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Tcm Slides Dec 2011

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A summary of the TCM model for a Global Impact Investment Bank.

A summary of the TCM model for a Global Impact Investment Bank.

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  • 1. Different by design, to make a differencesummary presentation Steve Podmore - Founder Dec 2011
  • 2. three questions... for every outlier that emerges, how many, large or small, perish or give up on the journey ? when black swans are on their way up, why are they so rarely spotted and supported by those supposedly best placed to do so?what would it mean for the world if there was a better way of finding,supporting, investing and fairly sharing rewards and returns with them? 2
  • 3. IMAGINE A SYSTEM OF INVESTMENT WHERE... • early in their • £50k - £200k in seed funding is development the black invested into many, that can be staged swans who are changing to £40m and beyond if need be the world can be found• investment is on fair and • impact entrepreneurs can transparent terms, along raise whatever is needed, with fully incentivised and on merit and on objectivestructured help and support assessment of potential • failure is not shunned joined up thinking or stigmatised, and lessons harnesses collective and learned are captured as key responsible intelligence drivers for collective success and blended returns 3
  • 4. AND WHERE... investors are able to Governments who are desperate generate risk adjusted to create jobs, are helped to do returns in strategically so with scale and diversity attractive areas responsible and academic and research motivated corporations personnel have the ability toare strengthened via access protect their pensions to open innovation and futures these features philanthropists can then be scaled are helped to generate, around the globe leveraged sustainable impact 4
  • 5. GLOBAL IMPACT INVESTMENT BANK TCM NOW IMAGINE a GLOBAL IMPACT INVESTMENT BANKfocussed on setting up the innovative funds, partnerships and structures which can best address the big issues of our time 5
  • 6. © 2011 Steve Podmore ‘Economic Food Chain Theory’ LODR short term markets miss or ignore the law of diminishing returns n so nvir io e ur on t ra ce m nt of en ce on ec tal lc on re ta om co pi ic ver ca POTEFC an y d with now capital starved plankton TCM of the economic food chain piecemeal individual investments, small scale aggregate pooled investments, larger scale ineffectual, not efficient, higher individual risk effective, efficient, lower individual risk companies of 1 - 500 employees, who are responsible for 50 - 80% of all job creation, and 50% plus of all innovation, are receiving less than 0.05% of institutional investment, and what they receive is often predatory and short term focussed
  • 7. TCM aims to widen or eliminate critical bottlenecks market IMPACT INVESTMENT working failure market job creation economic recovery solutions to big challengesTCM will be focused exclusively on eliminating bottlenecks, removing barriers, and fixing keymarket failures which have created severe instability by dangerously impeding levels of social,environmental and economic development. 7
  • 8. mis pricing of capital and return timeframe language / business model disconnects poor perception of risk / reward lack of historical data $1 Trillion management / scalelatent market global banks institutions investors platforms initiatives projectsfunds dealsimpact investments $1 Trillion of opportunity barriers, gaps & bottlenecks 8
  • 9. pipeline - capacity building intermediation TCM global banks institutions investors platforms initiatives projectsfunds deals creating optimum conditions for ‘game changing’impact investments and positive financial innovation to emerge 9
  • 10. 100 million jobs 500 million created worldwide people nourished $100 billion of 500 million tons impact investment of carbon removed“people generally overestimate what can be achieved in a year, and underestimate what can be achieved in a decade” 10
