Gam arkos citywire germany 2012

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Arkos CapitalJune 2012

2

About Arkos Capital SA (“Arkos”)

●

Swiss-based dedicated asset management company with EUR 607 m under management

●

Became part of GAM Group AG through agreement reached in February 2012*

●

A consistent approach, based on fundamental analysis and a bottom-up approach to stock selection

●

Core team of seven long-standing and highly experienced investment professionals

●

Managing a range of liquid and transparent absolute return funds, both offshore and UCITS

●

Significant portion of employees’

liquid assets invested in the funds

●

Authorised and regulated by the Swiss Financial Market Supervisory Authority FINMA as a manager of collective investments

Applying a solid and consistent investment approach since 2002

Our mission is to provide excellent performance and service to our clients through low volatility, liquid and transparent absolute return

investment strategies

Source: Arkos Capital, GAM as at 31 May 2012* The transaction is expected to close before the end of the second quarter 2012, subject to closure and regulatory approvals

3

Arkos’

investment philosophy

●

We believe that current stock prices reflect all available market information and this is also reflected in analysts’

consensus on earnings expectations

●

Therefore, in order to make money we need to anticipate changes:

We buy a stock if we believe that it will beat analysts’

expectations

We sell a stock if we believe that it will miss analysts’

expectations

Our edge lies in our ability to identify stocks that will surprise by exceeding or falling short of analysts’

expectations

4

Note:

The blue line shows the relative performance of a portfolio of stocks acquired on a monthly basis that in the previous 3 months have experienced the best positive revisionsThe orange line shows the relative performance of a portfolio of

stocks acquired on a monthly basis that in the previous 3 months have experienced the worst negative revisions

Changes in earnings expectationsA meaningful indicator of future equity prices

Source: Bloomberg (Index: MSCI Europe), Log Scale

Stocks with earnings upgrades outperform the underlying indices

Stocks with earnings downgrades underperform the underlying indices

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Cum

ulat

ive

Rela

tive

Perfo

rman

c

Long Short


Developed Europe Long/Short Equity

6

Name Talentum Activedge Talentum Enhanced World Invest Absolute Return

Strategy European equity long/short market neutral fund

European equity long/short market neutral fund European equity long/short fund

Description Low vol, beta neutral, all market cap Double gross exposure version of Talentum Activedge

Same long and short positions (through swaps and single stock futures) as Flagship European Equity L/S Market Neutral Hedge Fund, Beta up to 0.5, all market cap

Fund type Offshore Offshore UCITS

Fund manager Gianmarco Mondani Gianmarco Mondani Gianmarco Mondani

Inception date 23 Jul 2002 30 Nov 2004 4 Apr 2003

Typical number of positions 90-140 90-140 90-140

Target gross exposure 120-180% 240-360% 100-160%

DealingMonthly on 30 days notice

No lock-up

Monthly on 30 days notice

No lock-upDaily

Fees1.0% management fee

20% performance fee on a high watermark basis

1.5% management fee


1.75% management fee


Minimum investment EUR/USD 100,000 EUR/USD 100,000 EUR 5,000

ISIN (EUR/USD) KYG8668M1006/ KYG8668M1188 KYG8668P1037/ KYG8668P1110 LU0028583804

Talentum Activedge, Talentum Enhanced and World Invest Absolute ReturnKey characteristics

Source: Arkos Capital

7

Monthly performanceTalentum Activedge

% return Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD

2012 -0.4 1.7 2.1 0.7 -0.1 4.1

2011 -3.1 -0.1 1.2 0.2 -0.2 2.2 0.1 -1.3 0.4 0.6 0.8 0.9 1.7

2010 0.8 1.4 1.9 0.2 -0.3 0.3 0.1 0.8 0.3 0.8 0.8 0.8 8.3

2009 1.5 1.2 -1.7 -4.2 0.2 0.6 -0.7 -0.0 0.9 0.5 1.0 0.5 -0.3

2008 0.3 1.6 0.5 1.9 0.5 2.2 -2.5 -1.1 -5.9 0.4 -0.2 0.2 -2.2

2007 1.7 0.0 0.5 0.9 0.9 1.2 0.8 -0.5 2.8 1.9 -0.6 1.3 11.2

2006 2.6 0.3 1.8 1.3 -0.9 -0.4 0.7 0.4 -0.6 0.9 0.8 1.3 8.6

2005 1.5 0.6 0.8 0.2 0.3 2.0 1.1 1.7 2.5 -1.8 0.6 0.6 10.6

2004 2.5 1.4 0.1 0.4 -0.1 -0.2 1.7 1.4 0.6 -0.1 1.6 1.3 11.1

2003 -0.6 2.5 -0.7 1.0 0.4 -0.8 0.4 0.4 0.8 0.8 0.0 0.3 4.6

2002 0.1 -0.3 1.2 -0.6 -0.2 0.4 0.7

TALENTUM ACTIVEDGE –

A EUR

Past performance is not indicative of future performance. Performance is provided net of fees.


8

Monthly performanceWorld Invest Absolute Return


2012 -0.5 2.4 2.5 0.9 -0.1 5.2

2011 -3.2 -0.1 1.4 0.2 -0.6 2.4 0.1 -1.3 0.4 0.3 1.1 1.4 2.0

2010 0.8 1.4 2.0 0.3 -0.5 0.6 -0.0 0.9 0.4 1.0 0.8 1.3 9.2

2009 0.8 1.1 -1.9 -2.6 0.1 -0.1 -0.4 0.8 1.1 -0.3 0.9 0.8 0.1

2008 -2.4 1.3 -1.3 2.8 -0.0 1.6 -3.7 -0.5 -6.4 -0.4 -0.9 -0.9 -10.7

2007 2.3 -0.4 0.7 1.1 1.8 0.3 0.2 -1.4 1.0 1.3 -2.9 0.3 3.6

2006 3.9 1.0 1.7 1.6 -2.3 -0.7 -0.3 0.3 0.7 1.5 1.6 1.3 11.2

2005 2.2 2.3 -0.2 -0.9 1.9 2.4 2.6 1.6 2.3 -4.6 2.0 1.5 13.6

2004 3.1 1.6 -1.0 1.1 -0.5 0.5 0.3 0.5 1.0 -0.4 2.4 2.6 12.0

2003 0.9 1.3 0.8 1.8 1.7 0.3 2.6 0.7 0.1 9.0

WORLD INVEST ABSOLUTE RETURN –

C EUR



9

Arkos’

investment processOverview

Risk management

Investment guidelines and internal rules

Qualitative conditioning overlay

1Idea generation

Qualitative screening

Quantitative screening

2Stock selection

Fundamental analysis

3Portfolio construction

and management

Pre-trade risk analysis

Sizing of positions

Continuous assessment of portfolio robustness

10

Idea generationQuantitative screening

Analyst Revision Model (ARM): percentile ranking of stocks based on changes in estimates

ARM is highly predictive of relative price movements and is effective across stocks in each capitalisation category, investment style and market sector

Revision components are: EPS, EBITDA, Revenue

Indicators are a blend of P/E, P/B, dividend yield, P/CF, EV/Sales, EV/EBITDA

Price momentum is a percentile ranking of stocks based on recent (6 to 12 month) historical price performance

We buy on strength, we sell on weakness

Which stocks are candidates for long or short positions based

on revisions?

Earnings revisions Valuation Price

momentum

Which stocks appear to be relatively cheap

or expensive?

Which stocks have momentum for next year?

11

Current environment

●

Valuation–

Developed markets are not cheap when measured on the average profits of the last ten years–

But they are very cheap compared to bonds

●

Market re-rating is normally associated with a fall in interest rates–

This is unlikely given the current very low levels

●

Earnings growth is slowing due to macro headwinds (austerity)–

This will dent earnings growth, which has already started to disappoint

●

Economic growth is slowing, so the focus will be micro

●

The main trigger for share price movements will be at single stock level–

Changes in earnings expectations will be a main determinant of future performance

●

The stock market can be seen as a value stock with no catalyst–

Catalysts will be individual (earnings revisions)–

This is the best environment for our approach

●

There will be frequent rallies and reversals, mostly driven by sentiment associated with the short term movements in the global economies

Source: Arkos Capital as at 31st May 2012

12

Arbitrage opportunities in Europe

Source: Arkos Capital as at 31st May 2012The views are those of the manager at the time of publication and are subject to change.

