Tembusu Growth Fund II

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Tembusu Growth Fund II
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Disclaimer

• This document is for discussion purposes only and
  does not constitute an offering in any way or any
  jurisdiction. Reproduction and communication of
  this document in any form or manner is strictly
  prohibited. This document has not been
  independently verified and the authors are not
  liable for any claims or obligations whatsoever
  that may be attributable to this document. This
  document is strictly private and confidential and
  remains the property of the authors.
• This product is meant for accredited investors
  (individuals whose net personal assets exceeds in
  value S2 million or whose income in the
  preceding 12 months is not less than S300,000)
  and institutions (corporations with net assets
  exceeding S10 million) only. All investors
  should seek independent and competent advice on
  the suitability of this Fund in meeting their
  investment needs before making a decision to
  invest in this Fund.

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Table of Contents

1. Executive Summary
2. The Fund Manager Tembusu Partners
3. Investment Strategy
4. Investment Selection
5. Track Record
6. Other Details
7. Appendix A Biographies

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Executive Summary
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Executive Summary
Singapore Private Equity Manager Established In
2006

• Founded by Mr. Andy Lim, Mr. Tan Kim Seng and two
  other successful entrepreneurs
• 18 staff in six offices spanning Singapore,
  China, UK, and ANZ

S210 MM Assets Under Management Over Two Funds

• Tembusu Growth Fund I (TGF I) S100 MM Pan
  Asia growth capital fund
• Nanjing Growth Fund US80 MM China growth
  capital fund

Raising S300 MM For Tembusu Growth Fund II (TGF
II)

• TGF II Platform for investors seeking
  attractive risk-adjusted returns from alternative
  assets in Emerging Asia
• Mandated to invest in growth companies seeking
  expansion capital
• Exit investments within 3 to 5 years through IPOs
  or trade sales

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Summary of Principal Terms
Fund Company Tembusu Growth Fund II Ltd
Fund Manager Tembusu Partners Pte Ltd
Fund Size S300 million
Minimum Investment S5.0 million (Institutions) S1.0 million (Individuals)
Target Return (p.a.) 25
Hurdle Rate (p.a.) 8
Carried Interest 20 after hurdle on a catch up basis
Management Fee Year 1 - 3 2.00 Year 4 - 5 1.75 Year 6 - 7 1.50
Investment Period 3 years from Initial Closing
Charter Life (years) 5 1 1
Tax and other benefits Qualified for zero-rated tax incentive under EDB S13H Scheme for Funds
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Portfolio Allocation
Fund Allocation by Size

• Single investment limit not more than 15 of
  the fund or S30 million, whichever is lower
• Portfolio size no more than 25 companies
• Expected investment size S10 to S20 million

Fund Allocation by Stage

• 90 growth stage / pre-IPO / buyouts /
  restructuring
• 5 early stage
• 5 Private Investment in Public Equity (PIPE)

Fund Allocation by Geography

• Singapore-based or Singapore-linked businesses -
  50
• Greater China, Southeast Asia (ex. Singapore),
  India, ANZ - 50

Charter of the fund allows for investments in
companies in these stages. However, the fund is
primarily and substantially focused on growth
stage companies.
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The Fund Manager Tembusu Partners
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Tembusu Partners Timeline
Incorporation of Tembusu Partners Limited
Successful launch of S100 MM TGF I
Successful launch of US80 MM Nanjing Growth Fund
Agreement with China AMC (part of Citic Group)
Expected first close of S300 MM TGF II
2006
2007
2009
2010
2008

• 2007 Investments
• TTMI
• VDH Energy
• Hongwei
• ACTAtek
• Infinite Frameworks
• Artivision Technologies
• Standard Water
• Tongji Environment
• Global Roam
• China Dredging
• Ying Tai Biotechnology

• 2008 Investments
• Sports Asia
• Tangshan Ganglu

• 2009 Investments
• Cherie Hearts
• Silver City Minerals
• 2009 Investment exit
• VDH Energy 37.6 IRR

