Polar capital asian financial citywire paris 2011

POLAR CAPITAL

Polar Capital Asian Financials FundCitywire Paris ForumCitywire Paris Forum10th February 2011

1This presentation is for non-US professional investors only

Why use an Asian Financials Fund?

• Financials are over 35% of

your Asian portfolio

• Why use a generalist to

manage your largest

exposure?

Financials as % of total market

60%

47% 47%43%

37% 37%29% 28%

30%

40%

50%

60%

70%

80%

POLAR CAPITAL Please refer to the Important Information at the end of this presentation.

2

exposure?

• A sector with very different

balance sheet

issues/analytical skillsSource: JPMorgan, Oct 2010

16% 15%

0%

10%

20%

30%

Hong

Kong

Sin

gapore

Philip

pin

es

Austra

lia

Chin

a

Thaila

nd

Indonesia

India

Kore

a

Taiw

an

Why use the Polar Asian Financials Fund?

• Strong out-performance of Asian

markets over long-term

• Strong out-performance of Asian

financials over long-term

Polar Capital Asian Financials Fund relative to MSCI Asia (ex Japan) & MSCI Asia (ex Japan) Financials (Since inception)

200%

250%

300%


3

financials over long-term

• Out-performance in Asia requires

financials out-performance

• 20+ years of Asian financials

experienceSource: Bloomberg

0%

50%

100%

150%

Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10

Polar Capital Asian Financials Fund MSCI Asia x Japan Financials Index MSCI Asia x Japan Index

Best performing financial sector fund

• Asian financials have recovered more than other financial sectors

• Lipper Fund Award 2010 over 3 & 5 years

• Strength even with weak Chinese banks

Financial Sector Funds 1 Years 3 Years 5 Years 10 years


4

Source: Bloomberg, Dec 2010

Polar Capital Asian Financials (GBP adjusted) 18.3% 29.6% 66.4% 174.7%

Jupiter Financial Opps -2.2% 15.7% 34.5% 169.6%

Hiscox Insurance 16.8% 11.3% 17.7% 54.5%

Fidelity Global 10.3% -3.0% 3.2% na

Polar Capital European Financials (GBP adjusted) 1.0% -11.7% 3.0% 13.6%

Henderson Global 11.9% -15.0% 14.2% na

BlackRock World (GBP adjusted) 6.6% -19.9% -31.1% na

Scottish Widows Financial 12.5% -20.6% -1.8% 11.0%

JPM Global Financials 3.4% -25.9% -22.1% -6.7%

Axa Framlington Financials 5.4% -26.7% -30.2% -17.4%

Asian Crisis 1997/00 vs. Global Banking Crisis 2008/10

70

90

110

130

(%)

Moving on from recovery

• High quality sector with few

structural handicaps and

limited sovereign fears

• Valuations remain

attractive after consistent

Lehman Bankruptcy

Obama Stimulus

Dot-com bubble bursts


5

30

50

70

Feb-97 Jun-97 Oct-97 Feb-98 Jun-98 Oct-98 Feb-99 Jun-99 Oct-99 Feb-00 Jun-00

Hiscox Far Eastern Financial Fund (1997/00) Hiscox Far Eastern Financial Fund (2008/10) Hiscox European Financial Fund (2008/10)

attractive after consistent

earnings and BV growth

• Short-term interest rate

pressures offers

opportunity

Aug-08 Dec-08 Apr-08 Aug-08 Dec-09 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10

Thailand receives IMF loan S.Korea receives

IMF loan EU/IMF Bailout Fund

Source: Polar Capital

Basel III proposals

Outperforming the economy

• Loan growth stronger than

nominal GDP growth in 2009,

2010 and 2011

• Beneficiary of higher

government spending and

Asian Loan/Nominal GDP Growth (2011 estimate)

1513

1011

4

1513

9

5

21

12 12

7.8 7.5 7.4 7.69.1

7.56

15.7

4.65

10

15

20

25


6

government spending and

domestic consumption

• Personal lending has been a

key driver of loan growth but

corporate demand to recoverSource: JP Morgan

4

-2

4.6

-5

0

5

China Indonesia M alaysia Singapore Korea Thailand Philippines Hong

Kong

Taiwan India UK

%Loan Grow th %Nominal GDP Grow th

Improved competitive environment

• Weakness of foreign players

(mainly US/European banks)

