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Saint-Honoré Europe Synergie
Citywire, Zurich,
19 & 20 May 2010
Philippe Lecoq, Deputy Director – European Equities
Olivie...
Outlook for European equities
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 3
Country risk is a key factor again (*)
Sweden
Finland
Switzerland
United Kingdom
G...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 4
European companies have a high international exposure
Non European revenue percent...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 5
European equities outperform when the dollar rises
-40
-30
-20
-10
0
10
20
30
40
9...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 6
Companies emerging from the crisis are cash rich
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 7
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Operational margins have h...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 8
In 2010 operational leverage offers a good potential
European Market: operational ...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 9
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS 9
European corporates keep...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 10
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
M&A is back
Main indicato...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 11
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Conditions are ripe for a...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 12
A new M&A cycle has started in Europe
Transactions will accelerate as economy rec...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 13
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Market driven by new play...
Fund presentation
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 15
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Saint-Honoré Europe Syner...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 16
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Two complementary themes linked to economic...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 17
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Tried and tested investment process
Investm...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 18
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Step 1: Defining the research universe
Scre...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 19
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Step 2: Stock selection
 Stock-picking is ...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 20
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Step 3: Portfolio construction & risk contr...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 21
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Step 3: Portfolio construction & risk contr...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 22
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Step 4: Sell discipline
 Price targets are...
Portfolio structure
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 24
Gradual increase of potential takeover targets in Saint-Honoré
Europe Synergie
0%...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 25
Many catalysts for a new wave of M&A
United Kingdom
- weak valuations
- very larg...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 26
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Investment examples
 KPN...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 27
BG Group: a unique profile within the energy sector
DESCRIPTION
BG Group is a fun...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 28
EDMOND DE ROTHSCHILD ASSET MANAGEMENT
Burberry: attractive target in luxury secto...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 29
KPN: a cash cow
Incumbent operator in the Netherlands, where the Group is the
lea...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 30
Portfolio structure as of 30/04/10
Net assets 643 M€
Number of holdings 40
% inve...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 31
Portfolio breakdown by market capitalization
as of 3/3/10
0%
5%
10%
15%
20%
25%
<...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 32
Saint-Honoré Europe Synergie: performance since 31/12/2007
40
50
60
70
80
90
100
...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 33
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Events in portfolio since...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 34
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Technical characteristic
...
EDMOND DE ROTHSCHILD ASSET MANAGEMENT 35
EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS
Disclaimer
The data, comm...
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Présentation philippe lecoq citywire (english) 190510 presentation finale

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Présentation philippe lecoq citywire (english) 190510 presentation finale

  1. 1. Saint-Honoré Europe Synergie Citywire, Zurich, 19 & 20 May 2010 Philippe Lecoq, Deputy Director – European Equities Olivier Huet, Deputy Director – European Equities
  2. 2. Outlook for European equities
  3. 3. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 3 Country risk is a key factor again (*) Sweden Finland Switzerland United Kingdom Germany France Portugal Greece Spain (*) performances in euros 70 75 80 85 90 95 100 105 110 115 120 125 31/12/2009 14/01/2010 28/01/2010 11/02/2010 25/02/2010 11/03/2010 25/03/2010 08/04/2010 22/04/2010 06/05/2010
  4. 4. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 4 European companies have a high international exposure Non European revenue percentage
  5. 5. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 5 European equities outperform when the dollar rises -40 -30 -20 -10 0 10 20 30 40 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 -30 -20 -10 0 10 20 30 40-40 -30 -20 -10 0 10 20 30 40 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 -30 -20 -10 0 10 20 30 40 Source: Société Générale € / $ (annual variation) Europe vs US (annual variation) € / $ Europe vs US (reverse scale)
  6. 6. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 6 Companies emerging from the crisis are cash rich 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 01-1 02-1 03-1 04-1 05-1 06-1 07-1 08-1 09-1 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 01-1 02-1 03-1 04-1 05-1 06-1 07-1 08-1 09-1 Source: Société Générale European companies’ cash in percentage of assets
  7. 7. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 7 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Operational margins have held up well European EBIT margins
  8. 8. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 8 In 2010 operational leverage offers a good potential European Market: operational leverage (EBIT growth/Revenue growth) and earnings per share growth Operational levy EPS Growth
