2012 november sourcecap european alpha presentation eur cm110721 (1)
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Transcript of 2012 november sourcecap european alpha presentation eur cm110721 (1)
Hermes Sourcecap European AlphaNovember 2012
July 2012
Harriet Steel
For Professional Investors Only
Hermes SourcecapContents
Hermes Fund Managers Why Hermes Sourcecap? Overview Team Performance Investment Philosophy and Processest e t osop y a d ocess Risk Management Outlook Summary Summary Appendix
www.hermesfundmanagers.com I Hermes Sourcecap 1
Hermes Fund ManagersInstitutional asset manager
Established 1983
Owner BT Pension Scheme (BTPS)
Head Office London
Other Offices Boston, New York, Sydneyand Singapore
No. of Boutiques 14
Assets under Management €29.1bn1
Assets under Stewardship €93bnAssets under Stewardship €93bn
No. of Investment Professionals 121
1Please 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 venture between HFM and GPE Partner Limited. HGPE is an independent entity and not part of the Hermes group.S H t 30 S t b 2012
www.hermesfundmanagers.com I Hermes Sourcecap
Source: Hermes as at 30 September 2012.
Fixed Income 32.4
Equities 15.9
Breakdownby asset type (%)
Commodities 4.9
Hedge Funds 6.6
Private Equity 15.6y
Real Estate 21.6
Cash 3.0
2
Hermes SourcecapWhy Hermes Sourcecap?
An established boutique specialising in pan-European equities, ba
Highly skilled investment team with almost 70 years’ combined inv
Delivered strong relative performance2 against the backdrop of elevolatility experienced since 2007volatility experienced since 2007
Track record based on a clear and consistent investment philosopthat exploits the power of change over the long-term
Over 20 institutional clients invested in a mixture of separate acco
1 See Appendix for biographies 2 S 6
www.hermesfundmanagers.com I Hermes Sourcecap
2 See page 6
acked by a global asset manager
vestment experience1
evated market and economic
phy applied in a flexible manner
ounts and in-house UCITS funds
3
Hermes SourcecapInvestment philosophy
We believe that: High-conviction stock selection in a thematic framework is the bes
objectives in a sustainable manner over the long-term
Change provides a systematic market inefficiency where the cons Change provides a systematic market inefficiency where the conswhich can lead to significant shifts in the valuation of a company’s
Time is the last true arbitrage and final judge of a good investmen
Active managers are hired to be different to the index
www.hermesfundmanagers.com I Hermes Sourcecap
st way to add value to client
sequences persist over time andsequences persist over time and s stock price
nt decision
4
Hermes SourcecapStructure
HERMES FUND
HERMHERMSOURC
AndrewCEO Di
James Rutherford CEO, Di
Tim CrockfordSenior Analyst
Chi Chan Senior Analyst
Richard Board Analyst
CIO, Director
yy y
Paul DaltonProduct Specialist
www.hermesfundmanagers.com I Hermes Sourcecap
MANAGERS
MES HR / C li / Fi / ITMES ECAP HR / Compliance / Finance / IT
w Parry i t
Saker Nusseibeh – Director Victor Hymes – Directorirector Victor Hymes DirectorSteve Allen – Director
Alison UreMarketing / Admin Assistant
Melanie DukesCOO
Simon HandcockClient Service Administrator
Carly CzesnikowskaClient Service Administrator
5
Hermes SourcecapPerformance – Pan European
Composite returns to 30 September 2012 (%)
YTD 2012 1 yearComposite 18.5 32.4
35
p
Benchmark1 13.4 23.0
Relative Return2 4.5 7.6
51015202530
-10-50
YTD 2012 1 year
Composite Benchmark Relative Return1 2
Composite Benchmark Relative Return
Performance calculated in EUR (gross)
1 Benchmark FTSE All World Europe2 Relative Return is calculated on an geometric basis3 Performance calculated on an annualised basisPerformance calculated on an annualised basis4 From inception Date: 18th June 20075 3 years Ex-post Risk StatisticsThis information is supplemental to the GIPS© composite performance in AppendixSource: FTSE International Limited (“FTSE”)© FTSE 2012. FTSE® is a trade mark of London Stock ExchTimes Limited and is used by FTSE under licence. All rights in the FTSE Indices vest in FTSE and/or its its licensors accept any liability for any errors or omissions in the FTSE Indices or underlying data. No fuD t i itt d ith t FTSE’ itt t P t f i t li bl i di t f
