City of Fresno Retirement Systems High Yield Bond March 8, 2012

Transcription

1 City of Fresno Retirement Systems High Yield Bond March 8, 2012 Doug Forsyth, Managing Director, Portfolio Manager Clifton Wedington, Senior Vice President, Institutional Business Development For Use In One-on-one Presentations Only

2 About Firm Overview Multi-strategy investment management firm with entrepreneurial, autonomous investment teams Pursuit of sustainable alpha coupled with disciplined risk management Robust infrastructure platform and strong parent company backing Product Categories Alternatives Growth Equity Income & Growth NFJ Value Equity Non-US Equity Systematic Equity Absolute Return Portable Alpha Tail-Risk Hedging Large Cap Mid Cap Small Cap / SMID Micro / Ultra Micro High Yield Convertibles Large Cap Mid Cap Small Cap Non-US / Global Global Growth Non-US Growth Non-US Small Cap Large / Mid / Small / SMID Growth / Core Non-US / Global Emerging Markets Managed Volatility See additional disclosure at the end of this presentation. AUM1 2

3 High Yield Bond As of December 31, 2011 Deep, stable team with strong leadership Unique approach to identifying investment opportunities Proven ability to exploit rating inefficiencies Consistent alpha and strong risk-adjusted returns Benchmark Bank of America Merrill Lynch High Yield Master II Index Strategy Inception April 1, 1994 Assets Under Management $1.9 billion* *High Yield assets include CBO assets of $24 M. Stated assets under management may include both discretionary and non-discretionary assets, and may therefore exceed composite assets. See additional disclosure at the end of this presentation. Source: AUM CHART 4 3

4 An Experienced High Yield Bond Team Our Highly Credentialed Team Has Extensive Industry Experience And Utilizes The Firm s Global Research Platform Through Its Open Office Architecture Portfolio Management Team Emerging Markets Douglas G. Forsyth, CFA (17/20) David A. Foster, CFA (5/15) US Large and Mid Cap Global Equity William (Brit) L. Stickney (12/23) Joanna H. Willars (6/11) Justin M. Kass, CFA (11/14) David J. Oberto (4/9) US Small Cap Growth Income and Growth Michael E. Yee (17/18) Nicole Larrabee Rodrigues (10/16) Systematic International Growth Risk Management Equity Trading Numbers in parentheses reflect years of tenure at and affiliates/years of industry experience. INVTM 2 4

5 High Yield Bond Philosophy, Strategy and Style We Invest in Companies Poised to Benefit From Positive Fundamental Change We follow a disciplined, fundamental, bottom-up research process to build a portfolio of high yield corporate issuers that demonstrate improving fundamentals We minimize credit risk through our: Ability to maximize information through our global research platform Upgrade Alert Model Our portfolio includes issuers who exhibit the highest visibility of future expected operating performance - public companies See additional disclosure at the end of this presentation. CHYFP3 5

6 High Yield Bond Investment Process Idea Generation Company Summary Sheet Proprietary Upgrade Alert Model Relative Value and Trading Monitoring and Risk Management CHYFP4 6

7 High Yield Bond Investment Process: Idea Generation Our Resources Are Focused On Identifying Qualified Investment Opportunities Resources: People Investment Management Team External Research Specializing in company research across all industries Open environment Leverage fundamental company research from entire team Cross-check and verification of investment ideas Network of analysts: best insight, local expertise, and most promising companies Company meetings: first hand evaluation of company management and strengthen critical relationships Resources: Tools Technology Instant access to critical data Hands-on fundamental analysis Real-time portfolio management Proprietary Systematic Evaluation Model Quantifies positive change, sustainability and timeliness Evaluates combinations of company fundamentals Generates ideas for hands-on fundamentals analysis CHYFP5 7

