2019 RESULTS PRESENTATION - 26 SEPTEMBER 2019 - Ethos Capital
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2019 RESULTS PRESENTATION
26 SEPTEMBER 2019
0
Introduction
Portfolio overview
CONTENTS
Valuation overview
Liquidity analysis
Conclusion
1
Market conditions, cost pressures and uncertainty provide a tough investment backdrop!
Key drivers impacting top-line performance… Key cost of sales drivers…
Petrol price
Quarterly GDP growth (%) Fund VI
Fund VI 1900
Impact of key market drivers
8.0
MM Fund
Price (95ul; coastal; c/l)
1700
MM Fund
6.0 1500
2011 - 2018
1300
4.0 CAGR:
1100
Quarterly growth (%)
2.0 900
6.2%
0.0 700
500
-2.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
-4.0
Electricity price Fund VI
-6.0 82.5
90.0 81.8
75.4
Average price c/kWh sold
-8.0 67.6
70.0 62.8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 58.5 2011 - 2018
50.3 CAGR:
50.0 42.2
MM Fund
Annual GDP per capita (ZAR)
25.0
31.9 10.0%
Fund VI 30.0 17.0 18.1 19.6
56,500
10.0
56,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
55,500
Foreign Exchange Rate
55,000
16.0 Fund VI
54,500
14.0
54,000
Average USDZAR
MM Fund
53,500
12.0 2011 - 2018
CAGR:
10.0
53,000
MM Fund 9.0%
52,500 8.0
52,000 6.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2
The difficult operating environment has lent itself to opportunities across the funds
Large Equity
• Fund VI finished investing phase and commenced exit phase – two exits Kevro and Eaton
• Intensive focus on portfolio companies with strong traction in restructurings and cost reductions
Update on a fund by fund basis
• Fund VII in investment phase – two deals Channel Vas and Echo – strong pipeline of
opportunities
ZAR2.6 billion
• Focus on key investment themes and deep value opportunities with cyclical upside
Invested
ZAR2.1bn in
new investments
Mid Market ZAR500m in
follow on capital
• MMF is 65% invested and the team’s focus is on maximising outcomes in the portfolio
• Promising signs across the mid-market equity assets (Echo, Gammatek, Synerlytic, Kevro)
Autozone, Twinsaver and Eazi Access remain under pressure
• Very significant SA focussed investment pipeline – can afford to be selective
Mezzanine
• Strong pipeline of opportunities in East African structured equity growth capital
• Negotiations on two transactions nearing completion
ZAR2.9 billion
• Chibuku had a challenging year operationally given weather conditions and other exogenous Raised
issues in Malawi
ZAR2bn for Fund VII
R254m for EMP3
R640m for Ai Fund I
Ai • Strong traction in fund raising
• Differentiated value add impact on Channel Vas and Vertice
• Investment in Tyme Bank
• Strong pipeline of opportunities
3Highlights of the operating results
# of Portfolio Companies NAV per Share Growth in NAV per share
Key performance metrics
19 R11.34 3%
EV / EBITDA Capital Invested Capital Invested
(Actual) (Proforma)
6.9x R1.43bn R1.58bn
Net Debt / EBITDA Total Assets Proforma invested capital
(Actual) (as % of Total Assets)
1.9x R1.93bn 82%
4Introduction
Portfolio overview
CONTENTS
Valuation overview
Liquidity analysis
Outlook
5Portfolio overview and value contribution
Exposure to 19 portfolio companies across various sectors and vintages Invested Capital by sector / geography
3%
15%
4% 30%
10%
Portfolio overview
12%
26%
Banking Consumer goods
FinTech Industrials
Media MedTech
Telco services
40%
60%
South Africa Sub Saharan Africa
6Fund investments in 2019 Significant investment in the past 12 months across six new portfolio companies
867
712
Net new
investments
7Net asset value contribution and “age” of the investment portfolio
18%
Assets owned for more than one year
46%
Portfolio composition
Assets owned for less than one year
36%
Cash Assets < 1yr Assets > 1 yr
8Successful exit of Eaton Towers
Investment / Exit date: June 2015 / October 2019 Ethos consortium ownership: 14.4%
Business: Telecommunications Fund VI Invested Capital: R405m
Portfolio company overview
Ethos Fund VI ownership: 4.8% Gross returns (ZAR): 2.4x TMB / 23.4% IRR
Pan-regional presence
Eaton Towers is a leading independent pan-African tower company
with over 5,000 tower sites across five countries
5 Presence across Ghana, Uganda, Kenya,
Burkina Faso and Niger
Blue chip customer base
Key investment themes
A++ Airtel Africa, MTN, Orange, Vodafone and
Safaricom, amongst others
Balanced portfolio exposure
50% EBITDA margin increased from 30% to >50%
over life of investment
9Channel VAS update
