European Alpha     Q1 2012
Contents Hermes Fund Managers Overview Hermes Sourcecap Credentials Key Personnel Investment Style and Process Perfor...
Introduction          Global i tit ti           Gl b l institutional asset manager                              l     t  ...
Our Evolution       Manage specialist i        M          i li t investment strategies th                               t...
Institutional Asset ManagerEstablished                                                   1983                             ...
Investment Boutiques                                                                                                  Herm...
Responsible Asset Management                                                     Responsible Management                   ...
Hermes Sourcecap: Our Credentials                         – Building on a historic franchise in a boutique environment    ...
Core Principles                                                        Focus on sustainable alpha in a risk-adjusted manne...
Strategy Characteristics            – Mid to large capitalisation pan European equity product with strong emphasis on gene...
Key PersonnelJames Rutherford is the Chief Investment Officer of Hermes                                                   ...
Hermes Sourcecap Structure                                                                            HERMES FUND MANAGERS...
Team Approach                                                                                    • Clear ownership & accou...
Overview                        Philosophy                                                             Objectives         ...
Investment Style  Identifying                                                 As time is the last true                    ...
Change - A Source of Future Growth• Positively skewing returns from original research that compounds the force of change a...
Research Process                                                                                  • Ideas generated intern...
Closing Discipline                                                                                 • Stock Appreciation/De...
Current Portfolio Themes           –      Emphasising companies that have the ability to grow cash-flow and earnings regar...
Portfolio Structure         –       Implemented th                 I l     t d through t i ll 40 60 i di id l positions d ...
Risk Management Approach                              –      Investment research process must be the beginning of risk man...
Controls & Infrastructure        –       Regulated by the FSA and SEC        –       Comprehensive operational support tea...
Competitive Edge: The Complete Picture                                                   –      Experienced and high-quali...
Research PersonnelRonald Port joined Sourcecap as a senior analyst in June 2009 and in December 2011 became Portfolio Mana...
Composite Performance History Q1 2012  25  20                                                                             ...
Representative Portfolio AnalysisMarch 2012                                                                               ...
2012 q1 sourcecap ea eur presentation cm106799 v2
2012 q1 sourcecap ea eur presentation cm106799 v2
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2012 q1 sourcecap ea eur presentation cm106799 v2

  1. 1. European Alpha Q1 2012
  2. 2. Contents Hermes Fund Managers Overview Hermes Sourcecap Credentials Key Personnel Investment Style and Process Performance 2 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  3. 3. Introduction  Global i tit ti Gl b l institutional asset manager l t – Independent of any broader financial services group – Expertise across multiple investment strategies with AUM of €31.7bn*  Client alignment and focus – Owned by the BT Pension Scheme (BTPS) – Established institutional heritage and fiduciary culture – Focus on long-term performance over short-term profitability  Responsible Asset Managers – A leader on corporate governance and responsible investing – Transparency and the highest professional standards core to Hermes – Open and interactive relationships with clients  Multi-boutique structure – Series of dedicated specialist investment boutiques – Co-investment from managers in strategies managed – Remuneration aligned to long-term investment performance*Please note the total AUM figure for Hermes Fund Managers Limited (“HFM”) includes €4.6bn of assets that are managed by Hermes GPE LLP (“HGPE”), which is a jointventure between HFM and GPE Partner Limited. HGPE i an i d t b t d P t Li it d is independent entity and not part of th Hermes group. S d t tit d t t f the H Source: Hermes as at 31 D H t December 2011 b 3 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  4. 