Speaking at European Family Office Winter Symposium in London, February 2013

Investment Manager of BEF Fund attended European Family Office Winter Symposium held in conjunction with the Institutional Investors’ Congress in London in February 2013. Investment Manager was panellist at a round table on Emerging Markets and has presented growth potential of stock exchange markets in countries of former Yugoslavia.

BEF Fund Investment Manager highlighted the huge short, medium and long term growth potential of these markets. Short term stock value growth potential arises from still lagging growth of these regional markets behind the most of the world. While major global stock indices are growing for the last four years (and are quoting close or even above their 2007 levels), many stock shares in the region are quoted on only few % of their 2007 values. On the medium to long term the region has the greatest potential for growth in Europe, originating from the countries’ outlook to join EU in this decade. Croatia will become a full membership in a bit more than 3 months, while other countries in the region are also in the accession process. Consequently there will be large inflow of European funds and other investment capital in the region and this will be the last enlargement of EU in foreseeable future. This will not only arouse the investments into infrastructure but also stimulate regional economy growth, increase of mergers & acquisitions and further accumulation of domestic and foreign investment capital into regional financial markets. In this process of regional adjusting to European regulation the improvement of security and legal terms will enhance the business environment and investment security. This will all contribute tosubstantially higher values of enterprises and higher valuation of securities. Investment manager emphasized that the Balkan region has been so far pretty much overlooked while being »Unique opportunity in the heart of Europe«. When the investment capital will start flowing into the region, there will be high responsiveness of the quotations (high Beta), due to currently low liquidity and we will witness large increase of stock value. »Time to invest is now. Once the region will be on the cover page of Financial Times, it will be too late for superb returns for everybody«.

Last part of the panel was focused on the discussion on dilemma whether it is better to keep to one or more investment strategies. Panelists agreed that investment managers of funds investing in emerging markets should have local presence in order to make the most from local investment opportunities (by maximizing the returns and avoiding local risks). Investment manager of BEF Fund stressed that: »Managing a bit of everything might finish in average or even with poor overall results. For this reason BEF Fund’s Investment Manager company is being completely focused on BEF Fund investment region on 24/7 basis in order to obtain best results for the investors, as for the topmost returns and mitigation of specificrisks, specialization and focus are crucial.