Date of investment October 2018 % of EC Invested Capital 26%
Total Ethos ownership 17.5% (increasing to 20%) % of EC NAV 21% % of Ethos LTM change
Capital NAV: in NAV:
EC Invested Capital R372m Current valuation R408m (1.14x TMB)
21% +R53m
Portfolio company overview
LTM Return +R53m (14%) Dividends received, valuation largely unchanged
Channel VAS provides Airtime Credit Services and Mobile Financial Global presence
Services to prepaid mobile subscribers through MNOs Presence across 4 continents and >25 countries
Key investment themes
>25 (most of which are in sub-Saharan Africa) – six
new deployments since May 2018
Accessible customer base
650m Access to +650m mobile subscribers
Financial Increasingly Rising Ai and hyper
Daily advances
Inclusion +$5m advances distributed daily, with over 6
+$5m
connected consumer decision-
populations spending making million transactions per day (US$799m
advanced YTD vs US$566m in 2018)
Default rates
1.7 billion adults remain unbanked *
20% Y-o-Y LfL EBITDA growth LTM June 2019
10Kevro update
Date of investment October 2017 % of EC Invested Capital: 13%
Total Ethos ownership 27.6% % of EC NAV: 11%
% of Ethos LTM change
EC Invested Capital R185m Current valuation: R202m (1.10x TMB) Capital NAV: in NAV:
Portfolio company overview
LTM Return +R9m (5%) Multiple unchanged, gearing benefit 11% +R9m
KEY HIGHLIGHTS
Weak economic environment adversely impacted end customers
Service level challenges, recent improvements point to greenshoots
✓ Relatively strong financial performance in a difficult market, focus on new product strategies to drive growth
✓ COO appointed
✓ Full strategy review & operating model re-assessment completed
✓ Operational projects to improve service levels and enhance efficiencies
o New Warehouse and IT systems
✓ All the above projects to be funded by internally generated cashflows
✓ Delivered 1st B-BBEE rating in FY2018. This year rating was enhanced the business achieved a Level 4 rating
Constructing New Warehouse Facility ERP & WMS System
“1 Box” Integrate Ops & Systems
- Increased pallet locations - Enhance inventory management
- Warehousing, picking mezz & branding - Improve quality of BI in support of
Allows Kevro to consolidate into one site; decision-making processes
expected to drive efficiencies
11Primedia update
Date of investment December 2017 % of EC Invested Capital: 12% (including SKT)
Total Ethos ownership 19.9% + 5.0% (EC) % of EC NAV: 10% (including SKT)
% of Ethos LTM change
EC capital investment R172m Current valuation: R194m (1.13x TMB) Capital NAV: in NAV:
Portfolio company overview
LTM Return +R6m Primedia largely flat, SKT value increase 10% +R6m
KEY HIGHLIGHTS
Weak advertising market (industry radio and outdoor advertising spend both down YoY)
Most corporate advertising budgets have been cut
Lower occupancy in static billboards offset to some extent by the performance of digital billboards
✓ Relatively strong financial performance given difficult operating conditions
✓ Market share gains in broadcasting limited the revenue decline
✓ Significant investment (LTM and going forward) in digital billboards
✓ Sold SK Entertainment (proceeds used to repay debt)
✓ Unbundled SK Theatres (movies business) to shareholders, new Chairman, CEO and CFO
✓ Strategic review and operating model changes in SKT resulted in significant improvement in YoY profitability
Strategic re-focus Market share
Sold SKE and unbundled SKT to create a Growth in radio market share in broadcasting
focussed broadcasting and outdoor was a significant positive in 2019
advertising business
Digitization of Outdoor billboards
Capital expenditure in digitising billboards and
creating “new age” solutions for advertisers showing
good momentum
12Echo update
Date of investment February 2018 % of EC Invested Capital: 11%
Total Ethos ownership 31% (inc. to >65%) % of EC NAV: 9%
% of Ethos LTM change
EC Invested Capital R26m (+R152m) Current valuation: R28m (1.07x TMB) Capital NAV: in NAV:
Portfolio company overview
LTM Return +R2m (+7%) Effectively held at cost of investment 9% +R2m
KEY HIGHLIGHTS
Delayed implementation of Gondwana acquisition primarily due to regulatory challenges – likely to close in October 2019
✓ Strong growth year on year with increased market share
✓ Appointed Group CFO and Head of Product Innovation
✓ Business successfully delivered its 1st B-BBEE rating under the ICT Codes and obtained a level 4 rating
