12 Upper Grosvenor Street, London, W1K 2ND ~ Tel +44 (0)20-7208-1400 Fax: +44 (0)20-7208-1401 ~ www.odey.com

Authorised and Regulated by the Financial Conduct Authority

■ In August-15 the Fund returned +6.6% against the MSCI Daily TR Net

Europe return of -8.3%.

■ Positive performance came from our holdings in sectors including

Consumer Discretionary (+4.2%), Energy (+1.4%) and Materials (+0.9%).

Our holdings in the Information Technology (-0.8%) sector disappointed.

■ Individual best performers this month were Las Vegas Sands (+1.3%) and

Sands China (+0.9%); the worst were Sky (-0.8%) and LM Ericsson

Telefon (-0.4%)

28-Aug-2015

The developed world averted a recession in 2008 by cutting rates to 0%, then

embarking on QE. We all hoped we would get healing, then growth, then inflation,

then rising rates. But we have experienced the distortions of QE without

generating enough growth or inflation. Now central banks have ended up with the

safe assets and driven pensions and savers into everything else. We haven’t

achieved inflation, so we haven’t worked through our debt and the solution may

have to come from default.

In China, we foresaw the risks building rapidly - imbalances in capex and growth,

huge debt accumulation and falling competiveness due to the political imperative

for continued wage growth. We predicted a myriad of consequences - falling

export performance, faltering growth, rising fear of defaults, confidence in the

system failing, capital flight, falling currency reserves. So now China faces five

critical challenges; the economic slowdown, lack of competitiveness as wages

continue to rise, an overvalued currency, debt at 300% of GNP (with borrowers

who can’t pay the interest) and a stock market bust. The global implications are

profound – commodities crashing, EM currency wars, falling global trade, RMB

devaluation and a deflationary shock. In 2007-8, US housing indebtedness and

lack of visibility was the problem and we see the same in China now, with huge

debt and true affordability being hidden. In 2007-8 the interbank markets started

the recession, now that risk comes from China. If individuals lose confidence and

try to get their money out, the outflow from the RMB, already witnessed by the

fall in Chinese FX reserves, will turn into a flood.

As trading terms turn against EM economies, currencies take the strain. Currency

wars will lead to trade disputes, rising tariffs and trade block formation. And even

devaluation will not save EM economies as, post devaluation, imports fall a lot

quicker than exports rise. Eventually incomes will be a lot lower and the currency

markets will have to work out who owes what to whom. Many currencies will go

to the wall. This is a huge threat to world trade which, in the last 25 years, has

gone from 12% to 35% of GNP. The beneficiary of this transformation, China,

will turn from customer to competitor as it tries to move up the value chain to

protect its industries from a domestic and export slowdown.

For the indebted, if operating returns are faltering and deflation makes zero rates

too high, debt forgiveness becomes the only way out...

€ FundMSCI Daily TR

Net EuropeRel.

MTD 6.6 -8.3 14.9

3-month 8.5 -10.6 19.0

1-year 11.1 8.4 2.7

YTD -8.4 7.6 -16.0

1yr to 28-Aug-2015 11.1 8.4 2.7

1yr to 28-Aug-2014 -6.4 17.1 -23.4

Inc. to 28-Aug-2013 -3.4 2.5 -5.8

Since Inception 0.5 30.0 -29.6

CAGR since inception 0.2 11.2 -11.0

28-A u g-2015

€ I Class 100.49 € IR Class 100.88

€ R Class 99.30 AUD I Class 97.51

$ I Class 99.73 $ IR Class 99.34

$ R Class 98.66 £ I Class 100.78

£ R Class 104.49

Fund Size (€m) 531.34

Inception Date

Index MSCI Daily TR Net Europe

28-A u g-2015

08-Mar-13

Since Incept ion

80

100

120

140

160

Mar-13 Oct-13 May-14 Dec-14 Jul-15

%

Odey Swan(€) I

MSCI Daily TR Net Europe

28-A u g-2015

% Nav

Long Equity 88.0

Short Equity -134.5

Foreign Exchange 92.8

Government Bond -33.2

Commodity 6.7

-60.7

-9.1-4.2 -4.2 -3.5 -0.3 -0.3 -0.1

0.1

89.5 92.6

-80

-60

-40

-20

0

20

40

60

80

100

120

AU

D

HK

D

JPY

SA

R

SEK

GBP

NO

K

CH

F

DK

K

EU

R

USD

%

Shows all currency exposures of holdings and forward currency

positions. Internal unaudited figures.

