TFG Asia-Investments Copy

8/9/2019 TFG Asia-Investments Copy

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NOTICE

This Document is a property of TFG Asia and is provided on a private and confidential basis. This Document must not be

reproduced in whole or in part nor may any of its contents be divulged to any third party for any purpose without the express

written consent of the Company.

The information used in this Document has been obtained from sources deemed to be reliable. Except as required by law, the

Company and its officers, employees, agents and advisers do not accept any responsibility for or liability whatsoever in respect of

any loss, liability, claim, damage, cost or expense arising as a consequence (whether directly or indirectly) of reliance upon any

information or any statement or opinion contained in this document, nor do they make any representation or warranty (whether

expressed or implied) as to the accuracy or completeness of this document or its contents. This Document is not an offer

document and cannot give rise to any contract.

Parties to whom this document is provided must make their own assessment of its contents and undertake such additional

enquiries as they deem necessary or appropriate for their own purposes. Any costs arising out of a response, save those expressly

agreed, are not the responsibility of the Company, or any other parties mentioned in this document.


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CONTENTS


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INVESTMENT OBJECTIVE LONG TERM

ORGANIZATIONAL STRUCTURE

TFG Asia

ABOUT TFG ASIA

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ABOUT TFG ASIA

THE FIDELITY GROUP (TFG)

The Fidelity Group (TFG) comprised of three affiliates , a strategic partnership initiatives, a lending division and Venture Capital & Private Equity division. TFGseeks to capitalise on emerging investment opportunities in ASEAN region across all asset classes. We aim to provide equity capital and management expertise tocompanies with good fundamentals and growth potential in most industry sectors seeking investment for operation and expansion.

TFG mainly evaluates medium-sized businesses and project companies with the objective of transforming them into market leaders in the respective fields to deliverstrong and consistent returns to its stakeholders. We also explore deal opportunities in the Mezzanine Investment and Mergers & Acquisition space to capitalise onspecial situations investments.

FIDELITY FUNDING SDN. BHD.

Fidelity Funding is a private equity and venture capital firm, specialising in small to mid-cap companies with over 50 years of combined management experienceand track record of successfully identifying promising new enterprises. Our approach to each investment opportunity is simple: while we investigate opportunitieswithin virtually every sector of the ASEAN economy, we focus on companies which are cash flow positive, have annual revenue of $5 to $50 Million andenterprises values of above $10 Million. Each company must also have strong management team with a history of proven success. Most importantly, companies that

we evaluate must have strong potential for capital appreciation and value creation for our investors.

FIDELITY SPV1 SDN. BHD.

FVSB is Special Purpose Vehicle that focuses on creating a fixed income portfolio which is actively engaged in the acquisition of consumer financing portfoliosthroughout Malaysia. The Trust has currently secured $200 Million of Loans Portfolio with the objective of reaching $500 Million. Because of its varied expertiseand simple structure, FVSB has the flexibility to look at a wide variety of fixed income opportunities and enter into innovative and bespoke deal structures. WithTFG's privately-held and closely-managed company, management is capable of acting quickly to take advantage of new opportunities in this asset class.

FIDELITY CAPITAL SDN. BHD. *

FCSB main involvement are distributing property loan products to property buyers in Malaysia. FCSB has 80 Sales Personnel spread out across 5 states in Malaysia.Currently, FCSB is generating on average, $25 Million worth of property loans per month. With our highly experience and motivated management team in place, weare aiming to originate $50 Million loans on a monthly basis by Year 2014. Fidelity Capital has been crucial to Fidelity Funding by way of a distributing arm toFidelity Funding. Throughout our history, FCSB has remained a reliable and dependable source of finance. Today, we are one of Malaysia's leading LoansDistributor providing consumers with a broad range of innovative, financial products and services. In short, we are an alternative that offers innovative solutions atcompetitive prices to support customers with greater choice and freedom.

