FUTURE GENERATION AUSTRALIA LIMITED — Net Asset Value 2015

Nov 12, 2015

As at 31 October 2015

Investment Update & Net Tangible Assets Report

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Net Tangible Assets (NTA) figures

The following NTA figures are after the 2.0 cents per share fully franked dividend paid on 23 October 2015.

NTA before tax 115.10c	NTA before tax 115.10c
NTA after tax and before tax on unrealised gains 114.86c*
NTA after tax 114.48c*

The above figures are not diluted for 180,849,210 options on issue with an exercise price of $1.10. *These figures are after the tax payment of $174k (0.09 cents per share) in tax during the month.

Portfolio

In the financial year to date, FGX has significantly outperformed the market with an 8.22% gain against the ASX All Ordinaries Index. The FGX portfolio has risen 6.75% while the index has fallen 1.47% in the period. This outperformance has been achieved with lower volatility than the market due to the skill of the fund managers and the diversification benefits presented by the Company. The spread between the three broad equities strategies – long equities, absolute bias, market neutral and cash – has also contributed to the outperformance and reduced volatility. FGX delivered another positive month in October, rising 3.86% while the index increased 4.59%. The company is currently 50.1% long equities, 24.3% absolute bias, 17.2% market neutral and 8.4% cash.

Fund manager	Investment	Strategy	% of assets
Paradice Investment Management	Large/Mid Cap Funds (split out below)
			10.4%
	Paradice Australian Equities Mid Cap Fund	Long equities
			5.6%
	Paradice Large Cap Fund	Long equities
			4.8%
Regal Funds Management	Regal Australian Long Short Equity Fund	Long equities
			10.4%
Bennelong Australian Equities Partners	Bennelong Australian Equities Fund	Long equities
			10.1%
Watermark Funds Management	Watermark Absolute Return Fund	Market neutral
			8.1%
Wilson Asset Management (International)	Wilson Asset Management Equity Fund	Absolute bias
			7.8%
Eley Griffiths Group	Eley Griffiths Group Small Companies Fund	Long equities
			7.6%
Tribeca Investment Partners	Tribeca Alpha Plus Fund	Absolute bias
			7.1%
Cooper Investors	Cooper Investors Australian Equites Fund	Long equities
			5.2%
Optimal Fund Management Australia	Optimal Australia Absolute Trust	Market neutral
			5.0%
Sandon Capital	Sandon Capital Activist Fund	Absolute bias
			4.1%
Discovery Asset Management	Discovery Australian Small Companies Fund	Long equities
			3.7%
LHC Capital	LHC Capital Australia High Conviction Fund	Absolute bias
			3.4%
Bennelong Long Short Equity Management	Bennelong Long Short Equity Fund	Market neutral
			3.0%
Smallco Investment Manager	Smallco Broadcap Fund	Long equities
			2.7%
Lanyon Asset Management	Lanyon Australian Value Fund	Absolute bias
			1.6%
Qato Capital	Qato Capital Market Neutral L/S Fund	Market neutral
			1.4%
	Cash and Term Deposits	Cash	8.4%

Future Generation Investment Company Limited

Company Limited
ASX Code	FGX
Established	Sept 2014
Gross assets	$213.5m
Market cap	$201.5m
Share price	$1.09
Net assets per share (before tax)	$1.15
Shares on issue	184,858,446
Options on issue	180,849,210
Management fees Performance fees	0.0% 0.0%
Annual donation(% of NTA)	1.0%

Investment objectives

• Provide a stream of fully franked dividends

• Achieve capital growth

• Preserve shareholder capital

Company overview

Future Generation Investment Company Limited gives investors the opportunity to gain unprecedented access to a group of prominent Australian fund managers in a single investment vehicle and also support Australian children’s charities, with a focus on children at risk.

