gam niall gallagher citywire d 2013

This document is confidential and intended solely for the use of the person to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person.

European Equities – Beyond the Veil of Pessimism June 2013

Niall GallagherInvestment DirectorGAM

Introduction

● 15 years experience investing in equities

● Highly active, unconstrained approach– Concentrated– Bottom-up, Research down– No index constraint

Strategy managed Dates managed

BlackRock European Dynamic Fund Sep 03 – Oct 06

BlackRock European Growth Fund May 05 – Oct 06

T. Rowe Price Europe ex UK Fund Mar 07 – Apr 09

T. Rowe Price European Fund Mar 07 – Apr 09

GAM European Equities Since Nov 09

GAM Star Continental

Europe EquityEUR 504.6m

GAM Star European

EquityEUR 61.6m

GAM European Equities: EUR 566.2m

GAM AuM:

Source: GAM as at 31 May 2013 2

-10 %

0 %

10 %

20 %

30 %

40 %

50 %

60 %

2010 2011 2012 2013

Simple Perf.

%

Ann. Perf.

%

Ann.Std.

Dev.

GAM Star Continental European Equity –EUR

56.2 13.5 13.9

MSCI Europe ex UK Index in EUR 32.6 8.3 13.9

GAM Star Continental European Equity – EURMSCI Europe ex UK Index in EUR

GAM Star Continental European Equity – EURPerformance from 30 Nov 2009 to 12 Jun 2013

Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.

Past performance is not indicative of future performance. Performance is provided net of fees.

Source: GAM, MSCI 33

0 %

10 %

20 %

30 %

40 %

50 %

2010 2011 2012 2013

Simple Perf.

%

Ann. Perf.

%

Ann.Std.

Dev.

GAM Star European Equity – EUR 45.6 11.2 13.0

MSCI Europe Index in EUR ex-DEM 37.7 9.5 12.5

GAM Star European Equity – EURMSCI Europe Index in EUR ex-DEM

GAM Star European Equity – EURPerformance from 30 Nov 2009 to 12 Jun 2013


Past performance is not indicative of future performance. Performance is provided net of fees.

Source: GAM, MSCI 4

Process overview

● Bottom up unconstrained approach – Primarily large cap investor with some exposure to mid and small caps

● Aim for detailed understanding of each position– High conviction research driven stock selection– Focussed portfolio of 30 – 50 stocks – Long-term (3 – 5 year) investment horizon

● Absolute, cash-flow based valuation approach augmented by a range of multiples incorporating entire capital structure

– Free Cash Flow Equity / Enterprise Value %– EV/Sales– EV/CE– EV/EBIT– Analysis of all metrics vs long-term historical range

● Returns ‘bias’– Preference for High Return on Capital Employed businesses– Preference for strong Free Cash Flow generation– Requirement for robust balance sheets– No preference for structural or defensive over cyclical

● Portfolio construction techniques aim to maximise risk-adjusted returns and reduce risk concentrations

Return target (net) Benchmark + 300 – 400bps pa

Typical tracking error 4 – 6% pa

Implied information ratio 0.75

Active Share >85%

Peer group comparison Achieve first quartile ranking

5

High conviction, fundamentally driven investing

Source: GAM

There is no guarantee that targets will be achieved.

Allocations and holdings are subject to change.

High conviction focused portfolio

6

GAMStar Continental

European Equity

Act

ive

Sha

re

Tracking Error

Low

HighLow

Hig

h

00

Diversified stock picks

Closet indexing

Factor Bets

Concentrated stock picks

Pure indexing

An active style:

• Bottom up focus and totally unconstrained approach

• Fundamentally driven stock selection with a high emphasis on diversification

• Produces a highly active, concentrated but diversified portfolio

Medium

Med

ium

7

Investment teamManaging Pan European and Continental European long-only strategies

James DavidsonHead of Investment Administration– 23 years’ experience– Joined GAM in 1997

John Paul Hodder-WilliamsHead Dealer – 11 years’ experience– Joined GAM in 2004

Supported by two additional members of the dealing team

Trading and Administration

Niall GallagherInvestment Director– 15 years’ experience– Joined GAM in 2009– Responsible for all portfolio decisions

James WigleyInvestment Analyst– 11 years’ experience– Joined GAM in 2010

Source: GAM as at 31 Mar 2013

Swetha RamachandranInvestment Analyst– 13 years’

experience– Joined GAM

in 2012


The Case for Europe

9

Some ‘older’ common views on European equities

● Low economic growth prospects for European economies

● Significant sovereign and financial sector stresses

● Weak policymaking infrastructure

● Unquantifiable tail risks

European equities are uninvestable

10

2012 confounded expectations

● Eurozone did not fall apart

● Policymakers were not useless

● Banks did not go bust

● Significant bounce in European equities

Is the asset class still investable?

