1Q10 EARNINGS RESULTS May 4th, 2010
1Q10 Results 1Q10 Results Disclaimer Disclaimer This presentation may contain forward-looking statements. Such forward-looking statements are and will be subject to many risks and uncertainties relating to factors statements are and will be subject to many risks and uncertainties relating to factors that are beyond the Tarpon’s ability to control or estimate precisely, such as future market conditions, competitive environment, currency and inflation fluctuations, changes in governmental and regulatory policies and other factors relating to the operations of Tarpon, which may cause actual future results of Tarpon to differ f f f ff materially from those expressed or implied in such forward-looking statements You are cautioned not to place undue reliance on these forward-looking statements, Y ti d t t l d li th f d l ki t t t which speak only as of the date of this presentation. Such forward-looking statements shall not be construed as guarantee of future performance. Tarpon does not undertake to publicly review or update these forward-looking statements in view of events or p y p g circumstances occurring after the date of this presentation This presentation does not constitute an offer, or invitation, or solicitation of an offer, to p subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever 2
1Q10 Results 1Q10 Results First quarter 2010 highlights First quarter 2010 highlights The assets under management (AuM) amounted to R$4.7 billion as of March 31 st 2010, g ( ) AUM AUM an increase of 20% when compared to December 31 st , 2009 Strong Funds’ performance: R$268 million increase in AuM Fund’s Fundo Tarpon (Long Only Equity): 8.1% (in R$) Performance Tarpon Fund (Long Only Equity): 5.5% (in US$) Tarpon All Equities Fund (Hybrid Equity): 5.8% (in US$) R$641 million raised in new commitments, mainly to our new co-investment structure: New the Tarpon Special Opportunities Fund Commitments N New commitments came from highly sophisticated institutional investor it t f hi hl hi ti t d i tit ti l i t R$69.4 million in revenues related to management and performance fees in the 1Q10, Fees business compared to R$42.8 million earned during FY2009 d t R$42 8 illi d d i FY2009 R$54.1 million in net income in the quarter, with net margin of 82% Net Income 3
1Q10 Results 1Q10 Results Asset base Asset base The efforts towards consistently improving the profile of our capital base by bringing investors with higher degree of sophistication provides strategic stability to our AuM base with higher degree of sophistication provides strategic stability to our AuM base. This strength allows us to focus on the best opportunities regardless the economic/financial health of the local or global markets. AUM by region AUM by region AuM by type AuM by type 2% 6% 4% 13% 15% 26% 69% 69% 33% 33% 68% 93% 96% 79% 24% 25% 19% 19% 17% 17% 7% 4% Dec/02 Dec/05 Mar/10 Dec/02 Dec/05 Mar/10 TIG Holding Ltd. & executives Americas (ex Brazil) Brazil Endowments & Foundations Sovereign wealth funds & Pension funds Sovereign wealth funds & Pension funds Europe Europe Asia & Middle East Asia & Middle East Non institutional investors 4
1Q10 Results 1Q10 Results Assets under Management growth Assets under Management growth Historical AuM - R$m Historical AuM - R$m 4,742 20% 3,959 3,895 4,742 3,574 3,895 112% 2 557 2,557 2,253 2,136 2,007 2,234 1,905 1,105 959 1Q09 1Q10 2006 2007 2008 2009 1Q10 Total AuM Management fee paying AuM AuM growth: performance and net subscriptions - R$m AuM growth: performance and net subscriptions - R$m g g p p p p $ $ 268 515 1,236 166 4,742 3,959 2,557 AuM at the Net subscriptions Performance AuM at the end of Net subscriptions Performance AuM at the end of beginning of 2009 2009 the 1Q10 5