www.hermesfundmanagers.com I Hermes Sourcecap
Data is permitted without FTSE’s express written consent. Past performance is not a reliable indicator of
3 yrs3 5 yrs3 Since Inception3,4
13.8 1.5 1.0
6.9 -3.3 -3.8
6.4 4.9 5.0
3 yrs 5 yrs Since Inception 33 3,4
Risk Information5 Composite
Tracking Error 4.76
Information Ratio 1.35
Sharpe Ratio 0.58
Beta 0 95
hange Plc and The Financial licensors. Neither FTSE nor
urther distribution of FTSE f f t lt Beta 0.95f future results
6
Hermes SourcecapInvestment process
A four-stage process:
Idea generation Focused on
Bottom-up
Thematic
Thesis validation
Thematic
Thorough in
T Team appro
Detailed finValuation
Detailed fin
Look at mu
Implementation & portfolio construction
Portfolio of
Position siz
www.hermesfundmanagers.com I Hermes Sourcecap
n change
nvestigation of investment thesis to identify enduring change
hoach
ancial analysisancial analysis
ltiple angles
between 40-60 stocks
ze reflects level of conviction
7
Hermes SourcecapIdea generation – a dynamic process
Identifying change: Company visits
Thematic research Themaframew
Opportunistic sources
Industry events
External research
T h i l l i
framew
Technical analysis
Porter’s Five Forces1
Forces of change:Chan
Restructuring
Management change
Industry consolidation
Capital cycles Capital cycles
Disruptive innovation
Improving fundamentals
Product cycle
Analy
Product cycle
New competition
1 P t ' Fi F i f k f i d t l i d b i t t d l t d l d
www.hermesfundmanagers.com I Hermes Sourcecap
1 Porter's Five Forces is a framework for industry analysis and business strategy development developed
Thematic framework: Bottom-up approach
selecting each stock on its individual merits
atic work
Macro themes can be a source of ideas or lead to identifying change
Themes can be applied
work
Themes can be applied across different industries and businesses nge
Identifying the potential for sustained positivefor sustained, positive change lies at the heart of our approach
ysis
d b Mi h l E P t f H d B i S h l i 1979d by Michael E. Porter of Harvard Business School in 1979
8
Hermes SourcecapThesis validation
Company Analysis Team approach Meeting management and competitors
Industry conferences
Portfolio Managanalysts
Third-party company and industry research
Financial and sensitivity analysis
Analysts origina
Continuous andconviction
Extensive background checks using external research
Team discussionnew idea
www.hermesfundmanagers.com I Hermes Sourcecap
er supported by 3 dedicated Develop thesis via intense analysis and team discussion
ate, as well as validate, ideas
open debate helps build
n and 360° appraisal of every
9
Hermes SourcecapValuation
Financial analysis Favoured charac Multiple metrics applied depending on
industry Businesses with
good cash gene
Evaluation of what is discounted already
Identification of where we differ from consensus
Self-help situati
Businesses expgrowth themes
Price sensitivity to the delta in the business
Understand the risks if thesis is proved wrong
Pricing power
Improving cash
www.hermesfundmanagers.com I Hermes Sourcecap
cteristicsh high franchise value and eration
Seek companies whose share price has the potential to rise by at l t 50% 2ions
posed to long-term structural
least 50% over a 2-year horizon
returns to shareholders
10
Hermes SourcecapImplementation and portfolio construct
Implemented through typically 40-60 high-conviction individual posof ideas
All positions held as “active bets” and expected to be performance
Varying sector exposures depending on environment to further en Varying sector exposures depending on environment to further en
Unit sizes typically of 1-3% over the index weighting with active mavoid pools of unintended thematic exposures