4. Our Evolution Manage specialist i M i li t investment strategies th t t t t i through multi-boutique structure h lti b ti t t Owned by and manage assets for UK’s largest pension scheme* Invested €37m into a new operating infrastructure over three years Focus on delivery of new products to meet client requirements 1983 1995 2008 2010 The foundation is laid for PosTel changes its name to Hermes Investment Funds Hermes global presence is Hermes with the formation of Hermes, the Greek messenger (UCITS) launches a range of increased when Hermes Fund PosTel, the investment of the gods. A reflection of its Dublin domiciled unitised funds. Managers Australia is registered management team of the Post ownership structure by the BT with ASIC and opens an office in Office Staff Superannuation Pension Scheme. Sydney. Fund. 1993 2007 2009 2011 Responsible Asset Management Hermes splits into separate Our presence in the US is Hermes continues its tradition of is at the top of our agenda. pension fund management and cemented when Hermes Fund spearheading industry change Alastair Ross-Goobey, the then asset management businesses. Managers North America is as Saker Nusseibeh founds the Chief Executive of PosTel, writes Outlines its vision to become a registered with the SEC. 300 Club. Whilst independent of to all FTSE-100 Chairmen, FTSE 100 leading third party asset third-party Hermes the club echoes pressing for shorter contracts for manager. Hermes call for greater CEOs. responsibility within the industry.*Pension Funds and their Advisers 2011 4 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  5. 5. Institutional Asset ManagerEstablished 1983 Breakdown by asset type (%)Owner BT Pension Scheme (BTPS) Fixed Income 40.8Head Office London Equities 14.2 Commodities 3.6Other Offices Boston, New York, Sydney Hedge Funds 5.5No. of Boutiques 14 Private Equity 14.3 Real Estate 18.7Assets under Management €31.7bn* Cash 2 8 2.8Assets under Stewardship €107bn AUMNo. of Investment Professionals 137 by client type (%) Third party 34.6 BT Pension Scheme 65.4*Please note the total AUM figure for Hermes Fund Managers Limited (“HFM”) includes €4.6bn of assets that are managed by Hermes GPE LLP (“HGPE”), which is a jointventure between HFM and GPE Partner Limited. HGPE is an independent entity and not part of the Hermes group. Source: Hermes as at 31 December 2011 5 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  6. 6. Investment Boutiques Hermes Fund Managers Hermes Investment Office Responsible Investment Equities E iti Fixed Income Fi d I Alternatives Alt ti Services Hermes Hermes Hermes Hermes Hermes Hermes Hermes Global Global Sourcecap Hermes BPK Partners Real Estate Equity Small & Mid Government Equities (European Credit (Fund of Investment Ownership Cap Equities & Inflation Advisors Equities) Hedge Funds) Management Services Bonds Hermes Hermes Hermes Hermes Hermes GPE Quantitative Emerging Japanese Commodities (Private Equities Markets Equities Equity) Equity)*Hermes Focus Asset Management (Activist Equities)*Hermes GPE LLP (“HGPE”) is a joint venture between Hermes Fund Managers Limited and GPE Partner Limited Source: Hermes as of 31 December 2011. Note: The chart does not represent legal structure of investment boutiques 6 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  7. 7. Responsible Asset Management Responsible Management Responsible Risk Adjusted Long-term Long term Transparency Right Benchmark Alignment Management: Returns Approach ‘Good Fiduciary’ Responsible Asset Management Responsible Environmental, Social & Governance, Strategy, Culture Public Policy and Best Practice Investment: Economic Sustainability ‘Good Owner’ Responsible Investment 7 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  8. 8. Hermes Sourcecap: Our Credentials – Building on a historic franchise in a boutique environment – Creativity and flexibility in the investment p y y process backed by a comprehensive y p operational platform – Considerable success despite launching into the teeth of what was considered one of success* the worst financial crises since the Great Depression – An institutional focus with a blue-chip client base already blue chip – Assets under management currently €1044.5m (as at 31st Dec 2011)*See page 25 8 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  9. 9. Core Principles Focus on sustainable alpha in a risk-adjusted manner Exploit the power of change at the stock & industry level Emphasis E h i on stock selection i a clear th t k l ti in l thematic f ti framework k Managed by an experienced team team* Independence and discipline in risk management*See pages 11 & 24 9 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  10. 