2012 q1 sourcecap ea eur presentation cm106799 v2

European AlphaEuropean AlphaQ1 2012

Contents

Hermes Fund Managers Overview

Hermes Sourcecap Credentials

Key Personnel Key Personnel

Investment Style and Process

Performance

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

Introduction

Gl b l i tit ti l t Global institutional asset manager

– 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 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 joint t b t HFM d GPE P t Li it d HGPE i i d d t tit d t t f th H S H t 31 D b 2011


3

venture 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

Our Evolution

M i li t i t t t t i th h lti b ti t t Manage specialist investment strategies through multi-boutique structure 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

The foundation is laid for

1995

PosTel changes its name to

2008

Hermes Investment Funds

2010

Hermes' global presence is Hermes with the formation of PosTel, the investment management team of the Post Office Staff Superannuation Fund.

Hermes, the Greek messenger of the gods. A reflection of its ownership structure by the BT Pension Scheme.

(UCITS) launches a range of Dublin domiciled unitised funds.

increased when Hermes Fund Managers Australia is registered with ASIC and opens an office in Sydney.

1993

Responsible Asset Management is at the top of our agenda. Alastair Ross-Goobey, the then Chief Executive of PosTel, writes to all FTSE-100 Chairmen,

2007

Hermes splits into separate pension fund management and asset management businesses. Outlines its vision to become a leading third party asset

2009

Our presence in the US is cemented when Hermes Fund Managers North America is registered with the SEC.

2011

Hermes continues its tradition of spearheading industry change as Saker Nusseibeh founds the '300 Club'. Whilst independent of Hermes the club echoesto all FTSE 100 Chairmen,

pressing for shorter contracts for CEOs.

leading third-party asset manager.

Hermes the club echoes Hermes' call for greater responsibility within the industry.


4

*Pension Funds and their Advisers 2011

Institutional Asset Manager

Established 1983 BreakdownEstablished 1983

Owner BT Pension Scheme (BTPS)

Head Office London

Breakdownby asset type (%)

Fixed Income 40.8

Equities 14.2

Commodities 3.6Other Offices Boston, New York, Sydney

No. of Boutiques 14

Assets under Management €31.7bn*

Hedge Funds 5.5

Private Equity 14.3

Real Estate 18.7

Cash 2 8Assets under Stewardship €107bn

No. of Investment Professionals 137 AUMby client type (%)

Cash 2.8

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 joint


5

venture 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

Investment Boutiques

Hermes Investment Office

E iti Fi d I Alt ti Responsible Investment

Hermes Fund Managers

Equities Fixed Income Alternatives Responsible Investment Services

Hermes Real Estate Investment

Management

Hermes BPK Partners

(Fund of Hedge Funds)

Hermes Global

Equities Advisors

Hermes Sourcecap (European Equities)

Hermes Small & Mid Cap Equities

Hermes Global

Government & Inflation

Hermes Credit

Hermes Equity

Ownership ServicesManagementHedge Funds)Advisors Equities) Bonds Services

Hermes Emerging Markets

Hermes Japanese Equities

Hermes Quantitative

Equities

Hermes Commodities

Hermes GPE

(Private Equity)*

Hermes Focus Asset

Management (Activist

Equity)

*Hermes GPE LLP (“HGPE”) is a joint venture between Hermes Fund Managers Limited and GPE Partner Limited

(Activist Equities)


6

Source: Hermes as of 31 December 2011. Note: The chart does not represent legal structure of investment boutiques

Responsible Asset Management

Responsible Management

Risk Adjusted Long term Responsible Transparency Risk Adjusted

Returns Right Benchmark Long-term Approach Alignment Management:

‘Good Fiduciary’

Responsible Asset Management

Governance, Strategy, Culture Environmental, Social & Economic Sustainability Public Policy and Best Practice

ResponsibleInvestment: ‘Good Owner’

Responsible Investment


7

Hermes Sourcecap: Our Credentials

– Building on a historic franchise in a boutique environment

– Creativity and flexibility in the investment process backed by a comprehensive y y p y p

operational platform

– Considerable success* despite launching into the teeth of what was considered one ofConsiderable success despite launching into the teeth of what was considered one of

the worst financial crises since the Great Depression

– An institutional focus with a blue-chip client base alreadyAn institutional focus with a blue chip client base already

– Assets under management currently €1044.5m (as at 31st Dec 2011)


88

*See page 25

Core Principles

Focus on sustainable alpha in a risk-adjusted manner

Exploit the power of change at the stock & industry level

E h i t k l ti i l th ti f k

Managed by an experienced team*

Emphasis on stock selection in a clear thematic framework

Independence and discipline in risk management

Managed by an experienced team


9

*See pages 11 & 24

9

Strategy Characteristics

Mid to large capitalisation pan European equity product with strong emphasis on generating sustainable– Mid- to large-capitalisation pan-European equity product with strong emphasis on generating sustainable

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,

t d ithi l th ti f kgenerated within a clear thematic framework

– 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


10

* Targeted returns are estimates only. No assurance can be given that these returns will be achieved.

