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  1. 1. SOURCING  INFRASTRUCTURE     INVESTORS,  PARTNERS  AND  INVESTMENTS     Industry  expert  advisory  with  InduStreams    June  2012
  2. 2. Overview     Process   We  advise  on  the  elements  of   Deal   ge?ng  to  goal  quickest  possible   from  scoping  relevant  targets  to    Develop   closing  agreements.  We  don’t  do   elaborate  and  4me  was4ng   analy4cal  work.   Engage     Geography   Focus   We  have  associates  in  many  key   geographies  that  are  able  to  add   + local  insight  to  the  specific  sector  in   ques4on.  Examples  include  China,   Panama,  Nigeria,  Italy  and  many   East  Asia   Europe   La4n  America   others.     + Sector   Sourcing   Sourcing   We  advise  primarily  on  the  sourcing   of  investors  and  investments  as  well   Investments   Investors  &  Partners   as  strategic  partnerships.
  3. 3. China  case:  Investor  perspecCve   Assignment  example   An  investor  is  looking  to  source  port   infrastructure  investments  in  China.       Our  role   Step  one  to  help  the  investor  get  a   market  overview  and  scope  relevant   regions  and  ports  based  on  a  set  of   criteria:     -­‐  Green  field  or  brown  field   -­‐  Investment  size  preference   East  Asia   Europe   La4n  America   -­‐  Bulk,  container  or  oil  sector   -­‐  Individual  terminal  investments   or  partnership  in  the  whole  port   + -­‐  Etc.   Sourcing   Sourcing   Investments   Investors  &  Partners
  4. 4. China  case:  Investor  perspecCve  (2)     Focus/scoping   Within  50  prospec4ve  ports  10  port   Deal   projects  have  been  iden4fied  and   shortlisted.      Develop     Engagement   Facilita4on  is  provided  to  engage  in   Engage   the  form  of  advise  on  approach  and   introduc4on  to  relevant  contacts  in   our  network.   Focus     Development   Input  is  provided  to  iden4fy  the  key   value  value  drivers  to  carry  out   valua4on  and  related  analysis.     Deal   Support  is  given  to  set  nego4a4on   strategy  in  a  Chinese  JV  context  as   well  as  facilita4on  to  close  relevant   agreements.
  5. 5. China  case:  Owner  perspecCve   Assignment  example   An  owner  of  an  oil  terminal  in   Zhejiang  Province,  China  is  looking   to  solicit  investors  and  strategic   partners  from  Europe.     Our  role   Step  one  to  help  the  owner  and   overview  of  the  investor  universe   based  and  scope  relevant  par4es   based  on  a  set  of  preferences:     East  Asia   Europe   La4n  America   -­‐  Investment  proposi4on   -­‐  Funding  requirement   -­‐  Target  investor  role  (opera4onal,   + financial,  etc)   Sourcing   Sourcing   -­‐  Majority/minority  investor   -­‐  Etc.   Investments   Investors  &  Partners
  6. 6. China  case:  Owner  perspecCve  (2)     Focus/scoping   For  the  client  iden4fy  30-­‐40   Deal   prospec4ve  European  investors  and   partners  and  shortlist  the  most    Develop   immediately  relevant  (e.g.  5-­‐10).       Engagement   Engage   Facilita4on  is  provided  to  engage  in   the  form  of  advise  on  approach  and   introduc4on  to  relevant  contacts  in   Focus   our  network.     Development   Any  help  needed  to  facilitate  a   speedy  process  on  the  investor  side.     Deal   Support  is  given  to  set  nego4a4on   strategy  in  a  European  fund  context   as  well  as  facilita4on  to  close   relevant  agreements.
