GSF

Investec GSF Global Franchise Fund

This communication is meant to be read only by professional investors, professional financial advisers and, at their exclusive discretion, their clients. It is not to be generally distributed to the public.

Asset Management

Investec GSF Global Franchise Fund

Key facts Seeks to invest in high quality companies which have good franchises gained through high customer loyalty, strong brands, patents and copyrights which can give companies a strong competitive position. This can lead to them earning consistent profits and delivering superior long term performance for investors Portfolio holdings are likely to be well suited to the current lower growth environment because they are typically less dependent on borrowing and more resilient in times of economic weakness A concentrated global portfolio seeking typically 25-40 high quality businesses, held for the medium to long term Stock choice is based on extensive fundamental research using primary sources and meetings with management Benchmark unconstrained Managed by a team of 10 investment professionals with an average of 14 years experience based in London and Cape Town Seeking high quality businesses
The Investec GSF Global Franchise Fund seeks to have a significantly differentiated investment approach. It is based on the premise that relatively few companies can consistently and reliably compound shareholder wealth at superior rates of return over the long term. Investment experience shows that high quality companies that are well positioned in stable or growing industries with high barriers to entry and low capital intensity can achieve this, often with lower than average absolute volatility. The Fund aims to invest in companies which have dominant intangible assets such as strong brands, patents, licences and copyrights. All of these create strong competitive advantage. Given that very few businesses meet these high quality standards, the Fund is relatively concentrated, typically holding only 25-40 stocks. It is also not benchmark constrained and aims to hold stocks for the medium to long term through the investment cycle. Our experienced investment team chooses businesses that are expected to benefit from the recovery of the global economy but are also defensively positioned. In particular, we seek out businesses that are not reliant on borrowing to fund their growth, something especially crucial in a credit restricted environment. Furthermore, the investment team expects it will avoid investing in banks but can invest in selected financials that fit its investment criteria.

High quality companies with enduring franchises can provide superior long-term performance with lower volatility over a full market cycle. Recent market events have put these companies on historic low valuations, which we believe creates an exceptional investment opportunity.

Typically the high quality companies we are looking for are well positioned in stable or growing industries with high barriers to entry and have low capital intensity. They usually offer meaningful returns when times are good, but just as importantly their defensive nature means they typically lose less than the market during a downturn.

A high quality solution for todays uncertain equity market

Buying quality businesses always feels right, and at the moment particularly so. In the current low growth environment we believe that investing in high quality, global franchise businesses is a sound investment decision. These high quality businesses can typically consistently grow their earnings, creating wealth for their shareholders year after year even when the wider economy is struggling. Global franchise businesses can have attractions in a range of different potential market environments. They can offer meaningful returns when times are good in the wider equity market, but more importantly their defensive nature means they often lose less than the wider equity market during a downturn. This is why the Investec GSF Global Franchise Fund seeks to invest in high quality businesses with the intention of delivering long term outperformance by participating in up-markets and losing less in down-markets.

to be high quality businesses into a concentrated global portfolio. The Fund Manager uses a research approach that is both qualitative and quantitative. In-depth sector analysis is combined with meeting company management, key customers, suppliers and industry consultants. The majority of the Funds top 10 stocks in June 2009 have been held since inception in April 20071. However, when market conditions change significantly, the Funds Manager reacts quickly to take profits from stocks and thereby ensures the Fund is fully invested in the most promising opportunities available. The Fund Manager looks for companies with: Sustainable high return on capital Low or no dependency on financial leverage Low capital intensity High free cashflow yields (in absolute terms) and stable and high free cashflow generation for the foreseeable future Free cashflow yield (and sustainable dividend yield) that is significantly higher than long term government bonds Positive earnings growth (albeit likely to be low in current circumstances)

Investing in high quality businesses, guided by independent primary research

The investment team undertake fundamental primary research to distil a focused universe of what we believe