  9. 9. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 9 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS 9 European corporates keep on reducing the gearing Net debt / Equity ratio (%)
  10. 10. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 10 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS M&A is back Main indicators are now bullish:  Reduction of leverage  Capital raising  Reasonable valuations  Credit conditions returning to normal  Decrease in risk aversion Reinforcing exposure to emerging country consumption is a major theme With economic growth set to remain weak for some time, companies are likely to focus on external growth Europe : FCF yield and cost of debt Source : Thomson Datastream, Exane BNP Paribas
  11. 11. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 11 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Conditions are ripe for a resurgence in takeover bids Global M&A volumes vs Debt/Ebitda Tr $ Debt to Ebitda du MCSI Monde
  12. 12. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 12 A new M&A cycle has started in Europe Transactions will accelerate as economy recovers Source: Factset, Goldman Sachs
  13. 13. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 13 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Market driven by new players N° deals and volume made by BRIC countries since 2001
  14. 14. Fund presentation
  15. 15. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 15 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Saint-Honoré Europe Synergie: a secular concept M&As Restructuring companies A European equity fund which combines Benefit both from the stock’s rise and premium offered by the buyer Benefit from the recovery of the company and ensuing stock market performance Accelerating economic growth Economic slowdown In order to outperform over the course of an economic cycle Restructuring cycleM&A cycle &
  16. 16. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 16 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Two complementary themes linked to economic cycles Expansion Slowdown Expansion Bid cycleRestructuring cycle Reversal Recovery Recession Bid cycle
  17. 17. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 17 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Tried and tested investment process Investment universe European equities 600 stocks Mergers & acquisitions Restructuring Internal / financial - Capital not controlled - No critical mass - Special know -how - Sector consolidation - High debt levels - Negative free cash flow - Pressure on profit margins - Poorly configured cost structure 150 stocks 80 stocks - Momentum - Management quality - Financial analysis - Comparisons with earlier transactions in same sector - Price potential acquirers are prepared to pay - Management quality - Debt reduction potential - Profit margin recovery potential - Sector environment - Comparisons with the company’s historic valuations and current sector valuations QUALITATIVE fundamental analysis DEFINING target price BUILDING 50- 60 stock portfolio SALES discipline Average holding time Average holding time Months Months Investment universe European equities 600 stocks Mergers & acquisitions Restructuring Internal / financial - Capital not controlled - No critical mass - Special know -how - Sector consolidation - High debt levels - Negative free cash flow - Pressure on profit margins - Poorly configured cost structure 150 stocks 80 stocks - Momentum - Management quality - Financial analysis - Comparisons with earlier transactions in same sector - Price potential acquirers are prepared to pay - Management quality - Debt reduction potential - Profit margin recovery potential - Sector environment - Comparisons with the company’s historic valuations and current sector valuations QUALITATIVE fundamental analysis DEFINING target price BUILDING 30- 50 stock portfolio SALES discipline Average holding time Average holding time Months Months
  18. 18. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 18 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Step 1: Defining the research universe Screening identifies a working universe of around 150 European companies that could be the target of financial transactions and/or might be undergoing restructuring, whether financial and/or operational.  An initial universe comprising around 600 European large cap stocks • Market capitalisation above EUR 1bn  Potential targets are identified using the following qualitative criteria: • Shareholding structure • Business sector • Attractiveness (know-how, brand) • The company’s competitive position  Companies being restructured are identified using quantitative criteria: • Net debt/Shareholders’ equity • Solvency ratios (financial stocks) • Free Cash-flow • Net debt/Ebitda • Operating margin Factset and IBES are used as data bases Data over 5 financial years (from N-2 to N+2)
  19. 19. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 19 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Step 2: Stock selection  Stock-picking is at the heart of our investment process and our principal source of outperformance  Our fundamental analysis is based on company visits and external research: 1. Company visits – Appraising the quality of management and its ability to complete the restructuring process 2. Meeting financial analysts – Understanding the business – Appraising the sector environment – Calculating deviations on market consensus  Companies are selected using the following criteria: – Financial robustness – Likelihood of a financial transaction given: » valuations » shareholding structure » the sector environment » the market environment – Potential to reduce debt – Potential to improve margins Potential targets Companies being restructured
  20. 20. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 20 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Step 3: Portfolio construction & risk control (1)  The decision to buy depends on the potential upside offered by the target price.  Portfolio breakdown between target companies and companies undergoing restructuring depends on the macroeconomic environment and market conditions: • In periods of accelerating economic growth, targets are favoured. Throughout an entire cycle, their weighting varies between 50 -100% of the fund’s assets. • When economic growth is slowing, the focus is on companies being restructured. Throughout an entire cycle, their weighting varies between 0-50% of the fund’s assets.  To limit the fund’s volatility, companies undergoing restructuring are capped at 50% of net assets.
