A New Beginning The Irish Investment Fund

1
A New BeginningThe Irish Investment Fund

• Presentation by
• Ciarán Spillane
• Bank of Ireland Asset Management (U.S.) Limited

March 2001
2
Overview

• A changed Economy
• A changed Environment
• A changing Equity Market
• Fund Strategy

3
Eurolands Shining Light
Real GDP Growth

Source Central Bank of Ireland, Merrill Lynch
4
Playing Catch Up
Irish GDP Per Capita Relative to EU Average
Source Davy Stockbrokers
5
Transformation - Why?

• A rapidly expanding Labour Force
• Pro-business Government Policy
• Foreign direct investment
• Exposure to the High Growth Industries

6
Demographic Positive
Population Structure
Source Central Statistics Office, Ireland
7
Ireland in Euroland
Population Median Age
Median Age
1995 2000 2005 2010
2015 2020 2025
Source NCB Stockbrokers
8
Fiscal Policy
Pro-Business Pro-Growth
Tax Rate Income Tax 1995 2001 Top
Rate 48 ? 42 Standard Rate 27
? 20 Share Options 48 ? 20 Corporation
Tax 38 ? 20
9
Government Expenditure as of GDP (1999)

Source OECD
10
An Environment where International Companies
Prosper

• 7 of Top 10 Software
• 9 of Top 10 Pharma
• 13 of Top 20 Medical Devices

11
Foreign Direct Investment
Ireland as US FDI in Europe
1994 1995 1996 1997
1998
Total Manufacturing 8.4 2.9 10.9 15.0 7.0
Electronic 7.6 5.4 18.0 33.2 39.2
Chemicals 6.9 2.4 13.0 17.3 15.4 Ireland

Source US Department of Commerce
12
A US Work Culture
Annual Hours Worked per Person (1999)
Source OECD Employment Outlook UNICE
1998
13
A US Work Culture
Employment Protection Legislation (1998)
Source OECD
14
Weeks to Company Start-up
No. of weeks to form a new business (1996)
No. of Weeks
Source UNICE
15
An Economy Transformed
Export Share by Industry

• 1990 1999
• Food/Beverages Tobacco 25.8 9.4
• Chemicals Pharmaceuticals 13.3 32.1
• I.T. - Hardware Software 19.2 27.2
• Other 41.7 31.3

Source Goodbody Stockbrokers
16
A Fertile Environment

• Both International and Indigenous high-growth
  companies prosper
• Recent research by Merrill Lynch Benchmarking
  the New Economy
• Ireland ranked second behind Finland

Source Benchmarking the New Economy, Merrill
Lynch 2000
17
Irish Software Industry

• Ireland is worlds largest exporter of software
  (OECD 1998)
• 87.6 of Irish exports by foreign companies
• Indigenous exports rank Ireland fifth in OECD
  behind US, UK, Netherlands and Germany

Source OECD, 2000
18
Irish Indigenous Software Industry

• 1991 1999
• No. of Companies 291 690
• Revenues (m) 291 1,006
• Employment 3,801 11,100
• estimated

Source National Software Directorate,
Enterprise Ireland
19
Irish Equity Market 1990

• Majority of earnings from
  domestic economy
• Financial Services/ Industrials/ Construction
• Fund NAV Growth 10.8 since inception and 15.5
  over past five years

Total Return
20
Irish Equity Market 2001

• Equity Market reflecting
  economy with a lag
• Majority of all new Irish plcs in technology/
  healthcare/ telecom
• Many not listing on Irish stock exchange
• Exciting high-growth companies

21
Irish Growth Stocks
Iona Technologies

• Key Middleware Player
• B2B Integration Opportunity
• Financial Strength
• Founded 1991
• 5 Year Sales Growth - 77.9

22
Irish Growth Stocks
Datalex

• Technology provider to Travel Industry
• Fund invested when private
• Strong Customer Base
• 476 staff in 16 locations
• 3 Year sales growth - 71.5

23
Irish Growth Stocks
Parthus Technologies

• Semiconductor Design (IP) House
• Focused on Mobile Internet
• 308 engineers in seven locations
• Financial Strength - 160m cash
• 5 Year sales growth - 44.9

24
Irish Growth Stocks
Baltimore Technologies

• Leading E-security software provider
• Strong position in Europe
• PKI Infrastructural provider
• 5 Year sales growth - 56.1

25
Irish Growth Stocks
Ryanair

• Low-fare airline
• Clear leader in Europe
• Aggressive growth strategy
• Profitable business model
• 5 Year sales growth - 21.5

26
Irish Growth Stocks
Elan

• Acquisition driven story
• Strong focused pipeline
• Alzheimers - Blue Sky opportunity
• Attractive Valuation
• 5 Year sales growth - 46.1

27
Irish Growth Stocks
Icon

• Clinical Trials Provider
• Services to Pharma industry
• Global position
• Strong management
• 5 years sales growth - 39.4

28
New Fund Strategy

• BIAS to high-growth companies
• Technology/ telecommunications/ healthcare
• Reflect Indigenous dynamic
• New Ireland Investment Fund

29
Conclusion

• Fund must move in tandem with the growth
  direction of economy
• Unique environment
• Exciting investment opportunities