S.AG Private | Profile

Company Profile

ABOUT S.AG PRIVATE

Located in the South Pacific Ocean, New Zealand appears small on a map, however we know it’s as diverse as several continents rolled into one. We see New Zealand as the most beautiful country in the world, small in size but not in heart. Our independence at S.AG Private mirrors that of our nation – we have strong ties with the companies who support us but are proud to operate as an independent company, free from the constraints of the traditional corporate world.

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S.AG Private & Co Limited and our panel of advisers have many years of experience in the New Zealand Financial Markets, in a variety of roles, with a number of major corporations. We have come together with the shared belief that we can offer clients a more personal service by understanding their needs and using our experiences and contacts but most importantly by putting clients’ needs first.

At S.AG Private, our primary focus is to help our clients reach their financial goals. We work continuously to improve our approach, focusing on bringing together the people, philosophy and process to serve each clients’ unique financial needs and aspirations.

Our independence allows us to offer our clients a wide range of financial products from a variety of sources, which avoids the potential for conflict of interest. We are New Zealand owned and operated which gives us a unique insight into the needs of our domestic clients.

Clients are at the centre of everything we do, and can be assured that we are compensated with the alignment of our shared interests in mind. Our staff are remunerated by salary and overall company performance rather than commissions.

We work with our clients to understand their needs, goals and aspirations, and develop portfolios that are individually tailored to meet the specific needs of each and every one of them.

At S.AG Private we advise clients on the suitability of their investments to meet their needs.

Ian Witters – Managing Director.

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OUR APPROACH S.AG Private provides a customised and personalised service for individuals, trusts and institutions looking for tailored investment advice. We aim to establish and build a lasting relationship with you and your family based on trust, quality advice and results.

Each client is unique, and our offering takes into account the different life stages and requirements of each of our clients. We will spend time getting to know our clients – we know and value every one of them as people, not numbers.

Our investment advisory and portfolio solutions include both retail and wholesale: DISCRETIONARY SERVICE: We can offer clients a full

discretionary service for simplicity.

ADVICE FOR TRUSTS: We offer tailored advice for both

Trusts and Trustees.

ESTATE PLANNING / SUPERANNUATION: Together

with our panel of advisers we work with clients taking into account their needs, now and in the future.

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TAX: We endeavour to position client portfolios in the most

tax efficient manner, introducing our clients to tax experts as required.

BUSINESS ADVISORY: Our extensive network allows us

to introduce clients to business advisers of various levels to help with capital raisings, business restructuring or sale and purchase opportunities.

Independence S.AG Private is proud to be ‘independent’. For clients this means: • Not affiliated – can provide the most appropriate product(s) for our clients • No multi-national ownership – do not provide products where we are conflicted • Transparency - rebate all fees and commissions paid by product providers, which avoids concerns that advice is not always aligned with clients best interests • Remuneration – salaried staff not commissioned • No volume related sales incentives with product suppliers.

STRENGTH & SECURITY We strive to act with integrity, responsibility, fairness, transparency and discretion at all times in order to secure the trust of our clients. The way we interact with our clients is fundamental for our business and our success.

Clients can have confidence in our business model which outsources key operations to financially strong partners. Independence of the custodial and reporting function is an absolutely critical part of the investment management service that S.AG Private provides. Our investors’ funds are held with Investment Custodial Services Limited and administered by Aegis Limited, which have in excess of $8 billion of assets under management, and are owned by ASB Bank Ltd. All client assets are held in a bare trust. “A bare trust is one where the beneficiary has an immediate and absolute right to both the capital and income held in the trust.”

This gives clients confidence their investments are always held for the beneficial owner. We provide clients with the ability to access their own account via the internet, which in turn enables clients to access a current valuation of their assets, dividend/distribution records, corporate actions and a complete taxation report which can be also forwarded to their accountant if they so wish.

Security As part of the security infrastructure for S.AG Private, we have adopted a series of security measures that are consistent with recognised best practice. We use X-Plan as our CRM (Customer Relationship Management), which is owned by Iress Limited, an A$1 bn ASX listed company.

Clients can have confidence their personal records are safe and will be protected for future access if required.

Client/Investor Advice, Planning & Investment

$$ Funds can only go between client and custodian

S.AG Private Instruction

At S.AG Private all clients’ funds go directly from the client to the custodian, from where any subsequent investments are made. Any redemption of cash can only go back to the nominated client bank account.

