EFTA00615105.pdf

ELECTRON CAP I TAL PARTNERS LLC Electron Global Fund. LP O1 2013 INVESTOR PRESENTATION EFTA00615105  introduction & team executive summary focused & • Continuation of a 7-year global long/short equity strategy concentrated on global utilities and infrastructure companies in the US, consistent strategy Europe, Asia and Latin America James ("Jos- ) Shaver. Managing Partner & Portfolio Manager. has 8 years of experience as a long/short equity portfolio manager and 21 years (including 10 years working abroad in both Europe and Asia) covering the global utility and infrastructure sectors accomplished Shaver and the core investment team know each other well having worked together for an average of 6 years. both at SAC team Capital Advisors and the former Electron Capital Management (-Electron CM") Combined annualized net return of 10.3% cumulatively outperformed each of the MSCI World Utility. S&P 500 and HFRI Equity Hedge Indices by approximately 92%, 68% and 62%, respectively' demonstrated Consistent outperformance of the MSCI World Utility Index in 7 out of 8 years (in both up and down markets) resulting in track record 8.1% annualized alpha2 and capital preservation in challenging markets • Time-proven risk management culture and process which incorporates a proprietary global sector risk and capital allocation risk management model (60+ metrics) • The Managing Partner has committed a significant upfront investment to the Fund and management company aligned interests • All Partners will reinvest up to 1/3 of distributable profits back into the Fund which will vest over 3 years (no base salaries are drawn) I. Please see page 25 for detailed performance related disclaimers. 2. Jensen's alpha calculation. Jenseris alpha - Portfolio return -(Risk free rate Portfolio beta x (Market return - Risk free rate)]. ELECTRON Striety Confidential. Do Not Dupicate or Ciserbute. CAP. TAT. PARTNERS LTC EFTA00615106  rt rAL.ct or & team global utlity sector philosophy 8 process portfolio 8 risk management fund information ap accomplished team Cohesive team who have worked together at: the members of the investment team have extensive industry expertise and MI SAC Capital a history of success investing together and across market cycles • Electron Capital Management 2000 2001 2002 2003 2004 2005 2006 2007 I 2009 2009 2010 2011 2012 Jos Shaver• WS GSM/DJ SG Barr Devon PA Electron" SAC Capital Electro❑ Managing Partner/ Portfolio Manager g.I Director EU unities (UK) Managing Director. EU utilities Sector US PA Founder and Portfolio Manager. long/shod global utility and infrastructure fund Portfolio Manager. long/short global utility and infrastructure book < Goldman Sachs (since '96) Pequot Citadel SAC Capital Electron Nell Chol Partner/ Sell-side analyst covering US utilities Analyst covering Analyst covering US utilities. Analyst covering US utilities. Senior Analyst US utilities gas pipeines and IPPs infrastructure and select EU utilities Peter SUMO, CFA• Partner/ Senior Analyst < UBS (since '96) Sell-side analyst. Citigroup Sell-side analyst, valuation and Electron" al I III I Analyst covering infrastructure and deep fundamental dives in Electron Head. Man utility research accounting research US, Europe. Asia and Latam Ran thou, CFA Electron" Electron Partner/ Analyst covering Asia. sehect infrastructure and alternative Senior Analyst energy companies Electron" Electron Jeff Zheng Senior Analyst Technical and quantitative analyst. Aaron Keller, CPA CFO and Head of Operations II= Senior Accountant Intrepid Capital (Electron— Controller) Controller WIChief Financial Officer r Electron Greg Zarffro Managing Director. Marketing and IR Intrepid Capital (Electron- ) Associate 1I a Analyst Director Electron •Please see Appendix for full team background. education and advsory board biographies. "Denotes original Electron Capital Management (2004-2008) ELECTRON Strictly Confidential. Do Not Dupicale of DIV bute. 2 CAPITAL PARTNERS LLC EFTA00615107  