december 2017 Russian Prosperity Fund Euro

Investment Objectives and Methodology NAV EUR (A) 107.12, (K) 97.80 Prosperity utilises a long-only, bottom-up, fundamental-value, active investment approach that seeks to benefit from the significant value PERFORMANCE % INCEPTION DEC YTD 1 YR 3 YR 5 YR 10 YR generated from and the Former Soviet Union’s (FSU) on-going The Fund* 971.2 0.4 6.0 6.0 101.9 18.0 5.0 corporate consolidation and restructuring processes whilst mitigating the principal risk of investing in the region – namely corporate governance. In MSCI Russia (Euro) 105.7 1.0 -12.0 -12.0 41.6 -18.0 -51.9 general, Prosperity’s investment philosophy can be described as a bottom- up search for companies that are adding value through internal RTS (Euro) 364.3 0.9 -12.1 -12.1 47.6 -16.9 -38.3 modernisation and consolidation. Russian Prosperity Fund Euro is a UCITS compliant, Finland-domiciled *A Shares, in EUR terms, net of all PCM fees. Index data, provided for reference only, is not of the total return variants - which are not available to the Fund’s inception. vehicle advised by Alexey Krivoshapko. On 1 February 2014, RPFE became a feeder fund, investing its assets in the master fund, Russian Prosperity Fund Luxembourg – a UCITS compliant Sicav. Performance €120 Fund Comment The Fund Russian equities were up 1% in December, finishing the year 12% lower. €100 The fund had one of the best years with 18% relative performance. Our oil and gas holdings were 2% lower in the month, which is somewhat MSCI Russia surprising given that the oil price advanced by 4% in the month and €80 reached our mid-term forecast. KazMunaiGas rose by 9% as the company RTS announced a buyback at USD 14 per GDR - which is an improvement - €60 while still a very cheap valuation, especially taking cash into account. Financials were 1% higher. Sberbank held an upbeat Capital Markets €40 Day in London where it announced a targeted 15% profit growth in three years and movement to a 50% pay-out, which we welcome. Our materials exposure was 4% higher for the period on the rebound in NLMK, Evraz €20 and Highland Gold. We added to our Acron position following a reassuring meeting with its CEO. Our retail exposure was flat for the €0 period. We participated in ’s discounted capital increase. We added Mar 00 Mar 02 Mar 04 Mar 06 Mar 08 Mar 10 Mar 12 Mar 14 Mar 16 to Obuv Rossii following above-expectations Q3 2017 forecast and the reassuring CEO comments. Prosperity Funds reached an agreement to sell its entire holdings in Dixy to entities of the Dixy Group in a series of transactions. Dixy has been a long-term holding in the portfolio; however, Sectors Top Exposures’ Drivers we were continuously disappointed with its financial performance. Though the company might become an acquisition target for one of the bigger players, there is also a risk that it will remain independent and will fail to restore profitability in an increasingly competitive market where its relative size is decreasing. We skipped Detsky Mir’s placement. Our power sector holdings were flat for the period on weak performance of MRSK Center. We met the CEO of FSK, Andrei Murov, and, while valuation is cheap, we cut our dividend expectations on a government decree regulating pay-outs in the power sector, taking into account higher Oil & Gas 25.0% Value 59.5% required maintenance capex. MHP climbed by 1% and we met with the Financials 17.8% new chairman of the board to get a better grasp on international expansion Metals & Mining 16.6% Growth 22.1% Retail 14.7% Restructuring 9.7% and asked for a better-formulated dividend policy. LSR jumped by 2% Power 8.9% from the low. We skipped placement of Etalon, its peer, on valuation Agriculture 6.0% Corporate Governance 8.7% grounds. Overall, the fund still looks cheap at 5x 2018 P/E with a 6% DY Real Estate 3.0% and both oil and ruble trading in line with our 2018 average projections. Other sectors 7.1% Top Ten Exposures Cash 0.9% SECURITY EXPOSURE, % SECTOR PERFORMANCE, % PE17 PE18 DRIVER COMMENT