Country exposure typically a residual of stock and sector decisiondepending on the macroeconomic environment
www.hermesfundmanagers.com I Hermes Sourcecap
tion
sitions depending on availability
e-enhancing investments
nhance returns and control risk
A diversified portfolio structure that balances high-conviction i ti ith d tnhance returns and control risk
management of specific risk to
ns but can be a significant factor
investing with prudent risk control
11
Hermes SourcecapSell discipline
We sell stocks according to the following criteria:
Fundamentals Substitution
Positions are closed if the original thesis is broken
Another stock identified with a more compelling risk/reward profile
www.hermesfundmanagers.com I Hermes Sourcecap
Valuation Technical indicators
Position reduced/exited as its price discounts future growth potential
Re-evaluate position if price acts incorrectly to news
12
Hermes SourcecapRisk management approach
Stock selection is the beginning of the risk management process
Investment research
Balancing the Risk/Reward in our favour
Focus on high conviction ideas only
Risk budget allocation emphasised by a
Portfolio construction
Risk budget allocation emphasised by a clear thematic framework through focus on stock-specific risk
A commonsense approach with no large active bets
www.hermesfundmanagers.com I Hermes Sourcecap
Emphasis on empirical observation over a model-based approach
Risk management
Active management of stock specific, factor and portfolio risks
Extensive use of risk analytics, but with a sceptical mindset (MultiFrame (proprietary system) Barra Style Research Inalytics)system) Barra, Style Research, Inalytics)
Continuous reappraisal of existing holdings and investment themes
Portfolio management
Identifying and eliminating disappointments early
Active management of stock-specific and factor risks
13
Hermes SourcecapEuropean brands – global presence
Many European companies generate a large proportion
www.hermesfundmanagers.com I Hermes Sourcecap
of revenue outside of Europe:
14
Hermes SourcecapOverview
Hermes Sourcecap European Alpha Strategy
Universe: Mid to Large Cap pan European sto
Holdings: Concentrated portfolio of 40 to 60 s
Investment Horizon: Long-term view with a holding perio
1Target Excess Return: > 300bps1 per annum over the benc
Country/Sector exposure: Typically a residual of stock and semacroeconomic environment
Stock weights: Typically 1-3% over the index weig
Benchmark: FTSE All World Europe (MSCI Euro
Strategy inception: 18th June 2007gy p
Out of Benchmark holdings Maximum 10%, including emerging
Total AUM €1.5bn
UCITS European Alpha €201.9m
UCITS Europe ex-UK €127.7m
1 T t d t ti t l N b i th t th t ill b hi d
www.hermesfundmanagers.com I Hermes Sourcecap
1 Targeted returns are estimates only. No assurance can be given that these returns will be achieved
ocks with a free float >€1bn
stocks
od of typically over 2 years
chmark over rolling five-year periods
ector decisions and can be a significant factor depending on the
hting
ope)
g Europe
15
Portfolio positioning
Relative country weight
11.157.05
5.812 65
NorwayGermanySweden
Denmark 2.651.35
-0.14-0.18-0.20
DenmarkNetherlands
GreeceCzech Republic
Hungary 0.20-0.30-0.41-0.46-0.67
HungaryPortugal
IrelandAustriaPoland
-0.85-1.06
-1.62-3.04
TurkeyFinland
BelgiumRussia
-3.38-3.51
-4.01-4.264 95
UKItaly
FranceSpain
S it l d
All information as of 30th September 2012B h k FTSE All W ld E
-4.95
-10.00 -5.00 0.00 5.00 10.00 15.00
Switzerland
www.hermesfundmanagers.com
Benchmark: FTSE All-World EuropeSource: Style Research
Relative sector weights
13.796.23
4.252.15
Cons DiscHealth Care
Info TechMaterials
0.70-1.96
-4.68-5.83-5.86
Telecom ServicesEnergyUtilities
Cons StaplesIndustrials
-9.811.03
-15.00 -10.00 -5.00 0.00 5.00 10.00 15.00
FinancialsCash
Relative stock weights
Randgold ResourcesSyngenta Ag
Swedbank AbSwedbank AbElekta Ab
Pearson PlcAdidas Ag
Ing Groep N.V.