10. Strategy Characteristics – Mid to large capitalisation pan European equity product with strong emphasis on generating sustainable Mid- large-capitalisation pan-European alpha over the long-term from investing in high-quality companies with strong franchise value – Backing our judgement through a portfolio typically of 40 to 60 high-conviction bottom-up ideas, generated within a clear th t d ithi l thematic f ti framework k – Taking a long-term view with an investment horizon of over 2 years – Analysing and valuing stocks based on their own absolute merits as the benchmark is there to be beaten rather than clung to – Targeting returns in excess of 300bps* over benchmark per annum over rolling five-year periods Seeking Sustainable Alpha in a Risk-Adjusted Framework* Targeted returns are estimates only. No assurance can be given that these returns will be achieved. 10 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  11. 11. Key PersonnelJames Rutherford is the Chief Investment Officer of Hermes Andrew Parry is the Chief Executive Officer of HermesSourcecap Limited and he is also the lead portfolio manager for Sourcecap Limited and has specific responsibility for riskthe Hermes Sourcecap European Alpha product. James has 20 management, hedging and portfolio construction for theyears of experience in the investment industry. company.He graduated from London School Economics in 1988 and Prior to joining Hermes Sourcecap, Andrew establishedimmediately joined Fidelity as a Pan-European research Pembroke Capital Management in January 2003 and launchedanalyst.analyst James initially specialized in areas such as property property, the Magenta Fund a global equity non-directional fund in Fund, non directional fund,transportation, autos and media. March of that year.In 1994, he became portfolio assistant to Graham Clapp, and Before establishing Pembroke, Andrew worked at Northernquickly progressed to become a Pan-European institutional Trust Global Investments (Europe) Ltd as Chief Investmentportfolio manager in 1995. James also co-managed with Officer of International Equities and was responsible for theGraham th UK RG h the Recovery T t Trust. management of Gl b l I t t f Global, International and R i ti l d Regional portfolios. l tf liOver the last 11 years James came to manage $19bn portfolio Prior to Northern Trust, Andrew held a variety of seniorof pan-European institutional funds. James remained at Fidelity investment roles including Head of International Equities atuntil joining Hermes Sourcecap. Julius Baer Investments, Chief Investment Officer at Lazard Brothers Asset Management and Head of UK Equities at g q Baring Asset Management. He has over 25 years of investment management and business building experience and holds an MA in Mathematics from the University of St Andrews.Sourcecap International Limited was acquired by the Hermes Group on 3 December 2009 and became Hermes Sourcecap Limited on 21 December 2009. 11 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  12. 12. Hermes Sourcecap Structure HERMES FUND MANAGERS HERMES SOURCECAP HR / Compliance / Finance / IT Saker Nusseibeh – Director Rupert Clarke - Director Andrew Parry James Rutherford Saker Nusseibeh – Director Victor Hymes - Director CEO, Director CIO, Director Victor Hymes – Director Chi Chan Ronald Port Tim Crockford Alison Ure Senior Analyst Senior Analyst Analyst Marketing / Admin Assistant Richard Board Trainee Analyst Melanie Dukes COO Simon H d Si Handcock k Carly Czesnikowska Paul Dalton Client Service Client Service Product Specialist Administrator AdministratorNote: Hermes Sourcecap share capital ownership is between its executive directors, employees, Hermes Fund Managers and Legato Capital Management Ventures 12 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  13. 13. Team Approach • Clear ownership & accountability for the management of the portfolio Independent p • Alignment of interest through equity ownership Manager • Ability to stay true to an investment discipline developed over 20 years • Portfolio Management in Depth Experience g p p The lead manager has over 20 years of experience managing European equity assets for institutional clients Experience in managing portfolios in a wide variety of economic and financial environments Experienced • Experienced Analytical Support* Support Teams to Ability to leverage off the strength in depth of the team Assist Dedicated analysts to support product • Quality in Depth Over 70 years’ investment experience combined Risk • Independent risk assessment by the Investment Office with clear g p y guidelines for the manager that balance creativity and risk management Management Oversight • Pragmatic approach to risk management that emphasises empirical observation over a model-based approach*See page 24 13 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  14. 