8 Investment Process: Upgrade Alert Model Financial Statements Published Rating: B3 / B+ Financial Statements Income Statement Years Ended December 31 Projections: Base Case Sales 2,242 2,504 2,704 2,812 2,953 3,101 Gross Profit 903 1,004 1,068 1,133 1,196 1,259 Operating Income Net Interest Expense Net Income (Loss) Adjusted EPS EBITDA Cash Flow Statement Net Income (Loss) Depreciation & Amortization Working Capital 34 (123) 37 (13) (17) (18) Operating Cash Flows 118 (2) Capital Expenditures Sale (Purchase) of Business 0 0 (145) Investing Cash Flows (50) (55) (140) (50) (50) (50) Change in Debt (18) Change in Equity 0 0 (22) Financing Cash Flows (30) (12) (12) (12) Balance Sheet & Liquidity Available Revolver Cash & Cash Equivalents Total Available Liquidity Net Property, Plant and Equipment Total Assets 1,040 1,148 1,171 1,256 1,364 1,480 Debt Maturities/Repayments Total Debt Outstanding Total Equity Confirmation of our philosophy of improving operating statistics through detailed analysis Compare objective rating to published rating The hypothetical information listed above reflects the typical investment process applied to this strategy. At any given time other criteria may affect the investment process. See additional disclosure at the end of this presentation. CHYFP12 8

9 Investment Process: Upgrade Alert Model Operating Statistics Published Rating: B3 / B+ Operating Statistics Liquidity Years Ended December 31 Projections: Base Case Current Ratio Days Receivables Outstanding Days Payables Outstanding Coverages EBIT to Total Interest EBITDA to Total Interest EBITDA-CapEx to Total Interest Margins (%) Gross Margin EBIT Margin EBITDA Margin Cash Flows EBIT EBITDA Free Cash Flow 56 (69) Leverage Total Debt to Total Assets Debt to EBITDA Quantitative Rating BBB- BBB- BBB- BBB BBB BBB+ Operating Statistics Reviewed Objective Internal Credit Rating Eight Rating Factors Include: Liquidity Capital Structure Percentage of Capitalization Asset Utilization Coverage Ratios Margins Cash Flow Leverage Ratios The hypothetical information listed above reflects the typical investment process applied to this strategy. At any given time other criteria may affect the investment process. See additional disclosure at the end of this presentation. CHYFP13 9

10 High Yield Bond Investment Process: Company Summary Sheet Team Discussion Fundamental Analysis Basic Operating Statistics Issue Characteristics Company Description Positive Catalysts Key Risks Competitive Landscape Analyst / Company Management Contact Revenue Growth Operating Income / Margin EBITDA Margin Cash / Debt / Capital Expenditures / PPE / Interest Capital Structure Coupon / Price Maturity / Call Schedule Published Rating During any given stage of the investment process the selection criteria may vary from those shown above. The statements above reflect the typical investment process applied to this strategy. At any given time other criteria may affect the investment process. See additional disclosure at the end of this presentation. CHYFP6 10

11 Track Record: Rating Actions High Yield Investment Process Focuses on Identifying Upgrade Candidates. As Indicated, This Approach Has Proven Quite Successful As of December 31, 2011 * High Yield Universe** Upgrades Downgrades Upgrades Downgrades Total % 35% 42% 58% * As tracked by ; includes ratings actions by either Moody's or Standard & Poors, ** As tracked by JP Morgan. Composite inception: April 1, Past performance is not indicative of future results; ratings actions are Supplemental Information, and supplement the performance presented herein; See additional disclosure at the end of this presentation. Source: JP Morgan; CHYFP1 11

12 High Yield Bond Investment Process: Relative Value and Trading We Subject Candidates to Detailed Spread Analysis to Ensure the Attractiveness of Each Issue Relative Value / Trading Spread advantage Position in capital structure Supply and demand Liquidity Merger and acquisition trends Default history of industry CHYFP7 12

