Pioneer Global Asset Management
New York – February 2003
 Structure and Governance
 2002 Overview
 Future Perspectives
2
Structure and Governance
Pioneer Investments is part of UCI group,
whose structure has been designed to exploit
all the existing business potential and to drive
future growth
UCI
Retail
division
Retail
Bank
Corporate
division
Corporate
bank
Private
bank
3
Private & AM
division
New Europe
division
New Europe
Banks
Xelion
Structure and Governance
Strong Senior Management Team
PGAM
Dario Frigerio
(CEO)
CIO
Giordano
Lombardo
COO
Angelo Forloni
USA
Dan Geraci
(CEO PIM Inc.)
USA
Canada
Mexico
4
INTERNATIONAL
Matteo Perruccio
(CEO PIM Sgr &
Head of Intl.)
Italy
Cont. Europe
Latin America
Asia
NEW EUROPE
Dan Kingsbury
(CEO N.E.)
Poland
Czech Rep.
Turkey
Slovakia
ALTERNATIVE INV.
Alberto La Rocca
(CEO Alt. Inv.)
Dublin
Milan
Momentum Intl
Structure and Governance
A lean Holding Company: strong Investment,
Distribution and Operations structures
UCI
Holding Company
Audit
Global Finance
Research Unit
Compliance & Org.
Strategic Planning
44
Risk Management
Distribution
Human Resources
Investment
Milan
390
Inform. Technology
Boston
Dublin
Singapore
240
Total number of employees: 1,632
(as of 31 December 2002)
5
Operations
958
Structure and Governance
A Global Presence …
Dublin
Boston
Miami
Warsaw
London Munich Prague
Paris
Madrid
Milan
Hong Kong
Singapore
Buenos Aires
6
Structure and Governance
… leveraging on four Manufacturing Centres
Pioneer IM Ltd
Dublin
Pioneer IM
Singapore
Pioneer IM Inc
Boston
Pioneer IM SgrpA
Milan
7
Structure and Governance
The four pillars of Pioneer as a “Best
Practice Company”
 Corporate Governance: Active role of
Independent Directors, Self Regulation Code
 Risk Control: Segregated Investment and
Operational Risk Management
 Consistency in Communication:
Performance Presentation Standards GIPS /AIMR Compliant
 Asset Management: Disciplined investment
process and client oriented philosophy
8
Structure and Governance
Focus on Risk Management
Risk
Management
Dimensions
Investment Risk *
Operational Risk
Organisational
Categories
Market
Liquidity
Business
Event
Credit
* Portfolio Risk
 Investment Risks are controlled within the Investment Division and are reported ultimately to the
Global Chief Investment Officer. Independent monitoring is run by Risk Management function which
reports to the Board of Directors
 Operational Risks are controlled by the Risk Management function, providing guidance and support to
employees and executive management. All Pioneer employees have responsibilities for managing
operational risks.
9
 Structure and Governance
 2002 Overview
 Future Perspectives
10
2002 Overview
Most important achievements
 EBITA in line with 2001 thanks to:
 Good revenue stream, due to:

product innovation in Italy
 strong sales in USA, New Europe and International
business areas
 cost control
 Strong relative performance of leading funds
 Higher Third Party penetration and Brand
Awareness
11
2002 Overview – Focus on Sales
Record net sales in the US, New Europe and
International business areas; positive sales in
Italy
Net Sales
2001(1)
Net Sales
2002(1)
AuM
31.12.’02
TOTAL PIONEER
5,242.3
6,045.4
103,474
USA
1,375.7
3,211.1
17,659
596.5
972.7
2,754
2,862.6
1,342.2
80,655
New Europe
407.5
578.7
1,522
Alternative Investment(2)
145.2
220
1,520
(Euro mln)
International
Italy
PGAM Net Sales (Mln EUR)
3.500
3.211
2.863
3.000
2.500
2.000
1.500
1.376
1.342
(1) Excluding Proprietary Funds
(2) Net Sales already included in the other divisions;
AuM including Momentum (acquired in Nov. 2002)
973
1.000
597
408
500
579
145
220
US
International
2001
12
Italy
2002
New Europe
Alternative
Investm ents
2002 Overview – Analysis by business area
Italy - Shift towards high value added products:
Capital Guaranteed, Unit Linked and Hedge Funds
Innovative Capital
Guaranteed Products:
Hedge Funds