• Window of opportunity for local

banks (in banking and insurance)

Asian Syndicated Loan Market

24.4%25.2%

19.8%

11.9%15.0%

20.0%

25.0%

30.0%


7

• Strong oligopolies

• Excellent funding

7.5%6.1%

3.2% 3.30%2.40%

0.0%

5.0%

10.0%

Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q4 2010

% share on non-Asian banks

Source: Thomson

A focus on domestic growth

• Asian banks are domestic plays

(loan books biased to property,

consumers, domestic fixed

asset investment)

• Limited balance sheet exposure

Asian Breakdown of banking system loans (%)

55.90%

65.60%

44.10%

40.00%

60.00%

80.00%

100.00%

120.00%


8

• Limited balance sheet exposure

to exports (trade finance only

5% of loans)

• Growing proportion of

retail/consumer lending

Source: Central Banks

34.40%

55.90%

0.00%

20.00%

2000 2009

Households Business

Corporate lending returns

Asian Manufacturing Capacity Utilisation

92

94

96

98

100

102

• Recovery in capacity

utilisation, infrastructure

spending

• Low rates and strong

appetite from banks to lend


9

88

90

92

2007 2008 2009 2010

appetite from banks to lend

• Credit penetration is lowSource: JP Morgan

Additional supports to earnings

• Fee income strength

• Falling loan loss provisions

(coverage already high)

ROE (Asian Banks)

15.1%16.2%

13.9% 14.0%15.9%

17.3%18.30%

15%

20%

25%

%


10

• Rising margins (assuming

interest rate rises)

• Improved efficiencySource: JP Morgan

0%

5%

10%

2006 2007 2008 2009 2010 2011 2012

Top line translating into EPS growth

• EPS growth remains strong

• Supported by pre-provision operating profit growth (16.9% CAGR 2011/12).

EPS CAGR 2011-2012

10%

15%

20%

25%

30%


11

• Limited capital issuance 0%

5%

Philip

pines

Indi

a

Indo

nesia

Chi

na

Thaila

nd

Korea

Mal

aysi

aH

ong

Kon

g

Taiw

an

Singa

pore

Source: JP Morgan

Valuation fears overplayed

40

60

80

100

120

%

• Valuations do not reflect

‘bubble’ conditions

• Cheap in Korea, China

and Taiwan

Price/Book as % of average P/B*


12

0

20

Indonesia Malaysia Thailand Singapore Hong Kong Taiwan Korea India China

* Over the past 8 years

• 30% average growth in

book value over the next

2 yearsSource: Bloomberg

Book values have risen 35% since 2007

• Strong recovery in share prices

• But book values have also risen

• Price/Book close to average

Average:1.59

MSCI ASIA xJ.Finance P/B

1.0

1.5

2.0

2.5

3.0


13

• Price/Book close to average

Source: Bloomberg

0.0

0.5

02/08/02 02/07/03 02/06/04 02/05/05 02/04/06 02/03/07 02/02/08 02/01/09 02/12/09 02/11/10

PE approach equally attractive

60

80

100

120• Average earnings set

to double over next 2

years

• Falling provisions to

drive recovery

PE as % of average PE*


14

0

20

40

Indonesia Thailand Singapore Korea India Malaysia Hong Kong Taiwan China

* Over the past 8 years

drive recovery

• Strong loan demand

Source: Bloomberg

Well placed for future capital changes

Tier 1 Capital Ratio (2010)

Equity/Asset Ratio (2010)

Equity Growth (09-11)

Indonesia 15.2% 11.3% 33.9%

Thailand 11.3% 10.3% 19.5%

Singapore 13.6% 10.6% 16.8%

Malaysia 11.8% 8.0% 19.4%

India 10.5% 8.5% 44.1%

• Starting from a position of

strength

• Impressive internal capital

generation


15

India 10.5% 8.5% 44.1%

Hong Kong 10.7% 9.6% 14.5%

China 9.1% 6.6% 41.5%

Korea 9.6% 6.7% 20.2%

Taiwan 9.7% 6.8% 9.2%

Europe* 10.1% 5.4% n/a

* Core Europe excluding global banks

• Leverage is low

• Concerns focused on China

Source: JP Morgan

Rising rates are good for margins

• Economic momentum

suggests need to raise rates

(China/India)

