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Approaching Global Financials

Approaching Global Financials. Guy de Blonay November 2007. Agenda. Introduction Important and diverse sector Opportunities Case studies Summary Appendix. Sub-sectors: Regional Banks Investment Banks Thrifts and Mortgage Banks Broker Dealers Asset Managers Life Insurance

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Approaching Global Financials

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  1. Approaching Global Financials Guy de Blonay November 2007

  2. Agenda • Introduction • Important and diverse sector • Opportunities • Case studies • Summary • Appendix

  3. Sub-sectors: Regional Banks Investment Banks Thrifts and Mortgage Banks Broker Dealers Asset Managers Life Insurance Non-Life Insurance (Including Reinsurance) Speciality Finance (Credit Cards, Leasing, Financial Guarantors) Exchanges Property The financial sector is an important part of global markets: Sector important and diverse Source: Datastream at 31.01.2007.

  4. Approaching global financials Strategy • Fundamentally-based long term capital growth through investment in the Financials sector; guided by combination top driven/bottom up stock analysis Objective • Identify sub-sector fundamental themes and exploit them through investments in companies with prices that do not reflect longer-term trends • Be opportunistic and effective with capital by dynamically allocating it across multiple sub-sectors, capitalisations, growth/value categories and geographies • Liquid strategy with active management Goal • Generate meaningful returns in any market conditions • Avoid “disasters”

  5. Filtering and Portfolio Construction Universe “All of our ideas start with a view that a significant industry or company change, not yet being fully recognised by the market, is imminent or in progress” Europe UK US Japan Asia Emerging markets Best 15 – 20 themes chosen Potential stock opportunities (within 15- 20 themes) Detailed fundamental company analysis Active Management Risk Management Portfolio (15-20 themes/70-100 names)

  6. Household debt/GDP versus GDP per capita; underleveraged countries in terms of consumer debt are circled Canada Household leverage is low in many countries Opportunities – credit growth Source: IMF, OECD, Datastream, Credit Suisse research.

  7. Life insurance product penetration and GDP per capita Life company penetration is low in many countries Opportunities – insurance penetration Source: IMF, OECD, Datastream, Credit Suisse research.

  8. Exploiting the growing global savings pool Source: IFSL, based on data from Merrill Lynch Capgemini

  9. Mergers and acquisitions Global announced M&A deals – financials consistently active Source: Thomson Financial.

  10. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Media Banks Utilities Energy Telecoms Materials Retailing Transport Insurance Machinery Chemicals Real Estate Cap Goods Health Care Div Financ Constr & Engin Consumer Serv Metals & Mining Autos & Compon Software & Serv Food & Stapl Ret Pharmac & Biotech Commer Serv & Sup Tech Hardw & Equip Consum Dur & Appar Food Bev & Tobacco Sector consolidation Europe ex UK sector concentration: top 5 companies as % of total sector market cap Source: Credit Suisse.

  11. Playing sub-sector themes

  12. National Bank of Greece Ranked 27th amongst the strongest banking groups in Europe (at 06.07.2007) Core profit comes from South East Europe Expectations for dynamic growth Case studies National Bank of Greece – share price Source: Bloomberg, USD, 30/12/2002-21/09/2007. Turkiye Garanti • Third largest private bank in Turkey • GE Capital owns 26% stake • Finances 16% of Turkey’s exports and 14% of its imports Turkiye Garanti – share price Source: Bloomberg, USD, 30/12/2002-21/09/2007.

  13. Shenzhen Investment A mid-market property developer in southern China 45.7%-owned by Shenzhen's city government H1 2007 net profit rose sharply on property revaluation gains Case studies Shenzhen Investment – share price Source: Bloomberg, USD, 30/12/2002-21/09/2007. Citigroup • The world’s largest company* • Global, diversified financial services business model • Restructuring measures announced H1 2007 Citigroup – share price Source: Bloomberg, USD, 30/12/2002-21/09/2007. * Source: Forbes Global 2000, March 2007. Ranking is based on a mix of four metrics: sales, profit, assets and market value.

