1. Asset Management with OLZ & Partners
OLZ Efficient World®
Effi i t W ld
Efficient Worldwide Risk Diversification Strategies

2. Asset Management with OLZ & Partners
Efficient investment solutions…
…in contrast to indexing and traditional active portfolio management
© OLZ & Partners Asset and Liability Management AG 2

3. Asset Management with OLZ & Partners
OLZ...
Company Characteristics
… was founded by professors and assistants from the University of Bern Switzerland
… has an established track-record of 10 years
track record
… is managing money of: major Swiss Pension Funds, Swiss Post, multinational companies
Unique Approach
… has a disciplined and structured investment approach with academic foundation based on
state-of-the-art scientific models
© OLZ & Partners Asset and Liability Management AG 3

4. Asset Management with OLZ & Partners
How can we achieve efficient Investing?
Indexing …is not efficient! OLZ Efficient World® - efficient investment solutions
• Market capitalization determines the weighting in the • It is not possible to predict the return, but OLZ can
index - risk and return are of no consequence successfully forecast the risk using its own scientific
considering the composition (
g p (weighting) of the index!
g g) model.
• Relatively static weights of the index and permanent • The weightings for different countries and regions are
concentration on a few countries/markets calculated on the basis of risk values for a minimum
diversification problem! variance portfolio (ex-ante) to achieve a optimized
risk-return ratio.
MSCI World (illustrative) OLZ Efficient World Equity (illustrative)
USA 48% USA 9%
Euro Area 18% EURO Area 7%
UK 10% UK 11%
Japan 10% Japan 12%
Canada 5% Canada 17%
Australia 4% Australia 11%
Switzerland 4% Switzerland 25%
Hong Kong 1% Hong Kong 7%
© OLZ & Partners Asset and Liability Management AG 4

5. Asset Management with OLZ & Partners
What does OLZ not do? What does OLZ do?
OLZ has no crystal ball and can not predict the OLZ uses its own developed academic model
return of stock market, interest rates or exchange (based on GARCH) to forecast the volatilities and
rates. correlations of the individual stock markets (USA,
CAN, UK, EU, CH, JPN, HK, AUS) every 3 months.
, , , , , , ) y
OLZ d
does not make any macro, sector or business
t k t b i
analyses, and does not have an investment The forecast covariance matrix serves to determine
committee. the country allocation of the ex-ante minimum
variance portfolios (rebalancing every 3 months)
O
OLZ does not invest in trend products as Hedge
o es e d p oduc s edge
Funds and Structured Products. The portfolio manager does not have discretionary
power because the investment process is structured
and based on a quantitative model.
Direct Mandate
Private Funds Institutional Funds
+10 million USD
Global Equity
Global Bond
Gl b l B d
Equity Switzerland
Develops, if appropriate market specific modelds based on client requests
CHF USD EUR
© OLZ & Partners Asset and Liability Management AG 5

6. 2. OLZ Efficient World® - performance equity
OLZ Efficient World® Equity wealth evolution: 12-year-period
OLZ Efficient World® Equity (USD unhedged, CHF unhedged) vs. Global Equity Index (MSCI)
value USD 1 M)
2'500'000
Portfoliovalue (startv
2'000'000
1'500'000
P
1'000'000
500'000
0
98-12 99-12 00-12 01-12 02-12 03-12 04-12 05-12 06-12 07-12 08-12 09-12 10-12
Inflation Riskfree MSCI OLZ Effcient World® Equity CHF unhedged OLZ Effcient World® Equity USD unhedged
Evaluation period: 12 years (01 01 1999 – 31 12 2010) The returns are based on yearly rebalancing of portfolio weights and do not reflect any costs
(01.01.1999 31.12.2010). costs.
© OLZ & Partners Asset and Liability Management AG 6

7. 2. OLZ Efficient World® - performance mixed strategy OLZ 25 Equity
Efficient World® mixed strategy wealth evolution: 10-year-period
OLZ 25 strategy vs. composite Benchmark (25% MSCI World, 75% World Government Bond Index (Citigroup))
value USD 1 M)
3'000'000
2'500'000
Portfoliovalue (startv
2'000'000
P
1'500'000
1'000'000
500'000
0
00-12 01-12 02-12 03-12 04-12 05-12 06-12 07-12 08-12 09-12 10-12
Inflation Riskfree MSCI Benchmark 25% Equity OLZ Portfolio 25% Equity
Evaluation period: 10 years (01 01 2001 – 31 12 2010) All returns are based on yearly rebalancing of portfolio weights and do not reflect any costs
(01.01.2001 31.12.2010). costs.
© OLZ & Partners Asset and Liability Management AG 7

