ethos traditional values - investing to produce sustainable long term returns Cumberland Place

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2 Unicorn Investment Approach Investing in the Best of British Companies ethos traditional values - investing to produce sustainable long term returns Cumberland Place investment style consistent application of clearly defined investment criteria 24 th November 2015 stock selection systematic process to identify best companies analysis investment ideas researched in-house valuation experience backed by detailed financial analysis 4

3 Unicorn Asset Management Independently owned and managed company established in 2000 Fundamental stock picker Renowned UK mid and small cap companies, AIM & fledgling markets specialist Experienced, committed, and well-resourced investment team with >100 years combined experience Assets under management c. 950m* Managers invest in their own funds Aims to generate consistent long term outperformance - be the best rather than the biggest Source: Unicorn Asset Management 30 October

4 Alpha Generation Alpha Generation Alpha Generation Alpha Generation 3 Investment Philosophy Disciplined Investment Criteria End Market Identification Competitive Advantage Smaller Company Advantage We only invest in profitable companies Companies must be dividend paying or have a clear path to doing so We believe the highest quality companies should be able to both fund growth and pay dividends Companies exposed to growing end markets Strong niche market operators or best of breed companies in established markets Our sell discipline is usually driven by a change in the end market We prefer companies with a competitive advantage Important to understand why a competitive advantage exists We identify competitive advantage: intellectual property, scale, infrastructure, knowledge of market We prefer smaller companies for their inherent flexibility UK smaller companies attract less broker coverage This creates inefficiencies and investment opportunities All research conducted in-house

5 Current Market Valuations Forecast PE 2015 Forecast PE 2016 EPS Growth 2016 FTSE 100 * % FTSE 250 * % FTSE Small Cap * % Excluding Oil & Gas, Mining Source: * Peel Hunt UK Market Valuations 26 October 2015; Excluding loss makers **Unicorn Asset Management, weighted average figures 19 November

6 Unicorn Investment Approach Investing in the Best of British Companies ethos traditional values - investing to produce sustainable long term returns UK Smaller Companies Fund investment style consistent application of clearly defined investment criteria stock selection systematic process to identify best companies analysis investment ideas researched in-house valuation experience backed by detailed financial analysis 4

7 UK Smaller Companies Fund Genuine Smaller Companies Fund No stocks outside of remit with no attempt to benchmark Weighted Average market cap 255m* Flexible and nimble All Companies Profitable at Point of Investment High conviction portfolio of 30 to 50 stocks Well diversified by sector Strong Thematic Plays UK consumer US recovery and growth Strong Performance Top quartile over 3 & 5 years Underlying Investments* FTSE MID 250, 6.1% FTSE Small Cap, 57.8% FTSE Fledgling, 4.8% Full, 10.0% AIM, 19.2% Cash, 2.1% *Source: Unicorn Asset Management, 30 October Past performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the full amount of their original investment. 6

8 Preferred Sectors/Themes 2015 Broad themes, multi-year time horizon, keeping it fluid: Thematic UK economic recovery focusing on true small companies US GDP growth; US construction & manufacturing recovery Secular tech growth Dividend strength and quality General Selective participation in IPO market Speciality/niche businesses Active in secondary fundraisings Investee companies M&A activity 7

9 Weekly earnings growth % UK CPI Consumer spending driving UK growth 3.5 Weekly earnings growth versus CPI 6.0 UK consumer spending growth hit five-year high in Q Rising employment, low inflation and wage growth all contributing to the rise in consumer spending Strong house prices boosting confidence and encouraging falls in the savings ratio Regular weekly earnings YoY % growth UK CPI Forecasts envisage further near-term falls in savings ratio *Source: Bloomberg 8

10 Construction put in place ($' trns) % change YoY Stable and strengthening US economy U.S. construction put in place Construction put in place for the 12 months to the end of August up 14% YoY to c. $1.1 trillion Highest construction output for seven years Strongest YoY growth since March Construction put in place ($' trns) % change YoY -20 Robust growth in residential and nonresidential construction *Source: US Census Bureau data, seasonally adjusted figures 9

11 Somero Manufactures laser-guided machinery used in horizontal concrete placement Advances the productivity, concrete flatness and efficiency of the jobsite Addresses c. 99% of the global market Exposed to US and international construction Market Cap 80m Sector Industrial Engineering Index AIM All Share US exposure at 60% with construction recovery apparent Fleet in service average age approaching replacement age Source: Unicorn Asset Management, 30 October

12 Trifast Global manufacturer and distributor of industrial fastenings Margin enhancement from acquisitions Supply chain consolidation beneficiary Consumer discretionary exposure Self-help measures improving margins Market Cap 132m Sector Industrial Engineering Index FTSE Small Cap Increased demand from the automotive, domestic appliances etc. Source: Unicorn Asset Management, 30 October

13 Acal Specialist electronics group supplying niche electronics Serves 25,000 industrial manufacturers 80% of products are customerspecific and technologically complex Market Cap 159m Sector Support Services Index FTSE Small Cap Key markets in UK, Germany, France and Nordics. 40% of revenues from design and manufacturing Targeted acquisitions i.e Foss Fibre Optic Systems Source: Unicorn Asset Management, 30 October

14 Avon Rubber Global market leader in respiratory protection systems for military, security and emergency services World-leading dairy business, manufacturing liners and tubing for dairy industry Dairy business gaining market share Market Cap 354m Sector Aerospace & Defense Index FTSE Small Cap Exposure to growing dairy business in BRIC economies Good order book visibility in defence market Geopolitical concerns for CBRN defence Source: Unicorn Asset Management, 30 October

15 Clipper Logistics Group Leading provider of value-added logistics and e-fulfilment solutions Well positioned to benefit from evolving omni-retail market Blue-chip client list and strong new business pipeline Market Cap 272m Sector Industrial Transportation Index Full Beneficiary of strong UK consumer driving online sales and click & collect services Strong financial track record and robust balance sheet Source: Unicorn Asset Management, 30 October

16 Regulatory Notice This document is an advertisement and not a prospectus. It has been issued by Unicorn Asset Management Limited and constitutes a financial promotion under Section 21 of the Financial Services and Markets Act This document should not be regarded as constituting advice in respect of legal, taxation, investment or any other matters. Prospective investors are advised to consult their bank manager, stockbroker, solicitor, accountant or independent financial adviser before considering any investment. Past performance is not a guide to future performance. The value of investments & the income from them may go down as well as up & investors may not get back the full amount of their original investment. Investing in smaller companies, including AIM companies & unlisted companies, can carry greater risks than those usually associated with larger capitalised companies. Any decision to invest in the Unicorn OEICs or the Unicorn AIM VCT Plc. should be made solely by reference to the information, terms and conditions contained in the relevant prospectus and application form. Unicorn Asset Management Limited provides no guarantees, representations or warranties regarding the accuracy of this information. This information should not be construed as an invitation, offer or recommendation to buy or sell investments, shares or securities or to form the basis of a contract to be relied on in any way. If you are interested in any of these funds you should contact your usual financial adviser before making any investment decision. Issued by Unicorn Asset Management Limited, First Floor Office, Preacher s Court, The Charterhouse, Charterhouse Square, London EC1M 6AU. Authorised & Regulated by the Financial Conduct Authority. 15

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