IPREO REGIONAL FLOW OF FUNDS SERIES

Western Europe

Media

Q2 2017

Flow of Funds: WEU Media

Market Overview

Institutional Investment Flow Highlights

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Net Change ($M Value) by Region

Q3-16

Q4-16

Q1-17

Q2-17

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Net Change ($M Value) by Style

Q3-16

Q4-16

Q1-17

Q2-17

N. America 34.2%

W. Europe 28.9%

UK & Ireland 25.5%

Scandinavia 9.2%

Asia 0.9%

MENA 0.8%

Other 0.5%

Ownership by Region

Agg Gr./Growth 36.4%

Deep Val./Value 37.5%

Index 13.4%

GARP 4.8%

Specialty 0.5%

Yield 1.8%

Alternative 5.4%

Ownership by Style

• Q2-17 investor sentiment continued to show US equities out of favour. US equities were judged “by far” the most overvalued globally, with a net 84pc saying they are overvalued. Three quarters of respondents said US and global internet stocks were either “expensive” or “bubble like”, according to Bank of America Merrill Lynch (BAML) survey results for June 2017. The tech-heavy Nasdaq share index was seen as the “most crowded trade”, followed by Eurozone equities, which had enjoyed a lift after Emmanuel Macron’s victory. France was the most popular equity market in Europe in the same survey followed closely by Germany.

• Ipreo's analysis of Q2-17 funds flows showed, net inflows into Western European equities continued to grow for the third successive quarter nearly tripling to (+$29.9B) currently vs (+$9.2B) in the preceding quarter. The bulk of net inflows into the region continued to be driven by North American managers, particularly Index investors.

WEU Media • WEU Media equities have seen net selling of (-$422M) in the last 12 months to Q1-17 end with the bulk of this activity driven by UK & Ireland across a broad range of

investment styles. • Consistent with strong Index inflows into WEU equities in general Q2-17, WEU Media also saw (+$523M) inflows in the review period. Index inflows were led by BlackRock

Fund Advisors, Charles Schwab Investment Management, The Vanguard Group and Geode Capital Management in an environment that has seen record inflows into Passive strategies.

• German Media equities saw the most appetite from investors with the top beneficiary being Bertelsmann SE & Co. (+$199M), while French and Norwegian Media equities were the most sold down jointly (-$1.0B). Three of the top ten most sold stocks Publiscis Group, Havas and Television Francaise 1 were all French entities.

Outlook • Aug-17, shares of the world’s largest advertising company WPP had their worst day since 2000 . The agency has been the poorest performer in the media sector which

declined 4.8 percent overall this year against a resilient broader European market. The sector index which fell 2.7%, with WPP's French peer Publicis also down 3.2%. "Deteriorating trading conditions are a concern and ...we are minded to trim our full year profit before tax forecasts by 4 to 5 percent," said Roddy Davidson, media analyst at Shore Capital.

• A mix of profit taking and risk off attitudes are likely to drive Q3-17 fund flows as the latest BAML survey highlights, "fund managers are holding cash due to bearish views and fears of a crash in global bond markets”. Overally stimulative global monetary policy and policy mistakes from the US and European central banks are notable as among the biggest tail risks.

• Top WEU Media regional holder North America reverted to selling the sector in Q2-17 (-$1.1B) after topping inflows in the preceding quarter. Q2-17 outflows were driven by Capital World Investors (U.S) (Value), Lazard Asset Management (Value) and Invesco Advisors (Growth).

• UK & Ireland investor fund flows remained consistently negative for the last 12 months. The same region drove the bulk of overall net sales of the sector over the review period (-$550M), though this was over three times less than its net sales in Q1-17 (-$1.8B).

• WEU investors turned bullish in Q2-17 (+532M), following a net -$422M sales in the preceding 3 quarters. Current strong WEU investor inflows were driven by DJE Kapital, Norges Bank Investment Management, Moneta Asset Management and Caixabank Asset Management. DJE Kapital was buying Diversified Entertainment and Film Production & Theaters exposure whilst selling Publishing, Cable Television Systems and Television Broadcasting across WEU.