13 High Yield: Characteristics High Yield Representative Portfolio vs. Bank of America Merrill Lynch HY Master II Index As of December 31, 2011 Characteristics High Yield Bank of America Merrill Lynch HY Master II Index Number of Securities 98 2,003 Average Quality B1 B1 Yield to Maturity (%) Coupon (%) Duration (Yrs.) % maximum weight per industry 1.0% equal weighted positions U.S. companies No equities, convertibles, or investment grade corporate debt Average Maturity (Yrs.) Credit Quality Breakdown (%) BBB and above BB B CCC and lower Average quality is computed using weighted S&P or Moody's ratings (higher if split), excludes unrated securities, if any, and assigns the highest rating to cash in the portfolio. Representative account. Past performance is not indicative of future results. Portfolio characteristics are Supplemental Information, and supplement the performance presented herein. During any given stage of the investment process the selection criteria may vary from those shown above. The diagrams and statements above reflect the typical investment process applied to this strategy. At any given time other criteria may affect the investment process. See additional disclosure at the end of this presentation. Source: 13

14 High Yield Bond Investment Process: Risk Management and Portfolio Monitoring Daily News / information flow and issuer level performance attribution Weekly Portfolio review of credit and relative value Monthly Issuer and industry level performance attribution Quarterly Pre-reporting review of all holdings to assess the company s ability to meet or exceed expectations Semi-Annual Research cross verification (rotation of holdings based on industry coverage changes) in the portfolio to consistently stay objective Ongoing Updates Upgrade Alert Model See additional disclosure at the end of this presentation. RM 3 14

15 High Yield: Composite Performance As of December 31, 2011 Annualized (%) 30 High Yield Bank of America Merrill Lynch HY Master II Index Bank of America Merrill Lynch BB-B Constrained* N/A 4th Quarter 1 Year 3 Year 5 Year 10 Year Since Inception *Index inception February 1, 1997; The Bank of America Merrill Lynch BB-B Constrained Index measures the performance of bond securities that have a credit rating of BB or B. Bank of America Merrill Lynch uses a composite of Fitch Ratings, Moody s and Standard & Poor s credit ratings in selecting bonds for this index. The index is market weighted, and the representation of any single bond issuer is restricted to a maximum of 2% of the total index. Composite inception date: April 1, Performance of less than one year has not been annualized. The performance shown above is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. See additional disclosure at the end of this presentation. Source:

16 High Yield: Composite Performance As of December 31, 2011 Calendar (%) High Yield Bank of America Merrill Lynch HY Master II Index Bank of America Merrill Lynch BB-B Constrained* *Index inception February 1, 1997; The Bank of America Merrill Lynch BB-B Constrained Index measures the performance of bond securities that have a credit rating of BB or B. Bank of America Merrill Lynch uses a composite of Fitch Ratings, Moody s and Standard & Poor s credit ratings in selecting bonds for this index. The index is market weighted, and the representation of any single bond issuer is restricted to a maximum of 2% of the total index. Composite inception date: April 1, Performance of less than one year has not been annualized. The performance shown above is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. See additional disclosure at the end of this presentation. Source:

17 High Yield: Composite Market Participation As of December 31, 2011 Market Participation (%) High Yield Bank of America Merrill Lynch HY Master II Index Up Quarters 17 Down Quarters Composite inception date: April 1, The performance shown is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. Market participation is based on the average of quarterly returns in up and down markets as determined by the benchmark s performance. See additional disclosure at the end of this presentation. Source: 17

18 High Yield: Composite Market Participation As of December 31, 2011 Market Participation (%) 4 High Yield Barclays U.S. Gov't Credit Index* Up Quarters 20 Down Quarters *The Barclays U.S. Gov't Credit Index is a composite made up of U.S. government Treasury and agency securities as well as high grade corporate bonds. Composite inception date: April 1, 1994; The performance shown is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. Market participation is based on the average of quarterly returns in up and down markets as determined by the benchmark s performance. See additional disclosure at the end of this presentation. Source: 18

19 Why You Should Select Clear, consistent and proven investment philosophy and process Highly motivated, dedicated investment team Consistent strong returns Focused organizational structure Professional client service See additional disclosure at the end of this presentation. YN1 19

