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Deutsche UFG Capital Management

Mutual Funds

Moscow | 2010
UFG Asset Management - Transparent structure

UFG Asset Management

40% 60% 100% 100%

Public markets - Onshore Funds Public markets - Offshore Public markets


Private markets
Florian Fenner Funds Charles Ryan
Florian Fenner

Robert Sasson, Holger Mueller


Maxim Tishin, Vadim Ogneschikov, Dimitri Elkin, Mikhail Tarasov
Polina Minkina Dmitry Khilov,
Managed Accounts Mutual Funds Onshore Dominic Reed
Onshore - Petr Stolypin
- Non-state pension - Balanced
funds - Russian Bonds Marketable Alternatives Offshore Real Estate
Private Equity (Offshore)
- Insurance companies - Fund 2025 - UFG Russia Select Fund (equity/hedged) (Offshore)
- UFG Private Equity Fund I
- Corporations - Infrastructure - UFG Russia Alternative Fund (mid-cap equity) - UFG Real Estate
- UFG Private Equity Fund II
- HNWIs - UFG Russia Debt Fund Fund
(fixed income) - UFG Real Estate
- Credit Opportunities Fund (fixed income) Fund II

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Deutsche UFG Capital Management

United Financial Group


z Russian investment bank founded in 1994 by Boris Fedorov and Charles Ryan
z A leading Moscow and London based investment bank and brokerage firm
z Investment bank/brokerage business sold to Deutsche Bank in 2005 for final valuation of
$700 mln.

Deutsche UFG Capital Management (UFG Invest)


z Best money management services for domestic investors since 1996
z Alternative investment management strategies for offshore investors since 2003
z A part of UFG Asset Management Group, one of the leading asset management
companies in Russia
z Independently owned and managed by Founders and Employees
z UFG Asset Management sold 40% of UFG Invest to Deutsche Bank with option 100% by
2011

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Deutsche UFG Capital Management
– Some key events throughout our history

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Deutsche UFG Capital Management
– Key management

z Florian Fenner, Managing Partner and CIO, has the overall management responsibility with
particular emphasis on investment management part
z In addition to Mr. Fenner UFG Asset Management Group employs two more investment managers:
Vadim Ogneshchikov on the equity front and Maxim Tishin on fixed income front
z Head of Retail Sales Mrs. Galina Romanyuk overlooks all retail activity including sales, development
and day to day operations
z Domestic Sales Department is headed by Mr. Yury Anpilogov
z Compliance/Back-office department is headed by Mr. Boris Alexeev and also includes dedicated
mutual fund account and 5 more back officers/accountants

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Our partners

z Main counterparties: Aton, Troika Dialog, Uralsib, Goldman Sachs, Brunswik UBS, Deutsche
Bank, Renaissance, ING
z Our agents: Sberbank, Citibank, Barclays, BSGV, KIT Finance, Credit Suisse
z Custody: Rosbank, VTB, ODK, Irkol, SPETSDEP
z Registrar: Computershare
z Auditor: Marrillion

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Liquid products
Liquid products. Mutual funds

z Pyotr Stolypin – open-ended equity fund

z Russian Bonds – open-ended bond fund

z UFG INVEST – Balanced – open-ended mixed fund

z INFRASTRUCTURE – open-ended equity fund

z FUND 2025 – open-ended equity fund

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Open-ended equity fund – Pyotr Stolypin

• Launched on April 1, 1997; fully audited 12yr track


record
• Flagship Fund with a strong performance
• The investment objective is to achieve long-term capital
growth, primary through investments in equities actively
traded on the markets of Russian Federation.
• Strategy: “Best Overall Ideas” long term, pure long-only
investment vehicle to benefit from Russia re-rating.
• Dimension of fund is above 4,3 bn RUR. One of three
biggest open-ended equity funds in Russia

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Open-ended equity fund – Pyotr Stolypin

Fund structure as of August 31, 2010 Fund structure


as of August 31, 2010:
telecom
oil
metals&mining 4,97%
14,78%
Equity 88.59%
1,91% utilities
industrial
6,14% Cash 11.41%
0,47% transportation
2,71%

gas diversified List of TOP 5 positions


19,19% 4,44%
as of August 31, 2010:
finance
13,77%
MTS 14.78%
Gazprom 13.42%
chemistry gold Uralkali 12.20%
19,20% 1,01%
cash
11,41% Sberbank 6.21%
Novatek 5.77%

Strategy Highlights:
“Bottom-up” value-oriented approach focuses on the market price of a share relative to the portfolio
managers’ evaluation of the company in long-term earnings, asset value and cash flow
potential. The manager constructs the Fund´s portfolio on a stock-by-stock basis. Every purchase
is evaluated by weighting the potential gains against associated risks.