  21. 21. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 21 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Step 3: Portfolio construction & risk control (2)  Concentrated portfolio: 30-50 stocks  Stocks in the portfolio are generally held for: • 6-12 months for target companies • 12-18 months for restructuring plays  Liquidity risk: portfolio positions generally represent no more than double the stock’s average daily volume.
  22. 22. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 22 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Step 4: Sell discipline  Price targets are determined using the following criteria: • Target companies – Comparison with recent deals in the company’s sector – Identification of potential predators and estimation of possible price tags • Companies being restructured – Comparison with the company’s historic valuations and sector valuations  Stocks are sold in the following cases: • Target companies – Takeover announced – Price target reached – Company no longer a target – Deterioration in company’s fundamentals • Companies being restructured – Price target reached – Restructuring completed – Failure of restructuring
  23. 23. Portfolio structure
  24. 24. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 24 Gradual increase of potential takeover targets in Saint-Honoré Europe Synergie 0% 20% 40% 60% 80% jan-2009 jan-2010 apr-2010 Targets Restructuring
  25. 25. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 25 Many catalysts for a new wave of M&A United Kingdom - weak valuations - very large free floats - few obstacles to takeovers -> Burberry, Invensys, Intl Power, … MAIN INTERESTS OF SAINT-HONORE EUROPE SYNERGIE Search for future growth - exposure to emerging countries - recovery of capex -> Intercontinental, Beiersdorf, SAP, … Family-owned companies - recovery is a better environment for asset sales -> Zodiac, Bulgari, Rémy Cointreau, … Search for synergies / integration - sectorial consolidation - integration of the value chain -> KPN, Delhaize, BG Group, …
  26. 26. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 26 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Investment examples  KPN: potential target in sector consolidation  Bulgari: family could sell as company lacks critical mass  Burberry: attractive target for brand development and a rare asset in the luxury sector (capital not controlled)  Bayer: probable separation of pharmaceutical and chemicals divisions reinforced by upcoming changes in top management  Wolseley: financial restructuring (capital increase in April 2009, disposal of building materials division in May 2009)  Clariant: operational restructuring (new CEO since October 2008, sites closed down)
  27. 27. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 27 BG Group: a unique profile within the energy sector DESCRIPTION BG Group is a function of British Gas demerger in 1997 and operates in more than 25 countries (réserves prouvées = 2600 mmboe). BG Group is an integrated company operating in Exploration and Production, Liquefied Natural Gas approvisionnement de LNG (liquified natural gaz). Oil reserves have been considerably upgraded in the last two years with brazilian offshore discovery. The acquisition of Queensland Gas an australian gas producer in 2008 increases its LNG capacity, particularly towards Asia. The Santos Basin pre-salt in Brazil offers a high level of productivity. Excellent long term prospects from LNG division. With a much higher renewal rate of reserves than its peers, BG is an attractive target for oil majors willing to strengthen their upstream position. MARKET PERFORMANCE Market Cap: GBP 38.5bn P/E 2010: 15.1x Price to book 2010: 2.4x Net Debt / Ebitda 2010: 0.6x Yield: 1.1% STRENGTHS INDICATORS 50 70 90 110 130 m ars-09 avr-0 9 m ai-0 9 juin-09 juil-09 ao ût-09 sept-09 oct-09 no v-0 9 dé c-09 janv-10 févr-10 Performance absolue Performance relative stxe 600 € pr