Have we missed the rally?

11

Valuation

● Normalised valuation metrics are much cheaper

● Shiller / CAPE ratio of 13.2x versus 32 year average of 17.5x

● Very large discount to US equities on normalized metrics– 40% discount on CAPE vs. a 32 year average of 14% discount

● Trend PE ratio analysis shows same valuation discounts of Europe vs. US– Applies to “market ex- financials” as well

Source: Morgan Stanley (European Strategy Team) as at 31 Dec 2012

10

15

20

25

30

35

40

45

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11

-40 %

-20 %

0 %

20 %

40 %

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11

USUS averageEuropeEurope average

Premium / Discount

Shiller PEFrom 30 Nov 1979 to 6 Jun 2013

Note: European inflation data is based on market cap weighted aggregation of constituent country inflation rates

Past performance is not indicative of future performance.

Source: MSCI, OECD, various national sources, Haver, Morgan Stanley Research - European Strategy Team, Source: MSCI, OECD, various national sources, Haver, Morgan Stanley Research -European Strategy Team

12

Shiller PE Europe vs US

12

13

Some perspective on European equities

● European equities are global not local– 50% of revenues are from outside of Europe– 30% of revenues are from emerging markets– Significantly less exposure to € currency than assumed

● European equity market is not homogeneous– Significant divergences in ‘geographic exposures’ within the market

– Some sectors / stocks are almost completely global– Some sectors / stocks are almost completely local

● In many industries European companies are the global leaders

Europe is not a good proxy for European equities

14

Revenue composition for Europe

Source: Redburn Securities

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 2015

EuropeJapanUSA and CanadaOther AmericasAsia ex JapanRest of World

15

Economic context in which we invest

● Global economic growth forecast by IMF and other forecasters at 3–3.5%

● Broadly, in line with long-term averages although subject to frequent revision

● Significant regional divergences– Global growth primarily led by emerging economies

– Emerging economies strong(er)– Developed economies weak(er)– US economy somewhere in between

16

Growing convergence within Europe?

● Northern and Central Europe are heavily exposed to global trends– Strong export sectors and core competitive advantage – Stronger fiscal positions

● Virtuous feedback loops– Record levels of employment → decent wage growth– Decent wage growth → strong domestic demand– Strong domestic demand → improving fiscal positions

● Monetary policy is increasingly set for peripheral Europe– Interest rates too low for northern Europe– Exchange rate very competitive for northern Europe

● BUT, very significant improvement in current account positions of peripheral Europe

17

Focus on the current account – % of GDP

Source: Citigroup March 2013 Global Economic Outlook and Strategy

2012 2013 2014US -3.0 -2.7 -3.0UK -3.6 -4.5 -4.4Euro area 1.2 2.6 2.5

Strong EuropeGermany 7.0 6.8 5.7Switzerland 12.8 12.8 12.0Sweden 7.2 7.3 6.9Denmark 5.3 4.7 4.0Netherlands 9.9 9.9 9.0Weak EuropeFrance -2.4 -1.7 -0.9Italy -0.6 -0.3 -0.2Spain -0.8 2.3 3.7Portugal -3.5 -0.3 1.7Greece -4.3 -3.3 2.1Ireland 4.5 5.8 6.7

18

How to think about investing in this environment

● In a developed world characterised by low growth focus on companies that possess– Good revenue growth prospects, ideally indexed to Global Nominal GDP– High Return on Capital Employed (ROCE)– High Free Cash Flow conversion – Strong balance sheets

19

How to find growth?

● Geographic positioning of companies– Presence in growth markets vs no growth markets– Total geographic composition of revenues

● Industry / technological positioning– Innovation and evolution– Market leadership– Barriers to entry

● Structural vs cyclical growth– Growth does not just imply defensiveness– Many attractive global growth companies have embedded cyclicality


GAM Star European Equity

21

GAM Star European Equity InvestmentsTop 10 holdings (of 40) as at 31 May 2013

Source: GAM

Allocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.

