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Greenfield Development Fund LP


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Greenfield Development Fund LP

  1. 1. Investment in Bridgepoint Greenfield Development Fund 1LP
  2. 2. IMPORTANT NOTICE THIS DOCUMENT AND ITS CONTENT ARE PRIVATE AND CONFIDENTIAL, AND ARE NOT FOR PUBLI DISTRIBUTION. This document and the presentation are not, do not constitute, and under no circumstances be construed as, an offering of securities of the Bridgepoint Group Ltd. or Bridgepoint Greenfield Developmen I LP. In addition, this document and the presentation are not, and under no circumstances is it to be construe an advertisement or a public offering of any securities of the Bridgepoint Group Ltd. or Bridgepoint Greenfi Development Fund I LP. This document and the presentation have been prepared for informational purposes is personal to you, and has not been prepared to assist any prospective purchaser or investor to make an inve decision in respect of any securities. The following is a summary description of the Bridgepoint Group Ltd. or Bridgepoint Greenfield Development Fun (collectively, “Bridgepoint”) and its business and does not purport to be complete, and there are no represent or warranties made herein by Bridgepoint. This document and the presentation are not to be distributed to t parties without the prior written consent of the Bridgepoint. This document and the presentation may contain p names, trade names, trademarks and service marks of the Bridgepoint or other organizations or persons, all o are the properties of their respective owners. This document and the presentation contain forward-looking statements that reflect the current expectations of management of the Bridgepoint Group, including statements about its intent, belief or current expectations pri with respect to its future results, performance, prospects and opportunities. The Bridgepoint Group has trie identify these forward-looking statements by using words such as "estimate", "should", may", "will", "expec "anticipate", "believe", "intend", "plan", "estimate", "potentially" and similar words and expressions. You a cautioned not to place undue reliance on such information and statements as they are not guarantees and by nature, necessarily involve known and unknown risks and uncertainties that may cause the Bridgepoint Grou Bridgepoint Greenfield Development Fund I LP’s actual results, performance, prospects and opportunities in periods to differ materially from those expressed or implied by any such statements or information. These risk uncertainties include, among other things, risks related to: fixed costs; liquidity; financing risks; limit on activ availability of growth opportunities; access to capital; interest rate fluctuations; general uninsured losses; liqui securities; dilution; nature of investment; and risks associated with potential changes in tax laws, tax treatmen government regulation or policy with respect to the business. There can be no assurance that the expectatio the Bridgepoint Group or its management will prove to be correct. By accepting this document, you agree to, acknowledge and confirm all of the foregoing and you further agree a covenant: (1) to keep strictly confidential the contents of this presentation and such other material and not to d such contents to any third party or otherwise use the contents for any purpose; (2) not to copy all or any port this document, other confidential information or any such other material; and (3) to return this presentation an such other material to the Bridgepoint Group upon its request
  3. 3. Overview of Our Company
  4. 4. pany Overview • Established in 1998, Bridgepoint Group Ltd. is a boutique Consulting, Investment Banking and Private Equity firm that enables the development, management and acquisition of sustainable energy and infrastructure in Canada and the Unite States. • Bridgepoint Group enables transactions among public and private sector partners in the following markets: Power, Utilitie Transportation, Real Estate & Buildings, Waste, Environment, and Natural Resources. • Bridgepoint provides a unique value proposition: • Combining public and private sector network of leaders, secon to none; • Deep industry experience in generating transactions; and • Alignment of interests with clients through sharing of risks and rewards.
