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Police Pension Minutes 2013 06-21-13 investment committee Yorkville Police Pension Fund Board Special Meeting 804 Game Farm Road Yorkville, IL 60560 (630) 553 -4340 2 : OOPM on June 21 , 2013 Police Department Conference Room i Minutes --------------------------------- Meeting Call to Order: 13 : 59 Fred DuSell Roll Call: Present: Fred DuSell, Ray Mikolasek, Rob Fredrickson Guests : Kelly Weller, Great Lakes Advisors Citizen Comments : None Present Presentation: Great Lakes Advisors — Kelly Weller I Provided RFP packet o 4 . 7 billion in assets o list of police and fire funds — page 5 o client mix diversified - 24% of assets are public funds — page 4 list of Great Lakes advisors who would be assigned to police fund — Ed Calkins, William Gregg, and Christy Coon - biographies on pages 55 -57 sample investment policy language — page 10 as rates go up, fixed income will be drag on portfolio I 4 models — found in RFP I o Model 1 - Balanced Portfolio - 45 % equity — balanced portfolio — page 16 ■ 0% fixed income equity ■ Optimal peer group ■ Overweight emerging markets o Model 2 - GLA balanced composite - ideal model looking back last 5 years — page 19 ■ Fixed income allocation — 8% ■ Strip down large cap exposure — into fixed income equity o Model 3 - Representative sample police pension account ■ 40% equity o Model 4 — Income and Growth portfolio Fred DuSell Q : Do high yields need a certain bond rating? Kelly Weller A: No, bonds are used that are exchange traded and therefore considered stocks. Industry recognized j as stocks . - Fred DuSell Q : Would you consider junk, bonds? Kelly Weller A: Yes, as long as exchange traded funds . Cannot own individually but in an investment vehicle. - Kelly Weller o Hypothetical Portfolio - I ■ Would give protection when market down ■ Should be diversified across globe in emerging markets ■ Won 't be strict to S &P 500 — need to diversify — pg 29 ■ If interest rates go up I %, duration — lose 4 .4% - pg 41 If fund hires great lakes as equity manager — difficulties of two firms handling investment funds o One custodian should alleviate some issues — fund already uses Schwab as custodian. ■ Great lakes will trade off of Schwab platform ■ This will ensure compliance with fixed/equities ratio ■ Only need to be in compliance at end of fiscal year (April 30) ■ Could possibly alternate managers as meetings o Mitchell, Vaught, and Taylor (MVT) attend two meetings and Great Lakes attends two i Great Lakes fees o 138 basis points o $ 10, 000 fee minimum ■ Waived in contract for 2013 and 2014 j Kelly Weller Final suggestion o Balanced portfolio model o Kelly Weller left meeting at 3 : 20 PM Discussion o Board could use 2 managers (MVT and Great Lakes) o Board could utilize Great Lakes to manage entire account o Will need to set meeting for week of July 15 for special meeting to discuss options and vote on one of them I i I I Motion to Adjourn: Fred Dusell — 3 : 35 PM '0j President Secretary I I I i i i i i i i i �V ii ,�i ri► Iii yy .r► 1i yr' y ' yi ys' �,► yi yr iy r ir' 6+ Great Lakes Advisors: Client Service Team: Kelly Weller, Director of Client Service and Sales 312-553-3733 Great Lakes Advisors A Presentation to the: Yorkville Police Pension Board June 21, 2013 MOMW Agenda Great Lakes Advisors Overview 3 Illinois Pension Code Review 7 Model Portfolio Review 13 Large Cap Value Strategy 25 Intermediate Credit Strategy 35 Summary 46 Appendix 52 %' Great Lakes Advisors LLC Iii-see is see I& & a & & me & is a 100aftialftaft 010ii � ,� � � .� „�► � y y y y rr �r r r �r �r �r � � .r a► ;,r v >,r �r � � � .� � � � �r �r �r �r b J� � frr � .br Ownership Structure Wintrust Financial Corporation is a $17.5 billion publicly VV�NTR1UST traded financial services company (NASDAQ: WTFC). M N\ ",IAL — It is the second largest bank holding company headquartered in the Chicago C O R P O R A T 10 N" area and is the parent company of Wintrust Wealth Management. Great Lakes Advisors, LLC is a Chicago-based registered investment advisory arm of Wintrust Wealth Management offering large and small cap equity, as A� well as high quality fixed income strategies. GREAT I VKES ADVISORS ✓ $4.7' billion in managed assets across a diverse group of AW LNTRLST WFALTH MANAGEMENT COMPANY institutional clients and strategies. ✓ Long and steady track records dating back to 1989 ✓ Tenured senior investment professionals averaging 25 years of experience ✓ Portfolios customized to each client's unique goals, objectives and restrictions 1 Includes assets of Advanced Investment Partners, LLC (AIP), a majority owned investment adviser affiliate of Great Lakes Advisors C rp of T .nki c. A rlvicnrc I( ,7 ,6' wr r, Firm Review 1W -) (As of March 31 , 2013) Total firm assets under management: $4.732 billion' L ent Mix Asset Mix Illinois Police & Fire Funds $487 $110 _J I $166 $1,204 $818 I $89l Alm $257 $1,343 $100 $749 $335 $487 $553 $119 $68� $26J $1,135 $1 $208—/ ,604 ■ Corporate—2% '" Private Wealth —28% ■ Equity—53% N Endowment/Foundation—4% ■ Large Cap Value Equity—34% LA Balanced—25% Health Care—5% Large Cap Core—<1% Fixed Income—22% Individuals/Limited Partnerships- 16% ■ Small Cap Equity-2% Mutual Funds—3% Systematic— 10% Public Funds—24% ® Fixed Income—26% Religious— 12% Taft-Hartley—7% 1 Includes assets of Advanced Investment Partners, LLC Wrap/Sub-Advised— 17% (AIP), a majority owned investment adviser affiliate of Systematic— 10% Great Lakes Advisors Representative Institutional Client List Public Funds Taft-Hartley Religious Institutions Arlington Heights Police Pension Fund Boilermakers, Local #1 The Claretian Eastern Province Charitable Trust Algonquin Police Pension Fund Electrical Insurance Trust (IBEW #134) The Clerics of St. Viator Barrington Police Pension Fund Hawaii Laborers Annuity Fund Congregation of St. Joseph Bismarck Firefighter Relief Association (ND) Heat & Frost, Local #17 Diocese of Fairbanks Local #176 Loc Carbondale Fire Pension Fund Pipefi IBEW, Loc Local #195 Dominicans, Province of St. Albert the Great U.S.A. Chicago Park Employees Pipe Fitters' Retirement, Local #597 Dominican Sisters of Springfield, IL Chicago Municipal Employees' Annuity Fund Plumbers Local #68 The Friends Fiduciary Corporation Chicago Policemen's Annuity and Benefit Fund Plumbers & Steamfitters, Local #65 Glenmary Home Missioners Cook County Employees Structural Iron Workers, Local #1 The North American Province of the Congregation of Deerfield-Bannockburn Fire Union Health Service (SEIU) Our Lady of the Cenacle DuPage County Treasurers Office OSM Pooled Investment Fund Evanston Police Pension Fund Endowments and Foundations St. Francis of Mary Immaculate Forest Preserve District of DuPage County Bok Tower Gardens St. Francis Xavier Investment Corporation Methodist Health Foundation St. Vincent DePaul Regional Glencoe Police Pension Fund g onal Seminary Highland Park Police Pension Fund Nashville Area United Methodist Foundation Schoenstatt Sisters of Mary The Catholic Foundation of the Diocese of School Sisters of Notre Dame, St. Louis Province Kenilworth Police Pension Fund Green Bay Lake County Treasurer The Foundation for DePelchin Children's The School Sisters of St. Francis Libertyville Firefighters' Pension Fund Center Sinsinawa Dominicans Libertyville Police Pension Fund Helen Brach Foundation Sisters of Charity, BVM Lincolnshire Police Pension Fund The International Tennis Hall of Fame, Sisters of Charity of Ottawa Macomb Police Pension Fund Incorporated Sisters of the Divine Redeemer Moody Bible Institute Sisters of the Holy Family of Nazareth Midland County Employees (MI) The National Anti-Vivisection Society Sisters of Mercy of the Holy Cross Naperville Fire Pension Fund SOS Children's Villages Sisters of St. Francis of the Immaculate Conception Naperville Police Pension Fund Sisters of St. Francis-Mar crest Northfield Police Pension Fund Health Care Mary crest Park Police Pension Fund Covenant Ministries of the Benevolence Sisters of St. Joseph Third Order of St. Francis Probate Judges of Georgia Elkhart General Hospital Franciscan Alliance Corporations and Associations Riverdale Police Pension Fund Martin Memorial Health Systems p American Ordnance, LLC Sanford Police Officers' Retirement System (FL) Monongahela Valley Hospital Inc. Schaumburg Firefighters' Pension Fund St. Francis Medical Center Oshkosh Corporation Will County Treasurer We would like to thank our institutional clients for granting us permission to include their names on this client listing. Inclusion on this list should not be construed as an Great Lakes Advisors LLC endorsement of Great Lakes Advisors or the advisory services provided. (As of 3/31/13) Q. J C Organizational Chart Management Team Edward J.Calkins,CFA Thomas R.Kiley Stephen W. Rost Senior Managing Director—Equities Chief Executive Officer Senior Managing Director—Fixed Income ---------------------------- Equity—Large Value Client Service and Sales Operations Support Services Edward J.Calkins,CFA Kelly Weller Roberta Cramer ' Tom Zidar Senior Portfolio Manager Director of Client Services and Sales Managing Director of Institutional Operations Chairman, Wintrust Wealth Wells Frice CFA Kate Szymanski ' Senior Portfolio Manager Jason Turner Management Client Service Associate Ophelia Barsketis Jenny Notte Managing Director Tom Paulus Director o Client Service and Sales Maggie Br la Chief Financial Officer Senior Research Analyst f gg Y Huong Le,CFA Maureen Mulhern Portfolio Accounting& Trading Specialist Jelena Stevanovic Senior Research Analyst Client5erviceAssociate Wesley Crane Director,Human Resources Steve Wittwer, CPA,CFA Margaret Mary Cosgrove,BVM Portfolio Accounting& Trading Specialist Senior Research Analyst Director of Client Services Elia Juarez Elliott Silver Laura West Chief Compliance Officer Equity—Small Cap Client Service Associate Portfolio Administrative Assistant Mary Pifko Gary Lenhoff,CFA James Sommerfield,Jr.,CSCP Michael J. Howard Senior Compliance Officer/ , Senior Portfolio Manager Director of Client Services and Sales Portfolio