Introduction to BM Presentation Q3 2016

An introduction to Brooks Macdonald

November 2016

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• About Brooks Macdonald

• Investment management approach

• Investment solutions

• Investment performance

• Infrastructure

• Fees and charges

• Your team

Agenda

3

About Brooks Macdonald

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• 2016 – Citywire Wealth Manager Regional Stars – Scotland and Northern Ireland, North, Midlands, South East and London.

• 2016 – 5 Star rating for MPS, BPS and MPS platform (Defaqto).

• 2015 – WealthBriefing GCC Awards (Independent Wealth Manager)

• 2015 – Professional Adviser International Fund and Product Awards (Best International Wealth Management Provider)

• 2015 – Money Marketing Awards (Best Wealth Management Company).

• 2015 – Alternative Investment Awards (Best in Offshore Wealth Management).

• 2015 – Named in top 100 list of the best medium sized companies to work for (The Sunday Times).

• 2015 – Citywire Wealth Manager Regional Stars – South East, Scotland and Northern Ireland, North and London.

• 2015 – Finalist Investment Performance Defensive Portfolios (PAM Awards).

• 2015 – Finalist Investment Performance Cautious Growth Portfolios (PAM Awards).

• 2015 – 5 star rating for MPS, BPS and MPS platform (Defaqto).

• 2014 – Named in top 100 list of the companies to work for (The Sunday Times).

• 2014 – Gold Standard Awards: Awarded the Gold Standard for Portfolio Management (Incisive Media).

• 2014 – 5 star rating for MPS, BPS, MPS platform & 5 diamond rating for multi-asset funds (Defaqto).

• 2014 – Best Discretionary Fund Manager (Professional Adviser).

Recent awards

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Employee expansion and growth in discretionary FUM since 2006

Corporate overview

£690m 2006

£8.92bn 2016

FUM (Grown 13x)

No. of employees (Grown 11.8x)

41 2006

486 2016

6

Our discretionary FUM – to 30 September 2016

3.75

5.37

6.687.33

8.92

0

2

4

6

8

10

Sep-12 Sep-13 Sep-14 Sep-15 Sep-16

Fu

nd

s u

nd

er m

anag

emen

t (£

bn

)

Total FUM (£bn) 3.75 5.37 6.68 7.33 8.92

Change over 12 months (%) 29 43 24 10 22

WMA Balanced TR over 12 months (%) 14 13 8 2 18

Sept

2012

Sept

2013

Sept

2014

Sept

2015

Sept

2016

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International reach

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Investment approach

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Investment philosophy

Our approach is founded on three key investment principles:

• Active investment management

• Effective risk management

• Maintain portfolio focus

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Investment process

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Our research capability

Sector No. of investment

managers / analysts No. of investments on

buy list No. of investments on

hold list

Direct UK equities 18 47 1

Direct international equities 6 6 0

UK funds 9 29 12

Europe funds 8 16 5

North America funds 7 16 0

Japan funds 5 9 3

Far East & emerging market funds 8 18 2

Thematic funds 8 23 4

International funds 5 17 1

Fixed income 11 29 4

Alternatives 8 18 4

Structured products 8 29 0

Property 6 18 10

Total 107 275 46

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Asset allocation

+/-3 +/- 5 +/-7

Current guidance portfolios – October 2016

The investment managers’ tolerance limits:

Low

Low

(Income &

Growth)

Low-to-

MediumMedium

Medium-

to-HighHigh

UK fixed income 25 23 16 11 3 0

International fixed income 18 15 9 3 2 0

UK equities 8 8 15 22 28 32

North American equities 2 2 8 12 16 19

European equities 0 0 2 4 5 7

Japan, Far East & Emerging equities 0 0 3 7 11 15

International/Thematic equity 8 7 9 11 16 19

Alternatives 8 10 9 6 5 3

Property 8 8 8 4 2 0

Structured Return 10 14 10 10 4 0

Cash 13 13 11 10 8 5

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• Dedicated investment manager and team

• High level of personal service

• Solutions-based approach

• Emphasis on transparency

Approach to clients

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A typical investment management team structure

Head of Team

(Investment Management)

Trainee Investment Manager

Trainee Investment Manager

Senior Investment Management

Administrator

Investment Management

Administrator

Investment Management

Administrator

Investment Manager Investment Manager Investment Manager

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Investment solutions

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Investment solutions

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International Bespoke Portfolio Service

