The Search For Reliable Income Providing Pension Investments In Current Market Conditions

Key Reliable Income Solution Requirements

LocalMarket

ExternalMarkets

To complete retirement income solution non-domestic investments must also:

Who Has The Most Resilient Economy On The Planet?

Proof Of Australia’s World Record Resilience

*The highest amongst major advanced economies

On The Doorstep Of This Century’s Global Economic Powerhouse

• The impact of a worst case Chinese ‘hard landing’ (4.00% slowdown) on Aussie economy would be 0.50% reduction of GDP (The Economist, 25 August 2012).

World’s 11th Largest Economy: Highly Diversified

Low Australian Sovereign Net Debt - Enviably Sound Fiscal Finances

4th largest fund management AUM globally at >1.5 trillion AUD incl. superannuation

3rd largest banking sector by market cap behind US & China (bigger than combined

Eurozone)

Highest median wealth in world at USD 222,000

4 of the 9 top rated global banks (AA-) with no bail

outs

AAA Sovereign

Rating

Australian Solidity

LM Investment – Brief Intro To Company And Funds

LM Investment Management

LM Debt Security Funds’ Structure/Strategy

How Does LM Beat The “Big 4” Aussie Banks?

Track Record

No Hidden Fees

Real Client Partnership

Unrivalled Niche

Expertise

Efficient Decision Making

Superior Risk Assessment

Meticulous Due Diligence Process

4 to 6 weeks DD4 to 6 weeks DD OngoingOngoingScreenScreen

Historical Performance LM Income Funds

Australian

Income Fund

Managed

Performance

Fund

Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.

Indicative Future Return Projections

7 Day Flexi 1 Year 2 Years 3 Years 4 Years 5 Years

GBP 3.50%pa 4.00%pa 4.25%pa 4.50%pa 4.75%pa 5.00%pa

EUR 3.00%pa 4.00%pa 4.25%pa 4.50%pa 4.75%pa 5.00%pa

USD 2.00%pa 2.25%pa 2.50%pa 2.75%pa 3.00%pa 3.25%pa

ILS 5.00%pa 5.50%pa 5.75%pa 6.00%pa 6.25%pa 6.50%pa

AUD 5.50%pa 6.00%pa 6.25%pa 6.50%pa 6.75%pa 7.00%pa

2 Years 3 Years 4 Years 5 Years

GBP 6.00%pa 7.00%pa 7.50%pa 8.00%pa

EUR 6.00%pa 7.00%pa 7.50%pa 8.00%pa

USD 4.00%pa 5.00%pa 5.50%pa 6.00%pa

ILS 7.00%pa 8.00%pa 8.50%pa 9.00%pa

AUD 7.50%pa 8.50%pa 9.00%pa 9.50%pa

AIF

MPF

Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.

A Doing Business With LM Slide

Australian Property – The Facts

Huge Mature Aussie Property Market Provides High Quality Investment Opportunity For LM

Strong Fundamentals In Affordable Residential Housing Sector – Current National Supply Gap Of >250,000 Homes And Widening

National Population v Housing Starts

Supply and Demand

Supply and Demand

• High population increase of 1.5% annual growth over last 20 years

• 46% come from natural increase and 54% from net overseas migration

• Housing for over 6 million additional people will be required over next 20 years

• Highest global median wealth of $222,000 USD and low unemployment

• A finite supply of developable land around existing infrastructure

• Overall tightening of credit for developers

• There was no credit fuelled lax mortgage lending phase in the Australian market – full recourse.

Affordability

Mortgage Repayment Affordability as %

Disposable Income

AffordabilityAffordability

• Mortgage arrears are negligible and half of owner-occupiers are ahead on mortgage payments.

• Only 35% of households have a mortgage - almost a third own their home outright & remainder rent.

• 70% of owner-occupied mortgage total comfortably held by affluent top 40% of earners.

• Mortgage debt is equal to 30% of household assets - half of the proportion of the US.

• Disposable incomes have actually out-paced house prices by about 15% over last 9 years

Independent Expert View - BIS Shrapnel Residential Property Prospects Report 2012 - 2015

Supply side new dwelling commencements have

contracted to 20% below the national underlying demand

Supply side new dwelling commencements have

contracted to 20% below the national underlying demand

Purchaser demand is trending upwards nationally

with NSW and QLD accounting for the bulk of

the growth

Purchaser demand is trending upwards nationally

with NSW and QLD accounting for the bulk of

the growth

Price growth is forecast in NSW and QLD for the

remainder of 2012 and during 2013

Price growth is forecast in NSW and QLD for the

remainder of 2012 and during 2013

Combination of rising income, prices and

variable interest rates easing has resulted in affordability in many

capital cities improving to best level since 2008

Combination of rising income, prices and

variable interest rates easing has resulted in affordability in many

capital cities improving to best level since 2008

BIS Shrapnel is Australia's leading provider of reliable and detailed property market data, analysis of developments and drivers and thoroughly researched forecasts. The firm is completely independent with no vested interests in any of the industry sectors covered.

Strong population growth, arising underlying deficiency

of dwellings, low vacancy rates, solid rental growth and

strong economic conditions support current prices.

Strong population growth, arising underlying deficiency

of dwellings, low vacancy rates, solid rental growth and

strong economic conditions support current prices.

Having Said All That…..

…….LM Does Not Invest In National Averages!

Utterly committed

to the Israeli market

ILS Share Class

We work throughlicenced advisers only

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12 year flagship fund returns of 6%-10% p.a.

Trusted client partner to access Australian

story

Understanding Residential Property

Housing AffordabilityHousing affordability continues to improve, paving the way for future price increases.