1. Investing in Energy Efficiency & Fuel Free Energies ... The Perspective of a public equity fund manager Dr. Ilona Monz 14. November 2013Performance creates trust

2. Page 2Introduction Vontobel Trend Team Invest in equity of publicly traded companies that play an active role in shaping a sustainable energy future, globally Team with 5 members constituted 2008 Fund in focus today: New Power FundAUM CHF ~500 million Risk/Reward LiquidityVenture CapitalPrivate EquityListed equityProject Finance 3. Page 3Agenda Capturing the Energy Growth Opportunity Growth & Performance Drivers Blue Sky Scenario? 4. Page 4Capturing the Energy Growth Opportunity Strong fundamental growth drivers Demand for clean energy continues to grow driven by rising populations, industrialisation of emerging markets, environmental trendsDemand for CLEAN ENERGY GROWS MORE than GDP> 50% of all power ever generated has been consumed in the past 15 years 5. Page 5Capturing the Energy Growth Opportunity but theme focus has evolved over time Key issues Affordabilit y Acceptance by Society: Clean Supply, Climate ChangeOil priceSecure Supply: Fossil Resources are finite & located in politically unstable regions Growing Demand for EnergyKey events Climate change scienceWind take offCarbon TradingPV accelerationKyoto commitments Oil crisis 1970Chernobyl19801990Financial Crisis20002010 6. Page 6Capturing the Energy Growth Opportunity ... resulting in energy policy framed by three key issues. AffordabilityAcceptance by SocietyComplexity but also OpportunitySecure Supplyof todays Energy Policy 7. Page 7Capturing the Energy Growth Opportunity Four core areas for investment Secure Affordable Acceptable Improve Efficiency of SupplyEnergy Substitutes21Alternative EnergiesNatural Gas Markets Cleaner fossil fuelSolar WindTransition Fuel Growing # of applicationsHydro Wave/Tidal/Othe rImprove Efficiency of Consumption3 Efficient Generation & Transmission Efficient power generation Improved network management Critical power applications4Demand Side Energy Savings End user energy management e.g. smart metering Automation, engine and building efficiency Low emission transportation 8. Page 8Capturing the Energy Growth Opportunity Absolute returns of New Power themesPicking the right stocks Picking the right subsegment 9. Page 9Agenda Capturing the Energy Growth Opportunity Growth & Performance Drivers Blue Sky Scenario? 10. Page 10Growth and Performance Drivers Main Return Driver Outlook Q4-2013 Sub-segment Natural Gas Markets Efficient Generation & Transmission Demand Side Energy SavingsAlternative EnergiesReturn on Investment - Drivers* GDP growth Commodity/ Power Price Equipment Price Interest rate Construction Cycle Regulation*** applicable at different degrees; ** different types: incentive, feed-in, environmental, carbon, efficiency standardsOutlook 11. Growth and Performance Drivers Alternative Energy economics start to workPage 11Levelised Cost of Electricity GenerationAlternative Energy improving competitiveness Equipment price down No fuel cost exposureUS$/ MW h 350 300 250 200 150 100 50 0 PV - C rystalline SiliconBiomass IncinerationC Fired Plant oalSource: Bloomberg New Energy Finance, July 2013Q 2-2013Natural G C G as C T Q 2-2010W -O ind ffshoreW -O ind nshore 12. Page 12Growth and Performance Drivers Energy Efficiency - good underlying growth concealed Producers:Consumers: Tightening energy efficiency - Mandates standards e.g. building efficiency Awarenessstandards - Phase-outs e.g. incandescent light bulbs Innovation - Leaders drive technological progress - Differentiation, improving competitive positioning and gaining market shareRising energy costsEnvironmental consciousnessProduct labelling Economics - Technological advances driving cost reductions - Economically viable today without subsidies => short paybacks - Life-cycle cost gaining importance 13. Page 13Agenda Capturing the Energy Growth Opportunity Growth & Performance Drivers Blue Sky Scenario? 