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50
g pBayer Ag
Seadrill LtdPetroleum Geo-Services
16
0 00 0 50 00 50 00 50 3 00 3 50
Hermes SourcecapOutlook
Increasingly, local conditions will influence stock selection due to wperformance of individual companies in an environment of scarce
The global economic growth rate in the second half of 2012 is setin the first half of the year with the developing world slowing sharpy p g g p
Well-capitalized quality franchises with pricing power will get stronwhere there is a lack of credit
Draghi’s plans for the support of the ECB to struggling economiesrisk of fragmentation in the eurozone and is step towards makingrisk of fragmentation in the eurozone and is step towards making arm of governments
Politics is an unavoidable influence on markets with the decisions crisis at the heart of the Euro being pivotal to the direction and bebond marketsbond markets
www.hermesfundmanagers.com I Hermes Sourcecap
widening divergence in the growth
t to be considerably lower than ply and the US cycle maturingp y y g
nger in a deleveraging world
s in Europe helps eliminate the the ECB the potential fundingthe ECB the potential funding
on the best way to solve the haviour of European equity &
17
Hermes SourcecapSummary
Infrastructure Resources of aa boutique
Team Investment teaexperience1, wownership
Why Hermes Sourcecap?
ownership
Investment philosophy &
Track record baphilosophy apph thprocess change over th
Performance Delivered strong performance2 asince 2007
1 Refer to biographies in Appendix 2 R f t lid 6
www.hermesfundmanagers.com I Hermes Sourcecap
2 Refer to slide 6
a major asset management firm with the flexibility of
am with almost 70 years’ combined investment with a clear alignment of interest through equity
ased on a clear and consistent investment plied in a flexible manner that exploits the power of h l the long-term
against backdrop of strong market volatility experienced
18
A diAppendix
www.hermesfundmanagers.com
Hermes SourcecapBiographies
James Rutherford joined Hermes Sourcecap in December 2006 and is not only the Chief Investment Officer, but also the Lead Portfolio Manager for the Hermes
James Rutherford, CIO and Lead Portfolio Manager24 Years investment experience
Sourcecap European Alpha product. After graduating, James joined Fidelity as a Pan-European Research Analyst, initially specialising in areas such as property, transportation, autos and media. In 1994, he became Portfolio Assistant to Graham Clapp, and quickly progressed to become a Pan-European Institutional Portfolio Manager in 1995. James also co-managed the UK Recovery Trust which was ranked first in its peer group during that period OverRecovery Trust which was ranked first in its peer group during that period. Over 11 years James came to manage a USD19bn portfolio of Pan-European institutional funds and he remained at Fidelity until joining Hermes Sourcecap. James has over 20 years of experience in the investment industry and graduated from London School of Economics in 1988.
www.hermesfundmanagers.com I Hermes Sourcecap
Andrew Parry joined Hermes Sourcecap in December 2006 and as Chief Executive Officer has specific responsibility for risk management, hedging and portfolio construction for the company Prior to joining Hermes Sourcecap
Andrew Parry, Director, CEO28 Years investment experience
portfolio construction for the company. Prior to joining Hermes Sourcecap, Andrew established Pembroke Capital Management in January 2003 and successfully launched the Magenta Fund, a global equity non-directional fund in March of that year, which reached $240m peak assets under management. Before establishing Pembroke, Andrew worked at Northern Trust Global Investments (Europe) Ltd as Chief Investment Officer of International Equities ( p ) qand was responsible for the management of Global, International and Regional portfolios. Prior to Northern Trust, Andrew held a variety of senior investment roles including Head of International Equities at Julius Baer Investments, Chief Investment Officer at Lazard Brothers Asset Management and Head of UK Equities at Baring Asset Management. He has over 25 years of highly successful investment management and business building experience and holdssuccessful investment management and business-building experience and holds an MA in Mathematics from the University of St Andrews.
