Henderson global investors

May 2012

1\\hds.int\Data\Dist\Glob\BS\BST\Archive\TF\Rich Brown\Horizon Pan European Alpha Presentation - March 2012.ppt

Henderson Pan European Equity team

Lead manager Paul Casson

10 years running long/short portfolios

Aided by large European Equity team

Average investment experience of European portfolio managers of 17 years

Source: Henderson Global Investors, as at 30 April 2012

Paul CassonFund Manager15-years’ investment experienceJoined Henderson in 2005

Pan European Alpha team

+ 13 Large cap fund managers+ 4 Small cap specialists

Over 50 years experience in long/short management

Richard Brown CFAInvestment Specialist


Objectives and key parameters

Portfolio objectives Seek an absolute return of 10-12%

pa over rolling three-year periods

Smoothed exposure to Pan European equity markets using the flexibility offered by UCITS III

Alpha to be generated from the long and short book

Volatility since fund manager change of 11.8%* versus 18.5%* for the MSCI Europe index

A flexible Pan European fund that harnesses UCITS III capabilities

-20-150%Net exposure

60-90%Current short-term exposure

10% long5% shortMaximum position size

30-40% for long book90-160% for short bookTypical turnover

NoneSector/geographical restrictions

2-5% long2-4% shortTypical position size

40-60Typical number of positions

Typical parameters

200%Maximum gross exposure

< 2 x VaR of BenchmarkRisk

< 10% of NAVBorrowing

Rigid parameters

Source: Henderson Global Investors, BARRA, as at 30 April 2012Note: * Volatility is annualised

€189mFund size


Source: Henderson Global Investors, as at 31 March 2012Note: Figures assume 30% of 3 month average volume available

Liquidity

Henderson Pan European Alpha Fund

0%10%

20%30%40%50%

60%70%80%90%

100%110%

< 1 day < 3 days < 5 days < 10 days

LongsShorts


020406080

100120140160180200

Jul-0

8

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

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-10

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-10

Jan-

11

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-11

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-11

Jul-1

1

Sep

-11

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-11

Jan-

12

Mar

-12

0102030405060708090100

Short book (RHS)Gross exposureNet exposure

Henderson Horizon Pan European Alpha Fund

Historical positioning


% %


Cumulative return

-40-30

-20-10

0

102030

4050

Jun-

08

Sep

-08

Dec

-08

Mar

-09

Jun-

09

Sep

-09

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Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Sep

-11

Dec

-11

Mar

-12

Horizon Pan European Alpha FundMSCI Europe

Henderson Horizon Pan European Alpha Fund: performance since fund manager change (1 July 2008)

%

Source: Henderson Global investors, as at 30 April 2012Note: Performance is based on midday prices, retail share class, gross income reinvested and net of fees in euro.

Past performance is not necessarily indicative to future or likely performance of the fund.

+41.8%

+1.0%


40

60

80

100

120

140

160

180

Jun-

08

Sep

-08

Dec

-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Sep

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Dec

-11

Mar

-12

Horizon Pan European Alpha Fund Global Property UK EquityGlobal Bond Asia ex Japan US EquityHang Seng MSCI World MSCI Golden DragonMSCI EM MSCI Europe Japan equityMSCI LatAm

Henderson Horizon Pan European Alpha Fund: performance since fund manager change (1 July 2008)

Cumulative return versus other asset classes

Source: Henderson Global investors, as at 30 April 2012Note: Performance is based on midday prices, retail share class, gross income reinvested and net of fees in euro

Returns are in local currency, total return: FTSE All Share, FTSE EPRA/NAREIT Dvlp, JPM GBI Global Traded, MSCI Asia Ex Japan, S&P 500 and Topix IndexPast performance is not necessarily indicative to future or likely performance of the fund.


Downside protection

Source: Henderson Global Investors, Datastream, as at 31 March 2012Past performance is not necessarily indicative to future or likely performance of the fund.

