SEAN MELNICK

NEDCOR SECURITIES – MIDCAP CONFERENCE

GROUP SNAPSHOT

The Peregrine group is a leading provider of wealth and asset management solutions.

Assets under management currently exceed R 22 billion.

Citadel R 10 billionQuant R 9 billionHedge funds R 3 billion

10th biggest broker by value, 7th by shares traded and 5th by deals settled.

Market capitalisation (net of treasury shares) @ R7.50 of R1.5 billion.

Capitalised at 6.7% of assets under management.

PE ratio per trading update (@ R7,50) between 8.2 times and 9.3 times to end March 06.

GROUP PROFILE Contribution to Sep 05

WEALTH MANAGEMENT 23%

Citadel ASSET MANAGEMENT 35%

Hedge Funds

Peregrine Capital

Peregrine Investment Managers (PIM)

Caveo FOHF (JV with IS)

PeregrineQuant TRANSACTIONAL 26%

Broking & Structuring

PROPRIETARY CAPITAL 16%

Investment returns (net of group costs)

PERSONAL FINANCIAL FRAMEWORK

1.WEALTH

CREATION

(“What you do

for a living”)

2.YOUR LIFESTYLE

ASSETS

(‘How you live”)

3.WEALTH

PRESERVATION

(“Securing your

future”)

4.EXCESS

ASSETS

(“More than enough”)

WEALTH MANAGEMENT - CITADEL

CITADEL

Focussed on individual high-net-worth wealth management

Clients with R 2 million plus to invest

Average current top-up client size R 5,0 million

Average new client size R 8,0 million

Total assets under management approximately R 10 billion

New inflows of R 100 million per month

Client retention of 96%

Annuity outflows of almost R600 million

WEALTH MANAGEMENT

CITADEL - PROFITABILITY

Annuity profit R 4 million per month = approx R50 m per annum

PLUS 20% performance fee above lifetime benchmark per client

Benchmark is inflation after accounting for all costs and taxes

High watermark catch up from late 2001 / early 2002

Performances fees currently averaging R 3 million per month plus

Approximately half the client base now at, or above, high watermark

Strong gearing to weaker currency over time

WEALTH MANAGEMENT

CITADEL – PERFORMANCE FEE “RUN RATE”

At current level of AUM of R 10 billion :

if all clients at benchmark: run-rate of R 20 million per 1% real

if half the clients at benchmark: run-rate of R10 million per 1% real

Half the clients at benchmark: 5% real = R 50 million fees per annum

Half the clients at benchmark: 10% real = R 100 million fees per annum

WEALTH MANAGEMENT

PeregrineQuant

Over R9 billion in AUM

Cashflow positive

Good progress in both the institutional and retail markets

All the infrastructure costs have been spent

Belief that quantitative asset management will continue to gain ground

on the more traditional styles

ASSET MANAGEMENT

HEDGE FUNDS

Peregrine is the biggest player in the local hedge fund industry.

The group’s exposure to the hedge fund industry is extensive with investments across a broad range of strategies exceeding R5 billion on a worldwide basis.

In excess of R 2,5 billion is managed in single strategy hedge funds. Within the group’s wealth management arm, Citadel, over R1 billion is invested

with leading hedge fund managers on a multi - strategy approach. In addition, R1,7 billion is currently managed globally on a fund of hedge fund

basis with an international joint venture partner. Caveo, a newly formed FOHF joint venture with Investment Solutions currently

has R 330 million under management.

The group also houses one of the country’s leading derivative, equity and prime broking operations.

OUR INTEGRATED HEDGE FUND STRATEGY

FUND OF HEDGE FUNDS / MULTISTRAT

Caveo

Citadel Multistrat

SINGLE STRATEGY FUNDS

Peregrine Capital

Peregrine Investment Managers (PIM)

PRIME BROKER

Peregrine Prime

CAVEO – Top of the funnel

Combining Peregrine’s hedge fund experience and reputation

with Investment Solutions distribution (and manager access)

Currently R330 million under management

Potential to manage several billion

Conflict of interest resolved by “non-Peregrine” products

ASSET MANAGEMENT

OUR INTEGRATED HEDGE FUND STRATEGY

FUND OF HEDGE FUNDS / MULTISTRAT

Caveo

Citadel Multistrat

SINGLE STRATEGY FUNDS

Peregrine Capital

Peregrine Investment Managers (PIM)

PEREGRINE CAPITAL

Fundamental equity hedge fund management company

Over R2.1 Billion in AUM

Comfortable at current AUM , but closed to new flows

Hedge fund : 44% p.a. gross compounding since July 98

Performance fund : 65% p.a. gross compounding since July 98

50/50 economic deal with management – stability in team

Profit from annual fees of only R 10 million BUT

ASSET MANAGEMENT

PEREGRINE CAPITAL – PERFORMANCE FEES AT AUM of R 2,1 BN

168 m40% pa

147 m35% pa

126 m30% pa

105 m25% pa

84 m 20% pa

63 m15% pa

42 m10% pa

Performance Fees

Return

ASSET MANAGEMENT

OUR INTEGRATED HEDGE FUND APPROACH

FUND OF HEDGE FUNDS / MULTISTRAT

Caveo

Citadel Multistrat

SINGLE STRATEGY FUNDS

Peregrine Capital

Peregrine Investment Managers (PIM)

PRIME BROKER

Peregrine Prime

BROKING AND STRUCTURING

Peregrine Securities

Equity Broking

Peregrine Prime

Peregrine Equities

Derivative Broking

Derivative & Quantitative Research

Structuring

TRANSACTIONAL

Base Case (?) Earnings for Peregrine (note assumptions)

R 180 m @ 6.7%12Interest

PAT = R116m, HEPS ± 60 cps

@11%, each additional 5% pa = R17.5m

Large transactions/structures excl.

Each additional R1bn AUM = R2.5 m

@15%, each additional 5%pa = R12.5m

1% pa real performance = R10m

Sensitivities

(15)Holdings costs

162Total

40Return on proprietary capital

125Subtotal

30Securities

5PeregrineQuant

40Hedge funds

50Citadel

PBT (Rm)Company

Balance sheet

No external gearing at year end

R 360 million in cash / near cash investments

Approximately R 150 million cash in working capital

Generating cash at a rate of R 20 million per month (pre tax)

BUT

Earnings do rely on good investment performance

Business is highly people dependent

FINALLY, AN INTERESTING COMPARISON AND SOME HOMEWORK

Man Group Plc (www.mangroupplc.com)

Largest listed hedge fund manager. Listed on the LSE.

Man Group Plc is a :“leading global provider of alternative investment products and solutions. One of the world’s largest future’s brokers.”

Assets under management @ 12 Jan 06 - $ 45.8 billionMarket Capitalisation - $ 11.9 billionMarket cap : AUM = 26% !!!!Fiscal PE (trailing) – 19.3 times