Investor Day 2010 Welcome - Investis...

Investor Day 2010

Welcome

HansHufschmid

CEO

Agenda

Hans Hufschmid, CEOVernon Barback, COOMarty Veilleux, CFO

SummaryQ&A

Cocktails

Vision&

Strategy

VISION

STRATEGY

GROW CORE. EXPAND MARKET.

Grow core by serving complex global hedge fund clients.

Expand market with proven skill sets into new markets of banks, corporate treasury, endowments, insurance companies,

mutual and pension funds, proprietary desks, regional and custodial institutions, and managed services

Milestones

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Incorporated in LuxembourgOffices – London / New York

Risk Services

TA Associates Minority Interest

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

India Opening

TA

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Vernon Barback – President and COO

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Completed SAS 70 Type I

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

IPO – Main Market Listing, London Stock ExchangeCompleted SAS 70 Type II

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Bad Bank SpinoffInsurance Company

GM Asset Management

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

European Credit Management Lift-Out

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

JAN FEB MAR APR MAY TODAY AUG SEP OCT NOV DEC

10 Offices on 3 Continents1,700+ Employees

$139 Billion AuA190 Clients

Management Team

Hans Hufschmid

CEO

MartinVeilleux

CFO

AndreaDulberg

General Counsel

Ronald Tannenbaum

Managing Dir

JanZlotnick

CMO

Ira Rosenblum

ManagedServices

Tom KirkpatrickCRM and ERM

Jon Anderson

OTC and Valuations

NandiniSankar

Implementation & Regional COO

RobertDiazFund

Accounting& Operations

Robert Schwartz

CTO

MotriaMychajlukInternal Audit

Anthony Glickman

Risk Services

George Evans

Business Dev

JamesCasey

Investor Serv

VernonBarback

Pres & COO

397 YearsWall StreetExperience

NewMarkets

Industry Trends

Global Hedge Funds

0

2.5

5

7.5

10

0

0.5

1

1.5

2

1990 1995 2000 2005 2010

Thou

sand

s

$ tr

illio

ns

Assets Under Management (est) Number of FundsSource: Hedge Fund Research

Historical Trends

Outsourcing Drivers

Response to investor and regulatory demands

Technology requirements

Variable expenses

Core competencies

Institutionalization

Current Trends

Investor Landscape

Independent administration

Transparency

Managed accounts

Power shift to investors

Operational risk due diligence

Risk reporting

Current Trends

Hedge Fund Manager

LandscapeReturn of start-ups

Credit exposure and derivatives management

Valuation processes and controls

Investment bank prop desk closures

Fertile investment environment

Current Trends

RegulationsUnited States

Europe

Implications

Outsourcing Drivers

InvestorLandscape

RegulationsHedge Fund

Manager Landscape

More configurable

Real-time

More often

More detailed

Cost-efficient

Implications

More configurable

Real-time

More often

More detailed

Data Management

Cost-efficient

Competitive Environment

Service OfferingsFull-service Integrated Outsourcers Banks /

Investment Banks

Financial / Technology /

OtherGlobeOp CITCO State Street

Middle Office Outsourcing

Risk Services Partial Partial

OTC Processing Partial Partial Only JP Morgan

Other Middle Office Partial Partial

Back Office Outsourcing Back Office Partial Partial

Fund Administration Investor Services

Related Services

Prime Brokers

Global Custody

Competing Trading

Source: GlobeOp Management

Competitive Advantage Scalable infrastructure

Wall Street experience

Focused and nimble

Financial stability

Independence

Competitive Advantage

24 x 5

Complex products

Culture of remarkable service

1,000+ years tech development

VernonBarback

COO

5 Simple on Surface

5 Vital toOur Clients

5 How We Do What We Do

5 Sustainable Advantage

5 We Do It Well

Really Well

190Clients

1,700Employees

10Offices

100,000+TradesDaily

40,000+Reports

Daily

8,000+RecsDaily

50,000,000Items

ReconciledDaily

PrimeBrokers

CounterpartiesCustodians

Futures Commission Merchants

Daily

Trades Positions Cash Breaks Aged breaks P&L

ResolveBreaks

Publish P&L

Cash & PositionRecs

Approximately:$4.5 billion

100 managers860 investors

20,000Trades

Monthly

Counterparties 3rd Party Pricing

Sources

Scrub & Match

Monthly Trades, positions

and cash matched

Counterparties 3rd Party Pricing

Sources

Scrub & Match

Monthly

