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www.earthcp.com | Strictly Private & Confidential

EARTH CAPITAL PARTNERS

TBLI Better structure allows for better distribution11th November 2010, London

www.earthcp.com | Strictly Private & Confidential2Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.

CONTENTS

• Where have we come from?

• Drivers Behind Sustainable Investment

• Platform & Products

• Investment focus

• Integration of Environment, Social & Governance (ESG)

• Conclusion


CS/Tremont HFRI

S&P 500MSCI World

Barclays Agg. Bond

DJ STOXX 50 FTSE 100

Citi Gov. Bond

CS High Yield II General CB Arb.

Dedicated Short EM

Eq Mkt Neutral

Event Driven Distressed

ED Multi-Strategy Risk Arb. FI

Global Macro Equity L/S

Managed Futures

Multi-Strategy

S&P 500 100% - - - - - - - - - - - - - - - - - - - -

MSCI World 94% 100% - - - - - - - - - - - - - - - - - - -

Barclays Agg. Bond 1% -3% 100% - - - - - - - - - - - - - - - - - -

DJ STOXX 50 78% 81% -17% 100% - - - - - - - - - - - - - - - - -

FTSE 100 76% 81% -10% 86% 100% - - - - - - - - - - - - - - - -

Citi Gov. Bond -2% 9% 57% -33% -14% 100% - - - - - - - - - - - - - - -

CS High Yield II 58% 58% 20% 46% 48% 4% 100% - - - - - - - - - - - - - -

CS/ CS/Tremont 57% 63% 9% 54% 50% 1% 55% 100% - - - - - - - - - - - - -

Tremont CB Arb. 24% 27% 3% 25% 24% -6% 50% 50% 100% - - - - - - - - - - - -

Dedicated Short -77% -76% 7% -57% -59% 2% -56% -54% -28% 100% - - - - - - - - - - -

EM 59% 67% -1% 60% 59% -6% 53% 75% 36% -56% 100% - - - - - - - - - -

Eq Mkt Neutral 38% 44% 4% 28% 32% 17% 32% 42% 36% -32% 42% 100% - - - - - - - - -

Event Driven 60% 66% -7% 55% 54% -7% 68% 79% 58% -61% 70% 44% 100% - - - - - - - -

Distressed 57% 63% -6% 50% 49% -6% 68% 69% 52% -58% 61% 38% 93% 100% - - - - - - -

ED Multi-Strategy 54% 60% -9% 53% 51% -11% 61% 79% 58% -55% 70% 42% 94% 76% 100% - - - - - -

Risk Arb. 48% 54% 1% 38% 41% 11% 48% 54% 42% -51% 52% 37% 66% 55% 64% 100% - - - - -

FI 12% 16% 7% 14% 13% -3% 37% 43% 49% -13% 29% 28% 39% 36% 40% 19% 100% - - - -

Global Macro 22% 26% 23% 24% 22% 3% 25% 73% 33% -15% 50% 34% 42% 36% 44% 26% 42% 100% - - -

Equity L/S 66% 73% 5% 57% 57% 10% 54% 87% 39% -70% 72% 42% 75% 66% 73% 61% 27% 46% 100% - -

Managed Futures -1% 3% 24% -6% -3% 27% -8% 26% -7% 2% 3% 16% 1% 3% -2% -2% 2% 38% 16% 100% -

Multi-Strategy 27% 34% 1% 23% 22% 11% 43% 56% 56% -27% 39% 31% 50% 44% 52% 36% 37% 35% 48% 7% 100%

AVERAGE OF 36M CORRELATIONS

Note: The data provided above for "Equity Market Neutral" does not take into consideration the impact of fraud-related hedge fund blow ups. Correlations are based on monthly performancesSource: Dow Jones Credit Suisse, Bloomberg

31 January 1994 to 31 December 2009

> 60%

< +/-30%

< -60%

Source: Credit Suisse Liquid Alternatives ,Alpha Strategies Group


CS/Tremont HFRI

S&P 500MSCI World

Barclays Agg. Bond


Citi Gov. Bond


Dedicated Short EM

Eq Mkt Neutral




Managed Futures

Multi-Strategy

S&P 500 100% - - - - - - - - - - - - - - - - - - - -

MSCI World 97% 100% - - - - - - - - - - - - - - - - - - -

Barclays Agg. Bond 31% 36% 100% - - - - - - - - - - - - - - - - - -

DJ STOXX 50 89% 90% 8% 100% - - - - - - - - - - - - - - - - -

FTSE 100 88% 91% 32% 91% 100% - - - - - - - - - - - - - - - -

Citi Gov. Bond 21% 28% 82% -7% 13% 100% - - - - - - - - - - - - - - -

CS High Yield II 76% 80% 27% 72% 72% 7% 100% - - - - - - - - - - - - - -

CS/ CS/Tremont 70% 78% 15% 68% 72% 10% 76% 100% - - - - - - - - - - - - -

Tremont CB Arb. 61% 68% 28% 63% 68% 0% 82% 85% 100% - - - - - - - - - - - -

Dedicated Short -73% -68% -8% -72% -70% 8% -58% -40% -35% 100% - - - - - - - - - - -

