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Citywire Cologne, 20 – 21 June 2013
2 2 2
Head of the European Equities Team Laurent Ducoin
3 3 3
Europe is at the heart of our foundation
Source: Carmignac Gestion, 31/05/2013
5107
7060
5426
9478
Innovation
Europe
Commodities andGold
Emerging
Privileged access to companies’ key decision makers
Our global approach provides a sound angle to our analysis of European companies
1997 Carmignac
Euro-Patrimoine
1998 Carmignac
Euro-Entrepreneurs
1999 Carmignac
Grande Europe
1989 Carmignac Investissement
Carmignac Patrimoine
Investment theme breakdown at Carmignac Gestion in Euros millions
4 4 4
Our European Fund Range: synergies and complementarity Three way to take advantage of opportunities in Europe
Carmignac Euro-Entrepreneurs
Carmignac Grande Europe
Carmignac Euro-Patrimoine
Each fund has its own criteria
Large and Mid-Cap Fund
Diversified Fund Small and Mid-cap
Fund
5 5 5
Investment Philosophy & Process
6 6 6
The European team: Who are we?
Head of the European team – portfolio manager
Covers industry, services, technologies, media and leisure
Joined Carmignac Gestion in 2011
LAURENT DUCOIN 13 years experience
Portfolio manager Covers consumer goods and telecoms Joined Carmignac Gestion in 2010
Portfolio manager Covers healthcare, utilities,
materials, oil and gas Joined Carmignac Gestion in 2008
SAMIR ESSAFRI 9 years experience
FRANCOIS-JOSEPH FURRY 11 years experience
Analyst Cross-sector Joined Carmignac Gestion in 2012
MARKUS KULESSA 6 years experience
7 7 7
A team within the team
CONTINUOUS INTERACTION
BETWEEN TEAMS
Samir ESSAFRI Fund Manager
Laurent DUCOIN Head of Team Fund Manager
François-Joseph FURRY Fund Manager
Markus KULESSA Cross-sector Analyst
EUROPEAN EXPERTISE
MACRO ECONOMIC EXPERTISE
Edouard CARMIGNAC Chairman Fund Manager
Frédéric LEROUX Global manager Macro economic strategy and derivatives instruments
Laurent CHEBANIER Analyst Country Risk
Julien CHERON Quantitative Analyst
Tim JAKSLAND Analyst Innovation Sector
SPECIFIC EXPERTISE
Simon PICKARD Fund Manager Emerging markets
David FIELD Fund Manager Commodities
Matthew WILLIAMS Analyst Financial Sector
Antoine COLONNA Analyst Consumer Sector
Numerous synergies within the investment team enable us to cover the entire investment universe
8 8 8
Idea generation: All team members are financial analysts
Four of Carmignac Grande Europe’s positions
Source: Carmignac Gestion, 31/05/2013
Erste Bank
AB Inbev
Seadrill
Novo Nordisk
Finance
Consumer staples
Energy
Healthcare
Large caps
Large caps
Large caps
Large caps
9 9 9
Our management principles
A successful investment strategy focuses on both top-down and bottom-up
factors
On-the-ground research is key: 33 meetings/month and 396
meetings/year in average
Being fully exposed to equity markets require strong risk
control & active management to avoid extreme outcomes
and mitigate volatility
Best ideas are often simple: pragmatism is a major source
of outperformance
10 10 10
European Equity Fund Range: Investment process
STOCK-PICKING
Qualitative analysis of sectors and geographic areas
DETERMINING THE CORE MACROECONOMIC SCENARIO
INVESTMENT UNIVERSE
PORTFOLIO
TACTICAL EXPOSURE MANAGEMENT
FILTERED UNIVERSE
ANALYSIS
BOTTOM-UP
ANALYSIS TOP-DOWN
11 11 11
Our investment process: quest for structural growth
Structural Growth Successful strategic
positioning