global utility and infrastructure sector regional market capitalization* regional characteristics (US $2.8 Trillion) Europe Europe US Asia Latam 30% The Pace Setters Muddling Forward The Diligent Student Becoming Enlightened US 35%i • EU directive • Hybrid structure • Studying Europe • Improving regulatory 4ip yAjtalnaol (particularly UK) framework • Political risk realized • Consolidation • China factor • Corporate governance • Power and carbon • EPA mandates and renewables driving • Environmental issues • Government ownership • Country specific issues capex • Increased transparency Others 23% 12% • Coal-to-gas switching subsector market capitalization* universe of companies* global sector correlations* Region Europe US Asia Latam Total 0.8 One of the Least Correlated Sectors Electricity Water 2% 43% Electricity 44 66 43 20 178 0.6 Gas 22% Natural Gas Water Utility-related 7 5 38 15 7 59 14 4 46 0 3 0 36 19 143 .4!, 0.4 To 0.2 0.0 ii Health Care Utility- a A C O C a related us C 33% Total 94 147 107 23 376 O C it o 'Source: Morgan Stanley. MSCI U ELECTRON Since)/ Confidential. Do Not etspitate Of Cistrbute. 3 CAPITAL PARTNERS LLC EFTA00615108  t -sduction & team global utity sector ph losophy & process portfolio & risk management fund information why the global utility and infrastructure sector significant timely and ongoing Structural changes increasing opportunities in the sector. Textbook underperformance coming out Regulatory arbitrage of recession waning Timely OpportunIties Shale gas discoveries, change in fuel Generation capex waning yet transmission mix and LNG impact and distribution capex increasing structural change in Renewable subsidies expiring changes cycle • Efficiency measures gaining momentum Tax changes (dividends, subsidies, Environmental initiatives on an upswing Robin Hood taxes) Limited long/short dollars in what is viewed Re-regulation in some markets as a complex niche sector(') • Fuel cost pass-through clauses global utility and infrastructure opportunities Increased investor appreciation of utility Continued unbundling of the utiity characteristics - essential services, dividends value chain creating long/short and growth in a low growth environment opportunities Macro flows continue to create distortions Competition in generation and and thus long/short opportunities retaiVsupply dividends Investors largely not pricing in potential • Regulatory model changes deregulation and growth dividend increases and cuts Elimination of subsidies Re-rating or change in valuation metric Ongoing Opportunities possible in "new normal" Consolidation and divestitures changing risk profiles Infrastructure growth from both developed and emerging markets (1) Only 1 stock is contained in Goldman Sachs VIP and VISP lists as of August 2012. ELECTRON Stncty Conhclenttal. Oo Not Dupicalo or Dittntatte. CAPiTAL PARTNERS LLC EFTA00615109  g:obal utr ty s.C.CiOf st.o p - arziorroWor. ?trod ilurr global utility and infrastructure market structure • M&A • Unique commodity • Divestitures • Reverse margin changes • New entrants • New-build price signals • Fuel switching fragmentation/ commodity consolidation cycle Environmental • Efficiency Framework • Fossil fuel costs renewables market structure regulation • Commodity price impact focus • Market distortions • Bottlenecks • Peak shaving • Expropriatory politics • Carbon price distortions deregulation • SOr , NO,. Hg2 • Acts of nature • S • Generation competition • Politicization of tariffs • Supply competition • Nuclear • Value chain unbundling ELECTRON SIfiet COntdc - ti:11 Pu '.O1::up,c.:.flt. or Dot-outer 5 CAPITAL PARTNERS LLC EFTA00615110  rt' n-ut or Sto. i .. b: t ..I.. philosophy &process investment philosophy Work environment is a "safe" place for opinions and independent thought "Hunt as a pack" particularly for cross-border market structure changes Consistent measurement and feedback are the keys to improving as investors Focus on alpha generation team based culture Team members