Beyond the BRICs – an allocator’s dilemma Roelof Horne, Portfolio Manager

Page 2 | CONFIDENTIAL 10818

● Founded in 1991, in South Africa, by current leadership

● $100bn under management ● Origins are African – presence and

perspective is global ● Invest in frontier and emerging markets

globally, with a focus on Africa ● One of the largest third party investors

in Southern Africa with over US$40bn under management, and in Africa (ex SA) with over US$2.9bn invested in Public and Private Equity and Fixed Income

Investec Asset Management Frontier and Emerging Market capability

Page 3 | CONFIDENTIAL 10818

China18%

Korea15%

Brazil13%Taiwan

11%

South Africa8%

India7%

Russia6%

Smaller Emerging Markets

22%

-70.0

-60.0

-50.0

-40.0

-30.0

-20.0

-10.0

Jun 02 Feb 04 Oct 05 Jun 07 Feb 09 Oct 10 Jun 12

% D

raw

dow

nS&P 500MSCI EM (EMERGING MARKETS)

Drawdowns in MSCI Emerging Markets Index MSCI Emerging Markets Index Exposures

Benchmarking to a “traditional” measure like the MSCI Emerging Markets: ● Leads to a focus on large emerging markets leaving a large potential universe

untapped ● Has led to concentration – 7 countries account for 78.0% of the index; 14 countries

represent 22% ● Has resulted in volatility – a monthly return of -10.0% or greater, on average, every 16

months

Source: FactSet, Zephyr Style Advisor MSCI, as of 30 June 2012

Page 4 | CONFIDENTIAL 10818

Horizon Markets: a complementary solution

● Smaller emerging and frontier markets have outperformed large emerging markets 50% of the time

Best Performing

Worst Performing

Source: Standard & Poor’s & MSCI. All returns are taken from the S&P indices for 1998 to 2010. 2011 data is for MSCI, these are comparable indexes. For Large Emerging and Smaller Emerging Markets Investec has simulated returns using country indices and historical market capitalization. Large Emerging Markets are >5% of the MSCI Emerging Markets Index, Smaller Emerging Markets are <5% of the MSCI Emerging Markets Index, Frontier Markets comprise MSCI Frontier Markets Index constituents plus Investec Asset Management’s custom group of countries.

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Frontier Large EM Frontier Large EM Frontier Large EM Frontier Large EM Large EM Large EM Smaller EM Large EM Smaller

EM Smaller

EM

-13.4% 82.7% 3.5% 4.4% 39.1% 62.1% 49.6% 38.7% 41.3% 46.6% -45.4% 96.3% 34.1% -12.3%

Smaller EM

Smaller EM

Smaller EM Frontier Smaller

EM Smaller

EM Smaller

EM Smaller

EM Frontier Frontier Frontier Smaller EM Frontier Frontier

-24.0% 61.7% -26.9% -1.6% 6.0% 55.6% 40.0% 29.2% 35.9% 45.5% -53.7% 64.2% 22.8% -18.7%

Large EM Frontier Large EM Smaller EM Large EM Frontier Large EM Frontier Smaller

EM Smaller

EM Large EM Frontier Large EM Large EM

-27.1% -5.6% -36.4% -6.5% -8.7% 39.9% 18.8% 18.2% 30.8% 32.1% -56.1% 12.6% 17.1% -19.9%

Page 5 | CONFIDENTIAL 10818

Horizon Markets An initial universe of 40 countries

Source: Investec Asset Management as at 31 December 2011 *Investec Asset Management designated frontier markets not included in MSCI Frontier Markets Index

Smaller Emerging Markets Frontier Markets

Asia Malaysia Bangladesh Indonesia Pakistan Thailand Sri Lanka Philippines Vietnam

Latin America Mexico Argentina Chile Panama* Peru Trinidad & Tobago* Colombia

Eastern Europe & Central Asia Turkey Croatia Romania Poland Estonia Slovenia Hungary Kazakhstan Czech Republic

Middle East Bahrain Oman Jordan Qatar Kuwait Saudi Arabia* Lebanon UAE

Africa Egypt Botswana* Nigeria Morocco Kenya Tunisia Mauritius Zimbabwe*

Page 6 | CONFIDENTIAL 10818

Horizon Markets on the map Investable public equities markets

Source: Investec Asset Management, FactSet, as of 31 December 2011

Horizon Markets initial investable universe

No. of countries 40

No. of stocks listed 994

Market capitalization ($tr) 3.1

Daily value traded ($bn) 4.8

Page 7 | CONFIDENTIAL 10818

Smaller markets; not small cap stocks

● The investable universe is composed of 40 Horizon Markets with (i) 994 stocks, (ii) a market capitalization of $3.1 trillion and (iii) a daily value traded of $4.8 billion

