Baring Private Equity Asia

Presentation to San Diego County Employees Retirement Association

1

• Baring Asia invests in the Asian middle-market ($100 - $500 million enterprise value), in the non-auction space, in both growth equity and mid cap buyouts

• A large institutionalized firm with 11 partners, 64 total employees, from 10 countries or regions in Asia, 5 partners on investment committee have been working together for an average of 10 years

• A local on the ground presence. Six offices: Hong Kong, Beijing, Shanghai,Mumbai, Singapore and Tokyo

• Baring Asia has approximately US$2.5 billion in total assets under management and is one of the most experienced, best resourced and strongest performing private equity managers in Asia

Baring Private Equity Asia Background

2

• One of the few private equity firms in Asia with a 13-year track recordand with investment and operating experience through multiple business cycles

• Baring Asia’s most recent fully invested fund, Baring Asia III, was ranked by Cambridge Associates as the top performing vintage 2005 fund in Asiawith a net IRR of 69% as of June 30, 2010, and distributions equivalent to 148% of drawn capital

• Since its founding in 1997, realized in excess of $1.2 billion in cash at an average multiple of 3.3x invested capital and an IRR of 30%, making it one of the best realized track records and largest absolute dollar distributions in the Asian private equity middle market

• Baring Asia’s 47 historical portfolio company relationships and IPO success stories are a rich source of deal flow referrals and proprietary information

Baring Private Equity Asia Background (Cont’d)

Investment Performance

4

Private Equity Track Record Since Inception (1998 – 2010)

We have a very low loss ratio:

• Out of 15 Realized and Partially Realized Investments since 2000, not one has returned less than 1x.

Baring Private Equity Asia

Summary of Private Equity Investments (excludes venture capital investments 1998 - 2000)

as of September 30, 2010(US$ dollars)

Company

Total Invested

Capital

Realized

Proceeds

Unrealized

Value

Total

Value Multiple

Gross

IRR

Private Equity Investments

Realized & Part. Realized 450,415,610 1,228,201,300 241,484,241 1,469,685,542 3.3 x 30.0%

Unrealized 1,215,706,219 12,720,043 1,803,097,808 1,815,817,850 1.5 x 17.9%

1,666,121,828 1,240,921,343 2,044,582,049 3,285,503,392 2.0 x 26.4%

5

Baring Asia's Relative Returns Are Top Quartile

Source: Cambridge Associates benchmark data

Baring Asia III vs. Cambridge Asia Benchmark

As of September 30, 2010. Total Return for the S&P 500 and MSCI is calculated on a capital weighted basis to mirror the Fund’s investments, and by adding dividend income and price appreciation for a given time period. In effect, the dividend is reinvested in the entire index, not in the specific stock that paid the dividend.

Baring Asia Aggregate Returns vs. S&P and MSCI

-5.2%-10%

0%

10%

20%

30%

40%

Aggregate Returns Across all Funds (excluding VC)

26.4%

10.1%

Baring

MSCI EM Far East

S&P 500

Baring Asia IV vs. Cambridge Asia Benchmark

5.7% 10.3%19.6%

69.2%

0%

50%

100%

Bottom Quartile Median Top Quartile Baring Asia III

June 2010 Net IRR (2005 Vintage)

-10.3%

-1.0%

7.6% 8.3%

-20%

0%

20%

Bottom Quartile Median Top Quartile Baring Asia IV

June 2010 Net IRR (2007 Vintage)

Baring Asia’s Investment Approach

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The Asian Private Equity Market Remains Under-Penetrated

US

45%US

29%

Europe

35%

Europe

40%

Asia

19%Asia

31%

0%

20%

40%

60%

80%

100%

GDP (2009) Private Equity Investment

(2006 - 2009)