Exposure to leading global brands

Company Nestle Philip Morris International BAT Plc Pfizer Japan Tobacco Heineken Johnson & Johnson Diageo plc Unilever Proctor & Gamble Brands Nescafe, Maggi, Nestle, Nan, Nesquik, Baci Marlboro, Merit, Virginia Slims Lucky Strike, Pall Mall, Dunhill, Kent, Viceroy, Vogue Zithromax, Lipitor, Viagra, Celebrex, Norvasc, Zoloft Winston, Camel, Mild Seven, Silk Cut, Hamlet, Old Holborn Heineken, Zywiec, Amstel, Star Tylenol, Acuvue, Band-Aid, Concerta, Imodium Smirnoff, Johnnie Walker, Guinness, Captain Morgan, Baileys, J&B, Jose Cuervo, Tanqueray Dove, Lipton, Knorr, Lux, Sunsilk, Hellmans Gillette, Olay, Duracell, Clairol, Pantene, Pringles, Oral-B

This is not a buy or sell recommendation for any particular security. 1 The Investec GSF Global Franchise Fund was launched as a Luxembourg-based Fund on 6 July 2009. However a Fund with a practically identical investment objective and policy, run by the same Fund Manager, was launched as a UK-based Fund (the Investec Global Select Equity Fund) in April 2007. All of the assets of this Fund were merged into the Global Franchise Fund at the time of its launch in July 2009.

Investment process
Step 1: Broad universe The global landscape gives the Fund the widest possible opportunity to identify stocks that meet its stringent quality criteria. Step 2: Focused universe The investment universe is reduced to approximately 200250 stocks, because relatively few companies possess the exceptional quality characteristics sought by the Fund. The Fund Manager uses a range of in-house and external databases to screen and rank companies globally to assess whether they have the necessary financial characteristics. Those companies passing this test are reviewed on a qualitative basis to ensure their business models are consistent with the global franchise mandate of the Fund. Broad universe
MSCI World All stocks with market capitalisation greater than US$1 billion

Step 3: Fundamental research The team analyses each of these companies through a common framework that focuses on the business (industry background and competitive advantage), price (valuation) and meetings with management. The majority of research is conducted internally by the team. Step 4: Portfolio construction and risk management Our value-driven approach and valuation methodology which analyse companies-free cash flow, limits our investment universe. Given the scarcity of exceptionally high quality companies that also demonstrate attractive valuations, the Fund consists of a concentrated portfolio of typically only 25-40 stocks. We expect to hold our investments over the medium to long term or through the investment cycle.

Focused universe
Quantitative proprietary stock screen High free cash flow yield High gross margins High asset turnover Low PE ratios High CFROI & ROCE Qualitative overview High return on capital Low capital intensity Resilient intangible assets Capable management High free cash flow generation and repeat revenues Financial strength and comfortable coverage of fixed charges Strong growth potential

Fundamental research
Key questions Industry background Competitive advantage Financial strength Valuation Management Research process focused on Initial free cash flow yield above long bond yields

Portfolio construction
Concentrated portfolio of the BEST IDEAS New idea attractiveness relative to the current portfolio price, and quality Decision YES (BUY/SELL) NO

+ +

Sustainable free cash flow growth and stable margins Potential upward revaluation based on the replacement value of assets (including intangibles) Meet with management Incentives Capital allocation Shareholder friendly

Approx 1900 companies Approx 200-250 companies

Approx 40-50 companies Typically 25-40 companies

Understanding the risk environment

Risk is evaluated in the Fund in absolute terms, not relative to benchmarks. The Fund Manager focuses on absolute risk factors that are most likely to jeopardise the Fund achieving its long-term goal of seeking consistent total returns over the long run. The Fund aims to deliver long-term outperformance, selecting companies which we believe will participate in up-markets and lose less in down-markets. It is anticipated that the Fund will generate most of its outperformance relative to global equity benchmark indices when markets are falling. Conversely, it is anticipated that the strategy will underperform most frequently when markets are rising strongly, particularly in a narrow bull market driven by sectors that are leveraged or growth-driven, which the Fund seeks to intentionally avoid. This investment could be considered as a stand alone holding or a diversifer within a broader portfolio.