  • 11. agile   consulting scale,  and  cloud technologies TCM  Active   MAXIMUM Impact  Investment RETURN Focus TCM TARGET RESULTS financial  return  orientation Traditional   Capital Markets Traditional   Impact  Investment Position Traditional   NO Philanthropy RETURN NO impact  orientation PRIMARY   CONCERN FOCUS (Truestone Impact Investment Management)TCM aims to raise, blend and deploy capital, initially via indirect or direct funds, with a process ofsystematising added value and using intelligent networks to drive overall results and manage risk. TCM will change the rules of the game by deployingThe model gives the potential for capital efficiency and critical mass in order to deliver +/- market ACTIVE Impact Investment - GLOBALLYreturns, and leveraged social and environmental impacts (greater impact potential compared to traditionalinvestment or philanthropy alone). 11
  • 12. areas of impact business sectors fund/instrument‣ working market and job creation ‣ agriculture ‣ eduction ‣ pooled - seed, angel, venture and private‣ energy / resource management ‣ water ‣ energy equity funds‣ market / societal stability ‣ ‣ housing ‣ enterprise fund of funds‣ poverty eradication‣ quality of life gains ‣ climate ‣ technology ‣ fund of fund management‣ conflict reduction ‣ health ‣ finance ‣ capacity / scale funds ‣ direct & indirect funds return comparison - impact / benchmark ‣ impact bonds developed / emerging markets - vc / corporate debt ‣ climate bonds 30 ‣ micro finance 23 ‣ micro insurance ‣% IRR 15 platforms & exchanges 8 ‣ guarantees / wrappers TCM will have freedom to use 0 whatever instruments or fund Debt (developed mkt) Debt (emerging mkt) VC (developed mkt) VC (emerging mkt) structures are appropriate and Benchmark Impact Investment (JP Morgan) aligned with the mission. 12
  • 13. GLOBAL IMPACT INVESTMENT BANKstructure - raise - research - technology - network - template - publicity - brand GLOBAL IMPACT LOCAL IMPACT INVESTMENT FUND INVESTMENT FUND(S) sponsors 13
  • 14. Global Impact Investment Fund (GIIF)The  big  idea  around  the  Global  Impact  Investment  Fund,  is  to  find  the  most  innova4ve,  ‘system  innova4on’  game   changing  ideas  in  Impact  Investment,  to  fully  invest  in  the  management  or  opera4ng  companies,  and  with  our   Global  Impact  Investment  Bank,  support  their  further  fundraising  and  help  them  scale  at  op4mum  speed! pool of £300m + capital -12 - 15 venture/private equity style investments - invested at the GP/Asset Manager/Platform level the world urban peer climate sanitation social social eco system micro to peer stock impact insurance housing bonds financing services investment ? ? ? ? exchange bonds fund and energy facility fund fund platforms game changing financial innovators in - sustainability ● health ● education ● energy ● social enterprise investment banking and sponsor support provided to ensure financial service plays can scale, and scale at optimum speed 14
  • 15. Local Impact Investment Funds (LIIF’s) Im e pa t ra ct po In or ve C st rso rs to G es ov nv er lI nm ia nc en na ts Fi Global Impact Investment Bank Raise Capital - Technology - Research Investment Template - Brand - Network £2b UK Impact Investment Fund 15
  • 16. Local Impact Investment Funds (LIIF’s) lower total cost of capital SU LE PP A SC O RT Y SY IT C ST LI EM B PU S Global Impact Investment Bank Raise Capital - Technology - Research Investment Template - Brand - Network £2b UK Impact Investment Fund 16
  • 17. Local Impact Investment Funds (LIIF’s) p i sh Im so n ze cia £100k £30m iti e pa PP l/ /c t en ra ne ct e OR vir eli on SU po ipMANY   Inntal / T m LE /p CAPITAL orEARLY ve fina n A tio HEAVYSTAGE C ca SC stncial tifiDEALS or goa en id fund  returns s ls deals  found t ke and  nurtured  here generated  here ar mCAPITAL FEW   LIGHT LATE to iance STAGE jo rs l I ato TY es ompl bs DEALS SYation rn ,t ax nv r y c ia regul CI G ST & str m diversity  +  wisdom  of  crowds nc rns / LI ov EMategic ent dynamic  progressive  portfolios B e PU S inte s t u re ial re na c st an developed and developing world fin Fi transfer and scalability 20 year vision for a global connected fund network Global Impact Investment Bank • Raise Capital - Technology - Research • • • • • •• • • • • • • • • • • • Investment Template - Brand - Network • • • • • • • • • • •• • • • • • • •• •• yellow dots • • £2b UK Impact Investment Fund • denote each • • • • • • potential LIIF • • • (Local Impact • VENTURE TEAM AIDA TEAMInvestment Fund) • 100 ,000 - 150,000 jobs, and £4b - £6b in tax 60 Persons 180 Persons generation over10 years (per developed world fund) 17