EM 74% 83% 32% 69% 73% 23% 76% 92% 85% -44% 100% - - - - - - - - - -

Eq Mkt Neutral 57% 65% 31% 53% 54% 40% 51% 69% 56% -21% 71% 100% - - - - - - - - -

Event Driven 68% 75% 5% 71% 74% -2% 70% 96% 83% -39% 88% 65% 100% - - - - - - - -

Distressed 72% 76% 0% 73% 72% -6% 74% 93% 81% -42% 84% 59% 96% 100% - - - - - - -

ED Multi-Strategy 64% 71% 8% 67% 72% -1% 64% 94% 80% -36% 86% 66% 99% 90% 100% - - - - - -

Risk Arb. 61% 70% 42% 49% 62% 40% 64% 77% 67% -33% 80% 54% 68% 64% 67% 100% - - - - -

FI 69% 73% 28% 63% 65% 6% 83% 84% 90% -44% 84% 50% 78% 81% 72% 64% 100% - - - -

Global Macro 31% 40% 42% 18% 33% 37% 41% 72% 64% -3% 69% 59% 61% 53% 63% 66% 59% 100% - - -

Equity L/S 76% 85% 24% 75% 82% 15% 72% 94% 80% -50% 92% 69% 91% 85% 91% 81% 76% 65% 100% - -

Managed Futures -17% -13% 2% -23% -11% 23% -26% 14% -12% 12% 0% 18% 6% -2% 11% 13% -15% 48% 12% 100% -

Multi-Strategy 64% 71% 9% 66% 67% -4% 81% 96% 92% -34% 88% 61% 94% 93% 91% 72% 86% 63% 87% -2% 100%

CRISIS CORRELATIONS – A SEA OF RED EMERGES….31 January 2007 to 31 December 2009

> 60%

< +/-30%

< -60%




CS/Tremont HFRI

S&P 500MSCI World

Barclays Agg. Bond


Citi Gov. Bond


Dedicated Short EM

Eq Mkt Neutral




Managed Futures

Multi-Strategy

S&P 500 100% - - - - - - - - - - - - - - - - - - - -

MSCI World 98% 100% - - - - - - - - - - - - - - - - - - -

Barclays Agg. Bond 27% 32% 100% - - - - - - - - - - - - - - - - - -

DJ STOXX 50 88% 89% 8% 100% - - - - - - - - - - - - - - - - -

FTSE 100 89% 91% 28% 91% 100% - - - - - - - - - - - - - - - -

Citi Gov. Bond 25% 31% 78% 0% 18% 100% - - - - - - - - - - - - - - -

CS High Yield II 76% 79% 27% 72% 70% 10% 100% - - - - - - - - - - - - - -

CS/ CS/Tremont 72% 79% 19% 68% 73% 15% 80% 100% - - - - - - - - - - - - -

Tremont CB Arb. 61% 67% 30% 63% 66% 4% 83% 87% 100% - - - - - - - - - - - -

Dedicated Short -77% -72% -3% -71% -71% 7% -57% -46% -36% 100% - - - - - - - - - - -

EM 77% 85% 32% 73% 75% 26% 82% 93% 86% -52% 100% - - - - - - - - - -

Eq Mkt Neutral 61% 68% 28% 53% 55% 43% 54% 67% 54% -32% 70% 100% - - - - - - - - -

Event Driven 73% 78% 9% 72% 76% 2% 75% 96% 84% -52% 88% 65% 100% - - - - - - - -

Distressed 73% 75% 4% 71% 70% -2% 78% 92% 81% -51% 84% 58% 97% 100% - - - - - - -

ED Multi-Strategy 71% 76% 11% 70% 77% 4% 71% 95% 83% -51% 88% 67% 99% 91% 100% - - - - - -

Risk Arb. 64% 73% 40% 52% 65% 44% 67% 79% 69% -37% 82% 57% 71% 64% 72% 100% - - - - -

FI 65% 68% 32% 60% 58% 8% 83% 84% 90% -41% 83% 45% 78% 81% 74% 62% 100% - - - -

Global Macro 29% 37% 48% 15% 30% 41% 43% 70% 65% -4% 66% 53% 58% 50% 60% 65% 59% 100% - - -

