Blue Chip Investing in the Green Economy Corporate Presentation
December 31, 2014
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Overview Founded April, 2007 Focused - Global equity
environmental theme fund OM, RSP eligible, FundSERV, RBC IS back
office $25 million AUM 120 accredited investors 8 foundations
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Introducing Greenchip Financial Corp. John A. Cook President
-Former President and COO, MaRS Discovery District -Former
President Invesco Canada -Former Executive VP, BPI Financial Corp.
Chuck Holt, JD, LLM, CAIA Vice President, Operations -Formerly
practiced corporate/commercial law at Shibley Righton Greg Payne,
PhD, CFA Vice President and CIO -Former portfolio manager, KBSH
Capital Management -Published economist Management Team Board of
Directors Guy Burry CEO and Chair, Tenth Power Corp. Rosamond Ivey
Chair, Ivey Foundation Tom Heintzman Managing Partner, JCM Capital
John A. Cook Chairman Greg Payne Secretary, Treasurer
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Investment Thesis Changing demographics, resource scarcity and
environmental degradation are creating historic opportunity for
renewable energy and resource efficiency technologies and
unimaginable risks for business models dependent on an endless
supply of cheap resources and the ability to pollute for free.
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Greenchips Response Blue Chip Investing in the Green Economy 5
illiquidity/busine ss risk exposure to environmental drivers
LowHigh Low High Private Equity Cleantech Small Cap SRI
Environmental Investment Universe Greenchip Fund
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Our Investment Universe 1) Over 700 companies 1) To qualify,
companies must meet environmental revenue tests Revenue over $1
billion 20% from environmental products Revenue over $100 million
50% from environmental products Revenue less than $100 million 100%
from environmental products 3) Greenchip Advisory Board Helps
determine grey area inclusion in our universe 6.
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Greenchips Environmental Sector Universe Equipment/Infrastruc
ture Materials/ServicesOperators/Producer s Food Agricultural
machinery Irrigation equipment Ag storage and distribution Seeds,
crop protection, fertilizers Weather and pricing data Food process
advances (e.g. enzymes, proteins) Corporate farms Ag land
aggregators Organic/natural products Organic/natural distribution
and retail Water Water treatment plants Water distribution pipes,
pumps and valves Metering and monitoring Leak detection Water
treatment chemicals Water utilities Energy Renewable generation
equipment Electricity transmission and distribution infrastructure
Metering and monitoring Demand response Biofuels/biochemicals (e.g.
enzymes, catalysts) Renewable utilities Biofuel/biochem producers
Energy Efficiency Efficient HVAC Green buildings Variable speed
motors Green building materials Power management semiconductors
Building efficiency services LED lighting Green building
managers/REITs Transportation Rail equipment Rail infrastructure
Buses Electric cars Biofuels Energy storage Tolling and ticketing
systems Public transit utilities Intercity rail operators Capital
Risk
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How Environmental Sectors Compare to MSCI industrial sectors 8
Source: Bloomberg, MSCI
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Focus on Value 1) Screen 700 Companies 1) Perform intensive due
diligence over 150 Companies Private equity heritage Management
interviews and competitive analysis Use DCF modeling to determine
target price 1) Concentrated Portfolio 30 to 35 Companies Invest
with conviction Low turnover Disciplined sellers 9.
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Portfolio holdings fall into three thematic areas
(approximately) Efficient Infrastructure Diversified industrials
Engineers and Contractors Utility equipment manufacturers Renewable
utilities Fast-growing environmental leaders with superior products
and services Biofuels Li-ion batteries LED lighting Etc. 50% of
portfolio 30% of portfolio 20% of portfolio
Slide 11
Performance since inception 11 Source: RBC Dexia, Greenchip,
Bloomberg, MSCI Standard deviation of monthly returns Greenchip
Fund 4.3% MSCI World3.6% CleanTech Index 6.0%
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Manage Diversification - by Sector, Market Cap and Geography
12
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Examples Infrastructure Build 13 Siemens (Germany) SIE-DE 92.00
(January 7, 2015) 95.10 (Greenchip target) Yield 3.4% Leaders in
power production, electricity transmission and distribution,
building efficiency, factory automation, water infrastructure,
rail, wind turbines AGCO (United States) AGCO-N $42.72 USD (January
7, 2015) $61.45 USD (Greenchip target) Yield 0.8% Agricultural
equipment manufacturing company. Strong international reach, room
for margin expansion Alstom (France) ALO-PA 26.90 (January 7, 2015)
31.30 (Greenchip target) Yield 0% (pending update) Soon to become
the largest publically listed pure play in the rail industry
(particularly strong in high speed)
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Examples Renewable Utilities 14 EDPR (Portugal) EDPR-LS 5.30
(January 7, 2015) 5.05 (Greenchip target) Yield 0.8% One of the
worlds largest renewable energy developers. Assets in Europe and
the Americas Boralex (Canada) BLX-T $12.80 (January 7, 2015) $15.90
(Greenchip target) Yield 3.8% Renewable power developer and
operator with assets in Canada, Northeastern United States and
France Infigen Energy (Australia) INF-AX $0.235AUD (January 7,
2015) $0.42AUD (Greenchip target) Yield 0% Wind power producer with
assets in Australia and the United States
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Examples - Fast Growing Pure Plays 15 Polypore International
(United States) PPO-N $43.30 USD (January 7, 2015) $44.50 USD
(Greenchip target) Yield 0% Manufacturer of specialized microporous
membranes used in filtration, lithium batteries Trina Solar (China)
RSL-N $8.59 USD (January 7, 2015) $21.03 USD (Greenchip target)
Yield 0% Lowest cost, best managed integrated Chinese solar
manufacturer Centrotec (Germany) CEV-DE 13.98 (January 7, 2015)
18.13 (Greenchip target) Yield 1.4% Energy-efficiency technologies
for buildings
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Fund Details 1. OM - Monthly NAV 2. RSP eligible 3. Management
fee 1% or less (MER under 2% and dropping) 4. Unique performance
fee (6% annualized hurdle, charged only when client redeems) 5.