Reporting Investment Custodial Services Limited and Aegis Limited

Custody

Administration

Reporting (incl. Tax Reports)

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INVESTMENT PROCESS At S.AG Private, we use a structured investment process, and take time to understand the clients’ needs, goals and aspirations. We then develop a financial concept to meet their goals, incorporating all relevant data in the client profile. Prior to implementing any investment plan, clients open accounts with Aegis (our custodian) and S.AG Private. We will work with clients to make this process as simple as possible.

A key point of the investment process is setting the correct ‘asset allocation’. Using information and data from trusted global research houses, our asset allocation experts and S.AG Private Advisers develop and regularly review asset allocation strategies.

One of the most important parts of the investment process is regular reviews to ensure the investments are meeting expectations. Where possible we like to personally meet with each client regularly to review performance and goals.

Based on this information, our experts determine the optimal mix of asset classes across geographic regions, sectors and themes in our investment recommendation.

It is also very important that our clients confirm at least annually to our advisers that their investment goals and objectives remain appropriate.

Needs analysis and risk profile

Monitoring and reviews

Evaluation Client

Obtaining agreement and implementation

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Strategy and recommendation

ABSOLUTE RETURNS Absolute return investing aims to produce a positive return over time, regardless of the prevailing market conditions. Even when markets are volatile, flat or falling, an absolute return fund still has the potential to make money. As the objective is to deliver positive returns in good and bad times, absolute return funds can provide valuable diversification to a portfolio of traditional equity and bond investments.

The strategies absolute return fund managers use are less constrained than those of the long-only manager. For instance, they may ‘short-sell’ as part of their investment approach, a technique not used by long-only managers. Absolute return strategies can also be more complex than that of traditional portfolios. The way the absolute return fund manager is remunerated is more closely aligned with the performance of the fund than traditional relative performance measures adopted by other fund managers.

Some important factors S.AG Private considers when choosing an Absolute Return Fund Manager: • MANAGER EXPERIENCE • ALIGNMENT OF INTEREST • RISK MANAGEMENT • PROCESS • OWNERSHIP • PERFORMANCE/TRACK RECORD • TRANSPARENCY • FEES

We believe that with continued uncertainty over the prospects for domestic and global equity markets, the increased versatility of an absolute return strategy, and its potential for sustainable performance irrespective of wider economic conditions, make this approach a highly compelling alternative to the traditional approach for investors.

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RESEARCH & INSIGHTS The success of our portfolios relies on upto-date and accurate investment and market research. The fund managers we recommend dedicate significant time and resource to this core function. Research information is sourced from New Zealand and International research houses, specialist seminars, company visits, and international travel.

We have built strong relationships with a number of service and product providers and our clients benefit from our non exclusive or preferential terms with any single one product or service provider.

Because of our independence, we are free to select products and providers openly from the market place, allowing us to keep our clients’ best interests as our top priority.

At S.AG Private we believe that active management gives clients better returns than passive management. Clients understand that strong active management can be the difference between profit and loss in commercial business. We believe the same principle applies to “fund management”. We select managers on their track record, their investment philosophy and also ensure that the fund they represent fits with our overall economic view. Generally we favour funds that have a core objective of ‘absolute returns’ over relative performance. This means that the fund manager’s utmost responsibility is generating positive returns regardless of market conditions.

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S.AG Private offers a broad range of products, managed by experts in their specialised fields, these include: New Zealand Equities & Fixed Interest, Opportunistic Offerings (e.g. Initial Public Offerings & placement stock), International Equities, Global Equity Funds, Global Bond Funds, Income Funds, Hedge Funds, Absolute Return Funds, Sector Funds, Agricultural Funds, Geographic Funds, Emerging Markets Funds, Private Equity offerings, Venture Capital offerings, Specialist Funds, Alternatives, and Commodity funds.

At the core of our philosophy around investment is that you need to be an expert in your chosen field. We believe there are so many different geographic regions, economies, investment sectors and investment types that to get the best return, we need experts who monitor the underlying investments constantly, and who are remunerated on their performance.

We are great believers in backing those with “skin in the game”.

UNIQUE OPPORTUNITIES WITHIN NEW ZEALAND While New Zealand is a very small economy when compared with other global economies, it does offer investors great opportunities. Overall the New Zealand economy is well placed due to its agricultural output and growing global demand for quality food products especially from the developing Asian markets.

investors a great opportunity to be part of this exciting phase of New Zealand’s commercial development.

New Zealand’s clean green status has given many of our companies a market edge which is likely to continue in the future.

Unique investment opportunities are something that are often hard to access. We aim to identify unique opportunities, research them and where satisfied, suggest to appropriate clients that they might consider making an investment.