*Sold and Disposed to HCK Capital Berhad in 2013.


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BOARD OF DIRECTORS

Tan Sri Dato Seri Mohd Jamil Bin Johari, ChairmanHe is a graduate from the University of Malaya with a Bachelor of Arts (Hons) degree and Diploma in Education. He also obtained a Master of

Arts in Political Science from the University of Washington, Seattle, Washington, US. He joined the Royal Malaysian Police in January 1971 as

Chief Inspector and retired with the rank of Deputy Inspector General of Police in May 2002. Thereafter, he was appointed as High Commissionerof Malaysia to Brunei until July 2004. He is the Chairman and Independent Non-Executive Director of two company listed on the Main Market of

Bursa Securities Malaysia and Chairman of a private limited company involved in information technology services

Dick Yong Foh Fatt, DirectorPrior to joining Fidelity, Dick was with American International Group (AIG) in the Investment Risk management division. Dicks portfolio

included the energy sector and banking & finance sector. A graduate in banking and finance from RMIT University, Australia and an MBA, proves

beneficial to Fidelity. He is an associate of Australasian Institute of Banking & Finance (AIBF) and a Senior Associate of Financial Services

Institute of Australia (SA Fin). His responsibility include setting the strategic direction for Fidelity group and developing new businesses for the

group.

Wan Badroel Hisham, DirectorWan Badroel Hisham has 18 years experience in the field of investment banking. He was involved in various investment banking transactions,

covering origination, structuring and distribution of securities offerings, which include debt & equity offerings and mergers & acquisitions. His

clients include government linked companies, government agencies, large corporates and project companies. Throughout his career, he has held

various positions with responsibilities for originating, structuring, executing and overseeing investment banking transactions. He also undertook

various management responsibilities, including, strategic planning, resource management and financial management. He has served in some of the

large banking groups as well as independent investment banking firms, including Affin Investment Bank, RHB Investment Bank, MIDF Amanah

IB and Kenanga Investment Bank.

ABOUT TFG Asia (Contd)

James Raymond Burke, DirectorSince joining the Fidelity Funding Sdn Bhd in 2008, Mr. Burke has been involved in a variety of real estate acquisitions and initiatives in the

United States, Europe and Asia, and has played a key role in the financing investments across all Asset Class. Before BNP, Mr. Burke was at

Lazard Frres & Co. in the real estate investment banking group. Mr. Burke received an Bacherlor of Economics Degree from University of

Queensland.


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TFG Asia

INTRODUCTION TO VC & PE INDUSTRY

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MALAYSIA VENTURE CAPITAL & PRIVATE EQUITY

The government is well aware that the innovation eco-system inMalaysia needs to be tweaked and fine-tuned. We have beenlistening to the voices from the ground and have taken stock of theneeds and requirements of the business and industry sector. It isthe private sector that has to generate income that we need to behigh-income economy. For the private sector to do this effectively,we have to create the right environment-from funding to talent togovernment policies - Prime Minister Dato Sri Najib Tun Razak


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MALAYSIAN VENTURE CAPITAL INDUSTRY

Out of the 112 registered VCCs and VCMCs as at end

of 2012, 100 are locally-owned, 10 are joint ventures

while two others are foreign-owned.

As compared to the previous year, the total committed

funds as at end-2012 stood at RM5.698 billion which

represented an increase

The government remained as the main funder to the

VC industry, contributing 54.07% of total committed

funds, equivalent to approximately RM3.081 billion

as at end of 2012 (Chart 1).