8

Mid-Market has strong deal flow and is primarily a non-auction market

Upper end of the growth equity market, more established companies

Negotiated transactions at the lower end of the mid-market for buyouts

Baring Private Equity Asia

VC and Expansion Capital Mid-Market Growth Equity and Buyouts

Large-Cap Buyouts

Auction-Markets

Higher risk investments

Baring Asia Focuses on the Less Efficient Mid-market

VC and Expansion Capital Funds

Large Buyout Funds

$500m

$100m

Ente

rpri

se V

alu

e o

f Ta

rget

Co

mp

anie

s ($

mill

ion

)

9

Private sector is the largest part of economy

US$4.9T

US$405B

But has limited access to bank financing

Structural funding mismatch in China will continue to make China an attractive market for growth equity investing

Large Growth Equity Opportunity Exists in China

SOE

Private

Sector

$0B

$1,000B

$2,000B

$3,000B

$4,000B

$5,000B

$6,000B

China Economy 1990 China Economy 2009

Ch

ina

GD

P

SOE

Private

Sector

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Chinese Domestic Bank Loans (by

customer type)

10

Portfolio Construction is a Key Element of Risk Management

Fund IV, by investment cost, as of September 30, 2010

By Country

India

26%

China

39%

Japan

2%

Cross

Border

33%

By Sector

Consumer 16%

Construction 17%

Education 21%

Financial Services

9%

Agricultural 5%

Media 11%

Energy 13%

Industrial 2%

Medical-related 2%

IT 4%

By Sector

Consumer 16%

Construction 17%

Education 21%

Financial Services

9%

Agricultural 5%

Media 11%

Energy 13%

Industrial 2%

Medical-related 2%

IT 4%

By Deal Type

Buyout

22%

Growth

46%

Growth

Control

32%

Domestic vs. Export

Export

2%

Domestic98%

Case Studies

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• Well-positioned to gain share in the outsourcing industrial gas market in China

• Long-term take-or-pay contracts generate very predictable cash flows

• Entrenched and growing relationships with high-quality customers

• Cost advantages over multinational competitors

• Baring’s purchase enhanced the Company’s credibility with customers and banks by removal of financially troubled parent, enabling business expansion to resume

• Yingde Gases is the largest domestic independent on-site industrial gas supplier in China

• Company was owned by a financially distressed parent in China

• Baring financed an MBO in 2006 from a distressed shareholder

• At time of acquisition, the company had 6 plants in operation

• Baring’s financial support enabled the company to expand to 21 plants

• Company was listed on the Hong Kong Stock Exchange in October 2009 and currently has a US$1.8 billion market cap

Business & Investment Description

FinancialsInvestment Thesis

Yingde Gases – Recent Fund III Exit

(US$m) 2006A 2007A 2008A 2009A

Revenue 60.6 103.1 201.7 303.8

EBITDA 26.6 39.7 81.5 108.1

EBITDA Growth 49% 104% 33%

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Transaction Background Representative Schools

Investment Thesis

Beijing campus

Pudong campus

Abu Dhabi campus

Puxi campus• Public-to-private of UK-listed operator of British International Schools

• Company’s share price was depressed due to market conditions and recent non-performing acquisition of a nursery school business (disposed last year)

• Baring Asia made direct approach to company after global screen of education companies active in Asia

• Baring Asia’s deep sector knowledge of the Chinese and Asian education sector made management receptive to our public-to-private proposal

• 75% of School Capacity in China

• Company had recently completed expansion which doubled capacity

• Defensive sector, with strong growth potential

• Low risk execution plan of filling existing school capacity

• Predictable cashflows, pre-paid tuition fees

• Favorable supply/demand outlook, particularly in China

• Price inelastic business, annual price increases every year historically

• Significant operating leverage as enrollment grows

• Cross border deal provides exposure to China, but via a lower risk control transaction

Nord Anglia - Fund IV Largest Investment

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Baring Asia’s Competitive Advantages

Baring Asia’s Franchise

Investment Experience through

many cycles

Deal OriginationAdvantage

Focus on Capital Preservation

Experienced in Wide Range of

Deal Types

• 13 years investing in Asia fuelling dealflow and access to proprietary market information