• Inflation expectations

increasing

Expectations for Asian 10 year bond yields (2010)

5.5

5.6

5.7

5.8

5.9

6

%


16

increasing

(China/India/Hong Kong)

• But Asian banks will see

revenue benefits (as

margins widen)

5.1

5.2

5.3

5.4

Ap

r-09

Ma

y-09

Ju

n-0

9

Ju

l-09

Au

g-0

9

Se

p-0

9

Oct-0

9

No

v-09

De

c-09

Ja

n-1

0

Fe

b-1

0

Ma

r-10

Ap

r-10

Ma

y-10

Ju

n-1

0

Ju

l-10

Au

g-1

0

Se

p-1

0

Oct-1

0

No

v-10

De

c-10

Month

Source: Consensus Estimates, Dec 2010

Continued healthy macro picture

2011 Asian GDP growth expectations (consensus)

5.20

5.30

5.40

5.50

%

• GDP growth expectations

are stabilising

• Strongest improvements

in Hong Kong, Malaysia,

and Philippines


17

4.80

4.90

5.00

5.10

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Month

%and Philippines

• Consumer and

government spending

remain strong

Source: Consensus Estimate, Dec 2010

Country allocation

2005 2006 2007 2008 2009 2010

Hong Kong 39.7% 35.6% 20.6% 20.4% 21.6% 16.7%

China 0.0% 0.0% 9.0% 19.5% 19.6% 22.4%

• China - capital pressures but do not expect banking crisis (increasing exposure)

• Hong Kong - rising valuations and increased inflation (reducing exposure)

• India - attractive fundamentals but value difficult to find (stable exposure)

• Korea – very attractive valuations but earnings outlook is weak (increasing exposure)

• Indonesia – strong fundamentals although valuations a concern (stable exposure)


18

China 0.0% 0.0% 9.0% 19.5% 19.6% 22.4%

India 3.4% 7.0% 6.6% 6.2% 5.8% 7.9%

Korea 14.5% 15.1% 14.3% 6.4% 11.9% 8.9%

Thailand 6.8% 6.9% 8.1% 8.6% 9.5% 6.4%

Singapore 13.5% 10.8% 5.1% 8.7% 9.3% 7.6%

Taiwan 9.1% 11.3% 6.3% 2.2% 9.2% 7.0%

Regional 0.0% 0.0% 7.5% 10.5% 2.5% 3.4%

Malaysia 4.4% 5.4% 8.6% 8.4% 4.2% 5.4%

Indonesia 0.0% 0.0% 5.4% 1.8% 2.8% 4.8%

Cash 8.7% 5.7% 1.8% 7.3% 3.7% 5.6%

Source: BNP Paribas, As at 31 Dec 2010

Portfolio as at 31 December 2010 Top 10 holdings:

China Construction Bank

Bank of China

OCBC

Dongbu Insurance

ICBCPublic BankHSBCHang Seng Bank

China Taiping Insurance Holding

5.1%

4.5%

3.7%

3.5%

3.4%

3.4%

3.4%

3.2%

3.1%

Other

3.9%

M alays ia

5.4%

Indones ia

4.8%

Regional

3.4%

Taiw an

7.0%

Hong Kong

16.7%

China

Cash

5.6%


19

United Overseas Bank3.1%

3.0%Sector breakdown:

Diversified Banks Life & Health InsuranceDiversified Real Estate Property & Casualty InsuranceConsumer FinanceInvestment Banking & BrokerageThrifts & Mortgage Finance

67.6%6.3%3.6%3.5%2.4%3.2%2.3%

It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the immediately preceding 12 months is available up on request. Source: Polar Capital, As at 31 Dec 2010

