The Bridge to Mexican Infrastructure - Vinson & Elkins Bridge to Mexican Infrastructure ... pipeline...
Transcript of The Bridge to Mexican Infrastructure - Vinson & Elkins Bridge to Mexican Infrastructure ... pipeline...
NET Mexico Pipeline is a lean gas transportation pipeline that will transport natural gas from Agua Dulce Hub to a location near Rio Grande City, TX at the Mexico border and will interconnect with the Los Ramones Pipeline. At 2.3 Bcf/d capacity, NETMEX will become the largest natural gas export pipeline from US to Mexico.
Asset Map Asset Overview
• NET Mexico Pipeline is a 2.3 Bcf/d, 120 mile, 42” and 48” pipeline from the Agua Dulce Hub to the US / Mexico border, which will be completed in December 2014
– Pipeline will be completed on-time and under budget
– Mainline construction complete, all permits received, all ROW acquired
• Pipeline extends across the Rio Bravo River (Rio Grande) and interconnects with the Los Ramones pipeline in Mexico,
– Los Ramones is a 48” pipeline that spans five Mexican states and ends in Mexico’s largest industrial corridor
– Commercial operation for first phase of Los Ramones scheduled to begin in December 2014
• Anchored by a 20-year gas transportation agreement with MGS, an affiliate of PEMEX
– 2.1 Bcf/d firm, ship-or-pay agreement
– Guaranteed by PGPB
• Significant compression
– 100,000 HP of compression at the Agua Dulce Hub
– 20,000 HP of compression at three connecting processing plants
• PEMEX owns a 10% equity interest
NET Mexico Asset Overview
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GBM GRUPO BURSÁTIL MEXICANO IS A LEADING FINANCIAL GROUP IN MEXICO, WITH PRESENCE IN 5 COUNTRIES.
HAS THE MOST ROBUST RESEARCH TEAM IN MEXICO, WITH 44 ANALYSTS , COVERING 95% OF THE MARKET CAP OF
THE MEXICAN STOCK EXCHANGE’S PRICE INDEX (IPC).
GRUPO BURSÁTIL MEXICANO
Established in 1978
Listed in BMV: GBM O
Market Cap (March 2014) : $1,179
Equity: $511
Total Assets: $1,829
Assets under Custody: $15,180
Net Income (2013):$100
Employees: 700 +
Amounts in millions of US Dollars
Start of Operations in 1991
Fully registered BD – meber of FINRA
Services offered: Fixed Income, Equity
Funds and US Derivatives.
SIPC insured •
CHILE • Start of Operations in
2011
Brokerage – Member •
of Santiago
Exchange
3 Analysts
Stock
•
LUXEMBOURG • SICAV listed in Luxembourg with
a fund UCITS III
USA
MEXICO
•
•
•
#1 in volume since 2002
Market Share: 11.3%
44 Analysts
•
•
Start of Operations in 2008
Brokerage – Member of
Bovespa (CTVM)
8 Analysts •
BRAZIL (CTVM)
OVERVIEW FOOTPRINT •
•
•
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GBM HAS A SUCCESSFUL TRACK RECORD AS AN ASSET MANAGER,
PERFORMANCE AWARD, GRANTED BY FUND PRO, AMONG OTHERS.
CONSISTENTLY ACHIEVING THE PLATINUM
GBM ASSET MANANGEMENT
More than 30 years of experience
Mexico Investment Solutions
• Mexican debt and equity funds
Portfolios and investment mandates •
• Record Keeping
Global Investment Solutions
• SIC Funds
• Hedge Funds
International Wealth Management •
• UCITS III
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GBM team has been enhanced with independent advisors and the hiring of experts in the development of infrastructure projects.
INFRAESTRUCTURA SEEKS TO CAPITALIZE ON ITS EXPERIENCE IN PRIVATE EQUITY AND INFRASTRUCTURE, TAKING INTO
ACCOUNT THAT MOST SUCCESSFUL INFRASTRUCTURE FUNDS WORLDWIDE HAVE BEEN PROMOTED BY FINANCIAL
INSTITUTIONS.
