CBL Asset Management

Equity Funds

Q2 2017

CBL Asset Management

2

*Data as of 31/03/2017

Established track record since 2002

MiFID and UCITS compliant

Three integrated business lines

Fund management

Portfolio management

Pension Fund Management

Assets under management EUR 678M*

Experienced investment team of 14 specialists

Dedicated equity and bond picking strategy in Eastern Europe and the CIS

Award winning internationally recognized mutual funds

First in Latvia to receive a license to manage Alternative Investment funds

CBL Asset Management Shareholder Structure

3

* In 2014, the government of Latvia decided to sell its

shares in Citadele Bank to a group of international

investors, represented by the founder of the US investment

holding company Ripplewood Holding LLC, Tim Collins.

The transaction will be completed upon regulator’s

approval, which is expected during Q1 2015.

The 12 co-investors include:

Paul Volcker: served as Undersecretary of the Treasury for

Monetary Affairs from 1968-1972, and two terms as

Chairman of the Board of Governors of the Federal

Reserve System from 1979 to 1987. Mr. Volcker will act as

Senior Advisor for Citadele.

James D. Wolfensohn: the Chairman of Wolfensohn Fund

Management. From 1995 to 2005, Mr. Wolfensohn was

President of the World Bank. Mr. Wolfensohn will act as

Senior Advisor for Citadele.

James E. Staley: the Managing Partner of BlueMountain

Capital. Prior to that, Mr. Staley spent over 30 years at J.P.

Morgan where he was the CEO of J.P.M’s Investment Bank

and CEO of J.P.M Asset Management.

James Balsillie: the Chairman of the Board of Sustainable

Development Technology Canada. Co-founder of Research

In Motion (BlackBerry) Mr. Balsillie will join the Supervisory

Board of Citadele.

Graham T. Allison: the Director of the Belfer Center for

Science and International Affairs and Douglas Dillon

Professor of Government at Harvard's John F. Kennedy

School of Government. Dr. Allison has served as Special

Advisor to the Secretary of Defense under President

Reagan and as Assistant Secretary of Defense for Policy

and Plans under President Clinton. Mr. Allison will act as

Senior Advisor for Citadele.

** On December 22,2014 Citadele Asset Management

changed its name in CBL Asset Management

75% 25%

100%

Ripplewood

Holding LLC and

Private

Investors*

EBRD

Citadele Bank

CBL Asset

Management**

Equity Fund Management We focus on what we know best

4

Combining Western business practices with local insight

Specialists in the evolving Eastern European and CIS equities

Independent, benchmark unaware investment process

Disciplined team-based approach

Bottom-up stock picking based on in-depth in-house research

Two UCITS IV compliant equity funds:

CBL Russian Equity Fund

CBL Baltic Sea Equity Fund

International recognition

Experienced management team with established track record

5

Equity Fund Management Investment Philosophy

Eastern European markets are rapidly evolving, but market inefficiencies are still present.

Therefore, we can add value based on our local expertise and internal research. The most

appropriate investment process to achieve superior returns over medium term is built on

bottom-up, benchmark-unaware, and disciplined team-based decision making.

Equity Fund Management Investment Process

Fundamental Research and

Valuation

In-depth fundamental analysis

• financial strength

• growth outlook

• corporate governance

• management

• business risk profile

Valuation analysis

• relative valuation including

industry-specific metrics

• absolute valuation tools

• market environment analysis

(fund flows, market sentiment,

etc.)

Portfolio Construction and

Monitoring

Portfolio Construction Guidelines

• not structured around benchmark;

positions sized on conviction

• low to medium portfolio turnover

• continuous portfolio monitoring

Sell discipline

• achieved investment objective

• undesirable changes in

fundamentals and corporate

governance practices

• changing sector dynamics

• relatively more attractive security

identified

Risk Controls

• implemented on all levels of Fund

management process

• regular performance and risk

attribution analysis

Market Screening and

Monitoring

Equity Universe screening

• Locally and foreign listed

companies with core business in

the respective region

• Liquidity screening, focus on

stocks with sufficient liquidity

Qualitative Market Screening

• news, financial reports

• industry contacts

• senior management meetings

• 3rd party research

• new equity issues

Short-list of Investment Ideas

6

7

Equity Fund Management Risk Management: an integral part of fund management process

• Liquidity risk, market risk

• Industry and company specific risks, e.g. corporate governance Portfolio management

