credit suisse equity fund (lux) asian property fund · 2008. 5. 31. · source: clsa liquidity,...

CONFIDENTIAL

CREDIT SUISSE ASSET MANEGEMENT (AUSTRALIA) LIMITEDABN 57 007 305 384 AFSL 238390

Produced by: Name SurnameDate: 03.11.2005 Slide 1

Credit Suisse Equity Fund (Lux) Asian Property FundFebruary 2006Rob Sullivan

CREDIT SUISSE ASSET MANAGEMENT (AUSTRALIA) LIMITEDABN 57 007 305 384 AFSL 238390


European RoadshowFebruary 2006 Slide 2

Investment Case / Market Update – Asian Property marketsInvestment Process SummaryAppendix

Contents



Shanghai

Source: Credit Suisse and Emporis

Singapore

Property Boom in the Asian region

1990 2006 1990 2006



Source: CSAM.*Based on GPR General Asia Index composition

Combination of both mature and fast developing marketsInvestable universe includes both Property Developers & REITsREIT regulation within Asia is relatively newOffers investors with growth potential and yield

Asian Listed Property Market Characteristics



Asian Listed MarketsInvestment case and market overview



Strong economic growth is supportive for propertySurging urban population fuels property demandEmerging middle class REIT (Real Estate Investment Trust) market growthInvestor demand – Asian Listed Property is an under-invested asset class globallyValuations remain attractive

Key Drivers of Asian Listed Property Markets



$95

$161

$114

$24$2 $8 $7 $9 $12 $3 $4

$335

Australia Japan HongKong

Singapore NZ Korea Taiwan Malaysia China Thailand Phillipines UnitedStates

$USD

Billions

Developing property markets with strong upside potential

Vast market growth potential exists across other developing Asian Property markets

Source: Credit Suisse, EPRA and JP Morgan.Data as at January 2006 Market capitalisation figures include both Property and REITS.

Market Capitalisation of Asian Listed Property versus the United States



Conservatism since the

Asian crisis of 96/97

Result of 15 years of

deflation in Japan

Potential to switch into

high yielding real estate

11.7

13.1

24.5

25.5

37.8

41.2

70.3

72.2

74.9

0 20 40 60 80

US

Thailand

Singapore

Malaysia

Hong Kong

Korea

China

Taiwan

Japan

%

Source: CLSA

Liquidity, Asia is awash with cashM1 to GDP ratio



Regional property performance comparison

Source: GPR, performance returns are in local currency, annualised as at 31 December 2005

Asian Property Performance has lagged both the US and Europe over 5 years

13%

26%

19%

24%

30%

18%

13%

5.0%

20.0%

35.0%

1Y 3Y 5Y

Asia US Europe On a relative basis:

Asia has a stronger growth outlook

The Asian REIT market is in its infancy

Asia’s huge middle class is driving asset

prices

Asian demographics are supportive for

property

An exposure to Asia has diversification

benefits



Reit market capitalisation as a percentage of total country share-market

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

US Australia Singapore Japan Malaysia Thailand Hong Kong

Source: Credit Suisse

Start of Reit Cycle



An Evolution of listed propertyAsia still early in the cycleAn evolution of listed property

MalaysiaThailand

Korea Taiwan

Singapore

Japan

Lowly geared, illiquid property funds; single asset; retail owned; emerging economies / immature markets

Legislative change drives sector growth. Gearing limitations lifted, tax breaks in place, foreign ownership restrictions relaxed

Extended period of acquisition driven growth. Market prices vehicle for growth giving it the cost of capital to acquire accretively. Asset universe broad

Direct cap rates firm and acquisitions become more difficult. Management's focus turns to operational improvements. Trusts start to look off shore

Scarcity of accretive acquisitions drives M&A activity. Strong managers bid for weaker managers with good assets

A strong sector means IPOs make a return, increasing calls on equity placing a drag on funds flow into index, more overseas acquisitions are made, an increase in financial engineering

Introduction of operational earnings into the sector drives higher growth from higher risk oriented earnings steams - development, funds management, construction etc

Strong steady growth

Growth plateaus

Growth steps up

Sector consolidation drives prices Growth

plateaus

Where to from here?

