1. PM CAPITAL
Investment insights
June 2013

2. 2
Who is PM CAPITAL?
We are contrarian – equity investors behave poorly
As at 31 May 2013
Fund
Total
return
(inception)
Index
Total
excess
Absolute Performance Fund 167.4% 19.5% 147.9%
Emerging Asia Fund 139.4% 11.6% 127.8%
Australian Opportunities Fund 301.4% 177.2% 124.2%
Enhanced Yield Fund 111.2% 74.4% 36.8%

3. 3
Absolute Performance Fund
Performance (net of fees) Months Years Since
31 May 2013 1 3 6 1 3* 5* 10* Inception*
Absolute Performance Fund
15.0% 16.7% 34.7% 62.1% 10.3% 4.5% 4.1% 7.0%
MSCI World ($A)
8.3% 12.8% 23.2% 29.3% 8.4% 1.4% 3.6% 1.2%

4. 4
Why the Absolute Performance Fund?
Selective and concentrated long-term investments into
undervalued businesses, globally.
A high conviction fund, likely to significantly differ in
characteristic from a benchmark focused fund.
A contrarian investment style – investments are
purchased on the merits of their risk/reward
characteristics.
Investment Performance1
Total
Return
Absolute Performance Fund 167.4%
MSCI World ($A) 19.5%
Excess Return 147.9%
Unit holders that have been invested in the
APF since inception, have ~148% more
capital than if they had invested in the index.
APF Top 10 MSCI World Top 10
Lloyds Banking Group Apple
ING Groep Exxon Mobil
JP Morgan Microsoft Corp
Bank of America General Electric Co
Barclays Plc Chevron Corp
Wells Fargo Google
Applied Materials Johnson & Johnson
Google Inc IMB Corp
BB&T Corp Nestle
Royal Bank of Scotland Wells Fargo
GICS Sector
APF
allocation
1 Jan 2012
MSCI World Sector
performance
(1 Jan - 31 Dec 2012 - AUD)
Financials 50% 27%
Consumer Disc 21% 22%
Industrials 3% 15%
Materials 0% 10%
Consumer Staples 13% 13%
Health Care 4% 16%
Utilities 0% 15%
Information Tech 36% 14%
Energy 0% 1%
Telco's 0% 7%

5. 5
Selected US and UK banks – recovery of major economies
 Eg BB&T Corp, ING Groep, Bank of America, Wells Fargo
Technology – semi-conductor, data warehousing
 Eg Applied Materials, Maxim, Oracle
Services – stock specific opportunities
 Eg Google, NASDAQ, Comcast, CME Group
Global brewers – global consolidation of industry
 Eg Heineken Holdings, Anheuser-Busch Inbev
Property – recovery in US housing market
 Eg MGM Resorts, Howard Hughes Corp
AUD (unhedged) – under pressure
APF – Key investments
23/1/2013

6. 6
Portfolio Guidelines – Absolute Performance Fund
Description Guidelines
Number of stocks 35-45 stock specific ideas
Individual stock positions Max 7.5% at cost, 10% hard limit
Individual short positions Max 2% market value, 3% hard limit
Total short positions 30% excluding pairs/spread trades
Sector weighting >2x MSCI WEI weighting or 35%, hard limit 3x MSCI WEI weighting
Target net equity exposure 80% (+/- 10%)
Net equity exposure Max 110% (long equity – short equity)
Gross equity exposure Max 170% (long equity + short equity)
Allocation to debt securities 30% (maturities > 1 year)
Max net invested position 130% (equity + debt securities exposure)
Max cash position 100%
Options/derivatives may be used to minimise risk, enhance yields and replicate underlying positions but may not be used to leverage the portfolio.