  • 18. how do we create the right kind ofenvironment so this type of positivefinancial innovation can best occur? 18
  • 19. Global Impact Investment Partners finance health consulting resources partners receive: mobility ‣ intelligence and diversity agriculture ‣ recruitment and retention ‣ commercial returns ‣ active citizenship ‣ global publicity networks Global Impact Partners each provide £5m p/a logistics plus people and support in areas of core capability info tech construction engineering energy 19
  • 20. logo logo logo logologo logo GLOBALLY DIVERSElogo logo $100 billion of 500 million impact investment people nourishedlogo logo logo logo 20
  • 21. logo logo logo logo IN 100 million jobs 500 million tons WORK created worldwide of carbon removedlogo logo powerful brand associationlogo logo $100 billion of 500 million impact investment people nourishedlogo logo logo logo 21
  • 22. logo logo logo logologo logo exclusive access to a $1 Trillion opportunitylogo logologo logo logo logo 22
  • 23. Scalability First - LIIF (UK) 3 + GIIP’s & GIIF Target Close 2nd GIIP’s + £50m GIIF First Close £100m Cornerstone GIIP Deal (Equity/sponsor/GIIF-Investment) £5m - exclusive option on Cornerstone Global Impact Investment Partner£1.2m - equity - enable structuring, team, investment readiness - secure cornerstone 23
  • 24. structure for £100m cornerstone Global Impact Partner deal One ‣ £25m equity investment (held in a charitable foundation) - 20 - 40% IRRGlobal Financial ‣ £25m into Global Impact Investment Fund - 15% IRR Institution ‣ £5m p/a x 10 year Global Impact Partnership - multi level commercial returns £5m of the £25m equity investment to be paid to guarantee exclusive partnership rights for the banking category, with time to close the full £100m deal, the balance of which will crystallise on TCM securing the second Global Impact Partner an additional £25m in commitments to the GIIF modelled returns for a financial institution (annually - from year 5)‣ TCM investee company IPO Pipeline - 3 - 5 IPO’s annually ‣ distribution partnership for - £2b - £5b Global Impact between a £100m - £500m value range Investment fund subsidiary investments‣ debt issuance - 2 - 3 new LIIF’s annually with £500m - £1b ‣ central role in the 1,000 attendee Global Impact Investing debt raised in the market + fee for structuring guarantee Conferences to be held on all five continents each year‣ 1,000 + new business accounts + greater lending capacity ‣ priceless new and enhanced relationships with UHNWI etc. 24
  • 25. Steve Podmore – Founder - A believer in working markets but Matthew Hale - Head Of Sustainable Banking - Bank of America /driven by the market and value failure that has created so much inequity Merrill Lynch Europe; Treasurer - Merrill Lynch; Treasurer - Bankers Trust;in the world, Steve has made it his social business and life’s work to do Founder - BearBox & Striding Edge.something about it on a scale that can make a difference. With a businessbackground in marketing, psychology, finance and education, Steve created Arthur Wood – Founding Partner - Total Impact Advisors; Founder –the initial idea which over time morphed into the business model for World Sanitation Financing Facility; Head of Social Financial Services -Transform Capital Management. Ashoka; Expert in Social / Commercial Structuring; 20 yrs in banking creating replicatable financial products; Klienwort Benson; Coutts.The idea for a Global Impact Investment Bank to re-engineerhow global capital finds, funds and enables massive increases in Paul O’Donnell - Chairman, Ogilvy & Mather Group UK. Foundersustainability development and climate change action turned into a member of OgilvyOne Worldwide of Ogilvy Group Inc. and has served asworkable plan over the first five years. The Get Stuff Done Foundation President, OgilvyOne in Asia Pacific, Chairman of OgilvyOne London, andhas emerged to compliment and enable the vision and to embed its long Chairman OgilvyOne EAME. Founder of the IPA Direct Marketingterm governance and the fulfilment of any purely social objectives. Group. Paul holds the Inaugural International Diploma Programme fromGareth Hughes - Beetle Capital Partners - Founder; Prior to INSEAD, and Masters Degree from Haute Etude Commercial in Paris.establishing Beetle, Gareth was a Founder and Board member of ClimateChange Capital (CCC) with overall responsibility for