Truffle Asset Management presentation; Senate Group Conference; November 2014.

1. 6 November 2014

2. Agenda:
• The Business
• Asset allocation principals
• Funds and Performance
• Questions ?
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3. Truffle The business
• Owner managed
• Quality boutique managing co-investor assets
• Fundamental valuation philosophy
• Disciplined investment process
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4. Shareholder Structure
RMI
Holdings
76%
RMB
Structured
Insurance
(BEE 28%)
23%
Staff &
Management
77%
Truffle
Capital
100%
Truffle Asset
Management
43%
Maru Asset
Management
BEE 50.15%
(Enhanced
Beta)
(active)
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5. The Truffle Business
- >6 years old
- R 6 billion Assets Under Management
- CIS R2.2billion
- 12 Institutional Mandates
- R 3bn in Specialist Equity
- R 1.6bn in Flexible & Balanced
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6. Truffle AuM at 30 September 2014:
R6 billion
Structured Products R 604 million Equity Funds R 3 158 million
Flexible Funds R 1 741 million Hedge Funds R 62.7 million
Balanced Funds R 351 million Money Market R 89 million
Flexible Income R 10 million
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7. Truffle’s Performance Framework
- Generate consistent alpha
- Maximise independent positions –
don’t bet the farm
- Manage to any benchmark or risk
tolerance
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8. Truffle’s edge
• Experienced investment team
• Sound philosophy
• Disciplined and rigorous process
• Proprietary risk management
• ‘The Truffle’
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9. Truffle’s edge
• Experienced investment team
 100+ years experience. Small, focussed team
 Demonstrated Success – in prior positions
and at Truffle
 Stable team
 Total Staff Compliment 15
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10. Truffle Key Team Members
Louis van der Merwe 25 + years market experience
B Com Investment Management
CEO / Alternative Investments
CIS – Flexible Income Fund
Hannes van der Westhuyzen 25 + years market
experience
CA (SA)
Fixed Interest
CIS – Flexible Income/ Money Market
Charles Booth 30 + years market experience
Chem Eng, MBA,CFA
CIO
CIS Equity / Balanced/ Flexible Fund
Iain Power 20 years market experience
B.Com (Hons)
Portfolio Manager
CIS Equity/ Balanced/ Flexible Fund
Jonathan du Toit 8 years market experience
CA(SA), CFA
Portfolio Manager
CIS Equity/ Balanced/ Flexible Fund

