Reviewed Group Results for the year ended 31 March 2009 for the - - PDF document

Reviewed Group Results

for the year ended 31 March 2009 for the year ended 31 March 2009

Agenda

Introduction Factors effecting our performance Financial review Review of operations Review of operations Prospects

Business of Brait

Introduction Brait’s business is the structuring, raising and management of investment funds that are typically classified Alternative Assets. The current product-set includes i t it f d i d bt f d d f h d f d l ti private equity funds, mezzanine debt funds and a range of hedge funds solutions Additionally, Brait deploys its capital in proprietary investment programmes in these product areas These investments are made predominantly in South Africa and its region Investors include leading global and South African institutions Brait’s operations are organised in two segments – Private Capital and Public Markets

Highlights

Introduction Earnings

• Profit from South African operations up by 42% to R241.9 million (2008: 41%

decrease)

• Group profit from operations decreased by 21% to R237.3 million (2008: 31%

decrease)

• Headline earnings from continuing operations decreased by 34% to R166.6

million (2008: 8% decrease)

• Attributable earnings decreased by 58% to R166.6 million (2008: 16% increase)

Attributable earnings decreased by 58% to R166.6 million (2008: 16% increase)

• Return on equity 13% (2008: 30%)

Highlights (continued)

Introduction

• NAV robust at 1 436.4 cents per share, increased by 0.3% (2008: 19% increase)
• Assets under Management (fee earning) decreased by 9% from R11 6 billion to
• Assets under Management (fee earning) decreased by 9% from R11.6 billion to

R10.5 billion (2008: 20% increase)

• Cash generated of R415.1 million (2008: R117.4 million) compared to cash

applied of R279.3 million (2008: R101 million)

• Strong cash position of R430.1 million (2008: R417.7 million)
• Annual dividend distribution increased by 19% to 178.90 cents per share

(2008: 13% increase)

Factors effecting our performance

Introduction

Value Drivers Operating Environment

• Market conditions
• Investment product performance
• Assets Under Management
• Global recessionary conditions
• Economic uncertainty
• Private Equity Fund-to-Fund

cycle

• New product development
• Deployment of capital in

Proprietary Investing

Financial Review

Key Performance Measures

Financial Review

Return

• n

Equity Attributable Earnings Assets Under Management Investment Product Net Asset Dividend Product Performance Asset Value Dividend

Return on Equity

Financial Review

45% 41% 40.0% 45.0% 50.0% 31.1% 30% 29% 30% 29% 28% 25% 25 0% 30.0% 35.0% 40.0% 13% 23% 25% 15.0% 20.0% 25.0% 0.0% 5.0% 10.0% Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 ROE LT ROE Long Term target

Attributable Earnings

Financial Review

338.8 393.0 26% 26% 30% 30% 45% 340 0 390.0 440.0 211.7 300.8 238.2 267.9 301.4 339.1 0% 15% 240.0 290.0 340.0 166.6

• 30%
• 15%

90.0 140.0 190.0 R’m

• 51%
• 60%
• 45%
• 60.0
• 10.0

40.0 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Profit Target line (12.5% CAGR) Actual vs Target

Assets Under Management growth

14

Financial Review

9 4 11.6 10.5 10 12 6.1 9.4 6 8 10 Rbn 2.1 2.5 3.0 3.6 4.4 4 6 2 Mar 05 Mar 06 Mar-07 Mar-08 Mar 09 ZAR Target growth (20% CAGR)

Investment Product Performance

Financial Review

Private Capital Brait III & IV 4.5% AEP 1 4.2% Mezzanine Partners Fund 17.2% Public Markets Brait Multi-Strategy Fund 29.2% Public Markets a u S a egy u d 9 % Brait Matrix (launched 1 October 2008) 21.3% Brait Ruby Fund 20 9% Brait Ruby Fund 20.9% Lauriston Absolute Fund 0.5% Brait Absolute SA Fund