Marketing, Fund Rory Sutherland - Vice-Chairman of Ogilvy Group UK. One of WiredDevelopment, Capital Raising and Investor Relations. In this role Gareth magazines to 100, Rory joined Ogilvy & Mather Direct in 1988, served aswas involved in the incubation and development of CCCs funds and led head of copy in 1996 and Creative Director in 1997, where he was closelycapital raising of in excess of $1.75bn involved in the agency’s relaunch and restructuring as OgilvyOne.David George - Head of Energy, Europe URS; Sustainability and Executive Creative Director since 2002 and current President of the IPA.Environmental Due Diligence Expert;VP & Director of M&A Transaction Ian Philion - Speechwriter, Creative Media Producer, E-learning &Services Europe – URS. Sustainable Construction Entrepreneur; Advisor to Governments and toAnita Hoffmann – Special Advisor to the board of Bhairavi energy Corporates in the resources, media and financial sectors.and Managing Director of Executiva, mission critical search, advisory and Tim Kruger - Founder of the Oxford Geoengineering Institute,coaching in the Energy, Renewables, CleanTech, Sustainability and ClimateChange area. Previously Founder and Global Co-head of the Alternative & Founder of Cquestrate, a project to investigate a method of sequesteringRenewable Energy Practice at Heidrick & Struggles. Career in Resources carbon while also addressing rising ocean acidification Tim studied Naturaland Energy with Exxon, Dow Corning, Accenture, Deloitte and ABB. Anita Sciences at Cambridge and has worked for fifteen years in industry in a holds an MSc Chem Eng. from Lund Technical University in Sweden variety of roles mostly involving innovation.Founder, team and advisors are currently in discussions with additional members for the core management team. These include senior strategy, investing and operational personnel for a number of large blue chip institutions. 25
  • 26. £70 £58 £47 £69 m £35 Millions £50 m £23 £12£4 m £12 m £19 m £0 (£18) m -£12 Year 1 -£23 Year 2 Year 3 Sales Profit / Loss TCM 3 year profit and loss forecast 26
  • 27. TCM projected return multiple 20 17.1 15 11.4 10 8.0 5.5 5 3.1 3.7 2.6 1.0 0 start yr 3 yrs 4-5 yrs 6-7 £1.2m investor £25m investor Transform Capital Management projected values £600 Millions £400 £600m £200 £400 m £200 m £0 £63 m at start 3 years 4 -5 years 6 - 7 yearsvalue’s are based on benchmarked price/earnings ratios, and are derived from the full TCM business plan 27
  • 28. A Round of £1.2m - to commence operation with team of 10-12, improve communications & close cornerstone investor/partnerA Round 120,000 15.00% £1,200,000Final Seed 20,000 2.50% £200,000Existing Seed 220,000 27.50% £2,200,000GSD Foundation 40,000 5.00% £400,000 pre money value £6,800,000SP (Founder) 400,000 50.00% £4,000,000 post money value £8,000,000TOTAL 800,000 100.00% £8,000,000 price per share £10First Round of £25m - in order to fully capitalise the venture in order to reach profitability in years 2 or 3.First Round 800,000 50.00% £25,000,000A Round 120,000 7.50% £3,750,000Final Seed 20,000 1.25% £625,000Existing Seed 220,000 13.75% £6,875,000GSD Foundation 40,000 2.50% £1,250,000 pre money value £25,000,000SP (Founder) 400,000 25.00% £12,500,000 post money value £50,000,000TOTAL 1,600,000 100.00% £50,000,000 price per share £31.2520% - incoming management and personnel will receive restricted options (shares with performance criteria)Management 400,000 20.00% £12,500,000First Round 800,000 40.00% £25,000,000A Round 120,000 6.00% £3,750,000Final Seed 20,000 1.00% £625,000Existing Seed 220,000 11.00% £6,875,000GSD Foundation 40,000 2.00% £1,250,000 pre money value £50,000,000SP (Founder) 400,000 20.00% £12,500,000 post money value £62,500,000TOTAL 2,000,000 100.00% £62,500,000 price per share £31.25 TCM projected return multiple 20 17.1 15 11.4 10 8.0 5.5 5 3.1 3.7 2.6 1.0 0 start yr 3 yrs 4-5 yrs 6-7 £1.2m investor £25m investor 28
  • 29. GLOBAL IMPACT INVESTMENT BANK TCM I n v e s t                     I m p a c t                     I n s p i r e Steve  Podmore,  Founder  -­‐  Transform  Capital  Management,  10  Cabot  Square,  Canary  Wharf,  London,    E14    4BQ,  London,  Tel  +44  207  345  3546  :  Mob  +44  7853  008  199  :  www.transformcapitalmanagement.com  :  steve@transformcapitalmanagement.com 29

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