Quality management
Valuation (Free Cash Flow
Yield)
Portfolio 50-60 stocks
12 12 12
Carmignac Grande Europe Stock Picking and Portfolio Construction
13 13 13
Carmignac Grande Europe: Our investment discipline
The weighting reflects the strength of the fund managers’ convictions
CONCENTRATION 58 positions in the portfolio
WEIGHTING Core portfolio securities
between 2% and 5%
Securities in the satellite portfolio
between 1% and 2%
LIQUIDITY A very liquid fund : 90% of the
portfolio can be liquidated in 2 days
0
5
10
15
20
25
0-0,5 0,5-1 1-1,5 1,5-2 2-2,5 2,5-3 >3
1 2
21
15
10
3 5
Source: Carmignac Gestion, 31/05/2013
Nu
mb
er o
f st
ock
s
Weighting in the portfolio (in %)
Carmignac Grande Europe
14 14 14
0%
5%
10%
15%
20%
25%
30%
Evolution of our themes since Laurent Ducoin’s arrival
Source: Carmignac Gestion, 31/05/2013
Oil & Gas
Technology
Cons. Goods
Basic Materials
Healthcare
Cons. Services
Financials
Industrials
15 15 15
The main axis of our stock picking
Companies exposed to Emerging countries
Energy and materials
Innovation
End of Systemic risk in Europe
US Real Estate Market
Consumer Discretionary
Cyclical investment
Seach of Yield
16 16 16
The main axis of our stock picking
Companies exposed to Emerging countries
Energy and materials
Innovation
End of Systemic risk in Europe
US Real Estate Market
Consumer Discretionary
Cyclical investment
Seach of Yield
17 17 17
Carmignac Grande Europe: Thematic Breakdown
Source:
Carmignac Gestion,
31/05/2013
Search of yield 7.2
Cyclical investment 7.9
Emerging markets exposure 16.1
Energy & materials 8.9
End of systemic risk in Europe 18.0
Consumer Discretionary 8.9
US Real Estate Market 4.5
Innovation 20.5
31/05/2013
Global Brands 8.0
18 18 18
How we put this into practise ?
19 19 19
European consumption stocks are well positioned to benefit from the rebalancing of the global economy
*Source: Crédit Suisse and Carmignac Gestion, average over 2010 and 2011 on defensive and discretionary consumption stocks
A third of Europe’s largest capitalisations in the consumer sector
Our global investment strategy is now more than ever focused on segment champions
Breakdown of organic growth between emerging and developed markets for the main consumption stocks in Europe
Organic growth from developed markets
Organic growth from emerging markets
20 20 20
Volvo Trucks, a « best-in class »
Quality exposure to industrial cycle and strong cost cutting story
PRODUCT RANGE
Superior positioning in Trucks and Construction Equipment
Strong product momentum in the Truck division, new engine technologies introduction
THE RIGHT GEOGRAPHIES
Critical size in key Emerging markets (China, Brazil, India)
Powerful play on industrial investment rebound in the US and China
FUNDAMENTALS
Convincing restructring plan focusing on structural improvement of margins and further leveraging the group’s scale effect
Strong management team
Cyclical investments
21 21 21
80
85
90
95
100
105
110
115
120
125
130
Carmignac Grande Europe: 3-year performance
Past performance is not a reliable indicator of future performance. Performance may vary over time.
Source: Morningstar, Carmignac Gestion, 31/05/2013
Base 100: 31/05/2010
Carmignac Grande Europe
A EUR acc +17.06%
Reference indicator*
+25.17%
*Stoxx 600 NR (EUR)
From 01/01/2013, the equity index reference indicators are calculated net dividends reinvested.