FundSERV 16
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Disclaimer THESE MATERIALS DO NOT DISCLOSE ALL THE RISKS AND
OTHER SIGNIFICANT ISSUES RELATED TO AN INVESTMENT IN ANY PROPOSED
TRANSACTION DESCRIBED HEREIN. PRIOR TO ENTERING INTO ANY SUCH
TRANSACTION, POTENTIAL INVESTORS SHOULD ENSURE THAT THEY FULLY
UNDERSTAND THE TERMS OF THE PROPOSED TRANSACTION AND ANY APPLICABLE
RISKS, SOME, BUT NOT ALL, OF WHICH ARE DESCRIBED IN MORE DETAIL IN
THE OFFERING DOCUMENTS (AS DEFINED BELOW). This presentation has
been prepared to provide preliminary background information on the
Greenchip Global Equity Fund (the Fund). You should not rely on the
information set forth in this presentation for purposes of making a
decision to invest or not invest in the Fund. Please consult the
Funds confidential Offering Memorandum, available at your request,
for a detailed description of the Fund and its planned activities.
This presentation may not be distributed, reproduced, or used
without the express consent of Greenchip Financial Corp.
(Greenchip), or for any other purpose than the evaluation of the
Fund by the person to whom this presentation has been delivered.
This presentation does not constitute an offer or solicitation in
any jurisdiction to any person to whom it is unlawful to make such
an offer or solicitation. This presentation is not, and under no
circumstances is to be construed as a prospectus, a public
offering, a private placement memorandum, or an offering memorandum
as defined under applicable securities legislation. Any indications
of interest from prospective investors in response to the
information provided in these materials involves no obligation or
commitment of any kind. Any offering will be made only by means of
an offering memorandum, private placement memorandum, or other
appropriate materials (the Offering Documents) which are available
to you from Greenchip at your request. Any investment decisions
should be based only on the information in the Offering Documents.
The information contained herein has been prepared to assist
interested parties in making their own evaluation of the Fund and
does not purport to contain all of the information that an
interested party may desire. Greenchip has assumed no
responsibility for the independent verification of any of the
information set forth herein, including any financial forecasts or
statements about the prospects of the Fund contained herein.
Greenchip makes no representation or warranty as to the accuracy or
completeness of this presentation or the information contained
herein, or for any omissions from, this presentation or any other
written or oral communications transmitted to the recipient in the
course of its evaluation of the Fund. The securities described
herein have not been recommended by any Canadian Federal or
Provincial, or United States Federal or state, or any other,
securities commission or regulatory authority. The foregoing
authorities have not confirmed the accuracy or determined the
adequacy of this document. Nothing contained in this presentation
is, or should be relied upon as, a promise or representation as to
the future. Any statements, estimates and forecasts are subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the control of the Fund
and/or Greenchip. Accordingly, there can be no assurance that such
statements, estimates and forecasts will be realized. Greenchip
does not warrant or guarantee such forecast in any way. The reader
is cautioned that the assumptions used in the preparation of the
forecast may prove to be incorrect. The actual results achieved
will vary from the forecast results and the variations may be
material. There is no guarantee that the forecast will be achieved
in whole or in part. Greenchip disclaims any and all liability
relating to the information in this presentation, including without
limitation, any express or implied representation for statements
contained in and/or any omissions from any information set forth in
these materials. Greenchip has no obligation to, and does not
undertake to, update the data in these materials if the data
changes. These materials contain information that is general in
nature and accordingly has been prepared without consideration of
the investment objectives, financial situation or particular needs
of any particular investor. Investors should consider whether the
behavior of these investments should be tested under assumptions
different from those included in these materials. The assumptions
underlying the information presented in these materials may be
modified from time to time to reflect changed circumstances.
