EVESTMENT BREAKFAST SEMINAR - PDF Free Download

EVESTMENT BREAKFAST SEMINAR Toronto March 21, 2017 Ryan Anderson, Pavilion John Molesphini, evestment Jerrod Stoller, evestment

Gaining an Understanding of Your Competitive Landscape Case Study Effective Sales Process Viewing Yourself Through the Lens of an Investor Plan Perception Identifying Relevant Opportunities Prospect Preparing for Success Position Taking Action on Your Opportunities Pursue

PLAN Gaining an Understanding of Your Competitive Landscape

Challenging Environment for Investment Managers 100% 80% 60% 55% 56% 56% 56% 57% 56% 58% 59% 57% 60% 59% 61% 40% 20% 45% 44% 44% 44% 43% 44% 42% 41% 43% 40% 41% 39% 0% Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Strategies with Net Inflows Strategies with Net Outflows

Opportunities for Offense and Defense - Equity Universe Q4 2016 Inst. AUM (USD BN) 4Q'16 Net Inst. Flows (USD BN) 4Q'16 Gross Inflows 4Q'16 Gross Outflows FY 2016 Change FY 2015 Change FY 2014 Change All Japan Equity $193.68 $0.10 $4.33 ($4.23) -4.09% -2.78% 0.88% All Australian Equity $111.93 ($0.57) $3.59 ($4.16) -4.25% -2.02% -7.98% All UK Equity $99.76 ($1.16) $0.46 ($1.62) -7.63% -3.30% -1.49% All Emerging Mkts Equity $781.15 ($1.67) $13.27 ($14.94) 0.24% -2.22% 2.32% All ACWI ex-us Equity $580.71 ($2.81) $9.91 ($12.72) 1.01% 4.08% 2.82% All Canadian Equity $154.12 ($3.80) $2.31 ($6.11) -0.33% -1.83% -4.75% All Asia Pacific Equity $197.10 ($4.11) $4.03 ($8.14) -8.01% -9.97% -6.47% All EAFE Equity $1,113.79 ($5.02) $22.94 ($27.96) -0.58% 1.23% 0.89% All Europe Equity $252.80 ($7.77) $5.30 ($13.03) -10.31% 2.32% 2.90% All Global Equity $1,813.58 ($24.33) $37.55 ($61.89) -2.78% -1.60% 0.97% All US Equity $6,297.71 ($87.09) $114.44 ($201.53) -5.30% -4.79% -3.95%

Opportunities for Offense and Defense Fixed Income Universe Q4 2016 Inst. AUM (USD BN) 4Q'16 Inst. Flows (USD BN) 4Q'16 Gross Inflows 4Q'16 Gross Outflows FY 2016 Change FY 2015 Change FY 2014 Change All US Fixed Income $6,712.56 $32.61 $164.32 ($131.71) 1.79% -1.09% -1.38% All UK Fixed Income $274.73 $6.86 $12.81 ($5.95) 4.10% -9.07% 3.84% All Asia Pacific Fixed Income $80.68 $0.37 $1.83 ($1.46) 10.08% 9.56% -6.59% All Japan Fixed Income $56.27 ($0.09) $0.87 ($0.96) 5.49% -10.26% -10.17% All EAFE Fixed Income $24.97 ($1.20) $0.09 ($1.29) -15.49% -21.47% -6.93% All Australian Fixed Interest $67.27 ($2.13) $1.45 ($3.58) -7.02% -3.10% -1.12% All Global Fixed Income $1,241.12 ($3.85) $33.93 ($37.78) -2.72% 1.02% 5.77% All Canadian Fixed Income $159.83 ($4.45) $4.13 ($8.58) -2.24% 0.75% 3.46% All Europe Fixed Income $432.90 ($5.60) $13.36 ($18.96) 5.32% 8.76% 4.64% All Emerg Mkts Fixed Income $455.52 ($13.71) $12.31 ($26.01) -3.28% -7.12% -1.40%