20CFA® is a trademark owned by the CFA Institute.
Hermes SourcecapResearch personnel
Chi Chan joined Hermes Sourcecap as an Analyst in April 2007. Prior to this in early 2004, he had joined
Tim Crockford joined HermAnalyst in June 2008. Prior
Chi Chan, Senior Analyst14 Years investment experience
Tim Crockford, Senior An6 Years investment exper
p y , jExecution as a Senior Telecom Analyst with lead responsibility for companies with an aggregate market cap in excess of EUR200bn, and established a reputation for interesting and commercial analysis. Previously he was at Credit Suisse First Boston
yExecution in July 2006 as aAnalyst, working on major pand financial services. Tim with online, CATI, CAPI andcollection and was responsPreviously he was at Credit Suisse First Boston,
initially supporting the inception of the global value-based research group (the predecessor to HOLT) before being recruited internally to join the highly-rated pan-European telecom team. Chi started his
t th Fi i l S i ti f E t &
collection and was responsanalysis and interpretation subsequent report writing. Tcompleted his Securities anqualifications and in 2006 gU i it f M lt ith Bcareer at the Financial Services practice of Ernst &
Young where he qualified as a Chartered Accountant after graduating from UMIST in 1997 with a degree in Clothing Engineering and Management.
University of Malta with a B(Hons), having previously oCommerce degree from the
www.hermesfundmanagers.com I Hermes Sourcecap
es Sourcecap as an r to this Tim had joined
Richard Board is an Analyst for Sourcecap, after joining the Client Support team in September 2010.
nalystrience
Richard Board, Analyst3 Years industry experience
ja Primary Research projects in consumer, retail has experience working d intercept methods of data
sible for providing the
j g pp pHis initial focus is on stocks in the Retail sector. He joined after completing a degree in Banking, Finance & Management from Loughborough University. Richard had worked previously at Morgan Stanley in their Settlements Department for the industrialsible for providing the
of primary data and Tim has recently nd Investment Institute graduated from the B h l f A t
their Settlements Department for the industrial placement part of his degree.
Bachelor of Accountancy obtained a Bachelor of e same university.
CFA® is a trademark owned by the CFA Institute.21
Hermes SourcecapSwedish Match: no smoke without fire
Smokeless tobacco pricing power Scandinavian snus sales gaining share of the tobacco market
at the expense of cigarettes (see chart). Premium positioning has enabled volume and pricing growth – thereby boosting p g g y goperating margins too
US snuff has thus far been a volume story; A&P investment has established the brands, now SM has recently been able to increase prices
Joint venture with Philips Morris International to sell smokeless products in markets outside of Scandinavia and the US is a significant opportunity not fully reflected in broker estimates
Mass market cigar growth driven by innovation Two new product categories launched in mass market cigars
in 2010: a FoilFresh range and sweet cigars
Volumes grew 69% in the last quarter of 2010 and were up Volumes grew 69% in the last quarter of 2010 and were up 35% YoY in 2011 when the company reported in February. The company expects continued strong momentum
Product introductions also drove an increase in profitability, with FY2010 margin up to 38 6% from 34 4% the year earlierwith FY2010 margin up to 38.6% from 34.4% the year earlier
Swedish Match was added to the portfolio in March 2011
www.hermesfundmanagers.com I Hermes Sourcecap
Swedish Match was added to the portfolio in March 2011
