DSM Global Equities - Candoris · Sandra Montoya Nina Petrushev Nina Renna Trading Chris Bertoni...

FOR INVESTMENT PROFESSIONAL USE ONLY

DSM Global EquitiesPerformance data as of 30/06/2017, gross of fees


Agenda

1. About DSM Capital Partners

2. DSM’s Investment Style & Process

3. Performance & Characteristics

4. About Candoris

5. Important Information


Section One:

About DSM Capital Partners

FOR INVESTMENT PROFESSIONAL USE ONLY 4

About DSM Capital Partners, Ltd.A bottom-up, idea driven, growth stock firm

DSM: A growth firm with a value backbone

• 100% employee owned boutique founded in 2001, focusing exclusively on growth companies

• 24 employees currently managing over $6.7bn* in AUM long only, high-conviction growth strategies with 1 distinct philosophy:

• Global Growth

• Global Focus Growth

• Global Growth & Income

• U.S. Large Cap Growth

• DSM Global Growth and DSM Global Focus Growth are rated 5- and 4-stars overall (respectively) by Morningstar

• Clients include corporate pension plans, foundations and endowments, other institutions, and high net worth individuals.

• Firms headquarters is located in Palm Beach Gardens, FL.

Candoris & DSM

• Partnership dates to 2013

• Committed to growth in the Nordics and throughout Europe

• Provides capacity to grow in strategy, without jeopardizing performance

* As of 30/05/2017


Organizational StructureDSM Capital Partners

Steve Memishian, CFA

Founder, Co-Managing Partner

Daniel Strickberger

Founder, CIO,Co-Managing Partner

Research & Portfolio Management

Justin Burk, CFAHannah Chang JoJo Hu, CFA Pinaki Kar David McVey, CFA Takehiko Serai, CFA Steve Tish, CFAEric Woodworth, CFAKenneth Yang, CFA

Client Service & Operations

Patricia BonadioKristen D’AmbrosioVitas Martinenas

Patricia MichellSandra MontoyaNina PetrushevNina Renna

Trading

Chris BertoniShayn Logan

Legal & Compliance

Blair Barton, JDRussell Katz, JD

Client Service & Business Development

Stephen ConstantineMichael Wright


DSM’s Investment TeamExperienced team dedicated to one single philosophy

DSM’s ten person investment team specializes in quality growth companies worldwide

• Proprietary research used to identify and model quality growth companies, complemented by a rigorous valuation discipline used for both buying and selling positions

• 250 expert calls per year; buy-in research

• Analyst/PM’s compensated on quality of work and firm performance

• “Buy”, “Sell”, and “Avoid” recommendations are equally important

• Investment team has significant ownership of DSM portfolios

The team’s focus on proprietary research, in conjunction with a disciplined approach to valuation, results in a concentrated, benchmark-agnostic portfolio of 35-45 names

Industry DSM

Daniel Strickberger 36yrs 16yrs

Chief Investment Officer

Justin Burk, CFA 19yrs 15yrsMedical Technology, Enterprise Software, Computer Storage & Communications, Specialty Chemicals, Agriculture, Multi-Industry

Hannah Chiang 19yrs 2yrPayment Processing, Chinese Online Advertising, Retail, Apparel, Consumer Discretionary

JoJo Hu, CFA 10yrs 2yrChinese Internet, Chinese Capital Markets, Utilities, Consumer, Technology, Industrials, Healthcare

Pinaki Kar 9yrs 9yrsBiotech/Pharma, Consumer Staples, Discount Stores, Medical Technology, Industrial Glass, Business Software, Semiconductors

David McVey, CFA 21yrs 16yrsInternet Services, Payment Processing, Banking, Media/ Advertising, Energy Services, Investment Management

Takehiko Serai, CFA 21yrs 6yrs

Tobacco, Consumer Services, Industrial Distributors, Luxury Products

Steve Tish, CFA 26yrs 10yrs

Biotech, Pharmaceuticals, Restaurants, Gaming, Lodging, Travel

Eric Woodworth, CFA 16yrs 16yrs

Personal Computers, Railroads, Freight Forwarders, Aviation, Computer Services, Networking Software, Security Software

Kenneth Yang, CFA 19yrs 3yrsConsumer Discretionary, Industrials, Investment Management, Business Services, Instrumentation


Section Two:

DSM’s Investment Style & Process


DSM’s Investment PhilosophyA clear philosophy and a distinct investment style

DSM believes quality growth companies with predictable streams of earnings generate attractive rates of return over time when purchased at rational prices.

