Because Gender Diversity MattersPresentationSeptember 2009

Women’s Leadership Fund

Executive Summary

Gender Diversity :

Why?

-Companies which embrace it actually perform better

-We have amassed a strong body of research to demonstrate this

-Currently, no-one else uses Gender Diversity as an investment criterion: thus there is hidden value in it

-We want to earn strong returns for our investors whilst fulfilling an important social objective

Executive Summary

Gender Diversity :

How?

-We will invest in companies which have a) strong female representation in the boardroom and senior management and b) female-friendly policies, ie. childcare, and women’s networks

-We will also follow sound fundamental investment practice, by only selecting companies which also have competitive valuations, strong business models and compelling valuations

-We will take an activist stance against firms which show particular resistance towards hiring women for high-level posts

Executive Summary

Gender Diversity :

Who?

-An outstanding investment team with experience at Soros Fund Management, Goldman Sachs, and Templeton, amongst others

-A dedicated management team in both Zurich and New York

-An advisory board featuring two former Prime Ministers, and numerous business leaders

Outline

1. Why Does ‘Gender Diversity’ Matter?2. Five Steps to Alpha3. The Opportunity4. Women’s Leadership Fund5. Team6. Investment Approach and Risk Management7. Fund Structure

Section 1. Why Does ‘Gender Diversity‘ Matter?

Current Situation Neither Fair nor Efficient

The Past:

Competition depended upon physical assets such as land and machinery Workers performed manual and unskilled tasks This scenario was advantageous to men “I was privileged to work during a period when it was only necessary to compete against half the population” – Warren Buffett

The Future:

In a knowledge based economy, talent is the competitive advantage Women make up more than half of the ‘talent’ pool So their effective deployment is critical to success

The Basic Problem

•At both High School and University, Women tend to outperform Men

•This trend continues early in their careers.

•However, five years into their careers, women start to ‘fall out’.

WLF wants to go right to the heart of this problem and expand the opportunity set for women.

Relative performance

‘Gender Diversity‘ Matters Because…

Diversity of perspectives improves judgement about opportunities and risks

Leading to fewer mistakes, and

Enhanced ability to innovate

Can help guard against ‘six sigma’ events, ie. AIG, Lehman

Section 2. Five Steps to Alpha

Access to the Best Talent

Does this really make sense?

Board composition of FTSE-350 Companies (UK): 242/2742 directors are women

BOARD COMPOSITION

POPULATION COMPOSITION

Diversity Brings You Closer To The Customer

Example: Nestlé

•Approximately 80% of revenuescome from female customers

•But not a single division is run by a woman

•Who would understand the needs of female customers better, a male or female manager?

Gender Diversity –Higher Valuations, Profitability, ROA

McKinsey & Co.

Pepperdine University, Roy Adler

Naissance Capital

McKinsey Study: GD Improves Likelihood of Higher EBITDA and Valuations

Probability of having…

… an above-average EBITDA % … an above-average Company Valuation %

Source: McKinsey & Company, 2007

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Pepperdine University Study: Gender Diversity Correlated with Improved Profitability

- In a 19-year long study of 215 Fortune 500 Firms…

- …Prof. Roy Adler found that the firms with the strongest willingness to promote women to executive positions…

- …Enjoyed between 18%-69% greater profitability than other firms within the same industry

Adler, R. ‘Women in the Executive Suite Correlate to High Profits’ (2001)

Naissance Study: Gender Diversity most influential SRI determinant of higher ROA

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Source: Naissance initiated a study in collaboration with Professor Marisa Noeldeke, Ellen Johansen and Heidrick + Struggles

SRI variables…Regression of gender diversity scores and six other corporate factors to ROA (***: Statistical significant)

A Counterbalance to ‘Corporate Caesars’

‘The Julius Caesar Problem’

The 'Alpha Male’ CEOBuilds personal 'Empires' vs. sustainable businessesIs in the news more than the company itselfSurrounds himself with highly paid 'yes-men'Takes huge risksBends the rules, cheats if necessary

