor due to Unemployment has tripled since 2006 structural challenges – Real GDP growth of -3.2% predicted for 2013 Spanish unemployment level at 25% – 52% of under 25s out of work Source: Eurostat, August 2012. Spanish banking sector undercapitalised House prices down -25% since 2008 Troubled financials sector a key issue – Capital ratios short of regulatory requirements – Banks have €156bn of loans at risk of not being repaid (9% of all loans) Source: UBS Global Asset Management. 30 September 2012.Source: Citigroup, BBC. 30 September 2012. “…the battle for the Euro will be fought in Spain” Luis de Guindos, Spain’s finance minister, May 2012 35
  37. 37. FOR PROFESSIONAL CLIENTS ONLYGIPS DisclosurePerformance: Pan European Equity Concentrated Composite 36
  38. 38. FOR PROFESSIONAL CLIENTS ONLYGIPS DisclosurePerformance: European Opportunity Unconstrained (130/30) 37
  39. 39. FOR PROFESSIONAL CLIENTS ONLYDisclaimerUBS Global Asset Management (UK) Ltd is a subsidiary of UBS AG.Registered in England, authorised and regulated by the Financial Services Authority: UBS Global Asset Management (UK) Ltd, UBS Global Asset ManagementFunds Ltd, UBS Global Asset Management Life Ltd.Telephone calls may be recorded.© UBS 2012. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.This document is for Professional Clients only. It is not to be distributed to or relied upon by Retail Clients under any circumstances.This material supports the presentation(s) given. It is not intended to be read in isolation and may not provide a full explanation of all the topics that were presentedand discussed. Care has been taken to ensure the accuracy of the content, but no responsibility is accepted for any errors or omissions.Please note that past performance is not a guide to the future. The value of investments and the income from them may go down as well as up, and investors maynot get back the original amount invested.This document is a marketing communication. Any market or investment views expressed are not intended to be investment research. The document has notbeen prepared in line with the FSA requirements designed to promote the independence of investment research and is not subject to any prohibition ondealing ahead of the dissemination of investment research.The information contained in this document should not be considered a recommendation to purchase or sell any particular security and the opinions expressed arethose of UBS Global Asset Management and are subject to change without notice. Furthermore, there can be no assurance that any trends described in thisdocument will continue or that forecasts will occur because economic and market conditions change frequently.This document does not create any legal or contractual obligation with UBS Global Asset Management.The recipient agrees that this information shall remain strictly confidential where it relates to the Investment Managers business. The prior consent of UBS GlobalAsset Management (UK) Ltd should be obtained prior to the disclosure of commercially sensitive information to a third party (excluding the professional advisors ofthe recipient).Information reasonably deemed to be commercially sensitive and obtained from UBS Global Asset Management (UK) Ltd should not be disclosed. This informationis supplied with a reasonable expectation that it will not be made public. If you receive a request under the Freedom of Information Act 2000 for information obtainedfrom UBS Global Asset Management (UK) Ltd we ask that you consult with us. We also request that any information obtained from UBS Global Asset Management(UK) Ltd in your possession is destroyed as soon as it is no longer required. 38

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