These slides will give you a good overview on the current asset management market in Europe, South East Asia and US. Finch believes that it is currently in the right position to be disrupted - come figure out why.

1. Perspective on Innovation in Asset Management
Finch Capital
November 2018

2. 2
• Productivity boost
• Unlock value of
data for CRM and
service
• Risk management
Finch Capital invests on 3 themes
Rise of
Indonesia
Transfor-
mation of
Financials
Augmented
Intelligence
• Cost levels too high
• CeX poor
• Fragmented
industry
Focus presentation on impact for Asset Management
• Indonesia on track to be the
4th world economy
• Most mobile/social savvy
country in Asia
• Better investment climate
vs China/ India

3. 3
Asset Management is ripe for
disruption
• Net return issues
(=> Price
pressure,
Passive, etc.)
• Old school
experience
(Lengthy
onboarding, MF
settlement/
execution,
Transparency/
Quality issues)
• Product
development to
better meet
needs
• Margin pressure
• Regulatory costs
• Productivity of
people (50%
less people)
• Many players
lack scale with
legacy systems
• Low believe that
work can be
enhanced/taken
over by tech
• Resistance to
change
• Benign equity
market
performance,
with high P/E
• Global
trade/political
instability
• Largest asset
manager has
±1% of AuM
Poor Customer
experience
Profitability under
pressure
Prima donna
culture
Period of tailwinds
coming to an end
Fragmented
industry

4. 4
Digital leadership seems to matter for
incumbents….is not only a fintech game
Operating and technology
costs over revenue, %
Assets-under-management
growth, %
Profit margin
%
16
9
Industry
average
Digital leaders
3
6
Industry
average
Digital leaders
30
51
Digital leadersIndustry
average

5. 5
• Growing role ASIA
• High growth clients with
changing needs
 Millennials
 Retiring baby boomers
• Institutionalisation of Family
Offices
Use tech to win high
growth segments
New tech enabled
products
CeX & Productivity
improvers
New Distribution &
Business models
Key innovation themes changing the
industry
• Crypto as an asset class
• De - institutionalizing products
 Alternatives
 SME/Real Estate Credit
 Value/need based portfolios
• Better CeX/UX –
Distribution 2.0
• Zero fee Retail
• End to End process digitalization
• AI/data
 Investing
 CRM
 Service
 Risk

6. 6
Tech enabled models serving high growth segments

7. 7
Asia – Attractive macro dynamics…
1 Growing role Asia…not BRICS

8. 8
Source: McKinsey Global Asset Management Survey
In Asset Management, Asia is
gaining share
Operating profit/AUM
China already in a globally leading
position by penetration rate of online WM
…
12.5
11.1
12.2 12.5 12.1
13.0
21.3 21.2
22.6
2013 2016 20132017 2016 2017 2013 2016 2017
Europe US Asia
Operating profit, % of net revenues
32 30 33 35 36 37 41 42 44
WM AuM and online penetration rate in the US, China,
the UK and Singapore
5.55
4.04
3.81
2.13
0.10 0.01
9.36
US China
0.42
UK
6.17
0.32
Singapore
0.05
0.03
Online Non-online
Source: BCG Global Wealth Management Model 2018; desktop
research; BCG analysis.
Operating penetration rate, %
40.7 34.6 24.9 27.9
Strong appetite for ROBO and digital wealth
model
Profitable region
1 Growing role Asia…not BRICS

9. 9
• Greater chance for disruption across value
chain: 67% of millennials say they would try
financial services from brands they trust, e.g.,
Nike, Apple according to a LinkedIn survey
• Company ESG policies top of mind for
Millennials consumers: Millennials are twice as
likely to purchase from a brand because of the
company’s social and/or environmental impact
• Millennials show strong interest in
sustainable investing: 84% of Millennial
investors are interested in sustainable investing,
according to a Morgan Stanley report
Source: HFRI All HF Index
Millennials are 2x more likely to invest in companies or
funds that target specific social or environmental
outcomes
22
17
15
12
9
7
Exit an investment position
due to objectionable activity
Invest in companies using
high-quality ESG practices
Invest in companies targeting
social/environmental goals
All individual investorsMillennial investors
2 Millennials
Millennials tend to focus more on values &
Sustainability's than older generations