• 2010 Investment exit
• Tongji Environment 8.5 IRR

Appointed as exclusive distributor for China
Capital Impetus Fund for Singapore
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The Tembusu Value Add
Individual Partner Sourcing
Weekly Conference Portfolio Review New
Deals Resource Planning Partner Inputs Market
Feedback
Due Diligence
Detailed Action Plan Presentation to All
Partners and On-Site Visit Syndication Candidates
Decision by Investment Committee
Portfolio Monitoring Value Creation
Follow on Funding or Exit
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Organizational Structure
International Board of Advisors
Management Team
Investment Committee
Investment Team (China)
Investment Team (Singapore)
Administrative Accounts Team
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Principal Investment Committee and International
Board of Advisors
IC MEMBER
EXPERIENCE

• Chairman, Tembusu Partners Pte Ltd
• Chairman, MoneyWorld Asia
• Chairman, Viking Offshore and Marine
• Honorary Consul, Republic of Lithuania

Andy Lim
IC Member

• Chairman, Board of Governors, Raffles University
• Member of the Global Advisory Board of Chicago
  University Graduate School of Business
• Minister, Ministry of Transport, Trade
  Industry,
• MD, LMA Pacific Precision Castings

Yeo Cheow Tong
IC Member

• Chairman, Namma Real Estate Company
• Chairman, Qatar National Export Import Company
• Deputy General Manager, and Qatar Petroleums
  Representative at Anadarko Qatar Energy

Sheik Faisal Al-Thani
Board of Advisors

• Chairman, Nanyang Executive Program, Nanyang
  Business School, Singapore
• Honorary Professor, Faculty of Management, Xiamen
  University, China

Professor Wee Chow Hou
Board of Advisors
other Investment Committee members and Advisors
to be confirmed
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Management Team
Mr Mahim Chellappa Principal Mahim has over 9
years of investment banking experience in the
U.S. and Southeast Asia, with expertise in
private equity, MA, structuring and deal-making
across a broad set of industries.
Ms Emily Zhang Investment Director (China)
Emily Zhang has over 7 years experience in
consulting, business development and marketing
in China and New Zealand.
Mr Daniel Lee Investment Director (Australia, NZ)
Daniel has more than 15 years of experience in
the asset management, treasury and securities
industry. He is also involved in the hotel
management and property development in New Zealand
Mr Chandran Gnanakuru Investment Director
(Europe) Chandran is based in London, and spent
12 years running the alternative asset program of
several family offices. He currently works
closely with PE/VC teams on fundraising
activities.
Ms Emily Goh Director Emily has more than 9
years of field experience with regional start-up
and growth companies. She has also advised
businesses on strategic alliances, cross-border
MA and capital raising activities.
Mr Allen Shi Investment Director (Shanghai)
Allen has over 13 years of experience in
investment, business development and business
consulting in China.
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Investment Strategy
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Fund Focused on Emerging Asia Middle Market
Through Significant Minority Investments
Emerging Asia

• Emerging Asia has consistently outperformed ROW
• This dynamic region is expected to play a leading
  global economic role
• Much of developed world faces significant
  long-term crises, including massive debt, steep
  budget deficits, and structural unemployment

Middle Market

• Typically, greater revenue and earnings
  acceleration than large cap companies
• However, much less access to capital, providing
  investment opportunities for hands-on investors
  like Tembusu

Significant Minority Investments

• Tembusu invests with proven entrepreneurs who
  typically have significant personal stakes in
  their companies
• We target a 20 - 30 ownership stake and board
  representation
• Commit internal resources towards improving the
  finance and operations of our portfolio companies
  as required

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Capitalize on Strong Growth in Asia

• Continued strong growth from Asian economies
  particularly in our focused areas of China,
  India, and South East Asia
• Strong emerging middle class driving domestic
  consumption
• Rapid urbanization with significant
  infrastructure building

Source IMF and www.xe.com. SE Asian basket
consists of 7 countries, Pan Asian basket
consists of 9 countries, Western Europe consists
of 9 countries
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Significant Minority Investments in High Growth
Middle Market Companies
Minority Investment
Middle Market
Significant equity stake is key for management to
be motivated to succeed
Selectively invest in high growth SMEs
Tradition of Asian family businesses selling only
minority stakes
Our fund size is tailored to most attractive
investments in Emerging Asia
Tembusu is one of the few PE funds with expertise
in this space
Less efficient capital markets available for SMEs
creates value opportunities
Unique Growth Investment Opportunities
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Team Focused on Maximizing Returns Whilst
Minimizing Risk

