Undergraduate Student Managed Fund

UndergraduateStudent Managed Fund Presentation to the University of Connecticut Foundation Thursday, March 11 2010 School of Business Student Managed Fund

Undergraduate Team Spring Officers Ethan Beschler – Lead Manager Juan Casanova – Portfolio Manager Jennifer Sataline - Secretary Managers Jeffrey Annello Connor Antisdale Gregory Autuori Michael Baldi Michael Bokoff AmeyaGokarn Simone Hill Steven Reiman School of Business Student Managed Fund Student Managed Fund

Investment Process Performance Analysis Allocation Today Expectations & Positioning School of Business Student Managed Fund Student Managed Fund

InvestmentObjective & Philosophy • Objective: To outperform our benchmark, the S&P 500. • Philosophy: What would a prudent business person do? • Analyze as if to buy the entire business • Look for strong businesses and talented management • Seek companies trading below a reasonable range of intrinsic business value • Maintain a long-term horizon (5-10 years) • Hold a bottom-up approach with necessary top-down considerations School of Business Student Managed Fund Student Managed Fund

Investment Strategy Goal:To own 15-20 strong businesses selling at advantageous prices. What we look for • Free cash flow • Return on invested capital • Sustainable competitive advantage • Talented management teams • Transparency What we watch out for • Unsound business models • High leverage • Overvalued stock prices • Incapable management • Aggregation risk School of Business Student Managed Fund Student Managed Fund

Investment Process • We cover 10 sectors, with each manager assigned to 2-3 sectors • Research is focused on, but not limited to, assigned sectors • Stocks are brought to weekly meetings for presentation and peer evaluation • Analysis is done to ensure the position fits with our current portfolio • A 70% vote in favor of the position is required for approval • Upon approval, the trade is placed School of Business Student Managed Fund Student Managed Fund

Risk Management • General risk management techniques • Detailed research • Group discussion • Diversification among industries • Daily portfolio monitoring • Stop-loss orders • ~30% below original purchase price • Provides protection from unforeseen shocks • Upside and downside reviews at 10% and 20% above and below cost basis • In the event of a fulfilled stop-loss, we will thoroughly review the position and evaluate its future investment prospects School of Business Student Managed Fund Student Managed Fund

Portfolio PerformanceOctober 27, 2009 - February 24, 2010 School of Business Student Managed Fund Student Managed Fund

PortfolioAttribution Analysis School of Business Student Managed Fund Student Managed Fund

Portfolio Efficiency MeasuresOctober 27, 2009 – February 24, 2010 *Data was calculated using weekly portfolio returns School of Business Student Managed Fund Student Managed Fund

Individual Position PerformanceFebruary 24, 2010 School of Business Student Managed Fund Student Managed Fund

PortfolioHighest Performers • Berkshire Hathaway (BRK.B) • AutoZone (AZO) • Sysco Corporation (SYY) • Medtronic (MDT) School of Business Student Managed Fund Student Managed Fund

PortfolioLowest Performers • Royal Dutch Shell (RDS) • Sanofi-Aventis (SNY) • ITT Corporation (ITT) • Fluor Corporation (FLR) School of Business Student Managed Fund Student Managed Fund

Sector PerformanceFebruary 24, 2010 School of Business Student Managed Fund Student Managed Fund

Sector Allocation School of Business Student Managed Fund Student Managed Fund

Sector Allocation • Consumer Businesses (MCD, PG, KFT, AZO) • Simplicity, competitive advantage, management • Global Infrastructure (FLS, FLR, ITT) • Healthcare (JNJ, MDT) #1: Great businesses #2: Spending going up, not down (gov’t, private) • Financials = Berkshire Hathaway • Unparalleled strength School of Business Student Managed Fund Student Managed Fund

Portfolio Allocation School of Business Student Managed Fund Student Managed Fund

Economic SummarySeptember 2009 – March 2010 1,100 School of Business Student Managed Fund Student Managed Fund

Economic SummarySeptember 2009 – March 2010 • During our holding period: • Gradual growth • S&P 500 up 3.6% • GDP up 5.9% in Q4 2009 • 2/3 of growth due to inventory re-stocking • Production environment strengthening • Consumer environment still shaky School of Business Student Managed Fund Student Managed Fund

Economic Outlook • Positive but cautious • Concerns: • Unemployment (9.7%+) • Long-term inflation • Large & growing budget deficits • Rising government debt • Capital expenditures to increase in 2010 • Businesses play catch-up after 2009 spending freeze School of Business Student Managed Fund Student Managed Fund

How are we positioned? Rain means we’re driving carefully. School of Business Student Managed Fund Student Managed Fund

How are we positioned? An equation for any weather: Excellent businesses + good prices = Outperforming portfolio* *Over time School of Business Student Managed Fund Student Managed Fund

Risks? • We’re conservatively positioned. • Investors may “chase” risk • We’re not immune to recession or deflation. • Especially in energy, infrastructure • We have analytical risk. • The Human Element (apologies to Cisco) School of Business Student Managed Fund Student Managed Fund

How are we positioned? • We’re not compromising on business OR price. = Belt & suspenders • We’re looking for a margin of safety, always. = Conservative valuations • We need balance sheet strength. • We seek dollar protection. = Foreign revenue, commodity exposure School of Business Student Managed Fund Student Managed Fund

Acknowledgements • University of Connecticut Foundation • Investment Advisory Board • Pat Terrion • Dr. Ghosh • Mentors • University of Connecticut School of Business School of Business Student Managed Fund Student Managed Fund

Q&A and Thanks Sincerely, Jeff Connor Greg Mike Baldi Ethan Mike Bokoff Juan Ameya Simone Steve Jenn School of Business Student Managed Fund Student Managed Fund

Undergraduate Student Managed Fund