10

Key Personnel

James Rutherford is the Chief Investment Officer of HermesSourcecap Limited and he is also the lead portfolio manager for

Andrew Parry is the Chief Executive Officer of HermesSourcecap Limited and has specific responsibility for risk

the Hermes Sourcecap European Alpha product. James has 20years of experience in the investment industry.

He graduated from London School Economics in 1988 andimmediately joined Fidelity as a Pan-European researchanalyst James initially specialized in areas such as property

management, hedging and portfolio construction for thecompany.

Prior to joining Hermes Sourcecap, Andrew establishedPembroke Capital Management in January 2003 and launchedthe Magenta Fund a global equity non-directional fund inanalyst. James initially specialized in areas such as property,

transportation, autos and media.

In 1994, he became portfolio assistant to Graham Clapp, andquickly progressed to become a Pan-European institutionalportfolio manager in 1995. James also co-managed withG h th UK R T t

the Magenta Fund, a global equity non directional fund, inMarch of that year.

Before establishing Pembroke, Andrew worked at NorthernTrust Global Investments (Europe) Ltd as Chief InvestmentOfficer of International Equities and was responsible for the

t f Gl b l I t ti l d R i l tf liGraham the UK Recovery Trust.

Over the last 11 years James came to manage $19bn portfolioof pan-European institutional funds. James remained at Fidelityuntil joining Hermes Sourcecap.

management of Global, International and Regional portfolios.

Prior to Northern Trust, Andrew held a variety of seniorinvestment roles including Head of International Equities atJulius Baer Investments, Chief Investment Officer at LazardBrothers Asset Management and Head of UK Equities atg qBaring Asset Management.

He has over 25 years of investment management and businessbuilding experience and holds an MA in Mathematics from theUniversity of St Andrews.


11

Sourcecap International Limited was acquired by the Hermes Group on 3 December 2009 and became Hermes Sourcecap Limited on 21 December 2009.

11

Hermes Sourcecap Structure

HERMES FUND MANAGERS

HERMES SOURCECAPHR / Compliance / Finance / IT

Rupert Clarke – DirectorSaker Nusseibeh – Director

Victor Hymes – Director

James Rutherford CIO, Director

Andrew Parry CEO, Director

Saker Nusseibeh - DirectorVictor Hymes - Director

Alison UreMarketing / Admin Assistant

Chi Chan Senior Analyst

Ronald Port Senior Analyst

Tim CrockfordAnalyst

Richard BoardTrainee Analyst

Melanie DukesCOO

Si H d k

Trainee Analyst

Paul DaltonProduct Specialist

Simon HandcockClient Service Administrator

Carly CzesnikowskaClient Service Administrator


1212

Note: Hermes Sourcecap share capital ownership is between its executive directors, employees, Hermes Fund Managers and Legato Capital Management Ventures

Team Approach

Independent • Clear ownership & accountability for the management of the portfolio

• Alignment of interest through equity ownershippManager

• Alignment of interest through equity ownership

• Ability to stay true to an investment discipline developed over 20 years

• Portfolio Management in Depth Experience

Experienced • Experienced Analytical Support*

g p pThe lead manager has over 20 years of experience managing European equity assets for institutional clientsExperience in managing portfolios in a wide variety of economic and financial environments

Teams to Assist

Experienced Analytical SupportAbility to leverage off the strength in depth of the teamDedicated analysts to support product

• Quality in Depth

Risk

Over 70 years’ investment experience combined

• Independent risk assessment by the Investment Office with clear guidelines Risk Management

Oversight

p y gfor the manager that balance creativity and risk management

• Pragmatic approach to risk management that emphasises empirical observation over a model-based approach


13

*See page 24

13

Overview

Philosophy Objectives ProcessPhilosophy

Create value by identifying change and exploiting the potential market inefficiency

Build a portfolio of high-conviction original ideas with clear insights to provide

Target companies and industries undergoing fundamental change

Objectives Process

potential market inefficiency it creates

Gain a competitive edge by identifying stocks

with clear insights to provide sustainable alpha in a risk-controlled framework over the long term

fundamental change

• New Management•Technology advances • Restructuring• Hidden Assetswith strong franchise value