• In Q2-17, the biggest sellers were Value investors i.e. (-$958M). Value selling accelerated by a factor of 10 compared to the previous quarter. Despite this fact however Value investors were net buyers over the last 12 months (+$574M). Top Value buyers in the current quarter include Harris Associates, J.P., Norges Bank Investment Management (Norway), Moneta Asset Management and Wellington Management Company.

• Growth investors are the most consistent sellers of the sector over the last 4 quarters. Baillie Gifford & Company, Invesco Advisers and Mackenzie Financial Corporation sold (-$2.2B) collectively. Baillie Gifford & Company was a net seller of Marketing Services and Advertising Agencies, Cable Television Systems and Television Broadcasting with Publishing as the only industry to see inflows from this investor.

©2017 Ipreo. All rights reserved. None of Ipreo, its affiliates, or any of their third party providers is liable for any info rmational errors, incompleteness, or delays, or for any actions or decisions taken by any person as a result of any information contained herein.

Flow of Funds: WEU Media

Country / City

Total Equity Assets

($M)

Value

($M)

Activity

($M)

#

Firms Country / City

Total Equity

Assets ($M)

Value

($M)

Activity

($M)

#

Firms

United Kingdom (London) 2,064,145 16,832 -215 146 United Kingdom (London) 2,064,145 16,832 -215 146

France (Paris) 400,752 8,078 54 144 France (Paris) 400,752 8,078 54 144

United States (New York) 2,840,868 5,462 -425 77 United States (New York) 2,840,868 5,462 -425 77

United States (Boston) 2,210,320 4,077 -126 21 Spain (Madrid) 68,003 781 97 59

Norway (Oslo) 666,431 3,637 74 15 Sweden (Stockholm) 253,570 1,821 -18 35

United States (Los Angeles) 1,150,009 2,745 -808 10 Germany (Frankfurt) 313,120 2,089 16 30

Germany (Frankfurt) 313,120 2,089 16 30 Luxembourg (Luxembourg) 40,287 438 12 29

Sweden (Stockholm) 253,570 1,821 -18 35 Switzerland (Zürich) 288,740 708 -8 28

United States (Chicago) 354,458 1,174 329 17 Italy (Milan) 67,862 632 -54 24

Canada (Toronto) 601,000 938 -197 21 Switzerland (Geneva) 99,530 360 23 24

Excludes Passive/Index Investors 46,853 -1,316 516 Excludes Passive/Index Investors 37,201 -517 597

Top Holders Country Turnover Value ($M) Change ($M) % Port.

% Port.

Chg

Norges Bank Investment Management (Norway) Norway Low 2,887.6 86.4 0.5 3.1

Newton Investment Management, LTD United Kingdom Low 2,204.8 -99.8 4.9 -4.3

Fidelity International Limited - FIL Investment Services (U.K.), LTDUnited Kingdom Medium 1,564.6 -7.3 1.6 -0.5

Elliott Management Corporation United States Medium 1,556.8 0.0 10.5 0.0

Henderson Global Investors, LTD (U.K.) United Kingdom Medium 1,546.3 -99.1 2.5 -6.0

Fidelity Management & Research Company United States Low 1,492.7 -121.8 0.2 -7.5

DNCA Finance S.A. France Low 1,409.9 6.3 9.1 0.5

Northern Cross, LLC United States Low 1,073.2 -37.6 3.3 -3.4

Capital World Investors (U.S.) United States Low 1,030.9 -721.1 0.2 -41.2

Amundi Asset Management S.A. France Medium 919.2 -102.6 1.2 -10.0

9,760.3 -119.8

Top Buyers Country Turnover Value ($M) Change ($M) % Port.

% Port.