Investment guidelines
The current investment guidelines for the Investec GSF Global Franchise Fund are below. These parameters may change without prior notification to shareholders. Position size At least 1% at purchase Maximum individual position size: 10% Typical number of stocks: 25-40 Maximum sector/industry position size: 20% Sector Weightings are a product of bottom-up stock selection We do not expect to invest in banks Country Weightings are a product of bottom-up stock selection. Typical concentrations are Europe (non-UK), North America and UK

About the Fund Managers

Sam Houlie Fund Manager The Fund is managed by experienced portfolio managers and equity analysts who sit within a globally integrated team of ten with an average of 14 years of experience based in London and Cape Town. The Funds lead manager is Sam Houlie. Sam joined Investec Asset Management in 2006 and has been the head of equities in South Africa since March 2007. Prior to Investec, Sam worked for Abvest Associates where he was instrumental in creating the equity business, moving through the ranks from Chief Investment Officer to CEO. Sam has 12 years industry experience including managing global and domestic equities and multi-asset funds. He also has many years experience in analysing consumer and pharmaceutical sectors. The Funds deputy manager is Mark Wynne-Jones who sits in Investecs London office. Mark has been with Investec since August 2005, and has extensive research experience having previously been Head of UK Research with UBS Wealth Management. Mark was also a Fund Manager with Cavendish Asset Management. The investment team is also supported by an independent dealing team of eight and a performance, risk and attribution team of 12 specialists.

We seek to invest in companies with business models which can provide some certainty in uncertain markets.

Further Information UK: +44 (0)20 7597 1900 If calling within the UK: 0800 389 2299 broker@investecmail.com Europe: +44 (0)20 7597 1800 broker@investecmail.com Americas: +1 212 259 5617 US toll free: +1 800 434 5623 usbroker@investecmail.com Hong Kong: +852 2861 6888 investec.asia@investecmail.com Taiwan: +886 (0)2 8771 3000 iamtaiwan.iam@investecmail.com Australia: +61 2 9293 2346 asset.management@investec.com.au www.investecassetmanagement.com

About Investec
Investec Asset Management is a specialist investment manager, providing a premier range of portfolio management services and products to institutional and individual investors. Established in 1991, the firm has been built from start-up into an international business managing in excess of US$50 billion* on behalf of third party clients. We have grown from domestic roots in the UK and Southern Africa to a position where we proudly serve a growing international client base from the Americas, Europe, Asia, the Middle East, Australia and Africa. We employ over 100 investment professionals. The firm seeks to create a profitable partnership between clients, shareholders and employees and to exceed expectations for both client service and performance. Investec Asset Management is an independently managed subsidiary of Investec Group. *As at 31 May 2009. THIS DOCUMENT IS PROVIDED FOR GENERAL INFORMATION ONLY. IT IS NOT AN INVITATION TO MAKE AN INVESTMENT NOR DOES IT CONSTITUTE AN OFFER FOR SALE.THE FULL DOCUMENTATION REQUIRED TO MAKE AN INVESTMENT, INCLUDING THE PROSPECTUS AND SIMPLIFIED PROSPECTUS OR OFFERING MEMORANDUM, IS AVAILABLE FROM INVESTEC ASSET MANAGEMENT.
This document should not be distributed to private customers who are resident in countries where the fund is not registered for sale or in any other circumstances where its distribution is not authorised or is unlawful. Please visit http://www.investecassetmanagement.com/ fundregistrations to check registrations by country. In the USA this communication should only be read by professional investors and financial advisers. THIS INVESTMENT IS NOT FOR SALE TO US PERSONS.

Important information
This document is not for general public distribution. If you are a private investor and receive it as part of a general circulation, please contact us at +44 207 597 1900. The value of this investment, and any income generated from it, will be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which it invests. Investors are not certain to make profits; losses may be made. The portfolio may change significantly over a short period of time. All the information contained in this document is believed to be reliable but may be inaccurate or incomplete. A full explanation of the characteristics of the investment is given in the Prospectus and Simplified Prospectus. Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

Telephone calls may be recorded to confirm your instructions. Issued by Investec Asset Management, July 2009.

03290 06/09

Asset Management