  14. Northern Rock 5th largest UK mortgage lender Business model depends on funding from wholesale credit markets September 2007 - sought emergency funding from Bank of England Case studies Northern Rock – share price Source: Bloomberg, USD, 30/12/2002-21/09/2007.

  15. Summary • Global - greater opportunities and diversification • Global financial services are an attractive and diversified asset class • Current environment is positive: • Global growth, driven by BRIC countries (represented 26% of Global GDP in 2006 and this is expected to rise) • Low inflation, low interest rate environment provides supportive conditions • Global liquidity and strong M&A activity driving capital markets • Significant private equity capital raised in 2006 alone • Increasing consumer activity in both loans and savings

  16. Appendix

  17. Fund Manager Profile: Guy de Blonay • Director with 11 years’ investment experience • Manager of the CC&L Global Financials Fund since launch in May 2006 • Manager of the New Star Financials Hedge Fund since launch in April 2002 • Manager of the New Star Global Financials Fund (OEIC), top specialist financialfund since inception* • Formerly at Jupiter Asset Management Ltd, 1995-2001 ** Team: • Mick Groves Trader for Pan-European markets • Mark Hurley Trader for US and Asia (incl. Japan) • Nick Brind Pan-European financials specialist • Emily Adderson FinancialsAnalyst Leverage off the New Star network for real-time information sharing and security analysis: “…more ideas are generated by a team but decisions are best left to the individual…” * Source: Lipper Hindsight at 31.08.07 since launch (28.12.01), performance based on financial peer group comprising financial funds held within the IMA Specialist Sector. ** Source: Citywire at 31.08.07 Fund Manager ratings are based on assessing individual fund managers outperformance against appropriate benchmarks over a period of 36 months.

  18. Important information Past performance is not necessarily a guide to future performance. The value of investments and any income from them may fall as well as rise and investors may not get back the amount originally invested. The value of investments may also increase or decrease as a result of changes in exchange rates between currencies. The opinions expressed here are solely those of the fund manager at the time of print and should not be interpreted as investment advice. The New Star Global Financials Fund (formerly the WorldInvest Management Fund) (the "Fund") opened to retail investment on 19 May 2003. Performance history for the Fund includes that of the WorldInvest Management Fund which was launched on 28 December 2001.The Fund invests in a specialist sector, which may be less liquid and produce more volatile performance than an investment in a spread of investment sectors. This presentation is for professional investors, professional advisers and other financial institutions only and should not be provided to or relied upon by private investors. This presentation should not be distributed to any third parties. The Fund should be viewed as an investment suitable only for investors who can fully evaluate and bear the risks involved. This document does not constitute an offer or solicitation to anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Distribution of this document and the offering of shares in certain jurisdictions may be restricted and accordingly persons into whose possession this document comes are required to inform themselves about and to observe such restrictions. If this is the case, this Fund cannot be the subject of active marketing in your jurisdiction. The Fund is registered for sale in the UK, France, Spain, Italy and Singapore (recognised). Full details of the Fund can be found in the prospectus. Any decisions should be made solely on the basis of the relevant documents, which are available on request from New Star. The Simplified Prospectus is also available upon request. The shares referred to in this document have not been and will not be registered under any United States securities laws, and except in a transaction that does not violate the United States securities laws, may not be directly or indirectly offered or sold in the United States of America, or any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States person. New Star Investment Funds Limited is the ACD for the Fund, and the Investment Manager is New Star Asset Management Limited. Both firms are authorised and regulated in the UK by the Financial Services Authority. New Star Investment Funds is the trading name of New Star Investment Funds Limited, part of the New Star Marketing Group. New Star Investment Funds is not authorised to give investment advice and only provides information on the New Star Group’s products. Issued by New Star Investment Funds Limited.

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