Confidential 1

Pioneer Capital PartnersAn expansion stage value investor

Is there investable growth in New Zealand? How do we access it?Eriksens Conference

25 September 2012

Confidential 2

Start with what we know – the NZX

NZX profile

108 NZX All

80 Operating Companies

16Growth Companies

Financial profile

Remove:- Finance-related

companies- Investment companies- Property trusts

Select:- Companies with

three year revenue CAGR greater than 15%

Positive EBIT (#) 12Average revenue1 $61mAverage EBIT1 $7mAverage revenue growth1 28%Average EBIT growth1 31%EV/EBIT1 12.9x

Positive EBIT (#) 59Average revenue1 $173mAverage EBIT1 $13mAverage revenue growth1 5%

Average EBIT growth1 9%EV/EBIT1 11.3x

1. Trimmed average (90% of population), even weighted, all growth is 3-year historic CAGR, EBIT is normalised.Source: NZX and Reuters Knowledge (20 September 2012)

Confidential 3

What the rest of the economy looks like – Private Capital

NZ Productive Assets Valuations (bn)3

NZ Industrial Base1

Income $485bnEBIT $55bn

NZ Manufacturing1

Income $89bnEBIT $4.5bn

NZX OpCos2

Income $44bnEBIT $4.5bn

Ent. Val. $695 (13x EBIT)Debt $241 (2.8x cover) Equity $454

Ent. Val. $47 (10x EBIT)Debt $14 (3.8x cover) Equity $33

Ent. Val. $65 (14x EBIT)Debt $16Equity $49

Notes:1. Annual Enterprise Survey, Department of Statistics, 2010. Exc. ‘Financial and insurance services’2. Reuters, operating companies only3. Data for AES companies is book value, data from NZX companies from NZX

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Looking for growth – Manufacturing as an example

2009 2010 2011 2012-10%

-5%

0%

5%

10%

15%

1%

-5%

6%

8%7%

-5%

11%

NZX Manufacturing

Gro

wth

Revenue Growth 2009 to 2012

Confidential 5

Equity funding New Zealand

Equity Inflows p.a. NZ Productive Assets

NZ Industrial Base4

Income $485bnEBIT $55bn

NZ Manufacturing4

Income $89bnEBIT $4.5bn

NZX OpCos5

Income $44bnEBIT $4.5bn

Private Capital1

Early-stage $50m

Mid-market $130mLarge PE $300m

Trade (M&A)3

NZ Target $1,608m

Other - Huge

Public (NZX)2

IPO $112mSec. $760m Other $460m

Notes:1. NZ Private Equity and Venture Capital Monitor ; 5-year average to Dec 20112. UBS estimates, company filings; 5-year average to Dec 20113. Thomson Reuters; 5-year average to Dec 20114. Annual Enterprise Survey, Department of Statistics, 2010. Exc. ‘Financial and insurance services’5. Reuters, operating companies only

Confidential 6

Method:

–1994 to 2010 – 16 years

–$675m invested into 74 companies, majority of investments were mid-market

–11 Fund managers – essentially the population

Results:

–Pooled IRR of 26.8% p.a.1, 2.13x MM (Gross)

–Six investments were >5x MM; 5 went into receivership

–Strong performance throughout period of study, best was 2000 to 2008

Gross realised returns – Private Capital is showing promise

1. Excludes two biggest investments, both LBO, that skew results (otherwise pooled IRR of 33.6%)

Confidential 7

Private Equity Access Points

Manager Latest Fund Size When Raised

Direct capital $325m Feb 2009

Maui $250m May 2012

Pencarrow $82m1 open

Pioneer $70m2 Apr 2007

Knox $60m3 From 2007

Waterman $83m Aug 2011

1. Pencarrow achieved a first close on 30Nov 2011 and is seeking to raise $100m-$150m with a final close expected late 20122. Pioneer will launch a new fund Q4 2012 with a target of $100m3. Konx has launched a new fund with a target $100-125m

Confidential 8

Investment mandate is important

Early

Markets

Expansion

TraditionalTechnology

Global Domestic

Sectors

Mature(Buy-out)

250+

0

50

Rev

enueCa

sh F

low

Pos

itive

Confidential 9

Thank you

Confidential 10

Gross realised returns - analysis

NZ PE gross realised return over time periods

Source: New Zealand Venture Investment Fund

1994-2000 2000-2004 2004-2008 2008- -

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1.8

3.1 2.8

1.9

Gro

ss R

etur

n M

ultip

le (x

)

Confidential 11

Gross realised returns – analysis (cont.)

NZ PE gross realised return distribution 1994 to 2010

Source: New Zealand Venture Investment Fund

<0.5x 0.5x-1x 1x-2x 2x-3x 3x-5x >5x -

5

10

15

20

25

30

13

7

24

9

15

6

Real

ised

Inve

stm

ents

Confidential 12

Market activity – Mid Market

NZ mid-market activity 2003 to 2011

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY110

50

100

150

200

250

300

Investments Divestments Average investment across all periods

Inve

stmen

t / D

ivestm

ent (

NZ$m

)

Source: New Zealand Private Equity and Venture Capital Monitor

Confidential 13

Market activity – LBO

NZ LBO activity 2003 to 2011

Source: New Zealand Private Equity and Venture Capital Monitor

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY110

200

400

600

800

1000

1200

0

50

100

150

200

250

300

350

400

450

500

Investments Divestments Average investment deal size (NZ$m)

Inve

stm

ent /

div

estm

ent (

NZ$

m)

Dea

l siz

e (N

Z$m

)