Underwater chart

50

60

70

80

90

100

Jun-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11

MSCI EuropeHorizon Pan Eurp Alpha Fund

Largest drawdowns – MSCI Europe

March ‘11

June ‘08

Starting point

Ongoing

30 months

Recovery period

-19.1%

-39.4%

Draw down

Largest drawdowns – Horizon Pan European Alpha Fund

June ‘11

Sept ‘08

Starting point

8 months

8 months

Recovery period

-7.5%

-9.7%

Draw down

Positive returns in each of the last three calendar years



Alpha: Excess return

Source: Henderson Global Investors, as at 30 March 2012Note: Attribution is based on desk estimates

-1000

-500

0

500

1000

1500

2000

2500

Jul-0

8

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

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May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

Cumulative long alphaCumulative short alpha

bps


Investment process and philosophy


Investment philosophy

Active fund managers, focused on fundamental analysis Fundamental analysis can lead to decisions that are against the common

market opinion/trend

Bottom-up approach to stock selection

Cash-flow growth at a reasonable price Look for companies that can deliver good sustainable growth in cash flows

and where valuation is attractive

Mindset of allocating capital efficiently via stock selection


Stockviews

Stock analysis

Business assessment

Cash-flow analysis

Catalyst for sharp value changes

Valuation analysis

Macro outlook

Risks to analysis

Portfolio construction

Typical number of positions

= 40-60

Typical position size

= Long ~ 2-5%

= Short ~ 2-4%

Net exposure -20 to 150%

Max gross exposure 200%

Borrowing < 10% of NAV

Stock analysis and portfolio construction


Stock analysis

Business assessment Long-term prospects for the business Is the company’s competitive position strong enough to sustain cash returns

on investment above the cost of capital? Risks to analysis Meeting with company management gives important insights

Cash-flow analysis Drivers of cash flow How operating profit is converted to cash flow How cash flow is being deployed How this ties in with the balance sheet – capital efficiency


Short book - additional considerations

Selecting short positions is a very different discipline to long only management Paul Casson is experienced in managing short book portfolios, having assisted Stephen Peak with

Henderson's European Absolute Return Fund since he arrived in 2005 and previously assisting with hedge funds at SVM since 2001

The fund manager uses a pragmatic approach to allow for the additional risks Unlimited downside risk – losing shorts get larger M&A activity Cost

The fund manager looks for events/catalysts that will cause a significant drop in share price (eg, profit warnings) The short book will on average have a higher turnover than the long book. Short positions tend to be

initiated to benefit from a negative event anticipated to occur in the near future

The fund manager is constantly self critical and will cut the position if the investment case no longer stands


Portfolio construction

Stock selection drives portfolio orientation Index is something to benchmark returns against, not a guide to investment Country and sector weights arise from stock selection Market cap exposure also arises from stock selection May have a zero weighting to any country/sector that makes up a position of

the index

Typically 40-60 stocks and size of each stock position reflects: Relative attractiveness of the stock Conviction we have in our view Likely liquidity available in the stock on entry and any exit Typical position size is 2-5% long and 2-4% short Positions not usually over 5% and usually avoid positions below 2%


Position closing decisions

When do we close positions? See limited upside/downside to price across a range of potential scenarios Acknowledge a mistake or that the investment case has broken down Begin to reduce a successful holding before there is limited remaining upside

as the return/risk ratio becomes less attractive Require the release of money to build on other holdings with greater upside

potential A short position becomes involved in M&A speculation

Avoid explicit price targets Danger of becoming ‘anchored’ as conditions change


Risk management

Effective risk management starts with thorough stock analysis

Monitor predicted volatility using BARRA

Take care not to create unintended aggregate exposures

Monthly compliance sign off and pre-trade monitoring through Charles River


Current fund composition


Current positioning

2.9

3.0

3.0

3.0

3.0

3.0

3.1

3.2

3.3

3.4

Portfolio weight (%)