7. 7
Case Study: US/UK Banks

8. Do we understand how the business works?
8
• Borrow – from depositors / wholesale funding
• Depositors – cheap to borrow, stable funding source
• Wholesale funding – expensive to borrow, market volatility
can impact liquidity
• Lend – to retail / commercial
• Retail – low competition, small loan sizes, diversity reduces
credit risk
• Commercial – More competitive, larger loans, more
rigorous credit process
• Trading – for liquidity/ risk management
• Liquidity management – low risk trading, improve interest
spread
• Risk management – Manage interest rate and market risk,
minimise earnings volatility
• Investment banking – Advisory / Proprietary
• Advisory – Fees for advising big clients – high ROE
• Proprietary – Use bank capital to bet on the market

9. Borrow Lend Trading
Investment
Banking
Deposits Wholesale
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Stock We Own
Wells Fargo
BBT
JP Morgan
B of A
Lloyds
RBS
Barclays
ING
Deposits Wholesale
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Retail Commercial
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Stock We Don’t
Own
Goldman Sachs
Morgan Stanley
Citigroup
HSBC
BNP
TRANSPARENT INCREASINGLY COMPLEX
Not all banks are the same
9

10. Banks Forward
P/E
Current
P/B
Wells
Fargo
9.8x 1.3x
BBT 11.0x 1.2x
JP Morgan 7.8x 0.8x
B of A 10.7x 0.4x
Goldman
Sachs
9.6x 0.8x
Morgan
Stanley
10.3x 0.5x
Lloyds 12.5x 0.6x
RBS 10.7x 0.2x
Barclays 6.2x 0.5x
BNP 7.1x 0.6x
So what can a well run bank earn when the economies normalise?
Environment Recession Normal Expansionary
Net Interest Spread High funding costs =
2.50% spread
3.00% spread in
normal economy
Higher demand for
loans = 3.25% spread
Net Interest Revenue $2.50 $3.00 $3.25
Fee Income Low fees when
people stop using
banks = 2%
2.50% of Assets 2.50% of Assets
Non Interest
Revenue
$2.00 $2.50 $2.50
Total Revenues $4.50 $5.50 $5.75
Operating costs ($2.75) ($2.75) ($2.75)
Pre Provision Profit $1.75 $2.75 $3.00
Loan loss rate 1.50% as recession
leads to higher
consumer losses
1.00% in normal
environment
0.75% as consumers
are cashed up
Loan loss expense (1.50) (1.00) (0.75)
Pre tax profit $0.25 $1.75 $2.25
• Assume a simple bank like Wells Fargo , BBT or Lloyds
• For every $100 in loans/Assets what will the bank earn
Significant earnings upside for banks when moving from recession to
a normal economic environment…
But valuations imply they are
10

11. If earnings normalise US banks P/E’s look cheap
 S&P Banks are currently trading at a forward P/E
of 11.1x, or at 0.2x discount to historical levels.
This is:
• Narrower than where the broad market
is trading vs. historical levels, and;
• Narrower than 6 out of the 10 S&P
Sectors discount to historical
 In this rate environment banks are under-
earning. Adjusting EPS for a +200bp move in the
short end and +100bp on the long end, banks
would be trading at a 4.4x discount to
historical levels.
 We are selective and sticking to banks
that not only offer EPS upside in a higher
rate environment, but are also rationally
valued on current forward P/Es
11

12. Aust banks (CBA) v US banks (Wells Fargo)
Operational metrics comparison
Credit Costs/Loans
Pre GFC Average Current
CBA 0.40% 0.31%
WFC 0.92% 0.92%
Pre Tax Earnings/Credit Costs
1993-2003 Average Current
CBA 10.5 10.1
WFC 5.9 4.9
Valuation metrics comparison
Price/book
Pre GFC Average Current
CBA 2.1 2.7
WFC 2.9 1.3
 WFC is a higher margin business than CBA –
3.75% v 2.20% respectively.
 Credit costs (loan loss provisions) are more
likely to increase for CBA than WFC.
 WFC is more likely to improve its operating
performance than CBA (WFC PTE/CC peak
was 8x).
 WFC is still trading at a significant discounted
P/B, but CBA trading at a premium.
 Risk is greater for CBA, potential
reward is greater for WFC.
 WFC has “re-calibrated” for post GFC
life, CBA has not…priced for
perfection!
12

13. Banks in summary…
• We believe the current economic environment may provide a unique and
rare opportunity to generate returns from some US and UK banking stocks.
• It is vital to understand each bank’s operating model and key inputs to
valuation before deciding where to invest.
• Our view is that the banks that are largely focused on retail borrowing and
lending will benefit most in a transition from a recessionary to a normal
environment.
13