3-year volatility
Fund: 9.8%
Reference indicator*: 12.6%
Assets under management at 30 May 2013:
€328.31 Mn
Laurent Ducoin’s arrival
3-year performance
22 22 22
Carmignac Euro-Entrepreneurs Stock Picking and Portfolio Construction
23 23 23
Carmignac Euro-Entrepreneurs: Our investment discipline The weighting reflects the strength of our convictions
CONCENTRATION 62 positions in the portfolio
WEIGHTING Quality companies
between 1% and 4%
Special cases” and “high free cash flows but cyclical”
between 0.5% and 1.5%
LIQUIDITY A very liquid fund : 90% of the
portfolio can be liquidated in 3 days
0
2
4
6
8
10
12
14
16
18
0-0,5 0,5-1 1-1,5 1,5-2 2-2,5 2,5-3 >3
3
6
17 18
14
2 2
Source: Carmignac Gestion, 31/05/2013
Nu
mb
er o
f st
ock
s
Weighting in the portfolio (in %)
Carmignac Euro-Entrepreneurs
24 24 24
Small and mid caps: framework
Larger investment universe
Stronger growth profile
Management focused on long term value creation
Opportunities
Less market efficiency (coverage, liquidity)
Marginal innovation potentially has a stronger impact on growth
What we pay specific attention to
Quality
Liquidity
Small and mid caps deserve special consideration
Best segment for pure alpha generation over the long term
25 25 25
Carmignac Euro-Entrepreneurs: Thematic Breakdown
Source: Carmignac Gestion
31/05/2013
Cyclical investment 5,4
Companies exposed to Emerging countries 5,4
Energy 10,5
End of systemic risk in Europe 23,5
Consumer Discretionary 15,6
Innovation 36,2
Global brands 3,5
26 26 26
Rémy Cointreau, undisputed leader on the high-end cognac market
Rémy Cointreau:
Niche player on the high-end spirits market
90% of EBIT on bottles > $20
80% of EBIT is from Cognac, of which 30% in China
Quality management
Strategy focused on upmarket potential
Strong growth prospects in emerging countries
on the most profitable category
1%
52% 38%
10%
Imported spirits 5 million cases
Considerable growth potential…
2.6 million cases
Penetration rate*
2011 vs. 2007
Cognac 7% +3%
Other 5% + 1.5pts
Whisky
Other
Cognac
27 27 27
Europe is a Land of Innovation
6 of the 10 most innovative countries in the World are in Europe
Source: World Intellectual Property Organization, INSEAD, Indian Industrial Confederation, 2012
Top performer
s
Efficient innovation
Inefficient innovation
Glo
bal
inn
ova
tio
n in
dex
GDP per capita (PPP) in USD
Innovation and level of economic development
28 28 28
Europe is a Land of Innovation
6 of the 10 most innovative countries in the World are in Europe
Source: World Intellectual Property Organization, INSEAD, Indian Industrial Confederation, 2012
Top performer
s
Efficient innovation
Inefficient innovation
Glo
bal
inn
ova
tio
n in
dex
GDP per capita (PPP) in USD
Innovation and level of economic development
58
59
59
60
61
61
62
63
65
68
United States
Ireland
Hong Kong
Denmark
Netherlands
United Kingdom
Finland
Singapore
Sweden
Switzerland
Global innovation index (on a scale of 100)
29 29 29
100
110
120
130
140
150
160
170
180Grifols, pharmaceutical and chemical company
Structural growth driven by fundamental trends, in particular improving diagnosis and increasing awareness of plasma-derived protein therapies from doctors
Efficient organic and external growth
Acquisition of Talecris Biotherapeutics allowed cost synergies and to become the third largest global manufacturer of plasma-derived protein therapies and access Canadian and German markets
High barriers to sector entry
Grifols, among the best performers over 1 year on the Spanish stock exchange market
Source : Carmignac Gestion, 31/05/2013, base 100: 31/05/2012
Performance over 1 year
Grifols +60%
30 30 30
90
95
100
105
110
115
120
125
130
135
140
Carmignac Euro-Entrepreneurs: 3-year performance
Past performance is not a reliable indicator of future performance. Performance may vary over time.
Source: Morningstar, Carmignac Gestion, 31/05/2013
Base 100: 31/05/2010
Carmignac Euro-Entrepreneurs
A EUR acc +33.5%
Reference indicator*
+30.6%
*Stoxx 200 Small NR (EUR)
From 01/01/2013, the equity index reference indicators are calculated net dividends reinvested.