• 3.6%

Net Asset Value

Financial Review

240% 3 200 0 2,024.8 2,222.8 700.1 182% 210% 200% 240% 2,400.0 2,800.0 3,200.0 1,606.9 330.8 506.0 124% 120% 160% 1,600.0 2,000.0 R’m 757.5 1,141.9 39.4 166.1 59% 80% 800.0 1,200.0 R 5% 0% 40%

• 400.0

Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 NAV per year Cumulative Dividends paid Cumulative growth in NAV (base Mar 04)

Dividends per share (excluding special dividends)

Financial Review

200 150.34 178.90 160 200 119.32 133.34 120 ents 89.89 80 Ce 40 Mar 05 Mar-06 Mar-07 Mar 08 Mar-09

Abridged group income statement for the year ended 31 March y

Financial Review

Supplementary US$ information Reviewed Audited 2008 2009 2009 2008 US$m US$m Rm Rm 38.3 37.7 Revenue 334.1 272.6 34.5 18.6 Other income 164.4 245.9 72.8 56.3 Total revenue and other income 498.5 518.5 (31.0) (30.8) Operating expenses (272.8) (220.8) ( ) ( ) p g p ( ) ( ) 0.6 1.3 Income from associates 11.6 4.4 42.4 26.8 Profit from operations 237.3 302.1 (7.5) (6.7) Finance costs (59.2) (53.8) 22.8 4.4 Capital items 39.1 162.9 p 57.7 24.5 Profit before taxation 217.2 411.2 (4.7) (5.7) Taxation (50.6) (33.3) 53.0 18.8 Profit from continuing operations 166.6 377.9 2.1

• Profit from discontinued operations
• 15.1

p 55.1 18.8 Profit attributable to equity holders 166.6 393.0

Geographic analysis of income from continuing

• perations

p

Financial Review

GEOGRAPHICAL ANALYSIS 31-Mar-09 31-Mar-08 Segment income from continuing operations Rm Rm Revenue 334 1 272 6 Revenue 334.1 272.6

• International

44.0 56.3

• South Africa

290.1 216.3 Other income 164.4 245.9

• International

(19.3) 111.6

• South Africa

183.70 134.3 Total segment income from continuing operations 498 5 518 5 Total segment income from continuing operations 498.5 518.5 Net1 and Pangea reduced international profits. Solid f f S f performance from South African operations and underlying investee companies.

Net Contributions

Financial Review

31-Mar-09 31-Mar-08 Rm Rm Segment result from continuing operations 237.3 302.1

• International

(4.6) 131.6

• South Africa

241.9 170.5 Net contributions from international operations negative due to global equities market. Net1’s actual operating results showed 20% growth actual operating results showed 20% growth.

Brait’s effective investment in underlying portfolio companies p p

Financial Review

March 09: R1,668m

Pepkor 21% DGB 12% Consol 8% Primedia 6% Net 1 10% Other 9% Medu 9% Pangea Diamond Fields 2% Private Equity Fund

• f Funds 1%

Sponsored Funds 6% Mezz 3% Premier Foods Limited 3% Capital Africa Steel 2% Toehold 1% Kelly 4% Wilderness 3% Pepkor 17% DGB 10%

March 08: R1,459m

Limited 3% Steel, 2% Pan African Kelly Group 3% Pangea Diamond Fields 3% Medu 9% Consol 8% Primedia 8% Net 1 16% Other 10% Resource 1% Net 1 16% Natures Choice 1% AEP 2% Sponsored Funds 5% Mezz 3% Unallocated Participation 4%

Group Income Statement

Financial Review

Brait Group Income Statement Year ended 31-Mar-09 31-Mar-08 Variance % Notes Rm Rm Rm Fund management income 1 283.2 216.5 66.7 31% Fund management expenses: 2 (231.9) (207.9) (24.0) 12% Profit from fund management operations 51.3 8.6 42.7 498% Investment income 3 226.9 318.8 (91.9) -29% Investment expenses 4 (40.9) (10.2) (30.7) 301% Investment expenses 4 (40.9) (10.2) (30.7) 301% Profit from investment operations 186.0 308.6 (122.6) -40% Group Profit from Operations 237.3 317.2 (79.9) -25% Finance costs 5 (59.2) (53.8) (5.4) 10% Capital Items 6 39.1 162.9 (123.8) -76% Profit before taxation 217.2 426.3 (209.1) -49% Taxation 7 (50.6) (33.3) (17.3) 52% Profit for the year/attributable to equity holders 166.6 393.0 (226.4) -58%

