Www.sustainasia.com© Copyright 2010 SustainAsia Ltd. All Rights Reserved Clean Technologies Investment World Asia 2010 © Copyright 2010

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© Copyright 2010 SustainAsia Ltd. All Rights Reserved

Clean Technologies Investment World Asia 2010

www.sustainasia.com


Post-conference Masterclass

Establishing and Structuring a CleanTech Fund

Post conference Masterclass / 9:00 am to 12:30pm - 3 September 2010, Hong Kong

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Establishing and Structuring a CleanTech Fund

9:00 (Part I) Introduction and overview of investment and legal strategy in cleantech funds

Facilitated by:– Christopher Tung, Partner, K&L Gates, Hong Kong – Christopher Bongars, Founder & CEO, SustainAsia, Hong Kong

10:00 (Part II) Setting up a parallel fund structure in Hong Kong and China

Facilitated by:– Michael Chan, Partner, K&L Gates, Hong Kong – James Chen, Partner, K&L Gates, Taiwan

11:00 (Part III) Opportunities and risks for funds in carbon trading and finance

Facilitated by:– Christopher Tung, Partner, K&L Gates, Hong Kong – Rutger de Witt Wijnen, Partner, De Brauw, Netherlands– GeertPotjewijd, Resident Partner, De Brauw, China

12:00 Question and Answer and Panel Discussion

12:30 Lunch

MasterclassProgram

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Establishing and Structuring a CleanTech FundAbout SustainAsia

Defining the right strategy & positioning

What are the Key Success Factors?

Adding value across the entire investment cycle

Selecting quality investment opportunities

MasterclassPart I

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About SustainAsia

Sustainability and clean & green technologies Focus on the Asia Pacific region Since 2005, we provide services, expertise and tools to high

performance companies and investors

CONSULTING

Independent expertise on cleantech&greentech as well as environmental and energy infrastructure investments

Assessment of risks and opportunities, as well as due diligence of private equity investments, project financing or M&A transactions.

Asia Pacific partner of Enablon, a global leader of governance, risks and compliance IT solutions

Joint Venture partner in Greenware, a provider of next generation end-to-end wireless intelligent monitoring solutions.

TECHNOLOGY

INVESTMENTSingapore

Shanghai

Auckland

Associates & Partner firms

Brisbane

Main Offices

Melbourne

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Investment Advisory

Innovate & accelerate

SustainAsia selects and assists high-potential technology and service companies in the clean & green technology and eco-efficiency sectors to accelerate their growth in the Asia Pacific region.

Research, evaluate, execute & exitSustainAsia advises financial services and investment groups on investment risks and opportunities in clean & green technology, energy and environmental infrastructure in the Asia Pacific region.

As a technology and industry expert, SustainAsia provides research and transaction services for the independent assessment and due diligence of targeted companies during private equity investment and merger & acquisition transactions.

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MasterclassPart I

Establishing and Structuring a CleanTech FundDefining the right strategy & positioning




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Defining the rightstrategy & positioning

The designation “clean technologies” (“CleanTech” in short) are used interchangeably to designate solutions, products or services with innovative and high knowledge content, aimed at optimizing the use of natural resources (water, energy, raw materials, etc.) and reducing their ecological impact – for instance the quantity of greenhouse gas emissions, also known as ‘carbon footprint’ – while adding economical value:

AgricultureBio-materials and organic products (e.g. eco-textiles)Micro-irrigationNatural pesticides and bio-fertilizersBio-fuelsClimate change adaptation technologies

EnergySolar PhotoVoltaic (PV) Concentrated Solar and Solar ThermalWindBio-mass, bio-gas, waste-to-energyHydro (small & medium), geothermalSea wave and currentTransmission & Distribution ('smart grids')Fuel cellsUltracapacitors and batteries (storage)Energy efficiency and low carbon (solutions & services)

Industry and ConstructionMaterials (including recovery and recycling)Green ChemistryNew generation sensors & wireless solutionsHeat pumpsConstruction materials (isolation, BIPV)Green buildings (LEED certified)

TransportElectric vehiclesHybrid vehiclesFuel cellsSterling enginesIntegrated systems(e.g. "fleet tracking")Modal transportation solution

WaterWater resources managementWater recyclingBiological treatmentsPurification & UV disinfectionMicro-Filtration (MF) & Ultra-Filtration (UF)Desalination and Reverse Osmosis (membranes)Phytoremediation, micro-algaesSmart meters

Photo: hybrid vehicle (hydraulic technology) in China

Photo: BIPV concept (Building Integrated PhotoVoltaics)

Photo: Advanced UV disinfection

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Cleantechisa youngindustry. Today the main bulk of investments in innovation and intellectualpropertyisstilloccuring in Europe and NorthAmerica. This trend willstartreversing in the years to come, with the rise ofcleantech‘champions’ in Asia Pacific exportingtheirown technologies

Cleantechsolutions: a global market.Asia (and China in particular) isalready a formidable platform for the manufacturing and exporting of highlycompetitiveCleantechproducts to international markets. In parallel, givenitsrapideconomicgrowth, the demand for Cleantechproducts& services inAsiaisstrong

Technologytransfersare accelerating.Cleantechcompanies are actively seeking an international presence through strategic M&A transactions.