…and eventually causes the company’s destruction

Competent, impartial feedback is critical in preventing 'Caesars’ WLF’s aim is to broaden the management base and make this more likely

“The more women there were in a company’s management, the less the share price fell in 2008” – Prof. Michael Ferrary, Ceram Business School (“Gender Diversity and Stock Market Performance”)

Hidden Value in Gender Diversity

Greater Gender Diversity = More Efficiency•Selecting from 100% of the population, not 50%•Higher ROA, better performance – according to research•‘Closer to the customer’

Assets should migrate to their most efficient use (Ricardo)•So firms should be encouraging more diversity•And investors should look for it as a positive sign

But They Don’t…•So we believe there to be hidden value – ‘alpha’•The Women’s Leadership Fund seeks to take advantage of this

Section 3. The Opportunity – The First of its Kind‘

Despite strong association with improved profitability . . .

‘Gender Diversity’ is (largely) neglected by investors.

Firms scoring well in Gender Diversity are thus underpriced and possess hidden value.

The Women’s Leadership Fund, ‘1st’ of its kind, uses ‘Gender Diversity’ as a differentiating investment thesis.

Platform to encourage ‘best practices’

Growing Interest (from a low level)

Norway and Spain have passed legislation requiring female board members for listed companies

2nd Swedish national pension fund publishes ‘Female Representation Index‘

Goldman Sachs, ‘10,000 Women Partnership‘’to develop female entrepreneurial talent in developing countries as a means of reducing inequality and ensuring more shared economic growth’’

Leveling the Playing Field

The Fund’s primary objective is to provide strong returns There will be no better evidence for our case than this

Our Wider Objectives: To increase the number of female executives in the main countries we

operate in by 20% in the next 3-5 years

We will pursue this through shareholder activism, and participation in public debate

This will be supported by our website, newsletters, and other media efforts

To increase opportunities for women generally, via charitable activities. 10% of our management fee will go towards good causes

Really ‘Making a Difference’ - Activism

Can a company with an antiquated approach to Gender Diversity but many female stakeholders afford to get into a public debate?

IDENTIFY COMPANIES

ACT PURSUE

• Place matter on AGM Agenda

• Invite journalists to participate in debate

• Persist until improvements are made

• Build stake

• Write letter to Board

• Request meeting & positive action

• With negative attitude to Gender Diversity

• With little political will to fight

CHANGEE

Board of Directors

Our concept- and commitment to activism- has helped us attract a world-class advisory board:

Cherie BlairProminent lawyer and wife of formerBritish Prime Minister, Tony Blair

Kim CampbellFormer Prime Minister of Canada

Rob BauerProfessor of Finance and former head of research at ABP, one of Europe’s leading pension funds. Considered a leader in socially responsible investing

Wendy LuhabeBusinesswoman and chair of the Industrial Development Corporation;Considered one of Africa’s leading entrepreneurs

Janet HansonFounder of 85 Broads, an organisationof over 32,000 professional women worldwide, as well as own $2bn money management firm.

Jenny ShipleyFormer Prime Minister of New Zealand

Heidi SinclairFormer CEO of public relations firm Burson-Marsteller Europe, andChief Communications Officer, Bill & Melinda Gates Foundation

Avivah Wittenberg-CoxFounder of European Professional Women’s Network,and author of ‘Womenomics’. Considered a leadingauthority on Gender Diversity

Section 4. Women‘s Leadership Fund

Global equities and bonds

Actively managed, low volatility

2 versions: a) long only, no leverage b) hedged version

Initial fund size of US$200million, ultimately growing to US$2billion

Quarterly liquidity

Competitively priced for SRI space

Objective: is to achieve alpha, without taking undue risks

Founded in 1999 with the assistance of the Bodmer and Habsburg families

Swiss based - independently owned and managed.

