Dear Client

31 December 2015

In starting Allan Gray Investment Counsel in 1973, I was convinced that my passion for investing could be deployed to demonstrably enhance clients’ savings and wealth and provide them with good value for their money. This was our raison- d’être, our driving sense of purpose. We focused on earning and retaining the trust and confidence of our clients, leaving them to determine through their actions whether the firm would grow and prosper—or languish and fail. Our financial services were to be bought and not sold. Thus, if the firm prospered we would know we were making a positive difference to others in our daily work.

The same is true today. This client-centric sense of purpose continues to be our driving motivation at Orbis and Allan Gray— and we hope that it will endure in perpetuity. To ensure that control will remain indefinitely in the hands of those who best exemplify the ethos that has served our clients so well in the past, the newly established Allan & Gill Gray Foundation has been endowed with our family’s controlling interests in the Orbis and Allan Gray groups. At the same time, we have been mindful to provide capacity to further increase executives’ participation in the firms’ profits as appropriate.

In particular, we believe it is absolutely essential for the firms’ owners and key decision-makers to share the conviction necessary to stand behind our investment philosophy. For more than forty years, our experience has shown that taking a long-term perspective with a contrarian stance can produce demonstrably superior results—but only if one can withstand uncomfortably long periods of underperformance. Further, the perpetual nature of the Foundation empowers the executives to focus entirely on doing what is in the best long-term interests of clients, free from the short-term pressures that third-party ownership can bring. Indeed, all employees can be secure in knowing that nothing will change in this regard after the firms’ founders pass on.

Another equally important purpose of the Foundation is to ensure that the fruits from its controlling interests in Orbis and Allan Gray are ultimately devoted entirely and exclusively to philanthropy in keeping with the family’s long-held intentions. We consider this both the right thing to do and a small but necessary contribution toward a society full of hope for all humanity. The free enterprise system has done so much for so many, and it behoves the few whom it rewards particularly well to help those less fortunate.

Rather than being a way of “giving back”, I firmly believe that philanthropy is a natural extension of what Orbis and Allan Gray already do each and every day. Just as these firms strive to promote their clients’ financial security and peace of mind, so too will the Allan & Gill Gray Foundation strive to make a positive contribution to the common good. It is this holistic view of business entrepreneurship and the symbiotic relationship amongst all stakeholders—clients, employees, owners, and society—that the Foundation seeks to preserve.

Needless to say it is you, our clients, who have made possible this thrilling voyage spanning four decades. Thank you most sincerely for your valued support. As planned, I am now passing on my remaining responsibilities at Orbis to focus on the Foundation. I do so with the utmost confidence that the management of Orbis and Allan Gray remains in strong and capable hands.

I am also enormously grateful to my wife Gill, my soul mate and partner for over 50 years; our three children, Trevor, Jennifer and William, whose enthusiastic participation and selflessness has made the Foundation possible; and their descendants, who will be indispensable to the Foundation’s long-term success. So too will contributions from the wider family of all past, present and future colleagues at Orbis and Allan Gray whose shared sense of business purpose and excellence will continue to enhance your financial interests whilst also securing the Foundation’s philanthropy. It is hoped that the people at each firm will take pride in seeing the impact that profits attributable to the Foundation’s shareholdings are having in furthering the common good.

— Allan W.B. Gray

Values and Intentions

The creation and funding of Allan & Gill Gray Foundation (the "Foundation") is essential to bringing to fruition the Founders' Family's intention to ultimately devote exclusively to philanthropy the economic benefit of the controlling interests in the Orbis and Allan Gray groups of asset managers.

The funding of the Foundation is considered to be both the right thing to do and a small but necessary contribution to advancing social, economic and political stability in a thriving and engaged society full of hope for all citizens. It is believed that growing economic disparities within society threaten the very survival of the free enterprise system, which has been so successful in raising living standards worldwide, and that it behoves the few it rewards particularly well to invest in improving the welfare of fellow citizens so that they may realise their full potential. Rather than being a way of "giving back", philanthropy is seen as a natural extension of the Foundation's Businesses' purpose to make a positive difference.

The Foundation's philanthropy will be pursued by Allan & Gill Gray Philanthropies through the Foundation's wholly owned subsidiaries and their satellites. These philanthropies will be funded, as deemed appropriate by the Foundation, out of the recurring distributable profits received from the Foundation's Businesses.

The high cash generative nature of the Asset Management Businesses makes them ideal capital investments to fund the Foundation's philanthropy. It is therefore intended that the capital endowed on the Foundation, comprising the Asset Management Businesses together with a portfolio of marketable securities, will be retained indefinitely. By fostering the long-term success of the Asset Management Businesses and new financial services businesses, funding for philanthropy will be secured and enhanced.

Management of the Foundation's Asset Management Businesses will be delegated to business executives through its wholly owned subsidiary, Orbis Allan Gray Limited. Thus the Foundation's purposes include securing the continuity of the success of the Asset Management Businesses, with the expectation that the long-term stability of this ownership structure will facilitate continuance of their primary sense of purpose and their continuing freedom to adhere to their founding principles and core values, free from the short-term pressures that external ownership can bring.

The Foundation shall comprise only endowments from such of the Founders' Family, and from such entities, as the Founders (or the survivor of them) during their lifetimes may determine. It is very much a family affair including Gill and Allan Gray as partners and soulmates for over 50 years, their three children Trevor, Jennifer and William, whose enthusiastic participation and selflessness has made the Foundation possible, and their descendants who will make an indispensable contribution to the Foundation's long-term success. Also recognised and valued are the contributions from their wider family of all past, present and future colleagues at Orbis and Allan Gray whose shared sense of business purpose and excellence make the Foundation's philanthropy possible. It is hoped that members of the Foundation's Businesses will take pride in seeing the impact that profits attributable to the Foundation's shareholdings in these firms are having on those less fortunate in society.

Signed on 31 March 2015
By Allan and Gill Gray and their three children