21

GAM Star European Equity Investments

Stock % Overweight

Paddy Power 4.6

Schindler Holding 4.4

Henkel 3.8

Gas Natural 3.8

Wirecard 3.7

Ryanair 3.7

Kone Oyj-B 3.6

Swatch 3.3

Fresenius Se 3.2

BG Group 3.1

2222

Stock % Underweight

Nestle -2.8

HSBC Holdings -2.7

Vodafone Group -1.9

Bp -1.8

Glaxosmithkline -1.7

SANOFI -1.7

Royal Dutch Shell A -1.7

Total Sa -1.4

Royal Dutch Shell B -1.2

Bayer -1.2

Most overweight and underweight stocks versus MSCI Europe as at 31 May 2013

Source: GAM/UBS PAS


23


Sector % Overweight

Consumer Durables & Apparel 9.8

Capital Goods 7.0

Health Care Equipment & Services 5.7

Software & Services 5.5

Consumer Services 3.8

Automobiles & Components 2.8

Transportation 2.6

Household & Personal Products 2.2

Retailing 1.4

Technology Hardware & Equipment 0.7

23

Most overweight and underweight sectors versus MSCI Europe as at 31 May 2013

Sector % Underweight

Banks -7.7

Pharmaceuticals, Biotechnology & Life Sciences -6.8

Insurance -5.6

Materials -5.0

Telecommunication Services -4.1

Food, Beverage & Tobacco -2.6

Media -1.8

Diversified Financials -1.8

Food & Staples Retailing -1.7

Commercial & Professional Services -1.4

Source: GAM/UBS PAS


24

GAM Star European Equity InvestmentsIndustry Analysis as at 31 May 2013

Source: GAM, MSCI Note: Totals may not add to 100% due to rounding of data at source.


24

25

GAM Star European Equity InvestmentsGeographic Analysis as at 31 May 2013



25

26


26

GAM Star European Equity MSCI Europe Index

Market cap quintile as at 31 May 2013

Source: GAM/FactSet


27


27

Style analysis as at 31 May 2013

Source: GAM/UBS PAS


Sty

le w

eigh

ts


GAM Star Continental European Equity

29

GAM Star Continental European Equity InvestmentsTop 10 holdings (of 39) as at 31 May 2013

Source: GAM


29

30

GAM Star Continental European Equity Investments

Stocks % Overweight

Paddy Power 4.5

Schindler Holding-Part Cert 4.2

Gas Natural 3.7

Ryanair 3.7

Kone 3.7

Wirecard 3.4

Continental 3.2

Swatch 3.1

Fresenius 3.0

Publicis Groupe 2.7

Most overweight and underweight stocks versus MSCI Europe ex UK as at 31 May 2013

Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.

Stocks % Underweight

Nestle -4.3

SANOFI -2.6

Total Sa -2.1

Bayer -1.8

Siemens -1.8

Banco Santander Sa -1.5

Allianz -1.4

Novartis -1.4

Unilever -1.3

Novo Nordisk -1.3


Sectors % Overweight

Consumer Durables & Apparel 6.6

Capital Goods 6.0

Health Care Equipment & Services 5.3

Software & Services 5.0

Consumer Services 4.2

Media 2.6

Automobiles & Components 2.4

Household & Personal Products 2.4

Transportation 2.0

Technology Hardware & Equipment 0.7

3131

Most overweight and underweight sectors versus MSCI Europe ex UK as at 31 May 2013

Source: GAM/UBS PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.

Sectors % Underweight

Pharmaceuticals, Biotechnology & Life Sciences -8.2

Banks -6.1

Insurance -6.0

Food, Beverage & Tobacco -5.0

Diversified Financials -3.1

Materials -3.0

Telecommunication Services -2.4

Energy -1.5

Food & Staples Retailing -1.3

Real Estate -0.9

32

GAM Star Continental European Equity InvestmentsIndustry Analysis as at 31 May 2013



32

33

GAM Star Continental European Equity InvestmentsGeographic Analysis as at 31 May 2013



33

34


34

Market cap quintile as at 31 May 2013

GAM Star Continental European Equity

MSCI Europe ex UK Index

Source: GAM, FactSetAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.

