Addenda Capital September 2005

Addenda Capital September 2005 Benoît Durocher President and Chief Operating Officer ƒ One of the largest institutional money managers in Canada ƒ...
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Addenda Capital September 2005

Benoît Durocher President and Chief Operating Officer

ƒ One of the largest institutional money managers in Canada ƒ Established in 1996. IPO in December 2004; ƒ Assets Under Manager (AUM) grew from $15.4 billion to $21.4 billion in 2004; ƒ Further growth to $24.4 billion to June 2005; ƒ Ranked 10th largest pension fund money manager in Canada based on AUM*.

Growth in Assets Under Management (in $ billion )

$24.4 $21.4

$15.4

$10.5 $7.3 $3.7

$4.3

1998

1999

$5.5

$2.2 $0.5 1996

1997

*Source : Benefits Canada Magazine, April 2005

2000

2001

2002

2003

2004

2005 June 30th,

Clientele (based on AUM as at June 30, 2005)

Breakdown by client type

Insurance and Other Companies 10.2%

Third-Party Mutual Funds 15.7%

Foundations and Endowment Funds 7.5%

Geographical breakdown

Private Clients 1.4%

Pension Funds 65.2%

Maritimes 0.8%

West 3.5%

Ontario 32.1% Quebec 63.6%

ƒ Over 246 clients, where 144 clients are pension funds; ƒ 10 largest institutional clients represent less than 25% of revenue* ƒ No single client represents over 10% of institutional AUM*, or over 5% of revenue* ƒ Successful in attracting and retaining clients through: ƒ Superior long term investment returns ƒ High standard of customer service

ƒ Former Institutional clients: 10

*For the 6 months to June 30, 2005

Board of Directors

Senior Management Nathalie Simard B.B.A. Vice-President, Marketing and Communications.

Carmand Normand

Chairman, CEO, CIO

Benoît Durocher

B.A., M.A. Director, President, COO

Barbara Lambert

Benoît Durocher

Myriam Larcher

Jean-François Pépin

Carmand Normand

B.A.

B.B.A., CFA Portfolio Manager, Government Bonds.

B.B.A., M.Sc., CFA, FRM CFO, Sr. VP, Risk Management

FRM - Head Trader.

Joe DiMassimo

Sébastien Rhéaume

B.B.A., MBA Senior VP, Sales and Service.

Yvan Fontaine B.A., M.Sc., CFA Senior VP, Investments.

B.B.A., M.Sc., CFA,

B.Sc., MBA

VP, Client Servicing.

Christian Bélanger

B.Sc., B.B.A., M.Sc., CFA, FRM - Portfolio Manager.

Stéphane Corriveau

B.Sc., A.S.A. VP, Immunization & Structured Products.

André Bourbonnais Bourbonnais Capital Inc.

Robert Chevrier Société de Gestion Roche Inc.

CA, CFA Portfolio Manager, Corporate Bonds and Enhanced Index.

Henry W.C. Gibbs

François Galarneau

Pierre Martin

B.Sc. M.Sc.

Trader, Corporate Bonds.

Michèle Laframboise

Chairman of the Board

Michel Bourque M.Sc. CGA, CFA Analyst, Corporate Bonds. Jacques-Alexandre Caussignac M.Sc., Analyst, Immunization & Structured Products

Mario Lemay Manager, Private Wealth Management

Retired

Générale Immobilière (Montréal-Paris) Inc.

Marie Giguère Former Senior Vice-President, Chief Legal Officer and Secretary, Molson Inc.

ƒ A strong team, a growing company ƒ Team of highly competent and focused portfolio managers; ƒ A wide range of expertise and experience; ƒ Disciplined investment approach; ƒ High customer service standards; ƒ Superior long term investment performance for clients; ƒ Strength of relationship with consultants and clients; ƒ High level of corporate governance; ƒ Proven process is key to company’s success.

Investment Management Approach ƒ Bonds = Yield + Capital appreciation ƒ Annual forecast establishes equilibrium rate for coming year ƒ Position portfolios to take advantage of interest rate volatility ƒ Trades to lengthen or shorten portfolio duration

ƒ Position portfolios to take advantage of yield curve shifts and yield spread movements

Addenda Capital Bond Composite Comparison with the Mercer Composites – Canadian Fixed Income (GIPS® & AIMR PPS®) - Universe Performance before fees for periods ended December 2004

Rates of Return (%)

11

Consistently ranked among first quartile and the best performance for 5 & 10 year periods

9

7

5

Addenda SCU

3

ADDCOMP SCU 5th Percentile Upper Quartile Median Lower Quartile 95th Percentile # of Funds

1 Yr (%)

2 Yrs (% pa)

3 Yrs (% pa)

5 Yrs (% pa)

7.4 (11) 7.1 7.6 7.2 7.0 6.5 6.0 29

7.6 (0) 6.9 7.4 7.2 6.9 6.6 6.3 29

8.3 (0) 7.5 8.1 7.9 7.5 7.3 6.9 29

9.1 (0) 8.2 8.6 8.5 8.2 7.9 7.7 27

10 Yrs (% pa) 10.4 (0) 9.0 10.2 9.4 9.2 9.0 8.5 22

ƒ Annual Audited Financial Results $0.94

$11.4

$26.1

$16.7

.2% 3 3

.2% 5 3

.2% 5 3

$8.2 $0.57

$19.6

$12.4

$5.7

2002

$0.29

$9.0

$15.0

2003

2004

2002

2003

2004

2002

2003

2004

2002

2003

REVENUES

EBITDA

NET EARNINGS

NET DILUTED EPS

(Million dollars)

(Million dollars)

(Million dollars)

(Million dollars)

2004

ƒ 6 month Results ending June 30, 2005 and 2004 $24.4

$10.40

$15.6

.6% 1 3

.7% 27 $21.4

$0.60

$7.1

.5% 31

$7.9 $12.2 $0.45 $5.4

$17.6

June 04

Dec. 04

June 05

YTD-04

YTD-05

YTD-04

YTD-05

YTD-04

YTD-05

ASSETS UNDER MANAGEMENT

REVENUES

EBITDA

NET EARNINGS

(Million dollars)

(Million dollars)

(Million Dollars)

(Million dollars)

YTD-04

YTD-05

NET DILUTED EPS (Million dollars)

ƒ Outlook ƒ Maintain superior investment performance for our clients; ƒ Maintain superior quality in client service; ƒ Satisfy the increasing needs of our clients and attract new clients; ƒ Provide advice to our clients and collaborate with pension fund consultants; ƒ Develop Addenda’s business across Canada; ƒ Develop new investment management products; ƒ Explore other fixed income markets and identify business opportunities.

FORWARD-LOOKING STATEMENTS All statements, other than statements of historical facts, included in this presentation regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “believe”, “anticipate”, “estimate”, “plan”, “expect”, “intend”, “may”, “project”, “will”, “would” and similar expressions are intended to identify forward-looking statements, although not all forwardlooking statements contain these identifying words. We cannot guarantee that we actually will achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements, including, but not limited to, risks stated in our Annual Information Form dated March 30, 2005 and the MD&A for the year 2004. These factors and the other cautionary statements made in this presentation should be read as being applicable to all related forward-looking statements wherever they appear or are made in this presentation. The information in this presentation, including any forward-looking statements, is provided as at September 23, 2005, and should not be relied upon as representing our estimates as of any subsequent date. Except as required by law, we disclaim any intention and do not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, you are advised not to place undue reliance on those forward looking statements