Brookfield Asset Management Inc. - Arena International · 2 | Brookfield Asset Management Inc. For Institutional Use Only Significant timberlands owner-operator with large, established

Brookfield Asset Management Inc.

A GLOBAL ALTERNATIVE ASSET MANAGEMENT COMPANY Focused on Real Estate, Infrastructure, Power and Private Equity

BROOKFIELD TIMBERLANDS | TIMBER INVEST EUROPE 2012

MANAGER SELECTION: STRUCTURING A SUCCESSFUL PARTNERSHIP

Please see Notice to Recipients on page 11.

| Brookfield Asset Management Inc. 1 For Institutional Use Only

Brookfield – Leading Alternative Asset Management Firm

Experienced Value Investor

More than 100-year history of owning, operating and investing in businesses with a focus on real estate,

infrastructure, timberlands, power and private equity

Disciplined investment process focused on value-oriented acquisitions, operational value-add, long-term returns and

capital preservation

Global

Experienced team of over 500 investment professionals and 23,000 operating employees globally

Global reach with local presence in key markets, including New York, Toronto, São Paulo, London, Sydney, Hong Kong,

Mumbai, Abu Dhabi and Dubai

Established Asset Management History

Over $150 billion of assets under management

Approximately $50 billion of third-party capital in asset management business

Brookfield has an established private funds platform with commitments of approximately $29 billion, including $9

billion from Brookfield


Significant timberlands owner-operator with large, established platforms in core timberland markets

Brookfield – Timberlands Platform

Island Timberlands

(“Island”) 257,000 hectares

Longview Timber

(“Longview”) 264,000 hectares

Brookfield Brazil

Timber Fund

(“Brazil Timber”) 97,000 acres

Acadian Timber

Corp. (“Acadian”) 1 million hectares*

* Includes management services relating to approximately 526,100 hectares of crown licensed timberlands


A wide range of timberland investment structures is available with the most common having the following attributes:

Timberland Investment Structures

Structure Timberland

Exposure Ability to

Customize Contact with Management

Liquidity Typical Minimum

Investment

Direct Investments High High High Medium Varies, typically

$25 - $100+ million

Managed Account High High Medium Medium + $10 million

Fund High Low to

Medium Medium Low

$1 - $10 million

or more

Fund of Funds Medium to

High Low Low

Low to Medium

$1 - $10 million

or more

Publicly Traded Timberland REIT

Medium Low Low High + $5,000

Timberland Exchange Traded Fund (“ETF”)

Low to Medium

Low Low High + $5,000

Forest Products Co. Low Low Low High + $5,000

Source: TimberLink and Brookfield internal research.


Managers bring industry expertise and resources to the table

Given increased interest in and competitiveness of the asset class, manager selection has become more important

A dedicated timberlands group can offer an opportunity to add considerable value at all stages of the investment

Informed operating decisions play a key role in maximizing total return

It is generally not viable for investors to internalize the expertise required to properly manage timberlands

Why Hire a Manager?

John Deere log processor Loading ship with logs, destined for China Tree planter on BC Coast


Manager selection is the process of aligning investor goals with manager competencies and strategies

Investors should become familiar with the asset class, determine their own priorities and match these with manager

alternatives

There is no one-size-fits-all best strategy or manager – diligence is required

Areas to explore in order to evaluate a manager include:

— Competence / past performance

— Current strategy and offering(s)

— Alignment of interests

Selecting a Manager

Sources: Company reports/websites, DANA Ltd. 2011 and Brookfield internal research.

TIMO stands for Timberland Investment Management Organization.

(1) TIMO 3 owns and manages significant real estate assets in Australia, but does not currently operate timberlands in the region.

United

States Canada

Latin

America Australasia Funds

Managed

accounts

TIMO 1 4

TIMO 2 2

TIMO 3 1

4

TIMO 4 3

TIMO 5 2

TIMO 6 3

TIMO 7 2

TIMO 8 3

TIMO 9 3

TIMO 10 1

TIMO 11 1

Regional Experience Fund StructuringVertical

Integration of

Management


Cash Flow

vs.

Capital Appreciation

Manager Experience: financial / operational / other

Alignment: fee structure / investment participation

Organization: active / passive / vertically

integrated / internal analysis and

research competencies / etc.

Value added: tax / legal advisory

Decision-Making Authority Control Advisory Board

Manager discretion

Investment Likelihood Assured vs. Rapid

vs. Selective vs. Opportunistic

Placement

Fee Focus Balance between overall fee

loading, management and

performance fees

Investment Limitations Country / region, age class,

leverage, certification, etc.

Investment Emphasis Biological growth

HBU (housing, recreation,

wind, minerals, environmental

services, conservation, etc.)

Investor Goals

Typical Investor Priorities

Investor priorities are increasingly wide-ranging bringing increased attention to manager selection


— Deal sourcing capability

— Approach to underwriting

— Management approach and expertise

— Exit strategy

Process should inform investor and result in better manager selection

Timberlands investments involve a long-term relationship between investor and manager, process helps determine

whether the manager is someone you can work with!

Investors should explore different managers’ strategies, competencies and regional experience

Investigating manager competencies across all proposed investment regions and circumstances is important

Diligence should include, but is not limited to:

Exploring Manager Strategies and Competencies1

1 The items and views described herein are based on Brookfield’s good faith analysis and belief. Each investor should consider its own criteria before making an investment in any Brookfield fund.