may own a view point, but not a name or region Focus on utility market structure changes - generally slower to be priced into the stocks Take advantage of the global utility sector's low regional correlations Focus on the risk/reward proposition, not the greatest absolute return potential • Build conviction by first eliminating possibilities focused, sector-driven approach • cash flow is paramount Sizing is most important risk step • Keep risk model discipline - mitigate selective memory and bias rigorous risk management • When in doubt. get out ELECTRON T:irorty COT nol Qu •.O! Dup c.:41r. or '2,oroure 6 CA:" - A_ FAF - I,Ezic LLC EFTA00615111  introduction & team g'obai ub ty!ector philosophy & process portfolio 8 risk management fund information exhaustive, repeatable investment process key focus on structural changes in utility markets: - Integrated research Thesis with Differentiated View 1. Cross-country/region comparison ("where - Global network of management have we seen this movie before?") Toehold Positions relationships spanning 20 years 2. Deep-dive analysis and discussion with - Senior advisory board members multiple parties involved, such as company management, regulators, - Regulators consultants, etc. - Consultants 3. Evaluate the potential impact to the - Lobbyists industry and local utility market - Sell-side/buy-side analysts 4. Determine the company winners and losers under different structural change scenarios idea detailed generation analysis 5. Evaluate upside/downside potential for portfolio each affected stocks construction 6. Check how different we are from consensus technical ongoing - Trade around fundamentally based overlay monitoring 7. Maintain and increase conviction through positions research and elimination of possibilities - Proprietary utility focused statistical approach combined with multiple technical indicators - Daily review of risk model and limits - Short trade a bucket of - Discussion and action taken on positions fundamental losers breaching stops, targets and time limits - Sizing based on conviction, - Periodic drawdown analysis and stress tests • Maximize dividend capture risk/reward and liquidity - Daily measurement of alpha contribution by - Thesis write-up, upside/downside region and subsector valuation and time limits for each position in risk model - Deep-dive reviews of lessons learned ELECTRON Stncty Conldential. Do Not Dupicale or I>itrbute. 7 CAPITAL PARTNERS LLC EFTA00615112  7):1 Ln 'y ;C-CAO' portfolio & 6* management portfolio construction Typically 70 to 100 positions globally No long position greater than 10% of Fund's value position number, No short position greater than 5% unless paired with long sizing and liquidity 95% of portfolio <2 days volume • Top 10 longs generally 40 to 50% of Fund's value concentration of portfolio • Top 10 shorts generally 30 to 40% of Fund's value • Typically 150% to 250% • Historical median Electron: 185% gross, max 212% gross exposure Historical median SAC: n/a Generally ranges between 50% long to 15% short Historical average Electron: 30% net net portfolio exposure Historical average SAC: 17% net • Globally diversified with allocation according to the most attractive alpha opportunities • Approximately 40-60% ex-US geographic exposure • Approximately 85%+ OECD countries ' Past performance is not indicative of future results. No representation is made that the Fund will or is likely to have exposures similar to the historical exposures shown above. ELECTRON 2,rict Corlideutull Do o! 2up cab. of 8 CAP .TAE PARTNERS LLC EFTA00615113  portfolio B nsk management n. icl glom •r, risk management our proprietary global sector risk and capital model has been developed over the last 8 years provides multi-function/multi-level risk controls • Tracks on a real time basis 60+ risk and capital metrics relevant to the global utility and infrastructure sectors • Quantifies risk using a proprietary "risk lens" for the global utility and infrastructure sectors • Provides a "granular window" on market flows into and out of the global utility and infrastructure sectors • Conduct daily reviews to implement action plans on risk issues or triggered limit breaches • Periodic drawdown analysis and stress testing performed sample risk positions Competitive Integrated Nudear 0 eet-c ty Water Bola 0 0 0 0 Generale! Thailand Coal 0 Supply Action taken to mitigate ELECTRON Strictly Conklental. Do Not Dopicaie Dishbute. 