Mayar Fund Letter to Partners

MAYAR FUND LETTER TO PARTNERS

FOR THE QUARTER ENDING MARCH 31, 2015 OUR PARTNERSHIP PRINCIPLES

WE WILL COMMUNICATE WITH YOU REGULARLY AND IN A STRAIGHTFORWARD MANNER. WE WILL NOT SUGAR- COAT OR EXAGGERATE THE TRUTH. WE WILL NEVER PROMISE WHAT WE CANNOT DELIVER

WE HAVE A SUBSTANTIAL PERCENTAGE OF OUR NET WORTH INVESTED ALONG YOUR SIDE, AS DO MANY OF OUR FAMILY MEMBERS AND FRIENDS. REST ASSURED THAT OUR INTERESTS ARE ALIGNED WITH YOURS

WE WILL MANAGE YOUR CAPITAL TO MAXIMIZE LONG- TERM RESULTS AND WILL GLADLY ACCEPT “BUMPIER” SHORT-TERM RESULTS TO ACHIEVE THEM

WE WILL LOOK AT RISK BEFORE RETURN AND WILL IGNORE HIGH RISK OPPORTUNITIES REGARDLESS OF POTENTIAL PAYOFFS

OUR STRATEGY

BUY A GREAT BUSINESS

AT A REASONABLE PRICE CUMULATIVE RETURNS SINCE INCEPTION

ANNUALIZED RETURNS

MANAGER’S HISTORICAL PERFORMANCE*

*Actual results of the manager’s investment strategy including periods at predecessor funds PERFORMANCE DETAILS

NET, EX IF NET MSCI World FY 2012 4.9% 2.9% -5.1% FY 2013 21.5% 20.9% 18.6% FY 2014 16.3% 16.3% 24.0% FQ1 2015 -0.3% -0.3% -2.2% FQ2 2015 3.4% 3.4% 1.0% FQ3 2015 3.2% 3.2% 2.3% FYTD 6.3% 6.3% 1.1% SINCE INCEPTION 57.6% 53.8% 41.1%

NET, EX IF: Returns after deducting expenses and fees but before deducting incentive fees. This is the best number to use for comparison against the benchmark and is the basis for the calculation of the manager’s incentive fee

NET: Net return due to fund series holder. This is the net amount that an investor in this fund series has realized over the period after deducting all expenses and fees.

FY 2012: The fiscal year ending June 30, 2012. Mayar Fund's fiscal year ends on June 30th

FYTD: Fiscal Year To Date

FQ: Fiscal Quarter

PERFORMANCE STATISTICS (SINCE INCEPTION)

ANNUALIZED ALPHA 4.53 ANNUALIZED VOLATILITY 12.68 BETA 0.78 ANNUALIZED WEEKLY RETURN 12.70 R-SQUARED 0.84 TRACKING ERROR 6.00 SHARPE RATIO 0.83 UPSIDE CAPTURE RATIO 0.83 TREYNOR RATIO 13.51 DOWNSIDE CAPTURE RATIO 0.72 INFORMATION RATIO 0.45 BULL BETA 0.82 SORTINO RATIO 1.26 BEAR BETA 0.77 MY FELLOW MAYAR PARTNERS,

OUR PERFORMANCE For the three-month period ending March 31, 2015 Mayar Fund is up 3.2%, net of expenses and management fees, but before incentive fees (up 3.2% net for the Initial Series). Over the same period its benchmark, the MSCI World Index, increased by 2.3%. Since its inception in May 2011, Mayar Fund is up 57.6% (up 53.8% net) versus a 41.1% increase for the MSCI, which corresponds to an 12.4% annualized rate of return for Mayar Fund, compared to 9.3% for the MSCI.