Fund Management Income (Note 1):

Financial Review

31 M 09 31 M 08 V i % 31-Mar-09 31-Mar-08 Variance % Rm Rm Rm Management fees 166.2 185.7 (19.5)

• 11%

Fee income 112.9 23.6 89.3 379% Interest received 4.1 9.9 (5.8)

• 58%

Total fund management income 283.2 219.2 64.0 29% Performance fees from CMT boosted fee income Negatively impacted by loss of net R2.5 billion AUM from Brait Absolute.

Fund Management Income

Financial Review

Treasury C it l Mar-09 Private Capital 121.2 43% Capital 4.1 1% Public Markets 157.9 56% 56% Private Treasury Capital 29.6 13% Mar-08 Capital 100.2 46% Public Markets 89.4 41%

Fund Management Expenses (Note 2):

Financial Review

31-Mar-09 31-Mar-08 Variance % Rm Rm Rm Rm Rm Rm Fund Management Expenses: Advertising, marketing costs & foundation costs (9.9) (8.9) (1.1) 12% Audit fees & other professional fees (17 6) (19 1) 1 5

• 8%

Audit fees & other professional fees (17.6) (19.1) 1.5 8% Communication and computer costs (12.9) (7.4) (5.5) 75% Depreciation (2.0) (1.6) (.4) 24% Listing and related costs (3.4) (3.0) (.4) 12% Rent, travel and insurance costs (16.5) (15.3) (1.2) 8% Salaries and related costs (163.1) (146.5) (16.5) 11% Other costs (6.5) (8.7) 2.2

• 25%

Total Fund Management Expenses: (231.9) (210.6) (21.3) 10% Total increase of R21.3 million (10%) is in line with inflation. Communication and computer costs increased due to risk and operations management system in hedge fund business

Investment Income (Note 3):

Financial Review

31-Mar-09 31-Mar-08 Variance % Rm Rm Rm Investment appreciation : unrealised 162.2 88.6 73.6 83% : realised 2.4 154.5 (152.1)

• 98%

Dividend Income 9.4 19.0 (9.6)

• 51%

Income from associate 11.6 4.4 7.2 164% Interest received 41.3 52.4 (11.1)

• 21%

Investment income 226.9 318.9 (92.0)

• 29%

Investment Income

Financial Review

Private Mar-09 Capital 105.4 46% Treasury Capital 95.2 42% Public Markets Markets 26.3 12% Public Markets 8.3 3% Treasury Capital 22.2 7% Mar-08 Private Capital 288.4 90%

Investment Expenses (Note 4):

Financial Review

31-Mar-09 31-Mar-08 Variance % Rm Rm Rm Fund related expenses (27.6) (14.7) (12.9) 88% Loan impairments and other expenses (13.3) 4.5 (17.8)

• 396%

Total investing activities expenses (40.9) (10.2) (30.7) 301% Brait’s share of Brait IV Debt Facility Trust ‘s interest paid Relates to loan impairment provision on investee companies.

Finance Costs (Note 5)

Financial Review

31 March 31 March 31 March 2009 Rm 31 March 2008 Rm Variance Rm % change Dividends on preference shares¹ 54.2 48.9 5.3 11% Interest on shareholder’s loan² 0.5 2.5 (2.0) (80)% te est o s a e o de s oa 0 5 5 ( 0) (80)% Interest on bank overdraft 4.5 2.4 2.1 88% Total 59.2 53.8 5.4 10% Overall increase in line with movement in Prime rate of interest as Preference Shares dividend is 78% of Prime.

Capital Items (note 6) Capital items comprise: p p

Financial Review

2009 2008 2009 Rm 2008 Rm Gain on realisation of investment in subsidiary Realisation of Brait’s interest in Bayport, effective 1 April 2007.

