Mahube Infrastructure Ltd. · JSE:MHB
Mahube Infrastructure — GAIA Infrastructure Capital — IPO Roadshow (October 2015)
45 slides from Mahube Infrastructure's IPO roadshow presentation, October 2015
Slide 1: Introduction to GAIA Infrastructure Capital Limited
Introduction to GAIA Infrastructure Capital Limited October 2015
Slide 2: Contents
Contents 1. Proposed Investment Summary 2. GAIA Infrastructure Capital Limited 3. Closed Transactions 4. Appendix
Slide 3: Proposed Investment Summary
Proposed Investment Summary
Slide 4: Business overview
4 | Proposed Investment Summary Business overview Gaia Infrastructure Partners (Pty) Ltd • A specialist investment manager whose primary business is managing investments in infrastructure projects in Southern Africa • Formed and incorporated in 2012 • Has managed segregated infrastructure funds Init
Slide 5: GAIA IC – Infrastructure Investment HoldCo
5 | Proposed Investment Summary GAIA IC – Infrastructure Investment HoldCo • Diversified investment directly in large scale energy, transport and water related infrastructure • Provide investors with predictable, inflation linked and long-term investment in a listed environment • Open the investment
Slide 6: Investment proposition
6 | Proposed Investment Summary Investment proposition Investment opportunity set Sector Opportunity Investment characteristics Deal flow • Purchase of equity stakes in operational / near-operational assets (secondary market) Access to REIPPP secondary market opportunities through Solar / Wind / • 2
Slide 7: Investment proposition
7 | Proposed Investment Summary Investment proposition Investment opportunity set Sector Opportunity Investment characteristics Deal flow • Purchase of equity stakes in Private-Public-Partnerships Access to opportunities through Roads / (PPP) on economic expertise and market knowledge Transportation
Slide 8: Investment return profile
8 | Proposed Investment Summary Investment return profile Project investment stages Risk High Medium Low Equity IRR 100%+ CPI + 9% CPI + 6% Debt n/a Jibar/CPI + 4% Jibar/CPI + 2.5% Preferred Financial Commercial bidder close operation date Development Funding Construction Commercial production -2y 0
Slide 9: Investment criteria
9 | Proposed Investment Summary Investment criteria Criteria for investment options Operational criteria <6 Months to Operational Infrastructure Project or Operational Investment return target > 6% Real Return (before fees) Long-term inflation-linked income profile Predictable and transparent cash f
Slide 10: Investment criteria (continued)
10 | Proposed Investment Summary Investment criteria (continued) Investment strategy and criteria Sectors Infrastructure including Renewable Energy, Transport, Water and sanitation Geographies Southern Africa Investment size R200m and above Control Management value add and directorships Gearing To b
Slide 11: Key offer indications (continued)
11 | Proposed Investment Summary Key offer indications (continued) Proposed offer summary Listing Primary listing of a SPAC on Main Board of JSE Offer size Min. R500m placement • Anchors investors – up to 75% • Management – 5% Listing price R10 per share Target dividend yield CPI + 2.5% on NAV Estim
Slide 12: Dividend profiles of similar asset classes
12 | Proposed Investment Summary Dividend profiles of similar asset classes GAIA Infrastructure Capital target Dividend Yield of CPI* + 2.5% (c.8%) Proxy Avg 5 year DY% Current DY% FTSE/JSE Industrials Index DY CPI – 3.5% CPI – 3.4% FTSE/JSE Financials Index DY CPI – 1.9% CPI – 1.9% Growthpoint Prop
Slide 13: Key listing dates
13 | Proposed Investment Summary Key listing dates Anticipated listing timetable Formal roadshow Monday, 26 October – Friday, 30 October 2015 Opening of book Wednesday, 4 November 2015 Closing of book Friday, 6 November 2015 Anticipated listing date on JSE and Thursday, 12 November 2015 commencement
Slide 14: GAIA Infrastructure Capital Limited
GAIA Infrastructure Capital Limited
Slide 15: Listed investment structure
15 | GAIA Infrastructure Capital Limited Listed investment structure Gaia Infrastructure Capital Limited (Co. to be listed on the JSE) 100% Gaia Infrastructure Gaia Financial Services Partners Proprietary Investment Proprietary Limited Limited management agreement (Co. to hold underlying (Investment
Slide 16: Strong management team
16 | GAIA Infrastructure Capital Limited Strong management team Directors Role Background Years of experience Qualified actuary; Founder GAIA 25 years Leon de Wit Chairman (Founder) Infrastructure Partners; Life, pensions and BCom, FIA, OPM (Harvard) savings industry expert Qualified engineer; Found