Identify undiscounted emerging future growth stories

• Hidden Assets • Excessive pessimism/optimism• Product development• Supply/demand• Disruptive innovation • Regulatory changesstories• Environmental/sustainability issues

Fundamental Insight & Identify Change

Sustainable Alpha & Risk Control

Validation of theIntrinsic Value& Identify Change & Risk Control Intrinsic Value


1414

Investment Style

Identifyingcompanies with sustainable change leading to higher

As time is the last true arbitrage, the focus is on identifying high conviction

Rigorous fundamental analysis that uses original sources of ideas to step outside of

Flexibility to deliver returns from both individual stock and industry positionsleading to higher

growth, which is under-appreciated by the market

high-conviction, long-term structural opportunities

ideas to step outside of the consensus trade

industry positions

Identify Change & Time Arbitrage Analysis A Flexible Approachy gExploit Inefficiency

Time Arbitrage Analysis A Flexible Approach


1515

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 on: He that will not apply new ypes o c a ge e ocus o Restructuring Disruptive innovation Management change Product cycles Industry consolidation Secular themes Capital cycles Shifts in competitive landscape

He that will not apply new remedies must expect new

evils; for time is the greatest innovator.

~Francis Bacon, "On I ti " E 1597p y p p

Technological shift Environmental/sustainability issues

• The manifestation of change: Improving/deteriorating:

Innovation," Essays, 1597

p g g 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

• Aim: to identify emerging growth opportunities that the market has missed through understanding the power of change

16

Research Process

Identify • Ideas generated internally by experienced investment team*

Identify investment candidates through industry knowledgeInvestment Opportunity

• Identify investment candidates through industry knowledge

• Uncover new ideas through original research

R t t i Di ti i ti• Forces of change

Fundamental

Restructuring Management change Industry consolidation Capital cycles

Disruptive innovation Improving fundamentals Product cycle New competition

• Valuation – sector or situation specificFundamental Analysis

Valuation sector or situation specific

Porter’s 5 Forces**:• Franchise quality

Multiple metrics applied Replacement/liquidation value

Sum of the parts Discounted cash flow

Buy/Sell

Porter s 5 Forces : substitution, new entrants, power of suppliers, power of buyers, industry competitors

• Team discussion and 360˚ appraisal of ideasBuy/Sell Decision • Final decision by portfolio manager

• Position size reflects level of conviction, mis-valuation and liquidity

*See pages 11 & 24


17

**Porter's five forces is a framework for industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979.

17

Closing Discipline

• Stock Appreciation/DepreciationValuation

pp p

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

Fundamentals• Fundamental change

Positions are closed if changes in the fundamentals conflict with the original thesis

Substitution• Better alternative identified

Another stock identified with a more compelling risk/reward

• Price action not supporting thesis

Another stock identified with a more compelling risk/reward

TechnicalIndicators

Price action not supporting thesis

Exit/reduce position if it breaks down/up against thesis

Re-evaluate position if price acts incorrectly to news


1818

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 policiesUnderstanding 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 of credit scarcityo d o c ed sca c y

– 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%


1919

Portfolio Structure

I l t d th h t i ll 40 60 i di id l iti d di th il bilit f lli– Implemented through typically 40-60 individual positions depending on the availability of compelling

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 exposurespools 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


2020

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 portfolio risksg p , p

– 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 ExposuresFully Understanding the Multiplicity of Risk Exposures


2121

Controls & Infrastructure

– Regulated by the FSA and SEC

– Comprehensive operational support team

– Use of thinkFolio as order-management system, incorporating exposure and pre-and post-trade Use o t o o as o de a age e t syste , co po at g e posu e a d p e a d post t ade

compliance monitoring

– Daily performance and attribution monitoring

Abilit t d St i ht Th h P i ith lti l thi d t t di & f i– Ability to do Straight-Through-Processing with multiple third-party custodians & reference currencies

– 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 InfrastructureEstablished Infrastructure


2222

Competitive Edge: The Complete Picture

– Experienced and high-quality team* Investment

– Clear alignment of interest through equity ownership

– Access to a broad range of internal and external sources of original research

Investment Team

Investment Style

– Exploiting the forces of change to identify emerging high-quality growth opportunities

– Gaining unique insights through original research

– A focused portfolio of high-conviction investments

Long term investment horizon to avoid the noise around data points– 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 systemsInfrastructure

p g y

– Established systems infrastructure with a focus on business continuity

– Resources of a major asset management firm with the flexibility of a boutique

*See pages 11 & 24

Harnessing the Power of Change


23

See pages 11 & 24

23

Research Personnel

Ronald 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 he

k d f A ti i P d t M t d f C l i S l til h j i d Fid lit I t t i J l 2002 l t Th hworked for Aventis in Product Management and for Celanese in Sales until he joined Fidelity Investments in July 2002 as an analyst. There 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 commercialy 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 retailHe began working at Execution in July of the same year as a Primary Research Analyst, working on major projects in consumer, retailand 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 isRichard Board is a Trainee Investment Analyst for Hermes Sourcecap, after joining the Client Support team in September 2010. His initial focus ison 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.