10. 10
Addepar, the operating
system for our financial
world, has surpassed $1
trillion in assets on its
platform, up from $500
billion just 18 months ago.
Founded in 2009, Addepar
now counts over 300 firms
as clients, including AB
Bernstein, Jefferies,
Morgan Stanley and many
more.
Canopy was born in a
Singaporean shop house in
2015 – as part of the
Mesitis Group. Canopy
helps financial institutions
and wealth managers to
connect their siloed data,
analyze their data, and gain
new insights into their
business or market.
3 Family Offices
Using tech to get smart on Family
offices needs and add value

11. 11

12. 12
Institutional interest – Example Oct 2018Crypto market cap USD 200- 700 Bn
Crypto as an asset class – Emerging institution-
al interest despite negative recent sentiments
# Name
The most influential endowment manager just
jumped into crypto with best on two Silicon
Valley funds
• Swensen, who manages Yale‘s $29.4 billion endowment,
has invested in 2 funds dedicated o cryptocurrencies,
sources tell CNBC
• The funds are run by Andreessen Horowitz and Paradigm,
which was started by Coinbase co-founder Fred Ehrsam
and former Sequoia Capital partner Matt Huang
• The investment marks a much-nneded vote of confidence
for the volatile asset class
• Swensen started at Yale in 1985 when the endownment
managed just over $1 billion, according to its alumni
magazine, which has also called him Yale‘s „in-house
Warren Buffett.“
Market cap
1 $108,817,236,77
9
2 $20,718,344,912
3 $19,989,397,623
4 $8,334,938,605
5 $4,683,605,086
6 $4,638,181,742
7 $2,887,042,455
4 Crypto as an asset class

13. 13
Brickblock & Property
Partners provide the
technology and legal
framework to facilitate
real estate investments,
allowing developers to
raise capital from a
global investor pool and
investors to access
attractive investments
around the world.
Swarm Fund is the
blockchain for private
equity. It’s a fully
decentralized capital
market place that
democratizes investing
by using the power of
the blockchain to open
up high-return,
alternative investment
classes to smaller
investors through asset-
backed funds using
cryptocurrency tokens.
Trussle & Home Bay
are real estate brokers
however not in the
same vertical. Trussle is
a free online mortgage
broker whereas Home
Bay is a platform that
allows you to sell your
home for more money
and with less risk. Both
are simplifying complex
industries via a great
UEX and automation.
Zopa & Funding circle
are pioneers in the
peer-to-peer lending
industry, They use the
internet to cut out the
banks entirely and
match savers with
individuals who want to
borrow. Leaving out the
banks and offerin better
rate all round.
5 Deinstitutionalising
Deinstitutionalising and more direct

14. 14

15. 15
6 Better CeX / UX
Distribution 2.0 – Rise of ROBO,
mainly in the US and China
ROBO direct Partnerships with distribution plays
+
+
Leading Robo Advisors have a long runway for growth
Name
AuB
($B)
Market
share
Typical fee
(bps)
Account
Minimum
Vanguard 112.0 28% 30 $50,000
Charles Schwab 33.3 8% 0 $5,000
Betterment 14.0 3% 25 $0
Wealthfront 10.0 2% 25 $500
Personal Capital 7.5 2% 69-89 $100,000
Essential Protfolios
(AMTD)
1.6 0% 30 $5,000
Future Advisor (BLK) 1.0 0% 50 $10,000
Asset Builder 0.7 0% 25-48 $50,000
Rebalance IRA 0.5 0% 50 $100,000
Adaptive Portfolio
(ETFC)
0.4 0% 30 $5,000
Liftoff 0.2 0% 40 $5,000
SigFig 0.1 0% 25 $2,000
Jemstep (IVZ) 0.1 0% 15 N/A
Top 10 Subtotal 181.5 45.1%
Industry Total 401.9

16. 16
CompaniesModel Description
Phone
trading
Online
trading
Mobile
trading
• Disruption through offering phone trading
• Opening market to larger retail segment
• Market dominated by selected few large
players
• Disruption through low cost online brokerage
• Making market even more accessible for
larger retail clients
• Fragmentation throughout different
geographies
• Disruption through free stock trading for
everyone
• Mobile-first offering via mobile applications
• Large geographical coverage and expansion
Time
197
0
198
0
201
0
199
0
200
0
Now
7 Zero fee Retail
Development of retail stock trading
market in last decades