1. Visibility and growth versus structural problems–

Longs in leading growth companies with excellent cash flows and visibility of earnings will produce absolute returns

–

Due to weak markets last year, we are able to buy many such companies on cheap multiples (BIC, Nestle, DIA, Babcock, Bunzl, Ryanair, Easyjet, Aryzta, Nutreco, Orpea, Dufry, Croda, Viscofan; Rexam)

–

Many European companies have structural problems, independent of

economic growth and trade on higher multiples (ACS, Legrand, Stora

Enso, Ericsson, Panalpina, Salzgitter, Norsk

Hydro, Carrefour, Neste

Oil, PKN)

2. Resilient energy versus structural problems in utilities –

Many energy capex-dependent companies will experience a boom in demand and trade on some 12 times earnings (Seadrill, PGS, Kvaerner)

–

Many European utilities will be plagued by government intervention and falling demand, and yet trade at a premium to the market (Verbund, Fortum, Veolia, Suez Environment)

13

Arbitrage opportunities in Europe (cont)


3. Long advertising agencies versus structural losers in media–

Advertising agencies trade on 12 times earnings, don’t suffer from structural issues and will benefit from 2012’s “quadrennial”

events (WPP, Aegis)–

Pure media peers suffer from structural decline in viewership and trade at a premium (Sanoma, Mediaset, TF1, Schibsted)

4. Long growth banks versus struggling local banks with weak capital and high loan losses–

Swedish Banks (Swedbank) trade on 10 times earnings, have stronger than expected loan growth opportunities and are cutting costs fast. Their capital position is strong

–

Some Spanish banks (Banco

Popular, Caixa) will have to resort to dilutive capital increases and have not fully impaired their books for loan losses

–

Some Swiss Banks suffer structural problems and trade on similar

multiples.

5. Long structural growth in technology vs disappointing growth in health technology–

Long tech structural growth (ASML, ASMI, Austriamicrosystems, Utit4, Alten, Berdtrandt) lead to upgrades on cheap multiples.

–

Some healthcare equipment specialist companies still trade at high multiples despite lack of growth (Straumann, Gerreshiemer).

14

Outlook for Europe L/S


●

In a market led by earnings growth (see 2004-mid 2008) a conservative approach based on earnings revisions can deliver consistent absolute returns

●

In 2004 –

mid 2008 our funds kept pace with rising stock markets despite not taking any market risk

●

If anything market growth should be lower this time due to slowing macro indicators (earnings)

●

We believe our funds can achieve better returns than the markets

with no directional risk

●

Over the last two years, in a period of low economic growth, the

funds returned positive performance, despite falling markets, thanks to their focus on single stock differentiation. This is set to continue

●

We reduced gross exposure in the short term in order to insulate

the portfolio from the effects of a sentiment induced rally following a “European solution”

●

This has allowed the funds to withstand the recent swings with very low volatility

●

If we have a bounce in losing stocks due to sentiment, there will be no bounce in their underlying fundamentals, giving us an opportunity to increase the gross on our favourite short themes

15

Conclusions

●

Our investment approach focuses on potential changes in earnings' expectations

●

The results across all our funds have shown that earnings revisions works through time

●

Our edge comes from our ability to consistently generate alpha by identifying stocks that will surprise positively or negatively

●

The current market environment is particularly favorable for our

strategy, despite the macro head-winds, with stocks that positively surprise when reporting earnings rising and stocks that fall short of consensus earnings falling.

●

Our investment discipline has enabled us to thrive and deliver positive performance to our clients against a market back-drop that has been bleak over the same 10 year period

●

We offer our clients a high degree of transparency and liquidity

●

We are committed to being an open and client-friendly firm whose interests are aligned with those of our clients

16

Developed EuropeThemes

Source: Arkos Capital as at 31st May 2012. NOTE: Index positions

broken down into individual sectorsAllocations and holdings are subject to change.

Sector –

% breakdown Activedge Enhanced Absolute Return

Banks -2.1 -4.3 -2.5Basic Materials 0.0 0.1 0Consumer Cyclicals 1.5 3.0 3.2

Consumer Non-Cyclicals 4.6 9.3 9.4

Diversified Financials & REITs -0.5 -1.0 -0.6Energy 1.2 2.3 1.5Health Care -2.5 -5.0 -1.8Industrials -1.3 -2.6 -2.5Insurance 3.6 7.1 4.3Media 1.4 2.8 1.6Cyclical Services 0.1 0.3 -0.3Non-Cyclical Services 6.6 13.2 2.7Technology 2.9 5.9 3.5Telecommunication Services 0.2 0.4 0.2Utilities -3.9 -7.8 -4.5Long 52 105 62Short -41 -81 -48Net 12 24 14Gross 93 186 111


Appendix

18

0 %

20 %

40 %

60 %

80 %

100 %

2003 2004 2005 2006 2007 2008 2009 2010 2011

Simple Perf.

%

Ann. Perf.

%

Ann.Std.

Dev.

Talentum Activedge - A EUR 74.6 5.8 4.3

FTSE Eurotop 100 Index in EUR 49.7 4.2 16.3

Average EUR 1 Month Deposit Rate 24.2 2.2 0.4

HFRI/HFRX Equity Hedge Index (GAM Hedged) in EUR

-8.2 -0.9 8.1

Talentum Activedge - A EURFTSE Eurotop 100 Index in EURAverage EUR 1 Month Deposit RateHFRI/HFRX Equity Hedge Index (GAM Hedged) in EUR

Talentum

Activedge

-

A EURPerformance from 23 Jul 2002 (inception) to 31 May 2012

Past performance is not indicative of future performance. Performance is provided net of fees. Funds do not have the security of capital which is characteristic of a bank deposit.

Source: GAM, Thomson Reuters, Bloomberg

Offshore Fund – Track record for illustrative purpose only

19

0 %

20 %

40 %

60 %

80 %

100 %

2003 2004 2005 2006 2007 2008 2009 2010 2011

Simple Perf.

%

Ann. Perf.

%

Ann.Std.

Dev.

World Invest Absolute Return - C EUR

67.3 5.8 5.5

FTSE Eurotop 100 Index in EUR 53.1 4.8 14.3

HFRX Equity Hedge (GAM hedged) in EUR

-5.3 -0.6 8.4

World Invest Absolute Return - C EURFTSE Eurotop 100 Index in EURHFRX Equity Hedge (GAM hedged) in EUR

World Invest Absolute Return -

C EURPerformance from 7 Apr 2003 (inception) to 31 May 2012

Statistics herein based on currency hedged indices, identified by ‘(GAM hedged)’

in their title, have been calculated by GAM with the aim of valid comparison to our currency hedged products. Details of their calculation are available on request.


Source: GAM, Thomson Reuters

20

3

4

5

6

7

8

9

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

2006 2007 2008 2009 2010 2011 2012

BEst Standard EPS Adjusted + C A (RHS) Price (LHS)

Stock examplesWPP from 3 Jan 2006 to 1 Jun 2012

Past performance is not indicative of future performance.

Source: Bloomberg

21

Stock examplesLong example -

WPP

●

Leading advertising agency

●

Strong beneficiary of booming corporate cash flows

–

Particularly exposed to US corporates (45% of revenues)

●

During our holding period, organic growth has consistently outstripped expectations

–

At Q1 2012 results, WPP raised guidance to above 4% growth after

growing 4% in Q1

–

Three quadrennial events should push growth higher in 2012

–

We use 5% organic growth for 2012

●

According to our historic analysis of operating leverage, this should allow some 70bp margin increase

●

Indeed management said their target of 50bp increase could well be exceeded

●

We believe WPP can make a 50bp improvement with only 4% organic growth, in 2011 they had 110bp improvement with 5% organic growth

●

We are 5% above consensus (and the stock still trades on only 10.9 times earnings)

●

Strong balance sheet allows acquisitions, which will lead to further earnings revisions

22

50

100

150

200

4

6

8

10

12

14

16

18

2008 2009 2010 2011 2012

BEst Standard EPS Adjusted + 2012* A (RHS) Price (LHS)

Stock examplesPanalpina

from 6 Nov 2007 to 1 Jun 2012

Past performance is not indicative of future performance.