The identification of strategic&technological gaps is a key aspect of the anyfundinvestmentstrategy

Avoidance of hot sectorsover-invested or over-subsidized

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Type of fund

Early stage (seed money) = Angel Fund

Pre-profit stage = VC Fund

Growth stage = PE Fund

Late stage (pre-IPO) = LBO/MBO, Mezzanine

Geographic focus

Global mandate

Regional mandate: Asia, Australasia, South Asia, ASEAN

Country-focus: China (or greater China), India, Korea, etc.

Fund raisingFund Size and Currency Denomination (onshore/offshore)

Investors Profile (institutionals, family offices, individuals)

DealflowIntermediated vs. proprietarydealflow (local and global network)

Internalvs. outsourced PE research and analysiscapabilities

Balanced vs. sectorspecific (cleantech) focus

Clean energy(Clean Energy = RE/EE) % allocation

Supplyside = RenewableEnergy (RE) and demandside = EnergyEfficiency (EE) and otherclean energy (lowcarbon) projects and climate mitigation and adaptation technologies

Othercleantechsectorsin Agriculture, Industry& Construction, Transport, Water includingnon-energyrelatedClimatech % allocation

Focus of this presentation =

VC/PE

Focus of this presentation =

VC/PE

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Type of targets

Early/growth stageunlistedcompanies of the industrialCleantechsector focus. High value addedProducts and/or Services in the value chainwith a leadership positionin theirdomesticmarket and with a clearinternational developmentstrategy

Profile of targets

Technology companies, equipment manufacturers, distributors and installers, engineering service companies, project developers, EESCOs, project specific special purpose companies, independent power producers, energy and water utilities or end users, etc.

AmountinvestedTransaction size and limits (% of the Fund size per transaction) Series A ou B (or later) Shares? Possibility of co-investments ?

% of participation

Minority or majoritystake? Governancecriteria: representation and veto powersat the board

Number of investments

Numberinvestmentsper yearover the investmentperiod (extension?)

Investmentperiod and Type of exit

Trade sale to strategicinvestoror financialinvestor (later stage rounds withothercleantech PE fund) or IPO (onshore/offshore)

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MasterclassPart I

Setting-up a clean technology fund in AsiaDefining the right strategy & positioning




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What are theKey Success Factors?

A clear investment strategy with a systematic approach to adding value through the entire investment process and delivering high returns to investors

A well targeted positioning to capture Cleantech emerging opportunities and to address high value strategic and technological gaps through a global network of professionals and partners

Strong combination of experience and skills: a unique and diversified team with deep industry expertise, local knowledge and all the skills needed for quality investments

Active and credible sponsor with solid track record: a long established presence with a proven infrastructure

A rigorous investment methodology: systematic, robust and responsible investment selection, execution, management and exit processes

Balanced investment opportunities: access to an on-going diverse and proprietary deal flow

Optimized investment structure: a transparent and safe investment vehicle with full management and advisory capabilities in the selected geography

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MasterclassPart I

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Adding value across the entireinvestment cycle

Investment Committee (Fund Management Co.)

Investment Committee (Fund Management Co.)

Advisory or Supervisory BoardSponsor + Strategic Advisors + Nominees of Investors (Limited Partners)

Advisory or Supervisory BoardSponsor + Strategic Advisors + Nominees of Investors (Limited Partners)

External Advisors & Experts

LegalAdvisor

Financial Advisor

Auditor

+ Industry Experts by

theme (depending on

targets)

External Advisors & Experts

LegalAdvisor

Financial Advisor

Auditor

+ Industry Experts by

theme (depending on

targets)

Investment & Management Team (full-time professionals)

Dedicated Partners for origination, transaction & exit, plus fund raising and investors relations) + dedicated team for Research, Analysis & Investment Management and Execution of investment & divestment

transactions

Investment & Management Team (full-time professionals)