• 124.2

Net currency hedge loss Profit on restructure of the Group’s hedging instruments (79.5) 169.8 43.5

• F i

l dj t t f fi i l li bilit (16 3) (12 7) Fair value adjustment of financial liability (16.3) (12.7) Fair value adjustment of financial asset (34.9) 7.9 Total capital items 39.1 162.9 Cash Proceed of R299m reduced by R88 cost for new hedge per cash flow. Write-down of 32.3% in Sitogo due to lower profit forecasts for 2009 and 2010.

Taxation (note 7)

Financial Review

31 Mar 09 31 Mar 08 Variance % 31-Mar-09 31-Mar-08 Variance % Rm Rm Rm Deferred tax provision (31.6) (28.4) (3.2) 11% C ( ) ( ) ( ) % Current tax expense (15.4) (2.9) (12.5) 430% Prior year over provision (.1)

• (.1)
• Secondary tax on companies (STC)

(3.5) (2.0) (1.5) 75% Taxation (50.6) (33.3) (17.3) 52% Group effective up from 8% to 23% due to current tax paying position and international losses with no deferred tax credit.

Dividend Policy

Financial Review The Board maintains and is committed to the view that dividend distributions are an important part of longer-term shareowners wealth creation Dividend Policy:

• Pay annual dividends equaling 12.5% of opening NAV
• Arrived at to be 50% of targeted ROE of 25%
• Arrived at to be 50% of targeted ROE of 25%
• Provided that solvency is not impaired and the ability to finance its business plan

is maintained Reasons for Policy:

• provide more consistent annual dividend distributions
• to link the distribution to NAV which is a more stable measure of long-term value

generations generations

• Key measures for Brait are Investment product performance, NAV and Cash as

earnings tend to be cyclical

Allocation of Capital

Financial Review

430.0 413.7 145.5

Mar-09 Rm = 2,410.0

181.0 107.3 Mar 08: Rm = 2383.6 1,132.6 Treasury Cash and Capital Other Private Equity Funds Quoted investments 417.7 367.6 90.3 198.0 139.2 Private Equity Funds Quoted investments Unquoted investments Public Market Funds 1 170 9 1,170.9 Treasury Cash and Capital Other Private Equity Funds Quoted investments Unquoted investments Public Market Funds

Cash flow from operating and investing activities

Financial Review

Realisation of currency hedge Cash Generated R415.1m g R299.4m (72%) Working capital R10.4m (3%) P i Cash Applied R277.9m Dividends received R9.4m (2%) Interest received R43.7m (10%) Operating items R52.2m (13%) Finance costs 59.2 21% Premium

• n currency

hedge 88.1 32% Taxation 17.1 6% Investing activities 113.5 41%

Review of Operations

Private Capital Private Capital

Private Capital

Review of Operations

Funds Proprietary Investing Sponsored Funds Mezzanine Debt Fund-of-Funds Investing Funds Debt Management of Deployment of balance sheet Sponsorship of Niched JV between OMIGSA, Management Management of Private Equity Funds capital of R50m

• r less per

transaction Niched Investment Firms Management and Brait in management of Mezzanine Debt Private Equity Fund-of-Funds

• Brait III
• Brait IV
• Medu Capital
• Molash

Capital

• MP I
• MP II
• AEP I

Private Capital

Review of Operations Hi hli ht Highlights

• Strong operational performance from all large investment exposures especially

Pepkor, Net 1,Consol and DGB. Average EBITDA growth > 20% p , , g g

• Solid investment performance in Brait III and IV
• Finalisation of two substantial portfolio investments
• Mezzanine Partners I achieved full investment, and 1st investment in Mezzanine

Partners II Partners II

• AEP I became fully committed

Return on Capital Employed

Review of Operations - Private Capital

59.4% 60% 70% 42.1% 38% 33% 40% 50% 23% 30.9% 20.4% 24% 33% 29% 24% 18% 25% 20% 30% 4.9% 0% 10% M 04 M 05 M 06 M 07 M 08 M 09 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 ROE LT ROE Long Term target