Stage 5Stage 4Stage 3

Australia

NZ

Stage 8 Stage 7 Stage 6Stage 2Stage 1Interest rate impact*

Hong Kong




Superior growth and offshore confidence in the regionAsia has been very successful at attracting investment

Source: BNP Paribas Research and CLSA. *CLSA FDI forecasts

9.9

8.17.2

5.3

8.1

5.14.3

3.7

5.4

4.0

1.3

3.7

0.0

2.5

5.0

7.5

10.0

12.5

ChinaSingaporeHong KongMalaysiaIndiaPhilippinesThailandTaiwanIndonesiaKorea

EU US

Real GDP Growth, 2005 Asian Foreign Direct Investment

0

75

150

225

300

1999 2000 2001 2002 2003 2004 2005 2006

Accumulated

$USD332

Billion

Strong economic growth is supporting the wealth

prosperity of its consumers

Asia’s GDP has been approximately 1.5 times that

of world GDP for the past 5 years

China’s FDI represents a large majority of the

accumulated Asian investment from offshore



Investment UniverseAsia Pacific

China

Australia

India

Japan

New Zealand

Taiwan

Malaysia

Indonesia

Thailand

Singapore

South Korea

Philippines

Source: CLSA



Japan rebound

Source: Credit Suisse and JP Morgan.

75

100

125

150

175

200

225

250

275

300

Mar

-89

Mar

-90

Mar

-91

Mar

-92

Mar

-93

Mar

-94

Mar

-95

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Tokyo res. Land

Condo prices

Land prices at 70% discount

to their historic peaks

Catalysts for growth:Less then 5% of total property is listed in REIT’s

End of deflation after 20 years

Positive economic and reform outlook

Aging demographics demand for high yielding assets



Source: Credit Suisse and JP Morgan.

30

40

50

60

70

80

90

100

110

Jan

-94

Jul-

94

Jan

-95

Jul-

95

Jan

-96

Jul-

96

Jan

-97

Jul-

97

Jan

-98

Jul-

98

Jan

-99

Jul-

99

Jan

-00

Jul-

00

Jan

-01

Jul-

01

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

46%below the '97 peak

26%below the '94

peak

Centa-city Leading Index

Catalysts for growth:Beginning of REIT development

Hong Kong is the gateway to China

CEPA, Closer Economic Partnership Agreement with China

Residential prices are 46% below the peak of 1997

Hong Kong – Thriving property market



China – Surging property market


Market Characteristics

Emerging REIT market

Catalysts for growth:

Initiating REIT development

Significant growth potential

Emerging middle class driving asset prices

Strong economic growth

Evolving legal, regulatory and planning will

remove barriers for future growth



Singapore – Evolving listed real estate market

Source: CS, JP Morgan amd National Archive of Singapore.

Market Characteristics

First REIT Established 2002

Catalysts for growth:

Only 5% of total property is listed in REIT’s

Future potential growth from India

(CECA, recent trade agreement)

Most REIT friendly regulation in the region



Emergence of Indian Real Estate

Source: Colliers International and CS

CECA (Comprehensive Economic Co-operation Agreement with Singapore)

Opening of Foreign Direct Investment in Indian Real Estate

Real Estate Investment Trust Regulation on track for 2006

Demographics are supportive for future growth – Median age is 24, lowest in the world

High growth potential

Removal of hurdle’s sets the base for future growth



Asia Property vs both European and US Property

Asian Property has

a low correlation to

European and US

property

Source: GPR.



