1. 1 Mutual Funds in Russia: Developments and Prospects April 23, 2003 PIOGLOBAL Asset Management

2. 2 Mutual Funds in Russia: Developments and Prospects PIOGLOBAL Our Success in the Russian Market  Established Financial Services and Real Estate operations  Disciplined institutional strategies that capitalize on internal skills, experience, and research capabilities  More than $100 million in assets under management in PIOGLOBAL funds  Controls 20% of the Russian open-end unit fund industry  Proven Russian performance and the best customer service in the market  Extensive nationwide network of contacts  Over 60 highly qualified Russian and Western employees  Named #1 Asset Management Company in 2002 by rating agency RosBusinessConsulting, Business Open and Euromoney PIOGLOBAL Asset Management

3. 3 Mutual Funds in Russia: Developments and Prospects Positive developments  Political stability, previously undreamed of  Improving fundamentals (stable exchange rate, reduced inflation, budget surplus, trade surplus)  Unprecedented pace of structural reforms  Growing domestic and foreign investment, capital flight curtailed  Growth in real earnings and increased consumer confidence  Foreign debt repaid ahead of schedule Possible concerns  Global slowdown, significantly reduced demand for energy and metals, expectations of declining oil and metals prices  GDP growth slowdown  Weak banking system  Although maturing, the Russian political system remains very dependent on personalities Russian economy today Strengths and concerns PIOGLOBAL Asset Management

4. 4 Comprehensive tax reform Restructuring natural monopolies  Flat personal income tax at 13%  Simplified corporate profit tax at 24%  Jump in profit tax receipts, reflecting reform in force  Gas and electricity markets to be liberalized  Establishment of Electricity Trading System Administrator  Tariff hikes up to 35%, and repeated policy commitment to at least the same level of real increases in 2003 and beyond Pension reform  Pension reform introduced in 2002  Law on Investing Pension Reserves effective from 2003  Establishment of individual pension accounts Russian Reforms in Progress PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

5. 5 Financial changes  Stable growth in currency reserves  Currency regulation will be liberalized  Opportunity for the Russian citizens to invest in foreign assets and open accounts with foreign banks WTO and deregulation  Faster WTO acceptance is the main benefit to be reaped  Small business licenses and regulations simplified  Improved rate of small business creation  In June 2002 Russia was awarded the status of market economy by the US  In November 2002 Russia was awarded the status of developed economy by the EU Corporate governance  In 2003 corporate governance is expected to continue to improve  We expect to see further developments in areas such as disclosure and appointment of independent directors PIOGLOBAL Asset Management Russian Reforms in Progress Mutual Funds in Russia: Developments and Prospects

6. 6 Russia Stands Tall Selected GEM Indicators PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

7. 7 RTS Market in 2001-2002 and 1Q2003 PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

8. 8 Market for Great Business Opportunity  Russia was the world’s second best performing market in 2001-02  Sovereign discounts are set to decline further  Stocks are still inexpensive compared to GEM  Growth is yet to be priced into the markets  Further re-rating is inevitable  Corporate governance is improving  Smart managers and stakeholders will need and want to open up to capital markets PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

9. 9 Stocks are still cheap compared to GEMs Russian valuations relative to global emerging markets PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

10. 10 Growth is yet to be priced into the markets Russian growth relative to GEMs PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

11. 11 Mutual Funds in 2002 International Comparisons PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects Source: Investment Company Institute. International Mutual Funds Survey

12. 12 Mutual Funds in Russia: On the Road to Success  Overcoming of 1998 financial crisis  Robust sales growth  Improved attractiveness of mutual funds  New law on investment funds and regulations  Association of fund managers is playing a very active role PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

13. 13 Mutual Funds in Russia: Favorable Tax Regime  Mutual funds do not pay profit tax  Mutual funds do not pay tax on dividends received  Unit holders do not pay taxes on unrealized capital gains  Income tax of individual unit holders is collected and paid by the Management Company  Legal entities are allowed to reduce taxable income by the cost of the units purchased PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