Product Views by Asset Class All Investors vs. Canadian Investors 80% 70% 69.5% 69.3% 67.7% 60% 50% 40% 30% 20% 21.8% 20.1% 19.9% 10% 0% 3.7% 4.0% 5.0% 6.5% 8.5% 4.0% Equity Fixed Income Multi-Asset Alternatives 2014 Total Views 2015 Total Views 2016 Total Views

Product Views by Asset Class All Investors vs. Canadian Investors 80% 77.3% 76.7% 73.3% 70% 60% 50% 40% 30% 20% 16.7% 17.0% 17.6% 10% 0% 4.2% 4.1% 4.9% 1.7% 2.3% 4.2% Equity Fixed Income Multi-Asset Alternatives 2014 Total Views 2015 Total Views 2016 Total Views

Canadian Investor Asset Allocation 100% Multi-Asset 80% 60% Equity 40% 20% Fixed Income 0% Q4 2009 Q3 2010 Q2 2011 Q1 2012 Q4 2012 Q3 2013 Q2 2014 Q1 2015 Q4 2015 Q3 2016

Change in Asset Allocations: Canadian Investors 25% +7.4% 20% -4.1% +0.6% 15% 10% +0.1% 5% -1.6% +1.7% -2.2% +0.9% 0% Canadian Fixed Income Canadian Equity Global Equity US Equity EAFE Equity Global Fixed Income Global Multi- Asset US Fixed Income YE 2013 YE 2016

Canadian Investor Focus Outside of Domestic Market 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 15.3% 16.1% 17.9% 3.8% 3.7% 3.9% 10.0% 10.4% 10.8% 9.2% 7.2% All Global Equity All US Equity All EAFE Equity All Emerging Mkts FY 2014 FY 2015 FY 2016 Equity 7.9%

70% Equity Exposure: Canadian investors far above others 65% 60% 55% 50% 45% UK Europe Japan US Canada 40% 35% Q4 2012 Q3 2013 Q2 2014 Q1 2015 Q4 2015 Q3 2016

50% % of Equity Portfolios in Global Equity: Canadian investors lag significantly 40% 30% 20% UK Europe Japan US Canada 10% 0% Q4 2012 Q3 2013 Q2 2014 Q1 2015 Q4 2015 Q3 2016

40% 35% 30% 25% 20% -4.3% Change in Equity Allocations: Canadian Investors +3.0% +1.5% 15% 10% 5% -1.9% +0.7% 0% Canadian Equity Global Equity US Equity EAFE Equity Emerging Mkts Equity YE 2013 YE 2014 YE 2015 YE 2016

RYAN ANDERSON

PERCEPTION Viewing Yourself Through the Lens of an Investor

Product Name Global Equity Universe in Canada Total Product AUM ($B) Product AUM Canada ($B) Total product views 2016 Total Change in Views YoY Canadian Product Views Canada Change in Views YoY Mackenzie Global Large Cap Quality Growth $5,185.68 $5,185.68 177 10% 63-15% Walter Scott Global Strategy $31,536.37 $4,752.96 1,777-9% 371 27% Baillie Gifford Global Alpha $35,911.32 $4,491.76 1,040-24% 231 14% Burgundy Global Equity Fund $5,044.13 $4,318.98 1,181 1% 619 3% Letko, Brosseau Global Equity (Canadian Bias) $4,293.40 $4,272.55 127-22% 96-25% Fiera Capital Global Equity $6,800.20 $4,122.35 1,332 9% 618 26% Hexavest Global Equity $8,633.64 $3,831.88 1,345 40% 440 33% AGF Global Core Equity $3,958.90 $3,500.82 352-13% 156 12% Epoch Global Equity Shareholder Yield $18,852.44 $3,409.87 1,281-3% 370 15% Templeton Institutional Global Equity $46,202.81 $3,240.90 553 1% 46 142% Invesco Trimark Fund $2,921.69 $2,898.56 332 71% 252 108% Wellington Global Research Equity $12,564.00 $2,834.00 398 38% 17-6% MFS Global Equity $51,594.53 $2,811.89 1,374 8% 224 5% Black Creek Global Equity $3,578.83 $2,752.36 608 22% 187 55% Sprucegrove Global Equities $2,682.65 $2,682.65 576-21% 304-41%