Consumer StaplesImperial Tobacco Group

Consumer StaplesTesco

Consumer DiscretionarySES

Health CareFresenius SE

Consumer DiscretionaryBSkyB

EnergySeadrill

EnergyStatoil

Health CareGSK

Telecommunication ServicesVodafone Group

Consumer DiscretionaryWilliam Hill

SectorSector



3.5Industrials

0.0Utilities

1.3Information Technology

1.8Financials

13.9Consumer Staples

3.1Materials

8.8Health Care

16.3Energy

16.3Consumer Discretionary

5.4Telecommunication Services

Net exposure (%)Sector

96.8Gross market

70.5Net market

56.7Beta adjusted net

Total exposure (%)

-13.2

83.6

Short

Long

Fund positioning



Long example: SES

Description Provider of satellite communications and

broadcast services

Investment case Well placed to benefit from a wide spread

roll out of HD TV thanks to its bandwidth monopoly

2012 dividend yield of 5.2%

Bullet proof cashflow

Source: Henderson Global Investors, Datastream, as at 19 March 2012Note: The above example is intended for illustrative purposes only and is not indicative of the historical or future

performance of the strategy or the chances of success of any particular strategy. Henderson Global Investors, one of its affiliated advisors, or its employees, may have a position mentioned in the securities mentioned in the report. References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.Data rebased to 100 on 30 June 2008.

SES total return

80

90

100

110

120

130

140

Jun-

08

Sep

-08

Dec

-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Sep

-11

Dec

-11

Toll roads in the sky


0

10

20

30

40

50

60

70

80

Jun-

08

Sep

-08

Dec

-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Short example: Q-cells

Description Develops and manufactures solar

cells made of silicon

Investment case Structural cost disadvantage versus Chinese

competitors

Traded at 30x estimated 2010 earnings

Ongoing cuts in government subsidies

Lack of cash generation was early warning sign

Source: Henderson Global Investors, Bloomberg as of 21 April 2011Note: The above example is intended for illustrative purposes only and is not indicative of the historical or

future performance of the strategy or the chances of success of any particular strategy. Henderson Global Investors, one of its affiliated advisors, or its employees, may have a position mentioned in the securities mentioned in the report. References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.

€

Sell Short Covered

Price performance of Q-cells


Long examples: Gambling

Opportunity Negative sentiment toward traditional UK

bookmakers

Investment case UK economy remains robust

Strong balance sheets – Net debt/EBITDA <2x

High cash flow yields

And they are still cheap

Source: Henderson Global Investors, Datastream, as at 26 April 2012 2012Note: References made to individual companies or stocks should not

constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase in the Company.

Total return

60

80

100

120

140

160

180

200

220

240

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

Paddy Power

William Hill

MSCI Europe


Long example: Next

Description UK Clothes retailer

Investment case Negative sentiment toward UK retailers

depressed prices

Strong cash generation

Share buybacks

High quality, consistent management

Source: Henderson Global Investors, Bloomberg, as at 19 March 2012Note: The above example is intended for illustrative purposes only and is not indicative of the historical or

future performance of the strategy or the chances of success of any particular strategy. Henderson Global Investors, one of its affiliated advisors, or its employees, may have a position mentioned in the securities mentioned in the report. References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the securityData rebased to 100 on the 4 January 2010.

Next total return

80

100

120

140

160

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12


Short example: Vestas

Description Develops and manufactures wind

turbines

Investment case Severe deterioration in working

capital

Heavy cash burn and rapidly rising net debt

New orders and pricing a source of concern

Growth multiple inappropriate for serial market share loser

Price performance of Vestas

DKK

40

140

240

340

440

540

640

740

Jun-

08

Sep

-08

Dec

-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Sep

-11

Dec

-11

Mar

-12

Note: The above example is intended for illustrative purposes only and is not indicative of the historical or future performance of the strategy or the chances of success of any particular strategy. Henderson Global Investors, one of its affiliated advisors, or its employees, may have a position mentioned in the securities mentioned in the report. References made to individual securities should not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase the security.

