Threadneedle launches European Equities Absolute Return Fund

LONDON 18 JANUARY 2012: A pioneer in the regulated absolute return space, leading international asset manager Threadneedle Investments (Threadneedle) has today launched the Threadneedle (Lux) European Absolute Alpha Fund responding to client appetite for a UCITS European equities absolute alpha product. The fund will be invested in Pan-European equities and is managed by Paul Doyle.

Threadneedle has been managing absolute return strategies for more than 10 years and currently manages in excess of €1.6 billion (as at 31 Dec. 2011) across a broad range of strategies. The Threadneedle (Lux) European Absolute Alpha Fund utilises the same successful process and resources as the Threadneedle Apex European Fund (and previously the Threadneedle European Crescendo fund)1, in which high- conviction stock selection has been the dominant driver of returns with a strong focus on company analysis and valuation. This is combined with a top-down overlay to manage sector exposures while retaining focus on monitoring risk. The portfolio will primarily take long and short positions in European equities and will aim to generate the majority of performance from stock selection.

Paul Doyle, who joined Threadneedle in 1995, has over 20 years’ experience in European equities. As manager of both retail and institutional portfolios and of the Threadneedle Apex European fund (and previously the Threadneedle European Crescendo fund), Paul has a proven track record of generating alpha under different market conditions. Since launch in 2000, the European long/short strategy generated net pro-forma cumulative performance2 of 82.2% (vs. a performance of -10.8% for the index) whilst limiting annualised volatility to 5.6% (compared to 21.4% for the index).

Threadneedle’s 23-strong European equities team has an excellent long-term track record of outperformance and manages close to €28.0bn3 AUM across portfolios. 73% of Threadneedle’s European Equity funds outperformed in 2011 and 100% outperformed over 3, 5 and 10 years4. The team works closely with Threadneedle’s 120 investment professionals3 across all asset classes and regions.

Paul Doyle, manager of the Threadneedle (Lux) European Absolute Alpha fund, said: “Since we first launched the Threadneedle European Crescendo fund in 2000 and the European Apex fund in 2010, we have demonstrated that this particular high- conviction stock picking strategy has been successful in navigating both bear and bull market cycles whilst limiting volatility of returns. We are now pleased to offer investors access to the same strategy in a regulated, liquid and transparent format though the Threadneedle (Lux) European Absolute Alpha fund.

“Despite the negative news flow surrounding Europe recently, we believe that it is an exciting time to look at European equities as we are able to find many companies at compelling valuations. The opportunity to deliver absolute returns through fundamental and valuation analysis with high conviction long and short positions is considerable.”

Campbell Fleming, Head of Distribution at Threadneedle, said: “With over 10 years managing absolute return funds, Threadneedle has a strong reputation and a proven track record for delivering outperformance. Our clients have indicated a great appetite for a product that will seize opportunities to capitalise on European equities while interest rates remain at historic lows and Eurozone uncertainty has depressed equity valuations. Our European equities capabilities and the experience of our investment teams mean we are well placed to take advantage of these opportunities within a framework of careful risk management.”

The fund has been approved by the CSSF (Commission de Surveillance du Secteur Financier) for public offer in Luxembourg. Approval is pending in other jurisdictions.

 

1 The Threadneedle European Apex fund, launched on 1 October 2010, was closed on 17 January 2012. The Threadneedle European Crescendo fund launched on 30 August 2000 and closed on 30 September 2010.

2 Source: Threadneedle, JP Morgan, DataStream. Performance net of fees, in €. For comparative purposes only, index used is the FTSE World Europe inc UK Total Return Index in € as it best represents the investment universe. The performance data for the Threadneedle European Crescendo Fund and the Threadneedle European Apex Fund is being provided as related performance to illustrate Paul Doyle’s track record for similar products with substantially similar strategies over a longer period of time. No representation is being made that the Threadneedle (Lux) European Absolute Alpha Fund is likely to achieve returns in the future similar to those mentioned in this announcement.