Profit from Operations

Review of Operations - Private Capital

242.5 250.2 248.5 240.7 230% 280% 230 280 81 6 91.8 103.3 116.2 130.7 147.0 164% 142% 114% 130% 180% 130 180 81.6 75.9 91.8 84% 30% 80% 30 80

• 48%
• 70%
• 20%
• 70
• 20

Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Net profit BT Target line (12.5% CAGR) Actual vs Target

Assets under Management

Review of Operations - Private Capital

6.4 6.7 7 8 5.8 3 6 4.3 4 5 6 Rbn 2.1 3.4 2.5 3.0 3.6 2 3 4 1 Mar 05 Mar 06 Mar-07 Mar-08 Mar 09 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 ZAR Target growth (20% CAGR)

Fair value of fund portfolio investments (converted at year-end exchange rates) ( y g )

Review of Operations - Private Capital

7,000 8,000 9,000 7,439 8,566 5,000 6,000 ,000 4,187 4 035 2,000 3,000 4,000 1,572 3,550 4,035

• 1,000

Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Brait II Brait III Brait IV Braitec Mezz Sponsored Funds Private Equity Fund of Funds

Capital Invested

Review of Operations - Private Capital

533.0 1400.0 1600.0 1800.0 1,628.3 1,438.9 534.5 800.0 1000.0 1200.0 R’m 924.7 1,122.1 200.0 400.0 600.0

• 20.3
• 26.9
• 200.0

0.0 Mar 08 Mar 09 Working capital Proprietary investments Direct investment in Funds and capital participation

Sectoral Analysis

Review of Operations - Private Capital

March 09: R1,668m

Services 23% Mineral Resource Exploration 4% Other 17%

M h 08 R1 459

Black Economic Empowerment 8% Information Technology E t t i t l i Manufacturing 25% Food 4% Media 6% Manufacturing 21% Information Media 8%

March 08: R1,459m

Technology 10% Entertainment, leis ure, tourism 3% 25% Other 17% technology 16% Mineral Resource Exploration 7% Entertainment, leisure, tourism 2% Black Economic Empowerment 9% Services 20%

Brait effective investment in underlying portfolio

Review of Operations - Private Capital

March 09: R1,668m

Pepkor 21% DGB 12% Consol 8% Primedia 6% Net 1 10% Other 9% Medu 9% Pangea Diamond Fields 2% Private Equity Fund

• f Funds 1%

Sponsored Funds 6% Mezz 3% Premier Foods Limited 3% Capital Africa Steel 2% Toehold 1% Kelly 4% Wilderness 3% Medu 9% Pepkor 17% DGB 10% Consol 8%

March 08: R1,459m

Limited 3% Steel, 2% Other 10% Pan African Resource 1% Kelly Group 3% Pangea Diamond Fields 3% Primedia 8% Net 1 16% Other 10% Resource 1% Natures Choice 1% AEP 2% Sponsored Funds 5% Mezz 3% Unallocated Participation 4%

s1

Slide 41 s1 This graph needs to be the same as the one under Finance Review

ssithole, 2009/05/20

Funds

Review of Operations - Private Capital

Business Model Value Drivers Business Model Value Drivers

Investors Manager Investees

44.2% 60.0%

IRR - Brait III

Investment Performance 3rd party capital i t d Managed:

• Over 10 years

Diversified across various industries in corporate

44.2% 24.9%

• 20.0%

0.0% 20.0% 40.0% Over 5 years Over 3 years

invested B it it l y

• Illiquid
• Discretionary

in corporate SA

IRR (Rand) 3 434 5,759 6,223 6,187 4 000 5,000 6,000 7,000 Fee earning funds under management - 31 March 2009

Brait capital invested Team capital Economic effect on Brait:

• Up to 2% management fee p.a.
• Potential 10% capital

participation Fund-of-Fund

B it IV th 82% i t d

2,074 3,434 1,000 2,000 3,000 4,000 YE 2005 YE 2006 YE 2007 YE 2008 YE 2009 Rm

Team capital invested p p

• >30% IRR on invested capital

Fund-of-Fund Cycle

Brait IV more than 82% invested

Market Conditions

• Improved buying environment
• More challenging capital raising

Proprietary Investing

Review of Operations - Private Capital

Business Model Value Drivers Business Model Value Drivers

• Deployment of balance sheet capital of

R50m or less per transaction

IRR - Brait's investment in proprietary investments

Investment Returns R50m or less per transaction.