35


35Source: GAM, UBS/PASAllocations and holdings are subject to change. Presented as supplemental information only. Please refer to the relevant GIPS compliant report and the GIPS supplemental text.

Style analysis as at 31 May 2013


Stock Ideas

10

15

20

25

30

35

04 05 06 07 08 09 10 11 12

Gas Natural 30 May 2003 to 31 May 2013

Gas NaturalSpanish Utility

Reference to a security is not a recommendation to buy or sell that securitySource: Thomson Reuters

Quasi regulated electric/gas assets in Spain & Latam

Regulatory risk under control

Growth prospects in LNG supply & Latam networks

Strong balance sheet

Outstanding free cash flow generation

Decent returns 11% ROE, 10% ROIC

Valuation— 10x PE, 7.5% FCFE/EV, 15% FCFE 2014— Dividend yield 6.2%, >2x covered— Leverage 3x— Market Cap / EV only 45%

Extraordinary value opportunity for long–term oriented investors

37

38

20

40

60

80

100

04 05 06 07 08 09 10 11 12

Continental 30 May 2003 to 31 May 2013

ContinentalAutomotives Tyres and Parts


Excellent tyre business – replacement tyres have controlled distribution & strong pricing power.

Well positioned in auto parts – strong growth & margin potential in powertrain.

High pre-tax ROIC c.20% despite goodwill burden – tangible returns substantially higher.

Strong reinvestment opportunities to drive growth.

Balance sheet getting stronger after heavy debt burden following 2007 acquisition

Potential to reduce interest costs substantially over next few years as refinance & deleverage.

Significant shareholder overhang creates value opportunity.

Valuation— 8x PE 2014— 7% FCFE/EV 2014

Significant value opportunity for long–term oriented investors

39

10

20

30

40

50

04 05 06 07 08 09 10 11 12

Duerr 30 May 2003 to 31 May 2013

DuerrAutomotive Paint Shop Systems


Global #1 for automotive paint shop systems

Dominant player in Chinese market

Emerging market auto penetration drives growth

Prepayments and low capex lead to high ROIC

Significant opportunity from monetising installed base

Net cash balance sheet


Excellent returns 39% ROIC 2011

Valuation— 10% FCFE/EV 2014— Dividend yield 2.8%.

Extraordinary wealth creation for long–term oriented investors

40

10

20

30

40

50

60

70

04 05 06 07 08 09 10 11 12

Paddy Power 30 May 2003 to 31 May 2013

Paddy PowerTraditional sports 'bookmaker'


Betting shops in Ireland and UK

Expansion into online sports bookmaking and online gaming

— Acquired largest online sports bookmakers in Australia

Online now 80% of profits

Mobile internet and expansion into Italy

Canada and Australia offer huge growth potential

Financial metrics— 53% Return on Capital Employed in 2011— Net cash of EUR 136m at end of 2011— 10 year EPS compound annual average growth

rate of 18%— Share price performance of almost 27x in 12 years


20

40

60

80

100

120

140

04 05 06 07 08 09 10 11 12

Schindler 30 May 2003 to 31 May 2013

SchindlerGlobal Elevator Installed Base


2nd largest installed base of elevators globally

Installed base provides highly stable earnings

Emerging market urbanisation drives growth

Prepayments ensure high ROIC

Significant long term margin upside

Over CHF2bn of net cash for acquisitions available


Excellent returns >100% ROIC

Valuation— 7.5% FCFE/EV 2014— Dividend yield 1.5%— 20% discount to peer Kone


41

42

20

40

60

80

100

04 05 06 07 08 09 10 11 12

Elekta 30 May 2003 to 31 May 2013

ElektaRadiation Therapy Equipment


Global duopoly in radiation therapy equipment

Significant barriers to entry due to high switching costs

Installed base provides stable recurring revenue base

Demographic tailwind of aging population

Very low penetration rates today in emerging markets

Outstanding growth opportunities

Excellent returns >30% ROIC

Valuation— 5% FCFE/EV 2014— Dividend yield 1.3%


43

20

30

40

50

60

04 05 06 07 08 09 10 11 12

Henkel 30 May 2003 to 31 May 2013

HenkelGerman HPC and Adesives


Global adhesive market leader – adhesives is a GDP plus growth industry

Strong consumer brands e.g. Schwarzkopf, Persil – steady growth

Long term restructuring – margins have doubled over 10 years – and still rising

Working capital focus has reduced capital intensity – more gains to go for.

