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Transamerica Investment Management: Fixed Income Expertise and Proven Performance

Learn about Transamerica Investment Management's fixed income investment philosophy, process, and track record of generating consistent top-quartile performance. Discover their unique ownership structure and the benefits it brings to their team and clients.

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Transamerica Investment Management: Fixed Income Expertise and Proven Performance

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  1. Transamerica Investment Management, LLCHeidi Y. Hu, CFASenior Vice President, Head of Fixed IncomeChris Gwynn, Regional Sales Director The Ritz-Carlton, Bachelor Gulch, Colorado September 17-19, 2003

  2. One Firm Overview Two Fixed Income Investment Philosophy and Process Three Performance Four TIM at TRS

  3. Firm Overview

  4. Organizational Overview • Predecessor organization started in 1967 • $14 billion under management ending second Quarter 2003 • $6.7 billion in Equities • $5.2 billion in Fixed Income • $2.1 billion in Convertibles • 58 employeeswith offices in Los Angeles, San Francisco, Dayton and Denver Los Angeles – Fixed Income, Convertibles San Francisco – Growth and Core Equity Dayton – Traditional Value, Operations Denver – Sales, Marketing and Client Service • Unique Ownership Strategy – TIM, LLC formed in 2000 by parent AEGON, N.V. Economic Motivation 22% Employee owned Infrastructure 78% AEGON, N.V Autonomy Long standing track records Attract industry talent

  5. Organizational Overview EXECUTIVE MANAGEMENT John Riazzi, CFA Chief Executive Officer Gary Rollé, CFA President & CIO Heidi Hu, CFA Sr VP & Head of Fixed-Income Jeff Van Harte, CFA Sr VP & Head of Equities FIXED INCOME INVESTMENTS EQUITY INVESTMENTS FIXED INCOME/CONVERTIBLE PORTFOLIO MANAGERS Edward Han, VP & Portfolio Manager Kirk Kim VP & Portfolio Manager FIXED/CONV ANALYSTS Peter Lopez VP & Director of Fixed Income Research Irene Lu, CFA Sr Research Analyst Andrew Kim, CFA Research Analyst Greg Haendel Research Analyst EQUITY PORTFOLIO MANAGERS Chris Bonavico, CFA VP & Portfolio Manager Ken Broad, CFA VP & Portfolio Manager Daniel Prislin, CFA VP & Portfolio Manager Michelle Stevens, CFA VP & Portfolio Manager Patrick Fortier, CFA Portfolio Manager EQUITY ANALYSTS Van Tran Research Analyst EQUITY TRADER Lisa Hansen VP & Portfolio Manager (index/passive) Sangita Patel Securities Trader

  6. Organizational Overview As of 06/30/03

  7. Telling the Story $14.03 billion $14,025 billion 9878 8985 $8.8 billion

  8. Representative Client List Institutional Detroit General Retirement System City of Detroit Police and Fire UniHealth Foundation Aegon USA Bricker & Eckler The Cincinnati Reds Palmetto Rural Telephone Cooperative Visiting Nurses of Ohio Marianist Missions City of Ocala Taft Hartley Paint Manufacturer Employers Association The Painters & Allied Trades Paint Makers Subadvised SEI Investments Legacy Marketing Group Transamerica Retirement Services IDEX Mutual Funds Transamerica Capital Western Reserve Life IMAX Funds SMA Platforms SEI Investments Lockwood Financial Envestnet PMC Bank One Charles Schwab MAC Bear Stearns McDonald & Company DC Alliance Platforms Charles Schwab Corporate Services JP Morgan America Century Retirement Services AIG Valic Sungard BISYS Diversified Investment Advisers (DIA)

  9. TIM Competitive Advantages Investment Philosophy and Track Record • A responsibly focused approach to growth investing • Proven results through all market cycles Size • Competitive asset size – allows scalability • Flexible asset size allows managers to adhere to investment discipline Stability • Aegon, NV brings stability to the organization • LLC creates an autonomous business unit, bringing stability to the team Hidden Gem • 35 years of proven results • Formation of TIM, LLC unlocked availability for outside distribution