1Q10 Results 1Q10 Results Commitments to Tarpon Funds Commitments to Tarpon Funds Fundraising efforts concentrated towards the new co-investment vehicle. Commitments – R$m Commitments – R$m Tarpon Special Opportunities Fund “TSOF” Tarpon Special Opportunities Fund “TSOF” Co-investment strategy Co-investment strategy 935 935 The new co-investment strategy will serve as a 674 sidecar/co-investment fund, which primary objective 641 is to co-invest with the other Tarpon Funds in certain 536 515 478 478 special public and private equities special public and private equities. 415 497 166 Launched in January/2010 2007 2008 2009 1Q10 New Commitments Net subscriptions TSOF's commitments Our challenge going forward is to not let the growth of our asset base dilute the potential returns of the existing strategies. The new commitments came from highly sophisticated investors, with long term Through TSOF we intend to have more flexibility to capture Through TSOF, we intend to have more flexibility to capture investment approach investment approach specific investment opportunities together with the main funds, benefiting both strategies. 6
Investment vehicles and strategy Investment vehicles and strategy 1Q10 Results 1Q10 Results We conduct the asset management activity through three main investment strategies: Long only Equity Strategy Long only Equity Strategy Hybrid Equity Strategy Hybrid Equity Strategy Co-investment strategy Co-investment strategy The Long Only Equity strategy The Hybrid Equity strategy has The new co-investment strategy will serve as a invests exclusively in Brazilian the flexibility to invest in publicly sidecar/co-investment fund, which primary publicly traded companies listed traded companies and private objective is to co-invest with the other Tarpon at the BM&FBOVESPA equity in Brazil or other South Funds in certain special public and private American countries equities Launched in May/2002 Launched in October/2006 Launched in January/2010 Tarpon Fund Tarpon All Equities Fund Fundo Tarpon Tarpon Special Opportunities Fund (“TSOF”) (“TAEF’’) Managed accounts 7
1Q10 Results 1Q10 Results AuM by investment strategy & investment approach AuM by investment strategy & investment approach AuM by investment strategy - R$m AuM by investment strategy - R$m AuM by investment approach AuM by investment approach 2,205 132 1,834 1 834 91 2,073 85% 1,743 497 205 416 15% 205 81 Long Only strategy ⁽ ¹ ⁾ Hybrid Equity Special Opportunities Co - Investments 1Q10 strategy Private Private - Equity Equity Public - Equity Public Equity Called capital C ll d i l Uncalled capital U ll d i l 8
Tarpon Funds performance ⁽ ¹ ⁾ Tarpon Funds’ performance ⁽ ¹ ⁾ 1Q10 Results 1Q10 Results The Tarpon Funds posted strong fund performance in the quarter Long Only Equity Hybrid Equity co-investments Stock market index Tarpon Fund Ibovespa TSOF Fundo Tarpon TAEF Managed Fund (in R$) (in US$) accounts (in US$) in US$ in US$ in R$ in R$ (in U$S) (in U$S) (in R$) May Dec Inception date May 2002 Oct 2006 Jan 2010 2002 2006 1Q10 8.1% 5.5% 9.2% 5.8% - 0.3% 2.6% LTM 102.3% 150.1% 152.8% 123.5% 72.0% 111.3% - 3 years 57.0% 77.5% 55.0% 73.4% 76.9% 53.6% - 5 years 158.3% 233.8% 85.1% - 295.9% 164.5% - Since launch 35.8% 36.7% 20.3% 29.9% - (annualized) ( li d) 9 (1) The performance indicated is net of fees
1Q10 Results 1Q10 Results Financial highlights – management & performance fees Financial highlights management & performance fees Management fees revenues - R$’000 Management fees revenues - R$’000 34,906 12,784 29,556 10,231 9,031 9,165 9,340 8,701 8,009 7,491 413 % 413 % 12,784 2,494 2,494 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2008 2009 1Q09 1Q10 Performance fees revenues - R$’000 Performance fees revenues - R$’000 Potential performance revenues - R$’000 Potential performance revenues - R$’000 117,935 Accumulated (potential) revenues : 61,294 Based on the net asset of the funds that were above HWM 56,641 as of Mar 31 st 2010 but not as of Mar. 31 st , 2010, but not 39,940 yet entitled to collect performance fees 56,641 13,210 0 1Q10 2008 2009 1Q09 1Q10 Performance fees Accumulated (potential) performance fees as of March. 31st, 2010 As of March 31 st , 2010, the totality of the funds’ NAV (1) Gross values were above the high water mark 10
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