© 2007 University of St. Thomas, Opus College of Business3/13/2009

ARISTOTLE FUNDInvestment Presentation to

The CFA Society of MN

Overview Structure / Investment PhilosophyHoldings / PerformanceKey Takeaways

Agenda

Mission Statement

• Enhance the overall endowment of the University of St. Thomas

• Adhere to the University of St. Thomas Code of Ethics

• Provide an unparalleled educational experience

Overview• Created with an anonymous donation in1999• Mid cap focused equity long only fund• Managed by full and part time MBA students• Classes held September through May, volunteers

hold over summer• All decisions made by students (buy, sell and

operational)

Overview Structure / Investment PhilosophyHoldings / PerformanceKey Takeaways

Agenda

Investment Philosophy

• Valuation anomalies exist within the equity market

• We invest in companies that we believe are undervalued and possess catalysts for growth

• This enables us to outperform our benchmark

Investment Philosophy• Mid-cap Blend Fund

• Fully Invested approach

• Socially Responsible

Investment Selection • Equity presentation shall be accompanied by:

Company’s products and services and in depth revenue modelEPS growth rates, ROC and ROE trendsContributors to cash flowFinancial position evidenced by appropriate use of debtFirm specific and industry specific risksManagement

Portfolio Management Experience

• Weekly Performance Reports

• Quarterly/Annual reviews

• Mentor Guidance

• Guest Speakers

Challenges

• Current economic conditions

• Sector weighting

• Group consensus

• Stop loss provision

Overview Structure / Investment PhilosophyHoldings / PerformanceKey Takeaways

Agenda

Performance

Aristotle Fund Since Inception19.4

127.5

-32.7

-25.3

-7.4

-16.7-13.1

-3.6

24.920

4.9

9.713.6

-3.8

24.723.4

1.3

6 5.4

0.6

23

15.1

7.9

-11-5.5

1.1

-49.7-46.9

-3

-60

-50

-40

-30

-20

-10

0

10

20

30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Aristotle FundBenchmarkAlpha

Sector AllocationSector Weightings Versus Benchmark

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Consumer

Discre

tionary

Consumer

Staples

Energy

Financia

lsHealt

h Care

Industri

als

Informatio

n Techno

logyMate

rials

Teleco

m

Utilitie

s

% of AF Fund% of S&P Midcap

Materials – Ball Corp

Cons. Disc. – Service Corp. Intl.

Health Care - Amedisys

Overview Structure / Investment PhilosophyHoldings / PerformanceKey Takeaways

Agenda

We’ve seen…

• What We Do.• How We Do It.• What Happened.

• So… What’s This Mean?Learn Something!!!

What have we Learned???• Where there’s one cockroach, there’s probably

more• Market does not always value stocks on

fundamentals• Good Company ≠ Good Stock• Buy long term• Maintain sector discipline, but be flexible

More lessons…• Financial modeling experience

• Group dynamics

• IPS development

Board of AdvisorsDr. Christopher Puto, Dean, Opus College of Business

Dr. Michael Sullivan, Chief Investment Officer, Treasury Office Dr. Mary Daugherty, CFA, Associate Professor of Finance

MentorsNancy Barber, CFA® UBS Global Asset ManagementGerald Bren, CFA® FAF AdvisorsDoug Eiden, CFA® Lowry HillJason Matz, CFA® Carleton CollegeCurt D. McLeod, CFA® Arbor Capital Management, LLCRob Nicoski, CFA®, CPA Disciplined Growth InvestorsRoger W. Norberg Deephaven Capital ManagementPaul Pender, CFA® Speece Thorson Capital Group, Inc.Paul Pugsley, CFA® RBC Dain RauscherBret Rekas Somerset Asset ManagementRichard J. Rinkoff, CFA® Craig-HallumJohn Schweers DeMarche Associates, Inc.Rick Vitale, CFA® AEI Fund ManagementJohn Woo, CFA® Lowry Hill

Questions?

Thank you

Backup Slides

• Backup Slides

Energy – Tidewater Inc

Financial – Intercontinental Exchange

Cons. Disc. – Gamestop Corp.

Utility – Ormat Technologies

Valuation Metrics• Expected rate of return

RFR of 3.97% and MRP of 5.5%

• Cost of EquityCapital Asset Pricing Model

• Tax Rate• Adjusted Beta• Terminal Growth Rate

3.5%