Advisory Support Specialist Insurance Principal Bryan Engler Charles W. Dillon Haley Schumaker Patrick Sereda Research Analyst Director of Client Service and Sales Portfolio Accounting& Trading Specialist Ben Kim,CFA,CPA Thomas A. Erdmier Compliance Officer Senior Research Analyst Director-Intermediary Distribution Private Wealth Management Jacqueline Sedlak Fixed Income Frank J. Harmon David Cox,CFA Compliance Officer Stephen W. Rost Relationship Manager Senior Portfolio Manager , Eric Munger Senior Portfolio Manager Raymond O.Wicklander,Jr. Director of Strategy and William N.Gre gg Chairman Emeritus Allison Hall Associate Portfolio Manager Marketing ' Senior Portfolio Manager Compliance and Marketing Christy Coon,UP Lisa Patterson Emily Li,CFA Heather Ludlum Senior Portfolio Manager Marketing Manager Senior Portfolio Manager Managing Director Teodora Petrova Patrick Morrissey Aimie Roche Associate Portfolio Manager Maureen Mahoney Senior Portfolio Manager Administrative Assistant David Bruskin Marketing Coordinator Rich Rokus,CFA Xavier Quinn Senior Portfolio Manager Dennis Barron Senior Portfolio Manager Marketing& Operations Intern Adam Liebman Graphics and Production Scott Schneider Justin Liang Senior Research Analyst Associate Portfolio Manager Specialist y Marketing& Operations Intern L � � � � Allk AML IML - - - - - - - _ _ _ _ _ _ _ _ _ _ - - r'rn�tiT-Ilr " dA71QnU-C- T-T T' _ Great Lakes Advisors Illinois Pension Code Review v or 1; Illinois Pension Code (401LCS 511-101.4) Sec. 1-101.4. Investment adviser. A person is an "investment adviser", "investment advisor", or "investment manager" with respect to a pension fund or retirement system established under this Code if the person: (1) is a fiduciary appointed by the board of trustees of the pension fund or retirement system in accordance with Section 1- 109.1; (2) has the power to manage, acquire, or dispose of any asset of the retirement system or pension fund; (3) has acknowledged in writing that he or she is a fiduciary with respect to the pension fund or retirement system; and (4) is at least one of the following: (i) registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. SOb-1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State. (Source: P.A. 90-507, eff. 8-22-97.) Great Lakes Advisors, LLC is a Registered Investment Advisor under the federal Investment Advisors Act of 1940. We accept investment discretion, fiduciary responsibility and full compliance with the Illinois Pension Code. — — — — — — — — — — — — — — — — .. yi 1T ii J iii' ✓ y ✓ y 0 0 0 0 0 V W W ' ' ! OF W or s ar 4W 4W C C C C Illinois Pension Code (401LCS 511-113.4) Sec. 1-113.4. List of additional permitted investments for pension funds with net assets of $5,000,000 or more. (a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $5,000,000 and has appointed an investment adviser under Section 1-113.5 may, through that investment adviser, invest a portion of its assets in common and preferred stocks authorized for investments of trust funds under the laws of the State of Illinois. The stocks must meet all of the following requirements: (1) The common stocks are listed on a national securities exchange or board of trade (as defined in the federal Securities Exchange Act of 1934 and set forth in Section 3.G of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System (NASDAQ NMS). (2) The securities are of a corporation created or existing under the laws of the United States or any state, district, or territory thereof and the corporation has been in existence for at least 5 years. . . . (b) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Illinois Department of Insurance. (401LCS 511-113.2) Sec. 1-113.2. List of permitted investments for all Article 3 or 4 pension funds. Any pension fund established under Article 3 or 4 may invest in the following items: . . . (14) Corporate bonds managed through an investment advisor must meet all of the following requirements: (1) The bonds must be rated as investment grade by one of the 2 largest rating services at the time of purchase. (2) If subsequently downgraded below investment grade, the bonds must be liquidated from the portfolio within 90 days after being downgraded by the manager. (Source: P.A. 96-1495, eff. 1-1-11.) Great Lakes Advisors, LLC M� v Investment Policy Review Investment Policy Language: • Total direct stock equity investment in separate accounts shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Illinois Department of Insurance. Pursuant to the Illinois Department of Insurance and the State Attorney General's guidance, allocations up to 45% in total equities are permitted. However 10% of the allocation must be in mutual funds that meet the following requirements: • The mutual fund is managed by an investment company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953; • The mutual fund has been in operation for at least 5 years; • The mutual fund has total net assets of$250 million or more; and • The mutual fund is comprised of diversified portfolios of common or preferred stocks, bonds, or money market instruments. • With respect to investments in corporate bonds, bonds rated investment grade by two or more NRSRO's (Nationally Recognized Statistical Rating Organization) are acceptable. If there is a downgrade below investment grade by any one of the NRSRO, the position will be sold in a prudent fashion and within 90 days after the downgrade pursuant to Section 1-113.2(14)(2). Total exposure to corporate bonds shall not exceed 60% of the total fixed income portfolio. Exposure to any one entity shall not exceed 2% of the fixed income allocation. Corporate bond investments must be made through a registered investment advisor with a written contract stating that the advisor is a fiduciary under this plan. G .0' . � I"" I► OW- oil ,• $W ,• * ,* 1srL = ; rte lei Investment Policy Review Investment Policy Language: • Fixed Income Equity includes securities classified as fixed income by general market classifications, but considered equity for the purposes of portfolio allocation limitations under the Illinois Pension Code. Examples would include foreign debt (developed and emerging), floating rate debt, high yield, and/or any other debt security not otherwise allowable under 40 ILCS, Section 1-113.2, Subsections 1 through 11. • Goal: Create a synthetic Core Plus, Global or Opportunistic fixed income portfolio using asset allocation guidelines and allowable securities managed by a registered investment advisor. • Reducing the portfolio's interest rate sensitivity • Enhancing current and expected yields • Dampening volatility • Potential added returns Great Lakes Advisors, LLC s Alp � i C Great Lakes Advisors Model Portfolio Review r� ! I Portfolio Allocation & Style Portfolio Strategic Allocation Current Portfolio% Market Value FIXED INCOME&CASH EQUIVALENTS 55% $ 2,750,000.00 EQUITIES &OTHER- (REAL ASSETS&FIXED INCOME EQUITY) 45% $ 2,250,000.00 TOTAL 1w% $ 5,000,000.00 Balanced Allocation Style Bias 60% ° 18.0% 55% 16.3% 16.3% 16.0% 50% 45% 14.0% ° 4 12.0% In 30% 10.0% 8.0% 20% 6.0% 10% 4.0% 2.0% 0% FIXED INCOME&CASH EQUITIES&OTHER-(REAL ASSETS 0.0% EQUIVALENTS & FIXED INCOME EQUITY) GROWTH VALUE „ s � � s � * � * * ww * w � � � � AAA � w � • wwGreat Lakes Advisors iisLsr. � � � � Performance Review — Benchmarks (As of March 31 , 2013) Returns Annualized*(See Disclosures) Allocation QTR YTD 1 Year 3 Year 5 Year Barclays Intermediate Govt/Credit 55% 0.26% 0.26% 3.53% 4.74% 4.61% S&P 500 Index 45% 10.61% 10.61% 13.96% 12.67% 5.81% Blended Benchmark*(45%S&P 500&55%Barclay's Intermediate Gov't/Credit) 100% 4.92% 4.92% 8.22% 8.31% 5.15% Great Lakes Advisors, LLC mow Hypothetical Allocation - 45% Equity Real Assets 0 International- o� cash Illinois Police and Fire Portfolio Emerging \ [2% Markets1 -- -- ---- ----------------- - ---- ------- 3% Total Fixed Income & Cash 55% International- Developed Government/Corporate Credit Markets • Bond Separate Account 53% 5% • Government Money Market 2% Small Cap-- Equity Total Equity & Alternatives 45% 7% Domestic Equities Intermediate • Large & Mid Cap Equity 26% Term Fixed • Small Cap Equity 7% Income Large ; Mid Cap International/Global quity • Developed Equity 5% • Emerging Equity 2% Real Assets • REIT, Commodities, Other 5% Fixed Income Equity • Foreign, High Yield, Emerging, Other 0% Great Lakes Advisors 1iC ` +� s � �► * * * +� �► �• � � � * �► � r� Rwwww * mow_ w �► � � �► �r � w � � i . • . . . . w w w ww w w w we 0 Soo 0000 444 44 4 4 4 40 40 40 4w 40 c F Portfolio Allocation — Sub Asset Classes Portfolio Holdings (Recommendation) ° ■iSHARE RUSSELL 1000 GROWTH ETF Current 2.0 Asset Name Style Portfolio% Market Value ■GREAT LAKES ADVISORS-LCV iSHARE RUSSELL 1000 GROWTH ETF LCG 12% $ 583,333 GREAT LAKES ADVISORS-LCV LCV 12% $ 583,333 ■iSHARE RUSSELL MIDCAP INDEX ETF iSHARE RUSSELL MIDCAP INDEX ETF MCC 3% $ 125,000 iSHARE RUSSELL 2000 SMALL CAP ETF SCC 7% $ 333,333 ■OAKMARK INTERNATIONAL FD I OAKMARK INTERNATIONAL FD I INT 5% $ 250,000 53.0% iSHARE MSCI EMERGING MARKETS ETF INT-EMG 3% $ 125,000 �,iSHARE MSCI EMERGING MARKETS COHEN&STEERS REALTY SHARES FD I RA 5% $ 250,000 ETF GREAT LAKERS ADVISORS -FIXED INCOME IG/C SEPERATE ACCT 53% $ 2,650,000 COHEN&STEERS REALTY SHARES FD I CASH CASH 2% $ 100,000 GREAT LAKERS ADVISORS-FIXED Total 100% $ 5,000,000 2.5% INCOME IG/C 5.0% CASH 60% 53% Portfolio Asset Class Allocation 50% 40% ■Optimal Allocation 30°% ° 20% 10% /o a 2% 3% 3°%a 0% CASH DOMESTIC FIXED FIXED INCOME- DOMESTIC LARGE DOMESTIC MID DOMESTIC SMALL INTERNATIONAL INTERNATIONAL REALASSETS EQUIVALENTS INCOME EQUITY CAP EQUITY CAP EQUITY CAP EQUITY DEVELOPED EMERGING MARKETS EQUITY MARKETS EQUITY Great Lakes Advisors, LLC f AMP Performance Review - Model Portfolio Balanced (As of March 31 , 2013) Returns Annualized*(See Disclosures) SAMPLE PORTFOLIO-Allocation Model "Balanced" Allocation QTR YTD 1Year 3Year 5Year iSHARE RUSSELL 1000 GROWTH ETF 11.7% 9.49% 9.49% 9.89% 12.85% 7.12% GREAT LAKES ADVISORS- LCV(Gross) 11.7% 12.77% 12.77% 17.72% 14.37% 6.49% GREAT LAKES ADVISORS-LCV(Net) 12.67°0 12.67% 1729% 13.87% 6.00% iSHARE RUSSELL MIDCAP INDEX ETF 2.5% 12.90% 12.90% 17.14% 14.46% 8.25% iSHARE RUSSELL 2000 SMALL CAP ETF 6.7% 12.39% 12.39% 16.36% 13.44% 8.27% OAKMARK INTERNATIONAL FD 1 5.0% 5.35% 5.35% 16.56% 8.75% 7.08% iSHARE MSCI EMERGING MARKETS ETF 2.5% -2.13% -2.13% 0.99% 2.24% 0.92% COHEN &STEERS REALTY SHARES FD 1 5.0% 7.61% 7.61% 12.80% 15.28% 7.31% GREAT LAKES ADVISORS- FIXED INCOME I G/C(Gross) 55.0% 0.49% 0.49% 1 4.85% 1 5.570 5.65% GREAT LAKES ADVISORS-I G/C(Net) 1 0.44% 0.44% 4.64% 1 5.29% 5.36% PORTFOLIO WEIGHTED ALLOCATION RETURN 100% 4.28% 4.28% 8.24946 7.93% 5.81% Mutual Fund Vehicle .