Contact Greenchip for detailed explanations of any modeling
techniques employed in the derivation and presentation of such
information in these materials. By accepting this presentation, the
recipient acknowledges and agrees that: (i) this presentation is
confidential; (ii) the recipient will not distribute or reproduce
this presentation, in whole or in part; (iii) at the request of
Greenchip, the recipient will return this presentation to Greenchip
as soon as practicable, together with any other material relating
to the Funds which the recipient may have received from Greenchip;
(iv) the recipient will, and it will cause its directors, partners,
officers, employees and representatives, to use the information
only to monitor its investment interest in the appropriate fund and
for no other purpose and will not divulge any such information to
any other party; and (v) any proposed actions by the recipient
which may be inconsistent in any respect with the foregoing will
require the prior written consent of Greenchip. Potential investors
are advised that securities laws of some jurisdictions restrict any
person who has material, non-public information about a company
from purchasing or selling securities of such company (and any
options, warrants and rights relating thereto) and from
communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities. By accepting
these materials, the recipient agrees not to purchase or sell such
securities in violation of any such laws. 17
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Blue Chip Investing In the Green Economy Greenchip Financial
Corp 70 The Esplanade, Suite 400 Toronto, Ontario M5E 1R2
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Gross Monthly Performance 2008, 2009 19 $CADJan 2008 Feb 2008
Mar 2008 Apr 2008 May 2008 Jun 2008 Jul 2008 Aug 2008 Sep 2008 Oct
2008 Nov 2008 Dec 2008 GESF
-2.9%-0.4%1.0%-0.4%1.6%-5.9%1.9%2.2%-12.5%-12.8%-4.9%7.9% -24.1
MSCI -7.8%-2.4%3.8%3.3%0.2%-6.0%-1.4%1.8%-11.6%-7.3%-5.1%3.3% -26.7
CTIUS -13.4%-2.3%5.1%7.2%6.6%-7.2%-0.6%3.6%-19.6%-21.9%-7.8%9.3%
-38.7 $CADJan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 Jun 2009 Jul
2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Dec 2009 GESF
-8.2%-3.7%5.2%9.2%2.2%3.9%5.8%2.9%3.2%-1.9%0.7%3.0% +23.3 MSCI
-8.3%-8.1%6.6%5.0%0.6%5.5%0.9%5.8%1.6%-1.4%1.9%1.2% +10.4 CTIUS
-7.1%-8.3%7.9%13.6%-2.2%5.3%0.1%0.9%4.4%-5.1%1.6%5.2% +15.0 2008
2009
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20 $CADJan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011
Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 YTD GESF
4.9%-0.8%2.9%1.6%-2.1%-1.9%-5.5%-4.1%-8.7%6.7%-2.0%-0.8% -10.0 MSCI
2.9%0.8%-1.2%1.7%0.0%-1.9%-2.9%-4.7%-2.65.2%-0.1%0.1% -3.2 CTIUS
3.5%-0.1%5.3%-0.4%-1.5%-2.1%-6.9%-5.6%-10.25.8%-0.3%-0.8% -15.5
$CADJan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010
Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2010 GESF
-0.9%-0.4%1.3%-2.5%-6.9%-3.1%5.5%-0.5%7.0%3.5%-4.5%5.3% +2.6 MSCI
-2.6%0.6%1.9%-0.2%-6.3%-2.2%4.8%-0.3%5.2%2.9%-1.3%3.9% +5.9 CTIUS
-5.7%-1.4%4.0%2.0%-9.3%-2.4%6.9%-5.1%7.7%2.8%-1.6%5.6% +1.9 2010
2011 Gross Monthly Performance 2010, 2011
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21 $CADJan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012
Jul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 GESF
6.6%3.1%0.7%-5.3%-7.8%4.5%-1.4%3.7%1.2%0.2%2.5%4.111.7 MSCI
3.4%3.0%2.8%-2.3%-4.2%3.4%-0.4%1.0%2.4%0.9%0.7%2.1%13.3 CTIUS
6.0%0.9%1.3%-5.0%-5.8%1.1%-4.9%2.1%2.2%0.3%2.7%4.3%4.9 2012 Gross
Monthly Performance 2012, 2013 $CADJan 2013 Feb 2013 Mar 2013 Apr
2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013
Dec 2013 YTD GESF
7.2%2.1%-0.5%1.3%4.9%-2.1%4.4%-0.1%5.0%5.1%1.6%2.7% 35.8 MSCI
5.4%3.1%1.1%2.1%2.8%-0.4%2.6%0.4%2.3%5.4%3.3%2.5% 35.2 CTIUS
6.6%4.8%0.8%-1.7%6.6%-1.4%4.7%0.9%5.5%6.6%3.9%3.6% 46.3 2013
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Gross Monthly Performance 2014 22 $CADJan 2014 Feb 2014 Mar
2014 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014
Nov 2014 Dec 2014 GESF
0.8%3.5%0.5%2.6%0.9%1.6%-2.8%4.8%-2.2%-1.3%0.7%-2.0%+6.9 MSCI
1.1%4.3%-0.10.4%0.9%-0.2%0.6%1.8%0.2%1.5%3.2%-0.1%+14.4 CTIUS
1.7%6.6%-1.4-2.7%0.3%0.0%-4.7%2.3%-4.1%0.0%2.7%-0.5%-0.3 2014