2 Today’s discussion About the IFM Global Group A profile of our asset classes
3 About the IFM Global Group IFM manages $46 billion . . .. . . across four asset classes . . .. . . in three of the four largest pension markets in the world.IFM AUM BY ASSET CLASS$bn, 30 June 2013Debt 14Private Equity 2Listed Equities 14Infrastructure 16$46b* FUM figures at 30 June 2013.
4 About the IFM Global Group We do this for a range of leading wholesale investor brands that have a long term investment focus.30 of them are shareholders, which provides for a unique ownership structure . . .. . . and a philosophical alignment that ultimately focuses on the member investor.Superannuation fundsNon-super investment fundsGovernment authoritiesUniversitiesNot-for-profit foundationsUS Taft-Hartley fundsUS endowment funds
6 CEO and Board Chief Executive Board Members Brett Himbury joined IFM in April Brett’s experience spans 30 years in the financial services industry. Most recently he was Managing Director of Tyndall Investment Management, the funds management business of Suncorp. Prior to that he held a range of leadership roles across the Funds Management and Financial Planning sectors, and with this diversity of experience brings a strong track record and unique insight to IFM.ChairmanDirectorDirectorDirectorDirectorDirectorGarry Weaven Chair and Founder of IFM, Chair of Pacific Hydro, Director of Members Equity Bank. Appointed to the Federal Government’s Superannuation Advisory Committee in 2008, and to the Australian Securities and Investments Commission’s External Advisory Panel in Assistant Secretary of ACTU in the 1980s.Brian Pollock Director of Industry Super Holdings, Members Equity Bank, AE Smith & Son and Chair of the Macquarie Real Estate Equity Fund series of companies. Former chair of Becton Property Group and former director of Programmed Maintenance Services. Former Head of Property Investment and former Executive Director Property and Lending at National Mutual. Former Chairman of Clive Peeters and Former Chairman of Industry Super Property Trust.Michael Migro Head of Business Strategy (BT Funds Management), Joint Managing Director (Westpac Financial Services), CEO (Perpetual Funds Management and Principal Global Investors Australia), and most recently in the USA as COO (Principal Global Investors) and President and Chief Operating Officer (Post Advisory Group LLC). Also a Director of Industry Fund Services and the Investment Committee of the Steve Waugh Foundation Australia.Murray BleachFormer Head of North America for Macquarie Bank (US) and former Global Head of Macquarie's Private Placements Group (Aus).Glenn BunneyChief Executive in industrial and human services, Trustee Director with HESTA, Director of ISPT and IGIPT. Member of the IFM IAB. Director and Board office on several not-for-profit Boards at State, National and International levels.Linda RubinsteinFormer Chair of the Australian Government Employees Superannuation Trust (AGEST). Former union nominee to the board of HOSTPLUS and ACTU nominee to the Board of Cbus. Has part-time role with Holding Redlich as Director of the firm’s Pro-Bono practice.
7 Collective excellence for individual investors IFM’s Strategic GoalsMeet or exceed return objectives across all products over rolling five year periodDouble our preferred partners with like minded parties across multiple markets in five yearsGrow profit to reinvest in capabilitiesRetain, develop and motivate people who achieve excellenceIFM’s Cultural FoundationsPrioritise InvestorsAchieve ExcellenceInspire InnovationRespect EveryoneLead by Example
8 The future – challenging, exciting... potentially exceptional Volatile, generally low growth investment marketsDeliver superior performance across all asset classesBuild scale and commensurate investor benefits by selectively diversifyingContinue to innovate to meet evolving investor needsPrivate EquityPrivate AssetsGlobal Infrastructure DebtAustralian InfrastructureSpecialised Small CapsRetain and leverage our unique model of ownership.
