1. Baring Asset Management Limited 155 Bishopsgate, London EC2M 3XY Authorised and regulated by the Financial Services Authority Tel: +44 (0)20-7628 6000 Fax: +44 (0)20-7638 7928 www.baring-asset.com Fondsprofessionell Fondskongress Mannheim 2. Feburar 2006 Nicholas Williams Auf der Suche nach neuem Potenzial: Outperformance mit europäischen Nebenwerten

2. 2 Relative performance Small Cap vs Large Cap Since 1/1/1999

3. 3 Relative Performance Small Cap vs Large Cap Since 1/1/1990

4. 4 Why European Mid and Small Cap?  Small and Mid Caps have generated higher return, with comparable volatility to large caps  European and UK Small and Mid Cap returns and volatility very comparable Source: Baring Asset Management; Factset chart November 2005, based on index returns for last 7 years Risk and Return (EUR)

5. 5 Smaller Companies – Riskier than larger companies? Source: Cheuvreux

6. 6 Smaller Companies – Riskier than larger companies? Source: Cheuvreux

7. 7 Valuation Small vs Large (Europe) MSCI Europe ex UK HSBC Europe ex UK Small Cap Premium P/E 200614.65x19.17x+30.8% P/E 200713.34x15.81x+18.5% P/B2.48x2.20x-11.3% EPS Growth 06/05 9.54%16.6%+7.06pp -74% ROE18.5%13.9%-4.6% +24.9% EV/EBIT11.03x13.4x+21.5% Dividend Growth 05/04 10%9%-1pp +10% Source: UBS, Factset

8. 8 Small Cap Premium – Forward P/E Source: Cheuvreux

9. 9 Structural Changes in European Equity Markets Improved disclosure standards Corporate tax rate declining Competition for investor attention Improved financing More active M&A environment Decreased power of labour Improved liquidity

10. 10 Structural Changes Labour Costs Source: UBS smallcaps charts Labour costs as a percentage of sales

11. 11 Small er Companies – Financing and M & A Attractions Eurozone equity free cashflow yield v average iBoxx € BBB credit yield Source: UBS estimates; CreditDelta (UBS)

12. 12 M&A SmallcapMidCapLargeCap $m Deal Value# # # 2000113,164.74781122,064.1091210,681.3761 200171,251.9960244,031.7344118,654.4344 200278,577.0657661,773.396977,712.4531 200372,186.9964359,765.5567106,544.4442 200475,392.0157949,297.4566164,083.1839 200567,078.1650964,253.8374255,841.8679 Subtot al 477,650.943,690401,186.04411933,517.73296 Total477,650.943,690401,186.04411933,517.73296 Source: Dealogic, UBS estimates. M&A deals by size of target company.

13. 13 Sector Variations – Small cap vs. Large Cap MSCI Europe ex UK Large Cap MSCI Europe ex-UK Small Cap Difference Industrials9.7524.6814.93 Consumer Discretionary 16.729.916.81 Information Technology 11.805.895.92 Materials8.016.271.74 Energy6.817.15-0.35 Consumer Staples6.258.06-1.81 Health Care6.559.67-3.12 Telecommunicat-ions Services 0.896.61-5.72 Financials17.4630.60-13.15 source: Factset, Baring Asset Management

14. 14 Market inefficiencies increasing EU – Number of stocks researched down 15% from 2002 Source: Citigroup Small Cap Panorama February 2005 Analyst Coverage Source: Financial Times 8 th November 2004

15. 15 Some Examples Sell-side Analyst Coverage remains low despite good returns Jan 200620052004 Banco Pastor755 FBD Holdings41N/A Mariella Burani835 Source: Factset, Baring Asset Management

16. 16 Example – Current Holding Banco Pastor S.A  Spanish domestic retail bank network.  Initial purchase on 24/2/05 at €26.9. Target price €45.  Valuation ignored strong growth, strong B/S, speculative appeal.  New 5 year plan announced December.  Market Cap €2,848m Source: Factset January 2006 See Important Information

17. 17 Example – Current Holding FBD Holdings  Irish domestic P & C insurance group.  Initial purchase 23/3/05 at €21. Target price €28.  Valuation ignored strong cash generation, low combined ratio, capital strength, organic growth.  Target price revised to €41 19/12/05 based on continued growth, Irish P & C market and combined ratio.  Market Cap €1,517m Source: Factset January 2006 See Important Information

18. 18 Example – Current Holdings Mariella Burani Fashion Group See Important Information Source: Factset January 2006  Italian fashion retail and apparel group  Initial purchase 13/10/05 at €11.79. Target price €16  Strong management with venture approach creating value  Corporate restructuring ongoing highlights discount  Market Cap €378m

19. 19 Why Smaller Companies? Stock specific factors have a far greater impact on the returns of smaller companies Proportion of performance related to stock specific as opposed to macro factors Source: Citigroup Small Cap Panorama March 2005  90% of small companies’ historic returns have been driven by stock specific factors  Only 10% of smaller companies’ historic returns have been driven by macro factors  A bottom-up investment style addresses the key drivers of smaller companies’ returns

20. 20 Baring Europe Select Trust Performance as at 30 th December 2005 1 Jahr3 Jahre * (%p.a.) 5 Jahre * (%p.a.) Quartile111 Source: Baring Asset Management, Standard & Poor’s. (bid to bid, in Euro, with net income reinvested), as at 30/12/2005. Baring Europe Select Trust is a UK Authorised Unit Trust managed by Baring Fund Managers Limited (authorised and regulated by the Financial Services Authority). Index is HSBC Smaller Companies Europe ex UK. Reference to the benchmark is for comparative purposes only. * Annualised. Median fund refers to the median fund listed within the peer Group as defined by Standard & Poors. Standard & Poor’s: *****