✓ Investment in new sales force - strong momentum in delivering against sales targets (87% of target achieved in 6 months)
✓ Strategic review and operational model assessment project being scoped and will be completed by end January 2020
✓ Strong acquisition targets pipeline:
– Zambia
– Kenya
SSA presence Market opportunity
The B2B service market is
9 Countries $9.9bn growing faster than any other
segment of ICT in SSA
Growth in FTTX connections Growth in Africa’s data consumption
SSA severely underserved outside
x3 SA; FTTX connections projected to +42 % CAGR to 2021
grow three-fold to 2020
13Synerlytic update
Date of investment April 2019 % of EC Invested Capital: 7%
Total Ethos ownership 93.4% % of EC NAV: 5%
% of Ethos LTM change
EC Invested Capital R92m Current valuation: R105m (1.14x TMB) Capital NAV: in NAV:
Portfolio company overview
LTM Return +R13m (14%) Multiple unchanged, EBITDA growth (head office savings) 5% R13m
SSA & MEI presence Ai capabilities
Already processing 5% of samples
13 Countries using recently developed algorithms
Pakistan
UAE India
Healthy M&A pipeline across
Significant barriers to entry Ghana
DRC
various geographies Ivory Coast
Holds globally applicable 1x acquisition completed, Zambia
accreditations additional opportunities being assessed Angola
Botswana Zimbabwe
Namibia Mozambique
South Africa
Synerlytic Lab footprint Agent labs
14Gammatek update
Date of investment September 2018 % of EC Invested Capital: 6%
Total Ethos ownership 51.0% % of EC NAV: 5%
% of Ethos LTM change
EC capital investment R98m Current valuation: R98m (1.0x TMB) Capital NAV: in NAV:
Portfolio company overview
LTM Return R0m Held at cost of investment 5% -
KEY HIGHLIGHTS
Weak consumer environment, post-paid up-trade cycle getting longer
Geopolitical impacts (Huawei volume sell through impacted by US-China trade war)
✓ Relatively strong financial performance given difficult operating conditions
✓ Finalising appointment of CFO
✓ Appointed Independent Non-Executive Chairman
✓ Business successfully delivered its 1st B-BBEE rating under the ICT Codes and obtained a level 4 rating
✓ Increasing the proportion of exclusive customers to total customers
✓ In-store incentive app launched to leverage capacity of non-Gammatek staff
✓ Strategic review and operational model assessment project underway
New channels targeted Poised to increase market share
Assessing bolt-on acquisitions to Key competitor recently filed for business
diversify channel and products rescue
beyond the core (e.g. Audio)
Geographic expansion options
Exploring market entry strategies for East Africa
and models to supply into other international
markets
15Vertice update
Date of investment May 2018 % of EC Invested Capital: 4%
Total Ethos ownership >75% % of EC NAV: 3%
% of Ethos LTM change
EC Invested Capital R58m Current valuation: R61m (1.05x TMB) Capital NAV: in NAV:
Portfolio company overview
LTM Return +R3m (+5%) Effectively held at cost of investment 3% +R3m
KEY HIGHLIGHTS
✓ Strong growth year on year through increased market share, new
products and acquisition-led growth
✓ Appointed new CEO with strong technology background
✓ Strong Ai potential both in terms of new business growth but also product
utilisation and differentiation
✓ Strong acquisition pipeline with new acquisition opportunities well
CARDIO- WOUND ORTHO SURGERY NEUROLOGY BLOOD
DISEASE
DIAGNOSTIC
advanced
VASCULAR CARE
SOLUTIONS
✓ Significant investment in IT systems to facilitate platform consolidation and
roll out
✓ Potential for ex-South Africa growth is significant
Established
Biotech Technology AI and Data
uniquely
Infotech platform Science
skilled
convergence and scale
distribution
16MTN Zakhele Futhi update
Date of investment July 2017 % of EC Invested Capital: 3%
Total Ethos ownership 4.1% % of EC NAV: 2%
EC Invested Capital R43m Current valuation: R41m (0.96x TMB) % of Ethos LTM change
Capital NAV: in NAV:
Portfolio company overview
LTM Return -R2m (-2%) Marked to market off MTN share price 2% -R2m
KEY HIGHLIGHTS
• New management team in place
• “BRIGHT” Strategy fully adopted and being implemented Strategic Initiatives on course:
Share price lagging strong operation performance
Business remains susceptible to external policy, regulatory shocks
✓ Travelstart exited and Jumia listed on NYSE
✓ Mascom exit in progress (subject to regulatory approvals), MTN Cyprus (exited) and MTN Ghana Listed.