14. Australia versus Global
Summary
Commodity sweet spot has passed – China’s hard asset investment slowing
Australian banks fully valued – significant premium to global peers
Materials and Financials combined = 60% of index
Narrow subset of opportunities remaining
Currency Overlay
+ $A at all time high v most currencies
Consideration
Would suggest highly correlated ASX 200 funds to be avoided
Would suggest favouring offshore opportunities
14

15. 15
Emerging Asia Fund
Performance (net of fees) Months Years Since
31 May 2013 1 3 6 1 3* 5* 10* Inception*
Emerging Asia Fund
13.2% 12.8% 19.6% 24.5% 7.7% n/a n/a 18.7%
MSCI Asia (Ex Japan)
6.5% 4.5% 11.3% 17.6% 1.5% n/a n/a 2.2%

16. 16
Why the Emerging Asia Fund?
Selective and concentrated long-term
investments into undervalued Asian businesses.
A high conviction fund, likely to significantly differ
in characteristic from a benchmark focused fund.
A contrarian investment style
– investments are purchased on
the merits of their risk/reward
characteristics.
EAF Top 10 MSCI Asia ex Jap Top 10 MSCI Asia Pac ex Jap Top 10
SJM Holdings Samsung Electronics BHP Billiton
WuMart Taiwan Semiconductor Commonwealth Bank
Jobstreet Corp China Mobile Westpac Banking
Carlsberg Malaysia China Construction BK H ANZ Banking Group
Baidu ICBC H National Australia Bank
Turquoise Hill Resources Gazprom OAO AIA Group Limited
Beijing Capital Int'l Airport Tencent Holdings Ltf Woolworths Limited
iProperty China Petro & Chem H Wesfarmers Limited
Puregold Price Club ITAU Unibanco CSL Limited
Dallan Port Co American Movil Singaport Telecom Limited

17. 17
Infrastructure
 Eg Dalian Port, Beijing Capital Int’l Airport, China Merchants
Internet
 Eg iProperty Group, Jobstreet Corp, 104 Corp
Retail
 Eg Wumart Stores, Puregold Price Club, SunArt Retail Group
Gaming

Eg SJM Holdings
Consumer
 Eg Carlsberg Malaysia, China Resources Enterprise
EAF – Key investments

18. EAF Portfolio Guidelines
Description Guidelines
Number of stocks 15-35 stock specific ideas
Individual stock positions Max 7.5% at cost, 10% hard limit
Total short positions N/A – long only portfolio
Net equity exposure 0 – 100%
Max cash position 100%
Options/derivatives may be used to minimise risk, enhance yields and replicate underlying positions but may not be used to leverage the portfolio.
18

19. 19
Case Study: Wumart Stores

20. Case study: Non discretionary retail (Wumart Stores)
20
Secular change underway
High barriers to entry
Regional strategy/#1 market
share in Beijing
Modern retail in infancy
Strong management
Locals with operational
expertise
World class
margins and
returns
Triggers for mis-pricing:
 Initial trigger was
investigation into founder.
 Now the challenges with
integration of Tianjin
operations.
What the market
is missing:
 Long term earnings
growth – myopic focus on
short term earnings.
 Expansion opportunities
in Hebei not being
considered. Will double
target market, but leverage
existing supply chain.
 CNY appreciation.
Considerations for
valuation:
 Focus on long term earnings
growth potential.
 Target market is 90 mill
people/rev less than 5% of
Woolworths.
 20x P/E on 2012 estimate.
Earnings growth 25%pa for
last 5 yrs and forecast to
continue for next 5 yrs.
Wumart Stores…the business model
Potential risks:
 Migration to modern retail
stalls.
 Increase in competition.
over the longer term.
 Significant expansion
outside of Beijing.
 Rapid increase in input
costs ie wages, rent.
As at January 2013

21. 21
Australian Opportunities Fund
Performance (net of fees) Months Years Since
31 May 2013 1 3 6 1 3* 5* 10* Inception*
Australian Opportunities Fund 1.4% 8.3% 24.8% 36.5% 13.3% 6.9% 10.3% 10.9%
ASX 200 Accumulation Index -4.5% -2.4% 11.6% 26.5% 8.5% 1.8% 9.8% 7.9%