14. Page 14Blue Sky Scenario? Fundamentally Risk and Opportunity Important support from subsidy Expect Energy Market Reform: programmes China, Europe, US, Japan, Germany . Low Visibility in fragmented, high growth markets like solar, wind, LED Price stabilisation confirmed? Overcapacities filled? Inventories reduced?Fragile financial status for several solar stocks Macro Economic environment restrained tone Fed tapering decision? GDP growth outlook? Forex, Commodity price outlook?Earnings turn around? Capital Increases? Bankruptcies? Chinese Banking situation?Alternative Energy + Energy Efficiency qualifying as: Affordable, Acceptable, Secure 15. Page 15Blue Sky Scenario? Equity Funds Risk and Opportunity Attractive Opportunity Investment in high growth theme Regional and Segmental Diversification Liquidity Risk / Reward Relationship High reward High growthDivergence of expectations High risk Growth Return 16. Page 16Take Aways Energy Growth Opportunity Clean Energy Demand outgrows GDP Acceptable, affordable and secure energy policy offers investment opportunitiesGrowth and Performance Drivers Energy Policy / Regulation Commodity / Power Price Equipment CostsWhere does the music play? All four Sub-themes healthy outlook - Natural Gas - Alternative Energy - Power Generation and Transmission - Demand Side Energy Saving Balancing Risk/Reward 17. Page 17Appendix 18. Page 18Sector Weightings & Top Ten Positions Portfolio as of 31 October 2013 Company NameSectorsQuanta ServicesPower Generation & TransmissionUS3.7Schneider ElectricDemand Side Energy SavingsFR3.5AMETEKDemand Side Energy SavingsUS3.3PrysmianPower Generation & TransmissionIT3.3TernaPower Generation & TransmissionIT3.2ContinentalDemand Side Energy SavingsDE3.2NextEra EnergyAlternative EnergyUS3.0Roper IndustriesDemand Side Energy SavingsUS3.0Vestas Wind SystemsAlternative EnergyDK2.8Power IntegrationsDemand Side Energy SavingsUS2.6Total Top Ten Source: Vontobel Asset ManagementCountryWeight (in %)31.4 19. Page 19Country and sector exposures Portfolio as of 31 October 2013Source: Vontobel Asset Management 20. Page 20Performance B share class* Fund vs. benchmark (since inception) YTD1 Year3 Year (annualised)Since inception (annualised)Vontobel Fund New Power20.81%24.32%4.03%0.39%MSCI World Index18.20%19.87%12.72%2.55%As of 31 October 2013 Source: Vontobel Asset Management * Net of fees 21. Page 21Fund Flows by Investment Class Solar about 2x size of Wind Investments Solar InvestmentsSource: Bloomberg New Energy FinanceWind Investments 22. Page 22Energy Efficiency Waste not, want not 23. Page 23German Energy Policy: Affordable Acceptable - Secure Power mix, 2012Source: Bundesministerium fr Umwelt, 03/2013 by source of power 1990 - 2012 24. Page 24German Energy Policy Germany has one of the highest energy tariffs globally Energy tariffs in a global comparison Energy tariffs in US$ per MWh, 2012Forecast change in energy tariffs Energy tariffs in GB per MWh in 2010 pricesPower (42%) and Industry (29%) are the two biggest consumers of energy ahead of Transportation (18%) 25. Page 25German Energy Policy Affordable Acceptable Secure private households Power Price private HH GermanyEnergy costs (Power, Heat, Transport) 11% disposable income private HH (7.6% 1998) 16% disp. income low income HH (11% 1998)Power Price private HH - Europe Power Prices on an uptrend despite coal and gas 20% below 2007 levels 26. Page 26Global Energy Supply Affordable Acceptable - Secure Renewables: lion share investments still only small fraction in totalGlobal Investment (US$ bn, 2012)Share of energy consumption by fuel and region 27. Carbon Trading (EUs Emission Trading System ETS): Price collapse in Phase III (2013-2020) EUA OversupplyPrice ResponseDrivers GDP growth Renewable capacitySince June 2008 EUA down from EUR 26.6 to EUR 4 CER down from EUR 19.2 to EUR 0.40Oversupply of Carbon Certificates led to EU Allowances (EUA) price drop in Phase I + II however EUR 100bn windfall profits for European UtilitiesPage 27 28. Page 28Carbon Emissions CCS technologies are theoretically cost competitive 29. Page 29Disclaimer Important legal notice: This document is for information purposes only and nothing contained in this document should constitute a solicitation, or offer, or recommendation, to buy or sell any investment instruments, to effect any transactions, or to conclude any legal act of any kind whatsoever. Prospective investors must rely on their own examination of the legal, taxation, financial and other consequences of an investment in the funds, including the merits of investing and the risks involved. Prospective investors should not treat the contents of this document as advice relating to legal, taxation or investment matters. Before entering into an agreement in respect of an investment referred to in this document, you should consult your own professional and/or investment advisers as to its suitability for you. 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