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The global pathway to Australian investment solutions

About Australia November 2011

www.lmaustralia.com


A strong, profitable, sophisticated and well regulated financial sector: the largest sector within the economy.


The Australian Economy “A lot more to it than just the mining sector”

FINANCE/INSURANCE 10.8% GENERATED $A 121 BILLION

Manufacturing 9.1%

MINING 7.3%

Professional/Scientific Technical Services 6.5%

Agriculture/Forestry Fishing 2.8%

Construction 7.5%

Utilities 2.6%

Healthcare/ Social Assitance 6.3%

As a Percentage of Gross Domestic Product

Public Administration safety 5.5%

Transport/Postal Warehousing 5.4%

Other Services 15.7% Information Media Telecommunications 3.0% Rental/Hiring Real Estate Services 3.3%

Wholesale Trade 4.9% Retail Trade 4.9% Education 4.4%


Australia – Fast Facts n AAA Sovereign Credit Rating (Standard & Poor’s) n 4 of the world’s 8 AA-rated banks n 4th largest Managed Funds Industry in the world ($1.8 trillion) n The most resilient economy in the world 2011 n 20 Years of uninterrupted economic growth n SAFEST country in the world to invest in, alongside Canada, Norway & Switzerland (OECD)

Source: International Monetary Fund (IMF)


n BEST Performing Stock Market in the World (average 7.5%pa last 111 years) n 2nd largest Real Estate Investment Trust (REIT) market in the world n A higher GDP per capita than the US, UK, Germany, France, Canada or Japan n AUD is the world’s 6th most traded currency n AUD/USD is the 4th most traded currency pair

Source: National Agencies and Australian Bureau of Statistics


Australian Property: Size, Diversity and Performance Australia has one of the world’s best performing property markets, with strong demand continuing to drive prices in all sectors. With a naturally growing population and strong, qualified immigration, 200,000 new homes per year are required to satisfy demand. A housing shortage is expected to continue over the foreseeable future, as only around 150,000 homes a year are being completed, fuelling demand. Low unemployment and affordable loan rates continue to support a buoyant property market.

As a percentage of household income, affordability is at the same level as 2003. The government’s “First Home Owner Grant” encourages Australians to buy their own homes, fuelling demand. The sector is very diverse, due to state economic drivers. Different property asset classes can perform independently of the same asset class in different states of Australia.


The Australian Economy n The Australian economy’s performance during the global financial crisis has been unique among developed nations. n Australia was the only advanced economy to report positive through-the-year growth in the midst of the global crisis. n Australia has low levels of debt, currently at 5% of GDP. n The labour market has remained buoyant, with low unemployment. n Business and consumer confidence has remained strong and Australian businesses continue to employ workers and invest in capacity. n The strong underlying fundamentals of the economy mean the recent natural disasters have had a minimal effect on the national economy and property markets.

Source: Austrade

Australia’s strength and resillience provides a sound base for investment across the many diverse sectors


Australia is vast


Australia’s Area 7, 706, 168 sq km Europe’s Area 3, 483, 066 sq km

Darwin

Cairns

Broome

Townsville

Brisbane Gold Coast

Perth Sydney Adelaide

Distance between cities (km) Darwin to Perth 4,396 Perth to Adelaide 2,706 Adelaide to Melbourne 7,26 Melbourne to Sydney 887 Sydney to Brisbane 972 Brisbane to Cairns 1,748

Canberra

Melbourne

Hobart


Proven Economic Resilience The Australian economy has been one of the most resilient in the OECD during the global economic and financial crisis. The impressive results, which are only partially due to links to fast-growing China and India, have shown that the economy was well-prepared to face major shocks. Years of sound policies left ample room for monetary and fiscal policy to act rapidly and forcefully when the crisis struck. Source: OECD REPORT NOVEMBER 2010

 


Australia’s financial market is globally acknowledged as a model of responsible and prudential financial regulation.

COUNCIL OF FINANCIAL REGULATORS (COFR)

Reserve Bank of Australia (RBA)

Australian Prudential Regulation Authority (APRA)

Australian Securities & Investment Commission (ASIC)

n Monetary policy

n Prudential regulation of:

n Market integrity

n Systemic stability

- Deposit taking - Life and general insurers - Superannuation funds

n Consumer protection

n Payment systems

regulations

n Corporations

The Treasury

n Advice on economic and

financial issues, including: - Effective government spending - Taxation arrangements - Well functioning markets n Ensuring a sound

macroeconomic environment

LM Investment Management holds Responsible Entity and Australian Financial Services Licenses and is regulated by ASIC.