20 Disclosures and Additional Information 20

21 Income and Growth Assets Under Management As of December 31, 2011 Income and Growth Strategies: $6.2 B High Yield* $1.9 B Convertibles** $3.3 B CDO $337 M Income and Growth $606 M Deep, stable team with strong leadership Unique approach to identifying investment opportunities Proven ability to exploit rating inefficiencies Consistent alpha and strong risk-adjusted returns *High Yield assets include CBO assets of $24 M, **Convertibles assets include Investment Grade Convertibles assets of $90 M, Income and Growth assets do not include High Yield and Convertibles sleeves of the Income and Growth portfolios managed by the firm; these assets are included in the High Yield and Convertibles assets, respectively. Stated assets under management may include both discretionary and non-discretionary assets, and may therefore exceed composite assets. See additional disclosure at the end of this presentation. Source: AUM CHART 2 21

22 High Yield GIPS Disclosure As of December 31, 2011 High Yield Minimum Separate Account $50 M 0.55% on first $50 M 0.40% on next $50 M Negotiable thereafter Firm: LLC (AGIC) is an SEC registered investment adviser that provides investment management and advisory services primarily to separate accounts of institutional clients, and registered and unregistered investment funds. For GIPS purposes, the Firm is defined and held out to the public as the investment management and advisory services provided by AGIC and its SEC registered investment adviser subsidiary NFJ Investment Group LLC; excluding (1) administrative and/or sub adviser oversight services, and (2) separately managed account (wrap) services. The firm s list of composite descriptions, as well as information regarding the firm s policies for valuing portfolios, calculating performance, and preparing compliant presentations, are available upon request. Compliance Statement: AGIC claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with the GIPS Standards. AGIC and/or, as applicable, its predecessor firm has been independently verified for the periods through June 30, Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The High Yield composite has been examined for the periods April 1, 1994 through June 30, The verification and performance examination reports are available upon request. The Composite: The High Yield Composite (the Composite ) consists of accounts that invest primarily in below investment grade corporate securities as rated by Standard & Poor s or Moody s credit rating services. The Composite was created on April 1, The Composite includes all actual fee paying discretionary institutional and mutual fund accounts (including sub-advisory relationships) with comparable investment objectives and risks, managed by AGIC for at least one full month, and effective July 1, 2010 the minimum account size for inclusion in the composite has been removed, from January 1, 2000 to July 1, 2010 there was a minimum account size of $20 million for inclusion in the Composite. The Composite can include both tax-exempt and taxable accounts. All earnings are reinvested. In the event of a significant cash flow to an account which is defined by AGIC s policies and procedures as 25% or more of the beginning market value, the account will be removed from composite for one full month. Additional information regarding the treatment of significant cash flows is available upon request. As of December 15, 2009 the name of the composite changed from US High Yield Composite to High Yield Composite. Prior to July 1, 2010, the composite performance presented consists of the portfolios of Nicholas-Applegate Capital Management, which, as a result of an internal corporate reorganization, now are part of the Firm. Such performance results have been linked to the results achieved at the Firm in compliance with the GIPS standards on performance record portability. Portfolio Returns: Returns are calculated on a total return basis, including all dividends and interest, accrued income, realized and unrealized gains or losses, and are net of all brokerage commissions, execution costs and without provision for federal or state income taxes. Performance results are expressed in U.S. dollars. Fees: Performance results stated to be gross do not reflect the deduction of investment advisory fees. Gross performance results earned on behalf of AGIC s clients will be reduced by AGIC s advisory fees. Net performance results, which reflect the deduction of actual investment advisory fees, are also displayed. AGIC investment advisory fees are usually accrued monthly based on the market value of the assets in a portfolio, including cash or its equivalent, held for investment, at the end of each month. AGIC s standard advisory fees, as reported in Form ADV Part 2A Brochure for the investment style described herein, are 0. 55% annually on the first $50 million, 0.40% on the next $50 million, and negotiable thereafter. Index: As of December 1, 2009 the index name changed from Merrill Lynch High Yield Master II Index to Bank of America Merrill Lynch High Yield Master II Index. The index represents a broad set of High Yield issues. The Bank of America Merrill Lynch High Yield Master II Index captures the performance of below investment-grade debt issued by corporations domiciled in the United States or Canada. This index includes cash-pay and deferred-interest securities. Unless otherwise noted, bond index returns include all payments to bondholders, but do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index. All returns presented are calculated using U.S. dollars. Internal Dispersion: The internal dispersion is a asset weighted dispersion measure that explains the deviation of gross annual account returns from the Composite annual account return. Assuming normal distribution of returns, plus or minus one standard deviation from the mean return encompasses 68% of all possible outcomes. The internal dispersion may not be meaningful for composites consisting of five or fewer portfolios or for periods of less than one full year. Past performance is not indicative of future results. Gross returns do not give effect to investment advisory fees, which would reduce such returns. Investment advisory fees are described further in Form ADV Part 2A Brochure of the investment adviser. Advisory fees deducted periodically from accounts can have an impact on performance. As an example, the effect of investment advisory fees on the total value of a portfolio assuming (1) $1,000,000 investment, (2) portfolio return of 5% per year, and (3) 1.00% annual investment advisory fee would be $10, in the first year, $56, over five years, and $129, over ten years. Actual fees charged may vary by portfolio due to various conditions, including account size. The netof fee results for individual accounts and for different time periods may vary. Unless otherwise noted, equity index performance is calculated with gross dividends reinvested and estimated tax withheld, and bond index performance includes all payments to bondholders, if any. Indexes are referred to for comparative purposes only and are not intended to parallel the risk or investment style of the portfolios in the Composite. Indexes do not utilize leverage. Index calculations do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index. Index data contained herein (and all trademarks related thereto) are owned by the indicated index provider, and may not be redistributed. The information herein has not been approved by the index provider. 4Q11 Ver