• Economics derived from investment gains.

39.5% 30.6% 20 0% 30.0% 40.0% 50.0% 0.0% 10.0% 20.0% Over 5 years Over 3 years IRR (Rand)

Deployment Rate Market

• Last investment made 3 years

ago, but improved prospects

• Improved buying environment

Conditions

• Increased competition

Sponsored Funds

Review of Operations - Private Capital

Business Model Value Drivers

• Sponsorship of niched investment managers,

in ret rn for interests in Manco and f nds Investment Performance

• Strong performance from Medu

Capital (Medu I IRR – 60%+) in return for interests in Manco and funds Performance AUM Capital (Medu I IRR 60% )

• Weak performance from Molash

R34m write-down

• Molash I closed at R170m

Relationships

• Reduced plan for new

relationships

Mezzanine Debt

Review of Operations - Private Capital

Business Model Value Drivers

• Joint Venture between OMIGSA, Management and

B it i M i P t Investment Performance

• On-track for JIBAR + 9%

target (currently tracking 23% Brait in Mezzanine Partners.

• Economics derived from share in Manco and

funds. Performance AUM target (currently tracking 23% IRR)

• MP I fully invested. MP II

achieves a first closing of R400m Market Conditions R400m

• Benefits significantly from sub-

prime fallout and tightening dit diti credit conditions.

Fund-of-Funds

Review of Operations - Private Capital

Business Model Value Drivers

• Investment Management of unlisted fund-of-funds.

Funds Under Management

• Final close achieved at R630m
• Invests in Brait sponsored and third party funds.
• Economics derived from management fees and

performance fees. Management Investment Performance

• Rapid deployment of

commitments. Performance Market

• Investment performance too

early to determine, but prospective promising

• Market conditions challenging

Conditions

Strategic Initiatives

Review of Operations - Private Capital Launch Brait V Launch Brait V Drive value in existing portfolio Invest remainder of Brait IV Invest R50m p.a. in each of Proprietary Investing and Sponsored Funds

Review of Operations

Public Markets Public Markets

Brief overview of the Brait Public Markets Model

Review of Operations - Public Markets

3rd party capital invested Management of Funds:

• Open ended
• Monthly liquidity

Diversified across asset classes according to investment strategy: Investors Manager Investments invested Brait capital invested Team capital Monthly liquidity

• Discretionary

investment strategy:

• Listed Equities
• Bond and Credit Markets
• Exchange Traded & OTC

Derivatives H d F d p invested Economic effect on Brait:

• Management Fee: up to

2% p.a.

• Performance Fee:

between 10% & 30% of

• Hedge Funds

between 10% & 30% of

• ut performance
• Investment gains on

capital invested

Public Markets

Review of Operations Highlights R d fit f ti h i ifi tl i d

• Revenue and profit from operations have significantly increased
• Strong investment performance from CMT products - Brait Multi-Strategy, Brait

Matrix Fund & Brait Ruby Fund y

• Improved performance from Brait Absolute, especially in the last half of the

year, showing the ability to preserve capital; but still below target

• Launch of Brait Matrix Fixed Income Fund with R170m on 1 October 2008
• Assets under management have decreased

Assets under management have decreased

• Strengthening of the Multi-Management investment team

Multi Management

Review of Operations - Public Markets

Business Model Value Drivers

• Use Brait capital to seed products
• Provide institutional investors with risk managed

hedge fund solutions Investment Performance

• Performance drives capital

flows

• Behind target but there has

b i t th hedge fund solutions

• Range of fund-of-hedge fund products
• Accessing scarce sources of alpha
• Constructed to deliver targeted return

Assets under been an improvement over the last quarter – 3/16 in latest AF Fund of Hedge Funds Survey

• R3 1bn at 31 March 2009
• Revenue generated from management and

performance fees Assets under Management

• R3.1bn at 31 March 2009
• 28% decrease from 31 March

2008 Market Conditions

• Significant declines, volatility

and uncertainty – good for funds of hedge funds

Multi Management

Review of Operations - Public Markets

190 15%

Brait Absolute South Africa Fund

• Generate Cash plus 4% p.a. over rolling

three year periods

• Limit volatility to less than 10% p.a.