11. Non-core responsibilities outsourced
• Custody:
 Any of the recognised / registered custodians (segregated)
 Societe Generale (unit trust)
• Administration:
 Maitland (segregated)
 Prime CIS Management Co. (unit trust)
• Regulatory compliance
 Independent Compliance Services (Pty) Ltd
• We intend to remain small and focused on our core
skills
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12. Truffle’s edge
• Experienced investment team
• Sound philosophy
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13. Truffle’s investment philosophy
• Exploit short term inefficiencies that
market will recognise in the long term
• This inefficiency is not obvious and
difficult to find
• Experienced and skilled managers can
succeed through a disciplined, rigorous
investment process
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14. Truffle’s edge
• Experienced investment team
• Sound philosophy
• Disciplined and rigorous process
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15. Disciplined & rigorous process
• Establish Intrinsic Values
• Compare all opportunities
• Construct portfolios within risk
framework
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16. Determining intrinsic value
• Intrinsic value is the fair price for the entire business to own it
forever.
• Determined through rigorous bottom-up research involving:
 Detailed business analysis
 Management interaction
 Assessing the quality of management
 Assessing the quality of the business & industry
• Establish thru’ the cycle valuations by normalisation.
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17. Truffle’s Edge
• Experienced investment team
• Sound philosophy
• Disciplined and rigorous process
• Proprietary risk management
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18. Risk management and portfolio
construction
• We use a proprietary system (not off-the-shelf
risk management systems)
• Manage all active positions relative to volatility
• Size, sector, economic group, single stock
• Independent positions maximised
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19. Truffle’s edge
• Experienced investment team
• Sound philosophy
• Disciplined and repeatable process
• Proprietary risk management
• ‘The Truffle’ - that bit extra
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20. ‘The Truffle’
Size matters
• Asset size allows more alpha opportunities
 We can exploit large, mid and small cap opportunities
 We can outperform in all market phases
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21. Mid-Cap alpha opportunities!
Size matters
Share
Price
appreciation
annualized
Avg % of
assets
Holding
Period in
Months
Market Cap
Rm
R5bn AuM
2% Holding
% of
company
equity
R50bn AuM
2% Holding
Hulamin 109% 1.3% 5 2 500 R100m 4.0% 40%
GPI 95% 1.2% 10 3 000 R100m 3.3% 33%
Super Group 53% 2.0% 30 9 100 R100m 1.1% 11%
Mpact 50% 2.5% 23 4 400 R100m 2.3% 23%
Pinnacle Tech 43% 2.5% 33 2 000 R100m 5.0% 50%
Discovery 40% 3.0% 33 54 000 R100m 0.2% 2%
Cipla Medpro 27% 2.2% 18 4 500 R100m 2.2% 22%
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22. ‘The Truffle’
• Asset size allows more alpha opportunities
• Efficient implementation
• A competitive fee
• Personal Service
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23. Asset Allocation Principals
• Asset allocation funds are build from the bottom up
and are driven primarily by Equity stock selection
 Shares have to give the targeted return i.e. CPI
plus 4% in case of Balanced Fund and CPI plus
5% in the case of Flexible Fund
 Down side protection and capital preservation is
key
 We do not target asset allocation %
 Property compete with Fixed interest
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24. Asset Allocation Principals
 The current positioning in our Asset Allocation
funds are driven by the relative lack of
opportunities in the Equity stock selection
 Once Equity and property have been allocated –
left to allocate to Fixed Income
 Has to be liquid, low duration, readily available to
deploy in the Equity Market
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25. Asset Allocation Principals
Asset Allocation
Equity
Fixed Income
Cash
Property
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26. Asset Allocation Principals
Asset Allocation
Equity
Fixed Income
Cash
Property
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27. Floating rate Bonds
Issuer Maturity Rate
Steinhoff Jun 2017 JIBAR + 168
Resilient Nov 2017 JIBAR + 145
Nedbank March 2017 JIBAR + 93
Barloworld Dec 2018 JIBAR + 132
Growthpiont May 2016 JIBAR + 84
Imperial Group May 2021 JIBAR + 157
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28. Property stocks - looking attractive
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
FWD Yield
SA Corp Growthpoint Redefine Emira
Hyprop Resilient Vukile Fortress A
NEPI Intu Redefine Int GOZ
Source: Company data, Truffle
3Y CAGR EPS
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29. Property stocks - looking attractive
• Attractive distribution yields
• Low distribution forecast risk
• Leverage is up over the last 5 years but….
• Most companies have hedged the majority of their debt
• Many companies have expanded offshore offering further
portfolio diversification
• Domestic stock risks
• Major Rand weakness - likely in medium term
• Rise in bond yields - likely in medium term
• Offshore stock risks
• Rise in global interest rates - looks unlikely
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30. Truffle’s Funds and Performance
Risk
Flexible
Income
Balanced
Flexible
Black Truffle
Hedge Fund
Expected Return
Money
Market
Equity
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31. Truffle’s Funds and Performance
19.4%
19.4% 17.6%
Flexible Income
6.5%
Flexible
Income
Flexible
Balanced
Balanced
Flexible
Black Truffle
Hedge Fund
Downside Risk
Annualised Return
7.2%
Money
Market
Equity
5.3%
Values Value 31

32. Truffle retail fund’s performance
Fund Fund Return
to September
2014
Benchmark
Sector
Average
Inception
Date
Truffle General Equity
Fund 17.6% 15.7% 1 13.6% Jan 2011
Truffle Flexible Fund 19.4% 11.2% 2 12.4% Jan 2011
Truffle Balanced Fund 19.4% 10.0% 3 14.0% Nov 2011
Truffle Flexible
Income Fund 7.2% 5.5%4 - Mar 2013
* Returns are annualised since inception
1. All Share Index
2. CPI+5%
3. CPI+4%
4. SteFi
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33. Truffle Flexible Income Fund
 High income
 Monthly distributions
Preserving capital / Low volatility
 Diversified across asset classes
Minimum exposure to general equity market
Combination of Dividend/Interest/Rental
income = Tax efficient
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34. Target Investor
• Requires regular income
• Protection from equity and bond volatility
• Look to increase portfolio’s liquid holdings
• With a better total return yield than a money
market fund
• With optimised after tax return