EPS Growth

Dividend Yield

∆ in P/E Ratio

ExpectedReturns

This philosophy drives DSM’s distinct investment process, built on three core principles:

• Identify quality growth companies and perform fundamental research on them

• Create and utilize proprietary earnings models

• Utilize valuation discipline


DSM’s Investment ProcessA closer look

Step One:

Identify Quality Companies

• Strong business models; few competitors; high barriers to entry

• Serving growing end-markets while gaining market share

• Predictable revenue and earnings growth

• Solid balance sheets; high returns on equity & assets; free cash flow

• Appropriate ESG characteristics

Step Two:

Intensive Fundamental Research

• Suppliers, customers, competitors, experts

• Survey research

• SEC filings

• Industry/Wall Street conferences

• Question management

• Sell-side research

Step Three:

Proprietary Earnings Models

• Create detailed earnings models

• Models updated as necessary

• Create “most likely” scenario

• Create “low” scenario


DSM’s Investment ProcessA closer look

Step Four:

Valuation Discipline

DSM will only purchase a new stock when they can reasonably project a higher P/E three years from now

• DSM estimates a reasonable “target” P/E three years forward

• Normally buy 10% below the target P/E to provide a margin of safety

• Avoid the “Growth Managers’ Trap of paying too high a P/E

• Projected Return = EPS Growth + Dividends + P/E Expansion

Step Five a:

Decision making:Why DSM buys

• Business fundamentals are strong

• Earnings growth appears predictable and sustainable

• P/E has potential to rise ≥10% over next three years

Step Five b:

Decision making:Why DSM sells

Valuation

• Price appreciation reduces “most likely” future return

• “On deck” stocks offer more attractive “most likely” returns

Business Prospects

• Proprietary research indicates that business prospects have deteriorated

• Disappointing quarterly earnings or reduced guidance


Portfolio ConstructionDSM Global Equities

Sector Weights

• Normally diversified among 5 to 7 sectors

• Evaluate commonalities among industries/sectors

• Approximately 35% sector weight maximum

• Monitor economic sensitivity

Regional Weights

• Normally diversified across developed and emerging markets:

• North America 30% -60%

• Other Developed Nations 20% -50%

• Emerging Markets 10% -30%

Typical Position Weights

• DSM Global Growth: 35 to 55 positions

• 1% to 2% “starter” positions

• 3% to 5% “average” positions at cost

• 5% to 6% position size at cost for select investments

• DSM Global Focus Growth: Approx. 10 positions

Active Share

• Trailing fiscal 5-year quarterly range

• Global Growth 92% - 97%

• Global Focus 95% - 99%

• Global Growth and Income 92% - 98%



• Quality/concentrated portfolios generate alpha

• Ongoing research helps avoid disappointing earnings outcome

• Estimate “most likely” EPS growth and P/E target

• “Most likely” case is a projection that can be exceeded

• Estimate “low” EPS growth and P/E target

• Avoid companies with unpredictable earnings

• Reduces economic risk

• Reduces balance sheet and financial risks

• Reduces risk and enhances return

• Generated from many sources

Portfolio

Manage investment

risk

Most likelyanalysis

Low Growthanalysis

Invest in Quality

businesses

New Idea flow



ESG Considerations

DSM incorporates ESG factors in its security selection process. If

DSM determines that ESG factors may have a material impact on the potential long-term returns of an

investment, DSM will complete in-depth research on those

issues.

DSM will invest in companies with ESG

issues when our research concludes

that the issues are not material to long-term

financial returns.

DSM will evaluate Board of Directors

independence, qualifications and procedures with

regard to achieving future financial

returns for shareholders.


Section Three:

Performance & Characteristics


DSM Global GrowthHistorical Performance

* PreliminaryThe content presented is for informational and supplemental purposes only. The performance presented represents a composite of the prior performance of discretionary accounts managed by DSM Capital Partners LLC(“DSM”) in accordance with its global growth strategy. You should not consider this performance data to be an indication of future performance of DSM’s global grow style. The performance figures presented do not reflectthe deduction of investment advisory fees actually charged to the accounts in the composite. Rather, the performance results presented reflect the deduction of a model advisory fee. The model advisory fee for global growthis 1% per annum. The net of fee returns calculated for the composite were created by deducting the monthly amount of the model annual fee from actual gross returns. DSM has prepared and presented this performancereport in compliance with the DSM has prepared and presented the global growth performance in compliance with the Global Investment Performance Standards (GIPS®) of the CFA Institute. The CFA Institute has not beeninvolved with the preparation or review of this report. Past performance is no guarantee of future results and individual accounts and results will vary. Different market or economic conditions could result in markedlydifferent performance, including the possibility of loss. There are also special risk considerations associated with international and global investing (especially emerging markets), small and mid-capitalization companies, orother growth and/or concentrated investment strategies. Comparative indexes are unmanaged, do not reflect the payment of advisory fees and other expenses associated with an investment and may not reflect thereinvestment of dividends. Investors cannot invest directly in an index.

GIPS Compliant Gross Composite Performance* - DSM Global GrowthUSD; As of 30/06/2017

YtD 1 Year 3 Year 5 Year Since Inception

Global Equity (in US$)

Global Growth (Inception – Oct 10) 27,02% 32,34% 12,10% 16,60% 14,15%

MSCI ACWI Net 11,48% 18,78% 4,82% 10,54% 8,71%

+/- MSCI ACWI Net 15,54% 13,56% 7,28% 6,06% 5,44%


Historical PerformanceDSM Global Growth v. Benchmark

Source: eVestmentData quoted is past performance gross of fees. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate.