PRIVATE EQUITY WITH IPO EXIT
PRIVATE EQUITY AND INFRASTRUCTURE
(Divested)
Punta Venus
OTHER SUBSTANTIAL INVESTMENTS
Real Estate
Portfolio
PRIVATE INVESTMENT IN PUBLIC EQUITY OTHER INVESTMENTS
IN PRIVATE EQUITY
SINCA GBM
CA
PIT
AL
IN
CR
EA
SE
(AC
QU
IRE
D O
UT
RIG
HT)
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THE PERFORMANCE OF PRIVATE EQUITY INVESTMENTS IN PUBLIC COMPANIES IS REFLECTED IN OUR V1 AND V2
FUNDS, WHICH HAVE OUTPERFORMED THE IPC IN THE LAST 10 YEARS.
GBM’S TRACK RECORD AS A FUND MANAGER
• From 2004 to date, the V1 and V2 portfolios have returned 468% and 721%, respectively.
• The IPC has an accumulated yield of 268%, for the aforementioned period.
*YTD as of Marzo 2014
V1 AND V2 PORTFOLIO PERFORMANCE — 2004 TO 2014
800%
Source: Mexican Stock Exchange
400% 200%
0%
600%
mar
-04
mar
-05
mar
-06
mar
-07
mar
-08
mar
-09
mar
-10
mar
-11
mar
-12
mar
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mar
-14
GBMV1 GBMV2 IPC
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CAGR GBMV1 2004 - 2014 = 18.9%
CAGR GBMV2 2004 - 2014 = 23.4%
CAGR IPC 2004 - 2014 = 13.9%
Año IPC GBMV1 GBMV2
2004 46.9% 76.1% 41.5%
2005 37.8% 22.0% 28.2%
2006 48.6% 47.1% 48.6%
2007 11.7% 50.0% 57.9%
2008 -24.2% -6.0% -19.7%
2009 43.5% 2.9% 19.1%
2010 20.0% 5.7% 15.5%
2011 -3.8% 18.3% 18.9%
2012 17.9% 21.2% 30.8%
2013 -2.2% 14.1% 25.4%
2014*
-8.1%
-4.9%
-3.0%
GLOBAL COMPETITIVENESS INDICATORS SHOW THE
MEXICO.
POTENTIAL FOR THE DEVELOPMENT OF INFRASTRUCTURE IN
INFRASTRUCTURE IN MEXICO
Mexico’s Infrastructure Segment is ranked 65th of 144th worldwide.
MEXICO IN THE WORLD
Ranking Sector
MEXICO IN LATIN AMERICA
Ranking Sector
62°
64°
51°
60°
81°
Ports
Airports
Highways
Railways
Electricity
10°
10°
3°
3°
13°
Ports
Airports
Highways
Railways
Electricity
OVERALL COMPETITIVENESS COMPARATIVE CHART
Source: World Economic Forum – Global Competitiveness Report Source: World Economic Forum – Global Competitiveness Report
Source: World Economic Forum – Global Competitiveness Report
5.67 5.61 5.54 5.51 5.48 4.84 4.61 4.57 4.34 4.33
4.05 3.63
3.35 3.11 2.85
Sw
itze
rla
nd
Sin
ga
po
re
Fin
lan
d
Ge
rma
ny
US
A
Ch
ina
Ch
ile
Spain
Me
xic
o
Bra
zil
Uru
gu
ay
Eg
yp
t
Vene
zu
ela
Ha
iti
Ch
ad
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THE PPP LAW*, ENACTED ON JANUARY 15 2012, BOOSTS THE DEVELOPMENT OF NEW INFRASTRUCTURE
PROJECTS IN MEXICO • Prioritizes private over public investment.