130 160 5% 10% tive Returns ly Returns Monthly Returns Brait Absolute SA ALBI

`

Limit volatility to less than 10% p.a.

• Compound capital across all market

conditions Investment Philosophy

70 100

• 5%

0% Cumula Month

• Skilful diversification across multiple asset

classes, strategies, styles

• Identify talented managers

Managers must be complimentary Low correlations offer downside

300 350 Brait Absolute Cash All Bond Index

Low correlations, offer downside protection Good returns relative to risk

• Ensure appropriate risk management

infrastructure

150 200 250 All Share Index 100

Capital Management

Review of Operations - Public Markets

Business Model Value Drivers

• Integrated team of six experienced investment

professionals, who: Investment Performance

• Strong investment performance

esp from fixed interest disciplines

• collaborate to manage multi strategy

product

• perate independently to manage single

strategy funds specific to their expertise Assets under Management

• R1.4bn at 31 March 2009
• No change from 31 March 2008

strategy funds, specific to their expertise

• leverage a common operational platform
• Revenue generated from management and

performance fees and investment returns Premium Fees

• Management: 1% p.a.
• Performance: 10 – 30% of
• utperformance

Market Conditions

• Significant declines and volatility

Return on Capital Employed

Review of Operations - Public Markets

33% 35.0% 40.0% 45.0% 33% 27% 25% 25.0% 30.0% 6% 7% 19% 15% 16% 10.0% 15.0% 20.0% 6% 7% 6% 0.0% 5.0% ROCE LT ROE Long Term target

Profit from Operations

Review of Operations - Public Markets

700% 100.00 86.60 641% 600% 700% 80.00 90.00 100.00 369% 400% 500% 50.00 60.00 70.00 43.30 27.10 161% 200% 300% 30.00 40.00 7.30 8.30 8.21 9.24 10.39 11.69 1% 161% 0% 100% 0.00 10.00 20.00 1% Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Profit Target line (12.5% CAGR) Actual vs Target

Assets Under Management

Review of Operations - Public Markets

5.3 5 6 2 7 3.9 3.3 3 4 Rbn 2.7 2 3 0.3 0.4 0.4 0.5 0.6 1 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 AUM Target growth

Funds

Review of Operations - Public Markets

F d N AUM I t t St t T t R t O f Fund Name AUM 31 Mar 09 R’millions Investment Strategy Target Return Open for investment Brait Absolute SA Fund 3,115 Multi Strategy Fund of Hedge Fund Cash + 4% Yes Brait Multi Strategy 885 Multi Strategy Fund Cash + 8% Yes gy Fund gy Brait Cobalt Fund 290 Long/Short Equity Fund Cash + 6% Yes Brait Matrix Fixed Income Fund 137 Fixed Income Fund Cash + 8% Yes B it R b F d 21 E it Sh t Bi d C h 6% Y Brait Ruby Fund 21 Equity Short Biased Fund Cash + 6% Yes

Strategic Initiatives

Review of Operations - Public Markets Enhance investment performance Retain assets in Brait Absolute Raise assets behind performing products E d d t l ti l Expand product range selectively Expand investor universe Expand investor universe

Prospects

Challenge & Opportunity

Prospects Investors seeking structured and Tougher to find returns Reduced fair values of assets Investors seeking structured and hedge fund solutions Availability of private equity investments at attractive valuations Tougher to raise capital investments at attractive valuations f f Brait remains confident of its strategy and market position yet cautions that meeting of targets next year is unlikely.