Growth of US$ 100 – Since inception


Returns various periodsDSM Global Growth v. Benchmark and Peers


Consistent Outperformance


Upside/Downside CaptureDSM Global Growth v. Benchmark and Peers

Higher Upside Capture and lower Downside Capture leads to superior returns



Returns and Standard DeviationDSM Global Growth v. Benchmark and Peers

DSM Global Growth outperforms the benchmark and almost all peers.



Section Four:

About Candoris


About CandorisAccess to the world’s best investment strategies

Candoris pairs boutique investment managers with investors and distributors throughout the Nordics and the Netherlands. We are:

• A Dutch firm with two seasoned investment professionals

• Transparent about the managers we introduce, and the key criteria we use before partnering with them

• Transparent on price, and fund and separate account investment possibilities

• Honest and direct in our communication now and when you are a client

Can·dor“kandər-ˌ dôr”

noun: candour; candor

1. The quality of being open and honest in expression; frankness.

Synonyms: frankness, openness, honesty, candidness, truthfulness, sincerity, forthrightness, directness, plain-spokenness, bluntness, straightforwardness, outspokenness


Candoris matches clients’ needs with unique strategies and solutions.

For Investors in the Netherlands & the Nordics:

• Introduce and market investment strategies and styles that are unique

• Offer solutions to actual challenges for investors and distributors

• Present the investment strategy compared with peers, on an absolute and risk adjusted basis

• Ability to provide insight when including the strategy in portfolio context

• Facilitate European investment vehicles (funds) or mandates

• The organizations we introduce are boutiques, frequently employee-owned, and specialized

• Organizing roadshows at least twice a year through these markets

For Asset Managers:

• Access to Dutch and Nordic market at limited expense

• Asset managers can continue to manage assets without distraction

• Support in establishing funds

• Organize/fulfil regulatory requirements


Selected Strategies & ManagersAccess to the world’s best investment strategies

Candoris - Strategies & Managers

Global Equities DSM Capital Partners – Palm Beach Gardens, FL

US Equities Coho Partners - Philadelphia, PA

European Equities Eleva Capital - London

Senior Loans Pacific Asset Management - Newport Beach, CA

US High Yield Strategic Income Management (SiM) - Seattle, WA


Strategies & PerformanceAccess to the world’s best investment strategies

GIPS Compliant Gross Composite PerformanceUSD; As of 30/06/2017


YtD 1 Year 3 Year 5 Year 10 Year Since Inception

Global Equity (in US$)

Global Growth (Inception – Oct 10) 27,02% 32,34% 12,10% 16,60% 14,15%

MSCI ACWI Net 11,48% 18,78% 4,82% 10,54% 8,71%

US Equity (in US$)

US Equity (Inception – Oct 00) 7,14% 10,02% 8,84% 13,77% 9,75% 9,41%

S&P 500 TR 9,34% 17,90% 9,61% 14,63% 7,18% 5,23%

S&P 500 Value 4,85% 15,86% 7,79% 13,83% 5,25% 5,57%

European Equities (in €)

Eleva European Selection (Inception - Jan 15) 8,44% 22,63% 20,10%

STOXX Europe 600 EUR 7,04% 18,17% 9,72%

US Senior Loans (in US$)

US Senior Loans (Inception – Jan 07) 2,26% 7,76% 4,01% 5,26% 5,64% 5,76%

CS LL Index 1,96% 7,49% 3,49% 4,83% 4,16% 4,31%

US High Yield (in US$) until May 2017

US High Yield (Inception – Feb 11) 4,15% 12,44% 5,69% 9,24% 8,37%

BofA ML US High Yield Master II 4,80% 13,85% 4,74% 7,32% 6,79%


DSM UCITS FundFund Information

Fund Launch:

Global Growth: March 2014US Large Cap Growth: July 2016

Structure:UCITS

AUM:

Global Growth: $961 millionUS Large Cap Growth: $46million

Exchange:Luxembourg

Benchmark:MSCI ACWI

Liquidity:Daily

ISIN:

Global Growth: LU1016061043 US Large Cap Growth: LU1016061126

Management Fee

<€10 million 84 basis points

>€10 million 70 basis points

Larger Investments To be discussed

Other ExpensesCapped at 15 basis points for Institutional Investors; In reality, about 11 basis points

Custodian:

Northern Trust

Central Admin:

Northern Trust

Transfer Agent:

Northern Trust


Section Five:

Important Information


This information is proprietary and cannot be reproduced or distributed. Certain information may be received from sources Candoris B.V. considers reliable;Candoris B.V. does not represent that such information is accurate or complete. Certain statements contained herein may constitute “projections,”“forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical setof assumptions to certain historical financial data. Actual results, performance or events may differ materially from those in such statements. Any opinions,projections, forecasts and forward-looking statements presented herein are valid only as of the date of this document and are subject to change. Nothingcontained herein should be construed as (i) an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or sellingany security. Candoris B.V. assumes no obligation to update any forward-looking information.

Past performance is no guarantee of future results.

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