  7. 7. Our  advisory  proposiCon     ü  Big  and  diverse  project/asset  owner  and  local  industry   networks  (1,000+  execu4ves  in  the  community  and   increasing)   ü  Insight  to  both  the  industry  and  investor  communi4es   allowing  us  to  convey  proposi4ons  accurately  and  with  the   right  context  of  the  poten4al  value  these  have   ü  Simple  and  effec4ve  process  to  advise  on  the  key  items  that   maaer  that  maaer  from  market  scoping  through  to  closing   the  deal
  8. 8. Risk  free  engagement   We  talk  to  new  funds,  investors  and  industrials  every  week  and  as  policy  are   commiaed  to  listening  to  anyone  who  wishes  to  further  explore  the  possibility   to  invest  in  or  seek  investors  for  the  infrastructure  market  –  no  strings   aaached!     Our  primary  objec4ve  is  to  provide  access  to  opportuni4es  that  might   otherwise  not  be  available  to  you  and  your  company.     If  advisory  or  facilita4on  might  be  relevant  to  you  or  your  company  we   encourage  you  to  reach  out  to  any  of  our  representa4ves  or  on:
  9. 9. Disclaimer   This  presenta4on  is  issued  for  informa4on  purposes  only  and  does  not  cons4tute  an   agreement,  offer,  obliga4on  or  invita4on  to  enter  into  transac4ons  or  investment   business.       With  this  presenta4on,  INDUSTREAMS  LIMITED  does  not  act  in  any  way  as  your   advisor.  This  presenta4on  is  not  intended  as,  nor  should  it  be,  a  subs4tute  for   consul4ng  with  INDUSTREAMS  LIMITED.     Whilst  this  presenta4on  has  been  produced  from  sources  believed  to  be  reliable,  the   informa4on,  views  and  opinions  expressed  in  this  presenta4on  are  provided  as  of  the   date  of  this  presenta4on  and  remain  subject  to  verifica4on,  comple4on  and  change   without  no4ce.  No  representa4on  or  warranty  whatsoever  (whether  express  or   implied)  is  or  will  be  made  as  to,  or  in  rela4on  to,  the  accuracy,  reliability  or   completeness  of  the  informa4on  contained  herein  or  in  the  appendices  to  this   presenta4on.     INDUSTREAMS  LIMITED  will  not  be  liable  towards  you  or  any  third  party  for  any   eventual  damage  you  may  incur,  caused  by  the  informa4on  contained  in  this   presenta4on  and  its  appendices.
  11. 11. Private  oil  storage  terminal  (example)       Principal  purpose   Development  and  opera4on  of  storage  tanks  and  jeay  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  loca4on  it  could  be  anywhere  from  10%  to   20%+  (IRR).
  12. 12. Greenfield  container  develop.  (example)       Principal  purpose   Gateway  hub  to  facilitate  the  growing  export  and  imports  to   and  from  a  developing  country  serving  a  cap4ve  local  market.         Investment  size   Substan4al  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  4me  to  market  from  construc4on  is  ini4ated.
  13. 13. Port  group  partnership  (example)       Principal  purpose   Consolida4ng  all  container  cargo  ac4vi4es  in  a  new  port  area  to   boost  segment  growth  and  op4mize  port  opera4ons.         Investment  size   A  secondary  port  looking  to  develop  ini4al  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.
  14. 14. 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   consor4um  of  investors,  construc4on  and  other  companies).         Target  return     6-­‐10%  government  guaranteed  IRR  (fixed  payments  done  by   government  on  regular  basis  –  no  commercial  risk).
  16. 16. Pension  fund  example       ObjecCves   Pension  and  insurance  funds  typically  invest  to  secure  long  term  stable  returns  (e.g.  5-­‐10%).       Typical  investment  size   Typically  look  to  invest  $100-­‐200  million  as  minimum  per  investment  for  their  own  share  and   therefore  total  investment  size  target  onen  above  $500  million.         Role  and  shareholding  target   Onen  limited  to  that  of  a  “financial”  investor  and  thus  typically  looking  only  to  take  a  minority   posi4on  and  for  many  are  not  allowed  to  have  the  main  managing  role.         Investment  stage  and   In  general  look  for  acquisi4on  opportuni4es  or  constella4ons  whereby  they  mi4gate   holding  period   development  and  commercial  risk  and  look  to  hold  assets  for  long  periods  (30+  years).     Emerging  trends  include  pension  funds  seeking  to  take  ownership  along  side  en4re  port   owners  (landlords)  as  that  further  diversifies  their  risk  across  more  assets.         ProposiCon  to  asset/project   Primarily  bring  lower  cost  of  capital  to  the  table  (can  live  with  lower  returns)  but  also   owners   some4mes  specific  capabili4es  and  global  brand.