23 High Yield GIPS Composite Investment Performance for High Yield Composite April 1, 1994 to December 31, 2011 High Yield Composite Year Composite Return Gross (%) Composite Return Net (%) Bank of America Merrill Lynch High Yield Master II Index Returns (1) Composite 3-Yr St. Dev. (%) (6) High Yield Composite Benchmark 3-Yr St. Dev. (%) (6) Internal Dispersion Number of Portfolios in the Composite at Year End Composite Total Assets at Year End (USD $M) Percentage of Firm Assets (%) 1994 (2,7) ,272 (1) The Bank of America Merrill Lynch High Yield Master II Index returns, which do not reflect the deduction of investment fees, have been provided for comparison purposes and have not been examined by independent accountants. (2) Partial years, April 1, 1994 through December 31, (3) Period has not been examined by independent accountants. (4) As of December 15, 2009, the name of the US High Yield Composite changed to High Yield. (5) Prior to June 30, 2010 the total firm assets include only Nicholas-Applegate Capital Management assets. (6) The three -year annualized standard deviation measures the variability of the composite and the index returns over the preceding 36-month period. (7) The three -year annualized standard deviation is not presented because there are less than 36 monthly returns for the composite and benchmark. Total Firm Assets (USD $M) (5) 1995 (7) , (7) , , , , , , , , , , , , , (4) , (3) , (3) ,516 High yield bonds are either rated in the lowest category of investment grade or below-investment-grade. Below-investment-grade bonds have a higher default risk than investment grade bonds, are generally uncollateralized and subordinated to other outstanding debt of the issuer, and are considered predominantly speculative. 4Q11 Ver