7.0%

Singapore

7.6%

Thailand

6.4%

China

22.4%

India

7.9%Korea

8.9%

Performance to 31 December 2010

60

100

140

180

220

260

300

%


20

% December YTD 1 year 3 years Launch*

Polar Capital Asian Financials Fund ($) +1.7 +14.2 +14.2 +2.0 +156.3

Datastream Asia ex Japan Financials Index($) +2.8 +11.5 +11.5 -11.0 +40.6

MSCI AC AS xJ/Finance ($) +3.6 +12.3 +12.3 -11.2 +55.2

* 5 December 1996 Source: Polar Capital, As at 31 Dec 2010

20

Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10

Hiscox Far Eastern Financial Fund ($) Datastream Asia ex Japan Financials Index ($)

Appendices


21

Appendices

Chinese Financials

• Attractive valuations

• Continued growth momentum

• Risk profile reducing

China Asian Average

Price/Book 1.6x 2.0xPrice/Earnings 8.4x 12.0xReturn on Equity 20.50% 16.20%Loans/Deposit 67.40% 88.10%Non-performing loans 0.90% 1.90%

Chinese banks- key data


22

• Regulatory driven sector

• Capital is key concern

Non-performing loans 0.90% 1.90%Coverage Ratio 225% 126%Equity/Assets 6.10% 9.20%

Source: Polar Capital, As at 31 Dec 2010

Summary of Fund terms

• Only European domiciled fund dedicated to investing in Asian Financials ex Japan

• Dublin listed OEIC, launched in December 1996

• AUM: $71.2 million as at 31 December 2010

• 2010 Dividend : $1.77 per share

• Annual Management Charge: 1.00% p.a.

• Performance Fee: 10% (with high watermark)


23

• Performance Fee: 10% (with high watermark)

• Bloomberg: ELDFEFI ID

• Sedol: B2B0972

• Daily Dealing at NAV

• Dealing Tel: +353 1 612 6485 Fax: +353 1 512 5374

Investment approach

VALUEGROWTH

MACRO PORTFOLIOCONSTRUCTION

CAPM

RISK MGMT

NORMALISED

CAPITAL

FUNDING

LOANS

REVENUES

GDP + TREND MANAGEMENT

INFLATION + LONG-TERM

BOTTOM UP

30-40 STOCKS


24

NORMALISED ROE

PRICE/BOOK

PRICE/EARNINGS

HISTORIC VALUE

YIELD

FUNDING

GROWTH

MACRO

NPLS

COVERAGE

REVENUES

EARNINGS

BOOK VALUE

INFLATION + TREND

C/A +TREND

BUDGETBALANCE

BOND YIELD TREND

LONG-TERM PROFITABILITY

REGULARCONTACT

DIRECT INDUSTRYEXPERIENCE

30-40 STOCKS

IN-HOUSERESEARCH

SCORING AS DOUBLE-CHECK

The investment team

John Yakas joined Polar Capital in September 2010 and is the manager of the Polar Capital AsianFinancials and Polar Capital European Financials Funds. John has over 20 years experience in thefinancial services industry and has been involved with the Asian Financials Fund since its launch in 1996and has also been responsible for the European Financial Fund for the past three years. Previously, heworked for HSBC in Hong Kong and was the head of Asian research at Fox-Pitt, Kelton in 1995 andestablished their office in Hong Kong in 2000. John joined Hiscox Investment Management in 2003(subsequently HIM Capital).

John Yakas – Fund Manager


25

George Barrow - Analyst

George joined Polar Capital in September 2010 and is an investment analyst working closely with JohnYakas on the Polar Capital European Financials Fund and the Polar Capital Asian Financials Fund. Hewas previously at HIM Capital from 2008 where he completed his IMC. George holds a Masters degreein International Studies from SOAS where he graduated with merit.

Polar CapitalFour Matthew Parker Street

London SW1H 9NP

House view

This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated.

Important information

The information provided in this presentation is for the sole use of those attending the presentation it shall not and does not constitute an offer or solicitation of an offer tomake an investment into any fund managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital and is not intendedfor private investors.

This presentation is only made available to professional clients and eligible counterparties. Shares in the fund should only be purchased by professional investors. Anyother person who receives this presentation should not rely upon it. The law restricts distribution of this document in certain jurisdictions, therefore, persons into

whose possession this document comes should inform themselves about and observe any such restrictions.