Asian property diversification benefits

Low correlation to other asset classes

Global Equities

Global Bonds

Source: GPR. Data from 30/6/1997 to 31/1/06, MSCI World, GPR General Asia Index & JP Morgan Global Govt Bonds

-0.30

-0.10

0.10

0.30

0.50

0.70

0.90

Jun 97 Jun 98 Jun 99 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05



Portfolio ConstructionBuy/Sell Discipline and Portfolio Controls

Aggregate Ranking ScoreYield / Growth / Management

Structured investment decision making process and implementation

Macro Monitor and Top Down Risk Control

Quality of ManagementQuality of Market Quality of Assets

Property Market Assessment

Investment Process



CS EF Asian Property Fund

Source: CS. Data as 31 January 2006

Hong Kong31.5%

Other4.0%

Japan34.5%

Thailand1.9%

Australia17.7%

China3.7%

Singapore6.6%

Hong Kong29.8%

Singapore6.5%

Japan35.1%

Philippines1.3%

Malaysia0.5%

Australia25.8%

New Zealand0.9%

GPR General Asia Index

Country exposure CS EF (Lux) Asian Property



CS EF (Lux) Asian Property country and sector view

Underweight

Underweight

Overweight

Overweight

Overweight

CountryFund Position

--+Australia

+++Japan

+++Singapore

+++China

n-+Hong Kong

ResidentialOfficeRetailCountry

Major listed real estate markets

+ Positive - Negative n Neutral



CS EF (Lux) Asian Property Fund Performance

CS EF (Lux) Asian Property

Benchmark

6.3

18.3

28.8

6.0

19.1

26.9

1 Mth 3 Mth Since Incep

%

Source: Bloomberg/Credit SuisseNote: inception date of July 2005. Figures stated are annualised

As at 31 January 2006 (Net of Fees), Performance Returns Detailed in USD



Source: CS and Emporis

The long-term pillars are set in place for continued growthStart of a multi-year cycleDiversificationThe Credit Suisse EF (Lux) Asian Property Team are specialists in this asset class

Summary



Appendix



Boon-Hong Yeo

Head of Asia Ex Japan Equities19 years Asia equity experienceExtensive management and research experience

Extensive track recordHead of Investments– CMG First State– Nicholas Appelgate (takeover)– Credit Lyonnais– Indosuez Asset ManagementDirector of Investments– AIB Govett



David Scott

Head of Property (Australia)21 years property experienceIncludes property mgmt, leasing, development, acquisitions, divestments10 years managing LPTs in AustraliaConsistent long-term top quartile performanceMulti award winning fund manager



AwardsCredit Suisse Australian Listed Property Fund

Australian Fund Manager Awards 2004 - Winner

S&P Awards 2005 - 2nd

InvestorWeb Research Six Star Award 2004 –

Finalist

Money Magazine Best of the Best Awards 2004 - 2nd

InvestorInfo Golden Bull 2003 - Finalist

InvestorWeb Research Six Star Award 2002 –

Finalist

InvestorInfo Golden Bull 2002 - Finalist

Money Magazine Best of the Best Awards 2002 -

Finalist

Property Investment Research Award 2004 -

Winner

S&P Awards 2004 - Winner

Money, Best Rated Australian Property Securities Fund 2005 - Winner



Boon-Hong Yeo

David Scott

Jonathon Ong

Eng-Teck Tan

Poh Hong Tan

Ser Mui Lim

Kathy Ng

Patrick Barrett

Rob Sullivan

Narelle Elliott

Matthew Ryan

Head of Asia ex Japan Equities

Head of Australian Property

Investment

Investment

Investment

Investment

Investment

Investment

Client Portfolio Manager

Dealer

Dealer

19

21

10

9

23

25

9

12

17

15

3

Experience(Years)Name Role

Sydney

Sydney

Sydney

Sydney

Singapore

Singapore

Singapore

Sydney

Sydney

Sydney

Sydney

LocationCo- Lead Portfolio Managers

Highly experienced team – Average experience of the Asian Property team is 16 years


CS EF (Lux) Asian Property Team

The team leverage off the Tokyo office for stock selection in JapanTeam is linked into the Credit Suisse Global Property network of 132 investment professionals



Property markets are fast evolving in Asia

No2006/07e

No

2006/07e

Yes

India

Yes2003

Yes2006e

Yes2005

Yes1989

Yes2001

Yes1999

Yes1971

NoChina

REIT’s to be listed in Hong Kong

& Singapore

REIT Regulation

Yes

2005

NoYesYesYesYesYesYes

(listed in HK)

REITs Real Estate Investment Trust’s

YesYesYesYesYesYesYesYes

PropertyDevelopers

Hong Kong

KoreaThailandMalaysiaJapanSingaporeAustChina

Property Markets are at different development stages

Evolving Property Markets Developed/Maturing Property MarketsNote: *2006, China REIT listings in Hong Kong and Singapore.