• Promotes new financing schemes based on multi-year budgets.
• Distributes the risks involved in projects execution, in an equitable manner.
• Establishes agile and flexible contracting procedures with greater security and legal certainty.
• Beholds the constructive assent of the authorizations required to start projects.
• Supports projects that investors present without these haven’t been called (or tendered), with the possibility of reimbursement
of incurred expenses.
• Stipulates that the assessment of proposals is based on a cost-benefit criteria and rules that enable agility in tenders.
• Allows negotiation and if applicable the expropriation of property to develop the projects, as in the case of rights of way.
• Allows the modification of contracts to recognize the existence of some circumstances.
• Grants reimbursement of investments made in the case of an early termination.
• Solves disputes regarding technical or economic differences between parties, based on expert judgment or arbitration
NEW PPP LAW
*Project of Decree issuing the Public Private Partnerships Act and amending, supplementing or repealing certain provisions of the Law on Public Works and Related Services , the Law
of Acquisitions, Leasing and Services of the Public Sector, Law Expropriation, the National Assets Law and the Code of the Federation of Civil Procedure.
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The Energy Reform authorizes integrated services
and operational yield contracts as well as shared
production schemes.
ENERGY REFORM
THE 2013 ENERGY REFORM REPRESENTS A KEY MOMENT FOR THE ENTIRE HYDROCARBON VALUE CHAIN, GENERATING
OPPORTUNITIES FOR PRIVATE INVESTORS.
CHANGES IN THE REFORM
The Energy Reform creates opportunities for investing in the production, refining, distribution, storage and commercialization of hydrocarbons.
YES YES YES
The Energy Reform will allow the
treatment and refining of oil, as well
the processing of natural gas, to be
handled through permits.
With the Energy Reform, oil exploration and extraction
activities will be carried out through awards to state-owned
productive companies or contracts to private players.
Refining
Field
Abandonment Production Fields’
Development
Production
Delimitation of
Reservoirs Assessment
of Prospects
Analysis and
Strategy
Assestment
Analysis and
Assessment
of Hypothesis
Analysis and
Assessment
of oil systems
Analysis and
Assessment of
Basins
Exploration
Assessment of Potential Reservoirs
Characterization
Reserves
Incorporation
Before the Energy Reform After the Energy Reform
PEMEX Company with state-owned majority stake State Productive Company
Contract types Incentivized contracts Shared profit or production contracts
Accounting and Financial effects Awards and contracts cannot be reported for accounting effects. Companies will be able to report awards and contracts for
accounting effects.
Storage, transportation and distribution Regulated by PEMEX Regulated by the National Hydrocarbon Commission
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The state will be able to celebrate contracts
with private suppliers for the financing,
installation, maintenance, management,
operation and expansion of the infrastructure
required for energy distribution.
ENERGY REFORM
THE ENERGY REFORM OPENS THE GENERATION OF ELECTRICITY TO THE PRIVATE SECTOR, REDUCING THE BARRIERS
WHICH EXISTED UNDER THE SELF-SUPPLY AND CO-GENERATION SCHEME, WHILE GIVING CERTAINTY TO DISTRIBUTION.
CHANGES IN THE REFORM
YES
Construction and Generation Distribution Commercialization
PARTIAL
The National Center for Energy
Control (CENACE) will be in charge
of controlling the national electric
system, the wholesale electrical
market and the access to the
national transmission grid
YES
The commercialization of electricity to non-
qualified users will be initially handled by the
Federal Electricity Commission (CFE)., which will
offer tariffs regulated by the Energy Regulation
Commission (CRE). Afterwards, there’s a
possibility for the creation of commercialization
companies which would provide distribution
services, regulated by the CFE.
Before the Energy Reform After the Energy Reform
CFE Companies with state-owned majority stake State Productive Companies
Electricity generation Exclusively by CFE Will be fully open to the private sector
Contract types Self-supply, co-generation and public works schemes Contracts with private suppliers for the financing, installation,
maintenance, management, operation and expansion of
infrastructure.