Smoking cash generation and returns 2010 Free cash flow SEK3bn (FCF yield of over 6%). Share
buybacks combined with dividend puts the shares on a total yield of 8.5%. In 2010 the Group had a cash conversion ration y pof 85%
ROIC increased from 23% in 2009 to 27.3% in 2010 and ROCE increased from 28.4% to 32.2%
Sale of snus and cigarettes in Sweden
22
Hermes SourcecapValeo: I can see clearly now the rain ha
A quality franchise In all four business units (Powertrain, Comfort & Driving
Assistance systems, Visibility systems, and Thermal systems) it is number 1 or number 2 by market sharey
A strong reputation for quality and innovation within the industry
Demand-led innovation Legislation forcing car manufacturers to improve fuel efficiency
– achieved through powertrain innovations and lighter componentscomponents
Higher petrol prices and environmental impacts influencing consumer demand for more fuel efficient vehicles
www.hermesfundmanagers.com I Hermes Sourcecap
as gone
Momentum in Markets Problems at Peugeot have caused negative market sentiment
towards Valeo but France represents <19% of sales
Quality manufacturers in Germany and Asia represent 28% Quality manufacturers in Germany and Asia represent 28% and 29% of sales respectively
A self-help story too Since the last recession, Valeo has outsourced more
production and lowered break-even point considerably –leading to lower cyclicality going forwardleading to lower cyclicality going forward
This is not reflected in current valuations as 6x 2013 P/E suggests the market still believes earnings will be volatile
Ideal for our longer investment horizon style as these changes appear over timeappear over time
23
European AlphaRepresentative portfolio analysis Septe
1.72.1
2.7
0.4
2.8
1.20.9
2.0
0.2 0.3
2.7
0.00.0
1.0
2.0
3.0
4.0
e T
ilt™
Portfolio Style Skyline™
50
60
70
80
ight
Style Dis
-2.6 -2.7
-1.9-2.2
-2.9
-1.7-2.0
-1.3
-4.0
-3.0
-2.0
-1.0Sty
le
0
10
20
30
40
% W
e
Style Factors S
Country Weights Portfolio Benchmark
C
Liquidity
15
20
25
30
35
Wei
ght %
Coverage
60
70
80
90
100
mina
ted %
0
5
10
W
0
10
20
30
40
50
< 0 1 < 0 2 < 0 3 < 0 4 < 0 5
Posi
tions
Elim
Portfolio and risk analysis provided by Style Research This information is supplemental to the GIPS© composite performance enclosed
Country< 0.1 < 0.2 < 0.3 < 0.4 < 0.5
www.hermesfundmanagers.com
This information is supplemental to the GIPS© composite performance enclosed
I Hermes Sourcecap
ember 2012
P tf li
tributionPortfolioBenchmarkCoverageMarket
18.1
22.5
11 6
19.6
12.511 7
14.215
20
25
t %
Industrial Sector Skyline Portfolio (41)Benchmark (591)Coverage (17.0%)
9.910.7
0.0
7.08.5
6.8
4.9
11.6
4.7
2.7
11.7
8.5
6.0
10.79.3
1.0 1.60.0
1.3
4.8
2.1 2.5 2.1
0.21.4
0
5
10
Wei
ght
Style Sector
y Analysis Trade to benchmark
T d t h Style DistributionPortfolioBenchmark
Trade to cash
01020304050607080
% W
eigh
t
Style Distribution CoverageMarket
100% - 60% represents the top 40% of companies sorted in descending order by Market Cap
< 1 < 2 < 3 < 4 < 5 < 10
Style
< 1 < 2 < 3 < 4 < 5 < 10Days
24
GIPS® CompositeHermes European AlphaComposite: Hermes Sourcecap European Alpha Composite (EUR)Creation date: 18 June 2007 Inception date: 18 June 200
YearGross of Fees
ReturnNet of Fees
ReturnBenchmark
ReturnComposite 3-Yr St
Dev (%)2012 Q2 -0.5 -0.6 -2.8 14.5
2012 Q1 8.8 8.6 8.4 15.0
2011 -0.5 -1.0 -8.8
2010 20.2 19.6 12.2
2009 26.9 -26.2 34.4
2008 -40.5 -40.9 -44.2
*Partial Year returns for Composite and Benchmark
Hermes Fund Managers Limited claims compliance with the Global Investment
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
2007 * -1.6 -2.0 -6.4
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
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 p p
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.