35. Product Description
• Combination of
– Listed perpetual preference shares
– Listed corporate bonds
–Property
• CISCA – Unit trust
• Liquid

36. Portfolio Construction
• Corporate Paper
– Up to 5 years (fund)
– Floating rate – JIBAR linked
– Rating A or better
– No duration
• Preference Shares
– Risk Buckets
– CISCA
– Liquidity/Investability
– Floating rate – Prime linked

37. Flexible Income Fund - Current Indicative
Returns (21/10/2014)
8.98
7.53
5.6
%
8.22
(0.57)
(2.02)
5.53
PrefShares CorBonds Cash Fund Fee Tax AfterTax

38. Truffle Balanced Fund
 Invests in Equities, Property and Fixed
Income Assets
 SA and global exposures
 Complies with the Pension Fund Act of
1956 (Regulation 28 compliant)
 Target return CPI +4%
 Managed to preserve capital over rolling
3 years
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39. Truffle CIS Balanced Fund
as at September 2014
Rank: 2/106 3/99 9/90 5/82
8.1%
18.2%
19.4% 19.4%
4.3%
11.2%
14.8% 14.0%
3.9%
7.0%
4.6% 5.4%
25%
20%
15%
10%
5%
0%
6 months rolling 12 months rolling 2 years rolling Annualized since inception
(November 2011)
Truffle CIS Balanced Fund Sector Median Active Performance
Source Fund Analytics
Values Value 39

40. Truffle CIS Balanced Fund Asset allocation
September 2014
39.7%
13.8%
8.5%
10.1%
12.4%
15.5%
Domestic Equity
Domestic Property
Domestic Fixed Income
Holdings
Domestic Cash
Foreign Equity
Foreign Fixed Income
Holdings
Values Value 40

41. Truffle CIS Balanced Fund Asset allocation
September 2014
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Q4 2011 Q3 2012 Q2 2013 Q1 2014
Foreign Fixed Income
Holdings
Foreign Equity
Domestic Cash
Domestic Fixed Income
Holdings
Domestic Property
Domestic Equity
Values Value 41

42. Flexible Fund
 Invests in Equities, Property and Fixed
Income Assets
 SA and global exposures
 Does not comply with the Pension Fund
Act of 1956
 Target return CPI +5%
 Managed to preserve capital over rolling 3
years
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43. Truffle CIS Flexible Fund
as at September 2014
Rank: 4/76 5/72 11/65 6/62
7.9%
19.2%
22.0%
19.4%
3.9%
10.8%
16.0%
12.4%
4.0%
8.4%
6.0%
7.0%
25%
20%
15%
10%
5%
0%
6 months rolling 12 months rolling 3 year rolling annualized Annualized since inception
(January 2011) Truffle Flexible Fund Sector Median
* Class A returns after management fee of 1.4% per annum, source Fund Analytics
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44. Truffle CIS Flexible Asset allocation
September 2014
48.6%
8.8%
14.0%
14.0%
9.0%
5.5%
Domestic Equity
Domestic Property
Domestic Fixed Income
Holdings
Domestic Cash
Foreign Equity
Foreign Fixed Income
Holdings
Values Value 44

45. Truffle CIS Flexible Asset allocation
September 2014
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Foreign Fixed Income
Holdings
Foreign Equity
Domestic Cash
Domestic Fixed Income
Holdings
Domestic Property
Domestic Equity
Values Value 45