Time horizons and liquidity can vary greatly, but returns can be very rewarding.

Our so called isolation has turned out to be a bonus in keeping our country free from most unwanted pests and disease. The rapid improvement in communication has meant business can be based in New Zealand yet operate anywhere across the globe. These new and growing businesses often look for outside equity capital to allow them to fulfil their true potential, which gives

At S.AG Private we understand the New Zealand market and recommend investment, both short term and long term to suit clients’ needs. A key consideration is the tax implication of investments and this can often mean that New Zealand investment opportunities are more attractive than others. This can especially be the case with fixed interest offerings.

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GLOBAL PERSPECTIVES From forestry and agriculture in New Zealand, residential property in the United States, equities in Japan, or property in Asia, we look for the uniqueness and quality of the investment opportunities. Our independence allows us to work with leading financial experts and institutions to offer researched investment opportunities across geographies, sectors and industries.

Economies are cyclical in nature, with times of expansion and contraction. These cycles can be global, industryspecific or limited to a specific country or geographic location. By investing globally, the risk of being impacted by a downturn in the market is decreased. Even in the event of a global recession, there are still good opportunities for growth in companies that provide products and services required to meet a genuine need.

Our Clients enjoy access to a world of expertise and opportunity, and receive an exceptional level of personal service that simplifies and enhances their financial life.

At S.AG Private we recommend clients think globally when investing. Taking a ‘portfolio approach’ means ‘not having all ones eggs in the same basket’. The New Zealand economy is small. According to a survey done by the World Bank in

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2012, New Zealand ranked 56th with GDP of USD$169.7 billion compared with a world GDP of USD$71.6 trillion (NZ = 0.2% of global GDP).

To invest in these global economies we recommend using fund managers who understand and know these economies well. We look at each region’s growth expectations and the risks associated with them, then tailor recommended solutions accordingly.

The turmoil caused in recent years from the GFC was mainly a “Western” phenomenon and primarily caused by excessive debt, especially around property. Asia continues to grow and their banks have come through this mainly unscathed. Approximately 90% of the world’s population is in the developing nations, and we believe these regions will offer good investment opportunities for the future.

Comparative GDP figures ex World Bank Survey 2012 6th - United Kingdom (US$2.44 trillion)

11th- Canada (US$1.82 trillion) 9th - Italy (US$2.01 trillion)

15th South Korea (US$1.13 trillion) 7th - Brazil (US$2.25 trillion)

3rd - Japan (US$5.96 trillion)

8th - Russia (US$2.02 trillion)

5th - France (US$2.61 trillion)

13th - Spain (US$1.35 trillion) 4th - Germany (US$3.40 trillion)

14th Mexico (US$1.18 trillion) 1st - United States (US$15.68 trillion)

10th - India (US$1.84 trillion)

12th - Australia (US$1.52 trillion)

2nd - China (US$8.23 trillion)

56th New Zealand (US$140 billion – US$0.14 trillion)

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PRESERVING WEALTH Intergenerational Investing We recognise how hard our clients have worked to build their wealth. We also recognise the complexities that can be associated with significant assets and the challenges of preserving what they have built. Wealth created by one generation needs to be protected from short term actions if it is to be left as an “intergenerational� legacy. Making sure our clients’ wealth is protected and managed so it benefits them and those most important to them is just as crucial as growing it.

We work with family office structures, which often have long term investment horizons, consolidating portfolios and reviewing portfolios to ensure that the overall objective of the organisation is intact and that the underlying assets and managers are performing in accordance with their mandates.

S.AG Private and our panel of advisers can help clients set up structures and recommend long term investments with this in mind. Without serious planning, the required result of leaving intergenerational assets as a legacy, is unlikely to be achieved.

We understand that our clients have taken diverse paths to achieve their financial success. We believe that wealth management is about generations of wealth and not just generating wealth. With our dedication and expertise, we are committed to helping our clients achieve their goals.

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Philanthropy We find that clients, whether that be individuals, trusts or families, often have a strong commitment to “giving back” in a range of different ways – whether by supporting the local neighbourhood, a treasured educational facility or society at large. In a world where there is increasing pressure on governments to be financially responsible, budgets for sound projects are receiving less and less funds. To fill this void, charitable organisations are relying more and more on the generosity of individuals and their philanthropic actions.

We can incorporate clients’ philanthropic pursuits into their overall wealth strategy. We understand that philanthropy can form an intrinsic component of their overall financial portfolio – from ethical investments to the transparent structure of the foundations they support. Together with our Panel of Advisers we can help clients structure their investments so they receive the tax treatment most beneficial to their charitable objectives.