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Open-ended equity fund – Pyotr Stolypin

160%

140% Pyotr Stolypin

120%

100%

80%
`
60%

40%

20%

0%

-20%
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10

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Open-ended bond fund – Russian Bonds

zFund “Russian Bonds” (earlier “Templton”) was taken over


by Deutsche UFG Capital Management in November 2002
zThe fund aims to achieve high fixed income returns by
investing in short-term Russian corporate debt.
zThe investment objective of the Fund is to achieve fixed
income returns through investments in debt instruments
issued by corporations domiciled in the Russian Federation
and that are denominated in rubles

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Open-ended bond fund – Russian Bonds

Fund structure as of August 31, 2010 Fund structure


as of August 31, 2010:
precious stones industrial
1,12%
Bonds 83.85%
consumer 4,37%
cash
diversified
5,46%
16,15% Cash 16.15%
3,01%

gas
3,96%
List of TOP 5 positions
government
finance
19,09%
5,35% as of August 31, 2010:
TD Kopeyka BO 01 4.46%
utilities
metals&mining Novaya perevozochnaya
13,81%
2,89% 01 4.45%
transportation
8,85% oil
Russian Railways 10 4.40%
telecom
12,05%
3,89% Alrosa 4.37%
Belon finance 3.22%
Strategy Highlights:
The criteria for selection of investments will include such factors as attractiveness of the yield, the
prospects for compression of the spread over the yield for debt instruments issued by the Russian
government, currency exposure, relative sector valuation. In-house research-driven credit analysis
currently favors short duration instruments.

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Open-ended bond fund – Russian Bonds

45%
Russian Bonds
40%
35%
30%
25%
20% `
15%
10%
5%
0%
-5%
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10

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Open - ended mixed fund – UFG INVEST - Balanced

z Established on August 15, 2006


zThe Fund’s main objective is long-term capital growth
through investing in equity and bond markets. The
proportion of shares and bonds within the fund depends on
the market situation
zThe Fund may invest part of assets in expanding
companies, less liquid second tear shares and in so-called
“rising stars”.
z Equity part will be concentrated in top 5 ideas

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Open - ended mixed fund – UFG INVEST - Balanced

Fund structure as of August 31, 2010 Fund structure


government as of August 31, 2010:
utilities gas
1,65%
9,81% finance
3,98%
transportation 2,39%
Equity 39.63%
4,10% diversified
6,09% Bonds 23.69%
industrial Cash 36.41%
0,67%
telecom
18,14%
List of TOP 5 positions
as of August 31, 2010:

metals&mining
MTS 14.89%
4,37%
Uralkali 12.39%
cash
chemistry 36,41% Gasprom 9.81%
12,39%
Sibmetinvest 4.34%
RusHydro 3.98%
Strategy Highlights:
z Equity: Stock picking strategy. Decisions are based on deep analysis of emitters and their activities
giving preference to companies with stable financial results.
z As for bonds, the choice will be made in favor of emitters with attractive risk vs. profit index as well
as with the best potential for enhancing credit quality within a period of 6-9 months

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Open-ended mixed fund – UFG INVEST - Balanced

70%
60% OFG-INVEST Balanced

50%
40%
30%
`
20%

10%
0%

-10%
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10

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Open-ended equity fund – INFRASTRUCTURE

Objective:
The investment objective of the Fund is to achieve long-
term capital growth through investments in stocks with
the focus on infrastructure

Strategy Highlights:
INFRUSTUCTURE Fund invests into a wide range of
stocks belonging to actively developing sectors of the
Russian economy: construction, real estate,
transportation and utilities

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Open-ended equity fund – INFRASTRUCTURE

Fund structure as of August 31, 2010 Fund structure


as of August 31, 2010:

transportation
Equity 67.96%
metals&mining
19,47%
19,66%
Cash 2.04%

List of TOP 5 positions


industrial
8,96% as of August 31, 2010:
NCSP 12.33%
construction TMK 8.69%
8,38%
utilities
cash 41,49% LSR Group 8.38%
2,04%
IDGC of Centre 8.29%
Mechel Steel group 6.20%
Strategy Highlights:
z Investments in stocks with the focus on infrastructure
z Fund invests into a wide range of stocks belonging to developing sectors of the Russian economy:
construction, real estate, transportation and utilities