• Institutional firm, with substantial resources and large team, 64 people

• Established brand underpinned by multiple high profile successes

• Our team has been tested in difficult environments

• Draw on lessons of prior investment cycles

• Exit discipline

• Value oriented strategy

• Portfolio construction

• Highly structured investments

• Out of 15 Realized and Partially Realized Investments since 2000, not one has returned less than 1x

• Growth equity

• Equity buyouts

• Leveraged buyouts

• Public to privates

• Complex situations often involving distress at the shareholder level

Cross Border Capability

• Increasing intra-Asian trade flows

• Differentiated value proposition vs. country funds

• Fewer competitors and high barriers to entry

• Our China capability is highly attractive for companies

15

Baring Asia Investment ProfessionalsJean Eric Salata,

Founding Partner, CEO, Investment Committee Chairman (HK)

AIG, Bain & Co

Wharton School

Kenneth Cheong,

Managing Director, Investment Committee Member (SIN)

BZW Asia, DBS Bank

London School of Economics

William Flanz

Senior Advisor, Investment Committee Member (HK)

Sterling Enterprises, Gucci Group, Investcorp International, Prudential Asia, Chase

University of Michigan, NY University

Dar Chen,

Managing Director, Investment Committee Member (HK)

Prudential Asset Management Asia, Bank of America

CFA, University of California

Conrad Tsang,

Managing Director (BJ)

Merrill Lynch, Peregrine

University of Oxford, University of London

Kenneth Albolote,

Managing Director (TYO)Carlyle Japan, Goldman Sachs, Wasserstein PerellaHarvard Business School, Columbia University

Jack Hennessy,

Managing Director, Investment Committee Member (SIN)

Allen & Buckeridge, Orthogonal Capital, AccentureINSEAD, Monash University

Jimmy Mahtani,

Managing Director (IN)

General Atlantic Partners,Bear Stearns, Merrill Lynch

Georgetown University

Tadashi Maruoka,

Managing Director (TYO)Morgan Stanley, Nomura Securities, Wasserstein PerellaSophia University

Gordon Shaw,

Managing Director, Investment Committee Member (SHA)

AIG, Citibank, Schlumberger Technologies

Columbia Business School, MIT

Shane Predeek,Managing Director (TYO)Ripplewood Japan, Wasserstein PerellaWaseda University, Stanford University

Kosmo Kalliarekos,

Managing Director (HK)

The Parthenon Group, Bain & Co

Wharton School, Harvard Business School

Mike Sursock

Operating Partner (HK)

Former CEO of KKR Capstone, driving Value Creation across portfolio companies in Asia Pacific

COO of Motorola, spent 20 years at Mars Inc, including 4 years as President of Mars Greater China

Joe Lin

Operating Partner (China / Taiwan)

22 years of experience in retail business in Greater China

Former EVP of B&Q, COO of Tesco China, Merchandising Manager for 7-Eleven Taiwan

National Taiwan University

Richard Lin

Operating Partner (China / Taiwan)

Senior Advisor to CEO at Hsu Fu Chi

Former General Manager of Lianhwa Foods Corporation,

GM of Campbell Soup Asia, Marketing Manager of Kraft Taiwan

National Cheng-Chi University

16

Karen Ko,

Finance Manager – Fund Operations (HK)

University of Hong Kong

Edward Yuan, Associate (SHA)

Morgan Stanley Private Equity, A. T. Kearney

Tsinghua University

Hong Yong Leong, Associate (SIN)

Titan Capital , Deloitte

University of Melbourne

Priscilla Lam,

Finance Manager – Portfolio Monitoring (HK)

PMI Mortgage Insurance, Deloitte Touche Tohmatsu

University of Michigan

Joseph Li,

Associate (SHA)

Booz & Co

University of Chicago

Matthew Scattarella, Associate (SIN)