Source: Bloomberg

23

Stock examplesShort example -

Panalpina

●

Leading air and sea forwarding agent

●

After strong recovery in air traffic last year due to low global

inventories, Panalpina

is suffering declines in air freight volumes

●

After improving gross profit margin coming out of loss making contracts, Panalpina

has to accept lower than expected margins if it wants to grow as hoped by consensus

●

Recent hikes in rates by shipping lines posts further risk for margins.

●

Our EBIT forecast is 20% below consensus and it is based on an optimistically flat margin in sea and flat volumes in air despite Q1 decline

●

Panalpina’s

cash on the balance sheet is earmarked for legal provisions and

will not find its way back to shareholders

●

PE is 19x, still very expensive


Emerging Market Long/Short Equity

25

Name Talentum Emerging Alpha World Invest Absolute Emerging

Description Emerging markets equity long/short fund with a low beta style

Low volatility, emerging markets equity long/short fund with a low beta style

Fund type Offshore UCITS

Fund managers Enrico Camera and Iain Cartmill Enrico Camera and Iain Cartmill

Inception date 1 Feb 2007 10 Jul 2009

Typical number of positions 50-80 50-80

Target gross exposure 150-210% 100-140%

DealingMonthly on 30 days notice

No lock-upDaily

Fees2% management fee


2% management fee


Minimum investment EUR/USD 100,000 EUR 5,000

ISIN (EUR/USD) KYG8669L1014/ KYG8669L1196 LU0435115307

Talentum Emerging Alpha and World Invest Absolute EmergingKey characteristics


26

Monthly performanceTalentum Emerging Alpha and World Invest Absolute Emerging


2012 -1.6 3.0 4.2 3.9 -3.5 6.0

2011 -3.9 -0.3 0.6 1.5 0.9 -0.2 1.6 0.6 -0.5 -0.7 0.6 0.6* 0.7

2010 -2.4 -1.0 2.8 -0.7 -2.7 0.9 0.4 1.3 2.2 2.6 1.1 0.8 5.4

2009 1.4 -0.1 -1.3 0.4 1.9 1.1 2.1 2.5 3.7 0.2 1.0 2.7 16.8

2008 0.3 4.4 -0.7 2.3 6.2 2.3 -4.6 -2.2 -0.2 1.5 0.0 -0.3 8.7

2007 -0.8 1.1 1.3 0.4 0.4 -0.1 -2.3 2.8 2.7 -0.1 1.8 7.4

TALENTUM EMERGING ALPHA –

A EUR


2012 -1.2 1.9 2.7 2.5 -2.5 3.5

2011 -4.0 -0.4 0.8 1.5 0.9 -0.3 1.5 0.5 -0.5 -0.7 0.4 0.6 0.2

2010 -1.4 -0.4 1.4 -0.6 -2.7 1.2 0.3 1.2 2.2 2.5 1.0 0.5 5.2

2009 0.3 2.1 2.2 2.4 -1.1 1.9 8.0

WORLD INVEST ABSOLUTE EMERGING –

C EUR

Source: Arkos Capital. * Raised gross exposure range to 1.5x original targets


27

World Invest Absolute EmergingPortfolio breakdowns as at 31 May 2012

Source: Arkos CapitalAllocations and holdings are subject to change. Holdings breakdown shown without Bonds, Options, Sector look through for Index product.

Sector positions Long % Short % Net %

Consumer Discretionary 9.3 -0.8 8.5

Consumer Staples 10.6 -1.0 9.5

Energy 1.2 -3.3 -2.1

Financials 5.0 -9.3 -4.2

Health Care 1.7 -0.0 1.7

Industrials 9.9 -3.6 6.3

Information Technology 4.9 -3.8 1.1

Materials 6.2 -4.4 1.8

Telecommunication Services 1.3 -3.1 -1.9

Utilities 3.6 -2.5 1.1

Grand Total 53.8 -31.9 21.9

Geographic exposure Long % Short % Net %

Asia 0.9 -1.2 -0.3

Brazil 9.1 -6.0 3.1

Middle East 4.3 0.0 4.3

W. Europe 4.0 -3.1 0.9

South Africa 10.9 -6.5 4.4

Mexico 5.0 -1.0 4.0

CIS 0.8 0.0 0.8

Colombia 2.6 0.0 2.6

Chile 2.2 -1.7 0.5

Panama 2.2 0.0 2.2

Israel 1.4 0.0 1.4

Russia 1.2 -1.2 0.1

North America 1.5 0.0 1.5

Scandinavia 0.9 -1.3 -0.4

Turkey 3.7 -3.4 0.2

Czech 0.6 0.0 0.6

Poland 2.3 -6.4 -4.1

Grand Total 53.8 -31.9 21.9

28

Emerging markets themes

Longs Shorts

Overview


• Retail plays with strong consumer offers (Shoprite, Mr Price)

• Resilient consumer plays (Nokian

Tyres, AVI)

• Cheap materials with production growth (Gazpromneft, Exxaro

Resources)

• Telecoms with low competition (Etihad)

• Growth stories at discount (Valid, Check Point Software)

• Financials with sound balance sheets and growth potential (Capitec, RMI Holdings)

• Utilities with structural growth (Copasa, Aguas

Andinas)

• Competitive telecom environments (Telkom SA, Telekom Polska)

• Banks with weak balance sheets and slower growth rates (Santander Chile)

• Margin pressure in insurance sector (Sulamerica, Porto Seguro)

• Materials with poor cost control (Anglo American Platinum, JSW)

29

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

2009 2010 2011 2012

Simple Perf.

%

Ann. Perf.

%

Ann.Std.

Dev.

World Invest Absolute Emerging - C EUR

17.9 5.9 5.5

MSCI Emerging Markets Index (GAM hedged) in EUR

25.5 8.2 23.2

HFRX Equity Hedge (GAM hedged) in EUR

-5.6 -2.0 7.7

World Invest Absolute Emerging - C EURMSCI Emerging Markets Index (GAM hedged) in EURHFRX Equity Hedge (GAM hedged) in EUR

World Invest Absolute Emerging -

C EURPerformance from 10 Jul 2009 (inception) to 31 May 2012




Source: GAM, MSCI

30

8.05.2

0.23.5

34.3

17.3

-19.6

-1.0

-20 %

-10 %

0 %

10 %

20 %

30 %

2009Part

2010 2011 2012YTD

World Invest Absolute Emerging - C EURMSCI Emerging Markets Index (GAM hedged) in EUR

World Invest Absolute Emerging -

C EURAnnual returns from 10 Jul 2009 (inception) to 31 May 2012




Source: GAM, MSCI

31

Stock selectionFundamental in-depth analysis

P&L

Revenues: quantity by price by currency plus acquisitions minus disposals

Gross margin: measure of value added, mostly variable costs

Goodwill depreciation

Operating margin: influenced by fixed costs, prices

Interest costs: leverage can be good but it is a fixed cost

Associates (a separate company) and minorities (one way to fool you)

Dividends:

are they sustainable?

Cash Flow

Ebitda

–

interest –

tax –

capex: can the company support its growth?

Working capital: must grow no more than sales, can make a company bankrupt or reduce its competitiveness

If negative: can the balance sheet take it? Who is paying for this?

Balance Sheet

Debt levels: what is appropriate?

Provisions: future cash costs

Goodwill: impairment test, can it cause equity ratios to stretch?