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OPPORTUNITIES IN GREENFIELD PROJECTS GO BEYOND THOSE CONTEMPLATED IN THE NIP AND ARE PRESENTED IN
DIVERSE INFRASTRUCTURE SECTORS, THUS BEING ABUNDANT AND DIVERSIFIED. MAIN SECTORS VALUE PROPOSITION IDENTIFIED OPPORTUNITIES
INVESTMENT IN GREENFIELD PROJECTS
Highways
Commuter Transportation
Port Terminals
Multimodal Terminals
Touristic Infrastructure
Com
munic
ations &
Tra
nsport
E
nerg
y
Hid
raulic
Airports
Hydrocarbons
Pipelines
Renewable Energy
Aqueducts
Adjacent business development;
Real Estate value release
Efficient operating structures;
Creating synergies with urban transportation
Exploiting geographical advantages vs US
Development of new container terminals
Efficient operating structures;
Key locations’ development
Standardizing service offers;
Integrating touristic routes
Strategic relocation
New airport development
Creating new companies for the operation of oil fields,
implementing best practices.
Integration of polyethylene chain to address the market
deficit in Mexico.
Development of new hidraulic networks and efficient
Siglo XXI, Tuxpan –Tampico, Paquete Chiapas, Cardel
–Poza Rica, Guanajuato – San Miguel
Line 3 of Mexico City’s suburban train Mexico – Toluca,
México – Querétaro and Mérida – Q Roo.
Mazatlan, Lazaro Cardenas, Tuxpan, Veracruz
Mexico City and Monterrey
Calica, Los Cabos, Puerto Morelos
Mexico City, Riviera Maya, Puerto Vallarta
Oil E&P in mature fields in Chicontepec
Etileno XXI
Hermosillo, Monterrey VI
Wind in Tamaulipas, Solar in BCS.
Bio-jet fuel, ethanol Wind, solar, mini-hydro, biofuel
Petrochemicals
Power Generation from Cogeneration and
Combined Cycle Power Plants (CCPP)
Combined Cycle Power Plants in the area of influence
of new pipelines.
Utilization of both existing production chains, and of
gas prices to generate power to provide a wholesale
market.
operations to supply urban populations.
Dams Solve shortage in big cities. Xalapa Dam
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Fe
dera
l P
ublic
Tenders
Local P
roje
cts
R
estr
uctu
res a
nd
spin
-offs
Privatization of infrastructure projects that will
generated resources for FONADIN, Pemex and
CFE.
Using the value of the projects to reduce debt
and/or meet needs.
Highways
Airports
Ports & Railways
Energy Infrastructure
Hidraulic Systems
FARAC, CAPUFE (Querétaro, Cuernavaca,
Puebla)
ASA (Cd del Carmen, Poza Rica)
API’s, Ferrovalle, Chiapas Mayab
Platforms, ducts
Cutzamala System, Cancun, Puebla, Tuxtla
Highways
Hydraulic Systems
Airports
Highways and state roads
Cancún, Puebla, Chihuahua, Tuxtla Gutiérrez
Toluca, Tuxtla Gutierrez
Concessions
Private – Public Associations
Demerger of assets that improves the financial
situation of enterprises, in order to facilitate their
participation in bids.
THERE ARE MANY OPPORTUNITIES TO INVEST IN BROWNFIELDS, THAT ARE NOW UNDER CONCESSION TO PRIVATE
COMPANIES, SOME WITH NEEDS TO OBTAIN RESOURCES.