✓ MTN Nigeria Listed. Move to underpin stability with regulators and other local authorities
✓ Governance enhanced with establishment of senior advisory council and re-instatement of in-country VP’s across the footprint
✓ Options being explored re Tower assets (could unlock c. R20bn for MTN)
12 month share price analysis
120
100
80
c.50% INCREASE IN
60 SHARE PRICE
17Tyme Bank
Date of investment June 2019 % of EC Invested Capital: 3%
Total Ethos ownership 8% % of EC NAV: 2% % of Ethos LTM change
Capital NAV: in NAV:
EC Invested Capital R46m Current valuation: R46m (1.0x TMB)
2% -
Portfolio company overview
LTM Return R0m Held at cost of investment
Proven acquisition model
>770,000 customers signed up since launch in
770k November 2018
Large distribution footprint
Financial
inclusion
50%+
Smartphone
Disruptive
AI and hyper
decision-
14k Kiosks in 700+ stores with Tyme ambassadors,
and access to cash at 14,000+ till points
technology
use in SA making
Compelling low cost proposition
80% of customers underserved*
Highly attractive South African banking sector
R32 Half the cost of lowest cost banking competitor
Behavioural products
✓
Products designed using behavioural economics
- Unique and exclusive distribution platform through Pick n Pay and Boxer stores
promoting responsible and inclusive access to
with proprietary access to rich consumer data
banking
- Industry leading, low cost operational platform
- Established and operational cloud-based technology platform operating at scale Attractive financial dynamics
25%
- Reputable, experienced team with ability to scale the platform globally Technology and business model designed to
attain industry leading cost-to income ratio
* FinScope South Africa 2015, 2016 and 2017 consumer surveys. “Adequately served” defined as individuals having a balanced portfolio of products that are suited specifically to their financial wants and needs
18
18Performance of selected portfolio companies
AUTOMOTIVE PARTS RETAILER &
FMCG INDUSTRIAL EQUIPMENT
WHOLESALER
Portfolio company overview
Date of investment Dec 2016 Dec 2016 Dec 2016
% of Ethos Capital NAV 2% 4% 2%
Current value R40m (-R46m YoY) R74m (-R9m YoY) R34m (-R12m YoY)
LTM Return / TMB -54% / 0.51x -11% / 0.89x -26% / 0.64x
Consumer sector Consumer sector Construction sector
USD:ZAR USD:ZAR Eskom: long-term contracts ending
NON CONTROLLABLES (INDUSTRY) Pulp price (global commodity)
Poor category planning and inventory Significant operational inefficiencies Over-capacitation
CONTROLLABLES management
o Strategic review and reset o Strategic review and reset o Strategic review and reset
o C-suite capacitation o New CEO o New CEO
o Cost savings (R64m - closure of non performing o C-suite capacitation o C-suite capacitation
ETHOS FOCUS OVER LTM stores) o Cost savings (R53m – operational efficiency) o Cost savings (R39m – S189 & cost controls)
o Debt restructure o Debt restructure o Debt restructure
✓ Recovery plan in place with significant budgeted ✓ Significant traction on improving OEEs; ✓ Successfully diversifying away from
y-o-y growth in EBITDA driven by rationalisation saleable volumes ahead of budget construction; Good growth in new industry
of store footprint, leadership augmentation and ✓ Positive momentum in run rate verticals; construction = 54% of revenue at
CURRENT OUTLOOK enhanced inventory management acquisition vs. 45% currently
19Investment Strategy – backing key investment trends
Key themes Recent investments Most likely sectors
