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OLD MUTUAL GLOBAL INVESTORS (UK) LIMITED
+44 (0)20 7332 7500 OMGLOBALINVESTORS.COM Building better solutions
OLD MUTUAL UK SMALLER COMPANIES
For professional clients only in the UK. Not for distribution to retail clients.
April 2013
Citywire South West 2013
Team
Why UK Small Cap?
Why us?
1
AGENDA 03
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397
12 years at Old Mutual Global Investors
Old Mutual UK Specialist Equity Fund
2
EXPERIENCE, STRENGTH IN DEPTH AND CONTINUITY
ASHTON BRADBURY HEAD OF EQUITIES/FUND MANAGER
11 years at Old Mutual Global Investors
Old Mutual UK Smaller Companies Fund &
Old Mutual UK Select Smaller Companies
Focus Fund
DANIEL NICKOLS HEAD OF DESK/FUND MANAGER
12 years at Old Mutual Global Investors
Old Mutual UK Dynamic Equity Fund
10 years at Old Mutual Global Investors
Old Mutual UK Mid Cap Fund
RICHARD WATTS FUND MANAGER
Supported by a team
of analysts
TIM SERVICE
RESEARCH ANALYST/
DEPUTY FUND MANAGER
Old Mutual UK Specialist Equity Fund
5 years Old Mutual Global Investors
NICK WILLIAMSON
RESEARCH ANALYST/
DEPUTY FUND MANAGER
4 years at Old Mutual
Global Investors
UK Mid & Small Cap team
The highly rated, long
established Old Mutual UK
small and mid cap team have
won over 13 awards over the
last 5 years
LUKE KERR FUND MANAGER
FE ALPHA MANAGER RATING 2013
Daniel Nickols and Richard Watts are Citywire A rated for their risk-adjusted performance for the periods 31/03/2010 to 31/03/2013. An S&P Capital IQ fund grading represents an opinion only and should not be relied on when making an investment decision. Past performance is not indicative of future results. Currency exchange rates may affect the value of investments. A long-term grading denotes a fund that has achieved an S&P Capital IQ fund grading for five or more consecutive years and continues to hold a grading. Copyright © 2013 by McGraw-Hill international (UK) Limited (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved.
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OLD MUTUAL’S AWARD-WINNING UK EQUITY SUITE UK small and mid cap team
Strong performance across the investment cycle
RATING 1YR 3YR 5YR Since fund
launch
Strategy S&P OBSR RSM % Quartile % Quartile % Quartile % Quartile
Old Mutual UK Select Mid Cap Fund Manager: Richard Watts since 01/01/09 Fund launch: 25/02/02
UK mid cap 29.5 1 58.3 1 70.7 1 357.0 1
Benchmark: FTSE 250 ex ITs Index 26.1 52.6 67.9 254.9
Old Mutual UK Select Smaller Cos Fund Manager: Daniel Nickols since 01/01/04 Fund launch: 12/02/01
UK small cap
22.5 2 61.1 3 70.1 2 409.3 1
Benchmark: Numis Smaller Cos ex ITs Index 23.5 57.1 73.0 167.2
Old Mutual UK Select Smaller Cos Fund (Dublin) Manager: Daniel Nickols since 01/01/09 Fund launch: 21/01/02
UK small cap
24.1 2 65.4 2 78.2 1 512.3 1
Benchmark: Numis Smaller Cos ex ITs Index 23.5 57.1 73.0 219.6
Old Mutual UK Dynamic Equity Fund
Manager: Luke Kerr since 01/07/09 Fund launch: 01/07/09
UK equity
long/short 26.7 1 69.5 1 - - 115.7 1
Benchmark: FTSE 250 ex ITs Index 26.1 52.6 67.9 114.9
Source: Morningstar bid to bid, net income reinvested, all periods to 29/03/2013
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SMALL CAPS (NUMIS SMALLER COMPANIES EX ITS) HAVE OUTPERFORMED LARGE CAPS (FTSE 100)
Source: Morningstar (see important information). Bid to bid, net income reinvested, sterling terms. *Period from launch date 29/02/2001 **Period from fund launch to 29/03/2013
Period FTSE 100 Numis Smaller Companies
ex ITs index
YTD 9.9 12.3
2012 10.0 29.9
2011 -2.2 -9.1
2010 12.6 28.5
2009 27.3 60.7
2008 -28.3 -40.8
2007 7.4 -8.3
2006 14.4 28.0
2005 20.8 27.8
2004 11.3 20.7
2003 17.9 43.0
2002 -22.2 -23.3
2001* -14.4 -17.0
Cumulative* 59.5 167.2
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-150
-50
50
150
250
350
450
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
%Top 20 average return
Bottom 20 average return
Benchmark: Numis Smaller Companies Index
The small cap index is more dynamic than the large cap,
offering new opportunities at a more frequent rate
Small cap companies offer greater international
exposure than generally perceived
Small cap universe offers a tremendous range of stock
picking opportunities
5
WHY SHOULD YOU CONSIDER A SMALL CAP FUND?
UK SMALL CAPS OFFER SIGNIFICANT OPPORTUNITY TO ADD VALUE THROUGH STOCK PICKING
Source: Numis. Top and bottom 20 stocks are drawn from those that were included in the benchmark at both the start and end of each discreet period.