  5. 5. pany Overview • Why choose Bridgepoint Asset Management as a partner – Its deal origination capabilities: We source projects earlier in the development process Because of our industry reputation, developers come to us first to assist them with their financing needs Because of our extensive industry participation, we are able to efficiently and cost effectively source development opportunities – Its ability to qualify prospects: We can see where growth opportunities exist Given our long standing experience in the industry, we are able to quickly ass prospects and see where value may be unlocked when others may be too focused on financing already completed deals – Its risk mitigation process: No project is exactly the same Given our extensive industry network, we are able to quickly and effectively assess and analyze individual intrinsic risks associated with each project we look at and; Effectively manage these risks by picking and choosing from our network appropriate partners that can assume or greatly reduce these risks Our extensive experience in managing risk – Our investment in relationships with key decision makers: Regulators and Politici matter We have spent over a decade investing in relationships with industry regulato and politicians and we understand their motivations We work with them to address industry issues important to the private sector This has led to our staff holding a “trusted advisor” status and help facilitate a issues we may encounter in the development process
  6. 6. pany Overview • Why choose Bridgepoint Asset Management as a partner: – Our understanding of all stakeholders: They still have some say Even with the passing of new regulations minimizing the power of stakeholders, they still have to be consulted in the development process We take a proactive approach in managing stakeholder risks by engaging key people and effectively finding a project champion whi can facilitate the development and approvals process – Our neutral approach: We are opportunity driven, not technology dependent New technologies are continuously developed, improved and teste While some may be very promising, we prefer picking and choosin reliable, proven vendors to minimize our exposure to these risks In cases where a new technology may be appropriate, we seek to minimize our downside risk by engaging appropriate parties – We are non-threatening partners: We work with, not against industry players Because of our industry participation, developers come to us with projects they have sourced looking for assistance with the core competencies we provide and; We approach developers with projects we have sourced looking to
  7. 7. pany Overview • Why choose Bridgepoint Asset Management as a partner: – The volume of opportunities we manage: We are active on over $7 billion CAD of procurements and projects – We leverage Bridgepoint Group Ltd.’s team and expertise i managing both large and smaller scale projects – Bridgepoint Group Ltd. provides services to Bridgepoint Asset Management at cost to support the executive team a includes on its Advisory board the following key individuals • George Todd – Utilities • Robert Carillo – Power Generation • Michael Miceli – Real Estate, Asset Management, Healthcare & Long Term Care • Bill Leedy – Power Generation • David Turner – Risk Management
  8. 8. any Overview – Our Approach High Level Operational Decision Making Improvements Capital Structure •Strategic & Financial •Operational Strategies •Ongoing capital decisions post •Standardization and structure optimization acquisition automation of •Ongoing assessment •Execution of strategy operations and liquidity options and business plan procurement process •Active role in Board •Capex management meetings Regulated Governance Businesses Initiatives •Selected use of •Selection of a new partners management where •Leverage Bridgepoint’s needed network of contacts •Definition of •Implementation of management industry best practices compensation and learned from prior incentive structures experience
  9. 9. Overview of Our Market
  10. 10. t Overview – Infrastructure Assets Power generation, transmission and conservation Energy Energy including: wind, thermal electric solar, solar photovoltaic, renewable biomass, bio-gas, bio-fuel, landfill gas or water Transport Transport Toll roads, bridges, tunnels, airports, ports, railway lines, Infrastructure buses, urban rail, ferries, parking facilities and other Infrastructure transport-related facilities Networks and systems that provide basic utility services Utilities Utilities to communities such as gas, water and electricity, including transmission, storage and distribution Healthcare facilities, education facilities and defense Social Infrastructure Social Infrastructure facilities, government accommodation and judicial and correctional facilities (PPP / AFP) Communications Communications Broadcast transmission networks, mobile telephony Infrastructure towers, satellites and terrestrial or submarine cable Infrastructure networks
  11. 11. t Overview – The Market Structure y Vertical Transaction Vehicle Opportunities Ontario Power Standard Offe Public Authority, BC Programs Ministries of Energy ergy Procurement Hydro, Hydro Sole Source & Infrastructure Mechanism Quebec, Alberta FIT ISO, etc CESOP Ministries of Energy Pipelines of Canadian & Infrastructure Opportunities Public Provinces ructure Procurement PPP Agencies Social Mechanism Municipal Services Infrastructure & Agencies Municipalities Projects