24 Additional Disclosure As of December 31, 2011 All materials are presented for Institutional Client use only and are not intended for distribution to the public. The strategy may not achieve its desired results. Past performance is not indicative of future results. All returns are gross unless otherwise noted. Gross returns do not give effect to investment advisory fees, which would reduce such returns. Investment advisory fees are described further in Form ADV Part 2A Brochure of the investment adviser named in the performance presentation of the relevant strategy (the Adviser ). Advisory fees deducted periodically from accounts can have an impact on performance. As an example, the effect of investment advisory fees on the total value of a portfolio assuming (a) $1,000,000 investment, (b) portfolio return of 5% per year, and (c) 1.00% annual investment advisory fee would be $10, in the first year, $56, over five years, and $129, over ten years. Actual fees charged may vary by portfolio due to various conditions, including account size. The presentation may also contain net performance information. Notes to the performance presentation contained herein describe the methodology used to calculate net of fee performance. The results for individual accounts and for different time periods may vary. Descriptions of a strategy s investment process, and targeted, expected and similar forwardlooking portfolio information are based on the Adviser's future expectations regarding the strategy. Although the Adviser manages the strategy with the goal of achieving these expectations, actual results may vary, and the publication of these expectations should not be construed as a guarantee. Representative account characteristics do not reflect composite performance, which may be different. On any given date, any portfolio managed in the indicated strategy may include securities not held by the representative account, and may not hold each security held in the representative account. Consequently, any particular account may have portfolio characteristics and performance that differ from those of the representative account. For more information regarding account characteristics, please contact ( AGIC ). Portfolio characteristics are derived using currently available data from independent research resources that are believed to be accurate. Estimates (est.) are preliminary and unaudited. The asset and industry reports contained herein are unaudited. The summation of dollar values and percentages reported may not equal the total values, due to rounding discrepancies. Where applicable, currency conversions are provided by Russell Performance Universe and are based on monthly linked performance converted from U.S. dollar, and exchange rates are provided by the Federal Reserve Statistical Release as of month end. Unless otherwise noted, equity index performance is calculated with gross dividends reinvested and estimated tax withheld, and bond index performance includes all payments to bondholders, if any. Indexes are referred to for comparative purposes only and are not intended to parallel the risk or investment style of the portfolios in the Composite. Indexes do not utilize leverage. Index calculations do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index. Index data contained herein (and all trademarks related thereto) are owned by the indicated index provider, and may not be redistributed. The information herein has not been approved by the index provider. The information presented in this presentation has been developed internally and/or obtained from sources which AGIC believes to be reliable; however, AGIC does not guarantee the accuracy, adequacy or completeness of such information. Unless otherwise noted, AGIC is the source of illustrations, performance data, and characteristics. ( AGIC ) was formed from the combination of three affiliates: NFJ Investment Group ( NFJ ), Nicholas-Applegate ( NACM ), and Oppenheimer Capital ( OpCap ). In July 2010, all employees of NACM and OpCap became employees of AGIC, and the transition of management of client assets from NACM and OpCap to AGI Capital was initiated. AGIC provides oversight with respect to the investment management services provided by NFJ, as well as non-investment functions including marketing, operations, technology, legal/compliance, and client service. AGIC and NFJ are SEC registered investment advisers. 4Q11 Ver

