1. Robert Waugh Scottish Widows Investment Partnership

2. “When a measure becomes a target, it ceases to be a good measure.” Professor Marilyn Strathern FBA

3. The Great Leap Forward

5. Sources of return

6. Annual returns of top decile pooled funds less returns generated by 90th percentile Chasing the herd Source: CAPS pooled report. % Return differential

7. The Old Model

9. Long/Short 100% Market Exposure 0% 100% Best Sells 100% Best Buys

10. Long/Short

11. Absolute Return Stocks Best Buy Ideas Selling Futures Market Exposure SWIP solution

12. Absolute Return Stocks Best Buy Ideas Selling Futures Market Exposure SWIP solution

13. Absolute Return Stocks Best Buy Ideas Selling Futures Market Exposure

14. Absolute Return

15. Fund return to date Source: SWIP, Datastream, Credit Suisse/Tremont 31 st December 2006 Based on daily data except for Credit Suisse/Tremont which is based on monthly data * FTSE All Share ** Credit Suisse/Tremont Hedge Fund Index: Long/Short Equity All data on annualized basis Gross of fees except for Credit Suisse/Tremont which is net of fees

16. Fund performance & largest drawdowns Source: SWIP, 31 st December 2006.

17. Current portfolio Source: SWIP, 11 th January 2007.

18. “When a measure becomes a target, it ceases to be a good measure.” Professor Marilyn Strathern FBA