9 Leadership in Infrastructure, Listed Equities, Debt and Private Equity About the IFM Global GroupA profile of our asset classess
10 A closer look at IFM Infrastructure IFM FUM ASSET CLASS AND SECTOR BREAKDOWN$Bn, 30 June 2013IFM invests $16 billion in Infrastructure assets . . .. . . split across Australian and international funds in open-end structures . . .. . . successfully sourcing, building and managing a diversified portfolio.One of the world’s largest global infrastructure manager with 26 assets worldwideStrong deal pipeline both locally and globallyTeam of 47 infrastructure professionals in Australia, North America and Europe79 investors with dependable capital sources18 year track record has returned 12.1% pa (net of fees and tax) since inception*Established infrastructure portfolio diversified across industry sectors and geographical regionsOpen end fund structure aligned to the long-term characteristics of the asset classDebtListed EquitiesInfrastructurePrivateEquity44% Australia56% International* IFM Australian Infrastructure Fund from 1 August 1995 to 30 June 2013.Infrastructure AUM amounts include undrawn investor commitments and all infrastructure cash holdings
11 39 board seats on 26 assets across a range of industry sectors Australian Infrastructure Fund18 assetsInternational Infrastructure Fund8 assetsKM(Brief review – audience knows our global portfolio; use talking points only if necessary)Two portfolios: Australian and GlobalAustralian portfolio has a mix of economic and transportation assetsGlobal portfolio owns no transportation (because pricing has not been attractive)But together, we demonstrate broad experience across sectors and through time.Current Assets18Total NAVAU$6.6bnCurrent Assets8Total NAVAU$5.9bn/ US$5.4bnInfrastructure NAV amounts exclude undrawn investor commitments and feeder fund cash holdings
12 IFM Australian Infrastructure Fund assets InvestmentDescriptionYear AcquiredLocationIFM InterestRenewable electricity generation1996Australasia, Chile and Brazil100%Airport1997VIC23.7 %QLD18.9%WA3.2%Toll road1998NSW15.4%200014.4%2001NT77.4%2002SA12.8%Electricity generation2003 / 2008Transport hub /PPP2003IFM InterestWater treatment (PPP)70.0%School buildings (PPP)Public sector housing (PPP)2005Law courts (PPP)2006Aged care facilities (PPP)Defence Headquarters (PPP)2008ACTSeaport201026.7%Seaports201335.1%
13 IFM International Infrastructure Fund – portfolio Diversified portfolio of stable assets across Europe and the USUSUKCONTINENTAL EUROPEAcquired200720082006Acquired200420062013Acquired2010(1)2010Dalkia Polska investment was made in 2010 following on from the 2006 acquisition of Dalkia Łódź
14 Global Infrastructure Team PIONEER GLOBAL MANAGERLeading global infrastructure managerSpecialists in Australia, Europe and North AmericaLong-term, like minded investor base with a dependable capital source18 year track record has returned 12.1% p.a. since inception*Established portfolio diversified across industry sectors and geographical regionsOpen-end fund structure aligned to the long-term characteristics of the asset classStrong deal pipeline both locally and globallyIFM Infrastructure heads – each with 20+ years infrastructure experienceKyle ManginiGlobal Head of InfrastructureMichael HannaHead of Infrastructure – AustraliaChristian SeymourHead of Infrastructure – Europe26 direct equity investments39 board seatsReal time insight and informationAlec MontgomeryHead of Infrastructure – North America*IFM Australian Infrastructure Fund from 1 August 1995 to 30 June 2013 after fees and taxes.
15 A closer look at IFM Listed Equities IFM manages $14 billion in listed equities . . .. . . split across indexed, enhanced indexed and active products . . .. . . managed by teams of experts, with a robust investment processes, supported by proprietary systems.IFM FUM BY ASSET CLASS ($b)BREAKDOWN OF LISTED EQUITIES INVESTMENTS ($m)PrivateEquityExperienced investment teamsGenuine long term investors with a clear focusRobust investment processesProprietary systemsTrack record of long term outperformanceStrong focus on ESG2Listed Equities14Debt14InfrastructureEquity16As at 30 June 2013.
16 Listed Equities – Passive STRONG, EXPERIENCED TEAMFull replication to benchmark with targeted enhancements (e.g. arbitrage opportunities, IPOs, placements, flows, off market buy backs)Funds designed to pool investors with similar tax profiles (tax exempt, superannuation, tax paying)Focus on net returns to investors (after fees and tax)Consistent long-term performanceAidan PuddyExecutive Director, Listed Equities20 years experienceLaurence IrlichtInvestment Director, Listed Equities16 years experienceTravis HooperAssociate12 years experienceGavin PetrieInvestment Associate10 years experienceIFM Proxy & Engagement Committee (PEC)Clyde Haldane (Chair), Aidan Puddy, Neil Carter, Mark Zirnsak, Azhar Abidi
17 Listed Equities – Strategic STRONG, EXPERIENCED TEAMIdentify companies that stand out as superior capital investorsUnique selection criteria – Return on Equity (RoE) Impulse plus quality overlay drives buy/sell decisionsTrue ‘buy and hold’ strategy – genuine long-term investors with a clear focusConcentrated, high conviction portfolio (number of stocks typically in range of 15 to 25)Strong focus on ESGClyde HaldaneExecutive Director, Listed Equities24 years experienceDavina MachinInvestment Director, Listed Equities17 years experienceTravis HooperAssociate12 years experienceIFM Proxy & Engagement Committee (PEC)Clyde Haldane (Chair), Aidan Puddy, Neil Carter, Mark Zirnsak, Azhar Abidi
18 Listed Equities – Small Caps LEADING TEAM WITH STRONG TRACK RECORDHighly experienced team with excellent track recordStyle agnostic Australian small caps portfolioFocussed and rigorous fundamental researchDisciplined portfolio construction processStrong alignment of interestsNeil CarterExecutive Director, Listed Equities – Small Caps15 years experienceJim CoplandInvestment Director, Listed Equities – Small Caps13 years experienceMatt GriffinAssociate4 years experienceAlex BibaniInvestment Analyst9 years experienceIFM Proxy & Engagement Committee (PEC)Clyde Haldane (Chair), Aidan Puddy, Neil Carter, Mark Zirnsak, Azhar Abidi
19 A snapshot of IFM Debt Investments IFM manages over $14bn of debt . . .. . . across the debt risk/reward spectrum . . .. . . via a specialist team with deep experience across the debt spectrum.Experienced debt specialistsRecognised, niche credit market playersSuperior, rigorous bottom-up credit skills within a global macro economic environmentDisciplined processStrong access to deal flow through our networkTrack record of long term outperformanceAligned interests – IFM’s ‘raison d’être’; to create products that make sense and are good value for our investorsIFM FUM BY ASSET CLASS ($bn)BREAKDOWN OF DEBT INVESTMENTS ($bn)* Across one fund and seven mandatesFUM figures at 30 June 2013Figures may differ due to rounding.