MAIN SECTORS VALUE PROPOSITION IDENTIFIED OPPORTUNITIES
Durango – Gomez Palacio,
Cardel – Veracruz,
Monterrey – Saltillo
Coatzacoalcos Tunnel
Line 1 of Mexico City’s commuter rail
BRT Systems
INVESTMENT IN BROWNFIELD PROJECTS
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Financial restructuring of
construction companies and / or
concession operators
Consolidations
Nontraditional financial products
New Business Models
Asset Utilization: Federal, regional
and local
Private equity investments in both
Mexican and international companies
with operations in Mexico that have
solid business plans but whose
capital structures are compromised.
In fragmented industries
where there is the opportunity
to implement an acquisition
strategy for projects to achieve
synergies and economies of
scale to increase its market
share and strength of the
company.
Use of financial engineering through novel products where
traditional financial intermediaries do not participate
(examples: Mezzanine loans, convertible loans, etc…).
Redesign of the current
business model, allowing the
company to generate and
capture greater value, in order
to optimize its resource use and
returns on its operation
Transactions with governments
with assets that can be used to
solve the lag between income
and expenditure.
The presence of these
factors will be essential for
the projects’ feasibility
SOURCE OF INVESTMENT
THE CURRENT STATE OF THE INFRASTRUCTURE SECTOR WILL GENERATE OPPORTUNITIES MATCHING
INFRAESTRUCTURA’S EXPERIENCE AND CAPACITY.
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INFRAESTRUCTURA WILL INVEST IN ACTIVITIES RELATED TO PLANNING, DESIGN, CONSTRUCTION, DEVELOPMENT,
OPERATION AND MAINTENANCE OF INFRASTRUCTURE PROJECTS.
INFRASTRUCTURE CHARACTERISTICS
1. Relatively inelastic demand resulting from demographic and assets trade. The demand does not change substantially, regardless of
variations in the price of related goods or services
2. Regulated revenue flow resulting mainly from concessions or long-term contracts for services that generally offer predictable cash
flows and inflation coverage.
3. A limited level of competition in view of the entry and technological barriers and of government approvals.
INVESTMENT OBJECTIVE
INSTRUMENTS
Once the asset or assets have been selected, Infraestructura
will seek to invest through a flexible vehicle capable of
optimizing the capital structures with a clear exit strategy.
• Convertible debt,
• Mezzanine debt,
• Preferred, at a discount (stock or private),
• and Private companies’ equity, among others.
These instruments will be used depending on the case, and at
the different stages of the project’s life.
SECTORS
Infraestructura will focus on the following sectors:
Communication Sector: Roads, bypasses, ports, airports, railroads, commuter rail, cargo
terminals and logistics facilities, among others.
Hydraulic Sector: Water purification and treatment plants, aqueducts, water
distribution networks, among others.
Energy Sector : Oilfield operation, power generation, development of alternative
energy sources, biofuels and other clean energy sources, among
others.
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STRATEGY
THE INVESTMENT STRATEGY SHOULD BE BASED ON ADDING VALUE TO A RIGOROUS SELECTION OF ASSETS AND
OPERATING PARTNERS IN ORDER TO ENSURE ATTRACTIVE RETURNS.
Asset Selection Suitable Operating
Partner Added Value + + Higher returns than
market returns =
Synergies with adjacent projects
Growth Potential
Optimization of Tariff Structures
Elements that add value
Operating Efficiencies
Financial Structure Improvements
Creation of platforms seeking to exit
investments through financial markets
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GBM HAS THE PROVEN ABILITY TO CREATE, ANALYZE, STRUCTURE, INVEST, NEGOTIATE, MONITOR, AND CARRY OUT
INVESTMENT OPPORTUNITIES WITH AN EXPECTED RETURN BETWEEN 16%,AND 19% WHICH IS HIGHER THAN THE
AVERAGE RETURN IN THE INFRASTRUCTURE SECTOR.
PERFORMANCE AND RISK
Clear origination in the way of entering, managing risks, and exiting.
Rigorous analysis of the sector and the asset, as well as of the parties involved, to find
the right price and determine the feasibility of the project.
Negotiation of minority rights to ensure adequate strategic decisions and avoid
inappropriate behavior.