25 Income and Growth Strategies Team Douglas G. Forsyth, CFA Managing Director, Portfolio Manager Mr. Forsyth has over twenty years of investment industry experience, and is the lead portfolio manager for the Income and Growth Strategies team. He has been the lead for the firm's High Yield Bond strategy since its inception, and assumed lead portfolio management for the firm's Convertibles strategy in Mr. Forsyth has portfolio management, trading and research responsibilities. In addition to management responsibility for institutional clients, he supervises multiple open-end and closed-end mutual funds. Prior to joining AGI Capital via a predecessor affiliate in 1994, he was an analyst at AEGON USA where he earned his CFA designation. Mr. Forsyth heads the firm's Charitable Giving Committee. Mr. Forsyth earned his B.B.A. from the University of Iowa. Justin M. Kass, CFA Managing Director, Portfolio Manager Mr. Kass has over fourteen years of investment industry experience and has portfolio management and research responsibilities for the Income and Growth Strategies team. Prior to joining AGI Capital via a predecessor affiliate in 2000, he had interned on the team, adding significant depth to the proprietary Upgrade Alert Model. Previous experience includes Universal Studios, Ocean Realty, and the Center for Cooperatives. Mr. Kass earned his M.B.A. from the UCLA Anderson School of Management and his B.S. from the University of California, Davis. William (Brit) L. Stickney Managing Director, Portfolio Manager Mr. Stickney has over twenty-three years of investment industry experience and has portfolio management and research responsibilities for the Income and Growth Strategies team. Prior to joining AGI Capital via a predecessor affiliate in 1999, he was a Vice President of Institutional Fixed Income Sales with ABN AMRO, Inc., where his primary focus was on high yield corporate securities. Previously he was with Cowen & Company and Wayne Hummer & Company. Mr. Stickney earned his M.B.A. from the Kellogg School of Management, Northwestern University, and his B.S. from Miami University, Ohio. Michael E. Yee Senior Vice President, Portfolio Manager Mr. Yee has over eighteen years of investment industry experience and has portfolio management and research responsibilities for the Income and Growth Strategies team. Before joining the team in 1999, Mr. Yee had been an analyst for the Global and Systematic team, and previously held positions in global and domestic portfolio administration as well as in client service. Prior to joining AGI Capital via a predecessor affiliate in 1995, he was a financial consultant for Priority One Financial/Liberty Foundation. Mr. Yee earned his M.B.A. from San Diego State University and his B.S. from the University of California, San Diego. David A. Foster, CFA Vice President, Analyst Mr. Foster has over fifteen years of investment industry experience and has research responsibilities for the Income and Growth Strategies team. Prior to joining AGI Capital via a predecessor affiliate in 2007, he was an investment banking associate in the financial advisory services group for Houlihan Lokey, a national investment banking firm, a senior financial specialist at BAE Systems, and a supervising senior accountant at KPMG LLP. He began his career as a senior accountant at Follmer, Rudzewicz & Co., PC (now UHY Advisors). Mr. Foster earned his M.B.A. from the University of Southern California, Marshall School of Business, graduating magna cum laude, and his B.A. degree from Albion College, also graduating magna cum laude. He also passed the Uniform Certified Public Accountant Examination (CPA Inactive). Joanna H. Willars Vice President, Analyst Ms. Willars has over eleven years of investment industry experience and has research responsibilities for the Income and Growth Strategies team. Prior to joining AGI Capital via a predecessor affiliate in 2006, she was a senior global trust relationship manager with JPMorgan Chase Bank and had been an analyst for several energy companies. Ms. Willars earned her M.B.A. from the University of St. Thomas, Houston, and her B.A. from Texas A&M University. Bios3 25

26 Income and Growth Strategies Team Nicole Larrabee Rodrigues Associate, Analyst Ms. Larrabee Rodrigues has over sixteen years of investment industry experience and has research responsibilities for the Income and Growth Strategies team. Prior to joining AGI Capital via a predecessor affiliate in 2000, Ms. Larrabee Rodrigues was a sales associate with Salomon Smith Barney (Schroders), Lehman Brothers, and Heflin and Co. LLC. Previously she was with Sun Alliance Holdings and Cantor Fitzgerald and Co., Inc. Ms. Larrabee Rodrigues earned her Bachelor s degree in Finance from the University of Arizona and is currently pursuing her M.B.A. at the University of Southern California, Marshall School of Business. David J. Oberto Associate, Analyst Mr. Oberto has over nine years of investment industry experience and has research responsibilities for the Income and Growth Strategies team. Prior to joining AGI Capital via a predecessor affiliate in 2007, he was a portfolio administrator, CDS account manager and trade closer for Bain Capital. He began his career as an intern at Gabelli Asset Management. Mr. Oberto earned his B.S. from Fordham University. Bios4 26