City wire recovery presentation september final

Rathbone Recovery Fund

Citywire Wealth Manager Retreat Conference Rathbone Recovery Fund - James Baker, Assistant Fund Manager

Greg Mullins, Sales Director

Helen van Heesewijk, Associate Director - Sales

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Agenda

Introduction

Our definition of recovery

Key investment characteristics

Areas of investment

Historic performance

Appendix

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Introduction

• Over 30 years’ equity market experience

on both the buy and sell-sides.

• Renown for his considerable expertise in

mid to small-cap stock selection.

• James works alongside co-managers of the

Rathbone Recovery Fund Julian

Chillingworth and Marina Bond

Marina Bond

Small and Mid-

cap specialist

Julian

Chillingworth

Large-cap specialist

James Baker Small and Mid-cap specialist:

Specialist mid and small-cap expertise

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Our definition of recovery

Business transformation & management change

Macro/cyclical

Stock specific

Fashion

A focused fund with the freedom to invest across a wide universe

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Key investment characteristics

Revenue growth & visibility

Margin & cashflow

Balance sheet

Management

“… finding a company whose potential recovery-value is not

appreciated by the market”

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Key investment characteristics

Valuation

Portfolio Construction

Company Meeting

Qualitative assessment of management

Fundamental Analysis

Top down/bottom up: Macro, Industry, Stock Forensic financial analysis

Idea Generation

Brokers Management Teams

BUY WATCHLIST

Reject?

Reject?

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Areas of Investment Blinkx - £547m Market capitalisation

Business: Blinkx has developed an internet search engine, which sources online video clips

for websites like AOL and ASK. It monetises this service by attaching adverts to these video

clips, sharing the revenue with its content providers and the web publisher using its search engine.

Source: Internal.

Criteria:

Opportunity: Stock-specific - De-rated after two poorly explained acquisitions and a profits

warning in early 2012.

High growth, high margin

Data Source: Factset

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Areas of Investment SQS Quality Software - £118m Market capitalisation

Business: SQS is a software testing business. Recently it has repositioned itself from providing

ad hoc testing services to customers, to offering a managed testing service to major clients on

long term contracts. This new model has improved both revenue visibility and margins.

Furthermore it has begun partnering major software vendors like Siemens, testing their new

products and codes prior to sale. This strategy has enabled SQS to on-sell its services to Siemens

own customers and expanding out of its traditional European market into the USA.

Source: Internal

Criteria: Revenue growth and improved visibility

Opportunity : New management , business transformation

Data Source: Factset

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Areas of Investment Wilmington - £184m Market capitalisation

Business: Wilmington has transformed itself in recent years from an advertising dependent publisher

of business-to-business magazines, to a subscription based provider of online business information. It

provides business critical information into the Legal, Insurance, Compliance and Health markets.

Source: Internal

Criteria: Revenue visibility, high margin, management

Opportunity: Business transformation, management change

Data Source: Factset

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IMA sector

average

Rathbone

Recovery

10

30

50

70

90

10 12 14 3

yea

rs c

um

ula

tive

per

form

ance

(%

) 3 year annualised volatility (%)

IMA sector

average

Rathbone

Recovery

10

15

20

25

30

35

40

6 8 10 12

1 y

ear

cum

ula

tive

per

form

ance

(%

)

1 year annualised volatility (%)

Historic performance risk v return

Data Source – Financial Express. Data to 30/09/2013, net income reinvested.

