Make space for our performance Neptune European Opportunities Fund Neptune Investment Management

2 Neptune European Opportunities Fund Launched on 29 th November 2002 Managed by Rob Burnett ‘A’ rated by Forsyth-OBSR Fund size – over £95m (as at ) Income class introduced in January 2005 Available via key platforms & third party distributors

3 The Performance Story Discrete calendar year performance (source: Lipper) 1 st / 95 1 st / 97 1 st / 103 %

4 Three Overarching Fund Themes CashNew & Old EuropeNew World Order

5 Cash Outperformance: Yield, M&A, Private Equity Fund has income class, current yield c.1.5%, numerous opportunities European FCF generation has trebled in the last 5 years Cash balances at an all time high, gearing at a decade low Source: Morgan Stanley

6 Why M&A will continue to be strong in 2007 History suggests caution Clear financial imperative and fire power is strengthening We are mid-way through this cycle, but danger of protectionism Source: Exane BNP Paribas

7 New Europe Mainstream European fund Opportunities continue to abound from the GDP per capita convergence theme Optimal: western listed, but with emerging Europe growth profile. Greece, Turkey

8 “Old Europe”: German Competitiveness & Consumption Entered euro at a competitive disadvantage, now level playing field Consumers unleveraged. VAT increase, but savings rate decline Asset reflation

9 German Residential Property: Downside Limited * Federal Statistics Office Low prices. No more subsidies Today’s construction level too low Population growth to decline from 2010 but households will continue to rise until 2018* Source: VDM

10 German Residential Property: Downside Limited Low house ownership ratio to rise, particularly in cities. Privatisation Prices turned up in 2005 in all 5 major cities. Impact on consumer confidence But historic tenant protection keeps yields low Source: Federal Statistics Office

11 New World Order: Europe the Gateway to Global Growth Basic demographic and economic implications. Strong US parallels from 20 th century Savings rate at 30% will fall. Banking sector consolidation. Welfare provision Civil unrest

12 New World Order: Opportunity and Threat Stage 1: Infrastructure Stage 2: Consumption Changing patterns of global trade, lengthening business cycles: industrials Exclusive consumption and staples

13 After strong growth already: Energy in : All about non-OPEC & Saudi Arabia Oil Services. Liquidity. Avoid the crowd Alternative Energy: the political imperative

14 Outlook US economy was walking a tightrope in mid 2006 Path to the next economic cycle, rocky in the summer, less so now. US 10 year, Oil Inflationary trends. Stability of interest rates and growth at elevated levels. Risk premia Neptune European Opportunities Fund is a core European Fund offering outperformance, yield and low absolute risk profile

15 Important Information This document is issued by Neptune Investment Management Limited (“Neptune”) which is authorised and regulated by the Financial Services Authority. Neptune Funds are available to any persons that may be marketed to under the Financial Services and Markets Act (Promotion of Collective Investment Schemes) (Exemptions) Order Private customers should consult their Independent Financial Adviser or other authorised intermediary. Please check with your professional financial adviser as to whether such products are available in the country in which you are resident. None of our products are available to residents in the United States. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do not undertake to advise you as to any change of our views. This is not a solicitation or an offer to buy or sell. Neptune Investment Management Limited has produced this report for private circulation to professional and institutional clients only. The material is not intended for the use of private investors. All information and advice is given in good faith but without any warranty. Please remember that past performance should not be seen as a guide of future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Any past performance data that has not been shown is due to the information not being available. Neptune is not authorised to give investment advice and only provides information on Neptune products.