Sberbank 9.6 Financials -0.1 7.4 6.1 Value Dominant bank, rising consumer leverage, corporate transformation 9.2 Oil & Gas -3.4 3.6 2.9 Value Low valuation, efficiency turnaround potential, strong cash gen. MHP 6.0 Agriculture 0.5 4.6 3.5 Value Vert. integr. poultry prod, dominant Ukr. m. share, growing exports 5.1 Financials 1.7 11.5 8.4 Growth Leading data-driven credit card lender, strong management Magnit 4.7 Retail 0.6 14.9 10.6 Growth Leading food retailer, undergoing restructuring 4.5 Oil & Gas 0.1 6.2 5.2 Value Low valuation, attractive dividend yield 4.3 Oil & Gas -0.4 4.2 3.7 Corp. Gov. Low valuation, cash pile exceeds market capitalisation MMK 4.2 Metals & Mining -5.2 7.2 8.3 Restructuring Flat steel maker, non-integr. to raw materials, high dividend potential Dixy 3.9 Retail 0.6 22.9 19.3 Restructuring Third-largest food retailer, undergoing management changes X5 3.9 Retail 2.6 16.0 11.7 Growth Leading food retailer in Russia Total 55.4 Company exposure may comprise several individual equity positions - in ordinary shares, preferred shares or depository receipts. Where this is the case, the performance and price earnings ratios of the largest equity position are noted. december 2017 russian prosperity fund euro | prosperity capital management

Annual Performance Risk Characteristics (Three Years)

Year Fund Returns % MSCI RU % RTS(Euro)% Alpha(%): 14.76 Since Inception 971 106 364 Beta: 0.77 2000 -34 -32 -26 2001 114 63 90 R-Square: 0.69 2002 18 -4 18 Sharpe: 1.13 2003 60 42 32 Treynor(%): 33.99 2004 8 -4 0 Tracking(%): 14.31 2005 135 94 110 2006 46 38 53 Ann. Std Deviation(%): 22.99

2007 4 10 7 Source: FolioMetrics 2008 -76 -73 -71 2009 176 95 123 2010 48 26 13 Key Information 2011 -23 -18 -7 Investment Manager for Seligson & Co Fund Management Plc RPFE (Feeder Fund) 2012 20 8 8 Investment Manager for Prosperity Capital Management (UK) Ltd* 2013 0 -7 -9 RPFL (Master Fund) 2014 -42 -38 -38 Home Page www.prosperitycapital.com

2015 15 5 7 Status Open-ended (UCITS) 2016 66 53 57 Domicile Finland 2017 6 -12 -12 ISIN Code FI0008808183 (K Shares) FI0008802004 CAGR 14 4 9 (A Shares - open to Swedish/Finnish investors) Past performance is not an indication or guarantee of future returns. Trading Daily

Listing No Advisor Profile Date Of Inception 08-Mar-00 PCM is one of the leading Russia-focused asset managers in the world, with around USD 3.9bn of assets under management. Total Fund Assets EUR 48 million Founded in 1996, PCM has consistently topped performance charts Fees K Shares: 2.7% mgmt fee, A Shares: 1.2% mgmt fee, for emerging market funds. The firm has built a reputation for its performance fee of 15% over RTS Euro. thorough research and “active” investment approach. PCM is now a major shareholder in some of the leading companies in Russia, Minimum Investment Euro 25k Ukraine and Central Asia. Our international client base includes international pension funds, Placing/Exit fees Up to 2.5%/0.5% (within 6 months) insurers, endowments, family offices and private banks, as well as Redemption Daily, on dealing day sovereign wealth funds. PCM has a strong presence in - with 16 staff based in NAV/Price Release Bloomberg (SELPRUS), Morningstar offices close to Red Square. The majority of the staff are Russian. PCM Administrator also has offices in London and the Cayman Islands. Seligson & Co (Helsinki) +358 9 6817 8200 The company’s philosophy is “long-only/active” using no leverage. Investments are made on a fundamental value basis, using a bottom- up approach. Portfolios tend to be concentrated.