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Open-ended equity fund – INFRASTRUCTURE

250%
Infrastructure
200%

150%

100%
`

50%

0%

-50%
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10

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Open-ended equity fund – FUND 2025

Objective:
The investment objective of the Fund is to achieve
long-term capital growth. Fund 2025 employs an
aggressive investment strategy, preferable selection of
the second tier stocks based on fundamental
approach to selection and has a long-term investment
horizon. The Fund invests into present and future
leaders of the Russian and global stock market. The
fund is ideal for regular investments.

Strategy Highlights:
Fund 2025 employs an aggressive investment
strategy, preferable selection of the second tier stocks
based on fundamental approach to selection and has
a long-term investment horizon

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Open-ended equity fund – FUND 2025

Fund structure as of August 31, 2010 Fund structure


as of August 31, 2010:
oil diversified Equity 93.44%
5,38% 6,85%
utilities
11,04%
finance Cash 6.56%
10,07%
transportation
7,27%

gold
9,52%
telecom List of TOP 5 positions
7,88%

consumer
as of August 31, 2010:
5,31%
pharmaceuticals
6,53%
Polymetal 9.52%
cash Novatek 7.99%
metals&mining 6,56%
3,65%
industrial gas constructionchemistry Bank Saint Petersburg 7.68%
2,76% 7,98% 3,94% 5,26%
Sistema 6.85%
Pharmstandard 6.53%

Strategy Highlights:
Fund 2025 employs an aggressive investment strategy, preferable selection of the second tier stocks
based on fundamental approach to selection and has a long-term investment horizon

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Open-ended equity fund – FUND 2025

300%

250% Fund - 2025

200%

150%
`
100%

50%

0%

-50%
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10

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Charity

z Deutsche UFG Capital Management decided to create a long-term charity program for FUND 2025

z The philosophy of FUND 2025 is: “We can’t build our future without supporting children who need
our help. By developing your own financial prosperity for tomorrow, you help someone today”

z Partner of the program is “Grant life” charity fund

z We grant to charity 1/3 of our fee for managing FUND 2025

z This program supports children with oncology, hematology and other devastating diseases

“Fund 2025” - is the fund of future generations!

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Investment team
Investment team

Florian Fenner, CFA, (German), joined UFG Asset Management as Managing


Partner in July 2002. He is an investment manager with over ten years
experience in Russia. Prior to joining UFG, he was head of the representative
office of Unifund with responsibility for a Russia portfolio exceeding several
hundred millions of USD. He served as Deputy Head of Research at
Brunswick Brokerage, one of Russia’s leading investment banks, in 1996
before joining Brunswick Capital Management in 1997. He managed and co-
managed several funds and managed accounts as IMRO registered fund
manager. Before coming to Russia, he worked for Schröder Münchmeyer
Hengst Co, a German investment bank. Mr. Fenner is a Chartered Financial
Analyst, based in Moscow and speaks fluent Russian

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Investment team

Maxim Tishin, Ph.D., (Russian), joined UFG Asset Management as a Fixed


Income Portfolio Manager in 2003. Prior to joining UFG he has earned Ph.D. in
Economics from Finance Academy under the Government of the Russian
Federation and Master's degree in Applied Mathematics from Lomonosov Moscow
State University. His research was focused on applications of Probability Theory
and Mathematical Statistics to financial auditing. Mr. Tishin speaks fluent English

Vadim Ogneschikov (Russian), joined UFG AM as Lead portfolio manager July


2007. Mr. Ogneshchikov has over 10 years of experience in managing investment
portfolios focused on Russian securities. Prior to joining the firm Mr. Ogneshchikov
worked as a Fund manager for Evli Greater Russia Fund belonging to Evli Group,
a leading Nordic investment bank. During 1997 – 2004 Vadim was a portfolio
manager of Hansa Russian Equity Fund a division of Hansabank group, the Baltics’
largest universal bank.

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Contacts

Deutsche UFG Capital Management

Anton Denisov
Senior Investment Advisor

Anton.Denisov@ducm.ru

Tel. +7 (495) 721 1212


Fax. +7 (495) 721 1210

5 Petrovka Street,
107031 Moscow, Russia

www.ducm.ru

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