Smaller Emerging

Markets in MSCI EM Index

MSCI Frontier Markets Index Horizon Markets

No. of countries 14 25 40

No. of listed stocks 226 153 994

Market capitalization ($Trillion) $1.7 $0.4 $3.1

Daily value traded ($Billion) $3.1 $0.2 $4.8

Source: Investec Asset Management, FactSet, as of 31 December, 2011

Horizon Markets’ Market Capitalization # of Stocks Market Cap

($US) % of Total

Stocks greater than $5.0 bn 169 2,026.4 65.1%

Between $2.0 bn - $5.0 bn 178 560.4 18.0%

Between $1.5 bn - $2.0 bn 80 140.5 4.5%

Between $1.0 bn - $1.5 bn 110 135.9 4.4%

Subtotal 537 2,863.2 92%

Between $0.5 bn - $1.0 bn 230 165.3 5.3%

Between $0.25 bn - $0.5 bn 227 82.2 2.6%

Total 994 3,110.6 100%

Page 8 | CONFIDENTIAL 10818

Consumer Discretionary

Consumer Staples

Energy

Financials

Health Care

Industrials

Information Technology

Materials

Telecommunication Services

Utilities

Horizon Markets

MSCI Emerging Market Index

Consumer Discretionary

Consumer StaplesEnergy

Financials

Health CareIndustrials

Information Technology

Materials

Telecommunication Services

Utilities

7%

9%

11%

13%

15%

17%

19%

21%

23%

25%

27%

12% 17% 22% 27% 32%

Ret

urn

Risk

Horizon Markets SectorsMSCI Emerging Markets Sectors

-2%

74%

46%56%

1%

42%

-49%

55%

35%

-4%-3%

58%

26%35% 32%

40%

-53%

79%

19%

-8%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Horizon Markets

MSCI EM

Horizon Markets return profile versus MSCI EM

Risk/return profile Horizon Markets’ Sectors versus MSCI EM 10 year annualized returns January 2002 to December 2011

Calendar year returns for Horizon Markets versus MSCI EM January 2002 to December 2011

Source: Factset, MSCI, Investec Asset Management, as of 31 December 2011

Page 9 | CONFIDENTIAL 10818

A Pension Fund’s Dilemma – how to broaden exposure?

Optimal? Option 1 = 50% GEM; 50% BRIC Option 2 = 50% GEM; 25% BRIC; 25% FM Source: Investec Asset Management, FactSet, as of 31 December 2011

Option 1 – Add BRICs Risk/Return with Allocation to BRICs Managers 10 year annualized returns January 2002 to December 2011

Option 2 – Add Frontier Markets Risk/Return with Allocation to Frontier markets 10 year annualized returns January 2002 to December 2011

Simply adding more Risk Reducing Risk & Return

Page 10 | CONFIDENTIAL 10818

Horizon Markets... leads to improved Efficient Frontier

● Risk-adjusted returns can be significantly improved through dedicated exposure to an actively managed Horizon Markets strategy

● In the last 10 years, the Horizon Markets have shown higher returns and lower volatility when compared to the MSCI Emerging Markets index

Efficient Frontier with Horizon Markets 10 year annualized returns January 2002 to December 2011

Source: Investec Asset Management, FactSet, as of 31 December 2011 In order to model the Horizon Markets (green diamond)) an initial universe of 994 stocks was identified using screens based on 2011 data for liquidity and market cap criteria. A historic monthly return stream was created using data where available for those 994 stocks. Monthly returns, over a 10 year period, for the group of stocks were created on a market cap weighted basis using monthly market cap data and total returns for each stock.

75% EM + 25% Horizon 75% EM +

25% BRIC

HORIZON MARKETS

MSCI EM

75% BRIC + 25% Horizon

8%

10%

12%

14%

16%

18%

20%

22%

18% 20% 22% 24% 26% 28% 30%

Ret

urn

Risk (Standard Deviation)

Improved Efficient Frontier

Page 11 | CONFIDENTIAL 10818

Horizon Markets Equity: Model Portfolio Country Exposure

Source: Investec Asset Management, as at 30 September 2012. The portfolio may change significantly over time.

Mexico15%

Indonesia14%

Chile10%

Thailand9%Malaysia

7%

Nigeria6%

Saudi Arabia6%

Turkey5%

Egypt4%

Bangladesh3%

Peru3%

Poland3%

Canada2%

Morocco2%

Philippines2%

Qatar2%

United Arab Emirates2%

Columbia1%

Panama1% Other

3%

Page 12 | CONFIDENTIAL 10818

The Horizon Markets opportunity

● Given the preponderance of large emerging markets in emerging markets allocations, smaller emerging and frontier markets (the “Horizon Markets”) receive little dedicated investment capital

● These smaller markets are not well researched and are poorly understood ● Investec’s Horizon Markets: composed of an initial universe of 40 smaller emerging

and frontier markets, has shown attractive risk-adjusted returns and provides needed diversification

● Around 1000 stocks with a market cap of >$3 trillion across Latin America, Africa, Eastern Europe, Middle East and Asia with c$5 billion traded daily across the market cap spectrum.