In addition to government funding, local companiesand foreign companies as well as individualscontinued to support the industry by contributing23.27% and 10.64% respectively. Other contributorssuch as banks, insurance companies, pension and

provident funds, and local individuals have increasedtheir

Source: Securities Commission MalaysiaAnnual Report 2012,


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MALAYSIAN PRIVATE EQUITY

Often overshadowed by China and Japan, Southeast

Asia has started to earn its share ofattention, with Malaysia, Indonesia and Vietnam

garnering increased PE investments. Nonetheless, the

6 countries that together constitute almost all ofSoutheast Asias PE industry, Indonesia, Malaysia,Philippines, Singapore, Thailand and Vietnam,

remain at vastly different stages of development

Malaysia, a catalyst for PE investment - Malaysiaseconomy is expected to sustain growth at a slightly

faster pace of 5.4% in 2013, underpinned by resilient

domestic demand and continued progress in theimplementation of economic programmes.

The current market consensus expects the CentralBank to keep the OPR stable at 3.0% in 2013.

The coun t ry s mone ta ry po l i c y rema insaccommodative and supportive given that loan

growth and broader money supply are expected toexpand at a robust pace of 10-11% and 13%respectively.

Source:Private Equity Asia Pacific, Mckinsey & CoGlobal Private Equity Report 2013, Bain & Co


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SOUTH EAST ASIA PRIVATE EQUITY

Private investments and GDP correlation - As a

percentage of GDP, PE industry penetration ratesremain low in Asia in comparison with those in

PEs traditional homelands of the United Statesand United Kingdom

Players looking toward Southeast Asia have hadgood reason for optimism, given recent stability

and performance. The regions manyconglomerates present a particular opportunityfor PE firms with advanced skills in carve-out

deals .

There is an overarching conclusion from theAsian PE deal data for 2011, that smaller deals

are driving much of the industrys growth.Across Asia as a whole, PE investments dealvolume has more than doubled over 2010, but

the average deal size is substantially smaller.


SEA Correlation


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GLOBAL PRIVATE EQUITY

PEs prospects in the rest of the world remain largely

tied to macroeconomic conditions in the big emerging

markets of Asia and Latin America. More certain GDPgrowth going into 2013 could be strong enough to

support more deal activity, but the specifics of howthat will play out will vary from country to country.Meanwhile, as China slows and India looks for a pathforward, the emerging economies of Southeast Asia

continue to enjoy strong GDP growth that is attractingthe increased attention of PE investors looking for

investment opportunities.

Asia Pacific region now accounts for 21 percentof the global PE industry, that level is still lowerthan its share of global GDP, which has reached

28 percent. The regions low PE penetration ratealso confirms the likelihood of room for furthergrowth.



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TFG Asia

TFG ASIA VALUE PROPOSITION

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VALUE PROPOSITION


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VALUE PROPOSITION

Independent, NimbleValue Management

Focused on CoreInvesting Activity

No upfront InvestorCommitment &Collaborative

Approach

Minimal Expenses &Overheads with NoUpfront or Retainer

Objectivity and ClearAlignment of

Interest

Originate Acquisition& InvestmentOpportunities

As an independent private equity firm, TFG Asia provides value addedservices to investors and strategic investors by providing a dedicated, focused

and nimble approach to managing investments and acquisitions.

Our core activity is in investing with a clear objective of maximizing andrealizing value on the investments for our investors without the burden ofbureaucracy and non-core activities.

Unlike typical PE firms, our investment process are structured as a

collaboration with investors and the ultimate investment decisions are madeby the investors, while we originate and negotiate deals and provide valuemanagement throughout the investment period

Our services will relieve investors from carrying overheads and expenses inmanaging the acquisition process and maximizing value on the investment

throughout the investment period

We have a fiduciary duty to maximize the value of investments and ourcompensation structure is closely linked to the performance of the

investments and only upon realization of investments or upon exit.

Being a key stakeholder with clear alignment of interest with investors, will

ensure that we originate the best potential deals and provide aggressive valuemanagement with a clear objective of maximizing return on investments.