20 A closer look at Debt Investments Robin MillerGlobal Head of Debt Investments25 years experienceSimon TungAssociate Director17 years experienceSOLID BLEND OF EXPERIENCE AND SKILLSDeep market knowledgeStrong networks providing access to deal flowRobust process with strong credit disciplinesProduct range that covers the risk / reward spectrumScott BarkerExecutive Director18 years experienceDarren PascoAssociate Director17 years experienceDavid CooperExecutive Director (UK)17 years experienceLillian NunezAssociate Director19 years experienceBruce PottsInvestment Director30 years experienceNick ZannisAssociate9 years experienceCashVanillaCreditKevin LewisInvestment Director22 years experienceHiran WanigasekeraAssociate ((UK)8 years experienceLow return High liquidityHigh return Low liquidityLinda CunninghamInvestment Director19 years experienceHuiyi (Stella) WangInvestment Analyst7 years experienceLong-term assets suited to investors with a long- term outlookLloyd MitchellInvestment Analyst6 years experienceHannah LindbergInvestment Analyst ((UK)6 years experience
21 A closer look at IFM Private Equity IFM manages $2 billion in Private Equity . . .. . . across Australian and international private equity . . .. . . managed by an expert team.IFM FUM BY ASSET CLASS$Bn, 30 June 2013BREAKDOWN OF PRIVATE EQUITYCommitments A$BnExperienced teamNine private equity specialistsFocus on growth and transformationActive, engaged, niche investorGlobal networkIn-house legal and tax expertisePrivateEquityInfrastructureDebtListed Equities* FUM figures at 30 June 2013.
22 Private Equity STRONG TRACK RECORD IN PRIVATE EQUITY INVESTING Conviction investingSteven LipchinHead of Private Equity26 years experienceWayne PhillipsInvestment Director16 years experienceMultiples focus rather than internal rate of returnIntensive ‘Bottom Up’ Due DiligenceAlignmentActiveEngagement‘for the life ofinvestment’Global HurdleGareth AdamsInvestment Director19 years experienceAnna MorrisonInvestment Director15 years experienceJames LeosInvestment Director20 years experienceShane McKenzieAssociate15 years experienceSean LokeAssociate12 years experience
23 Our investment results are strong - investment results to 30 June 2013 Fund/Benchmark1 yearSince inceptionIFM Australian Infrastructure (after fees and tax) – inception Aug ‘95Obj – 10% pa over rolling three year periods12.1%10.0%IFM International Infrastructure (after fees and tax) – inception Dec ‘0414.4%7.5%IFM AFIF Long (including franking, after fees, before tax) – inception Jun ‘99UBS Australian Composite Bond Index6.6%2.8%7.9%6.4%IFM AFIF Short (including franking, after fees, before tax) – inception Jul ‘05UBS Australian Bank Bill Index9.6%3.3%6.7%5.2%IFM Transaction Cash Fund (after fees, before tax) – inception Mar ‘083.7%5.0%4.7%IFM Strategic Australian Equities Fund (after fees) – inception Jul ‘08S&P/ASX 200 Accumulation Index17.5%22.8%1.4%IFM Enhanced Indexed Australian Equities Portfolios (after fees) – inception May ‘03Benchmark – relative in accordance to client mandates23.6%23.8%9.9%IFM Wholesale Small Caps Fund (after fees) – inception Mar ‘12S&P/ASX Small Ords Accumulation Index12.4%-5.3%-2.9%-16.0%IFM Australian Private Equity Fund IV (IRR, after fees, before tax) – inception Feb ’07 S&P/ASX All Ordinaries Accumulation Index15.9% %7.5% 0.9%IFM International Private Equity Fund III (IRR, after fees, before tax) – inception Oct ‘07 MSCI World ex Australia in USD4.3% %3.7% 0.4%
24 Integral to our approach is a strong focus on responsible investment In-house expertise1EngagementExternal representation32Carbon footprintWorkplace safetyBoard reviewsDedicated Director, Sustainability and Responsible Investment appointed to deliver on environmental, social, governance issues in acquisitions, and in the management of the existing assets and portfolios.Speaker at the PEI Responsible Investment Forum (New York) and moderating the PRI infrastructure webinar in June 2011.The PRI has showcased IFM as a “best practice” case study in its 2010 Report on ProgressEngagement has become genuine dialogue rather than a confrontation that does and is continuing to bring about improvement in ESG issues.Mark Zirnsak, an independent expert for IFM on ESG matters, is currently a Director, Justice and International Mission Unit, Synod of Victoria and Tasmania, Uniting Church in Australia.. Mark has been responsible for engagement with companies to ensure compliance with the Synod Ethical Investment Policy since 2004.IFM’s Director Responsible Investment is the Chair of the PRI infrastructure Steering Committee and we have been a signatory since 2008.Other members of the committee include PGGM (Holland), ATP (Denmark), Caisse des Depots (France) and Capital Innovations (US).IFM is a member of the Investor Group on Climate Change (IGCC) .In 2010, IFM worked with the IGCC to prepare its submission to the Australian Federal government on its redesign of the renewable energy target.