Australia as an Exporter Australia’s top 10 export destinations

Rank

Country

Total Merchandise exports

1

China

23.0%

2

Japan

18.5%

3

Korea

8.3%

4

India

8.0%

5

United States of America

4.8%

6

New Zealand

4.0%

7

United Kingdom

3.6%

8

Taiwan

3.4%

9

Singapore

2.5%

10

Thailand

2.3%

Source: International Trade in Goods and Services


Things you might not know about LM

n 100% Australian owned and operated n Privately owned and first registered as a Responsible Entity in 1998 n All funds offered and managed by LM carry only Australian assets n AUD $1 billion of Assets Under Management n LM is an income fund specialist n In Australia, LM is recognised as a reliable, conservative lender to the property sector n Since the inception of our mortgage income funds, LM has lent in excess of $5 billion into the Australian property market n Head office is on the Gold Coast in Queensland, Australia n LM has approximately 90 people on the team across 10 offices, in the Gold Coast, Sydney, Perth, Auckland, Queenstown, Hong Kong, Johannesburg, Bangkok, Dubai and London n LM clients worldwide are licensed intermediaries; we do not solicit investment from the public directly in any country n Our expertise is in Australian property and funds management n Deutsche Bank manages our structured products and underwrites the guarantees across capital and income n “Capital Guaranteed� Products have guarantee periods from 1 to 5 years n LM Income Funds generally outperform bank cash rates by approximately 2.25%pa n The most popular investment term for the Australian Income Fund & Managed Performance Fund is 3 years. Terms are available from 6 months to 5 years n Ernst & Young are our Fund auditors & accountants and PKF are our company accountants


The global pathway to Australian investment solutions


Find Out More About Australia Australian Trade Commission Australian Government trade and investment agency www.austrade.gov.au

Intellectual Property Australia www.ipaustralia.gov.au Find out more on Australia’s intellectual property system.

Reserve Bank of Australia www.rba.gov.au Monetary policy, financial market statistics, inflation.

Australian Governmentand Parliament www.australia.gov.au/topics/ government-and-parliament Central link to information regarding the Australiansystem of government.

Australian Prudential Regulation Authority www.apra.gov.au Information on the prudential regulation of the Australian financial sector, policy and statistics. Australian Securities and Investments Commission www.asic.gov.au Central link for information on the policies and activities of Australia’s corporate watch-dog.

Law and Justice www.australia.gov.au/topics/ law-and-justice Learn more about Australia’s legal system.


Contact Details United Kingdom 64 Knightsbridge London SW1X 7JF

Gold Coast - Head Office Level 4, 9 Beach Road Surfers Paradise QLD 4217 Australia

Sydney LM House 333 Sussex Street, NSW 2000, Australia

Perth Level 24, Allendale Square 77 St Georges Terrace Perth WA 6000

Tel: +44 20 7590 9624 Fax: +44 20 7590 9626

Tel: +61 7 5584 4500 Toll Free: 1800 062 919 Fax: +61 7 5592 2505

Tel: +61 2 8268 0100 Fax: +61 2 9264 8729

Tel: +61 8 6141 3150 Fax: +61 7 5592 4116

South Africa 94 St Andrews Jackal Creek North Riding Gauteng South Africa

Auckland Level 27, PWC Tower 188 Quay Street Auckland 1010 New Zealand

Queenstown Level 2 Steamer Wharf 88 Beach Street Queenstown 9300 New Zealand

United Arab Emirates Level 42 Emirates Towers Dubai, UAE

Tel: +27 82 743 4482 Fax: +27 11 469 1606

Tel: +64 9 363 2901 Toll Free: 0800 255 628 Fax: +64 9 363 2938

Tel: +64 3 409 0387

Hong Kong Suites 3807-3808, 38/F Two International Finance Centre, 8 Finance Street Central Hong Kong

Thailand 2105, Interchange 21, 399,Sukhumvit Road, Klongtoey-Nua, Wattana, Bangkok 10110

Tel: +852 2501 0262 Fax: +852 2530 1076

Tel: +66 2661 7968 Fax: +66 2667 7285

This is not a PDS, it is simply an explanatory statement about Australia & LM

Tel: +971 4 313 2330 Fax: +971 4 313 2385


The global pathway to Australian investment solutions