1. Finasta © 2014
Opportunities in Emerging Europe: from growth
in Baltics to value in CEE
Finasta Asset Management, 2014

2. Finasta © 2014
Eastern Europe:
pick the most delicious one

3. Finasta © 2014
Finasta group
• Finasta Russia TOP20 Fund
• Finasta Emerging Europe Bond Fund
• Finasta Baltic Fund
• Finasta New Europe TOP20 Fund
The highest 5 Star rating is assigned only to 10 percent of the best performing funds within the same investment strategy group.
• Best equity and fixed income portfolio manager in Lithuania
Finasta provides the best customer service in Lithuania:
- Customer service satisfaction – the highest quality level (97,8%)
- 98% clients would recommend FINASTA to others

4. Finasta © 2014
Eastern European similarities
• EU membership
Year 2004, 2007 and 2013
• Lower GDP
GDP per capita at 58% of Westen Europe average
• Historical and potential economic growth
10 years growth : Eastern Europe 5.4%;
Western Europe 2.1%
• Low public debt
Eastern Europe 49.9%; Western Europe 85%

5. Finasta © 2014
Each country has different story
Size
Economic structure
Economic development
Economic cycle

6. Finasta © 2014
Non-correlated opportunities
Sweden
USA 0,67
Poland 0,66
Czech 0,64
Baltics 0,56
Hungary 0,49
Romania 0,48
Turkey 0,39
Serbia 0,24

7. Finasta © 2014
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2010/12/31 2011/12/31 2012/12/31 2013/12/31
Standard deviation:
Fund: 15.6%
Index: 22.0%
Alpha 3%
Beta 0.54
Finasta New Europe TOP20 vs benchmark

8. Finasta © 2014
Eastern Europe:
pick the most delicious one

9. Finasta © 2014
12000
14000
16000
18000
20000
22000
24000
26000
28000
30000
2010/02/09 2010/09/09 2011/04/09 2011/11/09 2012/06/09 2013/01/09 2013/08/09
HUF/share
Ev/EBITDA 3.2
P/E 7.1
+50% on the debtless
pharmaceuticals company
acquired by French Servier
Indebted Hungary: Egis

10. Finasta © 2014
0.4
0.5
0.6
0.7
0.8
0.9
1
2011/01/26 2011/07/26 2012/01/26 2012/07/26 2013/01/26 2013/07/26 2014/01/26
RON/share
Fondul Proprietatea
IPO worth
>6 bn EUR:
Fondul
Nuclearelectrica
Romgaz
SPO worth
<100m EUR:
Transgaz
Transelectrica
2010-2013
pension funds‘
AUM up
6x
Discount from
NAV >60%
Collecting
Fondul shares
Poor Romania: IMF restructuring

11. Finasta © 2014
- Bottom-up analysis + stock picking is the best and the only
approach investing in Eastern Europe
- Low correlation among the Eastern European countries
allows to truly diversify in a strong growth and low debt region
Finasta New Europe TOP20
• Morningstar
• EUR denominated
• UCITS compliant
Eastern Europe

12. Finasta © 2014
Golden colors
of Baltics

13. Finasta © 2014
Fastest growing region in EU, 2013
>3%
0-3%
<0%

14. Finasta © 2014
Scandinavian presence

15. Finasta © 2014
• Singapore1
• Sweden12
• Lithuania17
• Germany21
• Estonia22
• Latvia24
• Switzerland29
• Austria30
• Italy65
Doing Business Economic freedom
• Hong Kong1
• Estonia11
• Sweden20
• Lithuania21
• Austria24
• Latvia42
• Spain49
• France70
• Italy86
Favorable business environment

16. Finasta © 2014
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0
Western Europe
Eastern Europe*
Latvia
Lithuania
Estonia
Public debt

17. Finasta © 2014
Golden colors
of Baltics

18. Finasta © 2014
2013: 23%
2012: 2%
2011: 19%
2010: 53%
Sales
growth:
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2011/08/18 2012/01/18 2012/06/18 2012/11/18 2013/04/18 2013/09/18 2014/02/18
EUR/share
Ev/EBITDA 5.9
P/E 6.9
Ev/EBITDA 5.8
P/E 6.6
Best picks: dairy company Vilkyškių Pieninė

19. Finasta © 2014
0.4
0.45
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
2011/03/24 2011/08/24 2012/01/24 2012/06/24 2012/11/24 2013/04/24 2013/09/24 2014/02/24
EUR/share
2013: 14%
2012: -6%
2011: 25%
2010: 107%
Sales
growth:
Ev/EBITDA 5.6
P/E 12.6
Ev/EBITDA 5.8
P/E 12.2
SPO 0.51
EUR/share
Best picks: paper products from Grigiškės

20. Finasta © 2014
Performance (since
2013):
Finasta: 15.1%
Danske: 14.2%
East Capital: 13.3%
Standard deviation:
Finasta: 6.3%
Danske: 5.7%
East Capital: 7.5%
Management fee:
Finasta: 2%
Danske: 2.4%
East Capital: 2.5%
100.00
102.00
104.00
106.00
108.00
110.00
112.00
114.00
116.00
118.00
2012/12/31 2013/07/01 2014/01/01
Finasta Baltic Fund
Eastcapital Baltic Fund
Danske Baltic fund
Finasta Baltic fund: performance

21. Finasta © 2014
- Baltic countries are the shining star of the region with
superior growth potential and favorable business environment
- High quality companies provide a safe option for investment
appreciation
Finasta Baltic Fund
• Morningstar
• EUR denominated
• UCITS compliant
Finasta Baltic Fund

22. Finasta © 2014
22