LSM migration-led growth in consumer
goods
Key investment trends
Retail
Growing connectivity and data access Convenience
FMCG
Manufacturing
Lowest cost-to-serve, scalable
businesses Logistics
Financial Services
Business Services
High impact, differentiated services
ICT
Telecommunication Services
Technology-driven disruption to Technology Enablers
“business as usual”
Medtech
Transportable business models scaling
across countries
20Introduction
Portfolio overview
CONTENTS
Valuation overview
Liquidity analysis
Outlook
21Portfolio composition and valuation metrics
Portfolio composition Key valuation metrics
NAV discount 8.0x 31.3%
% of NAVPS % of NAVPS
31%
6.9x
7.0x 31.2%
Portfolio Composition
80% 88%
6.0x 31.2%
9.06 10.03
31% 5.0x 31.1%
NAV
4.0x 31.1%
11.34
31%
3.0x 31.0%
7.80 1.9x
2.0x 31.0%
1.0x 30.9%
2.28
1.31
- 30.9%
30 Jun 19 Adjusted 30 Jun 19 EV / EBITDA Net debt / EBITDA Discount to NAV Discount to peer group
Cash Invested Capital Share price
* Share price as at 30 June, 2019
2222Market implied valuation analysis
Portfolio valued at a 31% discount to the peer group... .....market “look-through” values portfolio at 4.8x EV / EBITDA
6.9x
100
2.28 1.9x
NAV BASED VALUATION
Valuation over view
31%
11.34
69 9.06 5.0x
31%
NAV Cash Invested NAV Valuation
48
4.8x
SHARE BASED VALUATION*
2.28 1.9x
7.80
5.52 2.9x
Peer group Ethos portfolio Implied market
company company company
valuations valuations valuations
NAV Cash Invested NAV Valuation
* Share price as at 30 June, 2019 23Growth rates and market implied EV / LTM EBITDA multiples of the portfolio
Sales growth by company Net debt / EBITDA by company
3
3
Portfolio company performance
4
3 8
2
6
4 477 443
393
291 296 270
269
201 1
40
0% - 5% - 15% 0x - 1.5x - 3x - 4.5x
Value - R'm Number
Value - R'm Number
EBITDA growth by company Market implied EV / EBITDA by company
6 6
3
527 851
5 465 3 5
4
175 297
173 2
137
55
-10% - 0% - 15% 4.5x - 5.5x - 6.5x
Value - R'm Number Value - R'm Number
24Portfolio company returns
4.0 1.6 5.0 0.9 0.7 0.2 2.4 1.7 1.6 1.3 1.1 0.0 0.9 1.9 6.9 4.3 4.3 3.4 4.5
Portfolio company performance
Positive value contribution
1.71x
1.54x
1.38x New assets at cost
Negative value contribution
1.15x 1.14x 1.14x 1.11x 1.10x 1.08x 1.07x 1.05x
1.00x 1.00x
0.96x
0.92x 0.89x
0.73x
0.64x
0.51x
Eaton Ster RTT Chibuku Channel Synerlytic Bevco Kevro Primedia Echotel Vertice TymeBank Gammatek MTN Waco Twinsaver Neopak Eazi Autozone
Kinekor Vas
Fund VI Mid Market Fund Mezzanine Fund Direct investment/Ai
Age of investment in years
25Introduction
Portfolio overview
CONTENTS
Valuation overview
Liquidity analysis
Outlook
26Fund commitments and levels of undrawn capital by Fund
141 950 48 250 1,250 150 371 3,161
6 1 12
Current Fund commitments
360 54
1,531
887
211
EF VI EMMF I EHP EMP 3 EF VII EaiF I Direct Investments Total
Invested/Committed Undrawn commitments
Ethos Capital commitment to underlying fund (Rm)
27Ethos Capital liquidity benchmarked against international peers
Total commitment ratio = (Invested Capital + Undrawn Commitments) / Net Asset Value
Relative liquidity benchmarks
173%
163%
139%
125% 126%
109%
Harbourvest Hg APAX Princess Pantheon Ethos Capital
Commitment coverage ratio = (Cash + Unutilised Debt Facilities) / Undrawn Commitments
63%
59% 58%
48% 50%
44%
Harbourvest Hg APAX Princess Pantheon Ethos Capital
28Liquidity profile analysis based on current commitments
Realisations Existing outflows Available liquidity
3,000 308 12% 3,000
Available liquidity and outlook
32%
