Bay County Employees’ Retirement System Investment Review Representing Barings: Barings Barbara Cassidy – Relationship Manager, North America Independence Wharf 470 Atlantic Avenue Boston MA 02210-2208 Tel 1 617 946 5200 Fax 1 617 946 5400 April 2014 One Embarcadero Center Suite 555 San Francisco, CA 94111 Tel 1 415 834 1500 Fax 1 415 834 1722 www.barings-us.com Confidential – Do not copy or circulate this document.
Contents Section 1 Barings Overview Section 2 Performance, Positioning & Holdings Section 3 Current Investment Themes Appendix
Barings Overview Section 1 3 3
Baring Asset Management • An international investment management company with a history dating back to 1762 • Operating in eleven countries with professionals from forty different nations • Owned by Massachusetts Mutual Life Insurance Company (MassMutual) • Current assets under management US$59.2bn • 125 investment professionals • Winner of the Queen’s Award for Enterprise: International Trade 2010 London, Boston, Dubai, Frankfurt, Hong Kong, Paris, San Francisco, Santiago, Seoul, Taipei, Tokyo, Toronto As of March 31, 2014 4
Representative Client List North America • • Alexander Proudfoot Companies Kentucky TRS • • Arizona State Carpenters Lexington-Fayette Policeman's & Fire-fighter's Pension Fund • • Aston Asset Management Local Union #226 IBEW Open End Pension Trust Fund • • Bernadine Franciscan Sisters MassMutual • • Bertelsmann, Inc. Miami University Foundation • • California PERS New York State Common Fund • Calvert County Sheriff’s Department Pension Plan • New York Teamsters • • Calvert County Employees Retirement Plan Ohio PERS • • Catholic Diocese of Columbus Oklahoma Municipal Retirement Fund • • Cement Masons' Union Local 502 Oklahoma Police Pension and Retirement System • Charlotte Firefighters’ • PERSIdaho • • Christian Schools International Plumbers & Steamfitters Local #166 • • Sacramento County Employees’ Retirement System City of East Providence Fire & Police Pension Plan • • City of Dallas Teacher Retirement System of Texas • • City of Hollywood Firefighters Teamsters Local 210 Affiliated Pension Trust Fund • • Cleveland Bakers and Teamsters Pension Fund Tennessee Consolidated Retirement System • • Colorado PERA Torstar Corporation, Inc. • • Curian Capital, LLC Transit Management of Charlotte, Inc. • • Excel Funds Management Inc. United Food and Commercial Workers Unions & Employers • Pension Plan Houston Municipal Employees' Pension System • • Virginia Pooled OPEB Trust Fund Investors Group iProfile • • WakeMed Ironworkers' Mid-America Pension Fund • • YMCA of the USA Kansas PERS Clients named are those who consent solely to disclosure of their name for the purposes of marketing to other existing and potential institutional 5 clients. By disclosure of their names, such clients neither approve nor disapprove nor endorse our services, products or performance. March 2014
North American Product Focus Multi-Asset Products Equity Products Fixed Income Products Global Dynamic Asset Allocation International Equity* Global Aggregate Active/Passive Alpha Tilt World Equity Global Government Active/Passive International Equity International Small Cap International Fixed Emerging Markets China Equity Global capabilities recognizing our dedication to macro analysis and bottom-up research 6 *EAFE, ACWI x-US and other benchmarks
What Sets Us Apart Strong platform of 40+ investment Significant global bottom-up research professionals searching for capability spanning world’s equity markets “unrecognized growth” Dedicated sector and country analysis Multiple sources of idea generation ‘Three - dimensional’ approach to Innovative process which combines both bottom-up and top-down insight identify active alpha Exploit market opportunities across All Cap, universe and holdings an unconstrained universe Clear and objective understanding of Integrated risk management risks A proven, research-driven process exploiting market inefficiencies 7
Portfolio Management Structure Barings International Equity International & World Equity Group 17 Susan O’Brien 26 David Bertocchi 16 Jon Greenhill 19 Tom Mann Nick Williams 24 Hayes Miller 34 Global Sector Teams Strategic Policy Group Technology 6 9 Percival Stanion 34 Consumer Discretionary 8 9 Andrew Cole 35 Consumer Staples 10 10 Hayes Miller 34 Energy 10 11 Marino Valensise 26 Telecoms 8 10 Khiem Do 37 Materials 11 11 David Bertocchi 16 Utilities 7 12 Christopher Mahon 15 Financials 12 14 Alan Wilde 29 Healthcare 9 12 Industrials 8 13 Investment Board 26 Tim Scholefield 26 34 29 James Ross 28 Marino Valensise Percival Stanion Alan Wilde Director of Investment Chief Investment Officer Head of Equities Head of Strategy Head of Fixed Income Process # Yrs Investment Experience # Number of Investment Professionals* As of February 1 st , 2014 8 * Some analysts may sit on more than one sector team
Performance, Positioning & Holdings Section 2 9 9
Bay County Employees’ Retirement System Performance Performance as of March 31, 2014 Since Q1 2014 1 Year 3 Years Inception 10/30/09 Bay County Employees’ -2.7 10.2 4.4 7.2 Retirement System MSCI EAFE Net +1% 0.9 18.7 8.3 9.4 Relative vs. Gross -3.6 -8.5 -3.9 -2.2 Benchmark: MSCI EAFE Index Net Dividends +1%. Relative return is calculated on a arithmetic basis, whereas the attribution is calculated on a geometric 10 basis.