Wrap
Accounts

Flexible segregated accounts,
invested in Pioneer funds and
securities linked to a 5-year put
option
 Guarantee: 100% of the
investment including entry fees,
plus the option cost
 Maximum weight of equities: 60%
of total assets
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Unit Linked



Adaptable to several
risk profiles
 Guarantee of capital
Single Strategy Hedge
Funds
Funds of Hedge Funds
(Momentum)
Structured products on
Hedge Funds
2002 Overview – Analysis by business area
Italy – Benefiting from a long tradition in
innovation, Pioneer has gained leading market
share in new products
Innovative Products
Hedge Funds:
20.18% Mkt. Share
Traditional Products
(as of 31.12.2002)
Unit Linked:
17.72% Mkt. Share
vs.
UCI current accounts
and other deposits:
9.50% Mkt. Share
(as of 30.06.2002)
Mutual Funds:
13.32% Mkt. Share
(as of 31.12.2002)
Source: Assogestioni for Mkt. Shares in Hedge and Mutual funds; IAMA for Unit Linked
and ABI for UCI current accounts and other saving deposits
14
(as of 30.09.2002)
2002 Overview – Analysis by business area
International – New mandates and new products
New Mandates

Agreement with Primary Spanish Bank

New mandate from GIC (Singapore)

Penetration into new markets (HK, Switzerland)

Signed agreements with major global platforms: UBS Paine Webber, Salomon Smith
Barney, Lehman Private Clients, Standard Chartered, Crédit Suisse Fund Lab.,
Merrill Lynch, Prudential Bache
New products


First launch of guaranteed notes
Launch of guaranteed products
High Ranking




15
Top ranking in Chilean Pension System (out of 59)
Top ranking in Merrill Lynch offshore platform
Top ranking in Prudential Bache platform
# 1 foreign fund brand in Germany
2002 Overview – Analysis by business area
USA – 2002 Major initiatives/achievements
First closed-end mutual fund
Pioneer High Income Trust


Lead underwriters: Merrill Lynch and UBS Paine-Webber
Over $ 500 million raised in one-month offering
2 asset-allocation concepts (for financial advisors)

Double Feature: combination of Pioneer Equity Income Fund and Pioneer High
Yield Fund in a single portfolio offering competitive performance and low volatility
through negatively correlated investments

Pioneer 4: a diversified mix of Pioneer Fund, Pioneer Mid Cap Value Fund,
Pioneer Small Cap Value Fund and Pioneer High Yield Fund that outperformed
the S&P 500 over the past 3+ years with significantly less volatility
Innovative principal-protected mutual fund

Over $160 million raised in less than 2 months
UNI-K: Innovative individual retirement account

16
Co-branded with Merrill Lynch and H&R Block
2002 Overview – Analysis by business area
New Europe: Leveraging on Euro-convergence
and international products
Poland



Continued shift from saving deposits to fixed income funds despite tax
disadvantages (+75% AUM growth)
Launch of closed-end tax-advantaged products
Launch of 2 USD fixed income products (clones of Pioneer US funds)
Czech Republic

Launch of a Luxembourg funds family
Slovakia

Start of sales of international products
Croatia

17
First-move into the market and launch of a balanced fund jointly with Zagrebacka Banka
2002 Overview – Key Financial Indicators
Sustained profitability, despite difficult market
conditions, …
‘02/’01
% ch.