Optimization of funding sources to boost the growth of the business and managing risk.
Institutionalization in order to increase accountability and facilitate access to capital
markets.
Choosing and implementing the appropriate mechanism based on market knowledge.
Vision
Due Diligence
Terms and Conditions
Corporate
Governance
Capital Structure
Successful Exit
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GBM’S INFRASTRUCTURE FUND HAS THE SUPPORT OF GBM TO ACHIEVE A PROPER STRUCTURE, MANAGEMENT AND
CONTROL.
SUPPORT OF CORPORATIVO GBM
MANAGEMENT CONTROL SUPPORT AND OPERATION OF ASSETS
GBM Infraestructura.
• Portfolio management
• Sales
• Monitoring of asset performance.
• Risk assessment.
• Corporate governance.
• Report (valuation and justification of
investment objectives).
• Periodic performance evaluation.
GBM Brokerage
• Market research.
• Evaluation of returns.
• Covenants.
• Sponsorship (channeling).
• exit strategies.
Holders’ Assembly
Technical
Committee
Investment
Comittee
Investment
Management
Regulation and
Accountability
Investment
origination,
monitoring and
analysis
Fiduciary
Independent Auditor
Operating Partners
Independent Apraiser
Common
Representative
• Fund Accounting and Reporting
• Cash management
• Buy/Sell Execution
• Monitoring the operations of the Trust
• Audit the Fund’s Accounting.
• Independent valuation
of the fund’s assets
• Origination, co-
investment and operation
of the projects.
C o r p o r a t i v o G B M
P o r t f o l i o I n v e s t m e n t s
I n c G B M C a p i t a l
G B M C a s a d e B o l s a
O p e r a d o r a G B M F o m e n t a G B M
S o f o m G B M
I n f r a e s t r u c t u r a
G B M B r a s i l
H o u s t o n B r o k e n D e a l e r
G B M C h i l e
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THE INVESTMENT COMMITTEE HAS A MAJORITY OF INDEPENDENT MEMBERS AND IS COMPRISED OF PEOPLE WHOSE
AMPLE KNOWLEDGE AND EXPERIENCE CONTRIBUTE TO THE INVESTMENT DECISIONS AND THE VALUE CREATION WITHIN
THE FUND’S PROJECTS.
• 30 years of experience in private and public equity markets.
• Executive VP at GBM.
Fernando
Ramos
INVESTMENT COMMITTEE
Member
Member
Independent Member
Independent Member
Independent Member
Member
Independent Member
Independent Member
Independent Member
Member
Manuel
Rodríguez
Guillermo
Guerrero
Diego Ramos Enrique Rojas
Rolando Vega
Oscar de Buen
Jesús
Reyes-Heroles
Fernando Ramos
• Expert in equity markets.
• Joint General Manager at GBM
• General Manager at CFE.
• General Manager at
CONAGUA.
• National Civil Engineering
Award (2007).
• 30 years of experience.
• Infrastructure
Undersecretary at SCT.
• Energy Secretary
• General Manager at PEMEX
• General Manager at Banobras.
• 21 years of professional experience, mainly in
infrastructure.
• 27 years of experiece in equity markets.
• GBM’s President and CEO.
• CEO and President of Grupo Atlas.
• President of the Mexican Association of
Insurance Institutions.
• VP of the Inter-American Federation of
Insurance Companies.
Rodrigo Franco Dionisio Garza
Medina
• President and CEO of
Grupo Alfa. • Joint General Manager at
INFRA
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THE TECHNICAL COMMITTEE HAS A MAJORITY OF INDEPENDENT MEMBERS AND IS FORMED BY REPRESENTATIVES OF
THE CKD’S HOLDERS AND OF GBM. WITH THE SUPPORT OF EXTERNAL ADVISORS, THE TECHNICAL COMMITTEE
MAKES THE FUND’S INVESTMENT DECISIONS AND FOLLOWS THE DEVELOPMENT OF THE ITS INVESTMENTS.