High ROIC and should continue to grow with further restructuring

Rising capex indicates high level of re-investment opportunities within the business

Rapidly deleveraging with balance sheet capacity to make acquisitions – strong track record

Valuation attractive 2014 – unleveraged PE of 15.4x, 7% FCFE/EV. Ords at 15% discount to Prefs.


44

20

40

60

80

100

04 05 06 07 08 09 10 11 12

Inditex 30 May 2003 to 31 May 2013

InditexLargest clothing retailer in the world


Key brands: — Zara, Zara Home, Massimo Dutti, Pull & Bear,

Bershka, Oysho, Stradivarius, Uterque

Significant global expansion over last 10 years— Spain was 46% of revenues in 2003 and 27% of

revenues in 2012— Growth in fast growing countries

Financial metrics— 28% Return on Capital Employed (lease adjusted)— 10 year compound growth of 16%— 5 year compound sales growth of 11%— €3.5bn net cash on balance sheet as of last

reporting period— Shares up 7x since IPO in 2001



Appendix

46

Niall Gallagher

Investment Director

Niall Gallagher is an Investment Director responsible for European markets. Prior to joining GAM in November 2009, Niall worked as a portfolio manager managing Pan-European equities and Continental European equities at T. Rowe Price for two years. Before that, he was at BlackRock for nine years, where he worked as an investment analyst before managing both continental European and pan-European equity strategies. He began his career as an economist at the Bank of England. Niall holds a BA in Economics from Manchester Metropolitan University and an MSc in Economics and Finance from Warwick University, and is a CFA Charterholder. He is based in London.

47

GIPS Supplemental Information

All GAM's discretionary assets have been allocated to appropriate GIPS composites. GAM's funds often are structured as investment pools with underlying currency classes and it is at the investment pool level that GIPS composite allocations have been made. Supplemental information shown in GAM's materials, including performance, geographic/industrial asset allocations, attribution details and other statistical analyses are based on a sample account of the relevant composite that represents the management style. Other accounts in the composite may have slightly different portfolio characteristics. In some cases sample accounts have history that pre-dates GAM's compliance with GIPS of 30 June 1996. Indices other than the benchmark are sometimes used in presentations for illustrative purposes. Please refer to the relevant GIPS compliant report.

48

GAM Continental European Equity Composite (G026)

Composite Performance 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD

Composite Returns % 11.24 18.92 34.23 20.67 10.20 -35.98 26.80 16.34 -10.66 35.87 7.76

Benchmark Returns* % 19.49 13.60 28.30 22.00 5.94 -42.20 29.77 9.56 -11.63 20.66 8.45

Composite Standard Dev 3Yr % 16.35 13.82 10.13 8.74 9.68 14.96 17.74 18.75 16.36 14.53 13.73

Benchmark Standard Dev 3Yr % 22.68 20.06 12.73 8.52 9.35 16.89 21.25 22.08 18.71 14.57 13.89

Number of Portfolios in Composite < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6

High Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Low Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Composite Asset value (DEXm) 12 14 84 77 124 75 67 192 232 343 480

Total Firm Assets (DEXm) 21,464 27,844 46,881 51,702 51,833 28,205 34,412 42,284 36,395 38,443 39,987

1: Established in 1983, GAM delivers active investment management to private clients, institutions and intermediaries. All GAM's assets are included in the GIPS definition of the firm, except for clients who set up separately-managed accounts which are administered by an independent third party for their fixed income hedge strategy and/or currency hedge strategy.

2: GAM claims compliance with the Global Investment Performance Standards ('GIPS®') and has prepared and presented this report in compliance with the GIPS standards. GAM has been independently verified from 1 January 1996 through 31 December 2011. In May 2009, GAM acquired Augustus Asset Managers Limited ('Augustus') and subsequently claims compliance for a single firm representing the combined business. Having determined that the GIPS portability criteria were satisfied, the pre and post acquisition performance records of Augustus are linked. Augustus has been subject to independent verification testing from 1 January 2000, the date from which Augustus performance results are first displayed. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

3: The composite consists of actively managed portfolios of European equities (excluding the United Kingdom). Mid to large capitalisation stocks are selected from attractive sectors based on existence of or potential for above average Cash Flow Return on Investment.