Counterparties 3rd Party Pricing

Sources

Pricing finalized Portfolio value

finalized Manager fee

calculated and paid

Trades, Position, Cash

Portfolio Value Report

Manager Fee Calculations

Monthly

Counterparties 3rd Party Pricing

Sources

Pricing finalized Portfolio value

finalized Manager fee

calculated and paid

Trades, Position, Cash

Portfolio Value Report

Manager Fee Calculations

Monthly Accountingfor 150 legal vehicles

150 trial balances

Lighthouse fees finalized

NAVs struck for all share classes

Counterparties3rd Party Pricing

Sources

Monthly

Statements available online

Individual statements860 investors

Counterparties3rd Party Pricing

Sources

Monthly

Shareholder ledger updated

Process redemption and subscriptions

Counterparties3rd Party Pricing

Sources

Statements available online

Monthly

BOOKS & RECORDS

COMPLETE

“Lighthouse is the brains, GlobeOp is the nervous system.”

Rob Swan, COO, Lighthouse

“Our partnership with GlobeOp is a core component of Lighthouse’s business.”

Rob Swan, COO, Lighthouse

July 2007 – Middle Back Office Services April 2008 – Advent Geneva Read-Only Access January 2009 – Administration Services November 2009 – Tax Preparation Services

February 2010 – Advent Partner Read-Only Access June 2010 – Managed Services September 2010 – Financial Statement Production

ServicesMiddle Back Office

Daily

Fund Admin

Monthly (Weekly)

Risk Reporting

Daily/Weekly/Monthly

Managed Services

IT Infrastructure

Capture trades Security master Reconciliations and break

reporting Loans and OTC transaction

lifecycle management P&L reporting and

attribution Portfolio valuation “8:00am pack” – middle

office reporting suite UCITs compliance

Independent valuations Independent NAV prep Fund accounting Shareholder statements Shareholder subscriptions

and redemptions AML Financial reporting Tax reporting Independent NAV

transparency reporting Independent performance

decomposition Independent performance

metrics

Sensitivities Stress testing Scenario analysis Full VAR suite Portfolio aggregation Risk attribution Ad hoc reporting

Secure data center Connectivity Server and database

administration Back-up and disaster

recovery Business continuity Office build out and

desktop support Email and Blackberry

infrastructure

How We DoWhat We Do

People

ProcessesTechnology

RemarkableService

Technology

Technology Is

Robust$40 million

Annual Spend

1,000s of Man YearsFlexibleRedundant

Brilliantly TransparentReal-TimeRich in

FunctionFormidableHuge Barrier

to Entry

Secure

Best Overall Fund Administrator Technology

Continue to invest: Maintain edge

Trade Status

OTC Documentation

Custom Desktop Rollout

Processes

Complete

Accurate

Timely

{ Confidential }

GoCheck

Six Sigma quality aims to reduce process output variation.

Its measure of quality strives for near perfection (3.4 defect parts

per million opportunities).

Six Sigma

Detecting DefectsAnalyzing Root Causes

Changing Manufacturing Processes

Six Sigma

Stronger ControlsLearn and Apply

Continue to MeasureCulture of Client Satisfaction

People

Jewel in Our CrownHigh-quality

Jewel in Our CrownScalable

Jewel in Our CrownTime Zone

Jewel in Our CrownBest Practices for Employee Satisfaction

TrainingSkills DevelopmentCompensationCareer Development

GoCheck

GoCheck

Follow the Sun

Global Strength – Management

India US UK Grand Total

Headcount

2005 28 94 43 165

2010 139 168 85 392

Average Tenure2005 1.30 2.38 2.67 2.27

2010 4.49 4.40 5.38 4.65

Remarkable Service

Why Are Our Clients Happy?

We’re Focused

We’re Nimble

We’re Unconstrained

We’re Motivated

We Apply the Same Rigor of Our Processes and Technology

to Client Service

So What DoesRemarkable Service Look Like?

Client Satisfaction Survey

2007 2008 2009

MartyVeilleux

CFO

Recurring Revenue

Positive AuA Trend

History of GrowthRevenue

Adjusted Operating Profit

Expanding Margins

Cash Flows from Operations

Modest Cap-x

MomentumECM impact on revenues

ECM impact on profits

Interim Management Statement

Recurring Revenue

1H 2010:MBA Comprised 92% of Revenue

Recurring Revenue

Visibility

StickyClient Base

GrowthDrivers

OrganicClient performance

Net Subscriptions

New fundsNew clients

New markets/servicese.g. Managed Services

Unbundled servicesStrategic growth

Lift-outs

M&A Driven by recurring revenue~190 clients

High level of client satisfactionCritical servicesSwitching costsFocus on core competenciesInnovation helps retention