32

Portfolio management

Goal

●

Maintain a consistently robust and liquid portfolio in accordance with the investment guidelines and internal rules for each fund

Portfolio characteristics:

●

Well-diversified

●

Clear maximum exposure for each stock

●

Exposure to market as per mandate with daily controls

●

Investment in any single stock not exceeding 3 days’

trading volume

●

No specific limits on country exposure (except for Emerging Markets products)

●

No specific sector limits unless a particular sector exposure leads to an unwanted correlation to external macro factors

●

No automatic lock-in of profits, no automatic stop-loss

●

Dynamic stop-loss policy

33

Risk management

Goal

●

Manage risk proactively at each stage of the investment process (idea generation, portfolio construction, portfolio management)

Structure

●

Robust risk management framework built around and integrated with investment approach

●

Set of risk management tools utilised by investment team as part

of ex-ante analysis

34

Risk management

Factors used to assess pre-trade single positions and level of portfolio risk:

●

Correlation management to avoid unwanted bets (adjusted Beta and

t-Stat)

●

Stress test analysis

●

Liquidity/volume

●

Volatility

●

Long, short, gross and net exposure

●

Proprietary (style) indicator of short-term overbought or oversold stocks

Pre-trade risk controls

35

Risk management function

●

Risk manager has independent supervisory function and operates at arms’

length

●

Monitors adherence to investment guidelines, internal investment

rules, restrictions and risk limits and initiates appropriate corrective actions in case of any transgression

●

In addition to the pre-trade risk analysis, the risk manager performs regular checks on: –

Capacity limits–

Sector and geographical exposure–

Consistency between what quantitative data suggest and existing portfolio (comparison of portfolio longs and shorts versus what quantitative indicators tell us about each position)

–

Dynamic stop/loss analysis–

Performance attribution

36

Risk management

By plotting the alpha generated by the current portfolio (blue line) over the last 6 months and fitting the 2 standard deviation bands above and below (red lines) we are able to gauge whether our style of investing could be overbought or oversold in the short term. This tool is used to prompt the manager to examine the current portfolio structure and might lead to measures such as a decrease/increase of our gross exposure.


Overbought style indicator

80

85

90

95

100

105

110

115

21.11.20

1128.1

1 .2011

05.12

.2011

12.12

.2011

19.12

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26.12

.2011

02.01

.2012

09.01

.2012

16.01

.2012

23.01

.2012

30.01

.2012

06.02

.2012

13.02

.2012

20.02

.2012

27.02

.2012

05.03

.2012

12.03

.2012

19.03

.2012

26.03

.2012

02.04

.2012

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.2012

16.04

.2012

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.2012

30.04 .20

1207

.05.20

1214

.05.20

1221

.05 .2012

28.05 .201

2

TALENTUM

1.96

Fitted

-1.96

37

Risk management


We want to ensure that the portfolio performance only reflects calculated bets.

We use a proprietary risk management tool that measures the current portfolio’s correlation to a wide variety of factors.

Correlation management

factor corr beta t-statEUR-USD X-RATE 0.129 0.023 0.834EUR-CHF X-RATE -0.087 -0.097 -1.112GBP-EUR X-RATE -0.088 -0.039 -1.016GOLD SPOT $/OZ 0.075 0.005 0.344DJ UBS INDUST METALS 0.124 0.003 0.291FTSE EUROTOP 100 INDEX 0.146 0.000 0.000CAC 40 INDEX 0.111 -0.003 -0.335MILAN MIB40 INDEX 0.023 -0.010 -1.269DAX INDEX 0.125 -0.002 -0.152FTSE 100 INDEX 0.281 0.025 1.718IBEX 35 INDEX -0.144 -0.029 -3.258SWISS MARKET INDEX 0.182 0.012 0.640NASDAQ 100 STOCK INDX 0.194 0.017 1.165S&P 500 INDEX 0.173 0.012 0.719BLP European Consumer Cyclical 0.266 0.016 1.568BLP European Consumer Non-Cyclical 0.367 0.063 3.056DJ EURO STOXX LARGE P = 0.083 -0.008 -0.694DJ EURO STOXX SMALL P = 0.117 -0.002 -0.211DJ STOXX TMI VALUE P = 0.068 -0.011 -0.898DJ = STXX TMI GRWTH P = 0.228 0.013 1.063US 10Y BOND -0.032 0.020 0.376S&P EUROPE 350 ENERGY IX 0.185 0.008 0.647S&P EU 350 CON STAPLE IX 0.380 0.066 3.367S&P EU 350 TELECM SV IDX 0.060 -0.012 -0.752S&P EU 350 CONS DISCT IX 0.271 0.018 1.636S&P EU 350 UTILITIES IDX -0.051 -0.027 -2.087S&P EU 350 MATERIALS IDX 0.176 0.005 0.475S&P EU 350 FINANCIALS IX -0.015 -0.015 -1.773S&P EU 350 HEALTHCARE IX 0.227 0.026 1.390S&P EU 350 INFO TECH IDX 0.227 0.015 1.300S&P EU 350 INDUST INDEX 0.202 0.008 0.756CYC-NCYC 0.131 0.003 0.233LARGE-SMALL -0.108 -0.051 -1.527VALUE-GROWTH -0.394 -0.154 -5.376EURO-BUND 0.057 0.058 1.550VIX -0.219 -0.005 -1.695VSTOXX -0.192 -0.003 -0.985US BREAK EVEN INFL RATE 10YR 0.107 0.167 1.334EUR-JPY X-RATE 0.180 0.030 1.331JAPANESE JPY SPOT 0.106 0.028 0.894RUSSELL 2000 0.145 0.005 0.490WTI Crude Oil 0.205 0.016 1.464DEFENSIVE vs AGGRESSIVE -0.093 -0.006 -0.248EUR-SEK X-RATE -0.124 -0.036 -0.888SWEDISH MARKET INDEX 0.225 0.011 1.116MSCI Emerging Free 0.199 0.018 1.313Dax-Ibex spread 0.406 0.072 5.314SHANGHAI 0.106 0.016 1.149

38

Risk management

• In periods of market turbulence (high volatility) beta becomes a poor indicator of correlation

• We perform stress test analysis to ensure that in such circumstances the current portfolio would not show significant unwanted correlation

• We analyse how the current portfolio would have performed in a sample of periods of high volatility


Stress testing

FROM TO EUROTOP 100 TALENTUM

05.12.2011 19.12.2011 -3.26% 0.85%

16.03.2012 18.05.2012 -12.71% 3.41%

13.01.2012 01.06.2012 -5.85% 7.51%

FROM TO US 10Y BOND TALENTUM

05.12.2011 19.12.2011 1.32% 0.85%

16.03.2012 18.05.2012 3.69% 3.41%

13.01.2012 01.06.2012 2.63% 7.51%

FROM TO EUR-USD X-RATE TALENTUM

05.12.2011 19.12.2011 -3.01% 0.85%

16.03.2012 18.05.2012 -3.00% 3.41%

13.01.2012 01.06.2012 -2.61% 7.51%

39

Arkos’

organisational structure

Board of DirectorsGianmarco Mondani (P)

Giulio Romani (VP)Fabrizio Lauro (D)

Paolo Bertolini

Board of DirectorsGianmarco Mondani (P)

Giulio Romani (VP)Fabrizio Lauro (D)

Paolo Bertolini

General ManagementFabrizio Lauro (CEO)

Gianmarco Mondani (CIO)Tristan Brenner (COO)

General ManagementFabrizio Lauro (CEO)

Gianmarco Mondani (CIO)Tristan Brenner (COO)

External AuditorErnst & Young

External AuditorErnst & Young

Risk ManagementFabio Trancanelli

Risk ManagementFabio Trancanelli

Operations & OrganisationTristan Brenner

Operations & OrganisationTristan Brenner

Front OfficeMirko Borghi / Michael Tornese

Front OfficeMirko Borghi / Michael Tornese

Middle OfficeSimone Vago

Giancarlo BrunettiFrancesco Freggiaro

Middle OfficeSimone Vago

Giancarlo BrunettiFrancesco Freggiaro

Marketing & Relationship ManagementChristina Howard

Eva Gianini

Marketing & Relationship ManagementChristina Howard

Eva Gianini

ComplianceTristan BrennerCompliance

Tristan Brenner

General AssistantZuhal De Santis

Christian Carabelli

General AssistantZuhal De Santis

Christian Carabelli

Outsourced services (HR, IT, Accounting)Outsourced services (HR, IT, Accounting)

Asset ManagementGianmarco MondaniRoberto Cantaluppi

Paolo LonginottiDavide MarchesinJonathan Stanford

Enrico CameraIain CartmillAldo Meroni

Asset ManagementGianmarco MondaniRoberto Cantaluppi

Paolo LonginottiDavide MarchesinJonathan Stanford

Enrico CameraIain CartmillAldo Meroni

40

Arkos’

investment team

Gianmarco Mondani

Founding Partner and CIO of Arkos Capital S.A. Fund manager of

Talentum

Activedge, Talentum

Enhanced, World Invest Absolute Return (all since inception).