4: Derivatives may be used in the portfolios to gain market exposure as well as for hedging purposes. Further details are available on request in the relevant product documentation. 5: Composite results are presented gross of investment management fees and net of trading expenses and net of withholding taxes on dividends, capital gains and interest. Benchmarks are gross of withholding taxes on

dividends. 6: The composite was created in Nov 2002 and applied retrospectively. 7: The maximum investment management fee for accounts is 1.5% per annum. Management fees may vary by product and jurisdiction. 8: High and low returns (for those constituents present in the composite throughout each period) are presented above to demonstrate dispersion within the composite. Dispersion information is only required by GIPS where there

are 6 or more portfolios in the composite. 9: From 01 Dec 2009 Niall Gallagher took over as manager from John Bennett. 10: The benchmark shown is MSCI Europe ex UK Index. 11: DEX - The reporting currency for this composite is EUR. Prior to Dec 1998, this composite was denominated in DEM. 12: Policies for valuing portfolios, calculating performance and preparing compliant presentations are available on request. 13: In 2005 GAM changed its methodology for calculating its Total Firm Assets (TFA) to follow the principles and guidelines of FINMA, resulting in TFA as of Nov 2005 increasing by 38%. In May 2009, GAM acquired Augustus

resulting in an increase of 22% in TFA and a change in the Firm definition to incorporate an exclusion of certain assets as detailed above. GAM's TFA before these exclusions were $53,251m. GAM discloses its TFA on a quarterly basis. Current data is as at 31 Dec 2012.

14: FX rates used for valuation of funds and portfolios within the composite are those at 23:00 hours GMT. FX rates for benchmark and composition calculation are those at 16:00 hours GMT.

GAM has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). A complete list and description of composites is available on request.

Source: GAM as at 30 Apr 2013

* The benchmark shown is for comparative purposes only. The composite is not managed to a specific benchmark.


49

GAM European Equity Composite (G025)

Composite Performance 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD

Composite Returns % 13.72 16.76 28.56 20.56 6.60 -38.85 26.94 11.26 -9.71 30.76 6.93

Benchmark Returns* % 15.76 12.65 26.68 20.18 3.17 -43.29 32.55 11.75 -7.51 18.09 7.48

Composite Standard Dev 3Yr % 16.81 15.20 10.92 7.90 9.22 15.21 18.20 18.91 15.91 13.69 12.98

Benchmark Standard Dev 3Yr % 20.15 17.85 11.31 7.37 8.73 16.22 20.21 20.84 16.98 13.00 12.28

Number of Portfolios in Composite < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6 < 6

High Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Low Return % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Composite Asset value (DEXm) 581 647 874 1,255 1,412 718 406 277 190 52 60

Total Firm Assets (DEXm) 21,464 27,844 46,881 51,702 51,833 28,205 34,412 42,284 36,395 38,443 39,987

1: Established in 1983, GAM delivers active investment management to private clients, institutions and intermediaries. All GAM's assets are included in the GIPS definition of the firm, except for clients who set up separately-managed accounts which are administered by an independent third party for their fixed income hedge strategy and/or currency hedge strategy.

2: GAM claims compliance with the Global Investment Performance Standards ('GIPS®') and has prepared and presented this report in compliance with the GIPS standards. GAM has been independently verified from 1 January 1996 through 31 December 2011. In May 2009, GAM acquired Augustus Asset Managers Limited ('Augustus') and subsequently claims compliance for a single firm representing the combined business. Having determined that the GIPS portability criteria were satisfied, the pre and post acquisition performance records of Augustus are linked. Augustus has been subject to independent verification testing from 1 January 2000, the date from which Augustus performance results are first displayed. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

3: The composite consists of actively managed portfolios of European equities (including the United Kingdom). Stocks are selected from attractive sectors primarily on a cash-flow based valuation approach and the fundamental long- term growth prospects of the business.