25 Summary COLLECTIVE EXCELLENCE FOR INDIVIDUAL INVESTORS Unique ownership model offering alignment of interestsExperienced, focused and specialist investment teams with a strong track recordLong-term strategic investment approach across all asset classesRigorous disciplined processes that marry investment and market knowledgeStrong, global networksFocus on responsible investment
26 Contact IFM Offices www.ifm.net.au Eddy Schipper Executive Director - Business DevelopmentPhone: +61 (3)Charles BrooksDirector - Business DevelopmentPhone: +61 (2)Lucy LiuManager - Business DevelopmentPhone: +61 (3)IFM OfficesMelbourneLevel 29 Casselden2 Lonsdale StreetMelbourne, VIC 3000AustraliaSydneyLevel 2, 50 Pitt StreetSydney, NSW 2000New York99 Park AvenueSuite 1920New York NY 10016USALondon3rd Floor60 Gresham StreetLondon EC2V 7BBUnited KingdomBerlinEichenstraße 3A12435 BerlinGermanyThe following disclaimer applies to this document and any information provided regarding the information contained in this document (the “Information”). By accepting this document and Information, you agree to be bound by the following terms and conditions. The Information does not constitute an offer, invitation, solicitation or recommendation in relation to the subscription, purchase or sale of securities in any jurisdiction and neither this presentation nor anything in it shall form the basis of any contract or commitment. This Information is provided to you on the basis that you warrant that you are a “wholesale client” or a “sophisticated investor” or a “professional investor” (each as defined in the Corporations Act 2001 (Cth)) to whom a product disclosure statement is not required to be given under Chapter 6D or Part 7.9 of the Corporations Act 2001 (Cth). Industry Funds Management Pty Ltd (“IFM”) shall have no liability, contingent or otherwise, to any user of the Information or to third parties, or any responsibility whatsoever, for the correctness, quality, accuracy, timeliness, pricing, reliability, performance or completeness of the Information. In no event will IFM be liable for any special, indirect, incidental or consequential damages which may be incurred or experienced on account of an attendee using Information even if it has been advised of the possibility of such damages. Certain statements in the Information may constitute “forward looking statements”. These statements involve subjective judgement and analysis and reflect IFM’s expectations and are subject to significant uncertainties, risks and contingencies outside the control of IFM which may cause actual results to vary materially from those expressed or implied by these forward looking statements. Attendees are cautioned not to rely on such forward looking statements. This Information does not constitute investment, legal, accounting, regulatory, taxation or other advice and the Information does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the Information. This Information is confidential and should not be distributed or provided to any other person without the written consent of IFM.Industry Funds Management Pty Ltd, ABN , AFS Licence NoIndustry Funds Management (Nominees) Limited, ABN , AFS Licence No , RSE Licence No. LIFM Infrastructure Funds, ABNIFM International Private Equity Fund I, ABNIFM International Private Equity Funds, ABNIFM International Private Equity Fund III, ABNIFM Listed Equity Funds Pooled Superannuation Trust, ABNIndustry Funds Management (UK) Limited, Company No , FSA Licence NoIFM Global Infrastructure (UK) GP Limited, Company NoIndustry Funds Management (US), LLCIFM (US) Investment Advisor, LLC, CRD No , SEC File NoIFM Global Infrastructure (US) GP, LLC