Today it counts some of Switzerland’s leading financial institutions and family offices among its investors

Finds or creates niche investment opportunities offering exceptional prospects for capital appreciation.

Conducts own research and draws upon the expertise and business relationships of its principals

Performance of approximately 18% p.a. since 1999

Section 5. Team

Naissance Capital

Conventional Asset

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Naissance Capital - The Track Record

Overall annualized return (all initiatives equally weighted): 17.7%Overall volatility: 16.3

Fund Inception Closing Theme Sponsor Return VolatilitySandler Capital Sep. ’99 Ongoing Telecom and Media Zurich Insurance 10.6 7.3

Naissance China Mar. ’01 Sep ’07 Collaboration with Value Partners focusing on small-mid Chinese companies

Sir John Templeton 42.2 18.9

Naissance Jaipur Jan. ’02 Ongoing Local shares of publicly listed Indian companies

Swiss Re 16.5 32.24

Swissport Feb. ’02 Sep. ’05 Private Equity Investment HNW 30.6 Na

Naissance Japan Jul. ’02 Dec. ’05 Japanese Long/Short Fund HNW 14.3 14.9

Naissance Healthcare

Nov. ’02 Nov. ’08 Healthcare fund with emphasis on emerging markets

Albert Koechlin Foundation 5.3 22.5

L-R Global May. ’03 Sep. ’07 Value investor in remote emerging markets with emphasis on natural resources, and mining

Rockefeller & Co – Leon Levy 20.6 16.3

Naissance Natural Resources

Sep. ’03 Sep. ’04 Index of Commodities, exhibiting high demand and constrained supply (oil, precious metals, etc)

Ex Glencore/Faisal Finance SA 38.4 18.8

Naissance Putin Sep. ’03 Dec. ’06 Vehicle to invest in local Gazprom shares Dr. Aminio Fraga 86.5 40.2

Naissance Beagle Sep. ’03 Ongoing Best Ideas Fund, ‘thematic’ investment approach followed by Naissance since its inception

Everest Capital 11.2 22.1

Management Team

The Women’s Leadership Fund was initiated by James Breiding, MD of Naissance Capital

James Breiding James Breiding is co-founder and owner of Naissance Capital. Most recently he was managing director of Templeton Switzerland and prior to that director of Rothschild Corporate Finance and Vice President of Julius Baer responsible for alternative investments. He trained at Price Waterhouse Coopers where he reached the rank of Senior Manager.

Marisa Noldecke is is Assistant Professor of Finance at WHU, Otto Beisheim School of Management, Germany. She holds a PhD from the University of Zurich. The main focus of Prof. Nöldeke's research are the areas of Corporate Finance and Corporate Governance

Daniel Tudor is Project Manager of the Women’s Leadership Fund. He previously worked in investment management in East Asia, and also wrote for The Economist. He holds a BA from Oxford University and an MBA from Manchester University.

Investment Council

Bjorn Thelander is a seasoned portfolio manager after a 15 year career with the Tetra Laval Group. He holds Master’s degree in Mechanical Engineering from the Lund Institute of Technology (Sweden) and an M.B.A. from the University of California at Davis.

Zoë von Streng is an experienced portfolio manager (global equities) after a 20 year career with UBS Global Asset Management and Phillips & Drew Fund Management in London and Zurich. She held the position of Managing Director, Co-Head of Equities, at UBS.

Steve Triantafilidis is Global Head of Equities for Swiss Re Asset Management. Previously he worked for a variety of fund management firms in Australia, where he is also Task Force Chair of the Financial Services Institute of Australasia

We have assembled a team of highly experienced fund managers to run the portfolio of the Women’s Leadership Fund

Rob Bauer served as head of research at ABP, one of Europe’s largest pension funds, and is currently head of Rob Bauer Consultants, as well as a Professor of Finance at Maastricht University. He is also an advisory board member of the Women’s Leadership Fund.