Previously co-fund manager of Talentum

Activedge, Talentum

Enhanced, World Invest Absolute Return at Banca

Arner, Lugano which he joined in 2002.

From 1996 to 2002 Gianmarco was a portfolio manager at Martin Currie IM in Edinburgh within the GBP 3 bn

European equity team. He was responsible for the Martin Currie European Unit Trust and Martin Currie European Investment Trust –

both Europe-ex-UK funds. At Martin Currie he also ran a pilot dummy portfolio in anticipation of the launch of Martin Currie’s first hedge fund.

BA (cum laude) in Economics and Business Studies from Genoa University (Italy), Master in Investment Analysis from Stirling University(UK).

Roberto Cantaluppi

Joined Arkos Capital S.A. in 2007. Co-Fund Manager of Talentum

Activedge, Talentum

Enhanced, World Invest Absolute Return and of World Invest Absolute Financials.

From 1999 to 2007 he worked in various functions at Allianz Asset Management and at RAS Asset Management SGR (a fully owned subsidiary of Allianz) in Milan and Munich. For three years he was the head of the sector analysts team and he managed the RAS Research, a global equity fund, and RAS Financial Services, a global financial fund. Previously he was the head of global financial services team at Allianz Asset Management, after having spent one and a half year as buy-side analyst on European banks.

From 1997 to 1999 he worked as an analyst for San Paolo IMI in Turin in the strategic planning office of the CEO.

From 1996 to 1997 he worked as analyst of derivative products in FX and bonds at Mediosim

–

Milan.

BA (cum laude) in Economics and a Master in Economics from Bocconi

University in Milan and certificate of Italian Financial Analyst Association.


Biographies

41

Arkos’

investment team

Paolo Longinotti

Co-Fund manager of Talentum

Activedge, Talentum

Enhanced and World Invest Absolute Return.

Joined Arkos Capital SA in 2011.

From 1998 to 2008 he worked as a Portfolio Manager and Buy Side Analyst for different Italian investment houses, such as Eurizon

Capital SGR, Eptafund

SGR and PrimeGest

(Generali

Group). He was Co-Fund Manager of European funds over the entire period and responsible for the funds SanPaolo

Salute&Ambiente, for the period 2000-2002, and SanPaolo

High Tech, in 2004-2008 timeframe.

From 2008 to 2010 he worked as a Co-Fund Manager on European hedge funds for SOPAF Capital Management SGR.

From 2010 to 2011 he was a Sell Side Analyst at Fidentiis

Equities in Milan.

He holds a BA in Economics and Business Administration from Università

Cattolica

del Sacro

Cuore

in Milan

Davide Marchesin

Fund Manager of World Invest Absolute Financials. Joined Arkos Capital S.A. in 2008.

From 2007 to 2008 Davide

worked for MainFirst

Bank in London (UK) as an institutional stockbroker, as a European equity institutional salesperson.

From 2003 to 2007 he worked for RAS Asset Management SGR (Allianz Global Investors) in Milan (Italy) as co-

portfolio manager of RAS Financial Services, a global financial fund.

From 2000 to 2003 he worked for Arca

Fondi

SGR in Milan (Italy) as a buy-side analyst, responsible for European financials.

BA (cum laude) in Economics from Università

Cattolica

del Sacro

Cuore, Milan (Italy), holder of the Italian Financial Advisor and the Chartered Financial Analyst designations.


Biographies (cont)

42

Arkos’

investment team

Enrico Camera

Fund Manager. Transferred to Arkos Capital S.A. from Banca

Arner

which he had joined in 2006. Fund manager of Talentum

Emerging Alpha and World Invest Absolute Emerging.

From 2000 to 2006 Enrico worked for Aureo

Gestioni

in Milan as head of Global Emerging Markets Equities and as

portfolio manager for the Aureo

Mercati

Emergenti

fund. During this 6 year period the fund ranked third among Italian GEM mutual funds in the sector. Enrico was also an active member of the management committee.

From 1999 to 2000 he worked for Epta

Fund in Milan as part of the institutional client sales team.

BA (cum laude) in Economics from Verona University (Italy) and holder of the Chartered Financial Analyst designation.

Iain Cartmill

Co-Fund Manager. Joined Arkos Capital S.A. in 2007. Co-

fund manager of Talentum

Emerging Alpha and World Invest Absolute Emerging .

From 2000 to 2007 Iain was a Director at AIG Private Bank in Zurich, where he worked in equity research and portfolio management covering European and emerging markets stocks.

From 1997 to 1999 he worked for a number of investment banks (Fleming, Morgan Stanley and Deutsche Bank) in London as a Product Accountant.

From 1993 to 1997 he worked as an Analyst for ANZ Banking Group in Brisbane (Australia) within the Treasury and Finance departments.

BA in Economics from Queensland University and Bachelor in Business (Honours) from Queensland University of Technology (Australia). Holder of the Chartered Financial Analyst designation.


Biographies (cont)

43

Arkos’

investment team

Aldo Meroni

Financial Analyst. Joined the team in December 2011. Analyst for the Talentum

Emerging Alpha and World Invest Absolute Emerging funds.

During 2011 Aldo worked as a quantitative equity analyst at CFO Sim

S.p.A., a family office based in Milan where he created and developed a quantitative stock screening model. He has previous experience as a research analyst with Deutsche Bank, London (2008) and with SOPAF Capital Management, Milan (2007).

Msc

(cum laude) in Finance from the Bocconi

University (Italy) and a Bsc

(cum laude) in Finance from the same university.

Jonathan Stanford

Fund Manager. Joined Arkos Capital S.A. in 2007. Fund manager of World Invest Absolute Strategy.

From 1997 to 2007 Jonathan worked for the investment banking division of UBS as Executive Director responsible for convertible bond sales for institutional clients

in Italy, Spain, Greece and Switzerland.

From 1994 to 1997 he worked at Banca

Commerciale

Italiana

(Suisse) as a portfolio manager and derivatives trader in Lugano and Zurich.

BA in International Management from Franklin College, Lugano (Switzerland) and MBA in International Management from Long Island University (USA).


Biographies (cont)

44

Arkos’

investment team

Fabio Trancanelli (Risk Manager)

Risk Manager. Joined Arkos Capital S.A. in December 2007.

From May 2002 to November 2007 Fabio worked for Aureo

Gestioni

S.G.R. as head of quantitative analysis within the risk management department, responsible for the identification and development of portfolio performance analysis and market risk models and performance and risk decomposition and attribution procedures. He was jointly responsible for internal audit and portfolio alert reporting, and for the selection of the risk management software solution for the entire group's managed products (approximately 8bn Euro).

BA (cum laude) in Statistical Science from Università

la Sapienza

in Rome and Masters Degree in Quantitative Finance and Insurance from Bocconi

University in Milan.