  12. 12. Overview – Examples of Existing Sources of Capital e of Fund Scope Differentiating Factors • Power only • Diversified holdings in generation fuels apital • Private equity focused on platforms and projects • US based • Renewables only • Develop, Hold & Operate tion Power • Fund owned, publicly listed ownership structure • Bridgepoint will be focused exclusively on Greenfield projects as • Later stage opposed to platforms (companies) • Infrastructure focused • Bridgepoint will be a Canadian based investor • Tied to constructors who use union • Bridgepoint will focus on power and social infrastructure assets labor • Bridgepoint will exit its investments at the end of the investment • Does not originate own projects horizon to maximize shareholder value • Bridgepoint will partner with existing platforms to develop projects • Early and later stage developments opposed to buying them outright • Power only al LLC • Higher cost of capital and return expectations • New to renewables • Power and infrastructure • Diversified company • Typically enters at a later stage • Will only invest if it can project finance
  13. 13. Overview – Examples of Existing Sources of Capital Return set Class Targets Differentiating Factors (Annually) • Fluctuating Returns: returns vary greatly, from bond funds to high risk aggressive growth capital funds • Over-diversification may occur nds 2%-20% • Cash & liquidity: mutual funds tend to keep high cash ratios to meet liquidity investments limiting their ability to obtain returns • Large management fees: can exceed 3% annually • Higher risk: they can employ leverage and derivative instruments to boost returns change Traded 5%-15% • Daily volatility: their value tends to fluctuate greatly on day to day basis • Market spread: bid/ask spread might be large • Tied to the performance of an index rather than an individual company or pool of investments ds 5%-10% • Capped return given its structure • Index composition changes risk and return profile • Possible tracking errors • Shorter investment horizons • Lack of transparency uity Funds 15%-40% • High leverage ratios • Aggressive fundamentals • High risk • Liberal use of leverage and derivatives to enhance returns nds 15%-30% • Complex financial structures • Higher barriers to entry: large minimum initial investments • Larger fees
  14. 14. The Opportunity
  15. 15. pportunity – The Development Stage Investmen e dollar value of capital targeting energy and infrastructure assets ha hieved near record levels but: There is a significant lack of capital available to invest in developmen opportunities before a government backed contract has been awarded o signed. Observing the source of capital: Investment Managers at large infrastructure funds, banks and pension funds have limited, if no expertise in originating opportunities nor in managing the pre-bid process, or in othe words the formation of a consortium and the pursuit of a project in its initia stages. In addition, they are merely interested in providing financings for large secured projects, seeing as their income is based on their ability to leverage their institutional relationships to raise funds and obtain a fee as a percentage of the overall deal size. This “gap” provides major business opportunities for Bridgepoint Asse Management to successfully develop parts of this growing pipeline o opportunities The is no shortage of capital on the backend to provide adequate ex opportunities
  16. 16. pportunity – The Development Stage Investmen velopers require additional early stage development equity or sweat equity sources) to reach various development milestones that result in greater ject value velopers typically use their own capital to bring projects to a certain point in development process, but often run out of money and look for strategic tners that provide value added financing ere are few if any funds or investors who focus exclusively on funding early ge Greenfield energy & infrastructure developments pical project financiers seek to fund projects once they’ve obtained 90-95% heir permits or approvals and have almost secured an off take contract – ir risk appetite is limited given the nature of the investors they deal with h recent regulatory and legislative enacting of the Feed in Tariffs program d other infrastructure programs, the project pipeline will be quickly filled with velopers scrambling to find funds to push their projects to the finish line. A ed In Tariffs program is essentially a contract with a government entity ereby it guarantees the purchase of the power produced by the plant vided the developer builds and operates the project privately.
  17. 17. The Investment Fund
  18. 18. nd – Bridgepoint Greenfield Development Fund I LP • Private Placement • Seeking Accredited Investors – individuals who beneficially own, either alone or with a spouse, cash, securities, insuran contracts and deposits which have an aggregate realizable value which exceeds $1 mil (before taxes but net of related liabilities); – individuals whose net income before taxes exceeds $200,000 in each of the last two ye (or $300,000 with a spouse), and who have a reasonable expectation of exceeding that income level in the current year; – corporations, trusts, limited partnerships and other specified entities (other than mutual funds or non-redeemable investment funds) having financial statements that reflect net assets of at least $5 million; – banks (including authorized foreign banks); – loan, trust and insurance companies; – credit unions; – securities advisers and dealers (other than limited market dealers); – governments, governmental agencies, municipalities and provincial and territorial capita cities; – regulated pension funds and registered charities; – mutual funds or non-redeemable investment funds that distribute securities in Ontario to accredited investors only or under a prospectus; – current or former representatives of a securities adviser or dealer; – promoters of an issuer; – spouses, parents, grandparents and children of an officer, director or promoter of an issuer;1 – control persons; – a managed account acquiring a security that is not a security of a mutual fund or non- redeemable investment fund; and – persons or companies recognized as accredited investors.
