Blueskyfunds.com.au | Page 1 ASX SPOTLIGHT BLUE SKY ALTERNATIVE INVESTMENTS LIMITED MAY 2014 Private Equity | Private Real Estate | Hedge Funds | Real

blueskyfunds.com.au | Page 1

A S X S P O T L I G H T B L U E S K Y A L T E R N A T I V E I N V E S T M E N T S L I M I T E D

M A Y 2 0 1 4

Private Equity | Private Real Estate | Hedge Funds | Real Assets


This presentation has been prepared by Blue Sky Alternative Investments Limited (‘Blue Sky’). The information in this presentation is of a general nature and does not purport to be complete, nor does it contain all the information which would be required in a prospectus prepared in accordance with the requirements of the Corporations Act.

This presentation contains statements, opinions, projections, forecasts and other material (forward looking statements), based on various assumptions. Those assumptions may or may not prove to be correct. None of Blue Sky, its respective officers, employees, agents, advisers or any other person named in this presentation makes any representation as to the accuracy or likelihood of fulfilment of the forward looking statements or any of the assumptions upon which they are based.

The information contained in this presentation does not take into account the investment objectives, financial situation or particular needs of any recipient and is not financial product advice. Before making an investment decision, recipients of this presentation should consider their own needs and situation and, if necessary, seek independent, professional advice.

To the extent permitted by law, Blue Sky and its respective officers, employees, agents and advisers give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this presentation. Further, none of Blue Sky and its respective officers, employees, agents and advisers accept, to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation. Any recipient of this presentation should independently satisfy themselves as to the accuracy of all information contained herein.

DISCLAIMER


ABOUT BLUE SKY

• Founded in 2006, listed in 2012

• Focused on four major alternative asset classes:

– Real assets (water entitlements and water infrastructure)

– Private equity

– Private real estate

– Hedge funds

• >$145m market cap1

• Over $550m in Assets Under Management

• Investor base: HNW direct, institutional direct, retail & semi whole sale via listed diversified fund

• Offices in Brisbane, Sydney, Melbourne, Adelaide and New York

• 46 staff

1) Based on a closing price on 23 May 2014 of $2.61 and issued capital of 56,047,589 shares.


• Used to enhance risk/return characteristics of investment portfolios

– Increase diversification

– Reduce overall volatility (given low correlations to traditional investments)

– Potential for delivery of enhanced total portfolio returns

• Potential for strong returns

– Wider opportunity set

– Less efficient than public markets

– Direct and active management

– Managers incentives are typically based on absolute returns (not relative returns)

WHY ALTERNATIVES?


INSTITUTIONAL INVESTORS ALLOCATE >20% TO ALTERNATIVES

Russell Investments - Global Survey on Alternative Investing Example allocations

38% allocation to alternatives1

56% allocation to alternatives

24% allocation to alternatives

Average asset allocation by institutional investors

1) Includes alternative assets, private equity, infrastructure and timberland and propertySource: Company websites. Russell Investments’ 2012 Global Survey on Alternative Investing. Survey included responses from 146 institutional investors representing $1.1 trillion in assets


ALLOCATIONS TO ALTERNATIVES ARE GROWING IN AUSTRALIA

Allocations to alternatives have almost tripled,

from 5% in 1997 to 14% in 2013.

Allocations anticipated to rise to just under 20%

by 2033

Source: Rainmaker Roundup – Edition 64 (December 2013)


PRIVATE EQUITY

PRIVATE REAL ESTATE

HEDGEFUNDS

REALASSETS

• Expansion capital - minority partners for Australian SME growth companies

• Late Stage Venture Capital

• Private equity into real estate

• Affordable, medium density residential development projects

• Yielding investments in property management rights

• Property mezzanine investments

• Blue Sky Water Fund - investment in water entitlements

• Water Utilities Australia - investment into small scale water infrastructure

• Strategic risk allocation products

• Targets defined portfolio volatility levels

• Current AUM1 is ~$550m

• FY17 target of $2bn in AUM

• ~50% from offshore investors; ~50% domestic investors

• ~ 50% from institutional investors; ~50% from non-institutional investors

BLUE SKY ALTERNATIVE INVESTMENTS LIMITED (ASX:BLA)

RAPIDLY GROWING INDEPENDENT ALTERNATIVE ASSET MANAGER

(1) AUM stands for Assets Under Management.