Biographies (cont)


45

Arkos

Developed Europe Prime Brokers/ Custodians Administrator Auditor

Talentum Activedge EUR A Merrill Lynch, Morgan Stanley Citibank Europe Ernst & Young

Talentum Enhanced EUR A Merrill Lynch, Morgan Stanley Citibank Europe Ernst & Young

World Invest Absolute Return SICAV State Street Bank Luxembourg State Street Bank Luxembourg Ernst & Young

Emerging Markets

Talentum Emerging Alpha –

A EUR Merrill Lynch, Morgan Stanley Citibank Europe Ernst & Young

World Invest Absolute Emerging –

C EUR State Street Bank Luxembourg State Street Bank Luxembourg Ernst & Young

Financials

World Invest Absolute Financials SICAV State Street Bank Luxembourg State Street Bank Luxembourg Ernst & Young

Convertibles

World Invest Absolute Strategy SICAV State Street Bank Luxembourg State Street Bank Luxembourg Ernst & Young

Additional fund information

Source: Arkos Capital, GAM

46

Disclaimer

Neither this Presentation nor any other document in connection with the Shares in the funds are a Prospectus/Presentation according to the Austrian Investment Funds Act (Investmentfondsgesetz, InvFG), the Austrian Capital Markets Act (Kapitalmarktgesetz, KMG) or the Austrian Stock Exchange Act (Börsegesetz, BörseG) and has therefore not been drawn up, audited, approved, pass-ported and/or published in accordance with the aforesaid acts. Neither the fund nor Arkos Capital or related persons are under the supervision of the Austrian Financial Market Authority or any other Austrian supervision authority.

Prospective purchasers of Shares in the funds should note that the Shares in the fund have not been and will not be offered in the Republic of Austria in the course of an offer to the public within the meaning of section 24 of the Austrian Investment Funds Act or section 33 of the Austrian Investment Funds Act or sec 1 para

1 no 1 of the Austrian Capital Markets Act but under circumstances which will not be considered

as an offer to the public under any of the aforesaid acts. Therefore, the provisions of the Austrian Investment Funds Act and the provisions of the Austrian Capital Markets Act

relating to registration requirements and to prospectus requirements do not apply and the Shares in the fund have thus neither been registered for public distribution in Austria with the Austrian Financial Market Authority (Finanzmarktaufsichtsbehörde) nor been the subject matter of a prospectus compliant with the Austrian Investment Funds Act or the Austrian Capital Markets Act.

This Presentation is confidential and is being provided only to a limited number of recipients who have been individually selected in advance by certain criteria and are targeted in Austria exclusively by means of a private placement. This Presentation is provided solely for the information of such recipients

and must not be reproduced, published, distributed or made available to any other person (including the press and any other media), in whole or in part, for any purpose and no steps may be taken that would constitute a public offer of the Shares in the fund under either the Austrian Investment Fund Act or the Austrian Capital Markets Act (whether presently or in the future).

The offering of Shares has not been and will not be notified to the Belgian Banking, Finance and Insurance Commission (Commissie

Voor

Het Bank, Financie-en Assurantiewezen

/Commission Bancaire, Financière

et des Assurances) nor has this Presentation been, nor will it be, approved by the Belgian Banking, Finance and Insurance Commission. The Shares may be offered in Belgium only to a maximum of 99 investors or to investors investing a minimum of €250,000 or to professional or institutional investors, in reliance on Article 5 of the Law of July 20, 2004.

This Presentation may be distributed in Belgium only to such investors for their personal use and exclusively for the purposes of this offering of Shares. Accordingly, this Presentation may not be used for any other purpose nor passed on to any other investor in Belgium.

The following may be included if consumers will receive marketing material:

Any offer to sell or sale of Shares must be made in compliance with the provisions of the law of the 14 July 1991 on Consumer Protection and Trade Practices to the extent applicable pursuant to the Royal Decree of 5 December 2000.

The Shares shall be offered to selected investors in Bulgaria on

a private placement basis only. In no event shall the number of

investors to which the Shares are offered exceed 99 in the territory of Bulgaria. The Shares are not open to subscription or purchase by any person other than the persons to which any offer to subscribe or purchase or solicitation to submit an offer to subscribe or purchase has been specifically addressed by the Funds. No information in this Presentation may be disseminated to or be considered addressed to any person other than a person to which any offer to subscribe or purchase or solicitation to submit an offer to subscribe or purchase has been specifically addressed by the Funds in the territory of Bulgaria.

This document does not constitute or form part of any offer or invitation to the public to subscribe for or purchase shares/units in the Funds and shall not be construed as such. This document is strictly confidential. Under no circumstances should it be reproduced or distributed to any other person.

The shares mentioned in this material have not been registered under the Czech Collective Investment Act or any other Czech securities laws. Any public distribution, advertisement or similar activities in Czech Republic will constitute a violation of applicable law. This material may only be circulated in the Czech Republic on a private placement basis in accordance with the Czech Collective Investment Act.

The Funds have not obtained an approval for marketing in Denmark

by the Danish Financial Supervisory Authority pursuant to the Danish Act on Investment Associations and Special-Purpose Associations as well as other Collective Investment Schemes etc. (Consolidated Act No. 904 of 5 July 2010) (the "Act") and the Executive Order on Marketing Carried out by Foreign Investment Undertakings in Denmark (Executive Order No. 505 of 12 May 2010) (the "Executive Order") issued by the Danish Financial Supervisory Authority. The Shares of the Funds have not been offered or sold

and may not be offered, sold or delivered, directly or indirectly, to investors in Denmark. This implies, inter alia, that the Shares in the Funds may not be offered or marketed to potential investors in Denmark unless an approval from the Danish

Financial Supervisory Authority in accordance with Section 16(1) of the Act has been obtained.

47

Disclaimer

This document is not addressed to or intended for any individual

or legal entity in the Republic of Estonia and does not constitute or form part of any offer or invitation to the public to subscribe for or purchase shares in the funds and shall not be construed as such. The funds are not authorised under the Estonian Investment Funds Act, and any sale, redemption or repurchase of shares will take place only outside the Republic of Estonia. The prospectus may not be distributed to the public in the Republic of Estonia.

This Document does not constitute an offer to the public in Finland. The units/shares cannot be offered or sold in Finland by means of any document to any persons other than “Professional Investors”

as defined by the Finnish Mutual Funds Act (Sijoitusrahastolaki

29.1.1999/48), as amended. No action has been taken to authorize an offering of the units/shares to the public in Finland and the distribution of this Document is not authorized by the Financial Supervision Authority in Finland. This Document is strictly for private use by its holder and may not be passed on to third parties or otherwise publicly distributed. Subscriptions will not be accepted from any persons other than the person to whom this Document has been delivered by the Fund/Manager or its representatives. This Document may not include all the information that is required to be included in a prospectus in connection with an offering to the public.

The Shares may not be offered directly or indirectly in the Republic of France and neither this Prospectus, which has not been submitted to the Autorité

des marchés

financiers, nor any offering material or information contained therein relating to the Fund, may be supplied in connection with any offer of

the Shares in the Republic of France.

Each purchaser of Shares acknowledges that the Funds are not and

will not be registered for public distribution in Germany. Accordingly, no offer of the Shares may be made to the public in Germany except pursuant to any of the exemptions set out in section 2 paragraph 11 of the German Investment Act including but not limited to if the Shares are distributed exclusively to credit institutions and financial services providers as defined in the German Banking Act, private or

public insurance companies, investment companies and their investment managers as well as pension funds and their

administrators.

The distribution of this Presentation and the offering or purchase of the Shares unless otherwise specified, may be restricted in certain jurisdictions. No persons receiving a copy of this Presentation or any accompanying subscription form in any such jurisdiction may treat this Presentation or any subscription form as constituting an invitation to them to subscribe for Shares, nor should they in any event use any such subscription form, unless in the relevant jurisdiction such an invitation could lawfully be made to them and such subscription form could lawfully be used without compliance with

any registration or other legal requirements. Accordingly, this

Presentation does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.

It is the responsibility of any persons in possession of this Presentation and any persons wishing to apply for Shares pursuant to this Presentation to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction (including exchange control regulations and taxes) in the countries of their respective citizenship, residence and domicile.