17. 17
7 Zero fee Retail
Passive move to ZERO fees

18. 18
Zero commission stock trading is
becoming a commodity on mobile
7 Zero fee Retail
Robinhood BUX
• Offering zero commission
trading
• Focus on US Market
• Main revenues from
interest income and selling
order flow (not allowed
in EU)
• Planning to offer zero
commission trading
• Focus on EU market
• Main revenues from
additional functionalities
Trading212 Revolut
• Offering zero commission
trading
• Focus on UK and EU
market
• Main revenues from cross
sell to CFD trading and
interest income
• Planning to offer zero
commission trading
• Focus on UK market
• Asia and US on planning
• Main revenues from cross
sell to interest income and
FX model

19. 19

20. 20
Current processes require end to end
digitalisation
8 End to End process digitalisation
Fast institutional client onboarding … … at lower cost trough automation
Average time to onboard a new institutional
client, days
Operating costs for client onboarding, adjusted to
industry average
~9
Industry
average
Digital leaders
~23
-62%
Industry
average
100
Digital leaders
25
-75%

21. Example AI for Investments

22. 22
8 End to End process digitalisation
Changing the investment industry
leveraging blockchain – Example Brickblock
The Solution
Give crypto-investors a way to invest in tokens backed by real world-assets
Easily trade your assets on the secondary market. Make real estate liquid: sell your
share of an apartment building (or any other asset) within minutes. Transfer your assets
when, where, and how you want
A truly global, decentralized investment platform, we are able to provide investments from
anywhere to anywhere through blockchain technology
Through the use of immutable blockchain records on every transaction, we remove
counterparty risk: we eliminate the need for a bank account & long waits, and immediately
confirm asset transactions
By using smart contracts, Brickblock is able to offer a flat-free structure: only 0.5% of the
transaction volume
These allow anyone in the world to invest in real estate in an easy, transparent, cost efficient and
accessible way

23. 23
9 AI opportunity in Asset Management
Potential impact of artificial intelligence, by sector Solution Benefits
Percentage of global companies in each sector that expect to adopt
artificial intelligence in the near, mid and long term
Healthcare Automotive
37%
23%
40%
35%
47%
18%
41%
59%
0%
41%
41%
17%
47%
36%
17%
54%
38%
8%
39%
44%
17%
14%
83%
3%
Financial
services
Transporta-
tion and
logistics
Technology,
communica-
tions and
entertainment Retail Energy Manufacturing
Near term
Mid term
Long term
Artificial Intelligence Revenue, Top 10 use cases, World Markets:
2025, ($ Millions)
0 1,000 2,000 3,000
Contract analysis
Object detection and classification –
avoidance, navigation
Object identification, detection,
classification, tracking from
geospatial images
Automated geophysical
feature detection
Text query of images
Content distribution on
social media
Predictive maintenance
Efficient, scalable processing
of patient data
Static image recognition,
classification, and tagging
Algorithmic trading strategy
performance improvement

24. 24
9 AI opportunity in Asset Management
AI has still many learnings to go

25. 25
AI – Example Behavox
• Behavox is a state of the art employee monitoring system
• Behavox is an enterprise platform that unifies all types of data into a single
data lake, allowing users to query the data and apply machine learning to
identify capital markets misconduct and insider threats.
9 AI opportunity in Asset Management

26. 26
9
• Predictive analytics, artifcial intelligence, and machine learning can be used to detect
patterns hidden in structured and unstructured data to produce actionable insights,
which can increase the accuracy of key investment decisions.
• Artifcial intelligence (AI) and machine learning are set to power this transformation.
Squirro’s AI-powered solution helps asset managers find new client opportunities and
offer the best products to their clients, delivering a better client service and saving
countless man-hours on research.
AI opportunity in Asset Management
Squirro for Corporate Financial
Services
• Investor Lead Origination (Plans,
Gov., Endowment etc …)
• Fund Recommendations
• Client Cockpit & Meeting
Preparation Dashboard
• Increase and retain Assets Under
Management (AUM)
• Improve customer engagements
• Stay ahead of competition by leveraging
market signals
• Save hundreds of hours of manual
research
Solution Solution Benefits

27. 27
• Exciting times ahead in Asset Management!
• The big winner is the customer
• The biggest impact is on employees, as industry likely will
produce same or more alpha with 50% of the people
• Digital adoption is important for Asset Managers to outperform
In summary

28. 28
Thank You
Questions email info@finchcapital.com