Dedicated Partners for origination, transaction & exit, plus fund raising and investors relations) + dedicated team for Research, Analysis & Investment Management and Execution of investment & divestment

transactions

Typical VC/PE fund organization: team

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Excellence across the entire value chain

Proprietary Sourcing

Proprietary Sourcing

Sourcing & Screening

Permanent

Sourcing & Screening

Permanent

Investing

2-6 months

Investing

2-6 months

Building Value

2-3 years

Building Value

2-3 years

Divesting

6-12 months

Divesting

6-12 months

Intermediated Sourcing

Intermediated Sourcing

Structured Investment

Process

Structured Investment

Process

Proven due diligence network

Proven due diligence network

Managing transaction

parties

Managing transaction

parties

Strategic AdvisoryStrategic Advisory

Continuous MonitoringContinuous Monitoring

Value Roadmap and KPI

Value Roadmap and KPI

PositioningPositioning

Advisor SelectionAdvisor Selection

Coordination of parties

Coordination of parties

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Typical due diligence and audit team: industry and professional expertise

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MasterclassPart I

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18

Step 1: Deal Selection

Deal SourcingDeal IntroductionFirst Screening (Internal)Meet Target (NDA)Evaluation & Project ReportSecond Screening*

Step 2: Term Sheet

Internal Due Diligence Revised Project ReportTerm Sheet (DRAFT) and Preliminary Investment Decision*Negotiation of Terms & Conditions with Target

Step 3: Closing

Internal & External Due Diligence (Legal, Financial, & Industry Review)Term Sheet (FINAL) and Final Investment Decision*Closing Transaction (Documentation)

Approval

Step 4: Management

Participation to the Board and Provision of Strategic GuidelinesSupervise Key Mngt StaffStrategic Decisions (by monitoring committee)*Quarterly Reporting

Step 5: Exit

Review exit optionsDivestment Decision*Implement exit options and distributions

* Each stage of the investment process requires prior approval of the Investment

CommitteeApprova

l

Approval

Approval

Investment criteria (stage, size, sector, company profile)

Commercial Factors

Financial Factors

Non-financial factors (including governance and Responsible Investment policies, if

applicable)

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SustainAsia is providing consultancy services to accelerate the market entry into Asia, of an innovative water disinfection technology company, through extensive market assessment, business planning and implementation, identification and selection of strategic partners, as well as identification of 'early adopters'.

Access to Asian market, initial promotion and representation steps, setting up distribution channels and demonstration project. Introduction to leading industry players.

“We approached SustainAsia to help initiate and build our base and distribution network throughout China and South East Asia. SustainAsia’s deep knowledge of the region, its water industry, the business culture and their wide network of relationships were key factors in our successful launch and our flourishing business in Asia”

OdedRose, Executive Vice

President, Atlantium Ltd

Market acceleration & technology transfer

Long term value delivered


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SustainAsia provides independent and confidential technical and operational reviews, before, during and after construction of the project, to ensure that the design, construction, operation and management systems \are meeting applicable internationally recognized standards

SustainAsia provides the necessary due diligence and audits for assessing operational risks, execution risks, as well as the implementation of cutting edge eco-efficiency practice

Fact findings and independent assessment of the growth opportunities as well as technology, industrial and operational risks faced by the investors. Validation of key assumptions in the financial model

Due diligence & audit – Infrastructure



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SustainAsia is mandated by several private equity investment and asset management firms to conduct independent assessments and due diligences of several clean technology companies in China, prior to a growth capital expansion transaction.

Our due diligences comprise site visits, interviews with management, technical auditing and market assessment, report on observations, analysis and recommendations, and contribution to the investment memorandum.

Independent and unbiased expert opinion, clarification on ‘key’ aspects of the transaction as well as possible technology & execution ‘deal breakers’ resulting in a more accurate valuation of the targeted company

“We engaged SustainAsia to help us evaluate an investment opportunity in the environmental services space and we found their services invaluable: they were able toget our team up to speed on the landscape in

China, and subsequently, help us evaluate the investment during site visits offering real expertise. Throughout our due diligence process, SustainAsia was a great resource and gave us comfort on many issues.”

Vinay Kumar, Vice President AEA Investors

Due diligence & audit – PE investment



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Thank You

Any question or inquiry shall be directed to:

Christophe BONGARSFounder and CEO, SustainAsia Ltd3905 Two Exchange Square, Suite 7495, 8 Connaught Place, Central, Hong Kong

E-mail: [email protected]: (852) 3667 9118www.sustainasia.com

Documents

Www.sustainasia.com© Copyright 2010 SustainAsia Ltd. All Rights Reserved Clean Technologies Investment World Asia 2010 © Copyright 2010