Source: Henderson Global Investors, DataStream, as at 20 March 2012


Outlook


Europe – valuation

Source: Mirabaud Securities LLP, Thomson, MSCI regional indices, as at 31 March 2012

European market: trend P/E, 1980-2012

0

5

10

15

20

25

30

35

Jan-

80

Jul-8

1

Jan-

83

Jul-8

4

Jan-

86

Jul-8

7

Jan-

89

Jul-9

0

Jan-

92

Jul-9

3

Jan-

95

Jul-9

6

Jan-

98

Jul-9

9

Jan-

01

Jul-0

2

Jan-

04

Jul-0

5

Jan-

07

Jul-0

8

Jan-

10

Jul-1

1

Trend P/EEx-bubble averageEx-Bub + 1 SDEx-Bub -1 SD

9.2x

10.3

UK

10.7

Europe ex UK

10.011.612.913.712 month forward P/E

Emerging MarketsAsia Pac ex JapanUSJapan


0

10

20

30

40

50

60

70

80

90

100

0 5 10 15 20 25 30 35 40

Earnings volatility

5 ye

ar e

arni

ngs

vola

tility

Forward P/E

13%

61%

3%

23%A

vera

ge =

14.

1

Average = 47.9

3.1High earnings volatility, high valuations22.6Low earnings volatility, high valuation

Long book (%)

13.061.3

High earnings volatility, low valuationLow earnings volatility, low valuation Current holding

European universe

Source: Henderson Global Investors, as at 31 March 2012


It has paid to buy at these valuations

Source: ASR, Henderson Global Investors, as at 20 February 2012

-10

-5

0

5

10

15

20

<8x 8x-to-12x 12x-to-16x 16x to 20x >20x

Ave

rage

forw

ard

retu

rn s

ince

197

3 (%

)

1-year3-year5-year

Forward returns in trailing P/E bands

Currently here


Market outlook

Uncertainties remain French and Greek elections Bank capital

The long term need to reduce debt is the priority Corporate balance sheets - Strong Consumer balance sheets - Stable Government balance sheets - Poor

LTRO very important – key liquidity risk removed

Equities look attractive – favourable risk/reward, investors very under-exposed


Summary

We have achieved our return objectives over 3.5 years In some of the worst market conditions for 20 years

The fund is not reliant on a strong European market to make good returns

It can be accessed through a client friendly,daily dealing fund


Summary

Making full use of UCITS III powers

Flexible approach driven by bottom-up stock picking

Superior risk/return profile, daily liquidity

Transparency and alignment of interests with investors

Absolute return investment approach


Appendices


Outlook

Source: NCBs, DB ResearchRecommendation: Garber, Peter (1998). “Notes on the role of Target in a stage III crisis”, NBER Working Paper No. 6619

Intra-Eurosystem balance of payments positions– as of Aug/Sept/Oct 2011


Alpha: Excess return

Source: Henderson Global Investors, as at 31 March 2012Note: Attribution is based on desk estimates

20(278)Long +ve/ Short -ve264(88)352Q1 2012

183543Long +ve/ Short +ve(485)494(979)Q3 2011

22350Long +ve/ Short +ve341197144Q2 2011

(178)64Long +ve/ Short -ve(72)(203)131Q1 2011

88106Long +ve/Short +ve(252)622(874)Q3 2008

580407Long +ve/Short +ve(101)1,666(1,767)Q4 2008

(222)519Long +ve/Short -ve(211)240(451)Q1 2009

(224)(101)Long -ve/Short -ve1,026(745)1,771Q2 2009

52433Long +ve/ Short +ve2,100(158)2,258Q3 2009

6935Long +ve/ Short +ve56326537Q4 2009

109(84)Long -ve/ Short +ve32931298Q1 2010

36(206)Long -ve/ Short +ve(682)129(811)Q2 2010

132(188)Long -ve/ Short +ve49825473Q3 2010

(19)365Long +ve/ Short -ve823(109)932Q4 2010

32194Long +ve/ Short +ve855(87)941Q4 2011

Short alpha

Alphasource

Long attributable bps

Short attributablebps

Totals

Long alpha

Total attributablebps

Quarterly


Fund particulars

1.2%Management fees:

20% of benchmark outperformancePerformance fees:

T+4Settlement:

1pm Luxembourg timeCut-off time:

The completed application form and documents must be sent to the Registrar and Transfer Agent for the first subscription. Orders may be sent by fax or post.