14. Overview Philosophy Objectives Process Create value by identifying Build a portfolio of Target companies and change and exploiting the high-conviction original ideas industries undergoing potential market inefficiency with clear insights to provide fundamental change it creates sustainable alpha in a risk-controlled framework • New Management Gain a competitive edge by over the long term •Technology advances identifying stocks • Restructuring • Hidden Assets with strong franchise value • Excessive pessimism/optimism • Product development Identify undiscounted • Supply/demand emerging future growth • Disruptive innovation stories • Regulatory changes • Environmental/sustainability issues Fundamental Insight Sustainable Alpha Validation of the & Identify Change & Risk Control Intrinsic Value 14 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  15. 15. Investment Style Identifying As time is the last true Rigorous fundamental Flexibility to deliver companies with arbitrage, the focus is analysis that uses returns from both sustainable change on identifying original sources of individual stock and leading to higher high-conviction, high conviction ideas to step outside of industry positions growth, which is long-term structural the consensus trade under-appreciated opportunities by the marketIdentify Change & y g Time Arbitrage Analysis A Flexible ApproachExploit Inefficiency 15 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  16. 16. Change - A Source of Future Growth• Positively skewing returns from original research that compounds the force of change and identifies emerging growth opportunities  Change creates uncertainty and uncertainty creates an exploitable mis-pricing. The market is generally slow to understand the implications of change and the long-term impact that it has on growth potential and valuations.  Change is typically analysed in a linear manner but is often geometric in its implications for business performance and hence stock prices. p  Investors get anchored to a previous bias about a company, both the positive and negative aspects, and are reluctant to alter their embedded prejudices. Independent research gives us the insight & confidence to appreciate the true nature and consequence of change.• Types of change we focus o ypes o c a ge e ocus on: He that will not apply new  Restructuring  Disruptive innovation remedies must expect new  Management change  Product cycles evils; for time is the greatest  Industry consolidation  Secular themes innovator. ~Francis Bacon, "On  Capital cycles p y  Shifts in competitive landscape p p Innovation," E I ti " Essays, 1597  Technological shift  Environmental/sustainability issues• The manifestation of change: p g g Improving/deteriorating:  Sales  Earnings  Margins  Assets  Cash-flow  Director share activity• Aim: to identify emerging growth opportunities that the market has missed through understanding the power of change 16 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  17. 17. Research Process • Ideas generated internally by experienced investment team* Identify Investment • Identify investment candidates through industry knowledge Opportunity • Uncover new ideas through original research • Forces of change  Restructuring R t t i  Disruptive i Di ti innovation ti  Management change  Improving fundamentals  Industry consolidation  Product cycle  Capital cycles  New competition Fundamental • Valuation – sector or situation specific Analysis  Multiple metrics applied  Sum of the parts  Replacement/liquidation value  Discounted cash flow • Franchise quality  Porter’s 5 Forces**: Porter s Forces : substitution, new entrants, power of suppliers, power of buyers, industry competitors • Team discussion and 360˚ appraisal of ideas Buy/Sell Decision • Final decision by portfolio manager • Position size reflects level of conviction, mis-valuation and liquidity*See pages 11 & 24**Porters five forces is a framework for industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. 17 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  18. 18. Closing Discipline • Stock Appreciation/Depreciation pp p Valuation Position reduced as it moves toward targeted price & risk/reward trade-off shifts Exit position when target price is reached if fundamentals haven’t improved • Fundamental changeFundamentals Positions are closed if changes in the fundamentals conflict with the original thesis • Better alternative identified Substitution Another stock identified with a more compelling risk/reward • Price action not supporting thesis Technical Exit/reduce position if it breaks down/up against thesis Indicators Re-evaluate position if price acts incorrectly to news 18 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  19. 