Transamerica Retirement Services

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Transamerica Retirement Services San
Francisco May 8, 2002
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Assets Under Management - 3/31/02
Millions
Equities Mutual Funds 2,361 Pension
Accounts, Foundations Other
3,092 Insurance Companies
892 Total Equities 6,345 Convertibles
Mutual Funds 14 Pension
Accounts, Foundations Other
23 Insurance Companies 1,680 Total
Convertibles 1,717 Fixed Income
Mutual Funds 458 Pension Accounts,
Foundations Other 1,621 Insurance
Companies
1,865 Total Fixed Income
3,944 Total 12,006
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New Chapters in TIM HistoryPost-Millenium

• Legacy Convertible Growth 750 million
• Fixed Income Growth 1.25 billion
• SEI Large Cap Growth 1.35 billion
• John Riazzi, CEO 500 million
• New Foundation Accounts 150 million
• Opened Dayton Office
• Hired Michelle Stevens, VP Portfolio Manager
• Hired David Lubchenco, VP Director of IS
• Expanded Distribution Agreements--2002

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Equity Performance
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Mission
Outperform the SP 500
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Year-to-Date Performance - 3/31/02
TA Equity -0.9 TA Aggressive
Growth 0.9 TA Growth
Opportunities 8.4 TA Core
Equity 2.2 TA Balanced
2.0 TA Bond -2.8 TA High
Yield -0.3 SP 500
0.28 Russell 2000
3.98 Lehman Govt./Credit
-0.48 Merrill Lynch All High Yield 1.96
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Transamerica Equity FundGrowth of 100 Million
Investment
CAGR Equity Fund 19.00 SP 500
11.87
TA Equity Fund 1,285 Million
Millions
TA Equity Fund
SP 500 508 Million
SP 500
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Transamerica Equity Fund
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Transamerica Equity FundVs. Lipper Large Cap
Growth FundsAnnualized Returns for Periods
Ending 3/31/02
Transamerica Equity Fund is a commingled separate
account for qualified retirement clients of
Transamerica Life Annuity and is not part of
the Lipper Universe. Returns are after fees.
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Transamerica Equity Fund vs. Janus 20
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Transamerica Equity Fund vs. Legg Mason Value
Trust
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Fund Returns Transamerica Who? (CAGR 12/31/90
to 3/31/02)
Transamerica Equity Fund 22.3
Legg Mason Value Trust 18.1
Janus 20 15.1
SP 500 14.4
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Top 10 Funds Transamerica Who? (CAGR 11/30/86
to 3/31/02)
Vanguard Health Care 19.65 Fidelity Select
Electronics 18.51 TRANSAMERICA EQUITY
FUND 17.89 Fidelity Select Banking 17.31 INVE
SCO Leisure Inv. 17.21 INVESCO Financial
Services 17.09 FPA Capital 17.09 Fidelity
Select Software 17.04 Fidelity Select Home
Finance 17.00 Eaton Vance Worldwide
Health 16.89
Source Morningstar Principia (out of 1,214
mutual funds and 2,517 sub-accounts with a
15-year track record)
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Transamerica Aggressive Growth FundGrowth of
100 Million Investment
TA Aggressive Growth 200 Million
CAGR TA Aggressive Growth 10.23 SP 500
7.05
Millions
SP 500 138 Million
TA Aggressive Growth
SP 500
Note Performance prior to 9/30/98 is the return
of the Premier Aggressive Growth mutual fund from
which the Separate Account was cloned.
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Transamerica Growth Opportunities FundGrowth of
100 Million Investment
TA Growth Opportunities Fund 325 Million
CAGR TA Growth Opportunities
25.79 Russell 2000
11.36
Millions
Russell 2000 135 Million
TA Growth Opportunities Fund
Russell 2000
Note Performance prior to 9/30/98 is the return
of the Premier Small Company mutual fund from
which the Separate Account was cloned.
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Transamerica Core Equity Fund - Total Return
Analysis As of March 31, 2002
Since
1 Year 2 Years 3 Years
Inception Transamerica Core Equity
Fund 1.65 -2.68 7.37
15.18 SP 500 -11.88
-10.50 -1.03 5.11 Inception
9/30/98
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Simply, buy a business with good economics, run
by experienced and honest managers, and pay a
good price.
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Equity Investment Philosophy
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Catalysts for Fundamental Change
Industry Cycle Change
Stock Price Appreciation
Product Cycle Change
Management Change
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Masterpiece Companies AreWealth-Creating
Machines
Dominant market share Low-cost producer Well-known
brand Proprietary technology/product Excellent
management
Unfair, Sustainable, Competitive Advantage
High Return on Invested Capital
HIGH RETURN LOW COST
WEALTH- ON - OF
CREATING INVESTED CAPITAL
CAPITAL MACHINE
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Equity Investment Philosophy

• Buy masterpiece companies
• Focus on fundamental change
• Own businesses, not paper
• Take concentrated positions
• Stay invested
• Cash flow is the life blood of economic value

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Why We Sell

• We Find a Better Idea
• Valuation Defies Logic
• Unexpected Fundamental Change
• Management Change in Strategy

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Investment Strategy Looking Ahead
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Andy Groves Rules of Recessions

• They End!
• You Dont Save Yourself Out of Them!
• Some Companies Emerge Stronger!

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Transamericas Rules of Bear Markets

• They End!
• We Invest Our Way Out!
• Our Portfolios Emerge Stronger!

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Fundamentals to Emphasize in Recessions

• Strong Balance Sheets
• Excess Capital or Cash Flow
• Improving Competitive Position
• Internal Growth
• Attractive Valuation

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Transamerica Equity Fund Top 10 HoldingsAs of
3/31/02
1) First Data
Corporation 6) Intel Corporation
2) Safeway, Inc. 7) Microsoft
Corporation 3) United Parcel Service 8)
Concord EFS, Inc. 4) Moodys Corporation 9)
Comcast Corporation 5) Northern Trust Corp.
10) State Street Corporation
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Transamerica Growth Opportunities Fund Top 10
HoldingsAs of 3/31/02
1) Cymer, Inc. 6)
Expedia, Inc. 2) Investment
Tech. Group 7) BlackRock, Inc. 3) Barra,
Inc. 8) Expeditors Intl 4) CH Robinson
Worldwide 9) Moodys Corporation 5) Global
Payments, Inc. 10) Techne Corporation
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What has Changed?

• Dot.coms offered no return on investment
• Companies are not afraid of being Amazoned
• Valuations are more reasonable, but still high
• Significant excess capacity

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Market Environment of the 2000s

• Single-Digit Earnings Growth
• Single-Digit Market Returns
• Low Inflation
• Rationalization of Excess Capacity
• Multiples Remain High

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THE VIRTUOUS CIRCLE
Stock Market Returns
Technological Innovation
Low Inflation
Competitive Advantage
High Productivity
High ROIC
High Growth
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Summary The Never-Never Land

• Never Comfortable
• Never Satisfied
• Never Happy

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Transamerica Separate Accounts
PERFORMANCE
CONSISTENCY
QUALITY
FLEXIBILITY