Contrarian Value Fund Limited

Investor Presentation

August 2018

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Disclaimer

Important information and disclaimer:

While all reasonable care has been taken in the preparation of this presentation, neither Contrarian Value Fund Limited (“Fund”) nor ACVF Management Pty Ltd (“Fund Manager”) is responsible for any errors nor misstatements. To the full extent permitted by law, no representation or warranty is made, and any and all liability is disclaimed, in relation to the accuracy or completeness of any statement, opinion, forecast or information contained in this presentation. The information provided within the presentation is not intended to be a complete description of matters described.

This presentation has been prepared for the purposes of providing general information only and does not constitute an offer, solicitation or recommendation with respect to the purchase or sale of any securities in the Fund nor does it constitute financial product or investment advice nor take into account your investment objectives, taxation situation, financial situation or needs. An investor must not act on the basis of any matter contained in this presentation in making an investment decision but must make its own assessment of the Fund, conduct its own investigations and analysis, and seek independent financial, taxation and legal advice. Past performance is not a reliable indicator of future performance.

Usage of and linking to this presentation is at the user’s own risk. Neither the Fund Manager nor the Fund is liable for any loss or damage to a user’s system or to people linking to this presentation from a third party’s website or email. Any such loss or damage is at the responsibility of the user.

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Strong FY18 Results

$0.035

$0.045

$0.00

$0.01

$0.02

$0.03

$0.04

$0.05

Fully Franked Final Dividend Declared

($/share)

FY17

FY18 (Ex Date 31 Aug 2018,Payable 5 Oct 2018)

$1.03

$1.34

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

Pre-Tax NTA ($/share)

FY17 FY18

$1m

$21m

$0.0m

$5.0m

$10.0m

$15.0m

$20.0m

$25.0m

NPAT (AUD M)

FY17 FY18

$0.01

$0.30

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

EPS ($/share)

FY17 FY18

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Arowana CVF Core Objectives

Only invest when reward significantlyexceeds risk

Strong Performance

16.9%1 p.a.

Fully FrankedYield10.3%2

1 Returns quoted net of fees, pre tax, since inception (5 January 2015 – 30 June 2018)2 4.5c fully franked final dividend annualised on $1.18 Arowana CVF stock price at 30 June 2018

▪ Capital preservation is paramount

▪ Invest only when reward significantlyexceeds risk

▪ Concentrate capital in situations with best upside asymmetry to maximise risk adjusted returns

▪ Alignment...board and affiliates represent 10% of share register

▪ Grow NTA and dividends

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Our Process…Works

* Net returns are post all costs and fees, pre tax

Since inception (5 Jan 2015 – 30 June 2018)

1 mth 3 mths 6 mths 12 mths Annualised Cumulative

Arowana CVF Gross 4.0% 16.8% 22.4% 52.1% 21.3% 96.5%

S&P/ASX200 Accumulation Index 3.3% 8.5% 4.3% 13.0% 8.6% 33.7%

Gross outperformance 0.7% 8.3% 18.1% 39.1% 12.7% 62.8%

Arowana CVF Net * 3.2% 13.2 % 17.2% 41.7% 16.9% 72.9%

S&P/ASX200 Accumulation Index 3.3% 8.5% 4.3% 13.0% 8.6% 33.7%

Net outperformance (0.1)% 7.8% 9.6% 32.6% 8.3% 39.2%

Net outperformance multiple 1.0x 1.6x 4.0x 3.2x 2.0x 2.2x

Correlation to benchmark 22.5 %For

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...with no portfolio leverage

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan

-15

Feb

-15

Mar

-15

Ap

r-15

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

Feb

-16

Mar

-16

Ap

r-16

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-17

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-18

May

-18

Jun

-18

CVF Gross & Net Exposure

Gross Net

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CVF performance vs Benchmark Indices