► * * * R R R Great* Lakes 1*Advisors LLB 0 P.pe C Hypothetical Allocation - 45% Equity With Fixed Income Equity Allocation Fixed Income Illinois Police and Fire Portfolio Equity Cash Real Assets g% 2% Total Fixed Income & Cash 55% International- Emerging Government/Corporate Credit Markets, Bond Separate Account 53% 2% Government Money Market 2% International- Developed Total Equity & Alternatives 45% Markets Domestic Equities 5% Intermediate • Large & Mid Cap Equity 21% Small Cap_,.-'--� Term Fixed • Small Cap Equity 4% Equity - 4% International/Global • - = Mid Cap Developed Equity 5% Equity • Emerging Equity 2% Real Assets • REIT, Commodities, Other 5% Fixed Income Equity • Foreign, High Yield, Emerging, Other 8% Great Lakes Advisors, LLC � s A#W C Portfolio Allocation - Sub Asset Classes OAKMARK iSHARE MSCI Portfolio Holdings (Proposed) INTERNATIONAL FD EMERGING iSHARE RUSSELL._ 1,5.0% MARKETS ETF,2.0% �...�---1-'- Asset Name style Portfolio% Market Value 2000 SMALL CAP COHEN&STEERS iSHARE RUSSELL 1000 GROWTH ETF LCG 9.5% $ 475,000 ETF,4.0% REALTY SHARES FD GREAT LAKES ADVISORS-LCV LCV 9.5% iSHARE RUSSELL $ 475,000 MIDCAP INDEX ETF, iSHARE RUSSELL MIDCAP INDEX ETF MCC 2.0% $ 100,000 2.0% iSHARE RUSSELL 2000 SMALL CAP ETF SCC 4.0% $ 200,000 GREAT LAKES OAKMARK I NTERNATI0NAL FD I I NT 5.0% $ 250,000 ADVISORS-LCV, 50 9 ,000 . � iSHARE MSCI EMERGING MARKETS ETF INT-EMG 2.0% $ 100 r GREAT LAKE RS COHEN&STEERS REALTY SHARES FD I RA 5.0% $ 250,000 iSHARE RUSSELL ADVISORs-FIXED GREAT LAKERS ADVISORS -FIXED INCOME IG/C SEPERATE ACCT 53.0% $ 2,650,000 1000 GROWTH ETF, E{ INCOME IG/C, 9.5% 53.0% FIXED INCOME EQUITY EQ 8.0% $ 400,000 1I I CASH CASH 2.0% I $ 100,000 CASH,2.0%� j Total 100% $ 5,000,000 i I FIXED INCOME EQUITY,8.0% 60.0% 53.0% 50.0% Portfolio Asset Class Allocation 40.0% ■Optimal Allocation with Fixed Income Equity 30.0% 19.0% 20.0% 8.0% 10.0% 4 0% 5.0% 5.0% 2.0% 2.0% 2.0% 0.0% CASH DOMESTIC FIXED FIXED INCOME- DOMESTIC LARGE DOMESTIC MID DOMESTIC SMALL INTERNATIONAL INTERNATIONAL REAL ASSETS EQUIVALENTS INCOME EQUITY CAP EQUITY CAP EQUITY CAP EQUITY DEVELOPED EMERGING MARKETS EQUITY MARKETS EQUITY - *� r� T rs r* ^ r* „ r, 1W � � � � A r � � �► �► � �► e R � � *r4 aW *Lakes R Advisors W �L�!! C Wr W Performance Review - Model Portfolio Income & Growth (As of March 31 , 2013) Returns Annualized*(See Disclosures) SAMPLE PORTFOLIO-Allocation Model "Income &Growth" Allocation CTR YTD 1Year 3Year 5 Year iSHARE RUSSELL 1000 GROWTH ETF 9.5% 9.49% 9.49% 9.89% 12.85% 7.12% GREAT LAKES ADVISORS- LCV(Gross) 9.5% 12.77% 12.77% 17.72% 14.37% 6.49% GREAT LAKES ADVISORS-LCV(Net) 12.67% 12.67% 17.29% 13.87% 6.00% iSHARE RUSSELL MIDCAP INDEX ETF 2.0% 12.90% 12.90% 17.14% 14.46% 8.25% iSHARE RUSSELL 2000 SMALL CAP ETF 4.0% 12.39% 12.39% 16.36% 13.44% 8.27% OAKMARK INTERNATIONAL FD 1 5.0% 5.35% 5.35% 16.56% 8.75% 7.08% iSHARE MSCI EMERGING MARKETS ETF 2.0% -2.13% -2.13% 0.99% 2.24% 0.92% COHEN &STEERS REALTY SHARES FD 1 5.0% 7.61% 7.61% 12.80% 15.28% 7.31% GREAT LAKES ADVISORS- FIXED INCOME I G/C(Gross) 55.0% 0.49% 0.49% 4.85% 5.57% 5.65% GREAT LAKES ADVISORS-1 G/C(Net) 0.44% 0.44% 4.64% 5.29% 5.36% Barclay's U.S. Corporate High Yield Index 2.0% 2.89% 2.89% 13.13% 11.24% 11.65% JPM GBI Global Ex U.S. Bond Index 4.0% -4.18% -4.18% -2.68% 3.67% 2.65% JPM EMBI Global Diversified Index 2.0% -2.26% -2.26% 10.11% 9.87% 9.44% PORTFOLIO WEIGHTED ALLOCATION RETURN 100% 3.25% 3.25% 7.47% 7.48% 5.78% Mutual Fund Vehicle _ _ Great Lakes Advisors, LLC C Performance Review — Sample Portfolios (As of March 31 , 2013) Returns Annualized*(See Disclosures) C QTR YTD 1 Year 3 Year 5 Year Representative Sample Police Pension Account-40% Equity Policy Limit(Net of Fees) 3.53% 3.53% 5.10% 5.28% 3.53% GLA Balanced Composite (45%S&P 500&55% Barclay's U.S.Aggregate) (Gross) 6.46% 6.46% 11.16% 10.24% 6.28% GLA Balanced Composite(45%S&P 500&55%Barclay's U.S.Aggregate)(Net of Fees) 5.96% 5.96% 10.66% 9.74% 5.78% Sample Portfolio-Allocation Model "Balanced" 4.28% 4.28% 8.24% 7.93% 5.81% Sample Portfolio-Allocation Model "Income &Growth" 3.25% 3.25% 7.47% 7.48% 5.78% Blended Benchmark*(45%S&P 500&55% Barclay's Intermediate Gov't/Credit) 4.92% 4.92% 8.22% 8.31% 1 5.15% Great Lakes Advisors LLC 00 r r r r i i i i r r r r r �► cr w .► 7 7 7 7 4 Hypothetical Portfolio Results — Prior 5 Years Risk-Return Ratios Maximum Drawdown 1 .2 -21 1 0.88 __0.98 -21 .5 0.8 - 0.71 -22 -1 0.65 -22 0.6 u -22.5 0.4 -23 0.2 -23.5 0 -24 -24 Sharpe Ratio Sortino Ratio -24.5 ■Balanced 45-55 (Equity/Core) ■Balanced 45-55 (Equity/Core) Income& Growth 45-55 Equity(Expanded)/Core Income& Growth 45-55 Equity(Expanded)/Core Source: Morningstar(As of: 03/31/13) Great Lakes Advisors, LLC � s rr W, Hypothetical Portfolio Results — Prior 5 Years Standard Deviation Crosshairs: 45-55 Equity+Core Fixed Time Permed:V X008-3e'31P-g13 8.00 C L 4 w M -1-j 6.00 1- 4.00 2.00 0.00 0.00 2.00 4.00 6.00 8.00 10.00 Std Dev No Investment blame • 45-55 Equity+Core Fixed 45-55 Equity+Expanded Fixed Source: Morningstar (As of: 03/31/13) Great Lakes Advisors, LLC '+ T► ?� ?'� f'� f� 1� f* 1• 1R r 1� }► f! *► }� }► A }J A A # 0 00 0 00 0 000 00 t • • I► ® w w w '4P r ii ii 'W `i" Iw _ �w 'w ® imw _ ® ® I' -4W vi I 4.ij. `4.a- 'a 'za= as u 16jV a .s' -a Great Lakes Advisors Large Cap Value .�AVP �. Large Cap Value Team -IN Ed Calkins, CFA, Wells Frice, CFA and Huong Le, CFA, Ophelia Barsketis, Steve Wittwer, CFA are your Large Cap Value portfolio management team • Ed is one of the legacy firm's founders, Chief Investment Officer-Large Cap Value Equity and Senior Portfolio Manager • Wells is a Senior Portfolio Manager responsible for equity research and manages institutional portfolios. • Huong is a Senior Research Analyst, responsible for equity research, portfolio analytics and risk analysis for the strategy. • Ophelia is a Senior Research Analyst, responsible for equity research, portfolio analytics and risk analysis for the strategy. • Steve is a Senior Research Analyst, responsible for equity research, portfolio analytics and risk analysis for the strategy. r Great Lakes Advisors, LLC t :y � � � � Ir � �i � �i � � � i i i � � � � ii � 7 i � i i t • � � i � iiii � sY C vow Large Cap Value Philosophy Our active approach to value investing centers around a company's ability to produce above-average earning power • Define Value as Earning Power — Generate profit for reinvestment or payout — Measure by return on capital/return on equity • Capture Value in the Market — Long-tested valuation metrics based on definition of earning power — Focus on profits, dividends, cash flows and assets • Manage Risk Through Diversification — Industry-based — Avoid both large concentrations and "closet indexing" -- Great Lakes Advisors, LLC v Large Cap Value Process Focus on long Assess current Add stocks to Sell or review term earning valuations: portfolio to: stocks if: power: • Determine • Low price/ • Increase ROC/ • Targeted return opportunities for earnings ratio ROE achieved companies to • High dividend • Improve • Major change in improve or sustain above yield valuation investment case average • Enhance • Another stock ROC/ROE diversification — offers better • Margin • Ensure portfolio K r ` portfolio improvement is neither highly- diversification or • Better asset concentrated nor better value utilization index-like • Skillful use of cash flow • Improving balance sheet • Management change • Change in industry structure � A record of generating above-average results with - below average risk. Great Lakes Advisors, LLC ■e W 0 Vi Wi 4i Vi i � W ZW 7 V W W W W M 0 0 4W 40 a* ® � • a► a► s a 4w 4w � .r .r ... .� Large Cap Value Portfolio Composition 1W -- (As of March 31 , 2013) 33% Consumer 34% Industrial Drugs: Merck Aerospace: Lockheed Martin Food: General Mills Aluminum: Alcoa Kraft Foods Group Chemicals: Dow Chemical Mondelez Diversified: Eaton Health Services: Aetna Emerson CIGNA General Electric Household Products: Clorox Honeywell Energizer MMM Kimberly Clark Textron Leisure: Brunswick Forest Management: Plum Creek Timber Retail: Target Machinery: Caterpillar Tobacco: Altria Rail: Norfolk Southern Philip Morris Intl Environmental Services: Waste Management 16% Financial Specialty Metals: Allegheny Technologies Banks: Bank of America Wells Fargo Insurance: Berkshire Hathaway 7% Utilities Hartford Financial Electric: Duke Energy Services: American Express Public Service Enterprise Gr. Ameriprise Gas: AGL Resources, Inc. 11% Energy Citigroup Spectra Energy Oil: Chevron ConocoPhillips Exxon Refining: Phillips 66 - Great Lakes Advisors, LLC c Large Cap Value Portfolio Characteristics (As of March 31 , 2013) GLA Large Cap Valuation Analysis Portfolio (Median) S&P 500 (Median) P/E Ratio 15.3X 17.5X Yield 2.7% 2.2% Price/Book Value 1.9X 2.6X Return on Equity 14.0% 15.3% Median Market Capitalization $40.313 $14.1 B Normal Number of Stocks Held 35-55 Annual Turnover Expectation 10-40% Economic Sector Analysis GLA Large Cap Portfolio S&P 500 Consumer 33% 35% Industrial 34% 32% Financial 16% 16% Energy 11% 11% Utilities 7% 6% Market Capitalization Analysis ($billion) GLA Large Cap Portfolio S&P 500 Below $5.0 7% 11% 5.0 - 10.0 10% 24% 10.0 - 20.0 17% 29% Over $20.0 66% 36% Great Lakes Advisors, LLC'ML r �'i Vii ' ® ® � 'IQf ® � ® d/► d/ 040 V JP 04104r ♦ Warar41040 rJ Z. Large Cap Value Composite Performance (For periods ending March 31 , 2013) 20 18 16 14 12 10 8 6 4 2 0 1Q13 1 Yr 3 Yrs 5 Yrs 10 Yrs Great Lakes Advisors ■ Large Cap Value Equity 12.77 17.72 14.37 6.49 10.84 Composite (Gross Returns) Great Lakes Advisors Large Cap Value Equity 12.67 17.29 13.87 6.00 10.31 Composite (Net Returns) ■ Russell 1000 Value 12.31 18.77 12.74 4.85 9.17 Returns greater than I year are annualized The complete performance disclosure statement is available upon request Inception for Great Lakes'Value Equity Composite is 7/1/90 Great Lakes Advisors, LLC ME c Large Cap Value Composite Performance (Calendar Years) 30 7 ! 