Alignment of Interests1

Fee structure and meaningful co-investment align investor and manager interests

Meaningful co-investment requires that the manager contributes 10%+ of invested capital so that returns

generated by the investment become more relevant than the fees earned

This co-investment ensures an alignment of investor / manager objectives, but does not guaranty manager

competency

0%

10%

20%

30%

40%

50%

60%

0% 5% 10% 15% 20% 25%

GP

Ne

t IR

R (

%)

GP Participation as a Percentage of Total Equity

LP Investor Net IRR

IRR for GP Investor reflects LP IRR + management fees and carried interest

Source: Brookfield internal research.

Assumptions: gross nominal IRR of 10%, annual asset management fees of 85 bps, 80/20 LP/GP carried interest over 8.0% net LP return

Alignment of TIMO and Investment Partners Returns



Conclusion1

Approach to structuring a strong and sustainable, long-term partnership involves:

— Understanding your timberland investment priorities

— Finding a like-minded manager with a solid and consistent approach

— Completing due diligence required

— Seeking out and negotiating for partnership terms that demonstrate an alignment of interest between

you and the manager

Successful managers buy well, actively manage investment(s) and have an exit plan

This is a long term relationship, so find someone you can work with



Questions?

PNW operations

U.S. South plantation

Brazil 2 month old in front of a 7 year old plantation


Notice to Recipients

This document is strictly confidential and is intended solely for the information of the person to whom it has been delivered. It may not be reproduced or transmitted, in whole or in part, to third parties except as agreed in writing by Brookfield Asset Management Inc. (“BAM” and together with its affiliates, “Brookfield”). By accepting this material, you hereby acknowledge that you are aware that the United States and other applicable laws prohibit any person who has material, non-public information about a company or its affiliates obtained directly or indirectly from that company from purchasing or selling securities or other financial interests of such company or its affiliates or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities or other financial interests.

Brookfield Private Advisors LLC, a wholly owned subsidiary of BAM, is a registered broker dealer with the SEC and a FINRA Member. Certain employees of Brookfield’s Private Funds Group may be registered with Brookfield Private Advisors LLC. None of Brookfield, its officers, employees, agents or affiliates makes any express or implied representation, warranty or undertaking with respect to this document. This document has been prepared for institutional investors only. It has not been filed with FINRA and may not be reproduced, shown, quoted to, or used with members of the public.

In considering investment performance information contained herein, prospective investors should bear in mind that past performance is not necessarily indicative of future results and there can be no assurance that comparable results will be achieved, that an investment will be similar to the historic investments presented herein (because of economic conditions, the availability of investment opportunities or otherwise), that targeted returns, diversification or asset allocations will be met or that an investment strategy or investment objectives will be achieved. Any information regarding prior investment activities and returns contained herein has not been calculated using generally accepted accounting principles and has not been audited or verified by an auditor or any independent party. Unless otherwise indicated, internal rates of return (including targeted rates of return) are presented on a “gross” basis (i.e., they do not reflect management fees, carried interest or other general partner distributions, taxes, transaction costs and other expenses to be borne by investors, which in the aggregate are expected to be substantial and which would reduce the actual returns experienced by an investor). Nothing contained herein should be deemed to be a prediction or projection of future performance of an investment. Any references to “committed capital” include all pledged commitments.

Certain of the information contained herein is based on or derived from information provided by independent third party sources. While Brookfield believes that such information is accurate as of the date it was produced and that the sources from which such information has been obtained are reliable, Brookfield does not guarantee the accuracy or completeness of such information, and has not independently verified such information or the assumptions on which such information is based.

Nothing contained herein should be construed as legal, business or tax advice. Each prospective investor should consult its own attorney, business adviser and tax advisor as to legal, business, tax and related matters concerning the information contained herein.

Neither this document nor the interests offered hereby have been approved by the United States Securities and Exchange Commission or by any regulatory or supervisory authority of any state or other jurisdiction, including Canada and the United Kingdom, nor has any such authority or commission passed on the accuracy or adequacy of this document. The information contained herein is subject to correction, completion, verification and amendment. Any representation to the contrary is a criminal offense.

This document is not intended to be made available to any person in Australia who is not a wholesale client (within the meaning of the Corporations Act 2001 (Cth) of Australia). Any offer or invitation in Australia to invest in the fund, and any investment in the fund by a person in Australia, is limited to such wholesale clients. Any such offer or invitation is made in the expectation that such person will not sell or transfer its interest in the fund within 12 months after the issue of the interest. This document is not a disclosure document or product disclosure statement (within the meaning of the Corporations Act 2001 (Cth) of Australia).

U.S. Internal Revenue Service Circular 230 Notice: To ensure compliance U.S. Internal Revenue Service Circular 230, prospective investors are hereby notified that: (a) any discussion of federal tax issues contained or referred to herein is not intended or written to be used, and cannot be used, by prospective investors for the purpose of avoiding penalties that may be imposed on them under the U.S. Internal Revenue Code; (b) such discussion is written in connection with the promotion or marketing of the transactions or matters addressed herein; and (c) prospective investors should seek advice based on their particular circumstances from an independent tax advisor.

Unless otherwise noted, all references to “$” or “Dollars” are to U.S. Dollars. All time-sensitive representations are made as of June 2012, unless otherwise expressly indicated.

Please contact Brookfield if you would like to discuss any of the information set forth herein.

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Brookfield Asset Management Inc. - Arena International · 2 | Brookfield Asset Management Inc. For Institutional Use Only Significant timberlands owner-operator with large, established