*Rathbone Recovery Fund launched on 13 July 2009

Past performance should not be seen as an indication of future performance

One Year

Three Years

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Source: Data Source – Financial Express. Data as at 30/09/2013, net income reinvested. Based on R-class units

*Rathbone Recovery Fund launched on 13 July 2009

Past performance should not be seen as an indication of future performance

Historic performance

Performance % 6 mths 1 yr 3 yrs Launch*

Rathbone Recovery Fund 9.96 23.53 47.02 108.7

IMA UK All Companies Sector 6.26 22.49 36.48 91.5

Quartile 1 2 1 1

Rank 47/278 105/276 52/262 55/253

FTSE All Share -Index 3.84 18.93 33.36 85.74

The Rathbone Recovery Fund is a vehicle for all stages of the economic cycle

Sharpe Ratio 6 mths 1 yr 3 yrs Launch*

Rathbone Recovery Fund 1.62 2.22 1.08 1.25

IMA UK All Companies Sector 1.00 2.26 0.81 0.99

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Appendix

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Portfolio breakdown

Data source: Rathbones, data as at 30/09/2013

Top 5 FTSE 100 Top 5 FTSE 250

Top 5 Small-cap/AIM

Unilever 3.29

WPP 3.24

BG Group 2.92

Melrose 2.42

Aberdeen Asset Management 2.26

Booker 3.77

Senior 3.12

Hansteen Holdings 2.92

Synergy Health 2.43

Aveva Group 2.25

Clarkson 2.69

Sanofi 2.56

Daily Mail 2.26

GB Group 2.25

Advanced Medical Solutions 2.13

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FTSE 100, 24.15

FTSE 250, 28.74 FTSE Small Cap,

11.58

FTSE AIM and

other UK, 22.01

Europe, 3.67

Cash, 9.85

Oil & Gas, 9.71

Basic Materials, 5.98

Industrials, 18.49

Consumer Goods, 3.29

Health Care, 8.40 Consumer Services,

18.14

Telecommunications,

1.29

Financials, 14.40

Technology, 10.46

Cash, 9.85

Portfolio breakdown

Data Source: Rathbones. Data as at 30/09/2013

Capitalisation Split

Sector Split

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James Baker Assistant Fund Manager

James with over 30 years’ equity market experience on both the buy and

sell-sides joined Rathbones in October 2012.

Specialising in mid and small-cap stock selection, James was brought into

the Rathbone Recovery Fund team for his expertise to work alongside co-

managers Julian Chillingworth and Marina Bond.

He has worked for several organisations in this field including Capel-Cure

Myers, ABN Amro, and most recently, Collins Stewart.

James graduated from the University of Cambridge with a BA Honours

degree in History.

True mid and small cap expertise

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Julian Chillingworth Chief Investment Officer

Over 30 years’ experience managing equity and balanced portfolios -

both institutional and retail.

Co-Manager of the Rathbone Recovery fund working alongside Marina

Bond and James Baker.

Prior to joining Rathbones 10 years ago he ran the Pensions and

Charities subsidiary of Hambros/Investec.

Gross funds business, assets in excess of £6bn.

True large cap expertise

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Marina Bond Fund Manager, Investment Director

Co-Manager of the Recovery Fund, working alongside Rathbones CIO

Julian Chillingworth and James Baker.

Previously, she managed the Rathbone Smaller Companies Fund, and in

July 2009, undertook the merger of the Rathbone Special Situations Fund

into Smaller Companies Fund to form the Rathbone Recovery Fund.

Marina joined Rathbones in 2000, and has 12 years’ experience of

analysing small and mid-cap companies.

She holds the Investment Management Certificate and the Securities

Institute Diploma. She is also a Fellow of the Securities Institute.

True mid and small cap expertise

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Important Information

The information contained in this presentation is for use by investment

advisers and is not intended for circulation to clients or to the general public

Past performance should not be seen as an indication of future performance.

The value of investments and the income from them may go down as well as

up and you may not get back your original investment.

Rathbone Investment Management and Rathbone Unit Trust Management are authorised and regulated by the

Financial Conduct Authority and Rathbone Unit Trust Management is a member of the IMA.

Rathbone Unit Trust Management Limited : Registered Address 1 Curzon Street, London, W1J 5FB

Registered No. 02376568 - A Member of the Rathbone Group.

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For guidance, call:

0207 399 0399

Or email:

[email protected]

The Website: www.rutm.com

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