IMPACT INVESTMENT

Presented by : Quyen Duong

August 2013

INTRODUCTION Longest established asset manager in Indochina Active since 1994 Total assets under management grown from $17mn to $1bn at present

Invested in more than 130 companies

Completed 51 private equity exits through different routes The only fund manager in the region that has made investments in Vietnam,
Cambodia, and Laos

Recognised responsible investor shortlisted in the category Sustainable

Investor of the Year for the FT/IFC Sustainable Finance Awards in two consecutive years 2011 and 2012

Solid platform of more than 40 experienced investment professionals, 4 inhouse legal counsels and full-scale back office operation
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CASE STUDIES
VINAMILK
Sector: Food & Beverage Investment date: Oct 2003 Performance: Overall return is 35.6% IRR and 3x multiple. Partial exit tranche yielded 39% IRR and 5x multiple Background: Vinamilk is Vietnams largest diary company and currently the 2nd biggest non-financial on VNI with market cap of $2.4bn Strong market leader position with largest distribution network of dairy products in Vietnam Sales CAGR of 35% and net profit CAGR of 45% from 2007-2011 BOP Impact: Employment generation and inclusion of poor farmers in dairy supply chain as a result of raw material initiative Nutrition and health impact from increased milk consumption Active measure in environment and energy conservation Active CSR program to improve social well-being of the community

PRASAC
Sector: Financial Services Investment date: Dec 2006 Performance: 5x multiple

Background: Cambodias largest microfinance institution, with 154 offices in 24 provinces, focused on rural communities and micro-enterprises From 2004-2010, loan portfolio increased 12.5 times. Yet portfolio at risk above 90 days stays at less than 1% Net profit CAGR of more than 20% during 2007-2010, with net earnings of US$3.4m in 2010 BOP Impact: Cambodias largest microfinance institution, with 154 offices in 24 provinces, focused on rural communities and micro-enterprises From 2004-2010, loan portfolio increased 12.5 times. Yet portfolio at risk above 90 days stays at less than 1% Net profit CAGR of more than 20% during 2007-2010, with net earnings of US$3.4m in 2010 3

IMPACT INVESTMENT MARKET

The market at the base of pyramid is untapped and offers profound investment opportunities for investors
Population Share Poverty Line at $2 a day Country % Vietnam* Lao PDR* Cambodia* Thailand Total at $4 a day Vietnam* Lao PDR* Cambodia* Thailand Total
Source: Worldbank databank, as end of 2009, except * as end of 2008.

Population million

Purchasing Power US$ million

Accumulated Purchasing Power US$ million 39,340 63,581 49,234 3,535 245,007 213,763 269,841 238,287 66,433 1,264,848

43.4 65.9 53.2 4.6

36.9 4.0 7.4 3.2 51.4

31,654 48,125 38,870 3,368 122,017 121,349 135,041 127,594 52,632 436,616

83.1 92.5 87.4 36.0

70.8 5.6 12.1 24.6 113.0

BUSINESS SECTORS AND IMPACT OBJECTIVES

Deal sourcing: Select business sectors with opportunities for BOP impact then select appropriate companies within such sectors Select an impact objective then build appropriate projects together with target companies Agriculture Healthcare Pharmaceuticals Financial Services Education Employment generation Income growth

Productivity improvement
Access to products and services

Energy
Water

Health improvement
Supply chain improvement
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CHALLENGES AND PROPOSED SOLUTIONS

CHALLENGES
Sustainability

PROPOSED SOLUTIONS

Work with established companies Localise investment team Proper due diligence by experienced
professionals

Scalability
High cost Financial returns vs. social returns Impact measurement

Intensive post-investment monitoring Grant-sponsored technical assistance

facility

Manage investors expectation Impact Reporting and Investment

Standards

Unconventional partnership of multiple

stakeholders: fund managers, DFIs, NGOs, government agencies
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THANK YOU

Dragon Capital 2013. All rights reserved. The information contained in this presentation is strictly confidential and is intended only for the use of the individual or entity to whom Dragon Capital have provided the presentation. No part of this presentation may be divulged to any other person, distributed, resold and/or reproduced without the prior written permission of Dragon Capital.
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