20 10 � - q a� -10 -20 -30 -40 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 ■Great Lakes Advisors 15.53 Large Cap Value Equity 3.56 18.2 22.8 -37.1 7.9 14.6 8.3 21.8 30.8 S&P 500 16.00 2.11 15.1 26.5 -37.0 5.5 15.8 4.9 10.9 28.7 Russell 1000 Value 17.50 0.39 15.5 19.7 -36.9 -0.2 22.2 7.1 16.5 30.0 Returns are gross of fees Please see appendix for performance disclosure statement Great Lakes Advisors, LLC v MW Performance Consistency - Rolling 3 Year Returns (For Periods ending December 31) 25.0 - 20.0 (11) (51) (24) -- 15.0 (20) • (30) (93) (10) * (56) -- 10.0 (39) (92) (5) -- (43) �� (56) (20) L 5.0 -- m � (85) � (16) - -- (39) 0.0 (30) -- (32) (95) -5.0 (70) (25) (28) -- _ (58) - (77) (59) -10.0_ -15.0 12131/12 12/31/11 12/31/10 12/31/09 1 2/31/08 12/31/07 12/31/06 12/31/05 12/31/04 12/31/03 GLakes:Value Equity A 12.23 14.54 -2.99 -5.88 -8.03 10.21 14.77 19.93 10.51 3.75 Median 10.66 11.76 -3.50 -7.45 -7.69 9.73 13.91 17.53 6.31 0.47 Russell:1000 Value ® 10.86 11.55 -4.42 -8.96 -8.32 9.32 15.09 17.49 8.57 1.22 S&P:500 10.87 14.11 -2.85 -5.63 -8.36 8.62 10.44 14.39 3.59 -4.05 II _ _- Source:CAI Great Lakes Advisors, LLC Consistently Low Volatility Superior Returns for Risk 10 years ended March 31 , 2013 Risk/Reward Structure for 10 Years Ended March 31 , 2013 14.0 Great Lakes' Value Equity 12.0 ----------------- Russell:1000 Value 10.0 rr a� 8.0 -_ S&P 500 6.0 15.0 16.0 17.0 18.0 19.0 20.0 21 .0 22.0 Standard Deviation Source: CAI ,- ►+ +. t ,f► P(; os,,,:e4;ese*;ts P CAI utigyew o �a e Cgo)jgIu j V-%4V rr��n ers� #► * * * �'� '�!' S�r �11°-�r'• ti s 1 v► .r .► .ad Great Lakes Advisors Intermediate Credit Strategy C Fixed Income Team Steve Rost, Emily Li, CFA, Bill Gregg, Pat Morrissey, Rich Rokus, CFA, and Scott Schneider are the fixed income portfolio management team. • Steve is one of the legacy firm's founders, Chief Investment Officer-Fixed Income and Senior Portfolio Manager • Emiiy os responsible for the firm's intermediate and broad market composites, and specializes in the credit sector • Bill is responsible for the firm's intermediate credit, balanced and high yield portfolios, and specializes in the credit and mortgage-backed sectors 1 Steve Rost Emily, Li, CFA, CPA William Gregg 29 Years Experience 29 Years Experience 28 Years Experience 22 Years with 16 Years with Joined the Great Lakes team from Great Lakes Advisors Great Lakes Advisors Wintrust Capital Management Great Lakes Advisors, LLC E �• ¢• �. .. 1- 4. 4- 4f► �ft 4.. 4. 410 IP 06 10 40 0 0 0 0 p * 0 0 !W 0 0 V I a t �r C Fixed Income Team • Rich is responsible for managing cash, enhanced cash and short duration portfolios, and specializes in the commercial-mortgage backed sector • Pat is responsible for the firm's taxable portfolios, speciaHaing in municipal bonds • Scott is responsible for security analysis, portfolio maintenance and operational support Rich Rokus, CFA Pat Morrissey Scott Schneider 20 Years Experience 28 Years Experience 11 Years Experience Joined the Great Lakes Joined the Great Lakes Joined the Great Lakes Advisors team in 2011 team from Wintrust team from Wintrust Capital Management Capotai Management Gicest Lakes Advsorrs9 L it s JWP C Fixed Income Philosophy We believe in a conservative approach to fixed income management, adding value to our portfolios in lower risk ways. We apply sophisticated security and portfolio analytical tools to assist us in our research and risk controls. Our general strategy emphasizes. • Higher income sectors and securities • Controlling interest rate risk by constraining duration around a target benchmark duration • Actively managing issues, sectors, quality and yield curve positions Great Lakes Advisors, LLC Fixed Income Process Research/ Security Portfolio Sell Discipline General Selection Decisions Discussions • Global situation • Credit • Duration • Credit fundamentals are y • US economy • Mortgages reasur • Sector deteriorating deteriorating or • Bond market y expected to • Interest rates — • Agencies �� management • A bond has • Yield curve • Municipal • Quality preference performed well in • Structure relation to criteria, other preference bonds • An outlook changes • Duration Bloomberg,Wall Street and our g, Credit management experience are employed Services, TradeWeb, • Meet any throughout MarketAxess BondEdge, SunGard outflows Our long-term record has been produced through the consistent application of our time-proven approach by our experienced team of professionals. Great Lakes Advisors, LLC s � Fixed Income Security Selection Process For each potential purchase We invest sectors that Issues are purchased that we assess: offer the best relative offer: • Historical relative yield value: • Good relative value spreads k, • Emphasis on long-term • Meaningful risk/return • Current yield spread levels trends, rather than tradeoff • Future interest rate scenarios short-term fluctuations • Sufficient liquidity • Shape of yield curve • Non-Treasury positions are • Above average income • Supply/demand limited to approximately 1-3% of the portfolio Credit Review Credit Validation Security Selection Portfolio Risk Management • Liquidity • Supply Factors Construction • Diversification • Cash Flow Strength -' • Historical Spreads • Credit Ratings • Quality Control • Business Viability • Security Structure • Sector Weightings • Sell Discipline • Overall Solvency • Pricing Anomalies • Duration consistent with • Economic position • Volatility Core Process Management Factset, Liquidity Models, Bloomberg, Wall Street, BondEdge, SunGard Credit Services UBS-PIN, ITS, other pricing Great Lakes Advisors LLC Tr T� ft ? f► ! 1W 111� R f R !"k fs fr !s f t * 0 * 4 4�, ! ,ft o 0 a �, 4 40 �i 0 40 ei e► a0 40 er 40 40 ai b► gab MO 20 � ar ar ai ai ai 40 40 40 6* �40 � J.r .6 .60 L 40 L Intermediate Credit Composite Characteristics (As of March 31 , 2013) Great Lakes' Intermediate Credit Barclays Characteristic Fixed Income Composite Intermediate Credit Difference Quality Average Quality Baal A2 Risk Effective Duration 4.436 4.441 -0.005 Maturity (years) 5.539 5.028 0.511 Yield-to-Worst 2.425 1 .919 0.506 Return Current Yield 4.864 3.858 1 .006 Coupon 5.457 4.209 1 .248 Moody's Rating Symbols& Definitions can be found on Moody's website at: - http://v3.moodys.com/ratings-process/Ratings-Disclosures/006016. Great Lakes Advisors, LLC AVP C C F, sample Portfolio Holdings (As of March 31 , 2013) Grouped by:Sector Coupon Moody S&P Current Maturity Yield To Duration Par Amount Original Face Security ID Security Description Maturity Date Rating Rating Unit Price Yield Years Worst To Worst CREDIT 200,000.0000 0.0000 88166DAA4 TEVA PHARMACEUTICAL FIN 1.700 3121/2014 A3 A- 101.193 1.68 0.98 0.47 0.97 200,000.0000 0.0000 45920OGW5 IBM 1.250 511212014 AA3 AA 101.055 1.24 1.12 0.30 1.10 200,000.0000 0.0000 882508AQ7 TEXAS INSTRUMENTS 1.375 5115J2014 Al A+ 101.146 1.36 1.13 0.35 1.11 200,000.0000 0.0000 98372PAF5 XL GROUP PLC 5.250 9/1512014 BAA2 BBB+ 105.512 4.98 1.46 1.41 1.42 200,000.0000 0.0000 94974BFA3 WELLS FARGO 1.250 211312015 A2 A+ 101.153 1.24 1.87 0.63 1.85 200,000.0000 0.0000 713448BX5 PEPSICO 0.750 31512015 AA3 A 100.323 0.75 1.93 0.58 1.92 200,000.0000 0.0000 929043AF4 VORNADO REALTY TRUST 4.250 41112015 BAA2 BBB 105.696 4.02 2.00 1.35 1.90 110,000.0000 0.0000 651229ALO NEWELL RUBBERMAID 2.000 611512015 BAA3 BBB- 101.740 1.97 2.21 1.20 2.16 114,000.0000 0.0000 30257013-14 FPL CROUP CAP ITAL 2.600 91112015 BAA1 BBB+ 103.812 2.50 2.42 1.00 2.35 200,000.0000 0.0000 06406HCD9 BANK NEW YORK MELLON 0.700 1012312015 AA3 A+ 100132 0.70 2.56 0.65 2.54 200,000.0000 0.0000 565849AJ5 MARATHON OIL 0.900 111112015 BAA2 BBB 99.756 0.90 2.59 1.00 2.55 200,000.0000 0.0000 808513AHB CHARLES SCHWAB 0.850 121412015 A2 A 100.406 0.85 2.68 0.70 2.64 200,000.0000 0.0000 22160KAD7 COSTCO 0.650 121712015 Al A+ 100.143 0.65 2.69 0.60 2.66 200,000.0000 0.0000 36962G6M1 GENERAL ELECTRIC CAP 1.000 1211112015 AA3 AA+ 100.621 0.99 2.70 077 2.66 200,000.0000 0.00DO 172967GGO CITIGROUP 1.250 111512016 BAA2 Ar 99.880 1.25 2.79 1.29 2.74 200,000.0000 0.0000 865622AX2 SUMITOMO MITSUI BANKING 0.900 111812016 AA3 A+ 99.687 0.90 2.80 1.01 2.76 200,000.0000 0.0000 63254AAF5 NATIONAL AUSTRLIA BANK LT 0.900 1120/2016 AA2 NR 100.210 0.90 2.81 0.82 2.77 200,000.0000 0.0000 002799A.13 ABBEY NATIONAL 4.000 4/2712016 A2 A 106.337 3.76 3.08 1.87 2.88 200,000.0000 0.0000 037389AY9 AON 3.125 5127/2016 BAA2 BBB+ 105.601 2.96 3.16 1.31 3.00 200,000.0000 0.0000 0258MODCO AMERICAN EXPRESS 2.800 91l9/2016 A2 A 105.884 2.64 3.47 1.07 3.33 200,000.0000 0.0000 78355HJS9 RYDER SYSTEM 2.500 31112017 BAA1 BBB 103.009 2.43 3.92 1.70 3.75 200,000.0000 0.0000 120568AV2 BUNGE LIMITED FINANCE 3.200 6115/2017 BAA2 BBB- 103.439 3.09 4.21 2.34 3.94 200,000.0000 0.0000 05531FAL7 BB&T 1.600 811512017 A2 A- 100.974 1.58 4.38 1.37 4.23 200,000.0000 0.0000 92857WAY6 VODAFONE GROUP 1.250 912612017 A3 A 99.200 1.26 4.49 1.43 4.38 200,000.0000 0.0000 83368RAC6 SOCIETE GENERALE 2.750 10112J2017 A2 A 102.421 2.68 4.53 2.19 4.24 Wow 141 a 4:7 V OPP V V V V V 47 V ZZ 49 � 40 40 W 0 40 46 0 0 0 0 40 0 0 0 '0 4*040 410 40 40 40 40 40 40 40 40 Sample Portfolio Holdings (As of March 31 , 2013) 200,000.0000 0.0000 00206RBM3 AT&T 1.400 121112017 A3 A- 99.305 1.41 4.67 1.55 4.51 200,000.0000 0.0,000 25468PCV6 WALT DISNEY 1,100 121112017 A2 A 99.932 1.10, 4.67 1.11 4.55 200,000.0000 0.0000 052769AA4 AUTODESK 1.950 12J1 512017 BAA2 BBB 99.043 1.97 4.71 2.16 4.49 200,000.0000 0.0000 458140AL4 INTEL 1.350 1211512017 Al A+ 100.341 1.35 4.71 1.28 4.56 200,0,00.0000 0.0000 6411 ODAC8 NETAPP 2.000 1211512017 BAAl BBB+ 100.559 1.99 471 1.88 4.49 200,000.0000 