P&L History($ in thousands) 1H

20062H

20061H

20072H

20071H

20082H

20081H

20092H

20091H

2010Total

Growth

Revenues $63,660 $71,442 $77,795 $88,188 $94,505 $90,667 $79,151 $77,332 $89,428 40%

Expenses 56,681 62,879 85,072 64,950 77,100 69,863 113,280 62,486 69,336

Operating Profit 6,979 8,563 7,277 23,238 17,405 20,804 (34,129) 14,846 20,092 188%

Interest (income) / expenses, (net) 1,620 1,327 1,169 (292) (274) (250) (157) 45 225

Profit (loss) before income tax 5,359 7,236 (8,446) 23,530 17,679 21,054 (33,972) 14,801 19,867 271%

Income tax expense (benefit) 2,600 2,916 (429) 8,888 5,306 11,391 (14,292) 1,101 7,026

Net income (loss) 2,759 4,320 (8,017) 14,642 12,373 9,663 (19,680) 13,700 12,841 365%

Adjusted Operating Profit

Operating profit 6,979 8,563 7,277 23,238 17,405 20,804 (34,129) 14,846 20,092Depreciation & amortization exp 4,112 4,320 4,625 5,136 5,279 4,890 4,471 4,222 3,841Share-based compensation exp 1,884 2,396 3,145 3,962 2,548 495 2,023 1,860 1,442Legal claims and tax reserves 175 7,000 (9,936) (210) 43,500Costs related to water damage 459 (613) (570)Listing fees 9,015 6

Adjusted operating profit $12,975 $15,454 $16,967 $22,406 $24,619 $25,409 $15,865 $20,928 $25,375 96%

AOP % of revenue 20.4% 21.6% 21.8% 25.4% 26.1% 28.0% 20.0% 27.1% 28.4%

Revenue History

63,6

60

71,4

42

77,7

95

88,1

88

94,5

05

90,6

67

79,1

51

77,3

32

89,4

28

($ in thousands) 1H 2006 2H 2006 1H 2007 2H 2007 1H 2008 2H 2008 1H 2009 2H 2009 1H 2010

MBA $59,032 $66,607 $72,853 $81,903 $87,844 $83,963 $74,077 $71,807 $81,988

Risk Reporting 4,593 4,565 4,262 4,446 4,007 4,263 3,318 3,452 3,640

Transaction Solutions 35 270 680 1,839 2,654 2,441 1,756 2,073 3,800

TOTAL $63,660 $71,442 $77,795 $88,188 $94,505 $90,667 $79,151 $77,332 $89,428

% of MBA Revenue 93% 93% 94% 93% 93% 93% 94% 93% 92%

AuA Drivers and History New clients

New funds fromexisting clients

Client fundperformance

Subscriptions

Redemptions

Terminations

5876

97 88109

139

2005 2006 2007 2008 2009 2010 AugustAuA

$ in billions

2009 AuA Growth

88109

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

$ in billions

2009 AuA Growth

88109

(46)

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

$33b first half

$ in billions

2009 AuA Growth

88109

(46)20

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

Stronger in second half

$ in billions

2009 AuA Growth

88109

(46)20

14

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

Positive every month

$ in billions

2009 AuA Growth

88109

(46)20

1428

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

Notable wins

$ in billions

2009 AuA Growth

88109

(46)20

1428

5

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

Existing clients

$ in billions

2009 AuA Growth

88109

(46)20

1428

5

Dec 2008 Reds/Terms Subscriptions Performance New clients New funds Dec 2009

$ in billions

YTD 2010 AuA Growth

109139

(22) 284 17 3

Dec 2009 Reds/Terms Subscriptions Performance New clients New funds Aug 2010

$ in billions

Adjusted Operating Profit

aexcludes share-based compensation.b1H 2009 includes $1.6 million one-time costs related to exit of leased data center; AOP would have been 22.1% of revenues without this charge.