22. 22
Why the Australian Opportunities Fund?
Selective and concentrated long-term investments
into undervalued Australian businesses.
A high conviction fund, likely to significantly differ
in characteristic from a benchmark focused fund.
A contrarian investment style – investments are purchased
on the merits of their risk/reward characteristics.
AOF Top 10 ASX Top 10
QBE Insurance Group Limited Commonwealth Bank Australia
Asia Pacific Data Centre Group BHP Billiton Limited
Macquarie Group Limited Westpac Banking Corp
Echo Entertainment Group ANZ Banking Group
JB Hi Fi Ltd National Australia Bank
Transpacific SPS Trust Telstra Corp Limited
Wotif.com Wesfarmers Limited
Suncorp Metway Woolworths Limited
Rio Tinto Limited CSL Limited
Tabcorp Holdings Limited Rio Tinto Limited
Sonic Health Care
Investment Performance Total Return
Australian Opportunities Fund 301.4%
S&P / ASX 200 177.2%
Excess Return 124.2%
Unit holders that have been invested in the AOF since inception,
have ~105% more capital than if they had invested in the index.

23. 23
Financials – underweight this sector
 Eg Macquarie Group, NAB
Property
 Eg Asia Pacific Data Centre, Lend Lease, 360 Industrial
Corporate debt – taking advantage of favourable spreads
Significantly underweight resources

we seek low cost operators at distressed commodity prices (as per 2001).
AOF – Key investments
Source: ASX; Feb 03 – Jan 13

24. 24
Portfolio Guidelines – Australian Opportunities Fund
Description Guidelines
Number of stocks 15-25 stock specific ideas
Individual stock positions Max 7.5% at cost, 10% hard limit
Individual short positions Max 2% market value, 3% hard limit
Total short positions 30% (excluding pairs/spread trades)
Sector weighting >2x ASX200 weighting or 35%, hard limit 3x ASX200 weighting
Target net equity exposure 80% (+/- 10%)
Net equity exposure Max 110% (long equity – short equity excl. pairs trades/futures)
Gross equity exposure Max 170% (long equity + short equity excl. pairs trades/futures)
Allocation to debt securities 30% (maturities > 1 year)
Max net invested position 130% (equity + debt securities exposure)
Max cash position 100%
Options/derivatives may be used to minimise risk, enhance yields and replicate underlying positions but may not be used to leverage the portfolio.

25. 25
Case Study: Sonic Healthcare

26. Case study: Sonic Healthcare
26
High barriers to entry
Clean balance sheet
Growth through
acquisition
Dominant local presence
Strong management
CEO in play since IPO
Low cost
operator
Triggers for mis-pricing:
 Govt cuts to regulated pricing.
 QLD co-pay structure not
implemented by key competitor.
 Profit warning May 2010 –
stock down 20% next day.
 Increased business cost due to
deregulation of collection
centres.
What the market
was missing:
 Govt regulated pricing would
hit smaller players hardest –
opening the door for bolt-on
acquisition.
 Increasing volumes would
offset margin contraction.
 5 year deal with Govt to
guarantee 5% rev growth.
 FX masking underlying
offshore earnings.
 Seen as a “buyer of choice”
by potential vendors.
Considerations for valuation:
 Path volume growth at 6-8%
over last 15 years.
 Valuations were set at $10.10 on
13.4x FY10/11.7x FY11/ 10.6x
FY12.
 Expected return $10.10 › $13.78
= 36% re-rating + 5% div = 41%
Sonic Healthcare…the business model
Considered risks:
 No tangible assets as a service
company with long term
relationships/strong industry
reputation.
 Large fixed cost business
leveraged to volume.
Dilution risk – capital raisings to
partly fund future acquisitions.
As at January 2013

27. Case study: Sonic Healthcare
 The price chart demonstrates
the dramatic sell-off post the
profit warning in 2010.
 At $10.10, we forecast 36%
growth to fair value of
$13.78.
 Approaching $13.78, we have
been trimming our position.
 This is a text-book example
of mis-pricing on short-term
earnings issues or technical
factors. It provided an
opportunity to take a core
position in a “good business
at a good price”.
Ave buy price
$10.10
Buying period:
May 21 – Jul 23
Trimmed
position $11.67
Trimmed
position $13.82
27As at January 2013

28. 28
Enhanced Yield Fund
Performance (net of fees) Months Years Since
31 May 2013 1 3 6 1 3* 5* 10* Inception*
Enhanced Yield Fund 0.5% 1.6% 3.3% 6.7% 6.3% 6.3% 6.3% 6.9%
RBA Cash Rate 0.2% 0.7% 1.5% 3.3% 4.2% 4.3% 5.7% 5.1%