Tim Bepler is a trader and long-short portfolio manager with 15 years of experience at firms such as Merrill Lynch and Credit Suisse. He holds the CFA Charter, as well as an MBA from New York University.

Section 6. Investment approach‘Filters‘ based on ‘Common sense‘ Approach

Macro: Country risk

Industry prospects

View of currency

Regulatory regime, etc.

Gender Diversity: % and trend of women in management and Board

Actively embracing ’best practices’

Preferred employer for any gender

Strong Business Model: Quality of management

Flexible manufacturing systems

Superior competitive position

High ROE, ROIC

Solidity of balance sheet

Fair valuation.

Portfolio Construction – Selective, but Diversified

40,000 stocks

1,200 stocks1. Screening against Fundamental criteria (*)

Total Universe

2. Market Cap / Daily Liquidity screening > 400 stocks

3. Screening against ’Gender Diversity’ Criteria

150-200 stocks

4. Portfolio 30-50 stocks

(*) see fundamental screening criteria on next page

1. Screening Against Fundamental Criteria

What We Look For

Phenomenal business models Well positioned for tough times, low operating leverage, flexible capacity

Very strong financials (screening criteria) Growth (CAGR Net Sales and Operating Inc >10%) Profitability (Return on Capital > 10%) Balance Sheets (Leverage<30%, Z-score>3) Valuations (decent valuations, intrinsic value>market value)

Performance ObjectivesThe fund aims to outperform the MSCI World Developed Index (NDDUWI) by 4-8 percentage

points annually with a monthly tracking error of less than 10%.

2. Market Cap/Liquidity Screening

We select stocks with:

-A market capitalisation of $200m US or higher

-Liquidity of $10m US or greater

This gives us a field of around 400 stocks, from which we will then narrowdown further by screening for Gender Diversity

3. Screening Against Gender Diversity Criteria

Quantitative Screen: % of Women Directors

• Company to have absolute minimum of 15% female directors

• Also to exceed home country’s average % of women directors by 20%+

• We seek to raise the minimum % of women directors over time- by 20% over 3-5 years

• Exception: quota countries, ie. Norway

Qualitative Screen: Company Policy Evaluation

1. Company should have policies that work regarding:

• Career Advancement- mentoring, women’s networks, female employee attraction/retention

• Maternity- Flexible hours, childcare, good maternity leave

• Equal Pay for Equal Work

Example : Dow Chemical and Gender Diversity

Quantitative Screen: % of Women Directors

• 15.2% of Fortune 500 Directors are women (Catalyst, 2009).

• Thus our US minimum should be 18.2% (20% greater than 15.2%).

Dow Chemical has 23% (3/13) Women Directors

Qualitative Screen: Firm Policies

• 70% of employees take advantage of flexitime

• Women’s mentoring and inclusion network since the 1980s

Won awards from NAFE and Working Mother magazine for policies towards female employees

4. Portfolio (Model)

GeneralModel

Portfolio S&P 500

Number of Stocks 37 500Average Beta 1.02 1.00Median Beta 1.04 1.00Average Market Cap (BUSD) 27.5 16.0Median Market Cap (BUSD) 14.0 6.5

Profitability/Value/GrowthModel

Portfolio S&P 500

ROC 15.5 12.6P/E 14.3 9.6P/CF 9.0 6.1P/S 1.5 0.8P/B 2.5 1.5Oper Income Growth 16.3 12.5Net Sales Growth 11.9 10.7

Performance (%)Model

Portfolio S&P 500

Average Performance 1-Mo 10.9 9.1Average Performance 3-Mo 23.5 17.4Average Performance 6-Mo 61.2 37.4Average Performance 1-Yr 8.8 -7.6

B/S Strength Debt/Equity 13% 36%Altman's Z-score 5.2 2.9Interest Cover Ratio 18 9

