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Introduction of FIM

Investing in Emerging Europe according to FIM Fonds Professionell Messe, Wien Raoul Konnos, Fund Manager FIM Emerging Europe March 2007. Introduction of FIM. FIM Group FIM Emerging market funds Our investment process. FIM Group in a nutshell.

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Introduction of FIM

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  1. Investing in Emerging Europe according to FIMFonds Professionell Messe, WienRaoul Konnos, Fund ManagerFIM Emerging EuropeMarch 2007 FIM Emerging Europe

  2. Introduction of FIM FIM Group FIM Emerging market funds Our investment process Document Footer

  3. FIM Group in a nutshell • Established in 1987 as a brokerage, asset management since 1994 • AUM (Dec. 2006) EUR3,0bn • 2006 turnover EUR82m (+30%), EBIT 19m (flat Y/Y), 284 employees • Apart from Finland FIM has offices in Stockholm and Moscow • Icelandic Glitnir bank made a tender offer on FIM in February 2007 FIM Emerging Europe

  4. FIM Emerging markets funds • Forerunner in emerging markets fund products in Finland, AUM in emerging market funds total currently EUR750m • First Russian fund introduced in Finland (1998) • Focus on Eastern Europe (comprising of Russia, Russia Small Cap, Emerging Europe and Ukraine funds) • Total of 10 emerging market funds currently, including funds for all BRIC-countries FIM Emerging Europe

  5. This is FIM Emerging Markets FIM Emerging Europe

  6. FIM EM Investment Strategy PREFERENCE FOR DOMESTIC PLAYS VS. EXPORT SECTORS* GLOBAL TRENDS SHORTER/MEDIUM TERM OPPORTUNITIES • To get local, not global exposure • Higher pricing power/profitability • Consumption growth • Infrastructure investments • Regional generalists  global sector views • What sectors will perform, what should be avoided • Global sectors demand/supply balance • Local conditions CORE HOLDINGS SHORTER TERM HOLDINGS INTERACTION STOCK SELECTION WE DO NOT WANT TO EXCLUDE ANY OPPORTUNITIES ACTIVENESS • Case by case analysis rather than mechanical screening • Tactical aspects, M&A • Small Caps + non-benchmark stocks – keeping in mind the liquidity • Company visits, industry analysis • Regulation, pricing power, • structural changes • Valuation, liquidity • Management track, strategy • Ability to fast action • High individual responsibility rather than consensus committees • Dynamic and enthusiastic team open for new ideas * Since inception of funds FIM Emerging Europe

  7. FIM EM Investment Process COMPANY AND ANALYST MEETINGS • IDENTIFY • INVESTMENT • THEMES • IDENTIFY • SET OF • COMPANIES • RANK THE • COMPANIES • EVALUATE • INVESTABILITY • RISKS • INVEST • Growth dynamics • LT pricing power • Profit momentum • What areas to avoid? • The exposure of each sector/company to the trend • Market position • Valuation • Earnings quality/sustainability • Liquidity • Corporate governance • Timing - short term price development • Price impact PARALLEL VALIDITY CHECK/SEARCH FOR NEW IDEAS • CHALLENGE • INVESTMENT • THEMES • CHALLENGE THE CON-FIDENCE • CHALLENGE • RANKING/ • VALUATION • EXIT/REPLACE WITH NEW • THEMES • Still valid? • Still significant? • Any better ideas? • Story coming to an end? • Need for sector rotation? • Adjust company positions? FIM Emerging Europe

  8. FIM Emerging Europe fund A balanced approach on Emerging Europe Document Footer

  9. Fund facts • Launch date 4th October 2004 • Fund manager Raoul Konnos, since inception • Annualised return +32,9% since inception • AUM EUR52m (1 March 2007) • Investment area: new EU countries and EU applicants • Long-only equity fund FIM Emerging Europe

  10. Strong growth outlook in the entire investment area Lähde: ING FIM Emerging Europe

  11. 12M forward looking P/E ratios for fund’s main markets and Russia FIM Emerging Europe

  12. Small cap exposure only on selected markets FIM Emerging Europe

  13. Short-term outlook • Spring correction has happened every year in last seven years • Poland had become the leader among Eastern European countries with regard to nr. of listed companies and share liquidity • Turkey will suffer from twin elections this year, although the valuations partly already reflect this • The fund focus is on Poland, Romania and the Baltics FIM Emerging Europe

  14. Geographical focus on Poland, the Baltic countries and Balkans FIM Emerging Europe

  15. Sector focus on private consumption demand, including banking, consumer goods and construction FIM Emerging Europe

  16. Fund performance since inception (4 Oct. 2004) FIM Emerging Europe

  17. CV, Raoul Konnos, fund manager • 13 years of capital markets experience • Joined FIM AM in July 2004 and started FIM EE mutual fund on 4 October 2004 • Previous 8 years at premium Nordic broker D. Carnegie (in Helsinki) in various positions (Head of research, Equity research & sales) • BBA (University of Stockholm, Sweden), CEFA (Swedish School of Economics, Helsinki) FIM Emerging Europe

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