Solutions Investment management Service

AVAILABLE IN £, $, € (OR UPON REQUEST)

FOLLOWS BROOKS MACDONALD GROUP’S CENTRAL INVESTMENT PROCESS

HIGH DEGREE OF PERSONAL CONTACT

TAILORED ACCORDING TO OBJECTIVES, RISK PROFILE AND TAX STATUS

ACCESS TO FULL SPECTRUM OF ASSET CLASSES

ANNUAL MEETINGS WITH ADVISER OR CLIENT (OR AS REQUIRED)

ACTIVE PORTFOLIO MANAGEMENT FREQUENT AND DETAILED REPORTING

TRANSPARENT FEES WITH INSTITUTIONAL DEALING

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International Managed Portfolio Service


CHOICE OF SIX RISK-RATED, SEGREGATED PORTFOLIOS

FOLLOWS BROOKS MACDONALD GROUP’S CENTRAL INVESTMENT PROCESS

DEDICATED REGIONAL SUPPORT TEAM

AVAILABLE IN £, $ AND €

ACCESS TO FULL SPECTRUM OF ASSET CLASSES

ONLINE REPORTING AND INVESTMENT PROPOSAL GENERATOR

ACTIVE PORTFOLIO MANAGEMENT REGULAR CONTRIBUTIONS AND WITHDRAWALS

EXTENSIVE RESEARCH PROCESS AND INSTITUTIONAL BUYING POWER

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Corporate Bond Strategy


LOW-MEDIUM RISK

INVESTS LARGELY IN INVESTMENT GRADE CORPORATE DEBT


OPTION OF TAKING OR REINVESTING INCOME

DIVERSIFIED PORTFOLIO OF CORPORATE BONDS


AVAILABLE IN £, $, €

AIMS TO PROVIDE POSITIVE TOTAL RETURNS

FREQUENT AND DETAILED REPORTING


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Direct Equity Strategy


GROWTH-ORIENTED

PORTFOLIO OF UK, US AND EUROPEAN DIRECT EQUITIES


LOWER VOLATILITY

TYPICALLY LARGE MARKET CAPITALISATION COMPANIES


INFLATION PROTECTION

FREQUENT AND DETAILED REPORTING

AVAILABLE IN £, $, €


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Performance

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BM Low Risk 7.52 1.64 4.68 7.02 10.99 5.07 14.40 35.89

ARC Sterling Cautious PCI 6.10 1.37 4.01 4.54 6.79 4.67 11.87 24.89

Relative performance 1.42 0.27 0.66 2.48 4.20 0.40 2.53 11.00

BM Low-to-Medium Risk 9.41 1.85 5.42 9.31 11.29 5.60 17.48 42.92

ARC Sterling Balanced Asset PCI 9.96 0.84 5.22 8.05 9.43 6.79 16.68 37.96

Relative performance -0.55 1.01 0.20 1.26 1.86 -1.19 0.80 4.96

BM Medium Risk 11.47 1.56 5.43 11.39 11.52 6.44 19.37 48.29

ARC Sterling Steady Growth PCI 13.54 0.47 5.85 10.78 11.21 9.06 20.74 48.74

Relative performance -2.07 1.09 -0.41 0.62 0.31 -2.62 -1.38 -0.46

BM Medium-to-High Risk 14.39 1.33 5.53 13.25 11.68 7.79 22.32 54.71

ARC Sterling Equity Risk PCI 15.89 -0.52 6.24 14.06 13.22 10.59 22.50 58.19

Relative performance -1.50 1.84 -0.71 -0.81 -1.54 -2.80 -0.18 -3.48

BM High Risk 16.36 0.93 5.89 14.98 13.18 8.95 24.37 61.85

ARC Sterling Equity Risk PCI 15.89 -0.52 6.24 14.06 13.22 10.59 22.50 58.19

Relative performance 0.47 1.45 -0.35 0.92 -0.04 -1.64 1.87 3.66Hig

h R

isk

Rolling 12 months performance (%) Cumulative performance (%)

12 mths

to

30.09.12

12 mths

to

30.09.13

12 mths

to

30.09.14

12 mths

to

30.09.15

12 mths

to

30.09.16 YTD

3 year to

30.09.16

5 year to

30.09.16

Lo

w R

isk

Lo

w-t

o-

Me

diu

m

Ris

k

Me

diu

m

Ris

k

Me

diu

m-

to-H

igh

Ris

k

• Over the last five years, Brooks Macdonald has generally achieved strong relative performance compared to the ARC PCI.