This material does not constitute or form part of any offer or invitation to subscribe for or purchase Shares in the Fund which is not registered under the Greek law. Any distribution, advertisement or similar activities in Greece will

constitute a violation of applicable law. Such distribution, advertisement or offer may only be effected with the prior permission of the Capital Market Commission.

Neither the Guernsey Financial Services Commission nor the States of Guernsey Policy Council take any responsibility for the financial soundness of the company or for the correctness of any of the statements made or opinions expressed with regard to it.

If you are in any doubt about the contents of this document you should consult your accountant, legal or professional adviser or

financial adviser.

The managers of the company, have taken all reasonable care to ensure that the facts stated in this document are true and accurate in all material respects, and that there are no other facts the omission of which would make misleading any statement in the document, whether of facts or of opinion. The managers accept responsibility accordingly.

It should be remembered that the price of the units/shares and the income from them from them can go down as well as up.

48

This Presentation relates to shares issued through private placement, and it does not constitute or form part of any offer or invitation to the public to subscribe for or purchase Shares in the Funds and shall not be construed as such.

The funds are not subject to any form of regulation or approval in the Isle of Man. This document has not been registered or approved for distribution in the Isle of Man and may only be distributed in or into the Isle of Man by a person permitted under Isle of Man law

to do so and in accordance with the Isle of Man Collective Investment Schemes Act 2008 and regulations made thereunder. The participants in the Funds are not protected by any statutory compensation scheme.

The Shares may not be offered, sold or delivered and the Prospectus, or any circular, advertisement or other document or offering material relating to the Shares, may not be published, distributed or made available in the Republic of Italy unless: (i) the Shares have been previously registered with the Bank of Italy and, as appropriate, with the Italian Securities and Exchange Commission (Consob); and (ii) the offering, sale or delivery of the Shares and publication or distribution of the Prospectus or of any other document

or offering material is made in accordance with relevant Italian laws and regulations.

This Presentation relates to a private placement and does not constitute an offer to the public in Jersey to subscribe for the Shares offered hereby. No regulatory approval has been sought to the offer in Jersey and it must be distinctly understood that the Jersey Financial Services Commission does not accept any responsibility for

the financial soundness of or any representations made in connection with the Funds. The offer of Shares is personal to the person to

whom this Prospectus is being delivered by or on behalf of the Funds, and a subscription for the Shares will only be accepted from such person. The Presentation may not be reproduced or used for any other purpose.

The shares offered are offered to a narrowly defined category of

investors, in all cases and under all circumstances designed to

preclude a public solicitation in Liechtenstein. This Memorandum may not be reproduced or used for any other purpose, nor be furnished to

any other person other than those to whom copies have personally been sent. This offer is a private offer, this Prospectus (or Memorandum) and the transactions described therein are therefore

not nor have been subject to the review and supervision of the Liechtenstein Financial Market Authority.

This document and the securities/units referred to herein have not been registered with any Luxembourg authority. This document does not constitute and may not be used for or in connection with a public offer in Luxembourg of the shares/units referred to herein. This document does not constitute or form part of any offer or invitation to the public to subscribe for or purchase Shares in the Funds and shall not be construed as such and no person other than the person to whom this document has been addressed or delivered shall be eligible to subscribe for or purchase Shares in the Funds.

Shares in the Funds will not in any event be marketed to the public in Malta without the prior authorisation of the Maltese Financial Services Authority.

The Funds may not be offered or sold, directly or indirectly, to

the public in Monaco other than by a Monaco duly authorized intermediary acting as a professional institutional investor which has such knowledge and experience in financial and business matters as to

be capable of evaluating the risks and merits of an investment in the Fund. Consequently, this Presentation may only be communicated to banks duly licensed by the “Comité

des Etablissements

de Crédit

et des Entreprises

d’Investissement”

and fully licensed portfolio management companies by virtue of Law n° 1.144 of July 26, 1991 and Law 1.338, of September 7, 2007, duly licensed

by the “Commission de Contrôle

des Activités

Financières.

This document is not addressed to or intended for any individual

or legal entity in the Netherlands except (a) individuals or legal entities who qualify as qualified investors (as defined by article 2 paragraph 1(e) of the Prospectus Directive (2003/71/EC), as amended or (b) other persons to whom, or in circumstances where, an exemption or exception to the offering of interests in collective investment schemes (beleggingsinstellingen) applies pursuant to the Act on Financial Supervision (Wet op het financieel

toezicht), and the rules and regulations promulgated pursuant thereto, as amended. Distribution of this document does not trigger a licence requirement for the funds in the Netherlands and consequently no supervision will be exercised over the funds by the Netherlands Authority for the Financial Markets (Autoriteit

Financiële

Markten).

The fund is not authorised and registered under the Polish Act on Investment Funds of 27 May 2004, and any marketing, sale, redemption or repurchase of shares (units) can only be made outside Poland. The prospectus cannot be distributed to the public in Poland, and a Polish recipient of the prospectus cannot in any manner forward the prospectus to the public in Poland.

Disclaimer

49

The Funds have not been registered with the Comissão

do Mercado dos Valores

Mobiliários

(the “CMVM”) as a foreign collective investment scheme and this Prospectus (or any other agreement, document or material in relation to the Funds) has not been approved by the CMVM pursuant to Decree-Law 252/2003 of 17 October, as amended from time to time (the “Decree-Law”). Therefore: (i) Shares may not be advertised, offered or sold; and (ii) the Presentation or any other offering material, may not be distributed or caused to be distributed to the public in circumstances which

could qualify as the marketing of Shares in the Republic of Portugal pursuant to the Decree-Law and the Portuguese Securities Code without prior registration of the Funds with the CMVM and all such documentation and marketing material being approved by the CMVM.

“The distribution of this Presentation and the offering or purchase of Shares is restricted to the individual to whom it is addressed. Accordingly, it may not be reproduced in whole or in part,

nor may its contents be distributed in writing or orally to any third party and it may be read solely by the person to whom it is addressed and his/her professional advisers.

Shares in the Funds will not be offered or sold by any person:

(a) otherwise than in conformity with the provisions of the European Communities (Markets in Financial Instruments) Regulations

2007, as amended; or

(b) otherwise than in a manner that does not constitute an offer for sale to the public within the meaning of Section 9 of the Unit Trust Act, 1990; or

(c) in any way which would require the publication of a prospectus under the Investment Funds, Companies and Miscellaneous Provisions Act, 2005, as amended, and any regulations adopted pursuant thereto; or

(d) in any country or jurisdiction including Ireland except in all circumstances that will result in compliance with all applicable laws and regulations in such country or jurisdiction.

Shares in the Funds will not in any event be marketed in Ireland

except in accordance with the requirements of the Central Bank of Ireland.”

Where the Central Bank of Ireland has granted a derogation from the requirement that the marketing of the fund’s shares be approved by the Central Bank under Non-UCITS Notice 19, the following additional wording should also be included in order to ensure compliance with the applicable legislative and regulatory requirements:

“The Funds shall not advertise or market its Shares in Ireland in

any way without the approval of the Central Bank of Ireland. The Funds are not supervised by the Central Bank of Ireland and the Funds are not otherwise supervised or authorised in Ireland. The Funds are established in Luxembourg and Cayman Islands, and is

supervised by the CSSF and CIMA respectively.”

This document is not a public offer of securities under Act No. 594/2003 Coll. on Collective Investments, or any other regulation applicable in the Slovak Republic, and is addressed to only selected individuals in the Slovak Republic, the number of which does not

exceed 50. This document may not be distributed to the public in the Slovak Republic, and the recipient may not in any way forward it to other individuals or the public. Any public distribution, advertisement or similar activities in the Slovak Republic will constitute a violation of applicable law.

Unregistered non-UCITS Funds

The Fund has not been authorised by or registered with the Spanish Securities Market Commission as a foreign collective investment scheme in accordance with section 15.2 of Law 35/2003 of 4 November 2003 on Collective Investment Schemes. Accordingly, the

Shares of the Fund may not be offered or sold in Spain by means

of any marketing activities as defined in section 2 of Law 35/2003, as amended by Law 25/2005, of 24 November 2005.