GENERAL COMMENTARY There’s been a lot of discussion in the media recently about whether or not stock markets are overvalued. While some indicators suggest there might be some truth to that statement, you are all familiar with my approach by now: I do not believe that anybody can predict where markets will head over the next week, month, or year. In fact, with the exception of extreme cases, I don’t believe anyone can say with certainty whether markets are cheap or expensive. And while we have seen examples recently on both ends of the spectrum in the United States, in 2000 and 2008, those extreme cases are rare when we look at the past several decades. In all other cases it is extremely difficult to decide whether the market as a whole is expensive or cheap. Luckily, I believe you can still find success in your investments without wasting a great deal of energy trying to predict the future, or even fully understand the present. While every individual stock has a high correlation with the overall market in the short-term, long-term performance of individual stocks is more closely related to the underlying performance of the business and the valuation you pay at the time of your initial purchase (and time of sale). As a result, if you have a long-term view and can handle the interim volatility, buying great businesses at a reasonable price ness fundamentals. When we cannot find will generate satisfactory results for you. great companies to buy at a price that gives Will you have periods when your portfolio us a margin of safety, we are happy to sit on goes down by 20, 30, or even 40%? No cash and wait for such opportunities to pre- matter how intelligent and forward-thinking sent themselves. Eventually, they always do. your investments are, you’re practically guar- Over the past year and a half, those opportu- anteed to experience such a dip at least once nities have admittedly become scarcer, but during your journey. But if you remain pa- they still exist. This is evident in our ability to tient and stay focused on the end game (and invest significant amounts of our portfolio don’t sell when your portfolio drops) you will during this quarter. More specifically, we de- perform well in the bigger picture. As an ployed amounts equal to more than 8% of added bonus, you won’t have to panic with our net asset value (and a similar amount every abrupt shift in the market, you can last quarter). Our flexible mandate (global by stress less, and ultimately the pain of those geography and industry agnostic) and our seemingly-huge drops will fade from relatively small size give us tremendous ad- memory. vantages here compared to managers with What does this mean for us at Mayar? several billion under management. Unlike Truthfully, we put ZERO effort into trying to the large, lumbering firms whose expansive predict the valuation of the overall stock size sometimes translates to sluggishness, market or where it’s heading in the short we have the freedom to take advantage of term. Instead, we focus on two things: 1) smaller opportunities and act quickly on big- finding great businesses with durable eco- ger ones that show up only for brief periods. nomic moats that we would like to own for For example, back in January we increased many, many years, and 2) buying those busi- our investment in Swatch Group registered nesses only when the price offered is signifi- shares at a price that was available for less cantly below intrinsic value, giving us a mar- than a week--we’re up 15% in USD terms gin of safety on our purchase. After that, we since then—and during that week less than wait… for a long time. We wait and we ig- CHF 15 million worth of stock traded per day, nore the stock’s position. In fact, if we didn’t on average. As a result, if you wanted to stick need to keep an eye on our favorite stocks to, say, 20% of daily volume, the most you and buy more when the prices drop, we could’ve purchased during that period would would ignore our portfolio companies’ stock have been ~CHF 21 million. Let’s further as- prices altogether and focus solely on busi- sume that you wanted those purchases to fer sharing the details to a later date. Also comprise no more than 2.5% of your portfo- during the quarter, we sold our shares in lio. Those assumptions would limit the in- three companies: Reckitt Benckiser, realizing vestor’s portfolio size to roughly $1 billion, a total return of 59% over a period of less even though Swatch Group has a market than three years; PepsiCo, realizing a gain of capitalization of roughly CHF 23 billion. Other 58% over three years; and Becton Dickinson, companies in our portfolio have market capi- where we more than doubled our money talizations that are a fraction of that. This over three and a half years. We also sold our means that at some point in the future we shares in ADT Corporation at a small loss. will not be able to move as fast as we do While the business fundamentals continue to now nor take advantage of as many smaller improve, debt has increased to levels that opportunities. When that happens, years make us uncomfortable. Finally, we sold such as the one we just had, where opportu- some of our shares in Hanesbrands to take nities are not as plentiful or are fleeting, will advantage of more attractive opportunities. force us to maintain higher cash balances. I During the quarter, we initiated a new posi- do not know how soon that day will come, tion during the quarter in the common stock but I estimate that these considerations will of Evertec, Inc. Based out of Puerto Rico, become more relevant once our assets ex- Evertec’s operations focus primarily on pay- ceed US$1 billion. ment processing services, merchant acquir- ing, and miscellaneous business solutions. Operating in nineteen countries, the company is one of the leaders in all three business OUR PORTFOLIO lines in Latin America and the largest in the We added significantly to our investments in Caribbean and Central America where the Switzerland in early January, when panic hit company processes 2.1 billion transactions a year.. In addition, Evertec owns and operates the stock market on the heels of the Swiss the ATH network, one of the region’s leading National Bank abandoning its exchange rate PIN debit and ATM networks. You can find cap versus the Euro. We added to our shares more information about Evertec on their in Nestle, Swatch Group, and Richemont, website (http://www.evertecinc.com/) and taking Swiss stocks to 13.6% of our portfolio, in this informative video: https://youtu.be/ V7_HR9gm-Jo. up from 7.9% at the end of last quarter. We also continued to buy shares in the Norwe- gian healthcare company I mentioned in last quarter’s letter. As a result, I will have to de- THE FUND Fund assets increased slightly during the quarter and assets under management by Mayar Capital Management now stand at $24.5 million. This net increase was caused by return on investments, a redemption from an existing partner partially offset by additional subscriptions from existing partners, as well as to a new partner who has come on board. I would like to extend a warm welcome to the new partner who joined Mayar this quarter and thank every- one – new and old – for their commitment to the Fund and faith in our approach.