0.0000 064159BE5 BANK OF NOVA SCOTIA 1.375 12J1 812017 AA2 A-'-- 99,999 1.38 4.72 1.38 4.56 200,000.0000 0.0000 855030ALG STAPLES 2.750 111212018 BAA2 BBB 101.078 2.72 4.70 2.51 4.41 20,0,,000.0000 0.0000 740189AK1 PRECISION CASTPARTS 1.250 111512018 A2 A- 100.208 1.25 4.79 1.21 4.65 20,0,000.0000 0.0000 927904FMI VIRGINIA ELECTRIC&POWER 1.200 111512018 A3 A- 100.115 1.20 4.79 1.18 4.66 20,0,000.000,0 0.0000 06739GARO BARCLAYS BANK 5.125 11812020 A2 A--- 115.036 4.46 6.77 2.68 5.82 200,000.0000 0.0000 26138EAO-2 DR PEPPER SNAPPLE 2.000 111512020 BAAl BBB 98.687 2.03 6.79 2.21 6.35 200,000.0000 0.0000 40414LAH2 HCP 2.625 21112020 BAAl BBB+ 100.639 2.61 6.84 2.52 6.28 200,000.0000 0.0000 6174467P8 MORGAN STANLEY 5.500 712412020 BAAl A- 115.166 4.78 7.32 3.16 6.16 200,000.0000 0.00,00 71645WAR2 PETROBRAS INTL FIN 5.375 112712021 A3 BBB 107.899 4.918 7.83 4.18 6.49 200,000.0000 0.0000 38141 GGQI GOLDMAN SACHS 5.250 712712021 A3 A- 113.307 4.63 8.33 140 6-90 200,000.0000 0,0000 743263AS4 PROGRESS ENERGY 3.150 41112022 BAA2 BBB 101.895 3.09 9.00 2.91 7.80 200,000.0000 0.0000 46625HJE1 JP MORGAN 3.250 912312022 A2 A 99.846 326 9.48 3.27 8.23 100,000.0000 0.0000 25389JAK2 DIGITAL REALTY 3.625 101112022 BAA2 BBB 99.333 3.65 9.50 3.71 7.97 200,000.0,000 0.0000 68389XAPO ORACLE 2.500 1011512022 Al A+ 98.171 2.55 91.54 2.72 8.44 1001,000.0000 0.0000 237194AK1 DARDEN RESTAURANTS 3.350 111112022 BAA2 BBB 95.105 3.52 9.59 3.97 8.12 200,,0100.0000 0.0000 166764AB6 CHEVRON 2.355 121512022 AAl AA 99.279 2.37 9.68 2." 8.64 200,000.0,000 0.0000 71270,4AA3 PEOPLES UNITED FINANCIAL 3.650 121612022 A3 BBB+ 101.928 3.58 9.43 3.41 7.99 200,000.0000 0.0000 133131AT9 CAMDEN P RO P ERTY TRU ST 2.950 1211512022 BAAl BBB+- 97.689 3.02 9.71 3.23 8.42 200,000.0000 0.0000 755111BX8 RAYTHEON 2.500 101512022 A3 A- 97.640 2.56 9.71 2.78 8.60 100,000.0000 0.0000 06051GEU9 BANK OF AMERICA 3.300 111112023 BAA2 A- 98.606 335 9.78 3.47 8.36 200,000.0000 0.0000 878742AY1 TECK RESOURCES LTD 3.750 21112023 BAA2 BBB 97.591 3.84 9.84 4.05 8.24 Total CREDIT 2A29 A3 A- 1()1.986 2.35 4.99 1.84 4.54 CASH ON HAND 112,389.9800 0.0000 CASH SHORT TERM INVESTMENT FD 0.023 AAl NA 100.000 0.02 NA 0.01 0.01 Total CASH ON HAND 0.023 AA1 NIA 100.000 0.02 NA 0.01 0.01 Account Weighted Averages: 2-402 A3 A- 101.964 2.32 4.99 1.82 4.49 Account Unweighted Averages: 2-374 A3 A- 101.687 231 5.09 1.84 4.53 Great Lakes Advisors, LLC Intermediate Credit Fixed Income Composite Performance (As of March 31 , 2013) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1 .0 0.0 " 1Q13 1 Yr 3 Yr Since Inception Great Lakes Advisors ■ Intermediate Credit Fixed 0.79 7.23 7.13 8.18 Income Composite- Gross Great Lakes Advisors Intermediate Credit Fixed 0.67 6.81 6.59 7.62 Income Composite- Net Barclays Intermediate Credit 0.47 5.94 6.40 7.12 Returns greater than I year are annualized Please see appendix for performance disclosure statement Inception for Great Lakes' Intermediate Fixed Income Composite: 06/30/2008 r� T', -r4 1" 1,1� T* r* r+ r* r' r* r T+ 14, 4rk r+ f* 1* 40 1*. ! ! � �r��t►,l��ie vis�r���� � �. � � 0"4ao AW 40 AW 4W 4W AW AW �W 4W 4iw 4W 4W 4W 40 40 Aii� 40 10 40 40 4 4 4 0 4 4 Superior Risk vs . Return Risk/Reward Structure for 10 Years Ended March 31 , 2013 6.0 Great Lakes Intermediate Fixed Income _ 5.5 AL 5.0 a> 4.5 -- - - - - - -- - Barclays:Gov/Credit Inter 4.0 2.0 2.5 3.0 3.5 4.0 4.5 Standard Deviation Source:CAI - The ellipse represents the CAI universe of Intermediate Fixed Income managers Great Lakes Advisors, LLC Great Lakes Advisors Summary W w s s s s v s s s v v v v v v v v Summary ➢ Chicago based, with a 25 year history of serving Illinois Police and Firefighter Pension Funds ➢ Knowledgeable client service professionals who know and understand the State requirements with direct access to resources within our senior management team. ➢ Disciplined and `proven' repeatable process based upon fundamentals, valuation measures, and risk reducing diversification. ➢ Large Cap Value Consistent outperformance to the Russell 1000 Index: 3 Year, 5 Year, 10 Year and Inception (7/1/1990)*(Page 30) Less risk than the Russell 1000 Index as measured by standard deviation 10 Year Beta of 0.94 vs. the S&P 500 Index at .91 and Russell 1000V at 1 .00 (cai universe Rankings) Upper left hand quadrant on Risk/Reward Analysis `(Page 33) y Consistently (9 of 10 periods top third) and (7 of 10 periods top quartile) of Large Cap Value Managers on comparative rolling 3 Year performance (Page 32) ➢ Fixed Income Our size enables us to be nimble and responsive, and execute ideas and trades for our clients' benefit without moving the market Consistent outperformance to the Barclay's Intermediate Credit Index: 1 Year, 3 Year, and Inception (8/31/2009) '(Page 43) Less Risk, as measured by standard deviation, than the Benchmark - 10 Year Intermediate Fixed Income Composite*(Page 44) ➢ Top quartile performance comparison to our peer group for 1 and 3 year periods, top median for 5 and 10 year periods - 10 Year Intermediate Fixed Income Composite`(Page 64) ➢ Committed to earning and keeping your trust — Thank You! Great Lakes Advisors, LLC AVP Fee Analysis Fee Analysis-Total Portfolio(Estimated)-May 31,2013 Account Balance: $ 5,000,000 Effective Fee$ Effective Fee% Great Lakes Advisors,LLC Account Level Fee: First$5 Million 0.389/. $ 5,000,000 $ 19,000 Next$10 Million 0.25% $ - $ - On Balance 0.20% $ - $ - Expense Ratio Allocation% Allocation$ iSHARE RUSSELL 1000 GROWTH ETF 0.20% 11.7% $ 583,333 $ 1,166.67 GREAT LAKES ADVISORS-LCV 0.00% 11.7% $ 583,333 $ - iSHARE RUSSELL MIDCAP INDEX ETF 0.20% 15% $ 125,000 $ 250.00 iSHARE RUSSELL 2000 SMALL CAP ETF 0.20% 6.7% $ 333,333 $ 666.67 OAKMARK INTERNATIONAL FD 1 1.06% 5.0% $ 250,000 $ 2,650.00 iSHARE MSCI EMERGING MARKETS ETF 0.69% 2.5% $ 125,000 $ 862.50 COHEN&STEERS REALTY SHARES FD 1 1.03% 5.0% $ 250,000 $ 2,575.00 GREAT LAKERS ADVISORS-FIXED INCOME IG/C 0.00% 2.0% $ 2,650,000 $ - CASH EQUIVALENTS 0.00% 53.0% $ 100,000 $ - TOTAL 100.0% $ 5,000,000 $ 27,170.83 0.54916 Fee Analysis-Equity Portfolio(Estimated)-May 31,2013 Account Balance: 1 $ 2,250,000 Effective Fee$ Effective Fee% Great Lakes Advisors,LLC Account Level Fee: First$5 Million 0.38% $ 2,250,000 $ 8,550 Next$10 Million 0.25% $ - $ - On Balance 0.20% $ $ - Expense Ratio Allocation% Allocation$ iSHARE RUSSELL 1000 GROWTH ETF 0.20% 11.7% $ 583,333 $ 1,166.67 GREAT LAKES ADVISORS-LCV 0.00% 11.7% $ 583,333 $ - iSHARE RUSSELL MIDCAP INDEX ETF 0.20% 2.5% $ 125,000 $ 250.00 iSHARE RUSSELL 2000 SMALL CAP ETF 0.20% 6.7% $ 333,333 $ 666.67 OAKMARK INTERNATIONAL FD 1 1.06% 5.0% $ 250,000 $ 2,650.00 iSHARE MSCI EMERGING MARKETS ETF 0.69% 2.5% $ 125,000 $ 862.50 COHEN&STEERS REALTY SHARES FD 1 1.03% 5.0% $ 250,000 $ 2,575.00 TOTAL 45.0% $ 2,250,000 $ 16,720.83 0.74% Great Lakes Advisors LLC v v v v wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwow W r-W ° Balanced Fee Schedule Balanced Portfolio Account Size Annual Fee ($ millions) (basis points) First $5 Million 38 (0.38%) Next $10 Million 25 (0.25%) On Balance 20 (0.20%) Minimum Account Size: $2 Million This fee is inclusive of all direct and indirect fees, commissions, expenses and start up costs, except custodial services. Great Lakes Advisors does not mark up bonds or receive any other fee for the management of the account except as disclosed above. _ Great Lakes Advisors, LLC Alp Large Cap Value Fee Schedule Large Cap Equity Portfolio Account Size Annual Fee ($ millions) (basis points) First $25 million 50 (0.50%) Next $25 million 35 (0.35%) Over $50 million 25 (0.25%) Minimum Account Size: $2 Million This fee is inclusive of all direct and indirect fees, commissions, expenses and start up costs, except custodial services. Great Lakes Advisors does not mark up bonds or receive any other fee for the management of the account except as disclosed above. Great Lakes Advisors, LLC �rnA�Ow 413) :1►�,1► _ � s Intermediate Credit Fee Schedule Fixed Income Portfolio Account Size Annual Fee ($ millions) (basis points) First $10 million 30 (0.30%) Next $40 million 20 (0.20%) Over $50 million 15 (0.15%) Minimum Account Size: $2 Million This fee is inclusive of all direct and indirect fees, commissions, expenses and start up costs, except custodial services. Great Lakes Advisors does not mark up bonds or receive any other fee for the management of the account except as disclosed above. 151 Great Lakes Advisors, LLC AMP r Great Lakes Advisors, LLC i W i � I -I Appendix • Selected Biographies • Disclosures Great Lakes Advisors, LLC v Biographies Management Team: Thomas R. Kiley Chief Executive Officer Tom Kiley serves as the Chief Executive Officer of Great Lakes Advisors and is an active member of both the firm's Management Committee and its Board of Directors. Prior to joining Great Lakes, Tom was Managing Director/Principal at Bear Stearns Asset Management, where he managed the public fund and Taft-Hartley business group. Prior to this, he co-founded Continental Investment Group, an institutional asset management marketing firm focused on providing investment strategies to a diverse group of clients. Tom began his career as a bond underwriter/trader at First Chicago Corporation. Tom earned his MBA in Finance from the J.L. Kellogg Graduate School of Management at Northwestern University. Prior to that, Tom graduated with a BA in Economics from the University of Illinois, Urbana-Champaign. Tom is a Trustee and serves as President of a suburban Illinois Police Pension Fund. He is a member of several associations, including The International Foundation of Employee Benefit Plans, The National Conference of Public Employee Retirements Systems, The Illinois Public Pension Fund Association, and The Resource Center for Religious Institutes. He is also a committee member for The Annual Rerum Novarum Award. Stephen W. Rost Chief Investment Officer— Fixed Income Steve Rost is a Senior Managing Director and Chief Investment Officer for fixed income at Great Lakes Advisors. He is responsible for all fixed income products delivered to the firm's institutional and high net worth clients. He is