Urbanisation

Source: CEIC



Source: CLSA Asia-Pacific Markets

Average residential price per sq ft

0

100

200

300

400

500

600

700

800

900

1,000

1,100

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

(USD)Hong Kong New York

Greater London Japan

New York: US$943

HK: US$466

Greater London: US$1,099

Japan: US$469

Asian residential prices still lag



Japan – A Disappearing Problem

Source: CEIC, CLSA Asia-Pacific Markets

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

Jun-9

2

Dec

-92

Jun-9

3

Dec

-93

Jun-9

4

Dec

-94

Jun-9

5

Dec

-95

Jun-9

6

Dec

-96

Jun-9

7

Dec

-97

Jun-9

8

Dec

-98

Jun-9

9

Dec

-99

Jun-0

0

Dec

-00

Jun-0

1

Dec

-01

Jun-0

2

Dec

-02

Jun-0

3

Dec

-03

Jun-0

4

Dec

-04

Jun-0

5

Unsold condos in greater Tokyo



Reit Regulation summary



Credit Suisse Equity Fund (Lux) Asian Property

Portfolio Manager: Boon-Hong Yeo/ David Scott

Fund domicile: Luxembourg

Unit Class: Tranche B: Capital Growth

Launch date: 1 July 2005

Fund Currency: USD

Benchmark: GPR General Asia Index

Management fee pa: 1.92%

Initial charge: As per bank fees

Swiss Security Number: 2169074

ISIN Number: LU220210792

Key Facts



Disclaimer

This document was produced by CREDIT SUISSE (hereafter “CS") with the greatest of care and to the best of its knowledge and belief. However, CS provides no guarantee with regard to its content and completeness and does not accept any liability for losses which might arise from making use of this information. The opinions expressed in this document are those of CS at the time of writing and are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are not audited. This document is provided for information purposes only and is for the exclusive use of the recipient. It does not constitute an offer or a recommendation to buy or sell financial instruments or banking services and does not release the recipient from exercising his/her own judgment. The recipient is in particular recommended to check that the information provided is in line with his/her own circumstances with regard to any legal, regulatory, tax or other consequences, if necessarywith the help of a professional advisor. This document may not be reproduced either in part or in full without the written permission of CS. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under local law. Every investment involves risk, especially with regard to fluctuations in value and return. Investments in foreign currencies involve the additional risk that the foreign currency might lose value against the investor's reference currency. Historical performance indications and financial market scenarios are no guarantee for current or future performance. Performance indications do not consider commissions levied at subscription and/or redemption. Furthermore, no guarantee can be given that the performance of the benchmark will be reached or outperformed.

The investment funds mentioned in this publication are domiciled in Luxembourg and are in conformity with EU Directive 85/611/EEC of 20 December 1985, as amended, relating to undertakings for collective investment in transferable securities. Representative in Switzerland is Credit Suisse Asset Management Funds, Zurich. Paying agent in Switzerland is Credit Suisse, Zurich. Subscriptions are only valid on the basis of the current sales prospectus and the most recent annual report (or semi-annual report, if the latter is more recent). The prospectus, the simplified prospectus, the management regulations and the annual and semi-annual reports may be obtained free of charge from Credit Suisse Asset Management Fund Service (Luxembourg) S.A., Luxembourg, from Credit Suisse Asset Management Funds, Zurich and from any bank in the Credit Suisse Group. 2006 Copyright by CREDIT SUISSE

credit suisse equity fund (lux) asian property fund · 2008. 5. 31. · source: clsa liquidity,...

Documents