Golden Gate Capital, Bain & Company

Wharton School

Dayea Yeon,

Analyst (HK)

Morgan Stanley

Wharton School

Anshul Agarwal, Analyst (IN)

Ernst & Young, Deloitte

Indian School of Business, Chartered Accountant

Waynn Wu,

Associate (HK)

Coca Cola, Fedex

Wharton School, Stanford

Yusaku Enoki,

Analyst (TYO)

Goldman Sachs

University of Tokyo

Anubhav Kaul,

Analyst (IN)

McKinsey & Co

IIM Ahmadabad, IIT Delhi

Vishal Vijaywargiya,

Analyst (IN)

Kotak Investment Advisors

IIM Calcutta

Gabriel Ho,

Analyst (SIN)

Morgan Stanley

Harvard, University of Chicago

Baring Asia Investment Professionals

Patrick Cordes, Chief Financial Officer (HK)

Deloitte Touche Tohmatsu

Lehigh University, AICPA

Grace Gong, Deputy General Counsel Vice President (HK)

Deacons

China University of Political Science and Law, Southern Methodist University Law School

William Hay, General Counsel (HK)

GE Capital Asia Pacific, ICG Asia, Colony Capital Asia

Harvard Law School, Stanford Language Center

Lawrence Kam,

Financial Controller (HK)

Deloitte

University of Hong Kong

Joseph Ng,

IT/Finance Manager (HK)

HKHA, MTL

Baptist University of Hong Kong

Portfolio Monitoring, Finance & Legal

Kinji Adachi, Associate (TYO)

Matsuo & Kosugi

INSEAD, Columbia University,

University of Tokyo

Cartus Chan Analyst (BJ)

Goldman Sachs, McKinsey & Company

Chinese University of Hong Kong

Donna Jin, Principal (BJ)

IFC, Citigroup, Chase, Bank of China

Stanford Business School, Foreign Affairs College, CFA

Allan Chan, Vice President (HK)

Citigroup, Jacobson Partners, Merrill Lynch

Wharton School, CFA, Yale

Yan Jiao, Vice President (SHA)

Boston Consulting Group, Borden Capital, CSFB

Wharton School, MIT

Ashish Agrawal, Vice President (IN)

Lehman Brothers, Bank of America, JM Morgan Stanley, ICICI

Indian Institute of Management, SGS, CFA

Hari Gopalakrishnan, Vice President (IN)

New Vernon Capital, PricewaterhouseCoopers, University of Kerala, Indian Institute of Management

Nicholas Macksey, Vice President (SIN)

Westpac Institutional Bank, Deloitte Touche Tohmatsu

CFA, University Of Queensland

Han Chul Kim, Vice President (HK)

Lehman Brothers, Credit Suisse

Brown University

Alex Lee,

Vice President (HK)

Tullis-Dickerson,Maui Investment Group, Goldman Sachs

Stanford Business School, Columbia University

Jason Shi,

Analyst (HK)

UBS

University of Hong Kong, New York University

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Baring Asia Well Positioned

• Fund III is Asia’s top performing 2005 vintage private equity fund with a net IRR of 73% –we were proactive in realizing investments by taking advantage of favorable divestment market conditions in 2007 and early 2008

• Growing portfolio company earnings – Aggregate look-through EBITDA for Fund III and IV grew at an average of 24% last year despite the financial crisis and is forecast to grow over 25% this year

• Unlevered portfolio - We use very little acquisition financing, none of our companies are in breach of covenants

• Fund IV is already generating value – of note, our $256 million investment in Nord Anglia is performing strongly

• Operationally very engaged – Large team of 64 staff in 6 offices, intensive post investment involvement with portfolio company management teams to grow EBITDA

• Baring Asia’s competitive position enhanced – Strong track record, healthy portfolio, deep pool of talented and experienced team members, financial resources to grow our infrastructure with uninvested capital of $408 million. Baring Asia is well positioned to take advantage of a ripe investment market in 2010 and beyond

Thank You!