19. Current Portfolio Themes – Emphasising companies that have the ability to grow cash-flow and earnings regardless of economic environment (quality growth) – Understanding that Governments are actively sponsoring inflation through loose monetary policies to compensate for the deflationary impact from bank de-leveraging and sovereign fiscal austerity – Increasingly local conditions will influence stock selection due to widening divergence in national discount rates and growth – Well-capitalized quality franchises with pricing power will get stronger and stronger in a deleveraging world o c ed sca c y o d of credit scarcity – Differentiation at the stock specific level will continue in 2012 as not all companies will be able to cope successfully with the low growth environment – All reflected in a portfolio of typically 40–60 positions, each with an active position against the index and total active money of over 80% 19 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  20. 20. Portfolio Structure – Implemented th I l t d through t i ll 40 60 i di id l positions d h typically 40-60 individual iti depending on th availability of compelling di the il bilit f lli money-making ideas – All positions held as “active bets” and expected to be performance enhancing investments – Varying sector exposures depending on environment to further enhance returns and control risk – Unit sizes typically of 1-3% over the index weighting with active management of specific risk to avoid pools of unintended thematic exposures – Country exposure typically a residual of stock and sector decisions but can be a significant factor depending on the macroeconomic environment A Flexible Approach 20 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  21. 21. Risk Management Approach – Investment research process must be the beginning of risk management – Aim to optimize allocation of risk budget through stock and industry selection – Active management of stock specific, factor and p g p , portfolio risks – Identifying and eliminating disappointments early – Extensive use of risk analytics but with a “skeptics” mind-set – Comprehensive operational risk management – Commonsense and prudence – Focus on sustainable alpha Fully Understanding the Multiplicity of Risk Exposures 21 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  22. 22. Controls & Infrastructure – Regulated by the FSA and SEC – Comprehensive operational support team – Use o t of thinkFolio as o de o o order-management syste , incorporating exposure a d p e a d post t ade a age e t system, co po at g e posu e and pre-and post-trade compliance monitoring – Daily performance and attribution monitoring – Ability to do Straight-Through-Processing with multiple thi d Abilit t d St i ht Th hP i ith lti l third-party custodians & reference currencies t t di f i – Robust IT infrastructure and support with a focus on business continuity – The flexibility of a boutique with the backing of a large asset management group Established Infrastructure 22 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  23. 23. Competitive Edge: The Complete Picture – Experienced and high-quality team* Investment – Clear alignment of interest through equity ownership Team – Access to a broad range of internal and external sources of original research – Exploiting the forces of change to identify emerging high-quality growth opportunities – Gaining unique insights through original research Investment – A focused portfolio of high-conviction investments Style – Long-term Long term investment horizon to avoid the noise around data points – Clear thematic framework that represents the influences of the “real world” – Operational team utilizing full suite of systems p g y Infrastructure – Established systems infrastructure with a focus on business continuity – Resources of a major asset management firm with the flexibility of a boutique Harnessing the Power of Change*See pages 11 & 24 See 23 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  24. 24. Research PersonnelRonald Port joined Sourcecap as a senior analyst in June 2009 and in December 2011 became Portfolio Manager for the Sourcecap EuropeanAlpha Ex-UK strategy. Ronald graduated as Industriekaufmann (Industrial Business Administration) in 1997 in Frankfurt. Upon graduation heworked f A k d for Aventis i P d t M ti in Product Management and f C l t d for Celanese i S l until h j i d Fid lit I in Sales til he joined Fidelity Investments i J l 2002 as an analyst. Th t t in July l t There h hecovered Support Services, Paper/Pulp/Packaging, South African Retailers, Technology Hardware and Large Cap Consumer companies. Inaddition he was the country analyst for Germany from 2003-2004 and the country analyst for the Nordic region in 2008. In June 2008, Ronald wona mandate to invest internal money in the Nordic region and was given the two Fidelity Nordic retail funds to manage. During his time at Fidelity,Ronald worked closely with James Rutherford.Chi Chan joined Sourcecap as an