Global Asset Management M&A Environment

Review of 1H 2016 Activity and Trends

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Global Asset Management M&A Environment 1H 2016 Transaction Activity at a Glance

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Source: MHB Advisers. Data as of June 30, 2016.

• The asset and wealth management M&A market continued to be active in the first half of 2016, characterized by deep pools of high quality buyers and sellers as well as strong pricing

1H 2016 1H 2015

% Change vs

1H 2015 Comments

Total # of Announced Transactions 99 98 1% In line with 2015's brisk pace and with long-term averages

US Targets 58 60 -3%

Non-US Targets 41 38 8%

Targets with AUM between $2Bn - $10Bn 30 25 20% Increase in acquisitions of established firms with capacity to grow

AUM Transacted ($Bn) $531 $590 -10% Dearth of mega-deals; reflects a more "tactical" M&A environment

66% 72% -9% Vast majority of sellers continue to be independent firms

34% 28% 25% Uptick in divestiture activity but very few large-scale sales

7% 10% -31% PE firms finding current market conditions challenging as buyers

17% 16% 5% Slight increase driven by minority stake investments in alts firms

27% 23% 16% Reflects continued globalization in terms of products and investors

22 23 -4% Fewer alternative manager deals, but larger average deal sizes

22% 23%

43 39 10% Ahead of 2015's record volume of wealth manager transactions

43% 40%as % of Total

# of Wealth Management Transactions

as % of Total

Independent Manager Transactions

as % of Total

Financial Sponsor and Management-Led Acquisitions

as % of Total

Cross-Border Transactions

as % of Total

Divestiture Transactions

as % of Total

Minority Stake Transactions

as % of Total

# of Alternative Asset Manager Transactions

• Deal Volume and AUM Transacted:

– YTD transaction activity was robust; 99 asset and wealth management deals were announced in the first six months, on pace with 2015 and in line with the strong volumes observed in recent years

– The level of AUM transacted is down considerably from recent years; “mega-deals” (over $100bn of assets) were largely absent, as large-scale regulatory-driven divestitures have run their course

– Cross-border transactions accounted for a quarter of all deals; we anticipate that this proportion will expand over the longer-term as managers continue to seek diversification into growing markets

– In a period of global uncertainty heightened by the recent Brexit vote, we expect short-term activity to cool although the long-term conditions favorable to M&A in the sector persist

• Transaction Pricing

– During the first six months of 2016 pricing in the private M&A markets has been stable in contrast to highly volatile public market multiples

– Market sentiment battered public asset managers, particularly in the February market drawdown, and the group as a whole has significantly underperformed market indices for the year-to-date period

– While private market pricing has generally been consistent, certain areas of particular demand, including both liquid and illiquid alternatives and ETFs, have attracted premium multiples

– The need for strategic repositioning to combat stalling organic growth will result in continued high multiples for in-demand segments balanced by a strong emphasis on structural discipline

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Global Asset Management M&A Environment Transaction Volumes & Pricing

• Buyers:

– Asset managers were the most active acquirers of other investment firms in the first half; more than 70% of all AUM was acquired by asset managers, versus less than 30% on average over the last five years

– A “tactical” dealmaking environment continued with buyers seeking opportunities to fill specific product gaps; ETF providers and managers delivering yield and uncorrelated returns were especially attractive

– Multi-affiliate firms continued to demonstrate their attractions to sellers, with long-standing leaders (AMG, Legg Mason, et al.) concluding several transactions of note during the period

– Serial acquirers in the wealth management arena (Azimut, Focus Financial, United Capital, et al.) had a busy period with activity not just in the U.S. but also in certain foreign markets

• Sellers/Targets:

– YTD activity was dominated by transactions involving independent boutiques typically seeking broader distribution or assistance in solving intergenerational succession or liquidity needs

– Established institutional quality mid-sized managers (AUM of $2bn to $10bn) with differentiated products and capacity to grow are in keen demand

– Activity in the alternative segment has continued to broaden reflecting maturation of managers and an expanded range of transactional options including permanent capital minority stake investments

– Wealth management activity is on track to exceed last year’s record volume, as sellers effected overdue succession plans and took advantage of a broader array of potential transaction partners

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Global Asset Management M&A Environment Transaction Participants

Exhibits

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Global Asset Management M&A Environment Transaction Trends

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Buyers by Type (by AUM Acquired)

Source: MHB Advisers. Data as of June 30, 2016.