46. Limiting downside is key!
Month Truffle Flexible ALSI Month Truffle Flexible AlSI
Jan 10 -1.0% -3.5% Mar 12 2.6% -1.4%
Apr 10 1.1% -0.1% May 12 -3.7% -3.6%
May 10 -2.1% -5.1% Feb 13 -1.2% -1.9%
Jun 10 -0.8% -3.2% Apr 13 -1.3% -2.5%
Aug10 -0.6% -3.5% Jun 13 -4.1% -5.7%
Nov 10 0.7% -0.5% Nov 13 -0.1% -1.1%
Jan 11 -0.3% -2.2% Jan 14 -1.37% -2.36%
May 11 1.5% -0.8% Jul 14 -0.24% 0.93%
Jun 11 -1.9% -2.0% Aug 14 -0.02% -0.46%
Jul 11 0.5% -2.0% Sep 14 0.69% -2.58%
Aug 11 0.1% -0.3% Total -8.3% -48.53%
Sep 11 1.6% -3.6%
Dec 11 1.7% -2.5%
Values Value 46

47. Closing remarks
• Experienced and passionate team.
• Disciplined and repeatable process.
• Positive track record.
• ‘The Truffle’ - size matters.
• A combination that would be difficult to replicate even
in well established organisations.
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48. Questions?
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49. Thank you
-The Truffle Hogs

50. Truffle Asset Management is a registered Financial Services Provider (FSP Number: 36484). Registered for Categories I, II and
IIA.
This document does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation
is not authorised or to any person to whom it would be unlawful to make such offer or solicitation, and is only intended for
the use by the original recipient/addressee. If further distributed by the recipient, the recipient will be responsible to ensure
that such distribution does not breach any local investment legislation or regulation.
Prospective investors should inform themselves and take appropriate advice as to any applicable legal requirements and any
applicable taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might
be relevant to the subscription, purchase, holding, exchange, redemption or disposal of any investments.
Opinions expressed are current opinions as of the date appearing in this material only. The information is confidential and
intended solely for the use of Truffle’s client’s and prospective clients, and other specific addressee’s. It is not to be
reproduced or distributed to any other person except to the client's professional advisers. This document is not for
distribution in the United States.
While information obtained is from sources we believe to be up to date and reliable, Truffle does not guarantee the
accuracy or completeness thereof. Truffle does not accept any liability for inaccurate or incomplete information contained,
or for the correctness of any opinions expressed.
Past performance is not an indication of future performance
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51. Truffle Equity Fund
 Invested in JSE listed shares (no global)
 Fully invested at all times
 Benchmarked to All Share Index
 Hope to deliver market return plus Truffle
outperformance
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52. Truffle CIS Equity Fund
as at September 2014
Rank: 65/134 46/126 24/106 14/99
4.6%
15.6%
22.7%
17.5%
3.9%
13.5%
19.1%
13.6%
0.8%
2.1%
3.7% 3.9%
25%
20%
15%
10%
5%
0%
6 months rolling 12 months rolling 3 year rolling annualized Annualized since inception
(January 2011)
Truffle Equity Fund Sector Median Active Performance
* Class A returns after management fee of 1.4% per annum, source Fund Analytics
Values Value 52

53. Global economic outlook
• US economy continues to recover
 Rates expected to rise in H2 2015
 Collapsing commodity prices reduce inflation risk
 Expect the Dollar to strengthen into 2015
• Euro zone still struggling
 German growth stalling as China & Russia slow
 Deflation still a major concern
 High debt levels have not gone away……..
• Chinese growth surprising on the downside
 Property bubble continues to deflate
Values Value 53

54. SA economic outlook
• Growth continues to slow on the back of:
 Slowing Chinese growth, falling commodity prices
 Over indebted consumers
 Structural bottlenecks
• Twin deficits remain a major problem
 Rand likely to remain under pressure
 At risk of capital outflows
• Collapsing commodity prices reduce inflation pressure
• Strong Dollar a risk to Rand, equities and bonds
Values Value 54

55. SA Equity Market – Overview
• The SA equity market continues to trade above fair
value
 Current forward market PE 14.5 times
 The longer term historic PE 12.1 times
 Ratings have driven returns at the expense of
earnings
 The overall market may move sideways for a few
years till earnings catch up!
 Value still to found in selective sectors
Values Value 55