24

Sourcecap International Limited was acquired by the Hermes Group on December 3 2009 and became Hermes Sourcecap Limited on December 21 2009.

24

Composite Performance HistoryQ1 2012Q1 2012

Performance (Gross, EUR)20

25

Performance (Gross, EUR)

CumulativeYear-to-date 8.77 8.59 0.16One month -1.06 -0.30 -0.763 month 8.77 8.59 0.16

Composite % Benchmark %(1) Relative Return %(2)

10

15

20

6 month 21.50 17.81 3.131 year 7.31 -2.17 9.69Since fund inception -3.29 -22.05 24.07Annualised3 year 20.76 18.46 1.94Since fund inception -0.70 -5.08 4.61

-5

0

5

(%)

Risk Information

p(1) Benchmark FTSE All World Europe.

(2) Relative Return is calculated on a geometric basis.

Composite(3)-20

-15

-10

E Al h C itTracking Error 5.69Information Ratio 0.34Sharpe Ratio 1.07Beta 0.85

(3) 3yrs Ex-post Risk Statistics

-30

-25

2 20

07

3 20

07

4 20

07

1 20

08

2 20

08

3 20

08

4 20

08

1 20

09

2 20

09

3 20

09

4 20

09

1 20

10

2 20

10

3 20

10

4 20

10

1 20

11

2 20

11

3 20

11

4 20

11

1 20

12

European Alpha CompositeBenchmarkRelative Return

Inception Date: 19th June 2007This 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.

Q2

Q3

Q4

Q Q2

Q3

Q4

Q Q2

Q3

Q4

Q Q2

Q3

Q4

Q Q2

Q3

Q4

Q


2525

pPast performance is not a reliable indicator of future results.

Representative Portfolio Analysis March 2012March 2012

2 5 2 52.8

3.4

3.0

4.0Portfolio Style Skyline™

80

Style DistributionPortfolioBenchmarkCoverageMarket

Industrial Sector Skyline Portfolio (41)Benchmark (590)Coverage (17.0%)

-2 2 2 3-2.0

1.3

0.7

2.5

0.6

2.52.0

-2.0

-1.3

1.8

-1.0

0.5

-0.2

-2.0

-1.0

0.0

1.0

2.0

3.0

Sty

le T

ilt™

20

30

40

50

60

70

80

% W

eigh

t

8.6

11.4

7.9

17.3

8.7

22.8

6.6

4.1

12.5

18.7

13.1

4.9

2.8

11.3

13.6

8.8

6.1

11.09.7

1 7

4.6

2 2 2.6 2 15

10

15

20

25

Wei

ght %

-2.6-3.0

2.2 -2.3

-3.2

-4.0

-3.0

Style Factors

0

10

Style

0.00.9

1.70.0

1.32.2 2.1

0.11.5

0

Sector

100% - 60% represents the top 40% of companies sorted in descending order by Market Cap

20

25

30

35

ht %

Country Weights Portfolio Benchmark

Coverage

60

70

80

90

100 %

Liquidity Analysis Trade to benchmark

Trade to cash

Market Cap DistributionPortfolioBenchmarkCoverageMarket

0

5

10

15

Wei

gh

0

10

20

30

40

50

60

< 0.1 < 0.2 < 0.3 < 0.4 < 0.5 < 1 < 2 < 3 < 4 < 5 < 10

Posit

ions

Elim

inated

0

10

20

30

40

50

60

% W

eight

Portfolio and risk analysis provided by

This information is supplimental to the GIPS© composite performance on page 27

Country Days Range


2626

This information is supplimental to the GIPS composite performance on page 27

GIPS Disclaimer

Composite: Sourcecap European Alpha CompositeCreation date: 18 June 2007 Inception date: 18 June 2007 All information is quoted in EURp q

YearGross of Fees

ReturnNet of Fees

ReturnBenchmark

ReturnComposite 3-Yr St Dev (%)

Benchmark 3-Yr St Dev (%)

No of Portfolios

Composite Dispersion

EUR Total Composite Assets (Million)

% Total Firm Assets

2011 -0.5 -1.0 -8.8 15.7 17.7 15 0.32 990.2 3.7%

* Partial Year returns for Composite and Benchmark

H F d M Li it d l i li ith th Gl b l I t t P f St d d (GIPS®) d h d d t d thi t i li ith th GIPS® t d d H

