SOURCING	  INVESTMENTS	  AND	          STRATEGIC	  PARTNERS	                                                 	            ...
Summary	                            What	                                How	                                    Why	     ...
Introduc9on	              §  There	  are	  thousands	  of	  port,	  infrastructure	  and	  asset	  owners	               ...
Investment	  poten9al	  and	  need	  	                                §  In	  Asia	  alone	  ADB	  es?mates	  a	  need	  ...
Investment	  diversity	  (port	  example)	                Bulk	                       Financial	  investor	               ...
Investment	  diversity	  (explained)	      The	  infrastructure	  investment	  field	  is	  very	  diverse	  and	  whereas	...
The	  value	  crea9on	  chain	                            Creating the product                          Scaling the       ...
The	  value	  crea9on	  chain	  (explained)	      The	  diversity	  in	  preference	  across	  the	  investor	  value	  cr...
Typical	  engagement	  challenges	                                                        	           §  Many	  investors...
Our	  sourcing	  process	                                                                                                	...
Our	  engagement	  process	  (explained)	      As	  a	  first	  step	  it	  is	  important	  for	  us	  to	  understand	  y...
Our	  facilita9on	  proposi9on	                                                     	              ü  Big	  and	  diverse...
Risk	  free	  engagement	    We	  talk	  to	  new	  funds,	  investors	  and	  industrials	  every	  week	  and	  as	  pol...
Disclaimer	      This	  presenta?on	  is	  issued	  for	  informa?on	  purposes	  only	  and	  does	  not	  cons?tute	  an...
APPENDIX	                            INVESTMENT	  EXAMPLES
Private	  oil	  storage	  terminal	  (example)	       	                         	       Principal	  purpose	     Developme...
Greenfield	  container	  develop.	  (example)	       	                         	       Principal	  purpose	     Gateway	  h...
Port	  group	  partnership	  (example)	       	                         	       Principal	  purpose	     Consolida?ng	  al...
Government	  infrastructure	  PPP	  (example)	       	                         	       Principal	  purpose	     Key	  mari...
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Sourcing Investments


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Sourcing Investments

  1. 1. SOURCING  INVESTMENTS  AND   STRATEGIC  PARTNERS     With  InduStreams  –  June  2012
  2. 2. Summary   What   How   Why   •  Iden9fying    quality   •  If  you  engage  us  we   •  We  have  big  and   infrastructure   wish  to  deliver  –  so   diverse  project/ investments  and   Step  1  is   asset  owner  and   strategic   understanding  your   local  industry   partnerships  that   situa?on  and  needs   networks   match  your  needs   •  Step  2  is  typically  an   •  We  have  insight  to   •  Introducing   engagement   both  the  industry   relevant,  partners   agreement   and  investor   and  project/asset   •  Step  3  fast  track   communi?es   owners   process  to  find  3-­‐5   allowing  us  to   •  Facilita9ng  to   high  value  targets   facilitate  effec?vely   secure  agreement   (example)     •  We  have  simple  and   effec?ve  processes