CAN P:48.3% U:22.3% Where to Invest Time and Effort Europe P:0.9% U:3.6% US P:40.0% U:41.5% LAT AM P:0.0% U:0.0% UK P:5.1% U:15.9% Africa P:0.0% U:2.1% Asia P:3.9% U:5.6% Australia P:1.7% U:5.7% Japan P:0.0% U:3.2%

35% of the Interest in this Universe is Outside of North America

Understanding Perception From the Canadian Manager View Consultant/Investor Views 3-year Quartile Top Perceived Peer Passed/Failed Screens Adds to Universes 76 1 Epoch Investment Partners Inc. 77/117 53 Product Total Views Epoch Investment Partners Global Equity Shareholder Yield 1,209 Longview Partners Equity Total Return (Unhedged) 854 Mawer Investment Management Global Equity 627 Carnegie World Wide Global Equities 428 Pyford Global Core Equity 402 Ardevora Global Long Only Equity 256 Alliance Bernstein Global Core Equity 248

Understanding what Investors Wants to See From the Canadian Manager view 29.0% 15.9% 71.0% 84.1% Pass Fail Missing Data Criteria Not Met

Understanding what Investors Want to See 15.9% Current # of Holdings Screen Term Actual Value 100 442 Active Share Screen Term Actual value 0.7 0.65 84.1% Missing Data Criteria Not Met ESG Screens Screen Term Actual value Yes N/A

Characteristics of a Winner From the Canadian Manager view Product Performance Asset Flows Marketability Universe Health Distr. Impact Global Equity 4.3 2.3 3.0 3.3 1.0 Metric Score Value Investor Sentiment 1-341 Fee Level ($50 Mil) 3 64 BPS Portfolio Management Team Size 5 9

Characteristics of a Winner- Fees From the Canadian Manager view Metric Score Value Investor Sentiment 1-341 Fee Level ($50 Mil) 3 64 BPS Portfolio Management Team Size 5 9 Peers Value Global Equity Strategy 1 75 BPS Global Equity Strategy 2 60 BPS Global Equity Strategy 3 55 BPS Global Equity Strategy 4 75 BPS Global Equity Strategy 5 65 BPS 17.5 BPS 51.0 BPS 60.5 BPS 68.0 BPS 76.5 BPS 100 BPS Quintile Ranking

Characteristics of a Winner Portfolio Team Size From the Canadian Manager view Metric Score Value Investor Sentiment 1-341 Fee Level ($50 Mil) 3 64 BPS Portfolio Management Team Size 5 9 Peers Managers Global Equity Strategy 1 4 Global Equity Strategy 2 3 Global Equity Strategy 3 1 Global Equity Strategy 4 1 Global Equity Strategy 5 6 26 6 4 2 1 1 Quintile Ranking

PROSPECT Identifying Relevant Opportunities 27

Staying Current From the Canadian Manager View People Changes Large AUM Changes Consultant Views Constituent Changes Products in Bottom Quartile 14 21 94 21 10 Product Consultant Views Change GMO Quality Strategy 52 31 Investec Global Franchise 30 24 Trinity Global Equity Unhedged 23 21 AGF Global Core Equity 44 18 Standard Life Global Equity Unconstrained 27 17 Blackrock Global Alpha Tilts 16 16

Prospecting Opportunities Global Equity Top Product Outflows in Canada From the Canadian Manager view Product Flows By Inst. AUM Rank Inst. AUM Views MSCI World Index -$12,309.38 100 $82,931.70 17 Global Equity -$10,350.41 100 $12,203.04 119 Institutional Global Equity -$6,178.68 99 $46,202.81 73 Growth and Income Fund -$5,794.13 99 $81,708.18 23 Global Equity -$5,028.34 99 $51,594.53 162 Mutual Global -$4,968.56 99 $25,026.77 20 Global Thematic Equity -$3,976.49 99 $4,862.58 12 World Index -$3,821.44 99 $19,348.74 31 Global -$3,237.02 99 $6,100.19 83 Global Select -$3,224.49 99 $801.49 12