19% Estimated
2,500 outflows 2,500
by year
2,143
1,452
19% 19%
2,000 2,000
1,514
3,161
1,500 FY20 FY21 FY22 FY23 FY24 1,500
2,853
493
1,000 1,000
500 537
500 365 500
293
69
339
- -
(500) (500)
Total Fees adj Net Invested Current cash Debt facility Treasury Commitment FY20 FY21 FY22 FY23 FY24
commitments commitments capital shares gap
* Available liquidity = Cash plus Debt Facility less Net Investment outflows / Realisation inflows 29Relative share price to NAV discount South African listed PE firms trade at 2x the discount of international peers
55%
45%
Average = 36%
35%
2x
25%
Average = 18%
15%
5%
-5%
-15%
-25%
Discount to NAV 3 Year NAV Growth
-35%
30Introduction
Portfolio overview
CONTENTS
Valuation overview
Liquidity analysis
Outlook
31Outlook
Unlikely to be any short term improvement in business confidence and corporate investment
Outside of South Africa, growth remains strong although currency and political risks remain elevated
Outlook
Growth in NAV likely to increase as the portfolio is c.80% invested
Investment pipeline remains strong but given the market conditions and lack of competition, focus remains on being
extremely selective on deals
Liquidity management remains a key focus but Board remains focused on ways to enhance shareholder value
Board continues to assess strategic options that could unlock value for shareholders
32DISCLAIMER
THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATIONAL AND DISCUSSION PURPOSES ONLY AND IS NOT, AND MAY NOT BE RELIED ON IN ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE OR AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY AN INTEREST IN ANY OF THE
ETHOS PRIVATE EQUITY FUNDS OR LISTCO (TOGETHER THE “FUNDS”). A PRIVATE OFFERING OF INTERESTS IN THE FUNDS WILL ONLY BE MADE PURSUANT TO A CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM (THE “OFFERING MEMORANDUM”) AND SUBSCRIPTION DOCUMENTS, WHICH WILL BE
FURNISHED TO QUALIFIED INVESTORS ON A CONFIDENTIAL BASIS AT THEIR REQUEST FOR THEIR CONSIDERATION IN CONNECTION WITH SUCH OFFERING. THE INFORMATION CONTAINED HEREIN WILL BE QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE OFFERING MEMORANDUM, WHICH CONTAINS
ADDITIONAL INFORMATION ABOUT THE INVESTMENT OBJECTIVE, TERMS AND CONDITIONS OF AN INVESTMENT IN THE FUNDS AND ALSO CONTAINS TAX INFORMATION AND RISK DISCLOSURES THAT ARE IMPORTANT TO ANY INVESTMENT DECISION REGARDING THE FUNDS. NO PERSON HAS BEEN
AUTHORISED TO MAKE ANY STATEMENT CONCERNING THE FUNDS OTHER THAN AS SET FORTH IN THE OFFERING MEMORANDUM AND ANY SUCH STATEMENTS, IF MADE, MAY NOT BE RELIED UPON. THE INFORMATION CONTAINED HEREIN MUST BE KEPT STRICTLY CONFIDENTIAL AND MAY NOT BE
REPRODUCED OR REDISTRIBUTED IN ANY FORMAT WITHOUT THE APPROVAL OF THE FUNDS. NOTWITHSTANDING THE FOREGOING, EACH INVESTOR AND PROSPECTIVE INVESTOR (AND EACH EMPLOYEE, REPRESENTATIVE, OR OTHER AGENT THEREOF) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT
LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX STRUCTURE OF THE FUNDS AND ITS INVESTMENTS AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSES) THAT ARE PROVIDED TO SUCH INVESTOR OR PROSPECTIVE INVESTOR RELATING TO SUCH TAX TREATMENT AND
TAX STRUCTURE, PROVIDED, HOWEVER, THAT SUCH DISCLOSURE SHALL NOT INCLUDE THE NAME (OR OTHER IDENTIFYING INFORMATION NOT RELEVANT TO THE TAX STRUCTURE OR TAX TREATMENT) OF ANY PERSON AND SHALL NOT INCLUDE INFORMATION FOR WHICH NONDISCLOSURE IS REASONABLY
NECESSARY IN ORDER TO COMPLY WITH APPLICABLE SECURITIES LAWS.