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VALUE MANAGEMENT


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VALUE MANAGEMENT

As investment professionals, TFG Asia understands that in order to generate the desired returns toinvestors, we need to provide aggressive yet nimble value management to ensure that the investment isprotected while striving to achieve maximum ROI

Value management may take up a significant investors resources and time. As such TFG Asia shallundertake the value management tasks throughout the investment horizon, relieving investors of valuableresources for other activities.

LAYING THE GROUNDWORK

VALUE MANAGEMENT EXIT PREPARATION

TFG Asia shallincorporate the relevantmechanism to ensureseamless entry of ourinvestment andintegration withmanagement team withfocus in the followingareas:

GovernanceFinancial ManagementStrategic Plan

This is a critical period whereby TFG Asia and themanagement team shall execute the agreedexpansion plan while developing strategic options inenhancing value to investors

Mergers & AcquisitionNon-core divestituresExpansionCapital Management

Fund RaisingSupply chain managementGap analysis

Throughout theinvestment horizon,TFG Asia is focused onenhancing value inpreparation foreventual exit.

TFG Asia shall explore,evaluate and execute

the optimum exitstrategy to deliver thedesired ROI toinvestors.

INVESTMENT HORIZON

PARTNERSHIP


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PARTNERSHIP

TFG Asia believes that with the right partnership betweeninvestors and PE professionals, private equity investments is still

the best-performing asset class in the mid to long-term horizon.

Many established PE firms have grown too big. Independentand agile new PE firms such as TFG Asia will provide appealing

options to investors that should merit backing from investors.

Our collaborative model between investors and TFG Asia will

find creative new ways to work together for mutual success andTFG Asia will devote our attention and resources to develop adistinctive strategy.

Our investment structure which do not require upfront investorcommitment will motivate us to source and originate the bestpossible acquisition potential and investment opportunities.

Our compensation structure which is closely tied to theperformance of the investment will ensure mutual objectivity

and clear alignment of interest between investors and TFG Asia.

The performance edge of theprivate equity industrys strongestfunds hinges less on the specific

size and types of deals a fund

targets than on the alpha-generating capabilities of theprivate equity firms that manage

them Bain & Co

PE is resilient, nimble and hasdemonstrated an abi l i ty to

withstand shocks. Its no wonderprivate equity investors havecome out of the recession with arenewed focus on organic revenue

g rowth , app l y i ng a moreentrepreneuria l mindset toworking with their portfolio

companies - KPMG

PORTFOLIOS


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PORTFOLIOS

TFG ASIA FIXED INCOME FUND(2013)

TFG ANGKASA FUND(2014)

Koperasi KOPERKASA Bhd- RM200 Million

Koperasi Polis Diraja Malaysia Bhd- RM120 Million

Koperasi Kakitangan FELDA Bhd - RM75 Million

Iskandar Township Development- RM200Million

Cost of Funds 4.75%

TFG ASIA FIXED INCOMEFUND

TFG ANGKASA FUND

Cost of Funds 5.5%-8%

Annual ROR 6.5%- 7.35%

Expected ROR 15% Above

Annual Net Fixed Returns1.75%-2.6%

Annual Net Fixed Returns : 7%-9.5%

Capital Gains : *25% Upon Exit

Silverfly Airlines - RM68.5 Million


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TFG Asia

RETURN ON INVESTMENTS

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We are pursuing alternative investment strategies to optimize return on capital through active valuecreation with focus on mergers and acquisition strategies

Unlike listed equity investments, we are active managers and will be directly involved in the management

of our investee companies

Our target is to beat investment return from conventional avenues with a target of beating key benchmarksuch as average equity indices

Based on our approach, we are targeting an Equity IRR of 15%-20% for each investments


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TFG Asia

INVESTMENT STRUCTURE

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We believe the structure will provide for an efficient and effectiveplatform in implementing private equity investment strategies

INVESTORS

SPV/TRUST CO(Investment Co)

PreferenceShares

Investment

TFG Asia(Management Co)