Equity L/S 79% 87% 22% 76% 84% 19% 74% 93% 79% -57% 93% 69% 91% 82% 93% 82% 71% 61% 100% - -

Managed Futures -16% -10% 11% -25% -8% 38% -27% 14% -12% 15% 5% 20% 5% -7% 13% 17% -18% 49% 14% 100% -

Multi-Strategy 65% 71% 12% 66% 67% 1% 84% 95% 93% -39% 89% 60% 93% 92% 91% 74% 86% 62% 86% -5% 100%

LAST 36M CORRELATIONS – LITTLE REDUCTION BUT SOME….

30 September 2007 to 31 August 2010

> 60%

< +/-30%

< -60%




SUSTAINABLE INVESTING

Ethical considerations

Seeking interesting return properties

– Outperformance

– Correlation properties

– Lower risk

Respecting legal or regulatory constraints

Minding one’s reputation as an investor



Thematic approach:

clean energy, clean technology, water and waste water management

Screening:

Negative Screening

exclude environmentally harmful companies

Positive screening

“Best-in-Class”: select environmental leaders in each sector

Engagement:

Establish a dialogue on environmental and sustainability issues with the companies to change their practices.



• “Is environment protection an investment theme for you?”

86.3% of respondents consider environment protection an investment theme, 13.7% do not

Small-size investors are more concerned about green investing than medium size investors

– 100% of small-size investors (AUM <100mn)

– 23.6% of middle-size investors (AUM between 100mn and 10bn) do not consider this factor.

EDHEC-Risk survey released February 201097 European Institutional Investors, approx €300bn AuM



“Is sustainable development a specific investment sector?”

62.1% consider as an investment criterion across all sectors

21.1% consider it as a specific sector

16.8% consider it as both.

Most investors consider screening approaches across sectors rather than or in addition to thematic investments. EDHEC-Risk survey released February 2010

97 European Institutional Investors, approx €300bn AuM



“Do you differentiate between sustainable development (SD) and socially responsible investing (SRI)?”

For 61.9% SD and SRI are two identical concepts.

Among the remaining 38.1% of respondents:

– 60% consider that SRI encompasses issues beyond SD (such as social and corporate governance issues).

– 25% believe that SD encompasses issues beyond SRI.

– 15% think that SRI and SD refer to two distinct sets of issues.





“Some so-called socially responsible investing is effectively PR-seeking and a poor use of fiduciary funds.”

“We are working towards the integration of ESG factors…in order to help create returns that are sustainable in the long-term.”

Different respondents have conflicting views on the motivations behind sustainable investing, as evidence by the following statements of two survey participants…….




50% of respondents consider that a lack of credible standards is the biggest obstacle for them to adopt green investing criteria.

Limits to invest in green business

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

Relatively lowreturns

Higher risk Insufficientoffers

lack ofknowledge

Insufficientinformationabout offers

Lack ofcredible

standards


CONTENTS




• Investment focus


• Conclusion


Socio-economic security

Food

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Ris

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20th Century

21st Century

‘Health’

‘Resource’

En

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Wate

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Cli

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$ $


CONTENTS





• Conclusions


EARTH CAPITAL PARTNERS LLP

Strong, scalable infrastructure and governance

ECP Platform

CLEAN-TECH / VENTURE FINANCE FUNDS

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Ma

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Sp

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(Administration, risk management, sustainability, compliance, etc.)

FORESTRY & AGRICULTURE

FUNDS

RENEWABLE ENERGY FUNDS

WATER FUNDS

ENVIRONMENTAL COMMODITIES FUNDS

Investors

Projects


RENEWABLE ENERGY KEY DRIVERS

Key drivers for renewable energy growth include climate change mitigation, national and regional energy security and increasing energy demand

(1) IPCC (2008)(2) ERSTE Group (2009)(3) EIA (2008)(4) HSBC (2009)

Climate Change Energy security

Increasing demand Economic stimulus

Long-term renewable capacity growth

Oil & gas price volatility(2)Increasing global temperature(1)

Economic stimulus spend (biased to 2009-11)(4)Global energy demand forecast(3)

Other drivers

• Falling costs

• New technologies

• Distributed generation

• Limiting future compliance costs

Other drivers

• Falling costs

• New technologies

• Distributed generation

• Limiting future compliance costs


MARKET OVERVIEW: INVESTMENT OPPORTUNITY

•Sustained and significant investment activity to date(1) – looking ahead, an estimated US$5 trillion investment opportunity to 2030 in new renewable energy capacity globally(2)

(1) REN21 (2009)(2) World Economic Forum, Green Investing

(2009)(3) SEFI (2010)(4) IEA

WEO refers to World Energy Outlook, an annual report by the International Energy Agency. The different forecasts relate to the amount of spend required to achieve different carbon dioxide targets to limit the impact of climate change.