7

Returns are to 30 June 2018. Inception date 5 January 2015. Index returns are local currency; CVF is A$.CVF return is gross portfolio return. ASX (ASA51 Index) and S&P500 (SPXT Index) are total return indices including dividends.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

CVF ASX S&P500

3 Mths

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

CVF ASX S&P500

12 Mths

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

CVF ASX S&P500

Since Inception

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Performance: Uncorrelated Returns

8

More positive months…and negative correlation in months when the market is down

* S&P/ASX200 Accumulation Index, since Fund inception (5 January 2015)Arowana CVF returns shown are portfolio (gross)

0.7%

(2.3%)

(2.5%)

(2.0%)

(1.5%)

(1.0%)

(0.5%)

0.0%

0.5%

1.0%

Downside Participation -29%

CVF

ASX *

ASX *71.4 %

60.5 %

50.0 %

55.0 %

60.0 %

65.0 %

70.0 %

75.0 %

CVF

Incidence of Up Months

ASX *

2.0%

2.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Upside Participation+70%

CVF

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>2x market return with similar volatility

Loss

Gain

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

Av

erag

e R

etu

rn

Volatility

Annualised Monthly Returns (Jan 2015 - June 2018)

SPXT ACWI ASX CVF Gross

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Winners: Last 12 months (Gross Returns)

Loss

Gain

Winners Stock ReturnContribution to Gross

Portfolio Return

Afterpay Touch Group 218% 25.0%

Bellamy’s Australia 129% 7.3%

The Stars Group Inc. 85% 6.7%

Emeco Holdings 245% 4.8%

Weight Watchers International, Inc 68% 4.3%

Elders 63% 2.7%

All Other Positions 11.4%

Total Winners 62.1%

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Losers: Last 12 months (Gross Returns)

Loss

Gain

Losers Stock ReturnContribution to Portfolio Return

Silver Chef (46%) (4.8%)

Blackmores (10%) (1.0%)

Vocus (22%) (0.8%)

Mayne Pharma (26%) (0.8%)

Hedge (43%) (0.4%)

BetaShares USD ETF (4%) (0.4%)

All Other Positions (1.4%)

Total Losers (9.3%)

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Performance: Asymmetric Realised Returns

Loss

Gain

25.0%7.3%

6.7%4.8%

4.3%2.7%

2.0%2.0%

1.7%1.6%

1.4%1.1%

0.6%0.3%0.3%

0.1%0.1%0.0%0.0%0.0%0.0%

(0.0%)(0.0%)(0.1%)(0.1%)(0.1%)(0.1%)(0.2%)(0.2%)(0.3%)(0.3%)(0.4%)(0.4%)

(0.8%)(0.8%)

(1.0%)(4.8%)

(5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Afterpay TouchBellamy's

Stars GroupEmeco

Weight WatchersElders

Platinum Asset ManagementZillow

FacebookEquifax

ChipotleGrafTech International

Whitehaven CoalInteractive Brokers

[Cash]IPH Ltd.

CrestwoodAustralian Pharmaceutical Industries

HedgeHedge

Lendlease GroupCostco Wholesale Corporation

Boart Longyear LimitedHedgeHedge

Shima Seiki Mfg. Ltd.HedgeHedgeHedgeHedgeHedge

Betashares US Dollar ETFHedge

Mayne PharmaVocus

BlackmoresSilver Chef

Attribution of Gross Portfolio Returns across all positions - Last 12 mths to June 2018

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Performance: Asymmetric Realised Returns

Loss

Gain

27.2%24.3%

11.8%10.0%

8.0%6.7%

4.8%4.2%4.1%

2.0%2.0%

1.7%1.6%

1.1%1.0%0.9%

0.7%0.5%

0.3%0.1%0.1%0.1%0.0%

(0.0%)(0.1%)(0.1%)(0.1%)(0.1%)(0.1%)(0.1%)(0.2%)(0.2%)(0.2%)(0.3%)(0.3%)