Slide 17: Board of directors
17 | GAIA Infrastructure Capital Limited Board of directors EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS John Oliphant Leon de Wit BSc Actuarial Science, BSc (Hons) – MD BCom, FIA, OPM (Harvard) – Chairman Mich Nieuwoudt Botha Schabort BEng (Electronic), Pr Eng, MBA – CIO BEng Hons (Civil), Pr Eng, M
Slide 18: Investment management agreement
18 | GAIA Infrastructure Capital Limited Investment management agreement Relevant provisions Investment manager • GAIA Infrastructure Partners (Pty) Ltd Duration and term • A period of not less than 5 years • Thereafter the agreement may be terminated with 12 months’ notice Services • originating, e
Slide 19: Investment management fees
19 | GAIA Infrastructure Capital Limited Investment management fees Relevant provisions Fees payable Management fee*– SPAC stage • Annual management fee shall be 0.5% of the aggregate amount received from the subscription price of the shares Management fee* – post SPAC • Annual management fee shall
Slide 20: GAIA capabilities
21 | GAIA Infrastructure Capital Limited GAIA capabilities No other “Buy-side” team in South Africa •Current investors of infrastructure assets are developers Project finance and lending institutions •Gaia is pioneering the development of a platform for Project long-term investment for institutional
Slide 21: Four pillar investment process
22 | GAIA Infrastructure Capital Limited Four pillar investment process In-house multi-disciplined team • Strong, sustainable infrastructure deal flow origination • Dynamic, effective implementation processes • Prudent, transparent investment management systems • Execution of elegant exit strategies
Slide 22: Key investment risks
23 | GAIA Infrastructure Capital Limited Key investment risks Inadequate capital raising mechanisms to take advantage of strategic assets Liquidity constraints Interest rate risks associated with high levels of leveraging Asset transfer pricing issues Regulatory uncertainty – as infrastructure funds
Slide 23: Outlook
32 | GAIA Infrastructure Capital Limited Outlook Expect to acquire viable assets of over the next 12 months Regulatory outlook for renewable energy remains stable and bodes well for other infrastructure sectors Remain active in the secondary market which is potential worth c.R40bn for operational So
Slide 24: Thank you!
Se —_ GAIA’ Thank you! INFRASTRUCTURE CAPITAL Your Investment Partner -_
Slide 25: Appendix
Appendix INFRASTRUCTURE CAPITAL Your Investment Partner -_
Slide 26: Infrastructure as an Asset Class
Infrastructure as an Asset Class
Slide 27: South African macro-economic factors
36 | Infrastructure as an Asset Class South African macro-economic factors SA faces massive infrastructure requirements across energy, transport, water sectors (R3 trillion over 15 years) State initiatives are prioritising infrastructure development and investment into the sectors Establishment of t
Slide 28: Benefits of investing in infrastructure
37 | Infrastructure as an Asset Class Benefits of investing in infrastructure
Slide 29: Listed infrastructure investment universe
38 | Infrastructure as an Asset Class Listed infrastructure investment universe Over US$12bn infrastructure listed instruments traded daily globally Broad and diversified liquid infrastructure global market Sectoral diversification Source: CBRE Clarion, Bloomberg
Slide 30: Pension fund allocations to infrastructure
39 | Infrastructure as an Asset Class Pension fund allocations to infrastructure 100% 80% 42% 49% 47% 51% 55% 61% 60% 31% 40% 33% 40% 36% 28% Infrastructure: 30% 6% of Total 20% Alternative 25% 15% 19% 5% 12% 6% 6% 3% 0% 1% 2% 1% 2% 1995 1999 2003 2007 2012 2014 Cash Alternative Bonds Equities Sourc
Slide 31: Global return profile of asset class
40 | Infrastructure as an Asset Class Global return profile of asset class Nominal Returns of Global Listed Infrastructure Universe versus Global Equities and Global Bonds 13.30% 12.20% 11.50% 11.00% 15% 6.70% 6.70% 10% 3.40% 1.40% 0.80% 0.50% 5% 0% -1.70% -2.20% -2.50% -3.10% -5% -7.50% -10% Q2 201
Slide 32: Volatility levels of asset classes
41 | Infrastructure as an Asset Class Volatility levels of asset classes EAFE European European USA EAFE Market USA Market Infrastructure Infrastructure Market Infrastructure Average Average Index Index Average Index Average 0.54% 0.49% 0.60% 0.51% 0.33% 0.40% Standard Deviation 4.48% 5.11% 5.26% 5.
