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An Overview of IFM September 2013.

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Presentation on theme: "An Overview of IFM September 2013."— Presentation transcript:

1 An Overview of IFM September 2013

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 2013 Debt 14 Private Equity 2 Listed Equities 14 Infrastructure 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 funds Non-super investment funds Government authorities Universities Not-for-profit foundations US Taft-Hartley funds US endowment funds

5 IFM has an impressive 20 year history

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. Chairman Director Director Director Director Director Garry 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 Bleach Former Head of North America for Macquarie Bank (US) and former Global Head of Macquarie's Private Placements Group (Aus). Glenn Bunney Chief 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 Rubinstein Former 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 Goals Meet or exceed return objectives across all products over rolling five year period Double our preferred partners with like minded parties across multiple markets in five years Grow profit to reinvest in capabilities Retain, develop and motivate people who achieve excellence IFM’s Cultural Foundations Prioritise Investors Achieve Excellence Inspire Innovation Respect Everyone Lead by Example

8 The future – challenging, exciting... potentially exceptional
Volatile, generally low growth investment markets Deliver superior performance across all asset classes Build scale and commensurate investor benefits by selectively diversifying Continue to innovate to meet evolving investor needs Private Equity Private Assets Global Infrastructure Debt Australian Infrastructure Specialised Small Caps Retain and leverage our unique model of ownership.

9 Leadership in Infrastructure, Listed Equities, Debt and Private Equity
About the IFM Global Group A profile of our asset classess

10 A closer look at IFM Infrastructure
IFM FUM ASSET CLASS AND SECTOR BREAKDOWN $Bn, 30 June 2013 IFM 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 worldwide Strong deal pipeline both locally and globally Team of 47 infrastructure professionals in Australia, North America and Europe 79 investors with dependable capital sources 18 year track record has returned 12.1% pa (net of fees and tax) since inception* Established infrastructure portfolio diversified across industry sectors and geographical regions Open end fund structure aligned to the long-term characteristics of the asset class Debt Listed Equities Infrastructure Private Equity 44% Australia 56% 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 Fund 18 assets International Infrastructure Fund 8 assets KM (Brief review – audience knows our global portfolio; use talking points only if necessary) Two portfolios: Australian and Global Australian portfolio has a mix of economic and transportation assets Global portfolio owns no transportation (because pricing has not been attractive) But together, we demonstrate broad experience across sectors and through time. Current Assets 18 Total NAV AU$6.6bn Current Assets 8 Total NAV AU$5.9bn/ US$5.4bn Infrastructure NAV amounts exclude undrawn investor commitments and feeder fund cash holdings

12 IFM Australian Infrastructure Fund assets
Investment Description Year Acquired Location IFM Interest Renewable electricity generation 1996 Australasia, Chile and Brazil 100% Airport 1997 VIC 23.7 % QLD 18.9% WA 3.2% Toll road 1998 NSW 15.4% 2000 14.4% 2001 NT 77.4% 2002 SA 12.8% Electricity generation 2003 / 2008 Transport hub /PPP 2003 IFM Interest Water treatment (PPP) 70.0% School buildings (PPP) Public sector housing (PPP) 2005 Law courts (PPP) 2006 Aged care facilities (PPP) Defence Headquarters (PPP) 2008 ACT Seaport 2010 26.7% Seaports 2013 35.1%

13 IFM International Infrastructure Fund – portfolio
Diversified portfolio of stable assets across Europe and the US US UK CONTINENTAL EUROPE Acquired 2007 2008 2006 Acquired 2004 2006 2013 Acquired 2010(1) 2010 Dalkia Polska investment was made in 2010 following on from the 2006 acquisition of Dalkia Łódź