  3. 3. Introduc9on   §  There  are  thousands  of  port,  infrastructure  and  asset  owners   looking  to  source  investors  and  strategic  partners   §  There  are  as  many  investors,  operators  and  cargo  owners   looking  to  invest  in  and  par?cipate  in  the  development  of   ports  and  infrastructure   §  There  are  substan?al  challenges  in  connec?ng  from  either   side  including  lack  of  network  and  insight   §  We  have  built  the  network,  insight  and  process  to  facilitate   effec?vely  between  the  two  sides   §  In  what  follows  is  a  short  introduc?on  to  sourcing   investments  and  strategic  partners
  4. 4. Investment  poten9al  and  need     §  In  Asia  alone  ADB  es?mates  a  need  of   more  than    $8  trillion  for  infrastructure   (up  to  2020)   §  Globally  there  are  thousands  of  local   project  promoters  such  as  port  groups   that  simply  do  not  have  the  exposure   to  engage  investors  effec?vely  with   needed  investment  opportuni?es   §  And  there  are  as  many  asset  owners  of   many  different  types  of  assets  who   wish  to  capture  value  from  their     investments  or  simply  to  free  up  cash   from  non-­‐core  ac?vi?es
  5. 5. Investment  diversity  (port  example)   Bulk   Financial  investor   Singapore Dampier Corpus  Christi London Southampton Shanghai Hamburg Gladstone Bergen Wilhelmshaven Container   Rotterdam New  York Primorsk Taichung Calais $10+  million   Operator   Tianjin Nantong Bremen Bombay Baltimore Ningbo Vancouver Long  Beach Barcelona Forth  Ports Guangzhou Yantai Corpus  Christ Sao  Sebastiao Bilbao Greenfield   Brownfield   Qingdao Hong  Kong Nanjing Kitakyushu Algeciras Pohang Lake  Charles Trieste Pittsburgh Yanbu Qinhuangdao Tangshan New  Orleans Texas  City Karachi Dalian Itaqui Grimsby Baton  Rouge New  Mangalore Developer   Majority   Busan lianyungang Beaumont Saldanha  Bay Tampa Nagoya Tubarao Huntington Paradip Milford  Haven Shenzhen Marseilles Constantza Jeddah Odessa Acquisi2on   Oil  &  Liquid   South  Louisiana Houston Newcastle Kobe Mobile Hampton  Roads Tees Manila Leghorn Paranagua Antwerp Amsterdam  Ports St.  Petersburg Alexandria Paulsboro Ulsan Osaka Valencia Taranto Tarragona Logis2c  Zone   $100+  million   Chiba Port  Hedland Tanjung  Pelepas Sepetiba Plaquemines Dunkirk Gothenburg Tampa Valdez Texas  City Port  Kelang Richards  Bay Madras Jubail Liverpool Rizhao Hay  Point Jawaharlal  Nehru Tanjung  Priok Savannah Yingkou Novorossisk Los  Angeles Zeebrugge Brisbane Seed  investor   Free  Zone   Kaohsiung Tokyo Genoa Mormugao Lubeck Inchon Santos Calcutta Durban Pascagoula Yokohama Le  Havre Izmit Duluth-­‐Superior Angra  dos  Reis Minority   $1+  billion
  6. 6. Investment  diversity  (explained)   The  infrastructure  investment  field  is  very  diverse  and  whereas  it  shares  common   aSributes  across  asset  classes  each  class  and  most  loca?ons  have  their  own  unique   aspects.     When  taking  the  port  sector  as  an  example  the  range  spans  over  a  host  of  different   sectors  from  oil  storage,  bulk  terminals  (such  as  coal,  iron  ore  etc.),  container   terminals  to  en?re  port  areas  and  a  mul?tude  of  different  purposes  such  as   transshipment  or  gateway  hub.       When  adding  geographical  and  project  specific  circumstances  as  well  as  the   preferences  on  owner  and  investor  side  on  specific  roles  (minority,  majority,   operator,  financial  investor  etc)  this  makes  for  a  diversity  that  both  makes  it  possible   for  most  infrastructure  investors  to  iden?fy  something  that  suits  their  needs  but  also   makes  it  more  complex  to  iden?fy  such.