also a member of the management team that oversees Great Lakes Advisors. Steve was one of Great Lakes Advisors, Inc.'s founders in 1990. ince joining the firm in 1990, Steve has been responsible for fixed income products as well as the overall management of the company. He also handles all mortgage-backed and commercial mortgage-backed investing for the firm's clients. Prior to Great Lakes, Steve spent almost six years at Stein Roe & Farnham in Chicago managing the firm's fixed income portfolios and taxable mutual funds. Steve earned an MS in Finance, Investments, and Banking from the University of Wisconsin at Madison and a BA from the University of Iowa. Steve lives outside of Woodstock, Illinois with his wife and four children. Great Lakes Advisors, LLC wry wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww w Biographies Large Cap Value Team: Edward Calkins, CFA Chief Investment Officer— Equities Edward Calkins is a Senior Managing Director at Great Lakes Advisors where he has played an instrumental role in the development of the firm's unique approach to equity management. Ed currently leads the value equity approach and the asset allocation work on balanced portfolios, in addition to managing client relationships and participating in business development. Ed was one of Great Lakes Advisors, Inc.'s founders in 1990. Ed started at Continental Bank in 1973 after graduating with an MBA with distinction from the J.L. Kellogg Graduate School of Management at Northwestern University and earning a BS with honors from Saint Louis University. He is a member of the CFA Institute and its Chicago chapter and serves on the DePaul University Finance Advisory Board. Ed has also been a guest speaker at the International Foundation of Employee Benefit Plans. Wells L. Frice, CFA Senior Portfolio Manager Wells Frice is a Senior Equity Portfolio Manager with more than 23 years of investment experience in various markets with an emphasis in common stocks. Having been at Great Lakes Advisors for over 13 years, he is involved in the management of the firm's equity assets and client relationships. Previously, Wells served as a Senior Equity Analyst and Deputy Director of Equity Research at First Chicago NBD, and most recently an equity portfolio manager. Wells is a graduate of Lake Forest College and is a Chartered Financial Analyst. He is a member of the CFA Institute and The Investment Analysts Society of Chicago. He is an elected member of The Board of Education of Mundelein Elementary School District #75, and serves as a Referee Instructor for the American Youth Soccer Organization in his home town of Mundelein and in Lake County, Illinois. Great Lakes Advisors, LLC Biographies Fixed Income Portfolio Managers: William N. Gregg Senior Portfolio Manager William Gregg has over 28 years of trading and market experience which includes eight years leading and growing a successful alternative asset management company. Prior to joining Great Lakes Advisors, Bill was one of the original partners of a fixed income arbitrage hedge fund that grew to over $1 .8 billion in assets. He also founded Windy Hill Asset Management, a boutique firm specializing in global fixed income arbitrage. Most recently, he served as a Senior Portfolio Manager for Peak6, LLC. Bill holds a BS in Computer Science and Economics from Trinity College in Hartford, Connecticut and an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University Emily Li, CFA Senior Portfolio Manager Emily Li has been a part of the firm for over 16 years. She is directly involved in the management of the firm's fixed- income assets, with particular emphasis on the corporate and treasury sectors of the marketplace. Prior to joining Great Lakes Advisors, she spent 12 years at Harris Investment Management where she was Chief Financial Officer and then Principal, Portfolio Manager, managing institutional fixed-income portfolios. After receiving a BA in International Business from National Taiwan University and an MBA from Indiana University, Emily worked in various capacities at Brunswick Corporation and The Quaker Oats Company before entering the investment management business. From July 2000 to June 2001, Emily served as an officer of the CFA Society of Chicago (previously the Investment Analyst Society of Chicago). From July 2001 to June 2005, she was a Director of the CFA Society of Chicago. Great Lakes Advisors, LLC � P'c, O!' ee 0, !V, AC f, I ", " " w - - - - 4 44 *6 � 'V �rii 'ri► �.i 1%,& -41t 1%.L ar v- v., v. �. ZZW PF Biographies Private Wealth Management: David Cox, CFA Managing Director-Senior Portfolio Manager David D. Cox serves as Senior Portfolio Manager for Great Lakes Advisors. David joined the firm in 1993 and manages 1 investment portfolios for a variety of clients including high net worth individuals, family offices, guardianships, foundations, endowments, Taft-Hartley Plans, and pension plans. He brings nearly 20 years of experience to his clients and creates investment solutions tailored to meet individual objectives while carefully monitoring portfolio risk. He also sits on the firm's Investment Committee. David earned a BS in Economics and Accounting from Babson College of Wellesley, Massachusetts. He is a CFA charter holder and is an active member of the investment community, belonging to the CFA Institute and the CFA Society of Chicago. Christy Coon, CFP Portfolio Manager Christy Coon is a Portfolio Manager and has been providing comprehensive wealth management services to clients for more than 27 years. Christy joined Great Lakes Advisors in 2011 and creates investment solutions tailored to each individual's unique needs. With her deep experience and commitment to service, Christy creates client profiles, works to construct a long-term strategy, and implements a plan to help her clients meet their financial objectives while monitoring portfolio risk. Before Great Lakes Advisors, Christy spent time in various roles with J.P Morgan. She has served as Vice President and Investment Advisor in the Chicago and North Shore Private Wealth Management offices. Christy received a BS from the University of Nebraska and MS from the University of Denver. She is a CERTIFIED FINANCIAL PLANNER TM and holds FINRA Series 7 and 66 Licenses, in addition to her Illinois Insurance License. She is a member of the Greater North Shore Estate & Financial Planning Council and the Investment Management Consultants Association. Christy resides in Wilmette, Illinois. Great Lakes Advisors, LLC 1111= Biographies Client Service and Sales: Kelly Weller Director of Client Service and Sales Michael Kelly Weller joined the Great Lakes Advisors team as Director of Client Services and Sales. Kelly has been a trusted advisor to Institutional Clients since 1994. With over 19 years of experience in the financial and investment business, he specializes in investment solutions for public, corporate, and multi-employer retirement plans. A former public fund trustee, and current Advisor to the National Conference on Public Employee Retirement Systems, Kelly brings a deep relationship network and practical experience to the Great Lakes Advisors, LLC, Client Service Team. Prior to joining Great Lakes Advisors, LLC, Kelly held similar positions with PNC Capital Advisors, LLC, and JP Morgan Asset Management Company. Kelly is a Certified Public Accountant; he received his undergraduate degree from Illinois College and an MBA from the University of Illinois, Springfield. Kate Szymanski Client Service Associate Kate Szymanski began her career at Great Lakes Advisors in 2009 and serves as a Client Service Associate on the marketing team. Kate focuses on relationship management. Additionally, she is responsible for preparing marketing materials including pitch books, fact sheets, Requests for Proposals, and presentation books. 1, Kate began her professional career in the financial services industry in 2009 after completing an internship with the firm. She graduated cum laude from the University of Illinois-Chicago where she earned a degree in History. Kate currently resides in Chicago and volunteers weekly at the Ann & Robert H. Lurie's Children's Hospital of the Chicago. She is also a member of the Bear Necessities Pediatric Cancer Foundation's Auxiliary Board. Great Lakes Advisors, LLC i '� :iwww . wlw ww1 ! lw . . . wwwww . . w . w . wli • wi • i _s �r 1 � Large Cap Value Composite Quarterly Returns Time-weighted return (interest and dividend income plus security price changes) data for all funds managed by Great Lakes Advisors, LLC include reinvestment of income and capital gains. Time-weighted total return data for all financial market indices does not include reinvestment of those items. Composite includes cash and is gross of management fees. Large Cap Value Composite 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 First Quarter 12.8% 10.7% 8.9% 6.6% -13.6% -9.9% 2.1% 5.6% 1 .3% 3.0% -5.9% Second Quarter -2.9 -1 .0 -9.4 12.9 -2.6 8.2 -0.4 -0.1 3.8 16.5 Third Quarter 5.0 -14.6 12.4 17.1 -7.9 2.6 1 .4 3.8 2.8 2.6 Fourth Quarter 2.4 12.4 8.9 7.5 -22.2 -4.8 7.5 3.1 11 .0 16.3 Year 15.5 3.6 18.2 22.8 -37.1 7.9 14.6 8.3 21 .8 30.8 Please see appendix for performance disclosure statement Great Lakes Advisors, LLC AVP MMW L�_ Large Cap Value Performance Disclosure • Great Lakes Advisors, LLC ("Great Lakes" or "G LA") is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940. Great Lakes is a wholly-owned subsidiary of Wintrust Financial Corporation. Great Lakes is a distinct business unit with distinct investment processes and procedures relating to the management and/or trading of investment portfolios for its clients. • Performance results are presented gross and net of management fees. • Returns are dollar and time weighted and include reinvestment of dividends, income and gains. All cash equivalents used by the manager are included in returns. • Rates of return presented are historical results. Future results may differ or vary from the past performance results presented. Past performance is no guarantee of future results. • The