Global Transaction Volume AUM Transacted

1H2016 Transaction Structures

Global Asset Management M&A Environment Transaction Trends (cont’d)

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Alternative Manager Transaction Activity Select Buyers of Alt Mgr Minority Stakes (2014-1H2016)

Source: MHB Advisers. Data as of June 30, 2016.

Select Multi-Affiliate Manager Activity (2014-1H2016) Select Multi-Affiliate Target Capabilities (2014-1H2016)

* For purposes of this chart, AM G/Petershill transaction counted as five minority stake investments

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AMG* Dyal Blackstone GS Petershill FundII

KKR

Aggregate AUM Acquired ($B) # of Investments

* For purposes of this chart, AM G/Petershill Fund I deal counted as one transaction (portfo lio of five alternative managers)

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AMG* Legg Mason Victory Fiera Natixis OMAM

Aggregate AUM Acquired ($B) # of Transactions

* Includes hedge fund, fund of hedge fund, private equity and real estate managers

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

TraditionalDomestic

EQ / FI

TraditionalGlobal

EQ / FI

ETF / Smart BetaManagers

AlternativeManagers*

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Global Asset Management M&A Environment Notable Transaction Activity

Select Transactions Announced in 1H 2016

Source: MHB Advisers. Data as of June 30, 2016.

Date Target Country Strategy / Focus Buyer Country AUM (US$B) % Acquired

Jun-16 Marathon Asset Management US Event-driven global credit Blackstone Group US 12.8 Minority

Jun-16 Landmark Partners US Secondaries / PE+RE FOFs Old Mutual Asset Management US 15.5 Majority

Jun-16 Goldman Sachs' Petershill Fund I portfolio US Portfolio of five hedge fund managers Affil iated Managers Group US 55.0 100%

May-16 Carson Group US Wealth manager Long Ridge Equity Partners US 6.5 Minority

May-16 Resource America US Real estate and credit C-III Capital Partners US 21.7 100%

May-16 Kleinwort Benson Investors Ireland Global equities Amundi France 8.5 100%

Apr-16 Tennenbaum Capital Partners US Performing credit and special situations CNO Financial Group US 6.0 Minority

Apr-16 Towry UK Wealth manager Tilney Bestinvest UK 13.0 100%

Mar-16 GE Asset Management US Diversified institutional manager State Street Corporation US 100.0 100%

Feb-16 Aegon Capital/Fund Management Canada Canadian/global equity, Canadian FI/MM Foresters Canada 7.5 100%

Feb-16 Apex Capital Management US Growth equities Fiera Capital Corporation Canada 7.1 100%

Feb-16 Rogge Global Partners UK Global fixed income Allianz Group Germany 35.0 100%

Jan-16 Clarion Partners US Real estate Legg Mason US 39.4 Majority

Jan-16 EnTrust Capital US Fund of hedge funds Legg Mason US 12.0 Majority

Jan-16 Polen Capital Management US Growth equities iM Square UK 7.5 Minority

Jan-16 Capital Four Holdings Denmark High yield/leveraged loans Northill Capital UK 6.5 Majority

Jan-16 Baring Private Equity Asia Hong Kong Asia private equity Affil iated Managers Group US 8.0 Minority

Global Asset Management M&A Environment Publicly-Traded Asset Managers

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Data sources: MHB Advisers analysis, Bloomberg, Yahoo Finance. Data as of June 30, 2016. US Traditional managers include: AMG, APAM, BLK, CNS, EV, FII, BEN, IVZ, JNS, LM, OMAM, TROW, WDR & WETF. US Alternative managers include: APO, ARES, BX, CG, FIG, KKR, OAK & OZM. UK managers include: ADN, ASHM, HGG, JUP, EMG & SDR. Canadian managers include: AGF, CIX, FSZ, IGM & SII. Australian managers include: BTT, IFL, MFG, PPT & PTM. * Market index data per WSJ Market Data Center: S&P 500 for US Traditional and Alternative; FTSE 100 for UK Managers; S&P/TSX Composite for Canadian Managers; ASX 200 for Australian Managers

