UK Value Opportunities Fund Scottish Investment Forum January 2020 - PowerPoint PPT Presentation

Polar Capital Funds Plc UK Value Opportunities Fund Scottish Investment Forum January 2020 The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk

Polar Capital UK Value Opportunities Fund Polar Capital UK Value Opportunities Fund vs FTSE All Share TR Index, 31 January 2017 – 31 December 2019 1 35% 32.10% 30% 25% 21.63% 20% 15% 10% 5% 0% -5% ASTRX FTSE (All Share Total Return) Polar Capital UK Value Opportunities 1 Month QTD YTD Since Launch Polar Capital UK Value Opportunities Fund I GBP Accumulation 1 7.49% 14.17% 27.02% 32.10% FTSE All Share TR Index 1 2.62% 4.17% 19.29% 21.63% IA UK All Companies 2 3.72% 6.96% 22.11% 22.47% Quartile 2 1 1 1 1 IA Sector Rank 2 10/251 16/251 57/247 38/234 Source: 1. Polar Capital and Bloomberg. Date: As at 31 December 2019. Fund inception: 31 January 2017. Returns quoted in GBP and net of fees. The index performance figures are sourced from Bloomberg and are in GBP terms. 2. Lipper, as at 31 December 2019, in GBP terms. Past performance is not indicative or a guarantee of future returns. This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 2

Up To Our Waists… “In investing what is comfortable is rarely profitable” Robert Arnott This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 3

Philosophy BOTTOM UP 01 Bottom up, research driven stock selection. VALUE INVESTING 02 Value is underserved in the UK market Differentiated Fund High active share, 86% Differentiated holdings from other funds and the index 1 UNCONSTRAINED 03 Flexibility to invest in the very best opportunities RIGOROUS 04 Strict investment criteria that is repeatable Source: Polar Capital and Bloomberg. Date: As at 31 December 2019. 1. FTSE All Share Total Return Index. This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 4

Stock Selection CHEAP VALUATION Bargain Assets Cheap Value Creators Stocks trading materially Companies whose value creation is below their tangible asset materially underappreciated by the market base SUSTAINABILITY in the : Asset base (bargain assets) OR Returns (cheap value creators) FUNDING All shares must pass the safety check to ensure they are sustainably funded Source: Polar Capital UK Value Opportunities Team. This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 5

Investment Process: Today September December 2019 2019 VALUATION SUSTAINABILITY OF RETURNS FUNDING Upside remains BUT downside has severely moderated – median fall on a profit warning has improved dramatically Source: Polar Capital UK Value Opportunities Team. The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 6 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.

Valuation: Stretch At Extreme Levels Growth/value P/E dispersion at an extreme level – MSCI UK Growth vs MSCI Value Index 2.2 2 1.8 1.6 1.4 1.2 1 0.8 Valuation differential between the cheapest and the most expensive remains at extreme levels Source: Polar Capital & Bloomberg. Date: As at 13 December 2019. Past performance is not indicative or a guarantee of future returns. All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital. The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 7 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.

Valuation: Market Cap 12m Forward Rolling Median PE – Largest to Smallest 17% of Fund in 16% of the Fund 200m – 400m >10bn valuation 400 10,000 200 PE 30 25 20 15 10 Key FTSE 100 5 FTSE 250 FTSE Small Cap 0 100bn 5bn 700m 200m Market Cap Cheaper shares currently found at the very top and bottom of the market cap range Source: 1. Polar Capital and Bloomberg. Date: 17 December 2019. 2. Polar Capital UK Value Team and Bloomberg. Date: 17 December 2019. Past performance is not indicative or a guarantee of future returns. All opinions and estimates constitute the best judgement of Polar Capital as of the date hereof, but are subject to change without notice and do not necessarily represent the views of Polar Capital The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 8 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.

Sustainability Of Returns: Domestic Earners Consumer spend Government spending Business investment 14% 8% 7% -12% gap -3% gap between -1% gap between 7% 4% between cumulative cumulative outturn cumulative outturn outturn since 2016 Q1 since 2016 Q1 and 20 since 2016 Q1 and 20 and 20 year average year average year average 2% Source: Panmure Gordon. Date: Q3 2019. Past performance is not indicative or a guarantee of future returns. All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital. The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 9 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.

Corporate Britain Has Got Talent The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 10 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.

Corporate Britain Has Got Talent FUNDING FUNDING MEETING MEETING SUSTAINABILITY SUSTAINABILITY VALUATION VALUATION The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 11 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the lesser of the fund inception or the immediately preceding 12 months is available upon request.

Positioning: Top 10 Holdings 1 Morgan Sindall Group 2.5% % of Fund in top 10 holdings 2 OneSavings Bank 2.3% 3 SSP Group 2.3% 22% 39% is average Watkin Jones 2.1% 4 in top 10 of Polar UK Value in the top 10 of funds in 3i Group 2.1% Opportunities Fund 1 5 UK All Companies over £1bn 2 6 Hill & Smith Holdings 2.1% % in top 7 Barclays 2.1% 10 holdings 8 Restore 2.1% 9 Persimmon 2.1% WH Smith 2.1% 10 Source: 1. Polar Capital Operations Team. Date: 31 December 2019. 2. Polar Capital. Date: 29 March 2018. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. Past performance is not indicative or a guarantee of future returns. The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 12 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.

Positioning: Market Capitalisation Exposures Fund Market Cap Exposures 1 Geographic Exposures 2 Small cap Cash 6% Large cap 23% 29% 42% Mid cap Majority Domestic Earnings Majority Overseas Earnings Source: 1. Polar Capital Operations Team. Date: 31 December 2019. 2. Polar Capital UK Value Team. Date: 29 November 2019. Past performance is not indicative or a guarantee of future returns. The UK Value Opportunities Fund is currently not available for distribution in all jurisdictions. Please consult your Polar Capital representative for further details. 13 This presentation is for one-on-one use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.