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“Diamonds – Investors’ best friends”: an alternative asset to enhance the

return-risk profile of investors’ portfolios

April 29, 2015

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BV Diamond AGThe diamond industry – market dynamics and investment opportunitiesA structured approach to build physical diamond portfoliosFactors for succesful financial investments

Contents

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Specialist diamond investment advisory firm

Background professionals:

Harry Winston Dominion Diamond Corp De Beers / De Beers LV GIA Adveq Bank of America Merrill Lynch

Zurich (CH) and New York (US)

High security warehouse with customized spaces for precious assets

Experts in precious metals

Tax free storage options

Individual insurance solutions

Triesen (Liechtenstein)

BV Diamond AG BV Diamond AG is an Advisory firm specializing in building and managing physical diamond portfolios for qualified investors – a partnership between DAA and Trisuna.

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Trisuna High security facility in Liechtenstein for inspection and storage of diamonds.

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Source: De Beers, 2014; McKinsey & Company, 2014; Bain & Company, 2014; BVD Company Research, 2015

Diamond industry – value chain (2013) Major opportunities: inventory financing and physical portfolios.

Exploration &

production

Rough diamond trading

Diamond polishing & trading

Jewelry manufacturing & distribution

Retail sales of diamond jewelry

USD 18bn USD 18bn USD 25bn USD 51bn USD 79bn

4 companies with ~80% of sales

> 250,000 companies

Over 50 groups

1,000s of companies

10,000s of companies

De Beers Alrosa Rio Tinto Dominion ....

Leviev Group Steinmetz Pluczenick ...

RosyBlue Eurostar Chow Tai Fook ...

Stuller RosyBlue Tiffany Chow Tai Fook ...

Tiffany Richemont Swatch/Harry Winston, Walmart Group BlueNile Chow Tai Fook ...

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-12%

Regulated market(De Beers)

Market adjustmentphase Open market

Sources: BVD Company Research 2014; Rapaport, 2014

High quality polished diamond prices at wholesale level(Index basis January 1997: 100)

Diamond industry – structure and prices A competitive market with prices driven by supply and demand for physical diamonds.

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Sources: BVD Company Research 2014; Rapaport, 2014

Polished diamonds – 10 year price performance Solid price performance over 10 years – varying for different sizes and qualities.

*color D-F, clarity IF-VS2 **including purplish pink

0.5-0

.99ct*

1-1.99c

t*

3-3.

99ct

*

5-5.

99ct

*

Pink

**

Blue

Yello

w

Increase of diamond prices over last 10 years(2004-2014)

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Forecast rough diamond supply (2012 to 2030 in millions of carats)

Diamond supplySupply forecasted to significantly decrease over coming years.

Source: McKinsey & Company 2014; SNL Metals Economic Group, 2014

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McKinsey: supply-demand outlook(polished wholesale price)

Outlook – supply-demand gap

Supply will exceed demand in coming years – being key driver for price performance.

Source: Bain &Co., 2014; McKinsey & Company, 2014

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Investment approach – overview

Required: a structured approach to design, build and manage physical diamond portfolios – tailored to investor needs.

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Objectives(selection)

1(Aggressive

)

2 3(Diverse)

4 5(Conserv.)

Net Target return >20% p.a. 11-20% p.a. 8-10% p.a. 4-8% p.a. > 0%

Level of risk tolerance

High Significant Average Moderate Low

Physical ownership

Not required

Selective Partial Most Full (100%) required

Level of liquidity desired

Continuous > 1x p.a.

Significant0.2x-1x p.a.

Moderate ~ 0.2x p.a.

Some< 0.2x p.a.

None

Timing to build portfolio

Quick < 3 months

3-6 months

~6 months 6-9+ months

As needed

Timing to potent. liquidate portfolio

Quick < 3 months

3-6 months

~6 months 6-12+ months

As needed

Investment approach – objectives

Investor objectives to be analyzed and described systematically.

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IF VVS VS SI P

Carat (weight/size): 1 carat = 0.2 gram – investors to focus on 0.5ct+

Color: 11 grades from “D” (best) to “N” – investors to focus on to top segment (D-F)

Clarity: 14 grades from “IF” (no inclusion) to P – investors to focus on top quality (VS2 and better)

Cut: describes the shape of the diamond (e.g. round=brilliant) and quality of polishing – investors to focus on very good cuts and better

“4Cs” describing diamond quality – investors to focus on premium segment only.