BLUE SKY: A SNAPSHOT


BLUE SKY’S TRACK RECORD

0%2%4%6%8%

10%12%14%16%18%

PRIVATEEQUITY

REALASSETS

HEDGEFUNDS

TOTALPRIVATE

REAL ESTATE

Returns to investors in Blue Sky managed funds(since inception in 2006, net of fees)

16.3% 16.7%

7.9%

10.0%

13.9%

(1) Note that total returns are equity weighted returns since inception through to 31 March 2014 (for Real Assets and Hedge Funds) and 28 February 2014 (for Private Equity and Private Real Estate). All returns are net of fees.(2) Note that past performance is not a reliable indicator of future performance.


PRIVATE EQUITY

• Focused on expansion capital and late stage venture capital

• Australian SME growth companies

• Current portfolio of 16 assets

• Established in 2006

BLUE SKY PORTFOLIO COMPANIES


PRIVATE REAL ESTATE

• Asset backed, income generating assets e.g.

– Management rights

– Freehold motels

• High density, affordable developments



REAL ASSETS

• Water entitlements

– Australia has the World’s leading water rights trading market

– Our focus is on entitlements in the southern Murray-Darling Basin

– Asian food bowl investment thematic

• Water infrastructure

– Infrastructure for residential and commercial property (existing and greenfield)

– Agricultural schemes



HEDGE FUNDS

• Blue Sky acquired hedge fund manager, Investment Science, in April 2014

• Investment Science’s approach is focused on risk, with correlations between asset classes a primary determinant of portfolio construction

– Helps investors mitigate risk of allocating to a portfolio of assets that appear ‘diverse’ but that in reality are highly correlated

• Currently manages ~$70m across four funds that target different levels of risk (between 4% - 16% volatility p.a.)

• Market penetration across financial planners


(1) Note that past performance is not a reliable indicator of future performance. Note also that the returns reflect the average historical performance of Investment Science’s funds only and do not relate to the future performance of the Alternatives Fund, and should not be relied upon and is not an indication of future performance of the Alternatives Fund . Refer to the Glossary for further details.


SHARE PRICE PERFORMANCE SINCE IPO

SHARE REGISTER MAKE UP

Jan-

12

Feb-

12

Mar

-12

Apr-1

2

May

-12

Jul-1

2

Aug-1

2

Sep-1

2

Oct-1

2

Nov-1

2

Dec-1

2

Jan-

13

Feb-

13

Mar

-13

Apr-1

3

May

-13

Jun-

13

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-

14

Mar

-14

Apr-1

4

May

-14

$0.50

$1.00

$1.50

$2.00

$2.50

Jan-

12

Feb-

12

Mar

-12

Apr-1

2

May

-12

Jul-1

2

Aug-1

2

Sep-1

2

Oct-1

2

Nov-1

2

Dec-1

2

Jan-

13

Feb-

13

Mar

-13

Apr-1

3

May

-13

Jun-

13

Jul-1

3

Aug-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Dec-1

3

Jan-

14

Mar

-14

Apr-1

4

May

-14

0

100

200

300

400

500

600

In t

ho

usa

nd

s

DAILY VOLUME SINCE IPO

Blue Sky Directors 27%

Other Blue Sky Employees 9%

Other 64%

Total 100%Ma

y-1

4M

ay

-14

Note that charts above use data up to and including 21 May 2014.

• FY14 NPAT guidance of $5 million +

• $33 million tangible assets on Balance Sheet ~ Cash + Investments in AUM

SHARE PRICE AND REGISTER

FINANCIAL SNAPSHOT


BLUE SKY LISTED DIVERSIFIED FUND

• Currently completing the IPO of Blue Sky Alternatives Access Fund Limited on ASX (ASX:BAF)

• Blue Sky managed co-investment fund offered as a Listed Investment Company

• Diversified, low fee, co-investment along side HNW / institutional direct investment clients

• Provides “liquid access” to alternatives for retail and semi whole sale markets (e.g. Self Managed Super Funds)

• Raising up to $100m, offers closes 4 June*

* ‘A prospectus in respect of the Offer has been lodged with the Australian Securities and Investments Commission and is available at www.blueskyfunds.com.au. The offer of securities by way of issue is contained in the prospectus and you should consider the prospectus in its entirety before deciding whether to acquire the securities. If you wish to acquire securities under the offer you will need to complete the application form that accompanies the prospectus’.

http://www.blueskyfunds.com.au/

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Blueskyfunds.com.au | Page 1 ASX SPOTLIGHT BLUE SKY ALTERNATIVE INVESTMENTS LIMITED MAY 2014 Private Equity | Private Real Estate | Hedge Funds | Real