56. Flexible Fund expected returns –
October 2014
Share % Assets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Index Holdings
Steinhoff International Holdings Ltd 6.8% 3.2% 17.2% 20.4% 1.4%
Old Mutual plc 7.1% 5.2% 12.2% 17.4% 1.2%
Network Healthcare Holdings Ltd 3.6% 2.5% 17.6% 20.1% 0.7%
Firstrand Ltd 3.6% 4.2% 13.7% 17.9% 0.6%
Nedbank Group Ltd 3.8% 4.4% 12.1% 16.5% 0.6%
MMI Holdings Ltd 3.6% 7.5% 9.6% 17.1% 0.6%
British American Tobacco Corp 3.6% 4.6% 11.9% 16.5% 0.6%
Grand Parade Investments Ltd 2.8% 4.0% 15.0% 19.0% 0.5%
Mondi plc 2.2% 4.2% 11.6% 15.8% 0.3%
Hulamin Ltd 1.7% 2.2% 16.8% 19.0% 0.3%
Discovery Holdings Ltd 2.0% 1.7% 14.0% 15.7% 0.3%
The Foschini Group Ltd 1.7% 4.4% 11.9% 16.3% 0.3%
Phumelela Gaming & Leisure Ltd 1.7% 4.8% 10.9% 15.7% 0.3%
Values Value 56

57. Flexible Fund expected returns –
October 2014
Share % Assets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Index Holdings
Metair Investments Ltd 1.1% 2.2% 17.2% 19.5% 0.2%
Woolworths Holdings Ltd 1.0% 4.3% 15.1% 19.5% 0.2%
Tsogo Sun Holdings Ltd 1.3% 3.4% 11.2% 14.5% 0.2%
Super Group Ltd 0.9% 4.2% 14.6% 18.8% 0.2%
Sasol Ltd 0.9% 4.3% 11.7% 16.0% 0.2%
Aquarius Platinum Ltd 0.5% 0.0% 0.0% 0.0% 0.0%
Pan African Resources plc 0.7% 6.5% 9.5% 16.0% 0.1%
MTN Group Ltd 0.5% 5.5% 11.6% 17.1% 0.1%
Sephaku Ltd 1.5% 3.5% 15.0% 18.5% 0.3%
Alexandra Forbes Holding Group 0.7% 4.6% 15.0% 19.6% 0.1%
Basil Read Holdings Ltd 0.3% 4.1% 6.5% 10.6% 0.0%
Ellies Holdings Ltd 0.1% 2.4% 18.1% 20.5% 0.0%
54.0% 9.5%
Values Value 57

58. Flexible Fund expected returns –
October 2014
Share % Assets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Index Holdings
Redefine International Ltd 2.2% 6.7% 14.0% 20.6% 0.5%
Vukile Property Fund Ltd 2.4% 7.6% 9.9% 17.5% 0.4%
Fortress Income Fund A 2.4% 7.2% 5.0% 12.2% 0.3%
New European Property Investments PLC 1.5% 4.3% 13.0% 17.3% 0.3%
Equites Property Limited 1.0% 8.5% 13.0% 21.5% 0.2%
Resilient Property Income Fund Ltd 2.0% 4.4% 6.5% 10.9% 0.2%
Investec Australia Property Fund 1.4% 7.0% 6.5% 13.5% 0.2%
SA Corporate Real Estate Fund 0.9% 7.9% 9.0% 16.9% 0.2%
Growthpoint Properties Ltd 1.0% 6.5% 8.0% 14.4% 0.1%
Capital & Counties Properties plc 1.0% 0.4% 15.0% 15.4% 0.2%
Intu Group plc 0.0% 4.0% 7.0% 11.0% 0.0%
15.9% 2.5%
Values Value 58

59. Flexible Fund expected returns –
October 2014
Share % Assets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Index Holdings
Indiabulls Financial Services Ltd 2.7% 6.0% 18.0% 24.0% 0.7%
DB MSCI Global $ ETF 2.2% 2.7% 14.0% 16.7% 0.4%
Growthpoint Properties Australia Ltd 1.5% 7.4% 7.0% 14.4% 0.2%
The Buckle Inc 1.0% 2.0% 12.0% 14.0% 0.1%
CF Industries Holding Inc 1.0% 2.3% 13.0% 15.3% 0.1%
Netease Comm Inc ADR 2.6% 2.2% 18.0% 20.2% 0.5%
Sberbank 1.8% 4.0% 10.0% 14.0% 0.2%
SG Fleet Group Limited (AUL) 1.6% 6.0% 7.0% 13.0% 0.2%
14.3% 2.5%
SHF 6.375 05/26/2017 0.2% 6.0% 15.0% 21.0% 0.0%
SPDR Barclays Capital High Yield Bond ETF 4.3% 6.0% 0.0% 6.0% 0.3%
4.5% 0.3%
4.4% 0.0% 0.0% 0.0% 0.0%
Cash 3.8% 5.5% 0.0% 5.5% 0.2%
100.0% Total expected return 15.2%
Values Value 59