Source for above 2 tables: Internal unaudited figures. All

performance figures quoted are net of fees. Past performance

is not a reliable indicator of future performance.

CAGR - Compound annual growth rate

Source for above table and chart: Quintillion Ltd and

Bloomberg. Calculation on a NAV basis as at 31-Jul-15. The

data below refers to the € I share class.

12 Upper Grosvenor Street, London, W1K 2ND ~ Tel +44 (0)20-7208-1400 Fax: +44 (0)20-7208-1401 ~ www.odey.com

Authorised and Regulated by the Financial Conduct Authority

In Developed Market (DM) equities, we have high valuations and earnings risk. Not many assets are currently in distress but

there is evidence everywhere of the downturn. Three years after the replacement cycle began, we see growth faltering -

commodity capex is falling, the oil price is killing new aircraft demand, cars have already been replaced using cheap credit. As

demand weakens, we find ourselves on peak multiples of peak margins. Everyone has stayed in equities because there is

nowhere else to go, yet our short equity book has made money when it shouldn’t have done, in a world chasing carry. The

alpha in our short book has come from the sectors that broke early such as the Miners, but in August the whole market broke

down and, unlike last October, the technicals have turned, as short-term moving averages broke below their long-term

equivalents. We are not guaranteed a DM recession, but we are certainly not priced for any risk of one. Workaday stocks like

Kellogg are priced at 18-20x after a seven-year QE-fuelled market up cycle and the market is narrowing. Valuations are so

extended that they will need to fall 30-40% to be compelling in terms of carry.

So for investors, after a tumultuous August, the question is whether these shocks and adjustments are largely complete. Our

overriding conviction is that we are nearer the beginning of this process than the end. As discussed, China has huge

adjustments to make in terms of debt, competitiveness and lower growth (which will feel like recession to them), all the while

needing to stabilise the stock market, retain confidence in the system, keep the Party and people happy and manage a

migration from capex-led to service-biased growth. A virtually impossible task. We are already in a deflationary downdraft

amidst currency wars, yet China, the most bellicose country with the biggest army, has just fired the first shot.

In our view the cycle is no more abolished now than it was in 2007, when Bear Stearns and Northern Rock were seen as

containable. As Andy Haldane says, there is a recession every decade. We are now due ours. It is too late to chase the QE

happy trade, but not to enjoy the deflationary bust.

12 Upper Grosvenor Street, London, W1K 2ND ~ Tel +44 (0)20-7208-1400 Fax: +44 (0)20-7208-1401 ~ www.odey.com

Authorised and Regulated by the Financial Conduct Authority

This communication is for information purposes only and not intended to be viewed as a piece of independent investment research.

© 2015 Odey Asset Management LLP (“OAM”) has approved this communication which is for private circulation only, and in the UK is directed to persons who are professional clients or eligible

counterparties for the purposes of the FCA’s Conduct of Business Sourcebook and it is not intended for and must not be distributed to retail clients. It does not constitute an offer to sell or an

invitation to buy or invest in any of the securities or funds mentioned herein and it does not constitute a personal recommendation or investment taxation or any other advice. The information and

any opinions have been obtained from or are based on sources believed to be reliable, but accuracy cannot be guaranteed. Past performance does not guarantee future results and the value of all

investments and the income derived therefrom can decrease as well as increase. Investments that have an exposure to currencies other than the base currency of the fund may be subject to exchange

rate fluctuations. This communication and the information contained therein may constitute a financial promotion for the purposes of the Financial Services and Markets Act 2000 of the United

Kingdom (the “Act”) and the rules of the FCA. This communication is not subject to any restrictions on dealing ahead. The distribution of this communication may, in some countries, be restricted by

law or regulation. Accordingly, anyone who comes into possession of this communication should inform themselves of and observe these restrictions. OAM is not liable for a breach of such

restrictions or for any losses relating to the accuracy, completeness or use of information in this communication, including any consequential loss. Please always refer to the fund’s prospectus. OAM

whose company No. is OC302585 and whose registered office is at 12 Upper Grosvenor Street, London, W1K 2ND, is authorised and regulated by the Financial Conduct Authority.