  7. 7. The  value  crea9on  chain   Creating the product Scaling the – from greenfield to investment – from low Expand   operation to high yield Seed   Implement   Grow   Mature   Transform   Seeding the investment - from Creating the market - idea, opportunity or need to building the top line and Divest   attractive proposition foundation for efficiencies Continued value creation…
  8. 8. The  value  crea9on  chain  (explained)   The  diversity  in  preference  across  the  investor  value  crea?on  chain  (not  only  in   investment  types)  gives  further  opportuni?es  to  make  new  developments  viable  and   free  up  capital.     Some  have  interest  in  the  implementa?on/development  and  growth  stage  whereas   others  have  more  interest  in  the  mature  stage.  The  seed  stage  is  a  significant   challenge  for  most,  oVen  requiring  several  par?es  to  come  together  or  for  someone   to  play  the  seed  investor  role  which  however  is  uncommon  in  e.g.  the  port  sector.     In  most  cases  there  are  beSer  owners  out  there  allowing  par?es  to  either  free  up   their  capital  for  other  developments  or  bring  down  debts  or  commitments.       This  provides  an  opportunity  for  investors  with  interest  in  any  of  the  phases,  from   seed  to  mature.
  9. 9. Typical  engagement  challenges     §  Many  investors  have  liSle  knowledge  of  e.g.  the  port  sector   and  the  local  port  markets  and  many  therefore  abstain  from   inves?ng  due  to  lack  of  comfort,  insight  or  resources   §  The  local  port  or  infrastructure  related  owners  have  liSle  or   no  network  to  the  global  investor,  operator  and  cargo   owner/industrial  communi?es   §  Most  port,  infrastructure  or  asset  owners  rarely  engage  in  a   process  of  finding  partners  or  investors  (many  have  never   done  so  and  for  those  that  do  it  is  oVen  only  once  in  the   life?me  of  a  project  or  e.g.  terminal)
  10. 10. Our  sourcing  process     Step  4   Deal   Closing  the  deal   1-­‐5    Develop   Step  3   Deal  development   5-­‐10   Step  2   Engage   Engaging  the  most  relevant   10-­‐20   Step  1   Choosing  the  relevant     Focus   investment  segments   100-­‐500   Step  0   Informa9on   Engagement    Proposi9on   Crea=ng  founda=on   Exchange   Agreement   Formula9on
  11. 11. Our  engagement  process  (explained)   As  a  first  step  it  is  important  for  us  to  understand  your  situa?on  and  the   circumstances  surrounding  your  needs  including  the  objec?ves  you  are  looking  to   achieve  (Informa?on  Exchange).     With  a  reasonable  understanding  we  can  then  with  you  work  out  an  Engagement   Agreement  and  terms  that  makes  sense  on  both  sides  and  suit  the  situa?on.     Once  an  agreement  is  in  place  we  will  together  with  you  formulate  a  proposi?on  to   poten?al  project  and  asset  owners  or  partners  and  target  the  segments  that  fit  the   objec?ves  you  wish  to  achieve  (Selec?on).       We  then  typically  Engage  a  few  cons?tuents  one  at  the  ?me  and  typically  end  up   reaching  out  to  about  10-­‐20  in  order  to  create  substan?al  interest  and  a  good   selec?on  for  the  further  process.     From  there  we  chose  the  candidates  with  highest  fit  and  likelihood  to  close  actual   agreements  with  and  seek  to  facilitate  on  both  sides  (Develop)  un?l  agreement  is   reached  for  one  or  more  investments  or  with  a  partner  (Deal).