• Senior Management experienced in running
  companies as well as working alongside
  entrepreneurs
• General Partners committed significant funds to
  TGF I and are committed to TGF II

Entrepreneur Led Management Team
Aggressive Deal Structures

• Close attention to investment structures in order
  to maximize returns, while limiting our downside
  risks
• Experienced in the use of several different
  instruments in our investment agreements

Attractive Fund Structure

• No reinvestment risk, Tembusu will identify
  appropriate opportunities for partial or full
  realization of investments
• Capital gains on portfolio investments and
  distribution proceeds to investors are exempt
  from taxation in Singapore

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Aggressive Deal Structures
Tembusu carefully and aggressively structures our
investments in order to maximize returns, while
limiting our downside risk

• Our structured private equity investment
  agreements have included
• Convertible loans with detachable warrants
• Redeemable Convertible Preference Shares
• Performance guarantees with clawback provisions
• Put options exercisable in the event of non
  liquidity after a specified time period (e.g., 2
  years)

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Investment Selection
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Investment Criteria
High Growth and Scalable Companies
Tembusu Can Enhance Value Through Active
Sponsorship
Targeted Industry Focus
Proprietary Deal Sourcing
Companies Have Exit Visibility and Feasibility
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Aggressive Growth Capital Investments
TGF IIs Focus
Company Value
Time
Venture Capital
Business Plan
TGF Exit
Growth Expansion
Globally Competitive Enterprise

• Growth Stage Investment Focus
• Emphasis on companies that have expansion-ready
  business models
• Value Creation
• Utilize entrepreneurial experience to grow
  portfolio companies
• General Partners have over 90 years of combined
  entrepreneurial experience
• Hands-On Investment Approach
• Assist portfolio companies in Business
  Development, Finance and Corporate Governance
• Tembusu team has extensive experience in Private
  Equity, MA, Investment Banking, Financial
  Accounting, Management Consulting and Business
  Operations

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Sector Focus

• Emphasis on core sectors where Tembusu has
  operating and investment expertise

Sector Experience
Natural Resources Oil Services GP is Chairman of a listed offshore marine services provider Another GP founded a leading oil gas services company Existing investment in TGF I
Clean Energy Exited investment in TGF I
Infrastructure Engineering Existing investments in TGF I
Technology, Infocomm Media Existing investments in TGF I
Education GP founded and built a multi billion dollar education conglomerate with operations in China and SE Asia
Healthcare Biotechnology IC member was a Senior Government Official in the Health Ministry Existing investment in TGF I
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Proven Proprietary Deal Sourcing Ability

• Most investees in TGF I were proprietary
  investments
• Highly connected network of advisors
• Sample of potential investments under
  consideration

Industry Company Description Investment Stage Location
Technology Software development Growth India
Clean Technology 3 separate companies Growth South East Asia
Natural Resources Mining Growth South East Asia
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Track Record
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TGF I Tembusu Partners Flagship Fund
TGF I Raised S100 Million

• Raised S100 million from four general partners
  and 38 high net-worth individuals
• General Partners (including Andy Lim) committed
  approximately S50 million

Entrepreneur Driven Investees

• TGF Is strategy capitalized on growth
  opportunities available in the Southeast Asia
  and Greater China middle-market business space
• Invested in 15 entrepreneur-driven companies with
  scalable business models, investments made
  between 2007 and 2009

Executed Successful Exits

• Realized two investment exits and three liquidity
  events since inception
• Achieved IRR of 37.6 from first investment exit
  in July 2009
• Four TGF I portfolio companies expected to list
  on Hong Kong, Malaysia and Australian exchanges
  in 2010

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TGF I Portfolio Segmentation
Segmentation by Industry
Segmentation by Geography
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TGF I Portfolio Companies