3 As at 31 Dec. 2011; AUM excludes externally managed portfolios, and includes UK-specific assets of €16.4 billion. 4 All European Equities funds managed by Threadneedle, including segregated accounts/portfolios, by number of funds. The data does not include funds sub-advised by third parties or guest funds on a Threadneedle platform. All figures are as at 30 Nov 2011, in GBP unless stated otherwise. This information aims to demonstrate the overall performance capabilities of Threadneedle’s asset management team. It is not intended to indicate the performance of individual funds or products. Please refer to product specific documentation in relation to individual funds. Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up.

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NOTES TO EDITORS:

The Threadneedle (Lux) European Absolute Alpha Fund

Structure: UCITS IV Luxembourg SICAV Launch date: 18 January 2012

Fees: ␣ Retail: 1.5% Annual Management Charge (AMC) + 20% performance fee* ␣ Institutional: 0.75% Annual Management Charge + 20% performance fee*

* Performance fee is over a cash hurdle rate, 3 month EUR Libor

Other funds in Threadneedle’s UCITS Absolute Return range include: ␣ Threadneedle Absolute Return Bond Fund ␣ Threadneedle Target Return Fund ␣ Threadneede (Lux) Target Return (US$) Fund

␣ Threadneedle Target Return Core Fund ␣ Threadneedle Credit Opportunities Fund ␣ Threaneedle (Lux) American Absolute Alpha Fund ␣ Threadneedle UK Absolute Alpha Fund ␣ Threadneedle (Lux) Absolute Emerging Markets Macro Fund ␣ Threadneedle (Lux) European Smaller Companies Absolute Alpha Fund ␣ Threadneedle (Lux) Global Opportunities Bond Fund

 

For more information contact:

Andrea Hofer

+41 44 208 3736

andrea.hofer@threadneedle.com

 

About Threadneedle

Threadneedle is a leading international investment manager with a strong track record of outperformance across asset classes. We actively manage €71.9bn (as at 30 Sep 2011) of assets, investing on behalf of individuals, pension funds, insurers and corporations. We are the 4th largest UK retail fund manager1 and the 11th largest UK fund manager1 by AUM. In Europe we rank in the top 402. Established in 1994 in London, Threadneedle operates in 15 countries across Europe, the Middle East, Asia Pacific and North America.

Threadneedle's distinctive investment approach is based on creative thinking, sharing of ideas and rigorous debate. Our 120 investment professionals invest across developed and emerging market equities, fixed income, commodities and UK property. As at 30 Sep 2011, 59% of Threadneedle funds outperformed over 1 year, 69% over 3 years and 84% over 5 years3. In 2011 Threadneedle won 126 prestigious fund management industry awards globally4.

Threadneedle is owned by Ameriprise Financial (NYSE: AMP), a leading US diversified financial services company with over US$600bn in owned, managed and administered assets. As its international investment platform, Threadneedle provides Ameriprise and its retail and institutional clients with world class investment solutions.

1 UK IMA ranking, Sep 2011, see www.investmentfunds.org.uk 2 Europe ranking, Morningstar Sep 2011

3 All funds managed by Threadneedle, including segregated accounts/portfolios. The data does not include funds sub-advised by third parties or guest funds on a Threadneedle platform. All figures are as at 30 Sep 2011, in GBP unless stated otherwise. Total value of funds outperforming their relevant benchmark expressed as a percentage of total assets under management. This information aims to demonstrate the overall performance capabilities of Threadneedle’s asset management team. It is not intended to indicate the performance of individual funds or products. Please refer to product specific documentation in relation to individual funds. Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up.

4 For details see: www.threadneedle.com/awards This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any

securities or other financial instruments, or to provide investment advice or services.

The research and analysis included in this document has been produced by Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.

Issued by Threadneedle Asset Management Limited. Registered in England and Wales, No. 573204, 60 St Mary Axe, London EC3A 8JQ. Authorised and regulated in the UK by the Financial Services Authority.