analyst in April 2007. Chi graduated from UMIST in 1997 with a degree in Clothing Engineering andManagement. Upon graduation, he joined the Financial Services practice of Ernst & Young where he qualified as a chartered accountant. He thenjoined Credit Suisse First Boston in 2000 to assist in the inception of the global value-based research group (the predecessor to HOLT) beforebeing recruited internally to join the pan-European telecom team. In early 2004 he joined Execution as a senior telecom analyst. He had leadanalyst responsibility for companies with an aggregate market cap in excess of €200bn and established a reputation for interesting and commercial y p y p gg g p p ganalysis.Tim Crockford joined Sourcecap in June 2008 as a research analyst. He was raised and educated in Malta and in 2006 he graduated from theUniversity of Malta with a Bachelor of Accountancy (Hons), having previously obtained a Bachelor of Commerce degree from the same university.He began working at Execution in July of the same year as a Primary Research Analyst working on major projects in consumer retail Analyst, consumer,and financial services. Tim has experience working with online, CATI, CAPI and intercept methods of data collection and was responsible forproviding the analysis and interpretation of primary data and subsequent report writing. Tim has recently completed his Securities and InvestmentInstitute qualifications.Richard Board is a Trainee Investment Analyst for Hermes Sourcecap after joining the Client Support team in September 2010 His initial focus is Sourcecap, 2010.on stocks in the Retail sector. He joined after completing a degree in Banking, Finance & Management from Loughborough University. Richard hadworked previously at Morgan Stanley in their Settlements Department for the industrial placement part of his degree.Sourcecap International Limited was acquired by the Hermes Group on December 3 2009 and became Hermes Sourcecap Limited on December 21 2009. 24 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  25. 25. Composite Performance History Q1 2012 25 20 Performance (Gross, EUR) Composite % Benchmark % (1) Relative Return 15 %(2) Cumulative Year-to-date 8.77 8.59 0.16 10 One month -1.06 -0.30 -0.76 3 month 8.77 8.59 0.16 5 6 month 21.50 17.81 3.13 1 year 7.31 -2.17 9.69 0 Since fund inception -3.29 -22.05 24.07 Annualised(%) -5 3 year 20.76 18.46 1.94 Since fund inception p -0.70 -5.08 4.61 -10 (1) Benchmark FTSE All World Europe. (2) Relative Return is calculated on a geometric basis. -15 Risk Information -20 (3) Composite European Alpha C E Al h Composite it -25 Benchmark Tracking Error 5.69 Relative Return Information Ratio 0.34 -30 Sharpe Ratio 1.07 Beta 0.85 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 (3) 3yrs Ex-post Risk Statistics 2 3 4 2 3 4 2 3 4 2 3 4 2 3 4 Inception Date: 19th June 2007 This information is supplimental to the GIPS© composite performance on page 27 *Performance calculated on an annualised basis. **Source: FTSE International Limited (“FTSE”) © FTSE 2012. FTSE® is a trade mark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE under licence. All rights in the FTSE Indices vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE Indices or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent. p Past performance is not a reliable indicator of future results. 25 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.
  26. 26. Representative Portfolio AnalysisMarch 2012 Portfolio Portfolio Style Skyline™ Benchmark Industrial Sector Skyline Portfolio (41) 4.0 3.4 Style Distribution Coverage Benchmark (590) Market Coverage (17.0%) 3.0 2.8 2.5 25 2.5 25 80 25 22.8 2.0 1.8 70 2.0 1.3 20 18.7 60 17.3 1.0 0.7Style Tilt™ 0.6 0.5 % Weight 50 Weight % 15 13.1 13.6 0.0 12.5 11.4 11.3 11.0 -0.2 40 9.7 -1.0 10 8.6 8.7 8.8 7.9 -1.0 30 6.6 -1.3 6.1 -2.0 4.9 4.6 20 4.1 -2.0 -2.0 5 2.8 2.6 -2 2 -2.3 2.2 2 3 1.7 17 2.2 22 2.1 21 1.3 1.5 -2.6 0.9 -3.0 10 0.0 0.0 0.1 -3.0 -3.2 0 -4.0 0 Style Factors Style Sector Country Weights Portfolio Benchmark Liquidity Analysis Trade to benchmark Coverage Trade to cash 100% - 60% represents the top 40% of companies sorted in descending order by Market Cap 35 100 90 30 80 25 Portfolio Benchmark Market Cap DistributionWeigh % 70 Coverage 20 ht Market Positions Eliminated % 60 60 15 50 50 40 % Weight 10 40 30 5 30 20 20 10 0 10 0 0 < 0.1 < 0.2 < 0.3 < 0.4 < 0.5 <1 <2 <3 <4 <5 < 10 Country Days RangePortfolio and risk analysis provided byThis information is supplimental to the GIPS© composite performance on page 27 26 Disclaimer: Hermes Sourcecap Limited is registered in England and Wales No. 06630546, is authorised and regulated by the Financial Services Authority and is an investment advisor registered with the Securities and Exchange Commission.

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