2010 20.2 19.6 12.2 13 0.26 925.4 3.2%2009 26.9 26.2 34.4 7 N/A 407.4 1.6%2008 -40.5 -40.9 -44.2 <5 N/A 177.5 0.7%

2007 * -1.6 -2.0 -6.4 <5 N/A 49.9 0.1%

Hermes Fund Managers Limited claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. Hermes Fund Managers Limited has been independently verified for the periods 1 January 1998 through 31 December 2010. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS® standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS® standards. Verification does not ensure the accuracy of any specific composite presentation.

Notes:For the purposes of compliance with GIPS®, the firm is defined as Hermes Fund Managers Limited ("Hermes"), a multi-boutique asset manager consisting of a number of subsidiary or affiliate companies. As of 31 December 2009 the Hermes Fund Managers Limited firm definition was broadened to better represent the full range of investment strategies offered. Information about changes is available upon request. Gross of fees returns have been calculated gross of management, custodial fees and reclaimable withholding taxes, but after all trading commissions.

The composite includes all discretionary portfolios following the Pan European equity long only strategy run by Hermes Sourcecap Limited and has an inception date of COB 18 June 2007 (19 June 2007). The objective of the strategy is to outperform the benchmark over a rolling 3 year period. The benchmark is the FTSE All World Europe Index, which is designed to measure the equity market performance of European developed market countries. The tax basis of the benchmark is gross, except the UK which is net. The benchmark is rebalanced quarterly. The composite base currency is EUR.

The management fee schedule for this strategy is 0.75% per annum on the first EUR 60m and 0.50% per annum thereafter, with a minimum requirement in management fees of EUR 300,000.

Performance returns shown in EUR.

Hermes Fund Managers Limited do not use leverage in the management of any portfolios unless otherwise explained in the relevant composite disclosure. A complete list of composites descriptions, along with additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Where appropriate, composite dispersion is calculated as the equal weighted Standard Deviation of the annual returns of the constituent portfolios. If a composite consists of less than five portfolios for the full year then no measure of dispersion is shown. Hermes Fund Managers Limited have been verified for GIPS® Compliance for the period 01 January 1998 to 31 December 2010. A copy of the verification report is available on request.

Sourcecap International Limited was renamed Hermes Sourcecap Limited following its acquisition by Hermes Fund Managers Limited in December 2009. All rules relating to the portability of performance records have been met. Prior to integration Hermes Sourcecap Limited's claim of compliance has been verified to 31 March 2010. A copy of the verifier's report, detailing the scope of their work and extent of their responsibilities is available on request.


27Hermes Sourcecap I 2727

Disclaimer

F I tit ti l I tFor Institutional Investors

This document is for Professional Investors only. Any investment products referred to in this document are only available to such clients. Investing with Hermes may be restricted in other countries and as such, any person who receives this document is required to make themselves aware of their respective jurisdictions and observe any restrictions.

This document does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments; nor does it constitute an offer to purchase securities to any person in the United States or to any U.S. Person as such term is defined under the US Securities Exchange Act of 1933. It pays no regard to the investment objectives or financial needs of any recipient. No action should be taken or omitted to be taken based on this document. Tax treatment depends on personal circumstances and may change. This document is not advice on legal, taxation or investment matters so investor must rely on their own examination of such matters or seek advice. Before making any investment (new or continuous) please consult a professional and/or investment adviser as to its suitability.

Any opinions expressed may change. The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. Any investments overseas may be affected by currency exchange rates. Past performance is not a reliable indicator of future results and targets are not guaranteed. For more information please read any relevant Offering Document or contact Hermes.

Issued and approved by Hermes Sourcecap Limited (“HSL”) which is authorised and regulated by the Financial Services Authority (“FSA”). Registered address is Lloyds Chambers, 1 Portsoken Street, London, E1 8HZ. HSL is a registered investment adviser with the United States Securities and Exchange Commission (“SEC”). Hermes Investment Management Limited is the investment manager and promoter of Hermes Investment Funds plc (“HIF”) – an open-ended investment company with variable capital and with segregated liability between sub-funds – incorporated in Ireland. Authorised by the Central Bank of Ireland and recognised by the FSA. Telephone calls may be recorded for training and monitoring purposes. Potential investors in the United Kingdom are advised that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.


2828CM106799 – EUR Q1/12

2012 q1 sourcecap ea eur presentation cm106799 v2

Economy & Finance

Transcript of 2012 q1 sourcecap ea eur presentation cm106799 v2