60. Balanced Fund expected returns
– October 2014
Share % Asssets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Steinhoff International Holdings Ltd 4.53% 3.2% 17.21% 20.4% 0.9%
Old Mutual plc 5.15% 5.2% 12.17% 17.4% 0.9%
Nedbank Group Ltd 4.30% 5.0% 12.11% 17.1% 0.7%
Firstrand Ltd 3.83% 4.7% 13.74% 18.4% 0.7%
MMI Holdings Ltd 2.74% 7.5% 9.62% 17.1% 0.5%
British American Tobacco Corp 2.73% 4.6% 11.94% 16.5% 0.5%
Network Healthcare Holdings Ltd 1.99% 2.5% 17.60% 20.1% 0.4%
Grand Parade Investments Ltd 1.54% 4.0% 18.00% 22.0% 0.3%
Discovery Holdings Ltd 1.60% 1.7% 14.01% 15.7% 0.3%
Phumelela Gaming & Leisure Ltd 1.49% 5.2% 15.00% 20.2% 0.3%
Hulamin Ltd 1.14% 2.2% 16.79% 19.0% 0.2%
Sephaku Ltd 1.09% 3.0% 15.00% 18.0% 0.2%
Tsogo Sun Holdings Ltd 1.32% 3.4% 11.16% 14.5% 0.2%
Mondi plc 1.08% 4.2% 11.58% 15.8% 0.2%
Super Group Ltd 0.89% 4.2% 14.58% 18.8% 0.2%
Sasol Ltd 0.95% 4.3% 11.71% 16.0% 0.2%
Values Value 60

61. Balanced Fund expected returns
– October 2014
Share % Asssets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Metair Investments Ltd 0.72% 2.2% 17.21% 19.5% 0.1%
Aquarius Platinum Ltd 0.45% 0.0% 0.00% 0.0% 0.0%
The Foschini Group Ltd 0.65% 4.4% 11.87% 16.3% 0.1%
SAB Miller plc 0.68% 1.9% 13.40% 15.3% 0.1%
Woolworths Holdings Ltd 0.53% 4.3% 15.14% 19.5% 0.1%
Reinet Investments SCA 0.77% 2.0% 11.30% 13.3% 0.1%
MTN Group Ltd 0.57% 5.5% 11.63% 17.1% 0.1%
Pan African Resources plc 0.54% 6.5% 9.47% 16.0% 0.1%
Alexandra Forbes Holding Group 0.40% 4.6% 13.00% 17.6% 0.1%
Afrimat Ltd 0.40% 2.8% 14.17% 17.0% 0.1%
OneLogic Group Ltd 0.10% 2.6% 20.00% 22.6% 0.0%
Ellies Holdings Ltd 0.10% 2.4% 18.12% 20.5% 0.0%
Basil Read Holdings Ltd 0.12% 4.1% 6.48% 10.6% 0.0%
Domestic Equities 42.38% 7.50%
Values Value 61

62. Balanced Fund expected returns
– October 2014
Share % Asssets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Indiabulls Financial Services Ltd 2.42% 6.0% 18.00% 24.0% 0.6%
Netease Comm Inc ADR 2.38% 2.2% 15.00% 17.2% 0.4%
Sberbank 1.30% 4.0% 10.00% 14.0% 0.2%
SG Fleet Group Limited (AUL) 1.07% 6.0% 7.00% 13.0% 0.1%
DB MSCI Global $ ETF 1.44% 2.7% 6.0% 8.7% 0.1%
CF Industries Holding Inc 0.98% 2.3% 10.00% 12.3% 0.1%
Growthpoint Properties Australia Ltd 0.90% 7.4% 4.0% 11.4% 0.1%
The Buckle Inc 0.99% 2.0% 8.00% 10.0% 0.1%
International Equities 11.48% 1.76%
SPDR Barclays Capital High Yield Bond ETF 6.07% 5.0% 0.00% 5.0% 0.3%
Ishares Iboxx $ Inv Grade Corp Bond ETF 1.50% 5.0% 0.00% 5.0% 0.1%
International Fixed income 7.57% 0.36%
Values Value 62