Independent
TECHNICAL COMMITTEE
Manuel Rodríguez Ginger Evans
Diego
Ramos
Enrique
Rojas
Guillermo Guerrero
Oscar de Buen
Louis Ranger
Jeff Shane
Jesús
Reyes-Heroles
Fernando Ramos
• Joint CEO at GBM.
• Variable income
investments expert.
• CEO at CFE.
• CEO at CONAGUA.
• National Civil Engineering
Award (2007).
• 30 years of experience.
• Undersecretary of
infrastructure at SCT.
• Secretary of Energy.
• General Manager of
PEMEX.
• CEO at Banobras.
• Managing Director of GBM
Infraestructura.
• 21 years of professional
experience, mainly in
infrastructure.
• Deputy Minister of
Transport, Infrastructure
and Communities for the
Canadian government.
• VP of Engineering at
Metropolitan Washington
Airports Authority
• Director of Aviation and Sr.
VP at Parsons Corporation.
• Experience in infrastructure,
mainly in the US
Department of
Transportation (DOT).
• Undersecretary of policies
at the DOT.
• Executive Vice-President at
GBM.
• 30 years of experience in
private and public equity
investments.
• President and CEO of GBM.
• 27 years of experience in
equity markets.
AFORE Banamex
AFORE
SURA
• Assets under
management: MXP$270,
643 million.
• Assets under
management:
MXP$335,655 million.
AFORE Principal Financial
• Assets under
management:
MXP$130,651 million.
GBM Investors Members Advisors
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INFRAESTRUCTURA ADOPTS MARKET
TRANSPARENCY. FOR THIS REASON,
ASSOCIATION (ILPA).
PRACTICES WHICH ENABLE THE ALIGNMENT OF INCENTIVES AS WELL AS
IT FOLLOWS THE GUIDELINES OF THE INTERNATIONAL LIMITED PARTNERS
ALIGNMENT WITH BEST PRACTICES
THE 3 AXIS OVER WHICH THE FUND IS MANAGED:
ALIGNMENT OF INTERESTS FUND MANAGEMENT TRANSPARENCY
• Remuneration: Mainly based on the success of
the investments, through Performance
Distributions.
• Management fee: Competitive.
• Joint venture: Obligation to co-invest with the
Fund in each investment and disinvestment.
• Investment opportunities: Obligation not to
take advantage of investment opportunities that
are within the fund’s objectives, except for
specific exceptions (eg, after completion of the
Investment Period or investments rejected by
the Technical Committee).
• Subsequent funds: Obligation not to complete
a subsequent offer of a fund with similar
strategies and objectives until 80% of the Fund
has been invested.
• Investment Period: 5 years with the obligation
to invest 20% in the first 2 years.
• Investment strategy: Aligned to FONADIN’s
investment strategy.
• Capital calls and distributions: Subject to
market practices.
• Corporate
Shareholders’
Committee
bodies: Fiduciary, trustee,
Meeting, and Technical
in accordance with legal
requirements and market practices.
• Key Officials: Involve key persons leading the
daily businesses of the Trust
• Manager Replacement: With or without cause,
in accordance with market practices.
• Risk management. Infraestructura will have the
workgroup and support from GBM and its
analysts to identify and manage potential risks
of the
• Cascade, Accounts
Transparent.
and Expenses:
• Valuation: By independent appraiser.
• Independent Auditor: To audit the Fund’s
financial information.
• Financial information: In accordance with
market practices.
• Reserve and Independent Advisors. Set up
in order to be used by the Shareholders to hire
independent advisors.
• Reserved Matters: The Independent
Members of the Technical Committee will
decide on transactions where there is a conflict
of interest, as well as appoint a new
independent appraiser, Trustee or External
Auditor.