Infinite Frameworks
Media Post-Production
Singapore
Jun 2007

VDH Energy
Biodiesel
Singapore
Apr 2007

Hongwei
Synthetic Textiles
China
Apr 2007

ACTAtek
Biometric Security
Singapore
Jun 2007

TTMI
Metals Recycling
Malaysia
Jan 2007

China Dredging
Offshore Marine
China
Nov 2007

GlobalRoam
Internet Telephony
Singapore
Oct 2007

Tongji Environment
Water Treatment
China
Oct 2007

Artivision Technologies
Technology
Singapore
Jul 2007

Standard Water
Water Treatment
China
Aug 2007

Silver City Minerals
Mineral Exploration
Australia
Nov 2009

Sports Asia
Sports Apparel
China
Feb 2008

Tangshan Ganglu
Steel Manufacturing
China
Feb 2008

Cherie Hearts
Early Education
Singapore
Jan 2009

Ying Tai Biotechnology
Bio-Pharmaceutical
China
Nov 2007
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Investment Exit VDH Energy

• Van Der Horst Biodiesel Pte Ltd (VDHB or the
  Company) is a start-up company incorporated in
  2006 engaged in biodiesel production
• Annual production capacity of 200,000 tonnes of
  biodiesel
• TGF I invested S1.0 million in VDHB through a
  convertible loan in April 2007, with the view to
  exit through a listing on the Singapore Exchange
  within 6 to 12 months
• The convertible loan was converted to ordinary
  shares in October 2007 and swapped for 9.1
  million shares of Van Der Horst Energy Ltd, a
  listed company on the Singapore Exchanges
  Catalist board, through a reverse-takeover
  process
• The investment was successfully divested in June
  2009 through a block trade on the Singapore
  exchange, yielding an investment IRR of 37.6
• Investment period Apr 07 Jun 09 (2 years 2
  months)
• Return Multiple 2.0x
• Investment IRR 37.6

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Investment Exit Tongji Environment

• Tongji Environment (Asia) Pte Ltd (Tongji or
  the Company) is engaged in the business of
  wastewater treatment, sludge treatment and
  environmental engineering projects in various
  parts of China
• Tembusu invested S10.5 million in the Company
  through a combination of convertible loans,
  common equity, and collateral provision in
  October 2007 for an effective stake of 54.1
• In June 2010, Tembusu exercised its redemption
  rights on its convertible loans and sold its
  equity interest in Tongji for a total
  consideration of S12.4 million
• Investment period Oct 07 Jun 10 (2 years 8
  months)
• Return multiple 1.2x
• Investment IRR 8.5

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Portfolio Highlights Listed Investments
Hongwei Technologies

• 2 new production lines to commence operations in
  Q2 2010
• Likely exit after March 2011

Artivision Technologies

• Security business continues to perform well and
  advertising business is growing and attractive
  within interactive ad sector
• Likely exit by December 2010

GlobalRoam Group

• Relationship with StarHub continues to grow
• Looking to expand in Indonesia, Thailand, and
  India
• Likely exit in 2011 through trade sale

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Portfolio Highlights Investments Due to IPO in
2010
Tangshan Ganglu Iron Steel

• Awaiting approval from HK Stock Exchange
  Commission for September 2010 IPO
• Likely IPO multiple of 12 15x P/E, resulting in
  an IRR of 15 25

Standard Water

• KPMG appointed auditor on 4 May 2010
• Board will decide on IPO timing after completion
  of audit

Sports Asia

• IPO queries and awaiting approval from Malaysia
  securities commission
• Expected listing in 4Q 2010

SCI Minerals

• Recently hired well regarded CEO
• Expected listing on ASX during 4Q 2010

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Portfolio Highlights Other Investments
ACTAtek

• Distribution agreement with Certis CISCO
  (Southeast Asia) driving growth
• Also signed distribution agreement with leading
  Indian distributor G4S
• Likely exit in 2012 through trade sale or IPO

Infinite Frameworks

• Business has stabilized following a challenging
  2009 for entire industry
• Likely exit in 2012

Cherie Hearts Group

• Largest private childcare provider in Singapore
  with 67 centres
• Strong brand equity in Singapore

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Portfolio Highlights Other Investments
YingTai BioTechnology