+6.1%
Euro mln
Good net sales trend outside Italy and
related strong performance of underwriting
fees (+69.4% y/y)
113,8
120.7
… and EBITA
improves thanks to cost
control
Confirmed commitment on cost reduction
and monitoring, resulting in increased
efficiency
9M01
9M02
Managerial
EBITA(1)
Euro mln
Despite lower AuM due to
market conditions …
Euro bn
110.3
-0.7%
403.9
401.1
9M01
9M02
-2.3%
107.8
Revenues(2)
9M01
… revenues are in line
with 9M01 …
9M02
Avg AuM(2)
(1) Accounting Gross Operating Inc. + Interest expenses + Non-cash Operating items. (2) Revenues from pure Asset
Management business.
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2002 Overview – Focus on Fund Performance
… coupled with strong relative fund performance
in leading segments…
Top Quartile Funds
European
Equities
US Equities
 Pioneer French Equity**
 Pioneer Fund*
 Pioneer Top European
Players***
 Pioneer Small Cap
Value*
Bonds
 Pioneer European Small
Companies***
 Pioneer Euro Select***
 Pioneer US Small
Companies***
 Pioneer US High Yield
Corporate Bond**
 Pioneer Strategic Income**
 Pioneer Euro Short Term***
 Pioneer US Mid Cap
Value***
 Pioneer US Value***
 Pioneer
Independence***
Note:
* Over 5 years history – Comparison with peers universe for the last 5 years
** Over 3 years history but less than 5 years – Comparison with peers universe for the last 3 years
*** Over 1 year history but less than 3 years – Comparison with peers universe for the last 1 years
19
2002 Overview – Focus on Fund Performance
… and on average overperforming benchmarks
in bond and equity portfolios
% Funds outperforming Benchmark
1,3,5 years to December '02
0%
25%
50%
75%
Total
Equity
Bond
Balanced
1 Year
20
3 Year
5 Year
100%
2002 Overview – Focus on Fund Performance
New Products: Hedge Funds
Period:
January 1999 - December 2002
Annualised
Volatility
Sharpe
Ratio*
Morgan Stanley World Equity
-31.1%
8.9%
16.6%
-0.78%
JP Morgan Global Govt Bond
15.0%
3.6%
6.9%
-0.06%
CSFB/Tremont HF Index
37.8%
8.3%
7.6%
0.57%
Pioneer Global Opportunities**
26.4%
6.5%
4.9%
0.65%
Momentum All Weather Fund***
96.8%
9.2%
3.6%
1.19%
Dublin domiciled
Italian domiciled
Momentum
Pioneer Global Opportunities
Pioneer Conservative Hedge
All Weather Funds
Pioneer Convertible Bond Arbitrage
Pioneer Balanced Hedge
Orbit Funds
Pioneer Global Equity Arbitrage
Pioneer High Risk Hedge
Meteor Funds
Pioneer Long Short European Equity
Pioneer Global Macro
Note: *Risk free rate for computing Sharpe Ratios at 4%
** Since inception (April 1999) *** Since May 1995
21
Total Return Annualised
Return
Capital Guaranteed Funds
 Structure and Governance
 2002 Overview
 Future Perspectives
22
Future Perspectives – Strategic Guidelines
Leveraging on three business divisions with a
clearly defined mission
Pioneer Investments
Mainly Bank/Insurance Captive
Networks and Global Distribution
Euro-convergence
Open Platforms
Continental
Europe
Latin America
Asia
Be the best in class
provider for UCI Group,
while building international
presence through selected
Third Party channels
23
New Europe
North
America
Position Pioneer for Market
Share Growth and Introduce
Wealth Management Products
Further enhance leadership
in Asset Management in
close cooperation with UCI
Future Perspectives – Focus on Continental Europe
Still a positive medium-term scenario for Asset
Managers in Europe ...
European Asset Management
Revenue* and AuM growth
(% Change)
Medium-term sustainable AuM growth
Real GDP Growth
35.6
AuM
Revenue
2.5%
Performance
5%
17.6
7.9 7.5
AuM growth
Switch effect
into retirement**
11%
2.7%
Inflation
+
2%
Risk premium effect
0.5%
Financial savings/
Disposable Income
-6.7
Net inflows
-10.9
1998-1999 1999-2000 2000-2001
Is it
realistic?
Financial saving
/HFA
3.3%
12%
x
Disposable Income/
Household financial assets
* Pertaining to Asset Managers only
** The switch effect has been calculated assuming that in Europe in a 15 year time at least 45% of household financial
assets will be institutionally managed
Source: PGAM Research
24
28%
Future Perspectives – Focus on Continental Europe
... thanks also to the expected alignment of
household portfolios to Dutch, UK and US
standards
Total Household managed assets*/Household financial assets
Data as of 2000
Penetration
potential
59%
55%
47%
45% target in 15 years
35%
30%
24%
France
Italy
29%
24%
Germany
Spain
Europe (4) Netherlands
**
UK
* Calculated including mutual funds, pension funds, life insurance and segregated accounts
**Germany, France, Italy, Spain
Source: PGAM Research on National statistics data
25
US
Future Perspectives – Focus on Continental Europe
Our strategy: devising a winning combination of
two distribution models
Distinctive
Mission
Proprietary Model
One
Synergies and
cross- fertilization
platform,
two
distribution
models
26
Third Party Model
 Vertical integration with
distribution
 Continuous innovation
 Scalability
 Operational efficiency in risk
management
 Advice role
 Brand
 Gain recognition as
independent manager
 Excellence in products
such as European equities,
US value, corporate bonds
 Focus on high growth
segments of open platforms
 Customization and client
servicing for selected
channels (A.I., Structured
Products)
Future Perspectives – Focus on Continental Europe/Italy
Our consolidated expertise in the proprietary
model is a strong competitive advantage within
UCI new organization

