Private Equity India Art Fund

METRIC INDIA ART FUNDMETRIC GLOBALINDIAN MULTINATIONAL

MAPPING VALUE GLOBALLY !!

GROUP 4

Contents METRIC Global Objectives Investment Considerations Investment Paradigm Art Market - Destination Investment Theme Investment Allocation Investment Criteria


METRIC GLOBAL Is a fast growing Investment advisory and Boutique

Private Equity group It was started in 2004 by four SPJCM Grads Operates from 5 Locations: Mumbai, Singapore, Dubai, Shanghai, New York Current Assets under Management US $500 million Current Funds are divided into three family of Funds: METRIC India Real Estate Fund – US $175 million METRIC BRIC Special Situation Fund – US $150 million METRIC Emerging Market Alternate Asset Fund – US $125 million


METRIC INDIA ART FUND (MIAF): OBJECTIVE

The fund aims to build & finance the Art Industry as a whole Investment in publicly traded companies associated with the

Industry Investment in Museums, Art Galleries & Private assets

promising high growth Primary objective is to bring transparency in the Investments in

ART Bridging the Gap of Financial markets & Art as an asset class It would operate both as investor in works of Art And as a Structured Fund Manager investing in the Sector Emphasis would be to take the advantage of the untapped Art

market


INVESTMENT CONSIDERATIONS• The investment of significant levels of new money in the global art market

results in a preparing ground for businesses that serve stakeholders, art investment, and promotion processes worldwide

• Existing non-artisan corporate players have the first mover advantage as they shape and develop the emerging Art Industry

• The economic benefits from value appreciation are distributed in favor of intermediaries and other art businesses (and thus tend to be limited for artists and art buyers)

• Globalization of the Art Industry is inevitable and is fuelled by ease of transport / spread of artistic concepts, global nature of all industries serving high net worth individuals (consuming the best rather than local) and lack of regulation around the world

• However, the existing presence of art market is mainly reflected today in the auction and art fair segments of the art industry, leaving significant opportunity for further consolidation


INVESTMENT PARADIGM

• Creating, collecting & investing in art is an increasingly global activity with open access

• Significant returns from Art assets have spurred Art Investments as a separate asset class in the Portfolio

• Rapid emerging business in high growth segment of the global economy

• The business is also serviced by other business like media, IT, Finance, Manufacturing, Specialty Retail, Logistics and Security together forming ‘Art Industry’

• Emergence of Art houses, galleries, & Auction houses have bought transparency in the deal size.


The Art Market………Next Destination

In 2006, the assets of HNI’s grew by 11.4% to USD 37.2 trillion, showing the first double-digit growth in seven years

The number of HNI’s in the world increased by 8.3% to 9.5 million, and the number of ultra-HNI’s grew by 11.3% to 94,970. The largest growth of HNI population occurred in

Singapore(21.2%) India (20.5%) Russia (15.5%) the Middle East (11.9%) Latin America (10.2%) China (7.8%).(Merrill Lynch / Capgemini World Wealth Report 2007)

Christie's & Sotherby's Total annual auction sales

6

8.2

11.1

2005

2006

2007

YE

AR

S

SALES

SALES


•Requirements of Different Asset classes for Portfolio Diversification•BRIC countries are becoming more active in the Art market thus providing more liquidity in the sector•Increase disposable income in the hands of people to economic boom can be leveraged upon.

METRIC INDIA ART FUND (MIAF)INVESTMENT THEME

Private Equity – 60%

•High Growth Assets•Personal Arts•Auction Houses•Art Galleries•Historical Monuments

Public Equity – 30%•Equity Listed in Bourses•Ancillary Businesses


Liquid Funds – 10%•Treasury Bonds•Liquid Funds•Term Funds

From Investing in Art Investment in Art Industry

Art Industry – Private Equity


Business

•Auction Houses•Museums•Galleries•Online Stores•Specialty Stores

Services

•Security Services•Software IT (Art oriented•Supply Chain Management•Financial Services

Media

•Art Magazines•Event Management firms•Value services firms•Media Channels

Investment Criteria• Proven business model, scale-up potential• With strong international expansion potential• Significant and quantifiable barriers to entry• Strong management team and a clear path of succession, including

retention of exiting owners at the board level in active and clear management strategies

• Customary protection of minority shareholders rights, right of first refusal, drag along, tag along and other customary provisions

• Active board participation granted to METRIC Team, ongoing assistance with finance, M&A, international business development and investor relations functions

• Clear exit strategy over 5-year time horizon, including more than one option and allowing for over 25% in annualized IRR

• Deal size in excess of INR 1 million; for deals above USD 20 million in size co-investors would be invited


Investment Criteria – Segment Wise


Business

•Auction Houses•Museums•Galleries•Online Stores•Specialty Stores

Services

•Security Services•Software IT (Art oriented•Supply Chain Management•Financial Services

Media

•Art Magazines•Event Management firms•Value services firms•Media Channels

•Later Stage companies•Scalable Business Model•Improving Cash flows•4-5 years of track record•International expansion•Later Stage companies•Broader resource of Product•Technologically upgraded•3-5 years of Track record•Development Stage•Min net worth of INR 10 mn•Management Dependent•Metros (MUM & DEL)





Education

Private Equity India Art Fund