Experienced Board

Chairman

Jonathan Trollip

Founder and Director Geoff Wilson

Directors

Paul Jensen Gabriel Radzyminski Kate Thorley David Leeton Scott Malcolm David Paradice

Investment Committee

Geoff Wilson, Gabriel Radzyminski and Matthew Kidman

Joint Company Secretaries Sarah Maddox/Mark Licciardo Corporate Affairs James McNamara

Level 11, 139 Macquarie Street, Sydney NSW 2000 I GPO Box 4658 Sydney NSW 2001 I ABN: 97 063 935 553 Phone 02 9247 9202 I Fax 02 9247 6855 I info@futuregeninvest.com.au I www.futuregeninvest.com.au

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Investment Update & Net Tangible Assets Report

As at 31 October 2015

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Investment strategy allocation (% of assets)

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Cash
8.4%
Long equities
Absolute bias Market neutral
24.3% Long equities Absolute bias
50.1%
Cash
Market
neutral
17.2%
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Fund Managers
Charities
Service Providers
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Level 11, 139 Macquarie Street, Sydney NSW 2000 I GPO Box 4658 Sydney NSW 2001 I ABN: 97 063 935 553 Phone 02 9247 9202 I Fax 02 9247 6855 I info@futuregeninvest.com.au I www.futuregeninvest.com.au

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Investment Update & Net Tangible Assets Report

As at 31 October 2015

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Fund manager in focus: Tribeca Investment Partners

About Tribeca Investment Partners

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Tribeca Investment Partners is an Australian based, boutique fund manager with a reputation for delivering on performance targets. It was established in 1998.

Our clients are those who actively seek innovation beyond the mainstream. Distinct in our market, we blend traditional fundamental qualitative research with quantitative analysis. We combine quality investment decisions with the insight of successful experience.

Our investment style

The investment process is a fusion of fundamental and quantitative investment philosophies which enables a more consistent return outcome. The process benefits from the breadth and objectivity of the quantitative process as well as the extra insight and conviction gained from the fundamental process. The strategy is implemented through a long/short structure that provides for greater capture of investment ideas and greater diversification of positions across the portfolio.

Our market outlook

The decision by the US Federal Reserve to hold off on raising rates recently caused the market to shift expectations for the first rise out well into 2016. This seems unwarranted given that many measures of labour market slack, including the unemployment rate, are highlighting that the output gap in the US is pretty much closed. Emerging signs of wage pressure are likely to combine with the rolling off of the deflationary shock from collapsing oil prices to push inflation higher next year. As such, we continue to expect that US Federal Reserve will begin tightening an extremely loose monetary policy by early next year, if not the end of this year.

Chinese growth, and steel production in particular, continues to remain soft and broad areas of the manufacturing and construction sectors are suffering from chronic overcapacity. This will continue to weigh on the pricing of iron ore and coal, despite a nascent recovery in China’s property market. In combination with higher US rates and potential rate cuts domestically, this should see the A$ continue to weaken.

The impact of the collapse in the terms of trade for Australia has so far been cushioned by a renewed east coast housing boom. There are now clear signs that the housing boom is peaking out. Actions by the RBA to limit investment lending growth and APRA to lift bank capital requirements has caused auction clearance rates and house prices to flatten out. The lower A$ will steadily boost activity in the tradables sector, with Chinese tourism being a clear hotspot, but the risks of slower domestic growth or a recession are clearly rising.

The recent rebound in resources and energy stocks in the face of weaker commodity prices have left valuations looking stretched, particularly the large cap ones being supported by unsustainable dividends. We remain cautious on resources and mining services and retain a preference for offshore earners with currency leverage and exposure to stronger US growth. In the domestic market we have been moving away from housing and retail exposures towards those with leverage to tourism, although this is difficult to find.

Level 11, 139 Macquarie Street, Sydney NSW 2000 I GPO Box 4658 Sydney NSW 2001 I ABN: 97 063 935 553 Phone 02 9247 9202 I Fax 02 9247 6855 I info@futuregeninvest.com.au I www.futuregeninvest.com.au

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Investment Update & Net Tangible Assets Report As at 31 October 2015

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Designated charity in focus: Act for Kids

About Act for Kids

Child abuse and neglect is one of Australia’s biggest and most misunderstood social problems. Despite being under-reported, Australian authorities confirmed 40,844[1] children were abused or neglected in one year alone. That’s one child every 13 minutes suffering physical, sexual, emotional abuse or neglect, often by someone they know and should be able to trust. Thousands more cases go unreported. Many of these kids get no professional help whatsoever, and end up with lifelong problems. A report by Adults Surviving Child Abuse, showed that, as a nation, Australia could save $6.8 billion annually by addressing the impacts of child sexual, emotional and physical abuse.