• Daily compliance control

• Independent compliance reporting Fund administration

• Deals with credit and settlement risks

• Double layer: Citadele Bank and CBL Asset Management Custodian

• Operational risk controls

• Operational risk data processing and reporting Operations department

• Monthly aggregated market, credit and liquidity reporting

• Including individual VaR contributors and VaR cross tables Risk department

8

Equity Fund Management Our Team

Igor Lahtadir, CFA

Portfolio Manager

10 years in industry, 6 years with the company

BSc in Economics and Business from the Stockholm School of Economics in Riga

Earned his Chartered Financial Analyst designation in 2011

Elchin Jafarov Senior Portfolio Manager

12 years in industry, 8 years with the company

MA in Eonomics and Business from the Stockholm University

Assistant professor and lecturer in Latvian top business schools

Lecturer at Swiss Business School and Stockholm School of Economics in Riga

9

CBL Russian Equity Fund Pure Russian equity exposure

Source: CBL Asset Management

Targets long term growth from capital

appreciation and dividend income

Bottom-up stock picking based on in-house

research

Regular meetings with company representatives

Diversified portfolio of ca. 30 holdings

Actively managed not constrained by benchmark

No restrictions on industry and tracking error

More than 10 years of proven track record

CBL Russian Equity Fund Fund Performance and Structure (April 30, 2017) ISIN LV0000400190

Source: CBL Asset Management

10

Sberbank Financials 8.9%

X5 Retail Group Retail 8.6%

Lukoil Energy 7.8%

Novatek Energy 6.9%

Yandex IT 5.1%

Rosneft Energy 5.0%

Alrosa Materials 4.7%

Gazprom Energy 4.4%

Moscow Exchange Financials 4.4%

Megafon Telecoms 4.0% 2.0%

1.0%

1.9%

8.4%

13.2%

13.3%

14.2%

18.8%

27.2%

Cash

Industrials

Utilities

Telecommunication Services

Consumer Staples

Information Technology

Financials

Materials

Energy

-100%

-50%

0%

50%

100%

150%

200%

250%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cumulative gross return since inception (%)

EAA Fund Russia Equity

CBL Russian Equity

MSCI Russia

CBL Baltic Sea Equity Fund Fund Overview

11

Targets long-term capital growth from equity

investments in the Baltic Sea region

Diversified portfolio of 40-50 holdings

Active management, no benchmark

Reflects our in-house top-down views on markets

and sectors

Seeks qualitative companies with long-term growth

potential and attractive valuation within our preferred

segments

Focused on investments in German and

Scandinavian blue-chips

Pure bottom-up stock picking in the Baltics

Regional currency exposure, no FX hedging

12

CBL Baltic Sea Equity Fund Investment Process

Investment Committee Macro research team

Top-down allocation by

sector

Top-down allocation by

country, FX

Baltic Sea Equity Fund portfolio

Fund management team: in-depth sector and

company analysis 3rd party research

Bottom-up investment idea generation and

evaluation

Focus on top-down asset allocation

CBL Baltic Sea Equity Fund Fund Performance and Structure (April 30, 2017) ISIN LV0000400794

13

Siemens GE 6.1%

Bayer GE 5.7%

Allianz GE 4.9%

SAP GE 4.5%

Deutsche Telekom GE 3.6%

Infineon Technologies GE 3.5%

Investor AB SE 3.5%

Daimler GE 3.2%

Tallink Group EE 3.2%

Assa Abloy SE 3.0%

6.9%

37.4%

16.4% 8.3%

-55.8%

38.8% 26.6%

-22.3%

19.8% 9.3%

-3.0%

2.2% 1.4% 6.3%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

0

10

20

30

40

50

60

70

NA

V

4.6%

3.8%

6.1%

7.2%

8.6%

9.1%

10.7%

50.0%

Cash

Poland

Finland

Norway

Denmark

Baltics

Sweden

Germany

4.6%

1.2%

2.9%

3.0%

6.0%

7.2%

12.8%

13.2%

13.9%

16.3%

19.0%

Cash

Utilities

Consumer Staples

Energy

Telecommunication…

Materials

Information Technology

Consumer Discretionary

Health Care

Industrials

Financials

Source: CBL Asset Management

The information contained in this review was obtained in good faith from sources believed to be reliable. No guarantee, explicit or

implicit, is provided with respect to completeness and accuracy of the information. The opinions expressed represent the current

opinion of the authors and do not represent the opinion of CBL Asset Management or any of its affiliates, subsidiaries or

representatives. The opinions are subject to change without prior notice. Neither CBL Asset Management nor any of its affiliates,

subsidiaries or representatives accepts the liabilities arising from the possible use of the information contained in this review. This

material is provided for informational purposes only and should not be construed as advice to buy, hold or sell a particular security or

investment. Any investment you make shall be based solely on your own evaluation of your financial circumstances and investment

objectives.

Past performance is not a guide to future performance.

The opinions expressed are based on CBL Asset Management’s internal forecasts and should not be relied upon as indicating any

guarantee of return from an investment in our funds.

CBL Asset Management is a business name of CBL Asset Management IPAS, registered in Latvia on 11/01/2002, Reg.No.

40003577500. Registered Office: Republikas square 2A, Riga, LV-1010, Latvia. Authorised and regulated in Latvia by Financial and

Capital Market Commission, license No. 06.03.07.098/181.

14

CBL Asset Management IPAS

2A Republikas laukums

Riga, LV-1010, Latvia

T +371 6 701 08 10

E-mail: asset@cbl.lv

www.cblam.lv

Veronika Baranova

Head of Institutional Relations

Direct: +371 67010 716

E-mail: veronika.baranova@cbl.lv