Enquiries:

Andrew King

Tel: +44 20 7208-1454

Email: a.king@odey.com

Sarah St. George

Tel: +44 20 7208-1432 Email: s.stgeorge@odey.com

28-Aug-15

For the month ending 28-Aug-15 28-Aug-15

Crispin Odey Portfolio Manager

The investment objective of the sub-fund is to achieve long term capital appreciation by investing principally

in a portfolio of equities and equity related securities,

debt securities and currencies. The funds investments will tend, over time, to be weighted towards European

Securities but investments in non-European securities

will not be subject to any limit. The fund will invest in asset classes including equities, equity related securities

(such as warrants, convertible bonds and exchange

traded funds), derivatives (including those simulating short positions), government and corporate debt securi-

ties, collective investment schemes (including exchange

traded funds), commodities, currencies and cash. Derivatives may be used for investment purposes and to

manage the risk profile of the fund.

Comparative benchmark Primary: Cash, Secondary: MSCI Daily TR Net Europe

Fund inception date 08 March 2013 Fund type Irish long-short UCITS IV Base currency €

Share classes I (€, £, $, AUD), R (€, £, $), IR (€, $) Hedging Non-base currencies are unhedged Dealing / Valuation Daily forward to 2pm / COB

Front end fee Up to 5%. Annual Management fee I (€, £, $, AUD) & IR (€, $) 1.0%, R (€, £, $) 1.5%. Performance fee 20% of the increase in the value per share of the

fund between the beginning and the end of the year. Fees crystallise annually. Losses carried forward. Anti-dilution fee Applies to subs/reds if net subs/reds >5% of NAV Min. investment I class €1,000,000 (or equivalent in £, $, AUD)

R class €5,000 (or equivalent in £, $) Dividends Reporting and accumulation share classes available Administrator Quintillion Ltd.

Custodian J.P. Morgan Bank (Ireland) Ltd Auditor Deloitte & Touche LLP Price reporting Prices published daily in Financial Times

SEDOL: €I B4WC409, £I B87KFG9, $I B8B7QR4, €R B988MM4, £R B7W59X7, $R B8MJTS1 €IR B6YRXK9, AUD I BFTCNC48 $IR B8MJTS1

ISIN: €I IE00B4WC4097, £I IE00B87KFG99, $I IE00B8B7QR45 €R IE00B988MM46, £R IE00B7W59X71, $R IE00B8MJTS18 €IR IE00B6YRXK9, $IR IE00B8MJTS18, AUD I IE00BFTCNC48

28-Aug-15

Rank Security Strategy Notional Exposure (%)

1 JPN 10Y Bond(Ose) Sep15 Short 46.3

2 ACGB 2 3/4 04/21/24 Long 13.2

3 FTSE 100 IDX FUT Sep15 Long 5.1

4 DAX INDEX FUTURE Sep15 Long 5.0

5 ETFS Cotton Long 3.8

Rank Security Strategy Notional Exposure (%)

1 Sky Long 9.2

2 Las Vegas Sands Short 6.0

3 Swatch Short 5.7

4 Adidas Short 5.2

5 Intu Properties Short 4.2

-300

-200

-100

0

100

200

300

Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15

%

Long Equity Exposure

Short Equity Exposure

Net Equity Exposure

FX Exposure

Government Bond Exposure

-15

-10

-5

0

5

10

15

20

25

Co

nsu

mer D

iscretio

nary

Co

nsu

mer Stap

les

Energy

Fin

ancials

Health

Care

Industrials

Info

rmatio

n T

ech

no

logy

Mate

rials

Tele

com

munic

ation

Serv

ices

Utilities

%

Fund

Index

-2

-1

0

1

2

3

4

5

Co

nsu

mer

Discre

tionary

Co

nsu

mer Stap

les

Energy

Fin

ancials

Health

Care

Industrials

Info

rmatio

n

Tech

no

logy

Mate

rials

Tele

com

munic

ation

Serv

ices

Utilities

%

Fund

Index

Internal unaudited figures Internal unaudited figures

Internal unaudited figures Internal unaudited figures