Dealing:

BNP Paribas Securities Services/BNP Paribas Fund Services33 Rue de GasperichL-5826 HesperangeGrand Duchy of LuxembourgTel: +352 2696 2050 Fax: +352 2696 9747

Contact details of the Registrar and Transfer Agent:

€2,500 per sub-fund for the initial subscription and €500 per sub-fund for the subsequent subscriptions.

Minimum investment:

EuroBase currency:

50% MSCI Europe Total Return (net) / 50% ECB RateBenchmark:

LU0264597450 (income)LU0264597617 (accumulation)

ISIN codes:


The fund manager

Paul CassonDirector, Pan European Equities

Career: 2008 Takes over management of


2007 Director, Pan European Equities

2005 Henderson Global InvestorsJoined as Associate Director to manage European equity mandates initially running institutional funds in the retail space

2001 SVM Asset ManagementFund Manager, Pan European Equities

1997 Martin Currie Investment ManagementFund Manager European Equities

1995 KPMG BelfastTrainee accountant, Audit department

Education: University of Stirling,MSc Investment Analysis

Queen’s University Belfast,MSc (Distinction) AccountingBSc (Hons) First Class Accounting


Henderson Global Investors201 Bishopsgate, London EC2M 3AETel: 020 7818 1818 Fax: 020 7818 1819

Henderson Global Investors201 Bishopsgate, London EC2M 3AETel: 020 7818 1818 Fax: 020 7818 1819

Important InformationThis document is solely for the use of professionals and is not for general public distribution. The Henderson Horizon Fund (the “Fund”) is a Luxembourg SICAV incorporated on 30 May 1985. This document is intended solely for the use of professionals and is not for general public distribution. Any investment application will be made solely on the basis of the information contained in the Fund’s full prospectus (including all relevant covering documents), which will contain investment restrictions. This document is intended as a summary only and potential investors must read the Fund’s full prospectus before investing. A copy of the Fund’s full and simplified prospectuses can be obtained from Henderson Global Investors Limited in its capacity as Investment Manager and Distributor.

Issued in the UK by Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355) (incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE and authorised and regulated by the Financial Services Authority) provide investment products and services. Telephone calls may be recorded and monitored.

Past performance is not a guide to future performance. The performance data does not take into account the commissions and costs incurred on the issue and redemption of units. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. If you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially.

The securities included in this document are not registered in the Foreign Securities Registry of the Superintendencia de Valores y Seguros for public offering and, therefore, the use of this document is only for general information purposes.

Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment.

The Fund is a recognised collective investment scheme for the purpose of promotion into the United Kingdom. Potential investors in the United Kingdom are advised that all, or most, of the protections afforded by the United Kingdom regulatory system will not apply to an investment in the Fund and that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.

A copy of the Fund’s full and simplified prospectuses, articles of incorporation, annual and semi-annual reports can be obtained free of cost from the Fund’s: Austrian Paying Agent Raiffeisen Zentralbank Österreich AG, Am Stadtpark 9, A-1030 Vienna; French Paying Agent BNP Paribas Securities Services, 3, rue d’Antin, F-75002 Paris; German Information Agent Marcard, Stein & Co, Ballindamm 36, 20095 Hamburg; Belgian Financial Service Provider Dresdner Van Moer Courtens S.A./N.V. Société de bourse, Drève du Prieuré 19, 1160 Bruxelles; Spanish Representative Allfunds Bank S.A. Estafeta, 6 Complejo Plaza de la Fuente, La Moraleja, Alcobendas 28109 Madrid; or Swiss Representative BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich who are also the Swiss Paying Agent.

Economy & Finance

Henderson global investors