AN INVESTMENT IN THE FUNDS WILL INVOLVE SIGNIFICANT RISKS, INCLUDING THE LOSS OF THE ENTIRE INVESTMENT. THE FUNDS WILL BE ILLIQUID, AS THERE IS NO SECONDARY MARKET FOR INTERESTS IN THE FUNDS AND NONE IS EXPECTED TO DEVELOP. RESTRICTIONS APPLY TO TRANSFERS AND
WITHDRAWALS OF INTERESTS IN THE FUNDS, AND THE INVESTMENT PERFORMANCE OF THE FUNDS MAY BE VOLATILE. THE FEES AND EXPENSES CHARGED IN CONNECTION WITH AN INVESTMENT IN THE FUNDS MAY BE HIGHER THAN THE FEES AND EXPENSES OF OTHER INVESTMENT ALTERNATIVES AND MAY
OFFSET PROFITS. BEFORE DECIDING TO INVEST IN THE FUNDS, PROSPECTIVE INVESTORS SHOULD READ THE MEMORANDUM OF THE FUNDS AND PAY PARTICULAR ATTENTION TO THE INVESTMENT CONSIDERATIONS CONTAINED IN THE MEMORANDUM. INVESTORS SHOULD HAVE THE FINANCIAL ABILITY AND
WILLINGNESS TO ACCEPT THE RISK CHARACTERISTICS OF THE FUNDS’ INVESTMENTS.
IN CONSIDERING ANY PERFORMANCE DATA CONTAINED HEREIN, YOU SHOULD BEAR IN MIND THAT PAST OR TARGETED PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL ACHIEVE COMPARABLE RESULTS OR THAT TARGET RETURNS WILL BE
MET. IN ADDITION, THERE CAN BE NO ASSURANCE THAT UNREALISED INVESTMENTS WILL BE REALISED AT THE VALUATIONS SHOWN AS ACTUAL. REALISED RETURNS WILL DEPEND ON, AMONG OTHER FACTORS, FUTURE OPERATING RESULTS, THE VALUE OF THE ASSETS AND MARKET CONDITIONS AT THE
TIME OF DISPOSITION, ANY RELATED TRANSACTION COSTS, AND THE TIMING AND MANNER OF SALE, ALL OF WHICH MAY DIFFER FROM THE ASSUMPTIONS ON WHICH THE VALUATIONS CONTAINED HEREIN ARE BASED. THE IRRS PRESENTED ON A “GROSS” BASIS DO NOT REFLECT ANY MANAGEMENT FEES,
CARRIED INTEREST, TAXES AND ALLOCABLE EXPENSES BORNE BY INVESTORS, WHICH IN THE AGGREGATE MAY BE SUBSTANTIAL. ALL IRRS PRESENTED ARE ANNUALISED AND CALCULATED ON THE BASIS OF MONTHLY INVESTMENT INFLOWS AND OUTFLOWS. NOTHING CONTAINED HEREIN SHOULD BE
DEEMED TO BE A PREDICTION OR PROJECTION OF FUTURE PERFORMANCE OF THE FUNDS.
PROSPECTIVE INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND EVALUATION OF THE INFORMATION CONTAINED HEREIN. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN ATTORNEY, BUSINESS ADVISER AND TAX ADVISER AS TO LEGAL, BUSINESS, TAX AND RELATED MATTERS
CONCERNING THE INFORMATION CONTAINED HEREIN.
EXCEPT WHERE OTHERWISE INDICATED HEREIN, THE INFORMATION CONTAINED HEREIN IS BASED ON MATTERS AS THEY EXIST AS OF THE DATE OF PREPARATION OF THIS PRESENTATION AND NOT AS OF ANY FUTURE DATE. THE INFORMATION PROVIDED HEREIN WILL NOT BE UPDATED OR OTHERWISE
REVISED TO REFLECT INFORMATION THAT SUBSEQUENTLY BECOMES AVAILABLE, OR CIRCUMSTANCES EXISTING OR CHANGES OCCURRING AFTER THE DATE HEREOF.
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