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CONCLUSIONS
GBM Infraestructura meets all the requirements to ensure the success of the listed private equity fund
Alignment of incentives through the joint venture of 20% from GBM Investment and Technical Committees with a majority of Independent Members GBM Professional team with vast experience in various types of infrastructure projects. GBM track record in Infrastructure and adjacent businesses in Mexico. Alignment of incentives through Capital Calls Experience as fund manager in Mexico Strategy aligned to the NIP that identifies investment opportunities for Private Equity. Relationships Network to select proper partners and promote projects. Detailed Due Diligence and asset management processes. Experience in optimizing capital structures. Knowledge of the different stages of a project’s life cycle. Capacity to generate business exits (IPO, securitization, etc.). Accountability with best practices for corporate governance and reports. Proven commitment, assigning human and material resources by GBM.
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Mexico in a North American Context Historical Underdevelopment Implies Remaining Potential
Mexico today has 5% of the oil reserves and 4% of
the gas reserves in NAM…
…but it has not always been that way (1984)
There’s also shale potential
___________________________________
Source: EIA, CIA.
10 5%
201 95%
Oil Proved Reserves (Bbbl)
Mexico US & Canada
17 4%
395 96%
Gas Proved Reserves (Tcf)
Mexico US & Canada
13 16%
67 84%
Shale Oil Resource (Bbbl)
Mexico US & Canada
545 31%
1,238 69%
Shale Gas Resource (Tcf)
Mexico US & Canada
5642%
7758%
Oil Proved Reserves (Bbbl)
Mexico US & Canada
77 21%
297 79%
Gas Proved Reserves (Tcf)
Mexico US & Canada
25
Stage Set for Cross-Border Equilibrium
Mexico’s Growing Power Demand Needs Fuel… …and Texas’ Natural Gas Is Eager to Be It
100
150
200
250
2000 2003 2006 2009 2012 2015
Mexic
o P
ow
er C
onsu
mpti
on (
BkW
h)
___________________________________
Source: EIA.
0
5
10
15
20
25
2000 2003 2006 2009 2012 2015
Texas
Natu
ral
Gas
Pro
ducti
on (
Bcf/
d)
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Midstream Investments Needed to Keep Pace
Power Plants and LNG Terminals Will Fuel Demand for Additional Natural Gas Pipeline Capacity
___________________________________
Source: Woodmac, RBN Energy, Platt, Shalemag, KMI.
LNG Terminal
New or Expansion CCGT
Existing Pipelines
Expansion Pipelines
US exporting ~2 Bcf/d to Mexico
~3% of entire US output
>4 Bcf/d in next decade
$34B needed in pipeline
infrastructure investment
55 GW of new generation
needed over next few years
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Midstream and Downstream
• Private sector entities may invest in all midstream and downstream oil and gas activities
• Ministry of Energy (SENER) will issue permits for private sector oil treatment and refining, natural gas
processing, and import/export of hydrocarbons, LPG, refined products and petrochemicals, and (for the
remainder of 2014) also for the distribution and sale of LPG and LPG transportation/storage
• Energy Regulatory Commission (CRE) will grant permits for all other midstream and downstream activities,
including transportation and storage, distribution, liquefaction, compression and regasification, marketing
and retail sales activities for all hydrocarbons, LPG, refined products, and petrochemicals
• Starting on January 1, 2016, CRE will grant permits for gasoline and diesel marketing to private firms (in
2017, private firms will be able to import gasoline and diesel)
• CENAGAS will be created to act as independent operator of Mexico’s existing pipeline and storage
infrastructure, and will receive all of PEMEX’s pipelines and storage capacity at the end of a transition
period
• Permit holders for pipelines and gas storage facilities must provide open access on a non-discriminatory
basis to third parties, subject to available capacity. Midstream companies may not sell hydrocarbons or
other products that are transported through or stored in their facilities, except for limited exceptions.
Key Aspects of Mexican Energy Reform Legislation
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