Schroder Investment Management North America Inc. Bay County Employees’ Retirement System Matthew Dobbs, Head of Global Small Cap Equities, Portfolio Manager Hannah Piper, Pan-European Small Cap Analyst June 2018 For professional advisers only. This material is not suitable for retail clients Investment Philosophy and Team Investment philosophy Philosophical beliefs Deduction Process Stock selection is key source of Inefficiency higher for small stocks Stock selection predominant value-added Small stocks have higher specific Seek quality and growth – at the Embedded in screens and in-house risks wrong price stock research Low liquidity an opportunity and a Seek long-term, not short-term Long-term time horizon challenge valuation anomalies Opportunity set is global Need for on the ground presence Extensive, dedicated global team The views and forecasts contained herein are those of the International Small Cap team and are subject to change. 2 Resources International small cap team – A fully resourced and focused team – 20 specialists in international small Lead Portfolio Manager company research Matthew Dobbs 36 (36) and investment – Core team of Lead Portfolio Japan Pacific x Jap Pan Europe Manager and Regional Specialists Small Cap Specialist Small Cap Specialist Small Cap Specialist have an average of 25 years Takuya Furutani 14 (23) Richard Sennitt2 24 (24) Jean Roche 2 (18) investment experience and an Paul Rathband 6 (26) Andrew Lynch 19 (19) average of 17 years tenure at Small Cap Analyst Small Cap Analyst Small Cap Analyst Schroders Andrew Rose2 36 (36) Kim Young Roe 10 (19) Andy Brough 30 (30) Ayumi KobayashI 13 (29) Rebecca Xu 7 (7) Luke Biermann4 11 (11) – Local presence and knowledge the Kota Takahashi 5 (11) Gina Kim Ji Yong 5 (18) Iain Staples 6 (19) key – primary research conducted Nina Chen 2 (8) Hannah Piper4 5(7) out of Schroder research offices Siew Ling Tan 4 (8) Alexander Deane3 2(7) globally Chuan Yao Lu <1 (9) – Team can draw on the broader International Small Cap Team Schroder focus list analysts – approximately 20% of holdings covered by focus list analysts – Cross fertilization of investment ideas between regions and with Focus list analysts1 ESG Team Data Insights Unit Global Sector Experts -Japan – 8 -Team of 12 dedicated ESG -A team of data scientists, data -Pacific ex Japan – 33 specialists consultants and data engineers -Pan Europe – 14 Global Sector Specialists – 8 # = Number of years with Schroders. (#) = Numbers of years investment experience. 1 Source: Schroders as of March 31, 2018. 30 September 2017. Global Resource 2Located in London. 3Includes other coverage. 4Also a specialist. 3 Process update – Sector ranges – Screens UK screen - December 31, 2017 Free Cash Flow FCF Return On Piotroski Overall Screen Country of Free Cash Flow Yield FCF Return On Assets Score Overall Screen Rank Revisions Revisions Rank 3 ID Company Name Primary Listing Yield (Fractiles) Assets (Fractiles) Piotroski Score (Fractiles) Rank (Fractiles) Rank 3 months ago (Fractiles) months ago BYVGFL Gulf Keystone PetroleuUNITED KINGDOM 40.79 1 23.30 1 7 1 17.00 1#N/A3#N/A BYV249 Medica Group Plc UNITED KINGDOM #N/A NA 13.41 1 9 1 19.00 1#N/ANA#N/A B5TT18 Centamin plc UNITED KINGDOM 14.30 1 17.74 1 7 1 23.67 1145.00 B1FW50 Hochschild Mining plc UNITED KINGDOM 12.90 1 11.75 1 8 1 24.33 1155.00 087823 Taylor Wimpey plc UNITED KINGDOM 10.62 1 11.20 1 8 1 31.00 1131.00 B02L3W Berkeley Group HoldinUNITED KINGDOM 10.48 1 10.34 1 8 1 34.67 1112.00 075902 Fidessa group plc UNITED KINGDOM 8.32 2 23.73 1 7 1 35.33 1152.00 092922 Victrex plc UNITED KINGDOM #N/A NA #N/A NA 7 1 36.00 1332.00 037184 Games Workshop Gro UNITED KINGDOM 12.88 1 44.13 1 6 2 38.33 1111.00 033450 Fenner PLC UNITED KINGDOM 10.00 1 9.36 2 8 1 40.67 1311.00 – Smallcap Optimizer and Risk Tool (SORT) – ESG and DIU representation on the International Small Cap Investment Committee Source: Schroders. The security information shown is for illustrative purposes, is subject to change, and is not a recommendation to buy/sell. Past performance is no guarantee of future results. The value of an investment can go down as well as up and is not guaranteed. 