This document does not provide all information material to an investor’s decision to invest in the Polar Capital Financial Funds Plc – Polar Capital Asian Financials Fund,including, but not limited to, risk factors. For more information, please refer to the fund’s offer document and read it carefully before you invest.

POLAR CAPITAL

26

including, but not limited to, risk factors. For more information, please refer to the fund’s offer document and read it carefully before you invest.

Statements/Opinions/Views

All opinions and estimates in this report constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do notnecessarily represent the views of Polar Capital. Polar Capital is not rendering legal or accounting advice through this material; readers should contact their legal andaccounting professionals for such information.

Third-party data

Some information contained herein has been obtained from other third party sources and has not been independently verified by Polar Capital. Polar Capital makes norepresentations as to the accuracy or the completeness of any of the information herein. Neither Polar Capital nor any other party involved in or related to compiling,computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof),and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to anyof such data.


London SW1H 9NP

Holdings

This portfolio data is “as of” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the fund. The holdings mayrepresent only a small percentage of the aggregate portfolio holdings, are subject to change without notice, and may not represent current or future portfolio composition.Information on particular holdings may be withheld if it is in the fund’s best interest to do so. A complete list of the portfolio holdings may be made available upon request. Itshould not be assumed that any of the securities transactions or holdings discussed was or will prove to be profitable, or that the investment recommendations or decisions wemake in the future will be profitable or will equal the investment performance of the securities discussed herein. The information provided in this document should not beconsidered a recommendation to purchase or sell any particular security.

Benchmarks

The following benchmark index is used: Datastream Asia ex Japan Financial Index. This benchmark is generally considered to be representative of the Far East Financial universe. This benchmarks is a broad-based index which are used for comparative/illustrative purposes only and have been selected as it is well known and is easily recognizable by investors. Please refer to

http://thomsonreuters.com/products_services/financial/financial_products/investment_management_research/portfolio_management/datastream for more information.

Comparisons to benchmarks have limitations because benchmarks have volatility and other material characteristics that may differ from the fund. For example, investments made for the fund may differ significantly in terms of security holdings, industry weightings and asset allocation from those of the benchmark. Accordingly, investment results and volatility of the fund may differ from those of the benchmark. Also, the indices noted in this presentation are unmanaged, are not available for direct investment, and are

POLAR CAPITAL

27

and volatility of the fund may differ from those of the benchmark. Also, the indices noted in this presentation are unmanaged, are not available for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the fund may incur. In addition, the performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. The information regarding the indices are included merely to show the general trends in the periods indicated and is not intended to imply that the fund was similar to any of the indices in composition or risk

Regulatory status

This document is Issued in the UK by Polar Capital.

Polar Capital LLP is a limited liability partnership number OC314700. It is authorised and regulated by the Financial Services Authority. A list of members is open to inspectionat the registered office, 4 Matthew Parker Street, London SW1H 9NP


London SW1H 9NP

Information subject to change

The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update thisinformation in any way.

Forecasts

References to future returns are not promises or even estimates of actual returns Polar Capital may achieve, and should not be relied upon. The forecasts contained hereinare for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. In addition, the forecasts are based upon subjective estimatesand assumptions about circumstances and events that may not yet have taken place and may never do so.

Performance

Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Many factors affect fund performance includingchanges in market conditions and interest rates and in response to other economic, political, or financial developments. Investment return and principal value of yourinvestment will fluctuate, so that when your investment is sold, the amount you receive could be less than what you originally invested. Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federalagency), are not guaranteed by any bank, and may lose value .

Investment process - risk

POLAR CAPITAL

28

Investment process - risk

No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable. Investors may lose allof their investments.

Allocations

The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time. The types of investments presented hereinwill not always have the same comparable risks and returns. Please see the private placement memorandum for a description of the investment allocations as well as therisks associated therewith. Please note that the fund may elect to invest assets in different investment sectors from those depicted herein, which may entail additional and/ordifferent risks. The actual performance of the fund will depend on the Investment Manager’s ability to identify and access appropriate investments, and balance assets tomaximize return to the fund while minimizing its risk. The actual investments in the fund may or may not be the same or in the same proportion as those shown herein.

All photography © Martin Hartley