14 Global Infrastructure Team
PIONEER GLOBAL MANAGER Leading global infrastructure manager Specialists in Australia, Europe and North America Long-term, like minded investor base with a dependable capital source 18 year track record has returned 12.1% p.a. since inception* Established portfolio diversified across industry sectors and geographical regions Open-end fund structure aligned to the long-term characteristics of the asset class Strong deal pipeline both locally and globally IFM Infrastructure heads – each with 20+ years infrastructure experience Kyle Mangini Global Head of Infrastructure Michael Hanna Head of Infrastructure – Australia Christian Seymour Head of Infrastructure – Europe 26 direct equity investments 39 board seats Real time insight and information Alec Montgomery Head 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) Private Equity Experienced investment teams Genuine long term investors with a clear focus Robust investment processes Proprietary systems Track record of long term outperformance Strong focus on ESG 2 Listed Equities 14 Debt 14 Infrastructure Equity 16 As at 30 June 2013.

16 Listed Equities – Passive
STRONG, EXPERIENCED TEAM Full 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 performance Aidan Puddy Executive Director, Listed Equities 20 years experience Laurence Irlicht Investment Director, Listed Equities 16 years experience Travis Hooper Associate 12 years experience Gavin Petrie Investment Associate 10 years experience IFM Proxy & Engagement Committee (PEC) Clyde Haldane (Chair), Aidan Puddy, Neil Carter, Mark Zirnsak, Azhar Abidi

17 Listed Equities – Strategic
STRONG, EXPERIENCED TEAM Identify companies that stand out as superior capital investors Unique selection criteria – Return on Equity (RoE) Impulse plus quality overlay drives buy/sell decisions True ‘buy and hold’ strategy – genuine long-term investors with a clear focus Concentrated, high conviction portfolio (number of stocks typically in range of 15 to 25) Strong focus on ESG Clyde Haldane Executive Director, Listed Equities 24 years experience Davina Machin Investment Director, Listed Equities 17 years experience Travis Hooper Associate 12 years experience IFM 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 RECORD Highly experienced team with excellent track record Style agnostic Australian small caps portfolio Focussed and rigorous fundamental research Disciplined portfolio construction process Strong alignment of interests Neil Carter Executive Director, Listed Equities – Small Caps 15 years experience Jim Copland Investment Director, Listed Equities – Small Caps 13 years experience Matt Griffin Associate 4 years experience Alex Bibani Investment Analyst 9 years experience IFM 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 $14bn of debt . . . . . . across the debt risk/reward spectrum . . . . . . via a specialist team with deep experience across the debt spectrum. Experienced debt specialists Recognised, niche credit market players Superior, rigorous bottom-up credit skills within a global macro economic environment Disciplined process Strong access to deal flow through our network Track record of long term outperformance Aligned interests – IFM’s ‘raison d’être’; to create products that make sense and are good value for our investors IFM FUM BY ASSET CLASS ($bn) BREAKDOWN OF DEBT INVESTMENTS ($bn) * Across one fund and seven mandates FUM figures at 30 June 2013 Figures may differ due to rounding.

20 A closer look at Debt Investments
Robin Miller Global Head of Debt Investments 25 years experience Simon Tung Associate Director 17 years experience SOLID BLEND OF EXPERIENCE AND SKILLS Deep market knowledge Strong networks providing access to deal flow Robust process with strong credit disciplines Product range that covers the risk / reward spectrum Scott Barker Executive Director 18 years experience Darren Pasco Associate Director 17 years experience David Cooper Executive Director (UK) 17 years experience Lillian Nunez Associate Director 19 years experience Bruce Potts Investment Director 30 years experience Nick Zannis Associate 9 years experience Cash Vanilla Credit Kevin Lewis Investment Director 22 years experience Hiran Wanigasekera Associate ((UK) 8 years experience Low return High liquidity High return Low liquidity Linda Cunningham Investment Director 19 years experience Huiyi (Stella) Wang Investment Analyst 7 years experience Long-term assets suited to investors with a long- term outlook Lloyd Mitchell Investment Analyst 6 years experience Hannah Lindberg Investment 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 $Bn, 30 June 2013 BREAKDOWN OF PRIVATE EQUITY Commitments A$Bn Experienced team Nine private equity specialists Focus on growth and transformation Active, engaged, niche investor Global network In-house legal and tax expertise Private Equity Infrastructure Debt Listed Equities * FUM figures at 30 June 2013.