8. 2. OLZ Efficient World® - performance
Efficient World® strategies: Risk – return comparison
OLZ strategies vs. Global Equity Index (MSCI) vs. Riskfree
8.0%
Return (p.a.)
OLZ 25
OLZ Effcient World® Equity CHF
unhedged
6.0%
OLZ Effcient World® Equity USD
unhedged
4.0%
4 0%
riskfree
MSCI
2.0%
0.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%
Risk (Standard deviation annualized)
Evaluation period: 12 years (01 01 1999 – 31 12 2010) The returns are based on yearly rebalancing of portfolio weights and do not reflect any costs
(01.01.1999 31.12.2010). costs.
© OLZ & Partners Asset and Liability Management AG 8

9. 2. OLZ Efficient World® Equity
Risk-return optimization
New weighting methods improve the risk-return profile compared with the index.
Return
Minimum
variance
portfolio
(ex-ante) Minimum
variance
p
portfolio
(historical)
Equally
weighted
portfolio
Index
weighted by
price
Index
weighted by
capital
Example
Risk
© OLZ & Partners Asset and Liability Management AG 9

10. Global Bonds (CHF hedged)
Efficient W ld® B d
OLZ Effi i World Bond
Efficient Worldwide Risk Diversification Strategy for Bonds

11. 4. OLZ Efficient World® Bond
Diversification of the overall portfolio
During phases of greater market fluctuations, long-term bonds offer a good diversification potential in comparison to
equities.
equities Hedge funds show a high correlation to shares
shares.
10 worst monthly returns for MSCI World (in CHF) in comparison (Jan 2000 – Dec 2010)
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
-12.0%
MSCI TR Net World
-14.0% CHF
C ed Suisse e o
Credit Su sse Tremont
-16.0% Hedge Fund
-18.0% Citigroup Non CHF
31.10.2008 30.09.2002 31.01.2008 31.12.2002 30.06.2002 30.09.2001 30.09.2008 30.06.2008 30.06.2010 28.02.2009 WGBI CHF Hedged
Explanation of indices (Bloomberg Ticker)
 MSCI TR Net World CHF (NDDUWI): Equities world in CHF
 Credit Suisse Tremont Hedge Funds (HEDGNAV): Hedge Funds Index in CHF
 Citigroup Non CHF WGBI Currency Hedged CHF (SBWGNSZC): Non CHF government bonds, hedged to CHF
© OLZ & Partners Asset and Liability Management AG 11

12. 4. OLZ Efficient World® Bond
Diversification worked also during the crisis
Dec 2007 – Dec 2010: OLZ Efficient World® Bond – Efficient diversified, global portfolio of long-term government
loans offers in periods of crisis a good diversification potential towards shares.
OLZ Efficient World ® Bond versus Equities
120
100
80
SWISS MARKET INDEX
MSCI Daily TR Net World
60 CHF
OLZ Efficient World
Bond 95% Hedged CHF
Credit Suisse Tremont
Hedge Fund in CHF
40
Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
© OLZ & Partners Asset and Liability Management AG 12

13. Equity Switzerland (CHF)
OLZ E i S i
Equity Switzerland optimised
l d i i d
Efficient Risk Diversification Strategy for Equity
This shall be an example of a tailor made solution for a specific
equity market – if the data’s are appropriate any index can be
optimized.
ti i d

14. 5. Tailor made solution - OLZ Equity Switzerland optimised
Comparison of the 10 worst monthly returns since Dec. 2003
OLZ Equity Switzerland optimised has outperformed the relevant benchmark in 8 of the 10 worst month
6%
4%
2%
0.5%
0 5%
0%
-2% -1.7%
-4% 3 %
-3.4%
-4.4% -4.2%
-4.9% -4.9%
-6% -5.5% -5.2% -5.2% -5.0%
-6.1%
-6.4%
-8% -7.5%
-8.1% -8.2%
-10%
10% -9.3%
9 3%
-10.2% -10.0%
-12% -11.0%
-14%
-16%
Feb-09 Jan-08 Oct-08 Sep-08 Jun-08 Nov-08 May-06 May-10 Dec-08 Jan-09
SPI TR OLZ Equity Switzerland optimised Overperformance
© OLZ & Partners Asset and Liability Management AG 14

15. 5. Tailor made solution - OLZ Equity Switzerland optimised
Comparison with investment foundations
rformance vs. SPI
15%
Equity Switzerland optimised
10%
Total Overper
5%
0%
Average investment foundation
Equity Switzerland
-5%
-10%
-15%
-3% -2% -1% 0% 1% 2% 3%
Risk difference vs. SPI (Standard deviation investment foundation p.a. – Standard deviation Index p.a.)
Evalutation period: 5 years
Source: KGAST Vergleich per 31.12.2010
© OLZ & Partners Asset and Liability Management AG 15

16. Next Steps
We would be delighted to further discuss in more details potential
synergies and ways of cooperation.
y g y p
• Mr Sandro Steiner Managing Director and Partner is
Mr. Steiner,
looking forward to meet you.
© OLZ & Partners Asset and Liability Management AG 16