STEP Conference, Bermuda

1. STEP Conference, Bermuda Robert Walker, Private Client Director Philip Gent, Private Client Director Jupiter Asset Management For professional investors only

2. Introduction to Jupiter • Established in 1985 • One of Europe’s most successful and respected fund management houses, managing assets of $35bn* • Floated on London Stock Exchange in June 2010 • 437 employees including 66 investment professionals** • Sole discipline is investment management • Focused on performance

3. Investment regions and asset classes • Regional Equities • Europe • UK • Japan • North America • Global Equities • Emerging Market Equities • Emerging Europe • China • India • Specialist Equities • Financials • Sustainable Investment and Governance • Other areas • Absolute Return • Balanced • Fixed Interest (UK/Global) • Global Convertibles • Long/short equity hedge funds • Fund of Funds

4. 3 The aims of Jupiter Private Clients & Charities I would much rather earn a lumpy 15% (per annum) over time than a smooth 12%. Warren Buffett • Generate absolute returns over a market and economic cycle • Maximise returns without taking undue risks • Generate consistent, competitive, relative performance after all costs

5. 4 ‘Why macro views are so important I try every chance I get to convince people that in investing, there’s no such thing as a good idea or a bad idea. Anything can be a good idea at one price and time, and a bad one at another. Howard Marks, Chairman, Oaktree Capital

6. 5 Macro introduction; what’s different this time • We are in the midst of a rare credit cycle; not just a normal business cycle • This is a ‘balance sheet recession’ • Nominal interest rates are virtually 0% in the Western world • “Unconventional monetary policies” dominate current official thinking • The US is no longer the price setter of most commodity prices • Many traditional economic models are broken; e.g. the yield curve as a growth forecaster

7. 6 The four horsemen Leverage buys you a glimpse of prosperity you haven't really earned. Michael Lewis • Europe • The credit cycle and the Western balance sheet recession • Quantitative easing and inflation; undermining the business cycle • Emerging market growth

8. 7 The scale of debt Deleveraging is a long-term process

9. Estimated Eurozone gross financing requirements 2012 – 2014 €1.4trn needs to be refinanced this year by eurozone sovereigns

10. The balance sheet recession 9

11. 10 Cash isn’t king – return free risk! • We are in the midst of a European banking crisis; is cash a sensible investment? • Cash yields negative real returns

12. “Bonds should come with a warning label” Warren Buffett UK 5 year gilt minus CPI UK gilt 5yr real rate

13. 12 Sovereign fixed interest – asymmetric risk • Intrinsic value: UK Treasury 3 ¾% 09/07/2021 (current UK 10 year benchmark bond) • Today’s (17/10/2011) yield = 2.639% • At 1.00% yield, price = £125.83 or +14.8% • At 10.00% yield, price = £61.31 or – 44.0% • Does a better risk/reward opportunity exist?

14. Buying by official institutions has been surprisingly successful • Huge surge in ECB balance sheet • Now bigger than Fed • Refinancing risk has essentially been removed for European banks • But structural inadequacies remain

15. 14 Corporate fixed interest – the best of both worlds • Intrinsic value: • Companies in relatively good financial health • Generally higher yields than governments • Sentiment: • Perceived safe haven • Chase for yield versus bank accounts • Technicals: • Limited bond issuance • Default rates are too low • Crowded trade

16. 15 Commodities – energy • Intrinsic value: • EM growth, least efficient consumers • Depleting global resource • Sentiment: • Speculative asset • Extremely volatile • Technicals: • Tight markets • Difficult to invest in

17. 16 Commodities – precious metals • Intrinsic value: • Gold has no intrinsic value • All other PMs have industrial properties • Sentiment: • Subject to extreme speculation • Strong at present • Technicals: • Central bank & EM demand • Inflation hedge • Money printing anti­-currency • Negative real interest rates • Fear

18. 17 Equities – a love hate relationship • Intrinsic value: • Strong cash generation • Strong dividend streams • Cyclicals and counter-cyclicals • Warrants on growth • Inflation hedges • Sentiment: • Very poor • Extremely volatile • Technicals: • De-equitisation trend • Under-owned • Liquid

19. 18 The emerging consumer – its all about Asia in the long run Size of the middle class in 2009 and prediction for 2030

20. 19 Emerging market growth • Emerging markets are yet to decouple • The US consumer is still very important to EM exporters • Europe is also an important export destination • A slowdown / recession in the US and Europe will hurt EM exports • EM income inequality is at dangerous levels (Arab Spring, unrest in China) • Western monetary policies, combined with EM Dollar pegs, have caused domestic inflation • Wage pressure are increasing • So is unrest

21. Setting strategy - current asset allocation • Neutral Weighting in Equities • Still our favoured asset class over the long term, but we are mindful of volatility • Preference for companies with strong balance sheets, free cash flow and global franchises • Models are generally defensive – ie underweight in banking and mining sectors versus indices • Market positioning versus traditional benchmarks • Overweight: Global Funds, Asia and Emerging Markets • Neutral: US, Europe and Japan • Underweight: UK • Underweight Fixed Interest • Favour Strategic Bond funds exposed to strong corporate balance sheets and favourable yields in preference to Western Sovereign debt • Overweight Gold and Cash • Held as a partial insurance policy against further economic and market shocks • Underweight Property and Hedge Funds • Liquidity concerns prevail for these assets

22. 21 Conclusion • Super Mario Draghi and his LTRO have transformed a solvency crisis into a liquidity driven rally • But buying by official institutions is not a long term solution. European sovereign issues require major structural changes • Tail risks abound • Many traditional ‘safe-assets’ are over-owned and expensive • ‘Risk assets’ are still risky! But many are under-owned, yield and relatively cheap • Current themes: Caution, with pockets of opportunity; technology and energy

23. Any questions?

24. Disclosure • Jupiter Asset Management Limited (‘JAM’) is registered in England and Wales (no. 2036243).  The registered office is 1 Grosvenor Place, London SW1X 7JJ.  JAM is authorised and regulated by the Financial Services Authority whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS.   This presentation is intended for investment professionals and not for the benefit of private investors. However any one attending the presentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investment in a unit trust and the income from it can go down as well as up. It may be affected by exchange rate variations and you may not get back the amount invested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Quoted yields are not guaranteed. Current tax levels and reliefs will depend on the nature of the holding and details are contained in the key features documents. Past performance should not be seen as a guide to future performance. For your security we may record or randomly monitor all telephone calls. If you are unsure of the suitability of an investment please contact your financial advisor. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.