1. 0 Claudia Quiroz Fund Manager Cheviot Sustainable Investment The Challenges of Constructing a Sustainability Fund Whose Brains? ESG Data and Intellectual Property London Accord - Autumn Conference October 2010

2. What You Should Know Before We Start The Speaker – Claudia Quiroz 10 years of fund management experience Sustainable & Responsible investment specialist The Company – Cheviot Asset Management Largest independent asset manager AUM £3.2 billion* The Fund – Climate Assets Fund Launched March 2010 Investment themes  Climate Change  Population Growth  Resource Scarcity 1 Climate Asset Fund * as at 30.09.10 Population – increase of 50% by 2050 Energy – increase demand of 50% by 2030 Food – increase of demand of 50% by 2030 Water – increase of demand of 30% by 2030

3. Challenges & Strategies of New Product Development Thinking Framework –My MBA Text Book Challenges of Developing a New Product –Analysing Industry & Competitors »identifying market segments & selecting market target –Identifying the Product’s USPs (Unique Selling Points) »differentiating & positioning the market offering –Understanding the Consumer’s Adoption Process »analysing buying behaviour 2

4. 1. Analysing Industry & Competitors 3

5. 2. Identifying the Product’s USPs Investment Strategy –Multi- asset / Multi-thematic –Reduce Volatility / Increase Liquidity Investment Process –Top-down –Bottom-up Capital Appreciation & Income –Dividends from equities –Interest Income from coupons 4

6. Innovation –The early adopter paradigm Track Record –The new product dilemma Outperformance –Past performance is not necessarily indicative of future performance 5 3. Understanding the Consumer’s Adoption Process

7. Why Should Investors Look At Sustainability Investing? Government Support -Economic growth & job creation Growth -High digits growth Consumer Preferences -Makes economic sense Source: HSBC estimates, government announcements, Cheviot Thematic Allocation of Green Stimulus (USD 512bn) 6

8. “Fund” is no different from any other product –General product development and marketing strategies Sustainability / Climate Change Investing is worth having –Growth is key differentiator Consider the “Climate Assets Fund” –Unique & innovative product 7 Key Takeaways

9. Disclaimer The information provided in this document are from sources that Cheviot considers reliable but Cheviot provides no guarantees as to the accuracy of this information. Information has been provided from different sources including: the International Energy Agency (www.iea.org), the Intergovernmental Panel on Climate Change (www.ipcc.ch) and the Food and Agriculture Organization (www.fao.org).www.iea.orgwww.ipcc.chwww.fao.org The investment views reflect the current views of Cheviot's Sustainable Investment team which are subject to change. The investments or services mentioned in this document may not be suitable for all investors or be appropriate for their personal circumstances. If you are unsure as to whether the investments described in this document are suitable for you, we strongly recommend you seek professional advice from a financial adviser. Past performance is not necessarily indicative of future performance. The value of investments and the income derived from them may fluctuate and you may not receive back the amount originally invested. Currency movements may also affect the value of investments. Cheviot Asset Management Limited is authorised and regulated by the Financial Services Authority and is a member firm of the London Stock Exchange.