  10. Fixed Income Investment Philosophy and Process

  11. Fixed Income Philosophy Generate consistent top quartile performance and excess returns primarily through credit selection and strategic sector weightings. • Corporate credit markets are not efficient • Our expertise is in corporate credit valuation • We use an active management style to exploit inefficiencies in valuation

  12. Fixed Income Selection Process Philosophy: We seek to generate consistent top-quartile performance and excess returns through credit selection and strategic sector weightings. Result:Proven success across all asset classes Relative Valuation • • All team members have a seat on the trading desk, research does not occur in a valuation vacuum • • Value comparisons are made daily • • Economic indicators are reviewed and discussed daily • • Our investment outlook is reviewed on an ongoing basis, resulting in a published investment outlook piece • • Sector fundamentals are reviewed on an ongoing basis • • Sector selections emphasize catalysts for change, • e.g. regulatory, economic, technological • • All credits are stripped down to their underlying business models - which are evaluated for feasibility, profitability and defensibility • • Similarities in process result in excellent synergies • with our equity analysts Accountability Ultimate responsibility for performance resides with the portfolio manager Economic Outlook Sector Outlook Peer Review A strong culture of peer review is overlaid upon the entire investment process Credit Research

  13. Performance

  14. Transamerica Balanced Fund vs. Lipper Balanced FundsReturns for Periods Ending: 7/31/03 Inception: 8/1/1998. The Transamerica Balanced Fund is not part of the Lipper Balanced Funds Universe. TRANAMERICA Balanced Fund performance is gross of fees.

  15. Transamerica Investment Grade Fixed Income Composite vs. Lipper Single A-Rated Corporate Debt FundsReturns for Periods Ending: 7/31/03 Inception: 8/1/1998. The Transamerica Investment Grade Fixed Income Composite is not part of the Lipper Single A-Rated Corporate Debt Funds Universe. TRANAMERICA Investment Grade Fixed Income Composite performance is gross of fees.

  16. Transamerica High Yield Fixed Income Composite vs. Lipper High Current Yield FundsReturns for Periods Ending: 7/31/03 The Transamerica High Yield Fixed Income Composite is not part of the Lipper High Current Yield Funds Universe. TRANAMERICA High Yield Fixed Income Composite performance is gross of fees.

  17. Transamerica Money Market Composite vs. Lipper Money Market FundsReturns for Periods Ending: 7/31/03 The Transamerica Money Market Composite is not part of the Lipper Money Market Funds Universe. TRANAMERICA Money Market Composite performance is gross of fees.

  18. TIM at TRS Of the 22 “Transamerica” funds, 7 are managed by TIM Transamerica Cash Management Transamerica Bond Fund Transamerica Balanced Fund Transamerica Core Equity Fund Transamerica Equity Fund Transamerica Focus Fund Transamerica Growth Opportunities Fund

  19. TIM – Different, Simple, Makes Sense Difference Makes Sense • Unknown Firm Nobody Hates us • Structure Analyst = PM = Owner • Selection Process Cash Flow, Balance Sheet, Management • Focus 25-50 Stocks vs. 100 plus • Results Consistent Across time Frames

  20. TIM Small/Mid Growth vs. PSN Mid Growth Universe TIM Large Growth vs. PSN Large Growth Universe TIM Large Growth 18% 18% 15% 16.90% 15% TIM Small/Mid Growth R1000 Growth 15.07% 13% 10% R2500 Growth 10% 5% 1.36% 8% 8.14% 0% Since Inception: 7/1/1997 Since Inception: 1/1/1994 5% -2% TIM Core Equity vs. Large Core Universe TIM Balanced vs. Balanced Universe TIM Core Equity TIM Balanced 6% 17% S&P 500 15% Balanced Index 2% 2.93% 12% 9% -1% -0.92% Since Inception: 4/1/1998 Since Inception: 1/1/1994

  21. Consistency – 13 out of 13 vs. R1000G TIM Large Growth R1000 G Index

  22. Large Growth Lineup

  23. The Power of the Pyramid at work for You! 866-TIM-1800 Chris Gwynn (103) Toby Cromwell (102) Crissy Janzen (105)

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