  12. 12. Our  facilita9on  proposi9on     ü  Big  and  diverse  project/asset  owner  and  local  industry   networks  (1,000+  execu?ves  in  the  community  and   increasing)   ü  Insight  to  both  the  industry  and  investor  communi?es   allowing  us  to  convey  proposi?ons  accurately  and  with  the   right  context  of  the  poten?al  value  these  have   ü  Simple  and  effec?ve  process  to  engage  the  right  par?es  with   the  right  proposi?on  to  ensure  ge]ng  to  agreement  in  short   ?me  period
  13. 13. Risk  free  engagement   We  talk  to  new  funds,  investors  and  industrials  every  week  and  as  policy  are   commiSed  to  listening  to  anyone  who  wishes  to  further  explore  the  possibility   to  invest  in  or  seek  investors  for  the  infrastructure  market  –  no  strings   aSached!     Our  primary  objec?ve  is  to  provide  access  to  opportuni?es  that  might   otherwise  not  be  available  to  you  and  your  company.     If  such  opportuni?es  might  be  relevant  to  you  or  your  company  we  encourage   you  to  reach  out  to  any  of  our  representa?ves  or  on:
  14. 14. Disclaimer   This  presenta?on  is  issued  for  informa?on  purposes  only  and  does  not  cons?tute  an   agreement,  offer,  obliga?on  or  invita?on  to  enter  into  transac?ons  or  investment   business.       With  this  presenta?on,  INDUSTREAMS  LIMITED  does  not  act  in  any  way  as  your   advisor.  This  presenta?on  is  not  intended  as,  nor  should  it  be,  a  subs?tute  for   consul?ng  with  INDUSTREAMS  LIMITED.     Whilst  this  presenta?on  has  been  produced  from  sources  believed  to  be  reliable,  the   informa?on,  views  and  opinions  expressed  in  this  presenta?on  are  provided  as  of  the   date  of  this  presenta?on  and  remain  subject  to  verifica?on,  comple?on  and  change   without  no?ce.  No  representa?on  or  warranty  whatsoever  (whether  express  or   implied)  is  or  will  be  made  as  to,  or  in  rela?on  to,  the  accuracy,  reliability  or   completeness  of  the  informa?on  contained  herein  or  in  the  appendices  to  this   presenta?on.     INDUSTREAMS  LIMITED  will  not  be  liable  towards  you  or  any  third  party  for  any   eventual  damage  you  may  incur,  caused  by  the  informa?on  contained  in  this   presenta?on  and  its  appendices.
  16. 16. Private  oil  storage  terminal  (example)       Principal  purpose   Development  and  opera?on  of  storage  tanks  and  jeSy  for  oil,   petrochemical  products  or  other  liquid  cargo  to  service   amongst  others  oil  tankers,  oil  majors,  oil  traders  and  others.         Investment  size   A  smaller  private  facility  of  up  to  500,000  cbm  capacity  could     be  in  an  investment  range  of  $75  to  $100  million.         Target  return     Varies  greatly  from  product  to  product,  type  of  customer   contracts  and  geography,  for  a  private  smaller  facility  in  a   strategic  oil  trading  loca?on  it  could  be  anywhere  from  10%  to   20%+  (IRR).
  17. 17. Greenfield  container  develop.  (example)       Principal  purpose   Gateway  hub  to  facilitate  the  growing  export  and  imports  to   and  from  a  developing  country  serving  a  cap?ve  local  market.         Investment  size   Substan?al  capacity  of  1-­‐2  million  TEU  as  well  as  general  cargo     berths  with  expected  investment    requirement  above  $500   million.         Target  return     15-­‐20%  IRR  assuming  upfront  securing  of  anchor  tenants  and   reasonable  ?me  to  market  from  construc?on  is  ini?ated.
  18. 18. Port  group  partnership  (example)       Principal  purpose   Consolida?ng  all  container  cargo  ac?vi?es  in  a  new  port  area  to   boost  segment  growth  and  op?mize  port  opera?ons.         Investment  size   A  secondary  port  looking  to  develop  ini?al  smaller  dedicated     facility  with  3  berths  on  700  meters  with  capacity  of  500,000     TEU  could  require  investment  in  range  of  $100-­‐150  million.         Target  return     15%+  IRR  assuming  the  right  entry  price  and  management   structure.
  19. 19. Government  infrastructure  PPP  (example)       Principal  purpose   Key  marine  infrastructure  such  as  locks  providing  access  to   inner  ports.         Investment  size   $1.0  –  1.5  billion    to  be  invested  for  the  development  and     management  of  the  needed  infrastructure  (likely  to  be  a   consor?um  of  investors,  construc?on  and  other  companies).         Target  return     6-­‐10%  government  guaranteed  IRR  (fixed  payments  done  by   government  on  regular  basis  –  no  commercial  risk).