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S.AG PRIVATE PANEL OF ADVISERS S.AG Private has formed strong professional relationships with many experts in their chosen field. The process that we have developed relies on strong relationships; and we are aligned with a group of top advisers who share the same principles and philosophies.

PAUL BURBIDGE is the New

Zealand Manager for an Australiabased global investment firm, providing invaluable perspectives from a range of global investment partners, across asset classes and investment solutions. With experience gained from senior positions within investment management and his own advisory business, he provides assistance across all facets of investment management.

CLAYTON COPLESTONE has

been working in the Financial Services industry since 1984, with a background in share broking, money markets, financial planning and asset management. After spending 13 years in Sydney and Hong Kong with several leading financial institutions, Clayton returned to Auckland and now heads up a fund distribution business.

COUILLAULT has more than 20 years of experience in financial markets. Warren joined Fisher Funds in 2002. He was a shareholder, director and Chief Investment Officer at the time he left the company in early 2008.

Since then Warren has focused on selective private, direct investments.

WARREN

MCHARDY was the marketing executive at Macquarie Private Wealth New Zealand before moving to London to work for NYSE Euronext. She is currently based in Australia and has taken on the role as marketing adviser on the S.AG Panel of Advisers.

NINA

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PAUL MERSI is a New Zealand-

based company director, consultant, mentor, speaker, and media commentator. His commercial background includes 16 years as a senior Financial Services & Tax partner with PricewaterhouseCoopers. Paul is the Chairman of Grow Wellington Limited, and is also the Independent Non-Executive Director of Brook Asset Management Limited.

BARRY READ is the Managing

Director of Independent Development Solutions Limited who are the compliance partners for S.AG Private. Barry has been in the industry since 1987 with a background in corporate roles for insurance and investment companies.

Barry is also a previous Branch Chair and Council Representative of the IFA and has worked as a subject matter expert for numerous industry organisations.

DR ED SCHUCK is principal of

Fidato Advisory Ltd, a provider of investment consulting services to institutional investors and selected wealth management businesses.

He has worked in the investment industry since 1986 and completed his PhD in portfolio management at the University of Auckland in 2002.

Dr Schuck’s experience includes seven years as a Senior Lecturer at the University of Auckland, nine years as Managing Director at Russell Investments and four years as principal of Fidato.

COMPLIANCE & GOVERNANCE Committed to Compliance

Corporate Governance

We place utmost care on ensuring that our staff maintain the highest standards of compliance with all legal, regulatory and internal requirements. S.AG Private is a registered Financial Service Provider (FSP301946), and we are a member of the Financial Services Complaints Limited (FSCL) dispute resolution scheme. Our staff are required to observe strict standards of professional conduct at all times. Compliance considerations are critically important when selecting employees, developing training tools, defining processes and rules and are a vital element of all our supervisory and control systems. We contract out our compliance advice to external consulting firms. At S.AG Private we believe that compliance underpins our industry, and it gives investors’ confidence in the integrity of the financial markets and participants.

At S.AG Private we see corporate governance as a major responsibility of all members of the company. As the company grows, it is our intention to bring on Independent Directors to ensure that the company is compliant with all its regulatory and legal responsibilities as well as considering its responsibilities to all stake holders, whether they be shareholders, staff, clients or suppliers.

Legal disclaimer – Things you need to know: The material in this document is provided for general information purposes only and is not a recommendation or opinion in relation to any of S.AG Private’s products or services. You should not rely solely on the information in this document. Terms, conditions, fees and charges apply to S.AG Private’s products and services. For more details, please refer to the relevant brochures, disclosure documents, www.sagprivate.co.nz or your Authorised Financial Adviser. Investments made in any managed funds do not represent any liabilities of S.AG Private & Co. Limited. They are subject to investment and other risks, including possible delays in payment in withdrawal amounts in some circumstances, and loss of investment value, including principal invested. No member of the S.AG Private, or any other person guarantees the managed funds’ performance, returns or repayment of capital. You can get a copy of the current disclosure statement for S.AG Private and a copy of the investment statement for any securities for which an investment statement is required from S.AG Private free of charge. Disclosure Statements for S.AG Private Financial Advisers under the Financial Advisers Act are available on request and free of charge from any S.AG Private Financial Adviser.

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S.AG Private & Co. Ltd | PO BOX 105 198, Auckland 1143 | Ph: +64 9 972 9055 | www.sagprivate.co.nz