63. Balanced Fund expected returns
– October 2014
Share % Asssets
1 Yr FWD
DY
EPS 2yr
CAGR
Total
Return
Money
Weighted
Return
Redefine International Ltd 2.03% 6.7% 7.91% 14.6% 0.3%
SA Corporate Real Estate Fund 2.03% 7.9% 6.47% 14.4% 0.3%
New European Property Investments PLC 1.54% 4.5% 13.00% 17.5% 0.3%
Resilient Property Income Fund Ltd 1.49% 4.4% 13.00% 17.4% 0.3%
Fortress Income Fund A 1.72% 7.2% 5.00% 12.2% 0.2%
Equites Property Limited 0.97% 8.5% 13.00% 21.5% 0.2%
Vukile Property Fund Ltd 2.75% 7.6% 0.00% 7.6% 0.2%
Capital & Counties Properties plc 0.98% 0.4% 18.00% 18.4% 0.2%
Growthpoint Properties Ltd 1.04% 6.5% 6.79% 13.3% 0.1%
Intu Group plc 0.93% 4.0% 9.94% 13.9% 0.1%
Investec Australia Property Fund 1.10% 7.0% 3.50% 10.5% 0.1%
Hospitality Property Fund B 0.02% 2.0% 0.00% 2.0% 0.0%
Property 16.60% 2.31%
Fixed Income 15.80% 0.95%
Prefs 0.81% 0.13%
Call 5.35% 0.29%
100.0% Total expected return 13.30%
Values Value 63

64. Steinhoff
Becoming a European heavyweight
• Steinhoff is a European furniture retailer in the value segment of
the market:
 Trades on a forward EY of 9% and a DY of 3.2%.
 Cost savings and efficiencies will drive growth rather than
growing the market.
 Their scale and vertically integrated model will help them in
the consolidation of the market
 Expect share buybacks to optimise capital structure &
minimize dilution from rights issue
 Higher ROIC has helped drive the rerating
 The offshore listing in will help realise more value from an
improved rating.
Values Value 64

65. British American Tobacco
Stable earnings growth in Sterling
• British American Tobacco (BTI) is one of our largest
overweights in the portfolio:
 BTI is a Rand Hedge with very predictable earnings with
low volatility.
 BTI currently trades on a forward PE of 15x and DY of 4.6%.
 Expect earnings to grow at 7- 8% in Sterling plus Rand
depreciation of 4% p.a. = 11- 12% EPS growth in Rands.
 Despite regulatory risks we still like the stock as it is
offering a 16% return before rating changes.
 Core holding in the portfolio.
Values Value 65

66. SA Banks - reasonable value
Stock FWD PE EPS 3y
Barclays Africa 9.2x 11% 17.5% 6.0% 1.6x
FirstRand 11.6x 13% 23.0% 4.7% 2.9x
Nedbank 10.0x 11% 15.5% 5.1% 1.5x
Standard Bank 10.3x 10% 14.5% 5.0% 1.5x
Investec 11.2x 12% 12.0% 4.5% 1.4x
Source: Company data, Truffle
CAGR
ROE
FY15
FWD DY P/B
Values Value 66

67. SA Insurers are a mixed bag
• We are over weight Old Mutual, Discovery & MMI with
embedded values (EV) at or above their long term average:
Sanlam
Old Mutual
Liberty
Discovery
MMI
180%
160%
140%
120%
100%
80%
60%
10% 12% 14% 16% 18%
P/FY14E GEV
ROGEV FY15E
Source: Company data, UBS
Values Value 67