  28. 28. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 28 EDMOND DE ROTHSCHILD ASSET MANAGEMENT Burberry: attractive target in luxury sector Designs, produces and distributes luxury clothes (men, women, children and accessories (bags and perfumes). Products distributed through own retail network in Europe, North America and Asia. Retail represents 52% sales, wholesale 41%. Geographical sales exposure: Europe 37%, American continent 25%, Asia Pacific 24%, Spain 14%. Prestigious brand and successful diversification into accessories. Control tightened on distribution network. Could grow in emerging countries. Robust financial situation (negative net debt at end March 2009). Big restructuring drive since CEO Angela Ahrendts took over in 2006. Group’s appeal to potential buyers reinforced by famous brand and absence of controlling shareholder. Market Cap: GBP2,1bn P/E 2010: 17x Price to book: 3.5x Net debt/EBITDA: NS Yield: 2.5% 20 30 40 50 60 70 80 90 100 110 120 juil-07 sept-07 no v-0 7 janv-08 m ars-08 m ai-0 8 juil-08 sept-08 no v-0 8 janv-09 m ars-09 m ai-0 9 juil-09 Performance absolue Performance relative dj stoxx 600 € pr DESCRIPTION STRENGTHS MARKET PERFORMANCE INDICATORS
  29. 29. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 29 KPN: a cash cow Incumbent operator in the Netherlands, where the Group is the leading telecommunication service provider offering wireline and wireless, Internet and TV. KPN holds number 2 market positions on mobile in Germany with E-Plus et in Belgium with BASE. The Netherlands represent 70% of sales, Germany 24% and Belgium 6%. The Group has become a leader in IT services in Benelux since the acquisition of Getronics en 2007. 100% free float. The Dutch State does not hold any golden share. Excellence in costs control and capex optimization : 11% of sales for the 2010-2013 period (vs 14% in 2009). A FTTH roll-out at a lesser cost and a very shareholder friendly approach with both a high dividend and a 1 Md€ share buy back. The german spectrum auction will advocate for partnerships and reinforce the speculative appeal. Market Cap: € 19,4bn P/E 2010: 11.4x Price to book: 3.8x Net Debt / EBITDA: 2.0 Yield: 6.7% DESCRIPTION STRENGTHS MARKET PERFORMANCE INDICATORS 60 80 100 120 140 juil-07 sept-07 no v-0 7janv-08m ars-08 m ai-0 8 juil-08 sept-08 no v-0 8 janv-09m ars-09 m ai-0 9 juil-09 sept-09 no v-0 9janv-10 Performance absolue Performance relative dj stoxx 600 € pr
  30. 30. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 30 Portfolio structure as of 30/04/10 Net assets 643 M€ Number of holdings 40 % invested 96% • Over three years: 33/474 • Over one year: 113/552 • YTD: 165/567 Source: Europerformance Ranking as of 16/04/10 Targets Restructuring 74% 26% BURBERRY 3,9% SAP 3,8% BG GROUP 3,8% WOLSELEY 3,4% INVENSYS 3,3% CLARIANT 3,3% S E BANKEN A 3,3% INTERCONTINENTAL 3,2% INTERNATIONAL POWER 3,1% BAYER 3,0% Top ten holdings
  31. 31. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 31 Portfolio breakdown by market capitalization as of 3/3/10 0% 5% 10% 15% 20% 25% < 1 bn€ 1 - 2,5 bn€ 2,5 - 5 bn€ 5 - 10 bn€ 10 - 30 bn€ 30 - 50 bn€ > 50 bn€
  32. 32. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 32 Saint-Honoré Europe Synergie: performance since 31/12/2007 40 50 60 70 80 90 100 31/12/2007 29/02/2008 30/04/2008 30/06/2008 31/08/2008 31/10/2008 31/12/2008 28/02/2009 30/04/2009 30/06/2009 31/08/2009 31/10/2009 31/12/2009 28/02/2010 30/04/2010 Saint-Honoré Europe Synergie MSCI Europe Relative performance 2008 +10,90% Relative performance 2009 +6,28% Relative performance 2010 (YTD) +4,29% (*) (*) as of 30/4/10