Our Model Portfolio Consistently Outperforms

PERFORMANCE (in LOC) STATISTICS

Model Portolio

MCSI World Dev'd Difference

Model Portolio

MCSI World Dev'd

Aug-09 5.2% 4.1% 1.0% Volatility 22.1% 26.9%

2009 YTD 17.9% 23.9% -6.0% Tracking Error 9.4%

2008 -19.6% -41.2% 21.6% Correlation 0.95

2007 19.5% 9.4% 10.0% Alpha 0.3%

Beta 0.82

Ann. Return Since 29/12/2006 4.0% -7.8% 11.8% Sharpe Ratio 0.02 -0.42

Information Ratio 1.11

Weekly data since 31/12/2006

Performance of Model Portfolio vs Benchmark since 31/12/2006

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Example Investment Case: Hennes & Mauritz

Performance: Y-T-D 1-Mo 3-Mo 6 Mo 1-YrHENNES & MAURITZ AB-B SHS 32% 0% 10% 26% 32%MSCI Daily TR Net World USD 26% 7% 19% 51% -5%

Profitability: Market Cap:CEO: Rolf Eriksen Return on Capital 44% 333.1 Billion SEK

Return on Equity 44%Sub-sector: Apparel RetailBloomberg Ticker: HMB SS Growth: Valuation:Current Price: 398.5 SEK 5-Yr CAGR Operating Margin 17% P/E 21.9No. Females on Board: 5/11 45% 5-Yr CAGR Net Sales 13% Est. P/E 21.2

P/Book Value 10.5Company Description: Balance Sheet: P/Sales 3.4

Leverage -7% P/Cash Flow 19.1Altman Z-Score 19.2 PEG 1.70Interest Cover Ratio (x) 2,649.8 Div Yield 3.9%

Beta 0.81

Investment Case:

Well positioned in resilient value segment

Tremendous profitability (ROC 45%)

Defensive due to very strong B/S

Managing growth well Flexible Manufacturing System

Hennes & Mauritz AB (H&M) designs and retails fashions for women, men, teens, and children. The Company sells a variety trendy, sporty, and classic garments in addition to accessories such as jewellery, bags, and scarves, and cosmetics.

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Risk Management - Overview

Soft stop 10% Hard stop 20%

Goldman Sachs (AA3/AA-) is only counterparty

Adjust according to market conditions

80% of positions can be liquidated in 1 day

Correlation management, diversification across countries, sectors and market caps.

Risk Management

Stop Loss

Low counter-party risk

Value at risk,

Volatility

Low liquidity

risk

Diversifi-cation

Monitor absolute and relative performance

Risk Guidelines – Portfolio Construction

Risk Type What We Measure General Guidelines

Portfolio Volatility Annualized Volatility, Value at Risk

In line with market<3% daily

Sector Exposure Sector Exposure Max 30%

Country Exposure Country Exposure Max 40%

Concentration Risk # Positions 20-60

Position Sizing Individual Position 1%-7%, Max 8%

Liquidity Daily Avg Trading Volume Position Liquidity

Must be in/out <3 days with <25%

Currency Hedging Exposure by Currency Hedge when appropriate

Risk Guidelines – Safeguards

Mandatory Position Reviews 10% loss on absolute basis or relative to sector benchmark 20% loss on absolute basis or relative to sector benchmark

Continuous Monitoring of: Significant corporate actions (e.g. M&A, mgt changes, insider transactions) Earnings surprises High short interest levels

Monthly Risk Review Meeting with Investment Committee Is risk level appropriate for target returns and market conditions? Risk officer reports on compliance with risk allocations and strategy

objectives whilst evaluating risk at the fund level.

Operational Controls

Strong Internal Controls “Best practices” institutionalized Independent third party fund administrator (monthly NAV)

Monthly Investor Disclosure Performance estimates at month-end +1 day Final performance figures no later than month-end +6 days Portfolio composition by country, sector, market cap

Monitoring of counterparty exposure Trading counterparties Prime brokerage counterparties

Risk Monitoring Models

How much risk are we taking? Evaluate portfolio exposures unadjusted and beta adjusted Monitor VAR and Volatility (algorithmics) 20% loss on absolute basis or relative to sector benchmark on a

weekly basis.