68. Discovery – growth at a fair price
Discovery sum of the parts
Balanced
portfolio
9%
SA Life
34%
Insure
7%
PruProtect
3%
PruHealth
6%
BEE loans
Source: Company data
SA Health
40%
1%
• Biggest medical schemes
administrator, size generates
economies of scale
• Serial entrepreneurs, have
successfully started Invest &
Insure
• Life business has grown
organically at the expense of
competitors
• Growth ventures Pru Health &
Pru Protect to contribute more
meaningfully to earnings
• Highest ROEV in the sector on a
FWD P/EV of 120%
Values Value 68

69. Old Mutual – Very attractively priced
Old Mutual valuation breakdown
8%
-14%
10%
30%
4%
Source: Company data
• Building critical mass in the
wealth cluster = high quality
business
• Wealth cluster gaining client
cash flows
• High operating leverage in the
platform business
• Will sell the rest of USAM
• Trades at a 20-50% discount to
competitors
• Buying Nedbank at a 20%
discount!
35%
27%
Life Insurance EM
Wealth management
OMIGSA
US Asset Management
Nedbank
Other
Debt
Values Value 69

70. Old Mutual - Very attractively priced
• We have built a large position in Old Mutual
 Expect a DY of 5.0%
 Expect EV growth of 12% driven by EM and Wealth
growth strategies.
 Quilter Cheviot (QC) acquisition gives scale in the UK,
wealth business in a high growth market
 Trading at a 18% discount to EV
 Post Solvency II implementation potential special
dividends
 If the discount persists the group may be split to unlock
value
 The total expected return is DY of 5.5% + EV growth of
12% = 17.5% p.a. before rating changes.
Values Value 70

71. Grand Parade Investments – cash underpin
• Sold 70% of LPM business Sun International for +/-R1.0bn
• Sold its 25% equity interest in Grand West & other casinos for
R1.68bn
• The Burger King (BK) roll out continues, targets by 2020:
 Rollout of 120 corporate stores
 50 franchise stores & 120 Sasol forecourts
 Est R4bn sales on 9% PAT margin in 2020
• Acquired 100% of Mac Brothers - catering equipment supplier
• Setting up their own supply chain for raw materials – further
enhance margins
• Bought 10% in Spur Group Holdings, exit vehicle for BK
Values Value

72. Grand Parade Investments - Valuation
Asset Value
Cash R2.5bn
30% LPM R600m
Mac Brothers R90m
Burger King R2.4bn
Less Burger King Capex (R1.0bn)
Total R4.590m
Shares in Issue 469m
Value per share R9.8
Current share price R7.0
Values Value

73. Sephaku Holdings Ltd
• Market capitalisation R1 billion
 Owns 36% of Sephaku Cement
 100% of Metier ready-mix
• Have a Kiln in Lichtenburg and second milling plant in Delmas
• SA’s current cement producing capacity is old and inefficient
• Latest technology
 10% EBITDA cost advantage over PPC
 High energy efficiency
 Improved and more consistent quality
• Logistics advantage
Values Value 73

74. Sephaku Holdings Ltd
• Plant capacity 2.8mt, Dangote believes it can run at 3.3mt
• Commenced production September 2014
• Supplying all four major retailers
 60% of production will go to retail
 40% bulk market
• Risks
 Price war
 Imports
 Not securing volumes
Values Value 74

75. Sephaku Holdings Ltd
• FY 2016 at 85% utilisation we expect EPS of 100cps
• FY 2018 EPS of 150cps
• Good cash generation
 2016 expected dividend of 65 cps
• Low tax in initial years – 12C deductions
• Current share price R5.60
 2016 PE of 5.6x
 2016 DY of 11%
• We value the share at R10.50
Values Value 75

76. Current Market View - Summary
• We are finding value in selective cyclical, property, banking and
insurance stocks.
• Given our size we continue to find attractively valued companies
in the small and mid cap universe eg. Hulamin, Sephaku,
Metair, Super Group and Grand Parade Investments
• Remain at maximum offshore exposure with long term concerns
over the Rand
• Offshore equities offer significantly better value than domestic
equities
• Overall equities are not cheap but valuations are being supported
by low interest rates both locally and globally
Values Value 76

77. Risk Parameters
• Income floating (linked to Prime/JIBAR)
• Company Risk
• Credit Risk
• Credit spread Risk
• Liquid assets
• Prime gearing risk
• Risk of capital loss (minimum)
• Regulatory risk