Our performance vs. ARC’s PCI

Please note that due to rounding, the figures shown in this table may not precisely add up to the totals / differentials shown.

Past performance is no guide to future performance. All performance figures are net of underlying fund charges and Brooks Macdonald management fees but gross of professional adviser management fees. Deduction of these fees will impact on the performance shown.

Source: Brooks Macdonald, ARC

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International BPS performance (GBP)

All data provided by Brooks Macdonald, unless otherwise stated, as at 30.09.16. The above performance figures represent aggregate performance numbers from actual client portfolios and are net of any underlying fund charges and Brooks Macdonald fees. The data is drawn from portfolios managed by Brooks Macdonald Asset Management Limited for the period to 31.12.12 and from the relevant combined portfolios of Brooks Macdonald Asset Management Limited and Brooks Macdonald Asset Management (International) Limited from 01.01.13.

Defensive Low (%)

Cautious Balanced Low/Medium (%)

Balanced Medium (%)

Growth Medium/High (%)

High Growth High (%)

Calendar year

2011 -0.15 -2.38 -4.43 -7.48 -3.06

2012 9.38 9.41 9.60 10.06 10.99

2013 7.09 10.23 12.68 14.67 16.81

2014 4.46 5.12 4.87 4.77 4.43

2015 2.15 2.96 3.55 4.58 5.02

YTD (as at 30.09.16) 5.07 5.60 6.44 7.79 8.95

3 year annualised return 4.59 5.52 6.08 6.95 7.54

3 year annualised volatility 3.40 4.82 6.37 7.90 8.68

5 year annualised return 6.33 7.40 8.20 9.12 10.11

5 year annualised volatility 3.90 5.11 6.50 7.94 8.25

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International BPS performance (USD)

All data provided by Brooks Macdonald, unless otherwise stated, as at 30.09.16. The above performance figures represent aggregate performance numbers from actual client portfolios and are net of any underlying fund charges and Brooks Macdonald fees. The data is drawn from portfolios managed by Brooks Macdonald Asset Management (International) Limited.

Cautious Balanced Low/Medium

(%)

Balanced Medium

(%)

Growth Medium/High

(%)

Calendar year

2011 1.57 -6.42 -11.61

2012 3.36 6.39 10.59

2013 5.03 11.01 11.28

2014 2.78 0.89 1.19

2015 0.45 -0.75 0.68

YTD (as at 30.09.16) 2.35 0.95 -1.28

3 year annualised return 3.05 2.14 2.27

3 year annualised volatility 4.09 6.42 8.08

5 year annualised return 2.43 1.81 1.44

5 year annualised volatility 3.66 7.90 11.05

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International BPS performance (EUR)

All data provided by Brooks Macdonald, unless otherwise stated, as at 30.09.16. The above performance figures represent aggregate performance numbers from actual client portfolios and are net of any underlying fund charges and Brooks Macdonald fees. The data is drawn from portfolios managed by Brooks Macdonald Asset Management

(International) Limited. *Medium/High Risk Statistics ceased at the end of Q2 2013.

Cautious Balanced Low/Medium

(%)

Balanced Medium

(%)

Growth Medium/High

(%)

Calendar year

2011 -0.24 -7.34 -7.11

2012 4.68 8.21 8.33

2013 2.62 9.94 0.46

2014 6.76 6.75 -

2015 4.71 8.47 -

YTD (as at 30.09.16) -1.12 -2.35 -

3 year annualised return 3.96 5.78 -

3 year annualised volatility 7.99 9.14 -

5 year annualised return 3.58 4.65 -

5 year annualised volatility 6.56 8.83 -

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Corporate Bond Strategy performance (GBP)

• Portfolio launched January 2008. • Cumulative performance since launch to 30 September 2016.

Performance chart shows the value of £100 invested. Source: Brooks Macdonald* / FT Interactive data / BofA Merrill Lynch to 30.09.16. *Managed at the relevant time by DPZ Capital Limited, which merged with Brooks Macdonald Asset Management (International) Limited on 02.12.15.

