INVESTECO FINANCIAL CORP. SHARE CONFERENCE · CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY DISCLAIMER This presentation has been prepared to provide preliminary background information

CANADA’S FIRST ENVIRONMENTAL INVESTMENT COMPANY

All information contained in this document is confidential and may not, without prior explicit approvalfrom Investeco be disclosed or in any other way distributed to third or other parties.

INVESTECO FINANCIAL CORP.

SHARE CONFERENCE

December, 2009

Private and Confidential 1


DISCLAIMER

This presentation has been prepared to provide preliminary background information on the Investeco Private Equity Fund III, L.P. and/or the Investeco Global Environmental Sectors Fund

(together, “the Funds”). 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 Funds. Please consult the Funds’

confidential Offering Memorandum or Private Placement Memorandum (as applicable), available at your request, for a detailed description of the Funds and its planned activities.

This presentation may not be distributed, reproduced or used without the express consent of Investeco Capital Corp. (“ICC”) or Investeco Financial Corp. (“IFC”), as applicable, or for any other

purpose than the evaluation of the Funds 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 ICC and/or IFC 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 Funds and does not purport to contain all of the information that an interested

party may desire. Neither ICC nor IFC have assumed any responsibility for the independent verification of any of the information set forth herein, including any financial forecasts or statements

about the prospects of the Funds contained herein. Neither ICC nor IFC make any 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 Funds.

The securities described herein have not been recommended by any Canadian Provincial, or United States Federal or state, 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 Funds, IFC or ICC. Accordingly, there can be no assurance that such statements,

estimates and forecasts will be realized. Neither ICC nor IFC warrant or guarantee the 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. IFC and ICC each disclaim 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. Neither IFC nor ICC has any 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 ICC and/or IFC 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) if the recipient does not wish to pursue this matter, or at the request of ICC or IFC, the recipient will return this presentation to IFC or ICC as soon as practicable, together with any other

material relating to the Funds which the recipient may have received from IFC or ICC; (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 IFC or ICC.

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.

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 THAT PROPOSED TRANSACTION AND ANY APPLICABLE RISKS, SOME, BUT NOT ALL, OF WHICH ARE DESCRIBED IN MORE DETAIL IN THE OFFERING

MEMORANDUM


WHO WE ARE

Canada’s first environmental investment management firm

Environmental sector strategy - not SRI

Manage 3 private equity LPs and a global equity pooled fund

$40 million in AUM

6 managers



INVESTMENT THESIS

We believe that companies whose products and services offer solutions to higher energy costs, resource scarcity and environmental degradation should outperform those that don’t



ENVIRONMENTAL DRIVERS – OIL RESOURCES

Private and ConfidentialSource: The Guardian

5


ENVIRONMENTAL DRIVERS – ELECTRIFICATION


* Other; includes district heating Source: IEA


ENVIRONMENTAL DRIVERS – WATER SCARCITY

Private and Confidential

Source: JP Morgan

7


ENVIRONMENTAL RISKS ARE INVESTMENT RISKS

We consume approximately $4.6 trillion in oil equivalent energy at $70 barrel.

“in our opinion, corporate disclosure of water-related risks is seriously inadequate and are rarely included in the regulatory findings on which most investors rely.”

JP Morgan – Watching Water 2008

2009 carbon trading estimated at $122 billion Euros



ADDRESSING HIGHER ENERGY COSTS, RESOURCE SCARCITY AND ENVIRONMENTAL DEGRADATION?

Some products and services provide exquisite environmental solutions…

Geothermal

Conservation technologies

Mass transportation

Solar power



ADDRESSING HIGHER ENERGY COSTS, RESOURCE SCARCITY AND ENVIRONMENTAL DEGRADATION?

But sometimes green is grey and more thought is required…

Local food

Biofuels

Small cheap cars

Electric cars



OUR INVESTMENT UNIVERSE

1 Over 500 companies

• Alternative energy, water, agriculture, cleantech

• Names generated from private equity team, advisors, our extended community

1 To qualify companies must meet environmental sector tests

• Revenue over $1 billion – 20% from environmental sectors

• Revenue over $100 million – 50% from environmental sectors

• Revenue less than $100 million – 100% from environmental sectors

3 Investeco Financial Corp. Advisory Board

• Helps determine sub-sector inclusion in our universe

11

.

Private and Confidential


INVESTMENT PROCESS

1 Screening – 500 Companies

• Revenue exposure to sectors

• Financial performance

• Balance sheet strength

1 Perform intensive due diligence – Over 150 Companies

• Private equity heritage

1 Spreadsheet analysis – 100 Companies

• Premium/discount between trading value and intrinsic value

• Updated regularly

12Private and Confidential


PORTFOLIO CONSTRUCTION

1 Model Portfolio – 30-35 Companies

• 10 large cap positions (4-7% weighting)

• 25 small to mid cap (1-3% weighting)

1 Liquidity

• Illiquid positions capped at 2% weight

• Total illiquid positions less than 10%

• Market cap <$1 billion capped at 4% weight

1 Diversification

• Track geographic, sector and market cap allocation

• Cash allocation driven by valuation opportunity

1 Portfolio Turnover

• Target 30% annual turnover

13Private and Confidential


GESF PERFORMANCE – VS. INDEXES(TO NOVEMBER 30, 2009)



MONTHLY PERFORMANCE


$CAD Jan2008

Feb2008

Mar2008

Apr2008

May2008

Jun2008

Jul2008

Aug2008

Sep2008

Oct2008

Nov2008

Dec2008

YTD

GESF -3.3 -0.7 +0.7 -0.7 +1.3 -6.0 +1.5 +1.8 -12.7 -13.0 -5.4 +7.2 -27.3

MSCI -7.9 -1.3 +2.0 +3.4 -0.2 -6.3 -1.6 +0.9 -12.4 -8.4 -5.5 +2.9 -30.2

$CAD Jan2009

Feb2009

Mar2009

Apr2009

May2009

Jun2009

Jul2009

Aug2009

Sep2009

Oct2009

Nov2009

Dec2009

YTD

GESF -8.6 -4.0 +4.7 +8.7 +1.8 +3.4 +5.5 +2.5 +2.5 -2.3 +0.4 +14.6

MSCI -8.2 -7.9 +7.0 +5.3 +1.0 +1.2 +2.4 +5.0 +2.0 -1.3 +1.7 +10.1


CURRENT INVESTMENT THEMES

1 Electrification and grid development

1 Alternative energy developers (over equipment providers)

1 Efficiency solutions

2 Mass transportation

1 Overweight Europe and Canada, underweight Asia and USA

1 Not fully invested - based on valuation process

1 Like to increase allocations – water, solar, Asia

16

.


ELECTRIFICATION – OUR BIGGEST BET



ALTERNATIVE ENERGY DEVELOPERS (OVER EQUIPMENT PROVIDERS)



EFFICIENCY SOLUTIONS



MASS TRANSPORTATION - SEVERAL WAYS TO INVEST



SUMMARY

We focus on environmentally superior products and services not best practices

“Environmentally superior” should always be challenged – it’s about the sustainability of earnings

Environmental investing lends itself to active management

An environmental mandate can help hedge against the certain risks to the broader economy



All information contained in this document is confidential and may not, without prior explicit approvalfrom Investeco be disclosed or in any other way distributed to third or other parties.

Investeco Financial Corp.70 The EsplanadeToronto, Ontario

M5E 1R2

www.investeco.com