Investment Manager for RPFE (Feeder Fund) Investment Manager for RPFL (Master Fund) Client Services (Finnish investors) Client Services (Other investors) Seligson & Co Fund Management Plc Prosperity Capital Management (UK) Ltd* Seligson & Co Fund Management Plc Prosperity Capital Management (UK) Ltd* Erottajankatu 1-3 2nd Floor, 6 Cavendish Square Erottajankatu 1-3 2nd Floor, 6 Cavendish Square FI -00130, Helsinki, Finland London, W1G 0PD FI -00130, Helsinki, Finland London, W1G 0PD Tel +358 9 68178200 Fax +358 9 68178222 Tel +44 20 7299 6950 Fax +44 20 7299 6951 Tel +358 9 68178200 Fax +358 9 68178222 Tel +44 20 7299 6950 Fax +44 20 7299 6951 [email protected] [email protected] [email protected] [email protected] *Authorised and regulated by the UK Financial Conduct Authority. Registered in England and Wales. Company No. 04959887. Registered Office: 5 Old Bailey, London EC4M 7BA december 2017 russian prosperity fund euro | prosperity capital management

Disclaimer

The information contained in this factsheet is not approved for the public and Investment in investment vehicles investing in Russia and other FSU is only intended for recipients who would be generally classified as 'qualified', countries involves risks not normally associated with vehicles investing in 'professional', ‘sophisticated’, ‘accredited' or 'institutional' investors. No more developed and more politically and economically stable jurisdictions person in any jurisdiction may treat this factsheet as constituting an offer to with more sophisticated capital markets and regulatory regimes, such as the purchase any Shares, nor should any person attempt to purchase shares or United States and Western Europe. Such risks include political, economic and interests in the Fund. currency risks and the risks associated with investing in underdeveloped legal, The contents of this factsheet are not to be construed as investment, legal or regulatory and accounting environments. In addition, the Russian market is tax advice. Each investor should consult its own counsel, accountant or volatile and has limited liquidity, transparency and depth. This could result in investment business adviser as to legal, tax and related matters concerning its the relevant investment vehicle, including any Fund, not achieving the desired investment or potential investment. purchase or sale price for its investments. This factsheet has been prepared by Prosperity Capital Management Limited Some information contained on this factsheet contains forward-looking ("PCM "). The information, format, contents of and material contained in this statements. These forward-looking statements include, without limitation, factsheet are the copyright property of PCM and all rights are reserved in statements relating to revenues and earnings. The words "believe", "intend", relation thereto. This factsheet and all information or material contained "expect", anticipate", "project", "estimate", "predict", "is confident", "has herein may not be forwarded to any party, without the prior express written confidence" and similar expressions are also intended to identify forward- consent of PCM. looking statements. These forward-looking statements are not historical facts. Rather, these forward-looking statements are based on the current beliefs, This factsheet contains data and facts on investments which are provided for assumptions, expectations, estimates, and projections of and about the informational purposes only, nothing in this factsheet shall constitute an Russian and FSU markets, the economic conditions in Russia and FSU offering of any shares or interests in any Fund described herein. Any offering countries. These forward-looking statements are not guarantees of future of, or application for, interests in the Fund, is made by the Fund itself and is performance and are subject to risks, uncertainties and other factors, some of subject to the terms and conditions of the Fund’s Information Memorandum, which are beyond the control of PCM and are difficult to predict. constituent documents and the completion of any relevant subscription Consequently, actual results could differ materially from those expressed, application. The information in these documents may be different from the implied or forecasted in these forward-looking statements information contained in this factsheet. None of PCM, its affiliates or subsidiaries, any fund managed by PCM described herein (each, a "Fund" and The prices of shares or interests in the Fund(s) and any income from them can collectively, the "Funds"), or any of their directors, officers or shareholders go down as well as up and investors may not get back the full amount (together “PCM Related Parties”) gives any warranty or representation as to invested or any amount at all. Past performance is not indicative of future the accuracy or completeness of any of the data or information herein. performance and is not a guarantee of future returns. When an investment involves a foreign exchange transaction, it may be subject to fluctuations in Neither PCM nor any of the PCM Related Parties shall have any liability, in currency value. any respect, howsoever arising, out of or in relation to this factsheet, or reliance upon the information contained herein, including but not limited to any liability arising due to the inaccuracy, lack of completeness of, or failure to update or correct any information included herein or omitted to be included herein. PCM reserves the right at any time without notice (i) to change or withdraw the content or format of any part of this factsheet and (ii) to no longer send you this factsheet. The information in this factsheet is subject to updating, completion, revision and amendment.