Unregistered UCITS Funds

The Funds have not been registered with the Spanish Securities Market Commission as a foreign UCITS in accordance with section 15.1 of Law 35/2003 of 4 November 2003 on Collective Investment Schemes (which implements into Spanish law the provisions of Directive 85/611 EEC, as amended). Accordingly, the Shares of the Funds may not be offered or sold in Spain by means of any marketing activities as defined in section 2 of Law 35/2003, as amended by Law 25/2005, of 24 November 2005.

Disclaimer

50

This Presentation has not been approved by or registered with the Swedish Financial Supervisory Authority (Finansinspektionen) pursuant to the Swedish Financial Instruments Trading Act (lagen

1991:980) om

handel

med finansiella

instrument). Accordingly, the Shares may only be offered in Sweden in circumstances that will not result in a requirement to prepare a prospectus pursuant to the Swedish Financial Instruments Trading Act.

The Funds are not Investment Funds (fondföretag) for the purpose of the Swedish Investment Funds Act (lag (2004:46) om

investeringsfonder) and have therefore not been, nor will they be, approved or registered by the Swedish Financial Supervisory Authority pursuant to the Swedish Investment Funds Act.

“The Funds have not been approved by the Swiss Financial Market Supervisory Authority (FINMA) as a foreign collective investment scheme pursuant to Article 120 of the Swiss Collective Investment Schemes Act of 23 June 2006 (the "CISA") Accordingly, the Shares

may not be offered to the public in or from Switzerland and neither this Presentation nor any other offering materials relating

to the Shares may be made available through a public offering in or from Switzerland. The Shares may only be offered and this Presentation may only be distributed in or from Switzerland to "Qualified

Investors" (as defined in the CISA and its implementing ordinance).“

No information in this Presentation is provided for the purpose of offering, marketing and sale by any means of any capital market instruments in the Republic of Turkey. Therefore, this Presentation may not be considered as an offer made or to be made to residents of

the Republic of Turkey.

The offered Shares have not been and will not be registered with

the Turkish Capital Market Board (the "CMB") under the provisions of the Capital Market Law (Law No. 2499) (the "Capital Market

Law"). Accordingly neither this Presentation nor any other offering material related to the offering may be utilised

in connection with any offering to the public within the Republic of Turkey without the prior approval of the CMB. However, according to Article 15 (d) (ii) of the Decree No. 32 there is no restriction on the purchase or sale of the offered Shares by residents of the Republic of Turkey, provided that: they purchase or sell such offered Shares in the financial markets outside of the Republic of Turkey; and such sale and purchase is made through banks, and/or licensed brokerage

institutions in the Republic of Turkey.

Acquiring Interests may expose an investor to a significant risk

of losing all of the amount invested. The Funds are limited liability companies and any person who acquires Interests will not

thereby be exposed to any significant risk of incurring additional liability. Any person who is in any doubt about investing in the Funds should consult an authorised person specialising in advising on such investments.

This document is provided for information purposes only and its contents (including any opinions) are subject to change without notice. This document has been prepared exclusively for the information of the person or persons for whom it is intended and therefore may not be suitable for all investors. Nothing contained in this document constitutes or forms part of any offer to sell or buy an investment, or any solicitation of such an offer, by Arkos Capital, or any of its affiliates, in any jurisdiction where such activity is prohibited (including, without limitation, the United States of America) or to any person to whom it is unlawful to make any such offer or solicitation. Nothing contained in this document constitutes investment, legal,

tax or other advice, nor is it to be relied upon when making investment or other decisions.

The information set out in this document in relation to the funds is for general guidance only and potential investors must obtain further information from the prospectus, offering circular or

other offering document for the relevant fund. Any investment in the funds described in this document may involve significant financial risks. The price of investments and any income from them may fluctuate and may fall as well as rise. Past performance is not necessarily a guide to future results and there is a significant risk that investors will lose all of the money or other property invested. When an investment involves a foreign exchange transaction (i.e. an investment denominated in a currency other than the investor's base currency), it may be subject to fluctuations in currency values and the value of such investment and the income on them may go down as well as up. Units in a fund may not be readily realisable and there may be no recognised market in any such units in the event of an investor wishing to sell. There is no assurance that a fund's investment objectives will be achieved and investment results may vary substantially over time. Investment in any fund or in the funds generally is not intended to be a complete investment programme for any investor.

Disclaimer

51

This document has been prepared, approved and issued by Arkos Capital. The information and opinions contained in this document have been compiled, or arrived at, in good faith and on the basis of publicly available information, internally developed data and sources believed to be reliable as at the date of publication. However, no representation or warranty, express or implied, is made by Arkos Capital or any other person as to their reliability, accuracy, completeness or correctness. Neither Arkos Capital nor any of its directors or other employees accepts any liability for any loss or damage of any kind, including any loss of profit, whether direct or indirect in respect of the use of this document or reliance on the information and opinions contained in it from time to time. However, Arkos Capital does not exclude or restrict

any liability it may have under applicable laws and regulations.

All material copyright Arkos Capital 2011. All rights reserved. None of the contents of this document, either in whole or in part, may be reproduced, stored in a data retrieval system, or transmitted, in any form or by any means -

electronic, mechanical, photocopying, recording or otherwise -

without the prior written permission of Arkos Capital. However, reasonable extracts may be made for the purposes of comment or review, provided that the source is acknowledged.

This material is confidential and is intended solely for the use

of the person or persons to whom it is given or sent and may not be reproduced, copied or given, in whole or in part, to any other person. It is aimed at sophisticated, professional, eligible, institutional and/or qualified investors who have the knowledge and financial sophistication to understand and bear the risks associated with the investments described herein. Nothing contained herein constitutes investment, legal, tax or

other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to subscribe and is by way of information only. Reference to specific securities is not a recommendation to buy or sell those securities.

Subscriptions to the Talentum funds mentioned herein will only be received and shares or units (‘Shares’) issued on the basis of the current prospectus for the funds.

The World Invest funds mentioned herein are a Sub-fund of a Luxembourg based umbrella SICAV World Invest and is registered for sale in Switzerland, Italy, Norway and Luxembourg,

The Shares of the funds mentioned have not been registered under

the US Securities Act of 1933, as amended (the “Securities Act”), and the fund is not registered under the US Investment Company Act of 1940, as amended (the “Company Act”). Accordingly, unless an exemption is available, such Shares may not be offered, sold or distributed in the United States or to US persons. However, pursuant to an exemption from registration under the Securities Act and the Company Act, the Shares may be sold or resold in the United States or to certain qualified US investors in transactions that do not constitute a public offering.

In the United Kingdom, this material has been approved by GAM London Ltd, 12 St James's Place, London SW1A 1NX, authorised and regulated by the Financial Services Authority. The funds mentioned herein are not regulated under the Financial Services and Markets Act 2000, consequently no protection is provided by the UK regulatory system. Moreover benefits available under the UK Financial Services Compensation Scheme do not apply.

The funds are not authorised or registered for public sale in Asia Pacific. Therefore, no public marketing must be carried out for them in Asia Pacific. In Hong Kong, this material is restricted to professional investors (as defined in the Securities and Futures Ordinance (Cap 571)) only. In other countries in Asia Pacific, this material should only be distributed in accordance with the applicable laws in the relevant jurisdiction. In Japan, the funds mentioned herein shall not be disclosed

publicly pursuant to the Financial Instruments and Exchange Law (the “FIEL”) nor registered for public sale or private placement pursuant to the Law on Investment Trusts and Investment Companies. Therefore, none of the shares of the funds mentioned herein may be solicited in Japan or to residents in Japan. This material is intended for circulation to professional, institutional and/or qualified investors only. Any person in receipt of this material is not allowed to distribute it to residents in Japan nor communicate to residents in Japan about the funds mentioned herein.

Disclaimer

Date post:	20-Jun-2015
Category:	Business
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