EASTSPRING INVESTMENTS GUY STRAPP, CHIEF EXECUTIVE MICHELE BANG, DEPUTY CHIEF EXECUTIVE eastspring.com eastspring.com
NET FLOWS RECORD NET FLOWS IN 2014 Eastspring s External Client Net Flows, ex-mmf bn Eastspring s Total Net Flows, ex-mmf bn Equity Fixed Income YOY +82% 3.7 UK & Jackson Life Asia Life 3rd Party Non MMF YOY +97% 7.9 1.8 1.6 2.0 1.6 3.2 0.9 3.8 1.7 4.7 4.2 4.0 0.6 0.6 0.6 2008 2009 2010 2011 2012 2013 9M 2013 9M 2014 2008 2009 2010 2011 2012 2013 9M 2013 9M 2014 Note: Numbers are at actual exchange rate (AER). eastspring.com
SCALE AND PROFITABILITY STRONG GROWTH IN FUM AND PROFITS FUM and Asset Mix, bn Pre-Tax Profits, m 37 11% 42 14% 28% CAGR +10% 52 9% 32% 50 9% 40% 58 8% 43% 60 8% 43% YTD +22% 73 7% 42% 57 50 CAGR +4% 63 69 64 68 34 YOY +24% 42 37% 52% 59% 58% 51% 49% 49% 51% 2008 2009 2010 2011 2012 2013 9M 2014 Equity Fixed Income MMF PBT Margin 2008 2009 2010 2011 2012 2013 1H 2013 1H 2014 34% 33% 36% 38% 36% 34% 35% 39% Note: FUM numbers are at actual exchange rate (AER) ; All PBT figures reported post-ifrs 11, at constant exchange rate (CER) eastspring.com
INVESTMENT PERFORMANCE GOOD OVERALL PERFORMANCE GENERATED IN 2014 Funds Outperforming Over 3 Year Periods 1 Singapore & Hong Kong Managed Funds Funds Outperforming by Asset Class 1 (Sep 14) 90% 80% 70% 60% 64% 73% 74% 66% 66% 1Y 3Y pa Fixed Income - All Funds 81% 91% 50% 40% 30% 20% 10% 55% Equity - All Funds 74% 57% GAA - All Funds 49% 69% 0% Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Sep-14 1. Proportion of funds (based on 50% No. of funds + 50% FUM of funds) exceeding benchmark or peer median over 3 year rolling period. Funds with no benchmark and no peer ranking are excluded from aggregate score. There could be funds where the investment objective is not based on outperforming benchmark or peer and these funds success will be measured based on other appropriate objectives. For benchmark oriented funds, generally gross investment returns are used but if not available, NAV Gross or NAV Net returns (in this order) will be applied. With effect from June 2012, money market funds were excluded from the score calculations and this change was not retrospectively applied. 4
WELL DIVERSIFIED BUSINESS PLATFORM GOOD DIVERSIFICATION ACROSS CLIENTS, ASSET CLASSES AND COUNTRIES Client Mix Asset Mix External Country Mix 11% 38% UK/US Life External Clients (Retail & Institutional) 7% 42% Money Market Fixed Income 0.7% 4% 7% 8% 10% 15% Others Malaysia China Hong Kong Singapore Korea 15% Asia Life: ILP 15% Taiwan 36% Asia Life: Others 51% Equity 18% 23% Japan India Overall Overall External Note: Based on FUM position as at Q3 2014. FUM for JVs reflected at shareholding proportions. 5
COMPETITIVE POSITIONING ASIA S LEADING RETAIL MANAGER USD Mn 70,000 60,000 50,000 40,000 30,000 20,000 Top Retail Managers in Asia (Excl. Japan, Australia & New Zealand) (Based on assets sourced from the region as of Jun 2014) Asia Asset Management REGIONAL COMPETITORS ES Retail FUM grew at a CAGR^ of 25% vs top regional players FUM CAGR^ of 9%* 10,000 N.A. 0 Eastspring Franklin Templeton AllianceBernstein BlackRock Schroder Manulife Asset Mirae Asset Jun'12 Jun'13 Jun'14 AXA Investment BNP Paribas UBS Global Asset First State Source: Asia Asset Management, September 2014 issue (Ranked according to participating regional players only) ^ CAGR between Jun 12 and Jun 14 * Top regional players FUM CAGR of 9% excludes BlackRock as Jun 12 and Jun 13 data are not available For the purpose of compiling the results, FUM from JVs are grossed up to 100% if shareholdings exceed 35%. 6
STRATEGIC PRIORITIES FOR EASTSPRING Deepen Investment Capabilities Investment Performance Product Diversification Member of Prudential plc (UK) Partner with Life ALM Solutions Geographic Alignment Expand Distribution Geographic Focus Broaden Client Mix 7
DEEPEN INVESTMENT CAPABILITIES Good progress made on expanding investment capabilities: Global Emerging Market equity Building out negotiated credit teams, including: - Mezzanine debt - Asian loans - Infrastructure investment China and Emerging Market debt capabilities Developing multi-asset capabilities 8