14. 14 Mutual Funds in 2002-1Q03 Source: National League of Fund Managers, 2003 update PIOGLOBAL Asset Management  Fragmented industry: out of 92 management companies in Russia 42 were registered in 2002 and 10 in 1Q2003  Low barriers to entry: 19 unit funds were registered in 2002 (3 closed, 4 interval, 12 open) – compared to 14 in 2001 and 11 in 2000  Assets are highly concentrated: top 5 companies occupy 91.5% of assets, compared to even higher concentration of 94.29% in 2001  Around 11,100 investors in all funds by the end of 2002 compared to around 6,300 at the end of 2001  Individual investors are still “trading funds” Mutual Funds in Russia: Developments and Prospects

15. 15 Industry: Assets Under Management PIOGLOBAL Asset Management Source: National League of Fund Managers, April 17, 2003 Mutual Funds in Russia: Developments and Prospects

16. 16 Open-End Funds AUM Major Competitors in $80 million Universe PIOGLOBAL Asset Management Source: National League of Fund Managers, April 17, 2003 Mutual Funds in Russia: Developments and Prospects

17. 17 PIOGLOBAL Asset Management Independent Qualitative Rating of Management Companies Source: National League of Money Managers, “Your Money” magazine, April 2003 Mutual Funds in Russia: Developments and Prospects

18. 18 Significant Increase in the Average Purchase Size (in USD) 19992000200120021Q2003 INSTITUTIONAL CLIENTS 7,9266,85515,13117,57443,069 INDIVIDUALS8811,1571,0151,9862,292 PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects Source: PIOGLOBAL Company Data

19. 19 Average Purchase as Function of Investor Age (in RUR) PIOGLOBAL Asset Management  18, <30 Under 18In their 30sIn their 40sIn their 50sOver 60 All Source: PIOGLOBAL primary research. 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000 Mutual Funds in Russia: Developments and Prospects

20. 20 PIOGLOBAL Asset Management “Foreign Roots” – 5% “Past Performance” – 30% High reputation and good brand name – 47% “Other” – 12% “Hard to answer” – 6% Most “Reasonable” Guarantee of Success According to Russian Investor Source: PIOGLOBAL primary research. 4052 respondents. Mutual Funds in Russia: Developments and Prospects

21. 21 PIOGLOBAL Index Fund A unique product in the Russian Market  The first index-based interval mutual fund in Russia. Registered by FCSM on January 22, 2003  A successful combination of two widely-recognized brands of PIOGLOBAL and MICEX  A unique opportunity for investors to enter and exit the market at a low cost  High transparency and diversification  Passive management, free of individual bias  Low costs: management fee 0.5%, overall costs below 1%  Expected dividend yield in the range of 2.0-3.5% PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

22. 22 MICEX Index A widely recognized market tracker  Index - developed and administered by the Moscow Interbank Currency Exchange (MICEX).  Comprised of 18 stocks of the 12 most liquid companies, which represent 90% of the total market  Market Cap weighted  Adjusted for Free Float and Liquidity - two parameters crucial for the Russian market, dominated by closely-held and partly government- owned companies  Calculated on-line and overseen by the MICEX Index Committee which includes members of investment community and PIOGLOBAL representatives. Restated quarterly  The Fund’s portfolio will track the Index and will not deviate from it by more than 3% PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

23. 23 PIOGLOBAL Index Fund Sources of liquidity  The Fund will be open for purchases and redemptions 4 times a year  The Funds units will trade as individual stocks in the secondary market (MICEX and OTC)  Available to a wide range of investors  Accessible in the regions  Lower service fees charged by National Depository Center (in comparison to stocks)  Daily liquidity maintained by market makers  Units will not sell short or be bought on margin PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

24. 24 Mutual Funds: Further Developments  Pension reform  Education of general public  Increasing horizon for individual and institutional investors  Growing distribution network PIOGLOBAL Asset Management Mutual Funds in Russia: Developments and Prospects

25. 25 PIOGLOBAL Asset Management ПИОГЛОБАЛ Эссет Менеджмент PIOGLOBAL Asset Management