4: Derivatives may be used in the portfolios within the composite to gain market exposure as well as for hedging purposes. Please note that further detail is available on request. 5: Composite results are presented gross of investment management fees and net of trading expenses and net of withholding taxes on dividends, capital gains and interest. Benchmarks are gross of withholding taxes on

dividends. 6: The maximum investment management fee for accounts is 1.5% per annum. Management fees may vary by product and jurisdiction. 7: The composite was created in Nov 2002 and applied retrospectively. 8: High and low returns (for those constituents present in the composite throughout each period) are presented above to demonstrate dispersion within the composite. Dispersion information is only required by GIPS where there

are 6 or more portfolios in the composite. 9: From 01 Dec 2009 Niall Gallagher took over as manager from John Bennett. 10: The benchmark shown is MSCI Europe Index. 11: DEX - The reporting currency for this composite is EUR. Prior to Dec 1998, this composite was denominated in DEM. 12: Policies for valuing portfolios, calculating performance and preparing compliant presentations are available on request. 13: In 2005 GAM changed its methodology for calculating its Total Firm Assets (TFA) to follow the principles and guidelines of FINMA, resulting in TFA as of Nov 2005 increasing by 38%. In May 2009, GAM acquired Augustus

resulting in an increase of 22% in TFA and a change in the Firm definition to incorporate an exclusion of certain assets as detailed above. GAM's TFA before these exclusions were $53,251m. GAM discloses its TFA on a quarterly basis. Current data is as at 31 Dec 2012.

14: FX rates used for valuation of funds and portfolios within the composite are those at 23:00 hours GMT. FX rates for benchmark and composition calculation are those at 16:00 hours GMT.

GAM has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). A complete list and description of composites is available on request.

Source: GAM as at 30 Apr 2013

* The benchmark shown is for comparative purposes only. The composite is not managed to a specific benchmark.


50

Disclaimer

Source: GAM unless otherwise stated. (Unless otherwise noted, where shown, performance is shown net of fees, on a NAV to NAV basis).

This material is confidential and is intended solely for the use of the person or persons to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to subscribe and is by way of information only.

The fund is a sub-fund of GAM Star Fund plc. GAM Star Fund plc is an Irish umbrella fund with segregated liability between sub-funds. GAM Star Fund plc is authorised as a UCITS pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No.352 of 2011) and is a recognised scheme in the UK under the Financial Services and Markets Act 2000. The fund is managed by GAM Fund Management Limited which is regulated by the Central Bank of Ireland.

Subscriptions will only be received and shares or units (‘Shares’) issued on the basis of the current prospectus for the fund. Copies of the fund’s prospectus, Key Investor Information Documents (KIID) and financial statements can be obtained free of charge from GAM Fund Management Limited, George’s Court, 54-62 Townsend Street, Dublin 2, from the centralising agent for France, BNP Paribas Securities Services, 66 rue de la Victoire, 75009 Paris, from its representative in Switzerland GAM Anlagefonds AG, Klausstrasse 10, CH - 8034 Zurich, from the information agent in Germany Bank Julius Baer Europe AG, An der Welle 1, D-60322 Frankfurt am Main ,from the information agent in Austria, UniCredit Bank Austria, Schottengasse 6 - 8, A-1010 Vienna. Paying Agent in Switzerland is State Street Bank GmbH, Zurich Branch, Beethovenstrasse 19, CH-8027 Zurich. Shares are not available for sale in any state or jurisdiction in which such sale would be prohibited.

The Shares of the fund have not been registered under the US Securities Act of 1933, as amended (the “Securities Act”), and the fund is not registered under the US Investment Company Act of 1940, as amended (the “Company Act”). Accordingly, unless an exemption is available, such shares may not be offered, sold or distributed in the United States or to US persons. However, pursuant to an exemption from registration under the Securities Act and the Company Act, the shares may be sold or resold in the United States or to certain qualified US investors in transactions that do not constitute a public offering.

The views expressed herein are those of the manager at the time and are subject to changes. The price of Shares may go down as well as up and the price will depend on fluctuations in financial markets outside GAM's control, as a result an investor may not get back the amount invested. Past performance is not indicative of future performance and reference to a security is not a recommendation to buy or sell that security. Prices quoted refer to accumulation Shares unless otherwise stated. Historic data may be subject to restatement from time to time.

In the United Kingdom, this material has been issued and approved by GAM London Ltd, 12 St James's Place, London SW1A 1NX, authorised and regulated by the Financial Conduct Authority.

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