STRATEGIC PRIORITIES FOR EASTSPRING Deepen Investment Capabilities Investment Performance Product Diversification Member of Prudential plc (UK) Partner with Life ALM Solutions Geographic Alignment Expand Distribution Geographic Focus Broaden Client Mix 9
PARTNER WITH LIFE 62% of Eastspring FUM and 39% of net revenue FUM: year-on-year increase of 20%¹ - 37bn to 45bn Breakdown by Region (Sep 14) UK Life 17% ( 8bn) Life Business (Sep 14) 45bn US Life 1% ( 0.3bn) Product solutions cater for all phases across the demographic spectrum Product Innovation Negotiated credit (Mezzanine Debt, Infrastructure investments, Asian Loans) RMB credit Quant driven Low Volatility Asian Equity Asia Life 82% ( 37bn) Client Service Tailored client seminars and events Participate in select agency product training Note: Life funds include ILPs, Par Funds ¹ Life FUM growth of 20% at actual exchange rate (AER) 10
STRATEGIC PRIORITIES FOR EASTSPRING Deepen Investment Capabilities Investment Performance Product Diversification Member of Prudential plc (UK) Partner with Life ALM Solutions Geographic Alignment Expand Distribution Geographic Focus Broaden Client Mix 11
EXPAND DISTRIBUTION RECORD NET FLOWS WITH 71% COMING FROM NORTH ASIA Breakdown by Country (YTD Sep 14) Key Accomplishments Net Flows Singapore 8% Malaysia 8% Others 2% Japan 25% Japan Institutional net flows of 0.6b investing into Japan Equity Healthy retail net flows of 0.4b mainly investing into Japan Equity and Asia Equity China 11% India 13% Taiwan 13% Korea 20% Total YTD Sep Third Party Non MMF Net Flows: 3.7b Korea Strong net flows of 0.5b from third party insurance companies Variable Universal Life products Net flows of 0.3b from clients investing into retail mutual funds Taiwan Robust external client net flows of 0.5b attributed to introduction of complementary product features to existing flagships, strong product positioning and targeted distribution 12
SOLID FRANCHISE POSITIONS US FOR SUSTAINABLE GROWTH Mutual fund market size circa 1.8 Trillion CN KR JP HK TW IN VN TH MY SG PH Majority of funds sold are invested in domestic markets ID Half of the funds sold are invested in foreign markets What is the outlook for Asia? Market trend: Investor confidence returning to Asian markets Increasing risk appetite is evidenced by flows into Asia + Emerging market strategies 3 month rolling inflows into Asia ex-japan funds of circa 9bn¹ AUM for the Asia ex-japan mutual funds industry is steadily rising grown 30%² since 2011 Note: Size of the bubbles indicates relative retail mutual fund market size. Market size data as of Sep 14 for all countries except for HK & SG as of Jun 14, sourced from industry associations, Lipper and Strategic Insights. ¹Fund flows data sourced from Standard Chartered Research. ²Mutual Fund AUM growth data sourced from Cerulli Associates. 13
SOLID FRANCHISE POSITIONS US FOR SUSTAINABLE GROWTH Mutual fund market size circa 1.8 Trillion CN KR JP HK TW IN VN TH MY SG PH Majority of funds sold are invested in domestic markets How are we positioned to take advantage of this? Our unique geographic footprint across Asia presence in 10 Asian markets Leverage our established teams in Japan, Taiwan, Hong Kong and Singapore to capture off-shore flows Utilise presence in India, China, Korea, Indonesia, Malaysia and Vietnam to partner with Life and target domestic flows Our broad geographic base enables us to capture all demographic trends in investing Eastspring's adaptability to any regulatory changes such as fund passporting, domestication, or cross border product changes serves as strong competitive advantage. Note: Size of the bubbles indicates relative retail mutual fund market size. Market size data as of Sep 14 for all countries except for HK & SG as of Jun 14, sourced from industry associations, Lipper and Strategic Insights. ID Half of the funds sold are invested in foreign markets 14