Conviction investing Steven Lipchin Head of Private Equity 26 years experience Wayne Phillips Investment Director 16 years experience Multiples focus rather than internal rate of return Intensive ‘Bottom Up’ Due Diligence Alignment Active Engagement ‘for the life of investment’ Global Hurdle Gareth Adams Investment Director 19 years experience Anna Morrison Investment Director 15 years experience James Leos Investment Director 20 years experience Shane McKenzie Associate 15 years experience Sean Loke Associate 12 years experience

23 Our investment results are strong - investment results to 30 June 2013
Fund/Benchmark 1 year Since inception IFM Australian Infrastructure (after fees and tax) – inception Aug ‘95 Obj – 10% pa over rolling three year periods 12.1% 10.0% IFM International Infrastructure (after fees and tax) – inception Dec ‘04 14.4% 7.5% IFM AFIF Long (including franking, after fees, before tax) – inception Jun ‘99 UBS Australian Composite Bond Index 6.6% 2.8% 7.9% 6.4% IFM AFIF Short (including franking, after fees, before tax) – inception Jul ‘05 UBS Australian Bank Bill Index 9.6% 3.3% 6.7% 5.2% IFM Transaction Cash Fund (after fees, before tax) – inception Mar ‘08 3.7% 5.0% 4.7% IFM Strategic Australian Equities Fund (after fees) – inception Jul ‘08 S&P/ASX 200 Accumulation Index 17.5% 22.8% 1.4% IFM Enhanced Indexed Australian Equities Portfolios (after fees) – inception May ‘03 Benchmark – relative in accordance to client mandates 23.6% 23.8% 9.9% IFM Wholesale Small Caps Fund (after fees) – inception Mar ‘12 S&P/ASX Small Ords Accumulation Index 12.4% -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 Index 15.9% % 7.5% 0.9% IFM International Private Equity Fund III (IRR, after fees, before tax) – inception Oct ‘07 MSCI World ex Australia in USD 4.3% % 3.7% 0.4%

24 Integral to our approach is a strong focus on responsible investment
In-house expertise 1 Engagement External representation 3 2 Carbon footprint Workplace safety Board reviews Dedicated 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 Progress Engagement 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.

Unique ownership model offering alignment of interests Experienced, focused and specialist investment teams with a strong track record Long-term strategic investment approach across all asset classes Rigorous disciplined processes that marry investment and market knowledge Strong, global networks Focus on responsible investment

26 Contact IFM Offices Eddy Schipper
Executive Director - Business Development Phone: +61 (3) Charles Brooks Director - Business Development Phone: +61 (2) Lucy Liu Manager - Business Development Phone: +61 (3) IFM Offices Melbourne Level 29 Casselden 2 Lonsdale Street Melbourne, VIC 3000 Australia Sydney Level 2, 50 Pitt Street Sydney, NSW 2000 New York 99 Park Avenue Suite 1920 New York NY 10016 USA London 3rd Floor 60 Gresham Street London EC2V 7BB United Kingdom Berlin Eichenstraße 3A 12435 Berlin Germany The 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 No Industry Funds Management (Nominees) Limited, ABN , AFS Licence No , RSE Licence No. L IFM Infrastructure Funds, ABN IFM International Private Equity Fund I, ABN IFM International Private Equity Funds, ABN IFM International Private Equity Fund III, ABN IFM Listed Equity Funds Pooled Superannuation Trust, ABN Industry Funds Management (UK) Limited, Company No , FSA Licence No IFM Global Infrastructure (UK) GP Limited, Company No Industry Funds Management (US), LLC IFM (US) Investment Advisor, LLC, CRD No , SEC File No IFM Global Infrastructure (US) GP, LLC

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