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Fwd PE ex loss (x) Fwd EPS growth (%)
FTSE All-Share Index 11.7 7.7
FTSE 100 Index 11.5 7.4
FTSE Mid 250 Index 13.3 9.4
FTSE Small Cap Index 11.3 7.2
Numis Smaller Companies ex ITs index 12.4 6.4
6
MARKET VALUATION AND EARNINGS GROWTH
MARKET WEIGHTED AGGREGATES
Mid and small cap valuations well supported
Source: Peel Hunt, as at 15/04/2013
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VALUATION MULTIPLES STILL BELOW LONG-TERM AVERAGE
Source: Thomson Reuters Datastream as at 10/04/2013
5
10
15
20
25
5
10
15
20
25
03 04 05 06 07 08 09 10 11 12 13
(x)
FTSE 100 12m fwd P/E FTSE All Share long-term average FTSE 250 12m fwd P/E Numis Smaller Companies Index (12m fwd P/E)
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WE HAVE OUTPERFORMED THE NUMIS SMALLER COMPANIES EX ITS INDEX SINCE LAUNCH
Source: Morningstar (see important information). Bid to bid, net income reinvested, sterling terms. *Period from launch date 29/02/2001 **Period from fund launch to 29/03/2013
Period FTSE 100 Numis Smaller Companies
ex ITs index OLD MUTUAL UK SMALLER
COMPANIES FUND Quartile**
YTD 9.9 12.3 11.6 2
2012 10.0 29.9 27.1 2
2011 -2.2 -9.1 -8.9 2
2010 12.6 28.5 34.1 2
2009 27.3 60.7 39.2 4
2008 -28.3 -40.8 -32.8 1
2007 7.4 -8.3 0.0 1
2006 14.4 28.0 38.1 1
2005 20.8 27.8 34.6 1
2004 11.3 20.7 27.4 1
2003 17.9 43.0 45.6 1
2002 -22.2 -23.3 -12.7 1
2001* -14.4 -17.0 3.0 1
Cumulative* 59.5 167.2 409.3 1
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A BALANCED APPROACH
BOTTOM UP
ANALYTICAL FACTORS
TOP DOWN
ANALYTICAL FACTORS
INTERPRETATION • Management • Business profile
• Financial position
• Economic growth
• Interest rate cycle • Extreme events • Industry trends
VALUATION
BUY/SELL/HOLD
WHERE WILL THE INVESTMENT RETURN COME FROM?
MAKE A DECISION
KEY CRITERIA – the potential for
• Sustained above average growth
• Profit upgrades
• A re-rating
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PORTFOLIO THEMES
STRUCTURAL GROWTH IN A
LOW GROWTH ENVIRONMENT
INTERESTING SPECIAL
SITUATIONS TOTAL RETURN STORIES
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Small caps are a dynamic and diverse asset class
Valuations attractive
Experienced team
Proven process
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CONCLUSION 01
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OLD MUTUAL SMALL CAP FUNDS
APPENDIX
Current size £586m
108 holdings (typical range 90–110)
Typical holding size 0.5–2.5%
Typically no holdings to exceed 5%
Investments will usually have market capitalisations no greater than the largest company in
the Numis Smaller Companies ex ITs index at the time of initial investment
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OLD MUTUAL UK SMALLER COMPANIES FUND
Source: OMGI as at 29/03/2013
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Period Fund % Sector average % Quartile rank
1 year 22.5 18.6 2
3 years 61.1 55.4 3
5 years 70.1 57.1 2
14
PERFORMANCE OLD MUTUAL UK SMALLER COMPANIES FUND
5 YEAR PERFORMANCE VS SECTOR AVERAGE
CUMULATIVE PERFORMANCE
12 months to Fund % Sector average % Quartile rank
31/03/12 22.5 18.6 2
31/03/11 4.7 1.2 2
31/03/10 25.6 29.4 3
31/03/09 52.7 59.2 3
31/03/08 -30.9 -36.5 1
DISCRETE PERIOD PERFORMANCE
Source: Morningstar. Bid to bid, net income reinvested, sterling terms. Cumulative performance to 29/03/2013
40
60
80
100
120
140
160
180
2008 2009 2010 2011 2012 2013
Old Mutual UK Smaller Companies Fund
IMA UK Smaller Companies (sector average)
Numis Smaller Companies Index (benchmark)
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This communication provides information relating to funds known as Old Mutual UK Smaller Companies Fund (the “Fund”). This communication is
issued by Old Mutual Global Investors (UK) Limited (trading name Old Mutual Global Investors), a member of the Old Mutual Group. Old Mutual
Global Investors is registered in England and Wales under number 02949554 and its registered office is 2 Lambeth Hill London EC4P 4WR. Old Mutual
Global Investors is authorised and regulated by the Financial Conduct Authority (“FCA”) with FCA register number 171847 and is owned by Old
Mutual Plc, a public limited company limited by shares, incorporated in England and Wales under registered number 3591 559.
The Funds are also regulated by the FCA and therefore Old Mutual Global Investors may promote the Fund to the public. This communication has
been prepared for general information only. It does not purport to be all-inclusive or contain all of the information which a proposed investor may
require in order to make a decision as to whether to invest in the Fund. Nothing in this document constitutes a recommendation suitable or
appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommendation. No investment decis ions should be made
without first reviewing the prospectus and the key investor information document of the Fund which can be obtained from
www.omglobalinvestors.com.
Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as
well as up and investors may not get back the amount originally invested. Exchange rates may cause the value of overseas investments to rise or fall.
OMGI 04/13/0069
15
IMPORTANT INFORMATION 04
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