number of client accounts, the value of assets (expressed in U.S. dollars) and the percentage of the Firm's assets under management for the Large Cap Value Composite as of March 31, 2013, are as follows: #portfolios in composite $assets in composite % of firm's total assets Large Cap Value 55 $ 982.36 20.76% • The internal dispersion of the Large Cap Value Composite returns for the 12-month period ending 3/31/13 is: 0.53%; for the 12- month period ending 12/31/12: 0.92%; for the 12-month period ending 12/31/11: 1.44%; for one year ending 2010: 0.84%; for one year ending 2009: 2.21%; and for one year ending 2008: 2.26%; dispersion is calculated using the asset-weighted one-year standard deviation of annual gross-of-fees returns of those portfolios that were included in the composite for the entire year. • For periods prior to 1/1/10, the Large Cap Value Composite included segments of balanced accounts ("carve-outs") whereby return calculations included cash within balanced accounts allocated to segments based on target asset allocation weightings. The percentage of Large Cap Value Composite assets represented by these carve-outs as of each annual period end were as follows: for 2009: 2.70%; for 2008: 4.53%; for 2007: 20.91%; and for 2006: 20.01%. Effective 1/1/10, balanced accounts were divided into separate portfolios; therefore, the Large Cap Value Composite no longer includes segments of balanced accounts. Great bakes Advisors, LLC O W W W wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww ir i Large Cap Value Performance Disclosure • The three-year annualized ex-post standard deviation of the composite and benchmarks as of each year end are as follows: 2012 2011 2010 Large Cap Value Composite 4.27% 5.38% 6.33% S&P 500 4.42 5.48 6.40 Russell 1000 Value 4.54 6.06 6.79 S&P 500 Value 4.61 6.18 7.00 • The benchmarks selected for comparison of returns for the Large Cap Value Composite are the S&P 500 (an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. They are usually the 500 largest companies in terms of market capitalization and are chosen to represent the entire market's value.); the S&P 500 Value (companies within the S&P 500 with lower price-to-book ratios); and the Russell 1000 Value (the large-cap value segment of the Russell 1000, consisting of the 1 ,000 largest companies within the Russell 3000 index. Frank Russell Company reports its indices as one-month total returns). Index returns are provided to represent the investment environment existing during the time periods shown. All indexes are fully invested, which includes the reinvestment of income. The returns for the index do not include any transaction costs, management fees or other costs. The indexes are not available for direct investment. • The Large Cap Value Composite includes all institutional, discretionary, fee paying, tax-exempt total return portfolios managed with the Firm's value equity approach. The Firm's value equity approach employs large and medium capitalization, principally U.S.-based equities with attractive earning power and favorable valuation. Beginning June 30, 2012, the minimum portfolio size for inclusion in Large Cap Value Equity Composite is $2 million USD. Portfolios subject to substantial client imposed restrictions are excluded from the composite. Accounts meeting the above criteria will be added to the Large Cap Value Composite after the first full quarter of discretionary management. Accounts are removed from the composite, while retaining prior historical performance in the composite, at termination of the Firm as investment manager or when investment policy guidelines are instituted substantially restricting implementation of the value equity approach. Terminated portfolios will be removed from the Equity Composite after the last full month of active management. Accounts within this composite do not employ leverage. The composite inception date was June 30, 1990; and the composite was created in accordance with GIPS standards on December 31 , 1992. All cash reserves and equivalents are included in returns. Returns are time weighted and include reinvestment of dividends, income and gains. The value of assets is expressed in U.S. dollars. "� Great Lakes Advisors, LLC Alp Large Cap Value Performance Disclosure • "Great Lakes Advisors, LLC claims compliance with the Global Investment Performance Standards (GIPSO) and has prepared and presented this report in compliance with the GIPS standards. Great Lakes Advisors, LLC has been independently verified for the periods 1/1/1993 through 3/31/2011. A copy of the verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Large Cap Value composite has been examined for the periods 1/1/1993 through 3/31/2011. The verification and performance examination reports are available upon request." Great Lakes Advisors is currently undergoing a performance examination of the Large Cap Value composite for the periods 4/1/2011 through 6/30/2012, and is also undergoing an independent verification for the periods 4/1/2011 through 6/30/2012 as well. • A complete list of firm composites and performance results, and the policies for valuing portfolios, calculating performance, and preparing GIPS compliant presentations are available upon request. • Great Lakes Advisors, LLC's fees are available upon request and may be found in our Form ADV Part 2A. 0 � to 00 0 0 0- 0 0 0 0 0 0 0 0 0 0 . 0 0 *Gjejt J."A' � `#d�isROr�,�J�Ci • • � • � .. � �► .� .r • ® • �► err • r► �r � �rr� d► �r � d � dohddd � � t� � (� (rt �i► � � � � � � �' Gross, Net and Cumulative Performance and Growth of Assets ° For periods ending March 31 , 2013 The following table displays rates of returns for time periods covered by the performance data in this material. Historically, "net" performance is gross performance after the subtraction of only investment management fees. Net returns are calculated by subtracting the highest applicable separately managed account fee (0.50% on an annual basis, or 0.125% quarterly) on a quarterly basis from the gross composite quarterly return. Effective 1/1/12, Great Lakes Advisors adopted a new methodology to calculate net composite returns and actual fees paid are now utilized. Gross, Net and Cumulative Performance Returns for Periods Ending March 31, 2013 Large Cap Value Large Cap Value Large Cap Value S&P 500 R1 000V S&P 500 Value Composite Composite Composite Cumulative Cumulative Cumulative Gross Net Cumulative 1Q13 12.77 12.67 12.77 10.61 12.31 11 .97 1 Yr 17.72 17.29 17.72 13.96 18.77 16.64 3 Yrs 14.37 13.87 49.61 43.05 43.30 40.93 5 Yrs 6.49 6.00 36.97 32.64 26.72 22.07 10 Yrs 10.84 10.37 179.86 126.79 140.52 133.36 The following table is a representative example showing the effect of investment management fees on a $5 million portfolio for time periods covered by the performance data in this material. The example displays ending value of the portfolio before and after investment management fees for these time periods. Growth of Assets Gross of Fees and Net of Management Fees (Based on initial investment of $5,000,000) Beginning April 1, 2003 Gross Net 1 Yr $7,156,353 $7,123,632 3 Yrs $9,681,200 $9,544,488 5 Yrs $10,212,011 $9,968,067 10 Yrs $ 13,963,856 $13,316,366 Great Lakes Advisors, LLC v Performance Disclosure Intermediate Credit Fixed Income Composite The Intermediate Credit Composite includes all discretionary, fee paying, total return portfolios of taxable bonds with portfolio durations and security guidelines that are similar to the composite's benchmark, the Barclays Capital Intermediate Credit Index. Portfolios subject to substantial client imposed restrictions are excluded from this composite. The minimum portfolio size for inclusion in the Intermediate Credit composite is $1,000,000.Accounts are added to the composite when they have been fully invested and their duration is similar to that of the Barclays Capital Intermediate Credit Index. Accounts are removed from the composite prospectively, while retaining their prior historical performance in the composite, at termination of the Firm as investment manager, when there is a change in the benchmark or when investment policy guidelines are instituted substantially restricting implementation of the approach. Terminated portfolios will be removed from the Intermediate Credit composite after the last full month of active management. The composite was created on June 30, 2008. Great Lakes Advisors, LLC ("Great Lakes" or "GLA") is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940. Great Lakes is a wholly-owned subsidiary of Wintrust Financial Corporation. Great Lakes is a distinct business unit with distinct investment processes and procedures relating to the management and/or trading of investment portfolios for its clients. Great Lakes Advisors, LLC claims compliance with the Global Investment Performance Standards (GIPSO ). A complete list of firm composites and performance results, and the policies for valuing portfolios, calculating performance, and preparing GIPS compliant presentations are available upon request. Performance data quoted herein represents past performance. Past performance does not guarantee or indicate future results. All data is as of March 31 , 2013 unless otherwise noted. Returns and net asset value will fluctuate. For performance current to the most recent month end, please call 866-WH-DIRECT. Great Lakes Advisors, LLC's fees are available upon request and may be found in our Form ADV Part 2A. Performance results are presented gross of management and custodial fees and net of management fees. Returns are dollar and time weighted and include reinvestment of dividends, income and gains. All cash equivalents used by the manager are included in returns. Great Lakes Advisors, LLC 4F WP w w w w ® w • w w • w w • w r • M A S w w w w w ® w w ® ® ® w ® ® ® wI Performance Disclosure Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher- rated securities. To determine if this strategy is appropriate for you, carefully consider the investment objectives, risk factors, and expenses before investing. 