  17. 17. Operator  example       ObjecCves   Operators  and  some  developers  typically  seek  to  grow  their  porqolio  as  primary  objec4ve  and   require  medium  to  high  returns  (e.g.  10-­‐15%).               Typical  investment  size   Most  investment  sizes    are  relevant  ranging  all  the  way  from  $10-­‐20  million  to  above  $1  billion   (although  in  laaer  case  it  might  only  be  a  few  in  the  industry  that  would  want  to  do  that  alone).         Role  and  shareholding   Most  operators  would  like  majority  and  management  and  an  opera4onal  role  onen  a  must   target   have.             Investment  stage  and   Do  green  fields  as  well  as  acquisi4ons  onen  without  any  specific  holding  strategy,  but  most  tend   holding  period   to  just  “hold  on”  once  they  secure  an  investment.         ProposiCon  to  asset/project   Operators  typically  bring  significant  know-­‐how  and  skill  and  some4mes  actual  business  to  their   owners   projects.
  18. 18. Infrastructure  fund  example       ObjecCves   Many  infrastructure  funds  (including  private  equity  funds)  invest  on  behalf  of  other  funds  (e.g.   ins4tu4onal  funds  such  as  pension  fund)  and  look  to  achieve  strong  returns  over  a  shorter   period  (e.g.  15-­‐20%),  but  are  typically  also  willing  to  take  on  greater  risk.           Typical  investment  size   As  with  operators  such  funds  invest  in  small,  medium  as  well  as  very  large  scale  investments   (substan4al  diversity).         Role  and  shareholding   Many  funds  are  looking  to  take  majority  but  for  most  however  minority  is  also  an  op4on.  Some   target   of  the  more  sector  specific  ones  would  look  to  have  a  strong  opera4onal  role  as  well  whereas   others  would  not  have  opera4onal  capability  or  interest.         Investment  stage  and   Most  constella4ons  and  stages  are  relevant  for  such,  but  acquisi4ons  are  gaining  popularity,  and   holding  period   onen  look  to  hold  the  asset  for  8-­‐10  years.         ProposiCon  to  asset/project   Very  mixed  value  proposi4on  depending  on  the  fund  in  ques4on  but  do  have  the  benefit  of   owners   being  very  focused  (once  they  raise  a  fund  the  money  has  to  be  spent  over  a  short  4me  period   or  the  clients  will  withdraw  the  funds  again)  and  thus  tend  to  work  effec4vely  and  with  urgency.
  19. 19. Sovereign  wealth  fund  example       ObjecCves   Sovereign  wealth  funds  and  other  government  type  funds  have  many  different  agendas  but  of   course  mostly  to  further  the  interests  of  the  na4on  they  have  been  mandated  by.  Consequently   they  also  operate  on  a  very  wide  return  range  (e.g.  0-­‐20%).       Typical  investment  size   Work  almost  exclusively  with  larger  scale  investments,  most  in  excess  of  $500  million  and  onen   more  than  $1  billion.         Role  and  shareholding   Almost  exclusively  look  for  a  pure  financial  stake  but  may  well  want  extensive  influence.   target       Investment  stage  and   Green  fields  and  brown  fields  are  all  scope,  however  projects  onen  need  to  be  among  key   holding  period   projects  na4onally  or  within  the  region  they  invest  in.         ProposiCon  to  asset/project   Given  the  government  leverage  and  wide  return  spectrum  SWF’s  can  come  with  many  different   owners   kinds  of  proposi4ons  and  some4mes  fit  where  no  others  are  relevant.