Prospecting Opportunities- Bottom Performers From the Canadian Manager view Product Returns (Trailing 3 Year) Rank Total AUM Views International Growth & Value -3.28 100 $1,700 8 Global Equity Strategy -3.16 100 $381.56 1 Global Income Fund -2.76 99 $9.39 1 Global Equity 60:40 Fund -2.13 98 $1,719.21 5 Global Equity Income Fund -1.99 98 $1,499.74 19

Prospecting Opportunities Risk Based Opportunities From the Canadian Manager view Product Tracking Error (Trailing 3 Year) Rank Total AUM Views Global All Country 10.77 1 $2,710.19 -- Global Alpha Fund 9.94 1 $95.52 1 Global Equity Fund 9.87 1 $24.08 12 Global Equity 9.42 2 $2.24 5 Global Opp. Fund 9.13 2 $249.00 1

Prospecting Opportunities Least Correlated From the Canadian Manager view Product Correlation: Excess Return (Trailing 3 Year) Rank Total AUM Views Global Equity -0.78 100 $645.58 7 Global Alpha Fund -0.73 99 $95.52 1 Global Equity -0.72 99 $1,969.42 20 Global Equity Fund -0.66 98 $15.50 7 Global Strategy -0.62 98 $3,751.43 17

Position Position for success 33

Key Differentiators for Global/International Equity based on Public Plan IQ From the Canadian Manager view High Conviction Differentiated investment philosophy Complement to other global mandates Organization structure and staff backgrounds 36

3m Company Building the Story around Differentiated Holdings From the Canadian Manager view Accenture PLC Honeywell Int. Siemens AG United Tech Corp Keyence Corp UPS Inc. Safran General Electric Co Union Pacific Corp 0%.10%.20%.30%.40%.50% Peer Group Canadian Manager: Global Equity

Understanding Conviction From the Canadian Manager view

Largest Contributors to Active Share Be Prepared for Questions From the Canadian Manager view

Missed Opportunities Be Prepared for Questions From the Canadian Manager view

Dodged Bullets Be Prepared for Questions From the Canadian Manager view

PURSUE Ta k i n g A c t i o n o n Y o u r O p p o r t u n i t i e s 42

Always Be Prepared From the Canadian Manager view Global Equity Fund 1 Global strategy 2 Global Equity 3 Performance FIRST THIRD SECOND Risk FIRST THIRD FIRST People FIRST THIRD SECOND Separate Account Fees SECOND THIRD FIRST Asset Flows FIRST THIRD SECOND Perception THIRD FIRST SECOND Manager Skill THIRD FIRST SECOND

Always Be Prepared From the Canadian Manager view Asset Mgmt 1 Global Strategy 2 Global Equity Manager Skill THIRD FIRST SECOND Total Value Added MRP -3.84 0.57-1.01 Total Value Added 1 Year -4.74 1.66 5.38 Style Selection Effect-MRQ -2.11 0.74-2.39 Style Selection Effect 1YR -2.10 2.43 3.77 Sector Selection Effect - MRQ -0.70 1.41 0.12 Sector Selection Effect 1 YR -1.61 2.79 5.48 Region Selection Effect MRQ -4.13 0.83-0.76 Region Selection Effect 1 YR -4.95 2.36 4.68

Always Be Prepared From the Canadian Manager view Asset Mgmt 1 Global Strategy 2 Global Equity Risk FIRST THIRD FIRST Standard Deviation 3 YRS 10.06 10.24 8.94 Beta 3 YRS 0.86 0.90 0.74 Annualized Alpha 3 YRS 3.04 0.69 3.09 Information Ration 3 YRS 0.74 0.12 0.50 Sharpe Ration 3 YRS 0.68 0.39 0.66 Upside Market Capture 3 YRS -96.39 86.42 80.48 Downside Market Capture 3 YRS -79.21 84.17 64.46

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