6)5 Great Lakes Advisors, LLC v AOW Risk/Return Analysis 10 years as of March 31 , 2013 Returns for Periods Ended March 31, 2013 Group: CAI Intermediate Fixed-Inc Style 7.0 --- 6.0 -- (24) � ---- (42) -- 5.0 . (16) (39) (61) -- (40) -- -- - (79) - - -- (71) ---- (23) (95) (93) U) 4.0 - - (75) N cr 3.0 2.0 1.0 (18) �_ (24) - � 66 Last Quarter Last Year Last 3 Years Last 5 Years Last 10 Years 25th Percentile 0.44 4.52 5.56 5.95 5.26 Median 0.31 3.93 5.08 5.58 5.04 75th Percentile 0.23 3.53 4.81 5.15 4.81 G Lakes:Intermediate A 0.49 4.89 5.58 5.67 5.17 Great Lakes Int FI: Net ♦ 0.44 4.64 5.28 5.36 4.86 Source: CAI Barclays:Gov/Credit Inter ♦ 0.26 3.53 4.75 4.61 4.49 Returns greater than 1 year are annualized The complete performance disclosure statement is available upon request Great Lakes Advisors, LLC V* `' '91. 4k Rlr n',nF.if�.;gR,t i►cF4►ln�m�ia�=il,Ilir+,)rx (Cfvirsi tFm1Smp1Cm A& mt, jw m, ". AV �� 11�, ;�,f � - --I` - - - - :iw w • • • i , sssssss ® wwwwwwwwww rmmu(pcirvvv ® ® • ®I Intermediate Fixed Income Composite Quarterly Returns Time-weighted return (interest and dividend income plus security price changes) data for all funds managed by Great Lakes Advisors include reinvestment of income and capital gains. Time-weighted total return data for all financial market indices does not include reinvestment of those items. Composite includes cash and is gross of fees. Intermediate Fixed Income Composite 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 First Quarter 0.5% 1 .3% 0.6% 1 .9% 1 .0% 2.2% 1.6% -0.1% -0.6% 2.4% 1.7% Second Quarter 1.5 2.1 3.0 2.8 -0.8 0.0 0.4 2.4 -2.2 3.2 Third Quarter 2.1 2.1 2.7 3.5 -1 .2 2.5 3.1 -0.2 2.5 0.1 Fourth Quarter 0.7 1 .1 -1 .2 0.6 3.8 2.5 1.2 0.6 0.7 0.7 Year 5.8 6.0 6.4 8.0 4.0 6.8 4.7 2.3 3.4 5.8 -- Please see appendix for performance disclosure statement Great Lakes Advisors, LLC Afrp Wr C Fixed Income Performance Disclosure • Great Lakes Advisors, LLC ("Great Lakes" or "GLA") is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940. Great Lakes is a wholly-owned subsidiary of Wintrust Financial Corporation. Great Lakes is a distinct business unit with distinct investment processes and procedures relating to the management and/or trading of investment portfolios for its clients. • Performance results are presented gross and net of management fees. • Returns are dollar and time weighted and include reinvestment of dividends, income and gains. All cash equivalents used by the manager are included in returns. • Rates of return presented are historical results. Future results may differ or vary from the past performance results presented. Past performance is no guarantee of future results. • The number of client accounts, the value of assets (expressed in U.S. dollars) and the percentage of the Firm's assets under management for the various Fixed Income Composites as of March 31, 2013, are as follows: #portfolios in composite $assets in composite % of firm's total assets Intermediate Fixed Income 26 $303.05M 6.40% • The internal dispersion of the various Fixed Income Composite returns for the 12-month periods ending, are as follows: 1Q13 2012 2011 2010 2009 Intermediate Fixed Income 0.47 0.63 0.28 0.42 1 .39 Dispersion is calculated using the asset-weighted one-year standard deviation of annual gross-of-fees returns of those portfolios that were included in the composite for the entire year. e Great Lakes Advisors LLC � s Fixed Income Performance Disclosure • For periods prior to 1/1/10, the various Fixed Income Composites included segments of balanced accounts ("carve-outs") whereby return calculations included cash within balanced accounts allocated to segments based on target asset allocation weightings. The percentage of the Fixed Income Composite assets represented by these carve-outs as of each annual period end were as follows: 2009 2008 2007 2006 Intermediate Fixed Income 10.66 10.31 21.31 31 .95 Effective 1/1/10, balanced accounts were divided into separate portfolios; therefore, the Fixed Income Composites no longer include segments of balanced accounts. • The three-year annualized ex-post standard deviation of the various Fixed Income Composites and their corresponding benchmarks as of each year end are as follows: 2012 2011 2010 Intermediate Fixed Income 0.61 0.70 1 .04 Barclays Capital G/C. Int. 0.63 0.75 1 .14 • Intermediate Fixed Income Composite The Intermediate Fixed Income Composite includes all institutional, discretionary, fee paying, tax-exempt total return portfolios of taxable bonds with portfolio durations and security guidelines that are similar to the composite's benchmark, the Barclays Capital Intermediate Government/Credit Index. Portfolios subject to substantial client imposed restrictions are excluded from the composite. Beginning June 30, 2012, the minimum portfolio size for inclusion in Intermediate Fixed Income Composite is $2 million USD . Accounts are added to the composite when they have been fully invested and their duration is similar to that of the Barclays Capital Intermediate Government/Credit Index. _ Great Lakes Advisors, LLC Fixed Income Performance Disclosure • Intermediate Fixed Income Composite (cont.) Accounts are removed from the composite prospectively, while retaining their prior historical performance in the composite, at termination of the Firm as investment manager, when there is a change in the benchmark when the value of the account drops below $1 million for a period of nine consecutive months, or when investment policy guidelines are instituted substantially restricting implementation of the Intermediate Fixed Income Composite strategy. Accounts within this composite do not employ leverage. The composite inception date was December 31 , 1988; and the composite was created in accordance with GIPS standards on December 31 , 1992. All cash reserves and equivalents are included in returns. Returns are time weighted and include reinvestment of dividends, income and gains. The value of assets is expressed in U.S. dollars. The institutional-only separately managed account fee schedule for the Intermediate Fixed Income composite is as follows: 0.30% on the first $10 million; 0.20% on the next $40 million; 0.15% over $50 million. The benchmark selected for comparison of returns for the Intermediate Fixed Income Composite is the Barclays Capital U.S. Intermediate Government/Credit Index, an unmanaged index based on all publicly issued intermediate government and corporate debt securities with maturities of 1-10 years. Index returns are provided to represent the investment environment existing during the time periods shown. The Intermediate Government/Credit Index represents securities in the Government and Credit Indices. The Government Index includes treasuries and agencies. The Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. For comparison purposes, each index is fully invested, which includes the reinvestment of income. The returns for the index do not include any transaction costs, management fees or other costs. The index is not available for direct investment. Great Lakes Advisors, LLC W ssssss ® sv © sev ® vvvv ® vvvvvwvwwv ® ® • ® Fixed Income Performance Disclosure • "Great Lakes Advisors, LLC claims compliance with the Global Investment Performance Standards (GIPSO) and has prepared and presented this report in compliance with the GIPS standards. Great Lakes Advisors, LLC has been independently verified for the periods 1/1/1993 through 3/31/2011. A copy of the verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Core Fixed Income and Intermediate Fixed Income composites have been examined for the periods 1/1/1993 through 3/31/2011. The verification and performance examination reports are available upon request." Great Lakes Advisors is currently undergoing a performance examination of the Core and Intermediate Fixed Income composites for the periods 4/1/2011 through 6/30/2012, and is also undergoing an independent verification for the periods 4/1/2011 through 6/30/2012 as well. • A complete list of firm composites and performance results, and the policies for valuing portfolios, calculating performance, and preparing GIPS compliant presentations are available upon request. • Great Lakes Advisors, LLC's fees are available upon request and may be found in our Form ADV Part 2A. Great Lakes Advisors, LLC Gross, Net and Cumulative Performance and Growth of Assets- Intermediate Fixed Income For periods ending March 31 , 2013 The following table displays rates of returns for time periods covered by the performance data in this material. Historically, "Net" performance is gross performance after the subtraction of only investment management fees. Net returns are calculated by subtracting the highest applicable separately managed account fee (0.30% on an annual basis, or 0.075% quarterly) on a quarterly basis from the gross composite quarterly return. Fee rates used in the net of fee calculation may not represent actual fees incurred by all accounts in the composite. Effective 1/1/12, Great Lakes Advisors adopted a new methodology to calculate net composite returns and actual fees paid are now utilized. Gross, Net and Cumulative Performance Returns for Periods Ending March 31, 2013 Intermediate Fixed Intermediate Fixed Intermediate Fixed Barclays Capital Income Composite Income Composite Income Composite G/C. Int. Gross Net Cumulative Cumulative 1 Q 13 0.49 0.44 0.49 0.26 1 Yr 4.85 4.64 4.85 3.53 3 Yrs 5.57 5.29 17.64 14.92 5 Yrs 5.65 5.36 31 .66 25.29 10 Yrs 5.16 4.86 65.46 55.14 The following table is a representative example showing the effect of investment management fees on a $5 million portfolio for time periods covered by the performance data in this material. The example displays ending value of the portfolio before and after investment management fees for these time periods. Growth of Assets Gross of Fees and Net of Management Fees (Based on initial investment of $5,000,000) Beginning April 1, 2003 Gross Net 1 Yr $5,322,927 $5,307,222 3 Yrs $5,492,450 $5,443,599 5 Yrs $6,283,576 $6,191,038 10 Yrs $8,276,587 $8,040,056 Great Lakes Advisors, LLC