Market Review 3 Months Ending March 31, 2013 Sector Country % of % of Return Return Index Index Utilities 7.1 MSCI Europe ex UK 3.5 4% 47% Health Care 5.7 10% MSCI Pacific ex JP 3.0 12% Energy 1.7 2.1 7% MSCI Europe - MSCI EAFE 0.7 MSC SCI EA EAFE 0.7 - - Materials 0.6 8% MSCI Emerging Markets -0.4 0% Consumer Staples 0.6 11% MSCI United Kingdom -0.8 21% Industrials 0.4 13% MSCI Pacific -2.5 - Information Technology -0.4 4% MSCI Japan -5.6 20% Financials -0.4 26% Consumer Discretionary -2.0 12% Telecom Services -2.1 5% Green – Overweight, 2.5% or more Purple – Underweight, 2.5% or more 11
Performance Attribution 3 Months Ending March 31, 2014 By Sector By Country/Region Relative Relative % Selection Allocation % Contribution Selection Allocation Contribution Materials 0.16 0.17 -0.01 Middle East -0.08 0.00 -0.08 Consumer Japan -0.09 0.14 -0.23 0.01 0.01 0.00 Staples Emerging Markets -0.42 -0.19 -0.23 Energy 0.00 0.00 0.00 Pacific x-Japan -0.54 -0.36 -0.18 Consumer -0.17 -0.15 -0.02 Discretionary United Kingdom -0.72 -0.66 -0.06 Information -0.17 -0.16 -0.01 Technology Europe x-UK -1.52 -1.34 -0.18 Utilities -0.23 0.00 -0.23 Health Care -0.47 -0.59 0.12 Telecom. -0.48 -0.5 0.02 Services Industrials -0.89 -0.9 0.01 Financials -1.08 -1.06 -0.02 Benchmark: MSCI EAFE Index Net Dividends +1%. Relative return is calculated on a geometric basis. The primary difference between geometric and arithmetic is that 12 the former expresses the return difference in multiplicative terms (i.e. as a ratio) whereas the latter is a simple subtraction.
Performance Attribution 3 Months Ending March 31, 2014 Top 10 Contributors Bottom 10 Contributors Relative Relative Contribution Contribution Rakuten 0.22 Sumitomo Mitsui Trust -0.29 SES S.A. Class A 0.20 Mobile Telesystems -0.27 Admiral Group 0.16 Rolls Royce -0.26 Taiwan Semiconductor 0.14 Mitsubishi UFJ Financial -0.23 Randgold Resources 0.12 Adidas -0.22 UBS 0.10 WPP -0.22 HSBC 0.10 William Hill -0.20 Total 0.10 Mitsubishi Electric -0.19 Credit Suisse Group 0.09 Barclays -0.19 SoftBank 0.09 Elekta AB -0.17 Benchmark: MSCI EAFE Index Net Dividends +1%. Relative return is calculated on a geometric basis. The primary difference between geometric and arithmetic is that 13 the former expresses the return difference in multiplicative terms (i.e. as a ratio) whereas the latter is a simple subtraction.
Bay County Employees’ Retirement System Portfolio Structure March 31, 2014 Active Region Positions Portfolio Index Weight Weight 4.3 United Kingdom 25.4 21.1 3.6 Japan 23.3 19.7 Emerging 2.4 2.4 0.0 Markets Europe x-UK + -4.7 42.3 47.0 Dev. Middle East -7.8 Pacific x-Japan 4.4 12.2 Cash = 2.3% 14 Benchmark: Morgan Stanley Capital International MSCI EAFE Net Dividends +1%
Bay County Employees’ Retirement System Portfolio Structure March 31, 2014 Active Sector Positions Portfolio Index Weight Weight 2.9 Financials 28.5 25.6 Industrials 2.1 15.0 12.9 1.1 Health Care 11.5 10.4 0.7 Information Technology 5.2 4.5 0.2 Consumer Discretionary 12.0 11.8 Materials 0.2 8.3 8.1 Telecom. Services 0.1 5.1 5.0 Energy -0.1 6.8 6.9 Utilities -3.8 0.0 3.8 Consumer Staples -5.7 5.3 11.0 Cash = 2.3% 15 Benchmark: Morgan Stanley Capital International MSCI EAFE Net Dividends +1%
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