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Direct Equity Strategy performance (GBP)

• Portfolio launched March 2011. • Cumulative performance since launch to 30 September 2016.

Source: Brooks Macdonald / MSCI World to 30.09.16. The above performance figures represent aggregate performance numbers from actual client portfolios and are net of any underlying fund charges and Brooks Macdonald fees. The data is drawn from portfolios managed by Brooks Macdonald Asset Management (International) Limited.

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Infrastructure

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Our Risk Monitoring System (RMS) has been developed in conjunction with specialist product provider, BITA risk, to monitor:

Risk Monitoring System (RMS)

RMS

Risk management at individual

level

Compliance of managers and

investment teams

Portfolio compliance at

both the individual and

group level

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BITA

1

2

3 Comply or explain

Traffic light report

Click through to stock level report

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Security of client assets

• Client assets are registered in the name of a separately incorporated, wholly-owned legal entity,

Secure Nominees Limited, whose assets do not form part of our balance sheet, ensuring “ring-

fencing” of all assets at all times

• Robust custodians:

• BNP Paribas acts as global custodian for client securities

• BNP Paribas, HSBC, Barclays and Lloyds hold client cash

• Professional indemnity insurance in excess of regulatory requirements

• Fully audited annually by PwC

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Transparency of reporting

• Performance is reported net of all fees, in a way that is clear and easy to understand

• Performance reports show full history of the portfolio, including all cash additions and

withdrawals

• Portfolio information is available online

• We are always available for face-to-face meetings or telephone calls

The above table is an illustration of a client performance report. Source: Brooks Macdonald.

Period Cumulative Annual Period Cumulative Annual

31/12/2011 623,317 623,317

31/12/2012 976,471 353,154 446 92,171 1,068,195 12.05% 12.05% 12.05% 5.26% 5.26% 5.26%

31/03/2013 956,057 -20,413 115,513 1,071,124 2.23% 14.55% 2.23% 3.68% 9.14% 3.68%

30/06/2013 979,014 22,957 122,173 1,100,741 0.61% 15.24% 2.85% -1.74% 7.24% 1.88%

30/09/2013 962,107 -16,907 180,471 1,142,132 5.38% 21.44% 8.38% 2.04% 9.43% 3.95%

31/12/2013 945,307 -16,800 224,226 1,169,087 3.89% 26.17% 12.60% 1.40% 10.96% 5.41%

31/03/2014 935,307 -10,000 236,066 1,170,927 1.02% 27.45% 1.02% 0.54% 11.56% 0.54%

30/06/2014 918,795 -16,513 251,786 1,170,135 1.36% 29.19% 2.40% 1.14% 12.83% 1.69%

30/09/2014 897,819 -20,976 260,170 1,157,543 0.73% 30.13% 3.14% 0.96% 13.91% 2.66%

31/12/2014 866,523 -31,296 276,874 1,142,951 1.48% 32.06% 4.67% 1.48% 15.60% 4.18%

31/03/2015 846,899 -19,624 335,980 1,182,433 5.26% 39.01% 5.26% 1.45% 17.27% 1.45%

30/06/2015 832,660 -14,239 323,466 1,155,680 -1.07% 37.52% 4.13% 1.46% 18.99% 2.93%

Portfolio Benchmark

Performance %

Date Start value £ Cash in/outIncome paid

away

Cumulative

total returnEnd value £

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Website and online portal

• Comprehensive reporting

– valuations

– asset allocation breakdown

– transaction report

– full cash statements

• 24-hour access

– for advisers

– for clients

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Fees

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Fees

• We believe investment management costs should take into account a client’s aims and

objectives and a transparent fee quote will therefore be discussed and agreed. The fee will be

all inclusive and transparent, with no hidden charges.

• If requested, we are confident enough to work on performance-related fees where appropriate.

• When investing in funds on behalf of clients we never take a front end charge and only ever

invest into the lowest cost institutional share classes where available.