  19. 19. nd – Bridgepoint Greenfield Development Fund I LP • Investment Strategy: – Bridgepoint’s investment strategy is to invest in equity positions in po generation and social infrastructure projects where a creditwo Canadian government or quasi-government counterparty will assure take payments for the power or services to be provided by the facility. – These projects must be capable of an attractive exit within one to th years. – By leveraging its extensive industry network, long standing experie and reputation in the industry and trusted relationships with key deci makers, Bridgepoint will actively participate in the management of projects and seek to maximize its influence on the development proc to minimize early stage development risks. – As project owners and providers of development capital, the Fund wi in a unique position to have significant influence on the selectio strategic partners and key service providers. – By implementing this strategy in a disciplined fashion, Bridgepoint se to add value through a dynamic approach to asset allocation. It app resources and capital to situations of relative value, irrespective location, while also ensuring that the Fund portfolios Bridgep constructs are appropriately diversified by sector, size of investment geography. – The Fund will invest in a minimum of five (5) projects.
  20. 20. nd – Bridgepoint Greenfield Development Fund I LP • General Partner: – Bridgepoint Investment Fund GP (the “General Partner”), an Ontario general partnership. • Investment Manager: – Bridgepoint Asset Management Inc. (the “Manager”), an Ontario corporation that is wholly owned by Bridgepoint Group Ltd. to manage the Fund. – The Manager is a wholly-owned subsidiary of Bridgepoint Group Ltd. and will be managed by certain members of Bridgepoint Group Ltd.’s curre senior management team.
  21. 21. nd – Bridgepoint Greenfield Development Fund I LP • Investment Management: – The Management Fee shall be equal to 3.75% of Total Commitments for the first year of the Fund, subsequent to which the Management Fee shall be equal to 1.75% of the Net Book Value of the Fund until the end of the Investmen Term – From this fee, the General Partner shall pay to the Manage the investment management fee for managing the Fund’s investment portfolio and underlying projects • Preferred Return – 10.0% compounded annually, based on the per unit issuan price of CDN$50,000 multiplied by the number of Units outstanding at the beginning of the applicable fiscal year. • Carried Interest: – 25% in respect of the preferred return to the General Partn – 20% in respect of capital gains above and beyond
  22. 22. nd – Bridgepoint Greenfield Development Fund I LP Bridgepoint Asset Bridgepoint Group Ltd Management Inc. Bridgepoint Investment Fund (General Partner) Bridgepoint Greenfield Limited Partners Development Fund I (Investors) (Limited Partnership) Project 1 Project 2 Project X
  23. 23. Sample Transaction Experience
  24. 24. portunity – The Development Stage Investment Gap tural Gas/ Waste Toronto Waterfront Clean Energy Centre, 582MW - $600 million proposal Milton Clean Energy Center – Pristine Power – 680MW - $1.0 billion York Energy Center - Invenergy – 400MW - $533 million bid Kitchener-Waterloo Energy Center - Invenergy - $300 million bid Leading Ontario power producer, SW GTA – 900MW - $1.2 billion bid Black Bear Energy Corp Equity Raise – Vermont – 150 MW natural gas & biomass - $450 million US Biomass to gasoline refinery – British-Columbia - $117 million York Durham Energy from Waste – Covanta Energy – $320 million Securing Power Purchase Agreement for urban co-gen plant- 14MW - $50 million vironment Municipal energy conservation report for Ontario Power Authority District cooling contract with large government agency - $30 million Energy retrofit contract with social housing agency - $60 million Energy retrofit contract with large municipality - $10 million Energy retrofit contract with municipality - $20 million Raising venture capital for LED light technology - $2 million