  33. 33. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 33 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Events in portfolio since fund launch Date announced Buyer Target Amount in million € Type Payment Capital gain/loss Number of days stock held in portfolio 14 December 2006 KKR/PERMIRA PROSIEBEN SAT 1 MEDIA 2 513 friendly cash 3% 63 18 January 2007 ALLIANZ AGF 10 219 friendly cash + shares 9% 44 26 February 2007 SCOR CONVERIUM 1 271 hostile cash + shares 20% 49 15 March 2007 IMPERIAL TOBACCO ALTADIS 14 197 hostile cash 23% 178 10 April 2007 PPR PUMA 5 293 friendly cash 19% 126 20 May 2007 UNICREDITO CAPITALIA 21 935 friendly shares 17% 167 25 May 2007 NASDAQ OMX 2 764 friendly cash + shares 52% 171 18 June 2007 AKZO NOBEL ICI 11 089 friendly cash 31% 215 9 July 2007 DANONE NUMICO 11 953 friendly cash 39% 217 25 October 2007 CARLSBERG/HEINEKEN SCOTTISH & NEWCASTLE 12 484 friendly cash 27% 185 12 November 2007 HELLENIC TELECOM COSMOTE 2 827 friendly cash 17% 430 27 June 2008 FINANCIERE FC 1 CLARINS 1 096 friendly cash -1% 342 30 July 2008 GAS NATURAL UNION FENOSA 8 978 friendly cash 23% 329 23 February 2009 GENERALI ALLEANZA 2 278 friendly shares -29% 132
  34. 34. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 34 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Technical characteristic Saint-Honoré Europe Synergie Legal form: French-regulated Fonds Commun de Placement Inception date: December 2006 ISIN codes: A share: FR0010398966 I share: FR0010587642 Management fees: A share: 2% net max. I share: 1% net max. Variable management fees: 15% of outperformance of benchmark index Minimum subscription: A share: 1 share I share: € 500,000 Currency: Euro Front load charge: 4.5% net maximum Valuation: Daily Benchmark: MSCI Europe Minimum recommended investment horizon: Over 5 years
  35. 35. EDMOND DE ROTHSCHILD ASSET MANAGEMENT 35 EDMOND DE ROTHSCHILD ASSET MANAGEMENT | GESTION ACTIONS Disclaimer The data, comments and analysis in this document reflect the opinion of the LCF Rothschild Group and its subsidiaries with respect to the markets and their trends, regulation and tax issues, on the basis of its own expertise, economic analyses and information known to it at present. However, they shall not under any circumstances be construed as comprising any sort of undertaking or guarantee whatsoever on the part of the Group or its subsidiaries. In no event shall the LCF Rothschild Group assume responsibility for any decision to invest, to disinvest or to maintain a position on the basis of these comments or this analysis. It is the responsibility of each and every investor to obtain the various regulatory prospectuses for each fund or financial product prior to making any investment and to analyse the risk incurred and establish his or her own opinion, independent of the LCF Rothschild Group, and where necessary, to take specialist advice regarding such questions, and especially in order to determine the relevance of such investment to his or her own financial situation. Past performance and volatility are no guide to the future. The value of investments may fall and rise and performance is not constant over time. The summary or full prospectuses of funds approved by the French market authority, the Autorité des Marchés Financiers, are available upon request or from our website (www.lcf-rothschild.fr). Potential Investment Risks On the equity markets the value of assets may vary according to investor expectations, raising a risk to equity values. Prices on equity markets have historically varied more than those on bond markets. If equity markets fall, the net asset value of the fund will fall. The fund’s management style is based primarily on expectations of changes in the equity markets. Fund performance will depend on the stocks picked by the management company. There is therefore a risk that the management company may not invest in the best performing companies. Invested on European markets, the fund can be subject to foreign currency risk, particularly with regards to the Swiss Franc and Pound Sterling. To a more marginal extent, the fund may also be subject to interest rate risk, restricted to the money market and other negotiable debt instruments that may comprise up to 25% of the net assets.

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