Slide 33: Infrastructure Yieldco’s
42 | Infrastructure as an Asset Class Infrastructure Yieldco’s Stable, counter cyclical earnings Low correlation with bond yields Defensive qualities with lower drawdowns
Slide 34: Australian infrastructure correlations
43 | Infrastructure as an Asset Class Australian infrastructure correlations Australian market has similar characteristics to the South African market, we anticipate similar market performance from the infrastructure asset class locally Diversification through economic downturns Very low corrections
Slide 35: The evolution of listed property
44 | Infrastructure as an Asset Class The evolution of listed property 1969 Property unit trusts (PUTs) introduced in SA 1969 PUTs listed on JSE SAPY index over R160bn, we 1976 Separate PUTs sectors established on JSE anticipate a similar trend will materialise within the Infrastructure sector. As m
Slide 36: Board of directors
45 | GAIA Infrastructure Capital Limited Board of directors Leon de Wit (Non-executive Chairman) BCom, FIA, OPM (Harvard) Life, pensions and savings industry veteran Leon qualified as an actuary whilst working for Sanlam Limited and is currently a director and shareholder of GAIA Infrastructure Part
Slide 37: Board of directors (continued)
46 | GAIA Infrastructure Capital Limited Board of directors (continued) Botha Schabort (Non-executive Director) BEng Hons (Civil), Pr Eng, MBA Renewable energy developer, investment banker Botha is a qualified Engineer and currently a director and shareholder of GAIA Infrastructure Partners Botha st
Slide 38: Board of directors (continued)
47 | GAIA Infrastructure Capital Limited Board of directors (continued) Clive Ferreira (Non-executive Director) BSc Civil Engineering, Bcomm (Finance), MBA Corporate finance and project finance expert Clive joined Fieldstone in 1995, with more than twenty five years experience in corporate and proje
Slide 39: Board of directors (continued)
48 | GAIA Infrastructure Capital Limited Board of directors (continued) John Oliphant (Managing Director) BSc Actuarial Science, BSc(Hons) Adv Mathematics of Finance Investment and Pensions expert John is the MD and shareholder of GAIA Infrastructure Partners John is the former Principal Executive O
Slide 40: Board of directors (continued)
49 | GAIA Infrastructure Capital Limited Board of directors (continued) Mich Nieuwoudt (Chief Investment Director) BEng (Electronic), Pr Eng, MBA Infrastructure Development Expert Mich is a qualified engineer and currently the Chief Investment Officer and shareholder of GAIA Infrastructure Partners
Slide 41: Business model
50 | GAIA Infrastructure Capital Limited Business model GAIA Infrastructure Capital will initially invest in the secondary market of the REIPPP Implementation Equity Funding Agreement (usually 20%-30%) GAIA purchases the equity stakes once Renewable Energy Independent Power Mezzanine Funding project
Slide 42: Cost effective sustainability: REIPPPP tariffs
51 | GAIA Infrastructure Capital Limited Cost effective sustainability TARIFF OF REIPPPP TECHNOLOGIES PER BIDDING ROUND ( AP R I L 2 0 1 3 B AS E ) Medupi (Min) Medupi (Max) Wind Solar PV Solar CSP 3.5 3 2.5 TARIFF (R/KWH) 2 1.5 1 0.5 0 0 1 2 3 4 5 REIPPPP BIDDING WINDOW Source: DoE presentation (Ro
Slide 43: The REIPPP
52 | GAIA Infrastructure Capital Limited The REIPPP Total expected REIPPPP investment of R190 billion in current determination REIPPP capital Eskom pipeline expenditure R’bn capacity incl. REIPPP 1-3 80 3% 1% 70 46 3% 4% 60 7% 50 40 33 26 30 17 27 20 17 10 13 11 82% 0 Coal R1 R2 R3 Remain Renewables
Slide 44: REIPPP project capacity
53 | GAIA Infrastructure Capital Limited REIPPP project capacity Landscape of available projects REIPPPP summary Round 1 Round 2 Round 3 Round 4a Round 4b TOTAL (Est) Total MW’s 1 416 1 044 1 438 1 121 1 000 6 019 Total project spend (Rm) 47 792 28 059 43 324 23 077 20 000 162 252 Project Debt to Eq
Slide 45: Disclaimer
Disclaimer Prospective investors must not treat the contents of this presentation as advice relating to legal, financial, investment, taxation, or other matters and are advised to consult their own professional advisers concerning the acquisition, holding or disposal of any investment in the GAIA Fu
GAIA Infrastructure Capital — IPO Roadshow (October 2015) on 6ix