Chg

Harris Associates, L.P. United States Medium 816.3 328.6 0.8 67.4

DJE Kapital AG Germany High 436.2 171.4 9.4 64.7

Norges Bank Investment Management (Norway) Norway Low 2,887.6 86.4 0.5 3.1

Moneta Asset Management France Medium 189.1 82.7 5.7 77.7

J.P. Morgan Asset Management (UK), LTD United Kingdom Medium 428.6 74.7 0.4 21.1

Caixabank Asset Management, S.G.I.I.C., S.A. Spain High 95.8 73.2 0.7 324.9

Wellington Management Company, LLP United States Low 103.4 70.2 0.0 212.0

Gilder Gagnon Howe & Company, LLC United States Medium 94.5 70.0 1.4 286.2

BNP Paribas Asset Management France France Medium 473.7 67.4 1.8 16.6

Deutsche Asset Management Investment GmbH Germany Low 576.8 62.7 0.5 12.2

6,102.0 1,087.4

Top Sellers Country Turnover Value ($M) Change ($M) % Port.

% Port.

Chg

Capital World Investors (U.S.) United States Low 1,030.9 -721.1 0.2 -41.2

Lazard Asset Management, LLC (U.S.) United States Medium 303.8 -619.2 0.3 -67.1

Baillie Gifford & Company, LTD United Kingdom Low 116.1 -342.5 0.1 -74.7

Invesco Advisers, Inc. United States Low 703.7 -253.8 0.4 -26.5

Mackenzie Financial Corporation Canada Medium 304.7 -199.2 1.0 -39.5

Adelphi Capital, LLP United Kingdom Low 163.9 -136.4 15.3 -45.4

Fidelity Management & Research Company United States Low 1,492.7 -121.8 0.2 -7.5

Amundi Asset Management S.A. France Medium 919.2 -102.6 1.2 -10.0

Newton Investment Management, LTD United Kingdom Low 2,204.8 -99.8 4.9 -4.3

Henderson Global Investors, LTD (U.K.) United Kingdom Medium 1,546.3 -99.1 2.5 -6.0

8,786.1 -2,695.5

BOUGHT Securities Industry

Vivendi SA Diversified Entertainment

Bertelsmann SE & Co. KGaA Diversified Entertainment

Criteo S.A. Marketing Services and Advertising Agencies

Nos SGPS Television Broadcasting

Koninklijke Brill NV Publishing

SOLD Securities Industry

Publicis Groupe S.A. Marketing Services and Advertising Agencies

Schibsted ASA Publishing

Wolters Kluwer N.V. Publishing

Havas S.A. Marketing Services and Advertising Agencies

Mediaset S.p.A. Television Broadcasting

Growth 26,035

Value 125,553

Growth 14,279

Value 476,266

Growth 6,713

871,491

Value

Value

Deep Value

Growth

Value 77,118

635,843

32,070

15,575

Style

Alternative

Value

Growth

Growth

Style

Value

GARP

Value

Growth

Growth

Growth

Value

Most Invested Most Investors

Top Holders, Buyers & Sellers

Top Invested Cities

Growth

Style

Value

-218.8

Change ($M)

-521.6

-517.3

-477.0

-326.4

66.8

77.7

153.7

199.2

582.4

Most Bought & Sold Stocks

Change ($M)

Value

Growth

Equity Assets ($M)

61,743

14,785

97,744

44,719

613,647

Equity Assets ($M)

103,777

4,652

613,647

3,310

182,481

30,339

112,105

Equity Assets ($M)

635,843

89,695

132,895

Growth 44,719

Growth 61,743

Alternative 1,069

Growth 871,491

Value 77,118

for any actions or decisions taken by any person as a result of any information contained herein.

©2017 Ipreo. All rights reserved. None of Ipreo, its affiliates, or any of their third party providers is liable for any info rmational errors, incompleteness, or delays, or for any actions or decisions taken by any person as a result of any information contained herein.

• WEU Diversified Entertainment equities posted inflow (+$800M) driven by the buying of Vivendi (+$582M) and Bertelsmann SE & Co. (+$199M) respectively. The most sold stock came from the Marketing Services and Advertising sector in the form of French media company Publicis (-$522M) but in relation to this the most outflows overall came from the Publishing sector led by Schibsted (-$517M) and Wolters Kluwer (-$477M).

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Most Bought & Sold Sectors

Flow of Funds: WEU Media

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