3-year volatility
Fund: 10.3%
Reference indicator*: 14.4% Laurent Ducoin’s arrival
Assets under management at
31 May 2013:
€220.56 Mn
3-year performance
31 31 31
Conclusion: What makes us different ?
Europe is at the heart of our foundation
Privileged access to companies’ key decision makers
Our global approach provides a sound angle to our analysis of European companies
Our in-house top down analysis provides an edge in determining the most performing investment themes
All team members are financial analysts, thus idea generators
Not restricted to a unique style (ex. ability to add value themes depending on the cycle)
Active hedging policy of specific risks
Carmignac Euro-Entrepreneurs
Carmignac Euro-Patrimoine
Carmignac Grande Europe
32 32 32
Appendix
33 33 33
Our risk management
34 34 34
Management of the Fund’s level of exposure
Decisions to take derivative positions are taken by L. Ducoin, S. Essafri, F. Leroux and J. Cheron
STUDY OF TECHNICAL AND MARKET FACTORS
Identification of periods of risk appetite/aversion Relative valuations and correlations between asset classes Investors’ positions Analysis of markets’ response to macroeconomic and political events
DETERMINING THE LEVEL OF EQUITY EXPOSURE
Min: 60% Max: 100%
INSTRUMENTS USED
Standard, liquid futures contracts on regional and sector indices (DAX or EUROSTOXX)
Tactical use of options
35 35 35
Carmignac Grande Europe: an active management of our exposure
0
20
40
60
80
100
1201
1/1
1
12
/11
01
/12
02
/12
03
/12
04
/12
05
/12
06
/12
07
/12
08
/12
09
/12
10
/12
11
/12
12
/12
01
/13
02
/13
03
/13
04
/13
05
/13
Source : Carmignac Gestion, 31/05/2013
ECB’s recent intervention by the introduction of LTRO have reassured
investors
Increasingly complex European situation and
heavier recessionary pressures
Systemic risk is much lower thanks to the ECB
and Fed
Political uncertainty and slower global growth
point to greater volatility
1
2
3
4
1
2
3
4
36 36 36
90
100
110
120
130
140
150
160
170
Inditex, a unique vertical integration model
Inditex
Leading global player in clothes retailing (Zara, Bershka, Massimo Dutti, etc.)
Flexible, quality business model; a structural winner in the sector
Growing exposure to emerging countries
Past performance is not a reliable indicator of future performance. Performance may vary over time.
Source: Bloomberg, 31/05/2013, base 100: 31/12/2012
Inditex +43%
1-Year Performance
37 37 37
This presentation has been conceived for information purposes only and is intended to professional clients. It cannot be used for another purpose than the one it has been conceived for, and cannot be reproduced, distributed or communicated, partly or entirely, to third parties without prior written approval from Carmignac Gestion. This presentation is not an investment advice nor is it contractually binding. Due to their simplification, the information contained in this presentation are inevitably partial. This document may be subject to changes, without prior notice.
Past performance does not guarantee future returns. The value of an investment can rise or fall with market fluctuations, and shareholders may lose, as the case may be, the amount originally invested.
The access to the products and services described in this presentation may be subject to restrictions towards some persons or countries.
The risks and fees relative to the products are described in the KIID (Key Investor Information Document).
The KIID, prospectuses and annual periodic reports of the Funds are available on our website www.carmignac.com and can be obtained on demand from Carmignac Gestion. The KIID must be given to the investor before any investment.
Copyright : The data published in this presentation are the exclusive property of their owners as mentioned on each slide.
Non contractual document, redaction achieved on 17/06/2013
Carmignac Gestion – Société Anonyme au capital de 15 000 000 € - RCS de Paris B 349 501 676
Agrément AMF n° GP 97-08 du 13/03/1997 24 Place Vendôme – 75001 Paris – Tel : +33 1 42 86 53 35
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