As always, if you have any questions please do not hesitate to contact me.

Thank you all for your constant support and trust.

Best regards,

Abdulaziz A. Alnaim, CFA Managing Partner April 8, 2015

TEN LARGEST POSITIONS

COMPANY NAME % INDUSTRY COUNTRY OF LISTING INTERNATIONAL BUSINESS MACHINES 6.70 SOFTWARE & SERVICES UNITED STATES MEDTRONIC 5.31 HEALTHCARE EQUIPMENT & SERVICES UNITED STATES UNITEDHEALTH GROUP 5.10 HEALTHCARE EQUIPMENT & SERVICES UNITED STATES LABORATORY CORP OF AMERICA 4.95 HEALTHCARE EQUIPMENT & SERVICES UNITED STATES SWATCH GROUP 4.92 CONSUMER DURABLES & APPAREL SWITZERLAND DUN & BRADSTREET 4.82 COMMERCIAL & PROFESSIONAL SERVICES UNITED STATES MSCI INC 4.82 DIVERSIFIED FINANCIALS UNITED STATES GOOGLE INC (CLASS A & C) 4.67 SOFTWARE & SERVICES UNITED STATES NESTLE 4.62 FOOD & BEVERAGE SWITZERLAND HENKEL AG 4.45 HOUSEHOLD & PERSONAL PRODUCTS GERMANY TOTAL 50.36 LAST QUARTER THIS QUARTER LAST QUARTER

THIS QUARTER SUGGESTED READINGS

BOOKS

 Delivering Happiness by Tony Hsieh  Business Adventures: Twelve Classic Tales from the World of Wall Street by John Brooks

VIDEOS

 Thomas Russo at VIF 2009  WealthTrack: Eveillard: Legendary Value Investor  Bruce Berkowitz: 3 Steps to Successful Investing

ARTICLES & LETTERS

 Warren Buffett’s Annual Letter to Berkshire Hathaway Shareholders 2014  Value Investing Community Loses a Legend: Irving Kahn (1905 – 2015)  29 Charts Worth Your Time  Oaktree Memo from Our Chairman, Howard Markets: Liquidity INVESTMENT OBJECTIVE

The fund’s investment objective is long-term growth of capital by investing in equities and other securities to generate satisfactory risk-adjusted returns. The fund seeks to achieve its objective over the long term, which we define a minimum of OUR GLOBAL PARTNERS five years, by applying a disciplined value investing strategy to the selection of securities in global financial markets and only invests in securities that comply with Islamic ethical standards. BROKERAGE

FUND ASSETS (US$): 14,310,696

FIRM AUM* (US$): 24,513,915

FISCAL YEAR END: June 30

FUND INCEPTION: May 14, 2011 CUSTODY FUND MANAGER: Abdulaziz A. Alnaim, CFA

MINIMUM INVESTMENT (CLASS A): $100,000

MINIMUM INVESTMENT (CLASS B): $2.5 million

MANAGEMENT FEE: 1.5% (Class A) / 1.0% (Class B)

INCENTIVE FEE: 20% (Class A) / 14% (Class B) ADMINISTRATION of spread above benchmark, with a high watermark

BENCHMARK: MSCI World Index

DOMICILE: Cayman Islands

ADMINISTRATOR: Apex Fund Services Bahrain

AUDITOR: KPMG (Cayman Islands)

BLOOMBERG TICKER: MAYARFD KY AUDIT ISIN: KYG5905A1058

DISCLAIMER:

Mayar Fund follows a long-term investment strategy. Short-term returns will vary considerably and will not be indicative of the strategy’s merits.

*Firm Assets Under Management (“AUM”) include all assets managed by the firm within funds and separately managed accounts

This communication is confidential and is intended solely for shareholders of Mayar Fund Ltd. LEGAL

Mayar Capital Management Ltd Goversnors Square, Unit 5-202 PO Box MP10085 West Bay Road Grand Cayman, Cayman Islands [email protected] AWARDS

Winner - Acquisition International Hedge Fund Awards 2015 – Best Global Equities Hedge Fund - Cayman Islands

Mayar Capital Management Investment Company Of The Year - Saudi Arabia 2015

Saudi Asset Manager of the Year Saudi Asset Manager of the Year Shortlisted - 2013 Shortlisted - 2014

Saudi Asset Manager of the Year European Hedge Fund of the Year Shortlisted - 2015 Shortlisted - 2013