( )objective of the strategy is to outperform the benchmark over a rolling 3 year period. The composite 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. p
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
g , pThe benchmark is rebalanced quarterly.
The composite base currency is GBP. Performance returns shown in GBP. The management fee schedule for this strategy is 0.75% per annum on the first GBP 50m and 0 50% per annum thereafter with a minimum
www.hermesfundmanagers.com I Hermes Sourcecap
Limited ( Hermes ), a multi boutique asset manager consisting of a number of subsidiary or affiliate companies. As of 31 December 2009 the
0.50% per annum thereafter, with a minimum requirement in management fees of GBP 250,000. Hermes Fund Managers Limited do not
07 All information is quoted in EUR
Benchmark 3-Yr St Dev (%) No of Portfolios
Composite Dispersion
EUR Total Composite Assets
(Million)% Total Firm
Assets15.1 17 0.33 1075.2 4.3%
16.5 16 0.42 1030.6 3.5%
16 0.32 990.3 3.7%
13 0.25 925.4 3.2%
7 N/A 407.4 1.6%
<5 N/A 177.5 0.7%
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
less than five portfolios for the full year then no measure of dispersion is shown.
The three year annualised standard deviation measures the variability of the composite and
<5 N/A 49.9 0.1%
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
benchmark returns over the preceding 36 month period. 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 intergration Hermes Sourcecap
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 do not use leverage in the management of any portfolios unless otherwise explained in the relevant
g pLimited'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.
pcomposite 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 weighteddispersion is calculated as the equal weighted Standard Deviation of the annual returns of the constituent portfolios. If a composite consists of
25
Disclaimer
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 is not advice on lematters so investor must rely on tmatters or seek advice. Before macontinuous) please consult a profeadviser as to its suitability.
Any opinions expressed may chanThis 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
Any opinions expressed may chanand income from them may go donot get back the original amount ioverseas may be affected by currperformance is not a reliable indicare not guaranteed. For more inforelevant Offering Document or co
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.
CM110721
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CM110721
I Hermes Sourcecap
egal, taxation or investment heir own examination of such aking any investment (new or essional and/or investment
nge. The value of investments
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 PortsokenStreet, 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 Fundsnge. The value of investments
own as well as up, and you may nvested. Any investments
rency exchange rates. Past cator of future results and targets ormation please read any ntact Hermes.
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 Compensationunder the United Kingdom Financial Services Compensation Scheme.
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Hermes Fund ManagersHermes Fund Managers is a multi-boutique asset manager with a growing global presence.Our pursuit for excellence is defined by aOur pursuit for excellence is defined by a commitment to deliver innovative investment solutions through a responsible asset management approach.
We offer investment solutions across alternatives, fixed income and specialist equity products, as well as being one of the market leaders in responsible investment advisory services.
Our specialist investment solutions include: Alternatives: Commodities, Hedge Fund Solutions, Infrastructure, Private Equity and Real Estate.
July 2012
Harriet Steel
Equities: Emerging Markets, Europe, Global, Japan and Small & Mid Cap.Fixed Income: Global and UK Government Bonds, Global and UK Inflation-Linked Bonds, Investment Grade and High Yield Credit.Responsible Investment Advisory Services:Responsible Investment Advisory Services: Corporate Engagement, Intelligent Voting, Public Policy Engagement and UNPRI compliance.
Offices:London I Boston I New York I Singapore | Sydney
Enquiries:[email protected]
For Professional Investors Only
Excellence. Responsibility. Innovation.