($ in millions) 1H 2006 2H 2006 1H 2007 2H 2007 1H 2008 2H 2008 1H 2009 2H 2009 1H 2010Revenues $63.7 $71.4 $77.8 $88.2 $94.5 $90.7 $79.2 $77.3 $89.4Costs

Employeea 33.7 36.9 40.2 41.8 45.7 42.9 38.8 35.9 42.9Technologyb 8.8 9.8 10.6 11.8 12.0 12.3 13.1 9.9 9.6Occupancy 2.9 4.2 4.7 5.3 5.3 5.7 5.4 5.2 5.3Other 5.3 5.1 5.3 6.9 6.9 4.4 6.0 5.4 6.2TOTAL COSTS 50.7 56.0 60.8 65.8 69.9 65.3 63.3 56.4 64.1

Adjusted Operating Profit - $ $13.0 $15.4 $17.0 $22.4 $24.6 $25.4 $15.9 $20.9 $25.4% of Revenues

Employee costsa 53.0% 51.7% 51.7% 47.4% 48.4% 47.3% 49.0% 46.4% 47.9%Technology costsb 13.8% 13.7% 13.6% 13.4% 12.7% 13.6% 16.6% 12.8% 10.8%Occupancy costs 4.5% 5.9% 6.1% 6.0% 5.6% 6.3% 6.8% 6.7% 5.9%Other expenses 8.3% 7.1% 6.8% 7.8% 7.2% 4.8% 7.6% 7.0% 7.0%

Adjusted Operating Profit - % 20.4% 21.6% 21.8% 25.4% 26.1% 28.0% 20.0% 27.1% 28.4%

20.4% 21.6% 21.8%25.4% 26.1% 28.0%

20.0%

27.1% 28.4%

Operating Expenses

CompensationTwo-thirds of AOP costs

Average annual salaryUS $94kUK $95k

India $12kGlobal $39k

66% – 69% of employees based in India since 2007

TechnologyIncludes software license fees, data fees, network and

telecom costs, maintenance and support contracts

$9.6 million 1H 2010 vs $13.1 million 1H 2009(2009 included $1.6m lease exit costs)

Approx 50/50 fixed vs variable

OccupancyEight leased facilities, two owned facilities

Capacity to grow

Other ExpensesIncludes travel & entertainment expenses, audit fees,legal fees, tax accounting fees, BOD fees, advertising

and promotional expenses, foreign exchangetransaction gain/loss, and other expenses

Cash Flow from Operations Positive every year

Seasonality

Primary drivers: Adjusted operating profit Working capital Taxes

Funds: Recurring capital

expenditures Capital investments

$ in millions

(1.8)

8.3 14

.2

7.8 22

.2

17.0

25.9

29.3

15.2

2006 2007 2008 2009* 2010*First Half Second Half

*Excludes cash flow impact of settlement payments and related tax benefits.

Other Key Items

Average Basis Points on MBA Business

1H 2010 approximately 14 basis points

New client pricing reflects workload, along with size and complexity of mandate

Focus is adjusted operating profit marginContinuous expansion with addition of new business

Capital Spending$8.5 million 2009 vs $17.8 million 2008

2008 included purchase of new (Yorktown Heights, NY) data centerand expansion of existing (Harrison, NY) data center

$1.9 million 1H 2010 vs $5.3 million 1H 2009

Taxation1H2010: reported tax rate 35%

29% tax rate excluding $1.2m non-cash accounting correction

2009: reported tax rate 69% benefit; core tax rate 25%

2008: reported tax rate 43%; core tax rate 33%

ECM – Potential Financial ImpactRevenue

Profit

Shares and Free Float

SharesCommon shares 91.4 million

Beneficiary certificates (BCs) 12.2 millionCombined 103.6 million

Stock options ~20 million ($2.66 average strike price)

RSUs 1.3 million

Free Float53%

Less than 30% through September 2009

2H 2010 IMS – Issued 22 September

Growth in AuARecord level $139 billion* as at 31 August 2010

29% increase through first eight months of 2010

Approximate increase of $20 billion since 30 June 2010New clients = $15 billion

New funds, existing clients = $0.5 billionSubscriptions = $8 billion

Redemptions and terminations = $5 billionClient fund performance = $1.5 billion

*Client fund performance is recorded one month in arears, therefore, 31 August 2010 balance does not include client fund performance of August 2010

Further Diversification of Client BaseECM lift-out: Demonstrates capabilities and broad appeal

GM Treasury OTC derivative collateral management services

Follows:Various managed accounts mandates

Valuation services for pension fund managerAdministration for bank spin-off with illiquid assets

Cash of $65 millionAs at 31 August 2010

Up $5 million since 30 June

What’s Next

Stage 1People,

Processes& Technology

Stage 2Investment

in India

Stage 3Focus on

Productivity

Stage 4Sales &

Marketing

Q&A

IMPORTANT NOTICE Certain statements in this presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties, or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward-looking statements regarding past trends or activities should not be taken as representations that such trends or activities will continue in the future. Accordingly, undue reliance should not be placed on forward-looking statements.!