What kind of risk are we taking? Sector Country Currency Style (e.g. growth vs value, size of market cap)

Strict Buy / Sell Discipline

BUY

SELL

Pass screens and fundamental analysisRebalancing quarterlyStrive for roughly equally-weighted positions of 1.5% to 2.5% of NAV If more candidates than open positions -> subjective choice by the fund manager.

At quarterly rebalancing, sell if screening criteria no longer fulfilledCut back or sell if position > 2.5% of AUM (with exceptions but max 4%)Cut back or sell if substantive corporate action taken (e.g. bought up, capital raising, stock suspended, etc.)At fund manager’s discretion

Section 7. Fund Structure

Global listed equity investments

With strong gender diversification

Naissance Women’s Leadership

Fund

Investor

AdministratorIntercontinental Trust

AuditorDeloitte & Touche

Custodian/BankJefferies & Co.

Legal counselOgier

Investment ManagerNaissance IM Ltd

Investment AdvisorNaissance Capital Ltd

Cayman IslandsSwitzerland

Terms & Conditions

Naissance Women Leadership Fund

Appendices

Appendix I - Reference List

Adams and Ferreira (2008) looked at the fraction of women on the board of directors of S&P 500, S&P MidCap, and S&P SmallCap firms. They found that women have a positive impact on board governance; in particular diverse boards appear to be tougher monitors. After controlling for omitted variables and reverse causality Adams and Ferreira concluded that diverse boards are particularly valuable for companies with weak governance. Carter et al. (2003) examined the relationship between board diversity in the broader sense (including women and minorities) and firm value for Fortune 1000 firms. They found significant positive relationships between the fraction of women (or minorities) on the board and firm value after controlling for size, industry, other corporate governance measures, and for the direction of causality. Catalyst (2004) analyzed the link between gender diversity on top management teams and companies’ financial performance for Fortune 500 firms. Catalyst came to the conclusion that a positive correlation between gender diversity and financial performance exists, whereas the causality for this effect remains unclear.Erhardt et al. (2003) studied the relation between demographic diversity on boards of directors and firm financial performance and concluded that board diversity (i.e. board representation of women and minorities) is positively associated with firm performance. Jurkus et al. (2008) investigated gender diversity in the top management of Fortune 500 firms and concluded that it is positively associated with both firm performance and stock valuation. This evidence holds even after controlling for a sample-selection bias and for an endogenous relation. However, their study also found that the positive impact of gender diversity is only significant for what they call “women-exclusive work environments”. Smith et al. (2005) – one of the few studies from outside the US – examined 2500 Danish companies and reported that the proportion of women in top management has a positive impact on firm performance, even after controlling for numerous firm characteristics and direction of causality. Their study also showed that this relationship depends significantly on women’s qualifications.

Disclaimer

This presentation (‘presentation’) is for informational purposes only and does not create a commercial relationship between the user and Naissance. The presentation contains forward-looking statements and opinions. By their very nature, these statements and opinions are subject to uncertainty and involve inherent risks. Predictions, forecasts, and other outcomes described or implied may not therefore be subsequently achieved. Information contained in the presentation does not constitute a solicitation to buy or an offer to sell shares in any of the investment products described herein. Access to such investment products may be restricted to individuals in certain jurisdictions. You should not proceed further unless in your relevant jurisdiction, the information contained herein can be made available to you without contravening legal or regulatory requirements. The investment products described in this presentation may follow strategies that are speculative and involve a high risk of loss. Shares in the investment products can go up as well as down, and a favourable performance record is no indication of future performance. Information in this presentation is based on data provided by sources believed to be reliable. The advisor has not independently verified these data, and makes no representation as to the accuracy, reliability or completeness of this information; The advisor will not be held liable under any circumstances for any direct or indirect loss or damage suffered as a result of the use of this information.

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