US

$ bn

“…the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply.” (4)

Annual investment forecast to 2030Annual investment in renewable energy (2005-09)(3)


FORESTRY DEMAND DRIVERS

Environmental ServicesCarbon Example - Estimated Annual Carbon Abatement Potential Sources 2030 (4)

Population & Income GrowthIndustrial Roundwood Use per Capita by Region (1)

Energy Efficiency Life Cycle Energy Use Index for Large Storage Structures by Design Type - example (3)

Renewable Energy/ BiomassScenarios for Forecast Global Bioenergy in Primary Energy Supply (2)

Long term global timber demand growth

0

100

200

300

400

500

Wood Steel Concrete

Sources:

(1) FAO SOWF2009(2) EC/IIASA (2007)(3)Athena Sustainable

Materials Institute(4) Vattenfall (2007)

0.0

0.5

1.0

1.5

2.0

Africa Asia LatAm &

Caribbean

Europe Northern

America

Oceania

Cu

bic

Met

res

Strong Growth With Income

2000 20 40 60 80 2100

‘TRADITIONAL’ ‘NEW’

0

20

40

60

80

100

2030

Forestry (25%)

Other

26.7bnT C02


Source: ‘Bioenergy and Earth Sustainability (presentation ESSP workshop)’ IIASA (2008)

LATIN AMERICA & AFRICA: AVAILABLE, SUITABLE LAND

Climatic Suitability for Herbaceous and Woody Lignocellulosic Plants on Available Grass-Scrub-Woodland


ECP FUNDS IN THE MARKET

RENEWABLE ENERGY FUND

• €750m fund deploying capital in the construction and operation of solar and biomass fuelled energy projects

• Europe, the Middle East and North Africa

• Combined skills of ECP and E.ON Climate & Renewables (technical partner)

FORESTRY FUND

• $250m fund deploying capital in mature and green-field timberland (plantation assets)

• Latin America

• Experienced team of private equity and timberland investment professionals


CONTENTS





• Conclusions


INTEGRATION OF ESG

• Sustainable Development Investment Guidelines

• ‘No-goes’: Primary Forests; High Conservation Value Forests; Critical Natural Habitats

• ‘Minimum Standards’ Sustainable Forest management Practices; Equator Principles; Social Accountability 8000

• Investment process

• Investment Committee TOR

• Earth DividendTM

• Methodology benchmarked against and cross-references to international standards

• SD impact, defining +ve, -ve and neutral impact for 30 ESG indicators

• Resource Consumption; Ecosystem Services; Pollution; Social & Economic Contribution; Society & Governance

• Internal and external assurance

Investment decision making Portfolio monitoring & reporting

Benchmarked to recognised international standards, including IFC Performance Standards and Global Reporting Initiative G3 Sustainability Reporting Guidelines – the global standards for SD performance and reporting respectively


EARTH DIVIDENDTM

• Baseline assessed during acquisition due diligence

• Updated and reported to investors annually

• Provides investee projects with a practical commercially ‘value-adding’ platform to guide sustainability performance

• Provides investors with evidence of impact & performance improvement

Example Earth DividendTM from a Brazilian forestry plantation

-6

0

+6

+6+6

+6 +6

0

0 0

0

Clear measure of the contribution to Sustainable Development


The Earth DividendTM from a bio fuel plantation in Brazil. Example Earth DividendTM from a Spanish PV project


CONTENTS





• Conclusions


CONCLUSIONS

• Statistics work fine until you really need them…..

• Large scale investment opportunity in sustainable assets

• Institutional credibility & scale with stable, commercial rates of return

• Close alignment to the needs of long term investors with long term liabilities to meet

• Earth DividendTM – effective measure and reporting of impact

• Listen to what your clients want…….


Earth Capital Partners LLP is authorised and regulated by the Financial Services Authority.This material is for distribution only under such circumstances as may be permitted by applicable law. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The contents of this document should not be treated as advice relating to legal, tax or investment matters and prospective investors are advised to consult their own professional advisers.

Neil [email protected]

+44 (0) 20 7811 4500

CONTACT

LONDON RIO DE JANEIRO34 St James’s Street R.Ferreira de Almeida, 42St James’s Alto da Boa VistaLondon SW1A 1HD Rio de Janeiro – RJ - Brazil

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