29. 29
Guiding principles
Always start with “cash”… Capital preservation is our first priority, so depending on investment
opportunities in debt securities, our cash position can be anywhere between 20 – 100%.
Focus on the anomalies… A carefully selected portfolio of what we believe to be the best
opportunities in global debt markets – typically there are only 40-50 securities in the portfolio.
Broad universe mandate with a strong research focus… This enables broad access to global
credit markets, utilising our vigorous research process to identify mis-priced assets.
No surprises… We seek to deliver RBA Cash Rate plus 2%, over the medium term with minimal
volatility.

30. 30
Outcomes at a glance…
 Income provider
o The fund has returned 6.9% pa after fees,
since inception (2002).
 Low volatility of returns
o Annualised standard deviation of 2.3%,
since inception.
o 90% positive monthly returns, since
inception.
 Capital preservation
o Delivered positive returns during the
depths of the GFC.
o Sufficient cash to take advantage of
significant pricing anomaly's in 2009.
As at 31 May 2013
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
07/2007 01/2008 07/2008 01/2009 07/2009 01/2010
PM CAPITAL EYF versus Lonsec peers

31. 31
March 09: “a once in a generation opportunity to invest in yield securities.” Quote from our March 2009Quarterly Report.
Cash Allocation: an output of investment opportunities
June 11: “This decision to hold a meaningful amount of the fund in cash will also give us ample capital up our sleeve
to take advantage of further attractive investment opportunities that materialise over the next 6-12 months.”
Quote from our July 2011 Quarterly Report.
Enhanced Yield Fund’s monthly cash position
Please note that his chart is used for internal PM Capital purposes and is indicative only.

32. 32
Recent purchases
Issuer Investment Duration Current Yield
ALE Property Trust Senior Debt 1.5 years Bills + 275bps
Asciano Senior Debt (USD) 2.5 years Bills + 200bps
Mirvac Senior Debt 3.5 years Bills + 200bps
IAG Subordinated Debt (GBP) 3.5 years Bills + 475bps
Westpac Subordinated Debt (USD) 4.0 years Bills + 425bps
CBA Hybrid (USD) 2.0 years Bills + 350bps
Tabcorp Senior Debt 1.0 years Bills + 185bps

33. 33
EYF Portfolio
As at 31 May 2013
Top 10 Holdings
CFS
Westpac
ANZ
CBA
NAB
Mirvac
ALE
Dexus
Wesfarmers
IAG
Asset allocation
Cash 36.3%
Corporate Bonds 39.9%
Hybrids 22.4%
Buy & Writes 1.4%
Regional allocation
Australia 94%
US 5%
UK 1%
Duration
Interest rate 0.15 years
Avg term to maturity 2.50 years

34. Summary
Our investment approach is based on:
Selective and concentrated long-term investments into undervalued businesses.
High conviction funds, likely to significantly differ in characteristic from benchmark
focused funds.
A contrarian investment style – investments are purchased on the merits of their
risk/reward characteristics.
In executing our investment philosophy we would also note that the stock market is
far more volatile than the underlying business it represents. Thus, the key to
being a successful investor requires both good business judgement and the ability to
control your emotions, thereby avoiding the irrational behaviour of crowds or
consensus thinking.
34

35. 35
Investment Presentation - Disclaimer Statement
PM CAPITAL Limited
ABN 69 083 644 731
Australian Financial Services Licence 230222
Level 24, 400 George Street
Sydney NSW 2000
Ph: 02 8243 0888
www.pmcapital.com.au
This presentation is intended solely for the information of the person to whom it was provided by PM Capital Limited. It is intended to provide
information and does not purport to give investment advice.
While the information contained in this presentation has been prepared with all reasonable care, PM Capital Limited accepts no responsibility or
liability for any errors or omissions or misstatements however caused. Except insofar as liability under any statute cannot be excluded, PM Capital
Limited and its directors, employees and consultants do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for
any error or omission in this presentation or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the
recipient of this presentation or any other person.
Past performance is not necessarily a guide for future performance. Opinions constitute our judgement at the time of issue and are subject to
change.