Investment Mandate

FINANCIALINSTITUTIONS

Debt

ASSET CLASSES

COMPENSATION STRUCTURE


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Our compensation structure is designed to facilitate our investors and to minimise expenditure in return for

giving us the opportunity to provide value added investment management services to investors

Mutual Objectivity and Clear Alignment of InterestNo Upfront Fees or Retainer FeesTo minimise cost and expenditures by investors in managing the investments to increase IRR

DEAL ORIGINATION VALUE MANAGEMENT MANAGING EXIT

OUR ROLES & RESPONSIBILITIES

The Partners in TFG Asia have well established relationship within the financial and business communitythat gives them access to deals sources (investment opportunities as well as exit options) and to tap

industry talents to represent our investments.

FEE STRUCTURE



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TFG Asia

INVESTMENT METHODOLOGY

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INVESTMENT OBJECTIVE & PRINCIPLES


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In pursuing the investment objectives, TFG Asia shall observe key investments principles which we believe arecritical success factors to achieve a successful investment venture.

TFG Asia shall observe the following key investment objectives in evaluating and pursuing each investments

OBJ

ECTI

VES

PRINC

IPLES

INVESTMENT METHODOLOGY PRE INVESTMENT


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The basis of investment decision making will be on rigorous debate and intellectual discussions on themerit of each investments while allowing for speed of execution

To source and originate potentialacquisit ions and investmentopportunities

To form an investment thesis,

including investment horizon andpotential exit

Quantitative and qual itativeevaluation for pre and postacquisition, including strategic plan

Acquisition structure, instruments,timeline, settlement, equity control

Pricing, acquisition structure,

governance, management control,key executives retention

Financial close

TFG Asia

TFG Asia

TFG Asia

Investors &

TFG Asia

TFG Asia

METHODOLOGY ROLES & RESPONSIBILITIES

INVESTMENT METHODOLOGY POST INVESTMENT


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The critical period to enhance value of investments through aggressive management, implementation ofgrowth plan and developing strategic options

To develop a realistic strategic plantogether with management teamto build value leading to exit

To incorporate governance system

(Board/Exco/Authority/CAPEX) incl.appointment of industry experts.

Execute and monitor pre-agreedstrategic plan and progress

Formulate exit strategy and

options via asset injection, tradesale or IPO

ROI

TFG Asia

TFG Asia

TFG Asia

Investors &

TFG Asia

TFG Asia

METHODOLOGY ROLES & RESPONSIBILITIES

To manage balance sheet withoptimum form of capital structureand manage cost of capital



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TFG Asia

ASSET CLASSES

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CATALYST


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The Malaysian economy continues to be vibrant despite increasing volatility from external factors.

PRIVATE EQUITY


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Deal activity is likely to pick up in 2013 as private equity managers put more capital to work. Sectors such asoil and gas, real estate, healthcare, distressed debt, and infrastructuremay be ripe areas to minefor opportunity in the year ahead - Deloitte

!"# % &'()*'# +(,',*

-*./"0*(

1"2'20"'#(

+2,*.,'"23*

Announced M&A Deals 2011

!"# % &'(

)*'# +(,',*

-*./"0*(

1"2'20"'#(

+2,*.,'"23*2,

REAL ESTATE


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House Price Change (%)

Source : Valuation and Property Services Department, Ministry of FinanceHwangDBS Vickers Research

House Price Index

Residential properties will still do well in terms of numbers. For certain areas, prices willincrease. But overall for this year, there will be an adjustment in terms of prices, which areexpected to moderate - Valuation and Property Services Department, Ministry of Finance

The approval of the MRT 2 and 3 lines and the KL-Singapore high speed rail, along with theacceleration in awards of government redevelopment projects such as the Rubber ResearchInstitute of Malaysia land in Sungai Buloh, the financial district of Tun Razak Exchange andBandar Malaysia in Sungai Besi, should also boost interest in the sector HwangDBS

Vickers Research


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TFG Asia-Investments Copy

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