Trading Multiples and Stock Price Performance

YTD Change in Median EBITDA Multiples

LTM EPS FY1 EPS LTM Revenue LTM EBITDA Group Median Market Index*

US Traditional 15.8x 13.7x 2.9x 8.3x (10.1%) 2.7%

US Alternative na 13.3x 4.2x 9.4x (6.1%) 2.7%

UK Managers 14.6x 14.0x 3.8x 8.5x (18.0%) 4.2%

Canadian Managers 12.7x 13.0x 4.0x 7.7x 2.7% 8.1%

Australian Managers 14.8x 15.6x 4.4x 10.1x (15.6%) (1.2%)

Global Median 14.3x 14.0x 3.6x 8.9x (9.1%)

MHB Advisers

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MHB Advisers Our Firm

• MHB Advisers is an independent investment banking advisory firm based in the San Francisco Bay Area that is focused exclusively on the global investment management industry

– Our principals have over 70 years of diverse financial services experience, and a combined 40 years of experience in advising on strategic transactions

– Includes asset management operating experience, as well as being long-time investment bankers in the sector

– Exclusive focus on advising asset and wealth managers and their owners on M&A and other corporate initiatives

– We have served as trusted advisors to a wide range of traditional and alternative investment firms based in the US, Canada, Australia, Hong Kong, India, Singapore and several European countries

– Committed to providing independent, unbiased, conflict-free advice

– We design flexible, tailored engagements to help our clients achieve their strategic and financial objectives

Experience

Focus

Independence

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MHB Advisers Our Principals

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Roger Hartley

Roger is a co-founder and Managing Member of MHB Advisers. Prior to founding MHB, he served as Chief Operating Officer of Coast Asset Management, a long-established alternative investment manager in Santa Monica, California. Prior to joining Coast in late 2007, Roger was a Managing Director with Putnam Lovell in San Francisco. Before launching his career as a strategic adviser to asset managers in 1997, he spent over fifteen years in the international banking industry with Union Bank and Standard Chartered Bank through roles in California, Hong Kong, the United Arab Emirates and the United Kingdom. Roger received a M.A. with Honours in Politics, Philosophy and Economics from the University of Oxford.

Jeff Bechtel

Jeff is a Managing Member of MHB Advisers. Prior to joining MHB, Jeff served as Senior Vice President in the Financial Institutions Group at Jefferies & Company. Prior to joining Jefferies, he was a senior asset management banker at Putnam Lovell which he joined in 2002. Jeff began his career in 1996 in the capital markets group of Bank One where he served in the M&A and Corporate Finance Advisory practices. He received his MBA from Northwestern University’s Kellogg School of Management and BBA in Finance and Marketing, with Honors, from the University of Wisconsin-Madison.

Robert Kennedy

Robert is a Managing Member of MHB Advisers. Prior to joining MHB, he served as an independent consultant in the Western United States and internationally. Robert’s experience also includes over a decade of M&A advisory work as a banker at Putnam Lovell. In this role, he worked on transactions involving asset managers, depository institutions and related service providers. He received his BS in Finance, with Honors, from the University of Colorado at Boulder. Prior to moving to the U.S., Robert served as a Commissioned Officer in the Royal Australian Regiment.

MHB Advisers Contact Details

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Roger Hartley

hartley@mhb-advisers.com

+1 (415) 464-4940

Jeff Bechtel

bechtel@mhb-advisers.com

+1 (415) 464-4941

Robert Kennedy

kennedy@mhb-advisers.com

+1 (415) 464-4943

www.mhb-advisers.com

MHB Advisers, LLC

1100 Larkspur Landing Circle, Suite 101

Larkspur, CA 94939