4 Portfolio construction Risk management and position sizing Higher active weight Fundamental Factor Risk Analysis – Smallcap - Higher relative upside Optimizer and Risk Tool (SORT) 10 - Higher liquidity - Lower fundamental risk 9 8 Lower active weight -Lower relative upside 7 - Lower liquidity 6 - Higher fundamental risk 5 4 Risk scoring % 3 Fundamental Risk score Liquidity factors - ADTV 40 2 ESG factors 30 1 Financial factors - Piotroski score 15 0 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Earnings stability 15 Portfolio Weight (%) Ensuring risk and conviction are consistently aligned Source: Schroders. May 2018 Based on Schroder International Small Companies Fund (SISCO). The information is intended to illustrate the risk management process and should not be viewed as a recommendation to buy/sell. Please see full disclosures at the end of the presentation 5 Performance Performance Investment environment –Smaller companies have performed S&P EPAC SmallCap Index vs. MSCI MSCI EAFE and MSCI EAFE Small Cap strongly in both absolute and relative EAFE Index1 Index Performance in US$(%)2 terms over the last 12 months with MSCI EAFE Small Cap index rising June 1989 = 100 12 months to 30 April 2018 +20.0% compared to the +14.5% return 160 25 of the MSCI EAFE Index. 150 –Small cap outperformance came in all 140 20 regions with the strongest 130 contributions from continental Europe 15 and Japan. 120 110 –By sector, the strongest positive 10 impacts to small cap relative 100 outperformance were health care, 90 5 consumer staples and information 80 technology. Energy and consumer 70 0 discretionary were the only sectors 89 92 95 98 01 04 07 10 13 16 EAFE Cont UK Japan Pacific where smaller companies trailed large. Europe ex Japan MSCI EAFE MSCI EAFE Small Cap 1Source: Schroders, S&P, MSCI, 30 April 2018 2Source: Schroders, MSCI Performance shown is past performance. Past performance is not necessarily a guide to future performance. The value of investment can go down as well as up and is not guaranteed 7 Performance SISCO2 - Bay County Employees’ Retirement System Value: US$ 38,913,830 as at 30 April 2018 Inception date: June 30, 2006 Performance to 30 April 2018 (in US$%) 3 months 1 year 3 year1 5 year1 Since Inception1 SISCO (NAV)2 -3.4 +22.8 +12.0 +12.7 +7.9 Bay County Index3 -3.0 +21.5 +12.1 +12.4 +8.3 Fund Index4 -3.3 +20.0 +10.6 +10.9 +6.8 SISCO2 vs Fund Index -0.1 +2.8 +1.4 +1.8 +1.1 Performance Attribution against Fund Index4 Contribution from 3 months 1 year 3 years1 5 years1 Stock Selection +0.2 +4.1 +1.3 +2.0 Region Allocation -0.2 -1.1 -0.2 -0.2 Timing Residual -0.1 -0.2 +0.3 0.0 Difference Relative to Fund Index -0.1 +2.8 +1.4 +1.8 1Annualized 2Schroder International Small Companies Fund (SISCO). Performance based on JPMorgan NAV and is subject to fair value pricing adjustments applied in periods of elevated market volatility using an independent service. As the benchmark is not subject to this practice, artificial gaps between NAV and index performances can result. 3Fund Index plus 150 basis points 4S&P EPAC SmallCap to 12/31/2015, then MSCI EAFE Small Cap (NDR) Source: Schroders, S&P, MSCI, Factset PA3, gross of fees. Past performance is not an indication of future performance. Please see full disclosures at the end of the presentation 8 Performance and Performance Attribution 3 months to 30 April 2018 S&P EPAC SmallCap to 12/31/2015, SISCO1 then MSCI EAFE Small Cap (NDR) End Weight Total Return End Weight Total Return Stock Selection Regional Allocation Total Effect UK 14.9 -4.2 18.2 -1.5 -0.4 -0.1 -0.5 Continental Europe 41.5 -4.5 39.6 -4.7 0.1 -0.1 0.0 Japan 29.1 -0.6 31.1 -1.9 0.4 0.0 0.4 Pacific ex Japan 7.0 -3.7 11.1 -5.5 0.1 0.1 0.2 Emerging Markets 6.0 -5.3 - - --0.1-0.1 Cash 1.5 - - - -0.00.0 Residual ---- ---0.1 Total 100.0 -3.4 100.0 -3.3 0.2 -0.2 -0.1 Top 5 Active Contributors Top 5 Active Detractors 3 months to April 30, 2018 3 months to April 30, 2018 Return (%) Contribution (%) Return (%) Contribution (%) OBIC Business Consultants 30.4 0.22 Marie Brizard -37.0 -0.24 Nordax Group 11.0 0.21 Ascom Holding -20.6 -0.15 Basic-Fit 10.5 0.16 Durr -27.9 -0.12 Ubisoft Entertainment 11.5 0.16 COMET Holding -23.8 -0.12 Arcs Company 18.9 0.15 Aumann GmbH -27.0 -0.11 1Schroder International Small Companies Fund (SISCO). Source: Schroders, S&P, MSCI, Factset PA3 9 Performance and Performance Attribution 12 months to 30 April 2018 S&P EPAC SmallCap to 12/31/2015, SISCO1 then MSCI EAFE Small Cap (NDR) End Weight Total Return End Weight Total Return Stock Selection Regional Allocation Total Effect UK 14.9 13.7 18.2 17.7 -0.5 0.1 -0.4 Continental Europe 41.5 25.6 39.6 19.7 2.3 0.0 2.3 Japan 29.1 30.6 31.1 23.6 1.7 0.0 1.7 Pacific ex Japan 7.0 24.8 11.1 15.9 0.6 0.2 0.8 Emerging Markets 6.0 9.5 - - --0.7-0.7 Cash 1.5--- --0.7-0.7 Residual ---- ---0.2 Total 100.0 22.8 100.0 20.0 4.1 -1.1 2.8 Top 5 Active Contributors Top 5 Active Detractors 12 months to April 30, 2018 12 months to April 30, 2018 Return (%) Contribution (%) Return (%) Contribution (%) Ubisoft Entertainment 102.2 0.63 Marie Brizard -35.9 -0.38 YOOX Net APorter 74.3 0.50 SPIE -16.0 -0.37 Basic-Fit 72.5 0.42 Lenzing -34.0 -0.35 Advanced Metallurgical Grou 80.9 0.42 Origin Enterprises -17.9 -0.24 Kureha Corporation 56.6 0.32 Wirecard* 81.3 -0.20 1Schroder International Small Companies Fund (SISCO).