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Act for Kids believes every child has the right to a safe and happy childhood. Since 1988, we have provided free professional therapy to thousands of kids who have suffered abuse and neglect, and support services for families at risk. Act for Kids now has 19 centres from Adelaide to the Cape York Peninsula and in 2014-15 we helped 15,868 kids and families, a 9% increase from the previous year.

Thanks to recent generous funding from Future Generation Investment Company, Act for Kids will soon open its first Intensive Therapy Service centre in New South Wales, in Blacktown. We are currently in the recruitment phase and look forward to sharing our success stories in 2016.

Callum* – 2 ½ years old

At two-and-a-half years old Callum would scream for hours on end. He didn’t want to play and had no interest in other children. He couldn’t bear to be touched, was terrified of loud noises and had been diagnosed as Autistic.

Callum’s little life had been marred by physical abuse and neglect by both mum and dad. His home was a violent place where dad beat mum, and there were frequent fights with strangers in the house. Police were called regularly. With drug and alcohol abuse rife in the home, Callum’s 8 year old brother became the main carer for his brothers and sisters. The kids were eventually removed by Child Safety and placed in separate foster homes, before being referred to Act for Kids for help.

When we first met him, Callum showed significant developmental delays. We provided intensive occupational therapy, speech therapy and psychological services to help him

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process his traumatic experiences. Callum also participated in our Early Education Program until he was five years old. Our therapists then supported his transition to prep and worked with other services to address his complex needs.

After 2 ½ years of intensive therapy with Act for Kids, Callum is no longer diagnosed as Autistic. He plays well with friends and can communicate his needs clearly. Now attending school fulltime Callum does not require special education support and is seen as no different from his peers. We also provided intensive therapy to his mum and dad and worked to resolve the domestic violence, so that Callum and his siblings were able to finally return home to a safe and loving environment.

*Name has been changed to protect identity

For more information go to www.actforkids.com.au

1 Source: Australian Institute of Health and Welfare. Child protection Australia 2013–14. Child welfare series no. 61. Cat. No. CWS 52. Canberra: AIHW http://www.aihw.gov.au/publication-detail/?id=60129550762

Level 11, 139 Macquarie Street, Sydney NSW 2000 I GPO Box 4658 Sydney NSW 2001 I ABN: 97 063 935 553 Phone 02 9247 9202 I Fax 02 9247 6855 I info@futuregeninvest.com.au I www.futuregeninvest.com.au

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Investment Update & Net Tangible Assets Report

As at 31 October 2015

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Dividend growth

The Board is committed to paying an increasing stream of fully franked dividends to shareholders, provided the Company has sufficient profit reserves and franking credits and it is within prudent business practices. The Company’s ability to generate franking credits is dependent upon the receipt of franked dividends from investments and the payment of tax.

On 23 October 2015, the Company paid a fully franked dividend of 2.0 cents per share.

Bonus Option Issue

The options issued on the 8 September 2014 as a result of the capital raising via the prospectus dated 7 July 2014, are exercisable at $1.10 each and can be exercised at anytime on or before 16 September 2016. These options trade on the ASX under the code FGXO.

As at 31 October, 791,494 options had been exercised for a total consideration of $870,647 with the remaining balance of outstanding options being 180,849,210.

Investor presentation details

Date	City	Location	Time
19 November 2015	Perth	Parmelia Hilton 14 Mill St Perth	12.15 – 1.45pm
			FGX AGM
24 November 2015	Sydney	Wesley Conference Centre 220 Pitt Street	1.00 – 1.30pm Presentation
			1.30pm – 2.30pm
25 November 2015	Adelaide	The Playford 120 North Terrace	12.15pm – 1.45pm
26 November 2015	Melbourne	Rydges Hotel 186 Exhibition St	12.15pm – 1.45pm
		Brisbane Convention & Exhibition Centre
27 November 2015	Brisbane	Cnr Merivale & Glenelg Street	12.15pm – 1.45pm
		South Bank
		Belconnen Premier Inn
30 November 2015	Canberra	110 Benjamin Way	12.15pm – 1.45pm
		Belconnen

If you wish to attend one of our investor presentations, please RSVP by email to info@futuregeninvest.com.au.

Level 11, 139 Macquarie Street, Sydney NSW 2000 I GPO Box 4658 Sydney NSW 2001 I ABN: 97 063 935 553 Phone 02 9247 9202 I Fax 02 9247 6855 I info@futuregeninvest.com.au I www.futuregeninvest.com.au

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