  25. 25. portunity – The Development Stage Investment Gap al Estate & Buildings Extendicare research of operations opportunities in Ontario Royal Crest Long Term Care and Real Estate Portfolio – Receivership Transaction - $90 million buy-out bid Royal Crest Long Term Care and Real Estate Portfolio – Receivership Transaction - $60 million buy-out bid Securing public private partnership agreement with Whitby site – 35 acres newables Snap Lake in Canada - wind diesel hybrid project, Northeast of Yellowknife - Skypower - 10 MW Pelham & Woodburn – wind – Phase 1 – 230 MW - $ 630 million Lac Seul Generating Station – OPG – 12.5MW - $60 million Palsi in India – Skypower - 82.5 MW wind project Sea Horse in India - wind project – Skypower - 50 MW Lalin I, II, III - hydro power projects in Panama – Skypower - 82 MW Digby, Nova Scotia – wind – Skypower - 30 MW Zhen in China - Heilongjiang Province - wind power project - Skypower 49.5 MW Fujian Haixing, China - wind project– Skypower - 49.5 MW Ashalim, Israel -125 MW solar power project Biomass to gasoline refinery – British-Columbia - $117 million Strategy development and execution on securing Power Purchase Agreement for hydro- electric assets Developed business case for renewable power project opportunities in municipality
  26. 26. portunity – The Development Stage Investment Gap lities PowerStream merger with Barrie Hydro - $600 million Hydro One acquisition of Brampton Hydro - $300 million HVDC Transmission Line - Ontario based private power transmission company - $550 million LDC merger negotiations due diligence- $900 million LDC non-regulated asset buy-out bids - range of - $2 - $5 million bids Supported water client with Automated Meter Infrastructure proposal for Toronto - $200 million For client, researched water & wastewater public private partnership opportunities in Ontario ansportation Sourced strategic partner – Florida Turnpike expansion - $1 billion PPP Research Report for United States opportunities Automated signaling transaction - $20 million Competitive intelligence for hedge fund on PPP Highway
  27. 27. Glossary of Terms
  28. 28. ary of Terms C – Local Distribution Company: a wholly or majority municipally owned utility, responsible he distribution of electricity within its jurisdiction through a proprietary network of wires, sformers and sub stations rgy Retrofit: A service provided to a customer whereby the energy efficiency of a building i atly increased by the addition and/or modification of certain elements of the structure rict Heating/Cooling: a system where heat and cooling is provided to a network of end rs (buildings) where economies of scale, higher fuel efficiencies and lower emissions vide attractive pricing and alternatives to traditional heating, cooling and ventilation system rgy from Waste: a process whereby municipal solid waste is converted to energy by first ning the waste, then using the heat to produce steam which in turn generates electricity ugh a turbine A – Mergers & Acquisitions: A term used to describe the activities of corporations that are er merging, or the acquisition of one company by another A - Power Purchase Agreement: A contract where the supplier of power (power station) ees to sell its power via a contract to a purchaser for a predetermined period of time, price under negotiated conditions W – Megawatt: a unit of power equal to one million watts Feed In Tariffs: is an incentive structure to encourage the adoption of renewable energy ugh government legislation. The regional or national electricity utilities are obligated to buy ewable electricity (electricity generated from renewable sources, such as solar thermal wer, wind power, biomass, hydropower and geothermal power) at above-market rates set b government
  29. 29. ary of Terms ial Infrastructure: real estate that includes housing, educational, recreational and law & er facilities art Grid: A power transmission system that delivers electricity from suppliers to consumers ng digital technology to save energy, reduce cost and increase reliability P - Public Private Partnership: a government infrastructure program or private business ture which is funded and operated through a partnership of government and one or more ate sector companies that are contracted to provide design, build, finance, operations and ntenance services P – Alternative Financing and Procurement: Ontario’s version of PPP ation Linked Cash flows: a cash flow or payment stream that is linked to inflation, thereby ranteeing that the service provider will be paid real dollars for the goods and services it vides enfield: A project that is developed from ground up (“scratch”) Take Contract: A contract that guarantees the payments for goods and services provided he producer under negotiated conditions -bid: the early stages of the response to a Request for Proposals procurement, which udes assembling all necessary team members of a consortium P Agency: A provincial agency that has authority to procure for goods and services under a lic private partnership contracting mechanism
  30. 30. Frank Carnevale Managing Partner (416) 921-5274 Georges Arbache Managing Partner (416) 849-2979 Toll Free: 1-866-501-8141