• Veterinary drug for prevention and treatment of
  cows endometritis granted First Class Veterinary
  Drugs Certification in 2009
• Companys anti-infection bandages included in
  list of consumables in hospitals for patients
  medical insurance claims
• Exit likely through IPO in 2012 in HK or USA

China Dredging Engineering

• All 4 dredges are operating in the coastal
  regions of China
• Exit likely through IPO in 2012 in Singapore

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Other Details
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Contact Us
Beijing 1513 Zhejiang Tower, Anzhen Xili (North
3rd Ring Rd) Chaoyang District, Beiijng 100029,
China t (86) 10 6445 2108 f (86) 10 6445
1286 m (86) 1351 105 6187 m (86) 1870 139 8078
United Kingdom 120 West Heath Road London NW3
7TX United Kingdom t (44) (0) 20 8458 1947
Nanjing (China HQ) 23F Huijie Plaza, 268
Zhongshan Road, Nanjing 210008, China t (86)
025 8319 1520 f (86) 025 8319 2351
Shanghai Office 1001, Hong Kong Plaza, 283 Huai
Hai Road Central, Shanghai 200021, China t (86)
21 5116 0721 f (86) 21 5118 0190
Singapore (Head Office) 3 Phillip Street 08-04
Commerce Point Singapore 048693 t (65) 6238
7422  f (65) 6238 7237 e enquiry_at_tembusupartner
s.com
Australia New Zealand c/o 155 Queen
Street Auckland, New Zealand t (64) 21 2828 988
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Appendix A Biographies
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Investment Committee Members Biography

• Mr. Andy Lim chairs the Investment Committee of
  TPPL. He is also the Chairman of MoneyWorld Group
  of Companies, a leading foreign exchange player
  and Chairman and controlling shareholder of
  publicly listed Viking Offshore Marine Ltd. His
  other Board appointments include Chairman of
  Alpha Singapore, Board of Governors of Raffles
  University, and President of Enterprise 50 Club.
  Mr. Lim is also the Honorary Consul to the
  Republic of Lithuania. Mr. Lim graduated with
  First Class Honors in Engineering from Cambridge
  University and an MBA Degree at University of
  California at Los Angeles (UCLA) in 1989.
• Mr. Yeo Cheow Tong is currently a Member of
  Parliament for Hong Kah GRC. Mr. Yeo started off
  his career in the Singapore Economic Development
  Board and thereafter joined LeBlond Makino Asia
  in 1975. In 1981, he was appointed Managing
  Director of both LMA and its subsidiary company,
  Pacific Precision Castings. Mr. Yeo first entered
  politics in 1984 as the elected MP for Hong Kah
  Constituency and was appointed Minister of State
  for Health and for Foreign Affairs in 1985. In
  1988, he became the Acting Minister for Health
  and became full Minister in 1990. An experienced
  political leader, he has handled different
  Ministerial positions including Health, Community
  Development, Trade and Industry, Environment and
  Transport. He subsequently retired as Minister
  for Transport in 2006.

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Board of Advisors Biography

• Dr Faisal Althani is currently based in Qatar
  and is the Chairman of Namma Real Estate Company
  and Qatar National Export and Import Company. He
  has a strong background in the natural resources
  sector, with numerous years of experience gained
  at several petroleum companies with which he is
  currently the Deputy General Manager and Qatar
  Petroleums Representative at Anadarko Qatar
  Energy. Dr Althani has studied in the United
  States of America as well as the United Kingdom
  and was previously a Fullbright Scholar studying
  at University of Colorado, Boulder
• Professor Wee Chow Hou is Head of the Marketing
  and International Business Division and Chairman
  of the Executive Programs at the Nanyang Business
  School, Nanyang Technological University
  (Singapore). He is also an Honorary Professor at
  Xiamen University (China). Professor Wee has
  consulted/conducted executive training for over
  250 major organizations in over 30
  economies/countries, including Fortune 500
  companies, and is best known for applying Chinese
  classics to modern business strategies and
  practices. Professor Wee also sits on several
  boards of publicly listed companies in Singapore,
  and is also a member of various advisory boards
  locally and internationally.

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