9 CAPITAL PARTNERS LLC EFTA00615114  . portfolio & risk management risk management Electron believes that most metrics fall into the following three categories: company Country. regions. sectors. subsectors and sub-subsectors exposures risk metrics Commodity risk (e.g. power. oil, natural gas, coal. etc.) both direct and indirect Interest rate risk (e.g. regulated utilities, company leverage. etc.) Plethora of financial measures position Liquidity and concentration measures risk metrics Relative positions and volatility Absolute and relative stop loss flags capital metrics Real time alpha and beta attribution by regions and main sectors Thesis write-ups for all positions - consistently reevaluate thesis and avoid thesis creep Absolute and relative target gain flags Trade duration limit flags to mitigate stale positions ELECTRON Y C<>rldevtral. Du Not 2up:c:ate auk,. 10 CA? .TAI PARTNERS lle EFTA00615115  Introduction 8 team g:obai utity sector philosophy 8 process portfolio 8 nsk management fund information demonstrated track record' monthly returns (net of fees) • Electron • SAC Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2012 0.88% 2.30% -1.61% 1.21% 0.31% 2011 -1.87% -0.60% 2.15% 3.19% -3.77% 0.89% -2.01% -2.95% -3.20% 5.86% -1.06% 2.07% -3.48% 2010 0.84% -0.88% 1.63% 0.18% 2.70% 1.33% 1.65% 0.68% 1.88%. 1.15% •L51% 1.56% 5.85% 2009 6.83% 2.08% -1.18% 4.14% 3.40% 1.69% 2.29% 1.94% 3.79% -0.05% 0.37% 0.20% 28.36% 2008 -5.72% 2.16% -2.00% 1.229:6 1 47', n/a -0.13% -0.12% -6.23% -2.69% 10% 0smisses 0.01% 14A0% 2007 3.30% 3.22% 4.11% 2.70';6 3.46°% 4.06"; 234', 3.02"; 3.16'.1 •1.92% 1.35% 28.35% 2006 7.92% 0.08% 2.02% 2.52'. 0.03% -1.45% 0.18"; 1 .19", 0.52":: 3.59`- 5.21% 4.07% 28.24% 2005 2.52":: 1.60' 0.04% 2.20`: 3.14% cumulative returns performance metrics 120% Electron/ MSCI Wodd S&P 500 HFRI Equity . .Electron/SAC —MSCI World Utilities SAC UtNitles Index Hedge 100% , S&P 500 • HFRI Equity Hedge Total period return 91.2% -02% I 24.4% 30.1% 80% Annualized return 10.34% -0.03% 3.37% 4.07% 60% % positive months 65% 56% 61% 65% Annualized 40% 8.94% 14.65% 16.44% 9.81% standard deviation 20% Maximum drawdown -14.92% 41.97% -48.09% -28.86% Sharpe rail& 0.96 -0.12 0.10 0.23 0% Beta of Fundt 0.30 0.22 0.62 •20% Correlation of Fund3 0.49 0.41 0.68 40% Aug-05 May-06 Feb-07 Nov-07 Aug-08 May-09 Feb-10 Nov-10 Aug-11 Correlation of Fund In down mark& 0.29 0.18 0.55 1. see page 25 for detailed performance-related disclaimers. 2. monthly periodicity. risk free rate: 3 month treasury bil secondary market rate (source: Federal Reserve). 3. based on monthly net retuns. ELECTRON Stnctly Conrdc ,tut. Do Not Dupicale of Dtstibute. CAPITAL PARTNERS LLC EFTA00615116  introduction & team g'obai utity sector philosophy & process portfolio & risk management hind information demonstrated track record' capital preservation in down markets contra performance in down markets2 S&P500 E[ectron/SAC MSCI World Utilities Electron/SAC 45% 43% 0% 40% 0 25°. .0.37% 35% 2.4x -1% 30% 25% -2% 18% 20% 15% -3% 10% 5% 4% -3.65% 0% •4.07% To of positive months when MSCI % of negative months when MSCI -5% Average returns during indices' down months World Utilities Index was negative World Utilities Index was positive annual returns vs. benchmark index total outperformance over indices Annual Return MSCI World Utilities Outpettormance 100% 91.4% 2005P 3.14% 0.78% 2.36% 2006 28.24% 31.53% (328%) 80% 2007 28.35% 18A9% 9.86% 61.1% 60% 2008 (14.40%) (28.86%) 14.46% 2009 28.36% 2.01% 26.35% 40% 2010 5.85% (4.52%) 10.38% 20% 2011