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Fees and charges – segregated solutions

Charges Investment service

International BPS

International MPS

Corporate Bond Strategy

Direct Equity Strategy

Specified Portfolio Mandate

Annual management charge

1.00% 1.00% 0.75% 1.25% Negotiable

Transaction £40 Nil £40 £40 Negotiable

Custody Nil Nil Nil Nil Negotiable

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Your investment team

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Investment office

Tim Dallas-Chapman Director E [email protected]

Kevin Boscher Director – Chief Investment Officer, International E [email protected]

Phil Rose Senior Investment Manager E [email protected]

Andrew Prosser Trainee Investment Manager E [email protected]

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David Le Cornu Senior Investment Director E [email protected]

Daniel McAlister Senior Investment Manager E [email protected]

Richard Ramskill Senior Investment Manager E [email protected]

Mike Langstone Senior Investment Manager E [email protected]

Jamie Mourant Trainee Investment Manager E [email protected]

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Tim Sanders Investment Director E [email protected]

Greg Powell Senior Investment Manager E [email protected]

Oliver Harwood Investment Manager E [email protected]

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Your investment team - Africa team

Lindsay Bateman Business Development Director E [email protected]

Gary Hill Investment Director E [email protected]

Adam Greaves Investment Manager E [email protected]

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Adviser solutions team

Matt Wintour Relationship Manager T +44 (0) 1534 715 532 E [email protected]

Linda McLaren Business Development Director T +44 (0) 7584 340 525 E [email protected]

Jonathan Mynes Head of Adviser Solutions T: +44 (0) 1534 715 584 E [email protected]

Richard Hughes Head of Business Development T +44 (0)7797 955 576 E [email protected]

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Michael Caetano Senior Investment Manager E [email protected]

Simon Beal Investment Director E [email protected]

Akos Dietrich Investment Manager - Head of Credit Research E [email protected]

Scott Goodrum Investment Manager E [email protected]

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Mark O’Connor Investment Team Director E [email protected]

Isobel Whalley Investment Manager E [email protected]

Kevin Boscher Director – Chief Investment Officer, International E [email protected]

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Investment management administrators

Lisa Stolte Senior Manager – Head of Investment Management Administration E [email protected]

Mark Ward Investment Management Administrator E [email protected]

Carina Vasconcelos Investment Management Administrator E [email protected]

Jamie Drummond Investment Management Administrator E [email protected]

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Contact us

Richard Hughes Head of Business Development T +44 (0)7797 955 576 E [email protected]

Peter Musker Business Development Manager T +44 (0)1534 715 575 E [email protected]

Lindsay Bateman Business Development Director Regional focus: Africa T +44 (0)7797 753 400 E [email protected]

Linda McLaren Business Development Director Regional Focus: Europe T +44 (0)7584 340 525 E [email protected]

Adrienne Hodgson Business Development Assistant T +44 (0)1534 715 517 E [email protected]

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This document is intended for professional advisers only and should not be relied upon by any persons who do not have

professional experience in matters relating to investments. All data provided by Brooks Macdonald, unless otherwise

stated, as at 30.09.16. The value of your investments and the income from them may go down as well as up. You may get

back less than you invested. Past performance is not a guide to future performance.

Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald

group of companies. Brooks Macdonald Group plc is registered in England No 4402058. Registered office: 72 Welbeck

Street London W1G 0AY.

Brooks Macdonald Asset Management (International) Limited is licensed and regulated by the Guernsey Financial Services

Commission. Its Jersey branch is licensed and regulated by the Jersey Financial Services Commission. Brooks Macdonald

Asset Management (International) Limited is an authorised Financial Services Provider, regulated by the South African

Financial Services Board. Registered in Guernsey No 47575. Registered office: Yorkshire House Le Truchot St Peter Port

Guernsey GY1 1WD.

Brooks Macdonald Funds Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No

5730097. Registered office: 72 Welbeck Street London W1G 0AY.

Investment Fund Services Limited (IFSL) is the Authorised Corporate Director for the IFSL Brooks Macdonald Fund. IFSL is

registered in England No. 06110770 and is authorised and regulated by the Financial Conduct Authority. Registered office:

Marlborough House, 59 Chorley New Road, Bolton, BL1 4QP. Copies of the Prospectus and Key Investor Information

Documents are available from www.ifslfunds.com or can be requested as a paper copy by calling 0845 123 1084 or writing

to IFSL, Marlborough House, 59 Chorley New Road, Bolton, BL1 4QP.

More information about the Brooks Macdonald Group can be found at www.brooksmacdonald.com.

Important information

Introduction to BM Presentation Q3 2016

Documents

Transcript of Introduction to BM Presentation Q3 2016