Internationally recognised Brand

Best practice in client services

Ability to innovate and segment
product and service offerings
Private
Cross–fertilization of
global expertise
Personalised solutions/
Industrialised processes
Retail
Corporate
27
“Pioneer Inside”
Future Perspectives – Focus on Continental Europe/Italy
Two examples: one for the Wealth Management
Division …
Pioneer
UCI Private
Banking
(Manufacturing)
(Relationship)
 Asset management
advice
 Product Development
and marketing strategies
UniCredit
Private A.M.
(Specialist)
 Stock Picking Modelling
 Product Development
 A/L Risk Modelling
“industrial model”
 Packaging
 Profiling
 Personalization of
strategies on single
client portfolios
“personalized model”
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 Client relationships
 Sales effort
Future Perspectives – Focus on Continental Europe/Italy
… and one across all client segments including
mass/affluent and institutional
The Pioneer/Cambridge model
Since 1999 Pioneer has been engaged with the University of Cambridge-UK in a joint
research on Asset Liability Management, that has now delivered the first operational models.
Liabilities model
Model returns on investment classes
Dynamic optimization model for assets-liabilities
Dynamic Investment Decisions
Capital Guaranteed
& VaR Constrained
Portfolios
29
Multi
Manager
Long-term
Retirement
Products
Target
Portfolios
Risk preferences
Investment
horizon
Future Perspectives – Focus on Continental Europe (ex Italy), LatAm and
Asia
Gaining even broader recognition as leading
third party player in Europe, LatAm and Asia
Focus on strategic relationships

Excellence in key products
 Gaining Third Party Mandates proposing “non transactional” deals
 Focus on Funds of Funds, Structured Products, Institutional and Private Banking
Build Hedge Funds business

Focus on key partners and value added of being integrated provider with full range of
Long, Alternative + Structured Products
Brand Recognition

“Pioneer Investments is the most distinguished brand in the financial services sector in
Germany”*
* Source: Capital Corporate Branding survey – Sector Analysis 2002
30
Future Perspectives – Focus on USA
Position Pioneer USA for market share growth
and introduce Wealth Management products
Upcoming Initiatives

Diversify Pioneer’s mix of equity and fixed income fund sales through multi-asset class
fund packages (e.g., Pioneer Four, Double Feature)
 Actively promote and distribute Pioneer’s hedge fund strategies (institutional and
retail)
 Close gaps in product range (investment styles; various disciplines)
New Product Launches
 Separate account strategies and capabilities
 Enhanced variable annuity products now wrapped by Travelers Insurance
Company
 Tax deferred education savings program (i.e., 529 Plan)
 Institutional mandates across all appropriate disciplines
31
Future Perspectives – Focus on New Europe
Further enhance leadership in Asset Management
in close cooperation with UCI local banks
Poland



Launch clones of Pioneer Euro funds (fixed income, balanced, &equity)
Launch Savings Plan program with Bank Pekao
Work to shift emphasis from local fixed income to local balanced & equity
and to international strategies
Czech Republic

Complete registration of fixed income portion of Luxembourg family product line

Determine synergies with Zivnostenska Banka asset management
Slovakia

Launch a Luxembourg fund family
Croatia

Launch guaranteed products
Turkey

32
Explore and develop opportunities with new financial
service joint venture between UCI and the Koc Group
Future Perspectives – Strategy Synopsis
Our Mission: Help distributors to best service
their clients by optimising portfolio strategy
and risk control
33