Investment approach – portfolio design (I)

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Impact of clarity and color (prices of 1.00-1.50ct stone per carat in USD – based on Rapaport index)

Source: Rapaport, 2015 showing prices as of March 16, 2015

Significant differences in price – only high qualities to be considered for investments.

Investment approach – portfolio design (II)

24.200 USD/ct, D, FL/IF

Color

Clar

ity1.100 USD/ct, M, I3

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Individual diamonds in a portfolio are mapped according to their return-risk profile.

HigherLower

Inventory financing /

consignment

Level of risk

Rough diamond assets

15 x 1.0-1.06 ctD, IF (USD ~280.000)

20 x 2.01-2.28 ctD-F, IF-VS2

(~USD 1.000.000)

5 x 3.01-3.06 ctD, IF-VVS

(~USD 1.000.000)

4.33 ctE, VVS2

5.28 ctF, VS1

5.09 ctD, IF

5.16 ctD, IF

9.21 ctFancy Int.

Yellow

1.31 ctFancy Blue

Colored diamonds

White diamonds

Investment approach – portfolio design (IV)H

ighe

rLo

wer

Inve

stm

ent r

etur

npo

tenti

al

Illustrative example of a balanced USD 10 million portfolio

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Investment approach – portfolio build-upDiamonds to be sourced at global wholesale level by screening the market for best prices.

*1-1.1 ct. / D / IF / cuts: excellent

Illustrative example of price differences for top quality* 1ct diamonds – shown as discount offered to Rapaport index (as of March 16, 2015)

Investment focus

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Monitor and describe market developments

Customized financial reporting of client portfolio

Review of portfolio content (vs. target financial & qualitative objectives)

Define proposed portfolio adjsutments (incl. diamonds to be potentially divested)

Actively list diamonds for sale – with pricing strategy to reflect target time to liquidity

Investment approach – portfolio managementActive portfolio management to monitor portfolio development and to potentially adjust portfolio composition continuously.

Quarterly report

Q1/2015

Client: xvz

December 31, 2014

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Factors for successful investments

A number of requirements to be met for successful financial investments.

Objectives must be clear – need a view on desired risk-return profile of portfolio

Extensive market know-how – to assess attractiveness of segments

Access to wholesale market – need to avoid retail mark-ups

Pricing knowledge – by being engaged in buying and selling

Quality control skills – expertise to assess the individual quality of the diamonds

Minimize transaction costs – moderate and transparent costs

Manage taxes – knowledge of tax and regulatory considerations

Ensure security – experienced partners for logistics and storage

Avoid conflicts of interest – partners only with no interest to sell their own goods

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Disclaimer

The information contained herein has been prepared on a confidential basis solely for the benefit of selected, qualified individuals and entities for informational and discussion purposes only. It does not constitute an offer to sell or a solicitation of an offer to purchase an interest in an investment vehicle. All information contained herein is proprietary and confidential. Any reproduction or distribution of this document, in whole or in part, or the disclosure of its contents, without BVD’s prior written consent, is prohibited.

Recipients of this document should be aware that past performance data are not indicative of the future performance. Accordingly, there can be no assurance that the diamonds will achieve its investment objectives. Certain statements contained herein, including without limitation, the words "believes", "anticipates", "intends", "expects", "may", "plans", "projects", "will", "would" and words of similar import, constitute "Forward-Looking Statements". Such Forward-Looking Statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of the diamond purchases to be materially different from any future results, performance or achievements expressed or implied by such Forward-Looking Statements. Any analysis of potential investments in diamonds is necessarily based on past performance which is not necessarily indicative of future results. BVD cannot guarantee that they will actually achieve the plans, intentions or expectations expressed or implied in such Forward-Looking Statements. Investors should not rely on Forward-Looking Statements as representing the views of BVD or of any of its affiliates as of any date subsequent to the date set forth on the cover page hereof. Potential investors in any jurisdiction must ensure that they are able to validly invest in diamonds with resulting tax implications.

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Contact information

BV Diamond AG

Schliessa 16

9495 Triesen

Liechtenstein

T +423 392 31 31

F +423 392 31 33

info@bv-diamond.com

www.bv-diamond.com