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    L&g website version L&g website version Presentation Transcript

    • This is not a consumer advertisement. It is intended for UK professional financial advisers and should not be relied upon by private customers or any other persons Legal & General European Absolute Fund Citywire Absolute Return Forum Gavin Launder – Senior Portfolio Manager
    • Gavin Launder, manager of the Legal & General European Absolute Fund, discusses the opportunities available in European equities, the methodology behind the strategy and discusses the diversification benefits of Absolute Return strategies in a balanced investment portfolio.
    • A Formula for Success in Absolute Return Opportunity Set LGIM Resources Process Performance Skills
    • 1. Who we are Gavin Launder Ian King Working together since May, 2007 1 2 3 4 5
    • 1. Our Skills
      • An aggregate of fifteen years managing absolute return strategies
      • Experience of:
        • shorting successfully
        • managing net exposure
        • managing gross exposure
        • using derivatives, long and short
      We’ve done this before 1 2 3 4 5
    • 2. The Opportunity Set
      • Europe is a fertile hunting ground for Absolute Return strategies
      • Fifteen countries, fifteen governments, five currencies
      • A range of regulatory and fiscal regimes
      A broad range of long and short opportunities 1 2 3 4 5
    • 3. LGIM Resources - an Integrated Platform Central Dealing Execution Cash Management Enhanced Returns Product Specialist Dedicated Communication Risk Management Independent Oversight Macro Desk Countries Sectors Stock Picks Gavin Launder Ian King David Shaw Portfolio Short CFDs Long CFDs FX forwards ETFs Futures Options 1 2 3 4 5
    • 4. Process - Bottom-up and Top-down Active management of the net and gross exposure Top down research Driving the net Macro themes Regulation Supply & demand balance Country & sector Stocks Bottom up research Driving the gross Management Operational gearing Cash flow returns Screening Stocks 1 2 3 4 5
    • 4. A Long - Sky Deutschland € Source: Datastream 03/03/2011 1 2 3 4 5
    • 4. Another Long - Volkswagen € Source: Datastream 03/03/2011 1 2 3 4 5
    • 4. A Short - Banco Popular € Source: Datastream 03/03/2011 1 2 3 4 5
    • 4. Process – The Golden Rules of Shorting What we have learnt managing Absolute Return
      • It is not just the opposite of a long
      • Do not short purely on valuation
      • Avoid take-over candidates
      • Shorts don’t stay short forever
      1 2 3 4 5
    • 5. Performance since inception Relative to the reference market Source: Bloomberg, Legal & General, 22/10/2010 – 08/03/2011. Please remember that past performance is not a guide to future performance. 1 2 3 4 5
    • 5. Performance since inception Relative to the IMA sector Source: Financial Express, 19/02/2010 – 07/03/2011. Please remember that past performance is not a guide to future performance. 1 2 3 4 5
    • 5. Performance since inception Risk/return relative to peers Source: Lipper, 19/02/2010 – 28/02/2011. European Equity Absolute Return Peers defined as IMA Absolute Return Sector constituents investing primarily in European equities. Past performance is not a guide to future performance. 1 2 3 4 5
    • Why
      • An investment in an absolute return fund is an investment in a manager not an asset class
    • Absolute return funds a ‘fundamental change’ for Europe’s asset management industry* *Source: Lipper, Financial Times, March 2011. The performance of absolute return funds should not be correlated with any other asset class – bonds, equities or cash Diversification Currency risk should be hedged, to provide absolute returns in sterling, irrespective of foreign exchange moves Currency The volatility taken to achieve the return should be significantly lower than that of the underlying asset class Volatility
    • A Formula for Success in Absolute Return Opportunity Set LGIM Resources Process Performance Skills
    • Important Information This presentation, and any information it contains, has been produced for use by professional manager and advisors only and should not be distributed without the permission of Legal & General Investment Management Limited or Legal & General (Unit Trust Managers) Limited. The European Absolute Fund (“the Fund”) is authorised unit trust, established as UCITS III fund, managed by Legal & General (Unit Trust Managers) Limited. Legal & General Investment Management Limited has been appointed as the Investment Advisor and Distributor of the Funds and its main function is to invest the assets of the Funds. Both companies are authorised and regulated by the Financial Services Authority. The Fund is designed to be held for the longer term. The risks associated with this Fund are set out in the Prospectus and these should be understood before making any investment decisions. Additional information in relation to the Risk Management process is available on request. A copy of the Prospectus can be obtained from: Legal & General Investment Management Limited - Telephone number 020 3124 3583 "FTSE™", "FT-SE®" and "Footsie®" are trade marks of the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited ("FTSE") under licence. "All-Share" is a trademark of FTSE.