(0.8%)(0.9%)(1.0%)(1.0%)

(1.2%)(1.5%)(1.5%)

(3.2%)(3.7%)

(5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Afterpay TouchInfigen

Weight WatchersElders common

Bellamy'sStars Group

Emeco[Cash]

Elders hybridPlatinum Asset Management

ZillowFacebook

EquifaxGrafTech International

Australian Pharmaceutical IndustriesChipotle

Whitehaven CoalHedge

Interactive BrokersHedge

IPHCrestwoodLendlease

Boart LongyearHedgeHedgeSirtex

HedgeShima Seiki

CostcoHedgeHedgeG.U.D.HedgeHedge

Mayne PharmaHedge

MyerBlackmores

VocusBetashares USD ETF

HerbalifeTouchcorpSilver Chef

Attribution of Gross Returns across all positions since Inception

(0.8%)

4.8%

(2.0%)

(1.0%)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%Avg. Loss Avg. Gain

Avg Winners are 6x the Losers

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Process

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Our Process

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Definition of Insanity:

Doing the same thing as everyone else…

…and expecting a different (better than average) result.

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Our Process: We collaborate on each stock idea

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Gary HuiPortfolio Manager & Lead Analyst

• Idea Generation

• Logic Framing

• Risk Management

Ben WolrigeCo Manager & Senior Analyst

• Diligence

• Modelling

• Return quantification

John GrahamData Scientist

• Data acquisition

• Data analytics

• Programming

Typical fund: Sector specific analysts reporting to a PM. A lone analyst researches a single stock.

CVF: Cognitive & Skill Diversity. Measurably better outcomes.For

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Our Process: Targeted Alpha Generation

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Typical Global Investment Research Model

> 70,000 stocks globally across multiple sectors

Telecoms Consumer Utilities Finance Healthcare Tech Materials Energy

Our Model – the Barbell

Nothing in between … focus only on outsized opportunity

? A few thousand? ? A few hundred?

Mean Reversion

Candidates

Mispriced Structural GrowthF

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Our Process: Investment Screening Drives Idea Generation

▪ We generate proprietary screens that are not spreadsheet based.

▪ Plot key variables as a continuum through time, not as discrete data points on a spreadsheet.

▪ Readily identifiable: Margin cycle, valuation cycle.

▪ Flexible: Able to incorporate other fundamental and valuation factors.

▪ Typically focused on identifying mean reversion or mispriced growth candidates.

▪ Our secret sauce…which we do not share.

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Our Process: Asymmetric Risk Focus

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▪ Incidence of loss and severity of loss: Critical factors in driving Expected Return

▪ Hurdle rate is not enough

▪ Focus on risk / reward

▪ Target extreme positive asymmetry

▪ Drives our capital allocation

▪ Drives our higher expected and realised returns

Same Hurdle/ Different Asymmetry

Typical Asymmetric

Hurdle rate 30.0% 30.0%

Win rate 58.0% 70.0%

Loss rate 42.0% 30.0%

Avg. win upside 30.0% 30.0%

Avg. loss severity (30.0%) (6.0%)

Return/risk 1.0x 5.0x

Risk Type Binary Asymmetric

Expected return 8.4% 19.2%

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What does not drive our returns

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Doing the same thing as everyone else

Excessive diversification

Active trading

Chasing high returns

Leverage

This must result in mediocre returns

This must result in mediocre returns

Over time this destroys value

You can be prepared for opportunity but you cannot manufacture it

Our gross exposure is extremely low by industry standards

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What does drive our returns

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Maniacal focus on time prioritisation

Maniacal focus on asymmetry of return vs. risk

Screening funnel

Team structure & approach

Enhanced data

Why spend time on things that don’t make money?

A hurdle return rate is not enough

Unconventional filtering and idea generation process

Unconventional team based approach to every investment

Critical to maximising asymmetric returns

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