Who is Azalea? About Us Wholly-owned Independent board Investor, - PowerPoint PPT Presentation

Who is Azalea?

About Us Wholly-owned Independent board Investor, developer subsidiary of Temasek and management and manager team Led by a team of professionals Successfully launched with extensive industry and • 2016 - Astrea III experience in the private • 2018 - Astrea IV equity field • 2019 - Astrea V • 2019 - Altrium I

Educate Investors Investor education programmes and updates Broaden Investor Access Creating investment opportunities Develop and Innovate Sustainable investment products to suit the needs of investors Our Goals

Astrea PE Bonds Private Equity (PE) Fund Investments (US$) $1,324m $1,142m $1,098m

Astrea PE Bonds Private Equity (PE) Fund Investments (US$) $1,324m $1,142m $1,098m Astrea V Bonds Astrea III Astrea IV $600m Bonds Bonds $510m $501m Equity Equity Equity July 2016 June 2018 June 2019

What is Private Equity? General examples of private equity owned companies Buyout funds invest in established businesses Different PE strategies Growth Equity funds invest in high growth

What is a Private Equity Fund? Managed by a Multiple investors Invest in a portfolio of professional manager providing capital funding private companies – (General Partner) (Limited Partners) diversification What Role Does It Play In The Market? Grow the business by With an increased enhancing productivity and value, companies are efficiency of investee sold after 3 to 7 years companies

Who Invests in Private Equity? Institutional Investors Pension Funds / Sovereign Wealth Funds High Net Worth Individuals What are the Barriers to Entry? High amount of Long holding period J-curve effect minimum investment requires invested exposes investors to capital required capital to be locked initial negative cash up for a long time flows (~10 years)

What is a J-Curve? % of Capital Commitment Mature phase 40.0% 20.0% 0.0% -20.0% -40.0% -60.0% Year 1 2 3 4 5 6 7 8 9 10 11 12 13 Cash outflows Cash inflows Cumulative net cash position Net cash outflows at the Net cash inflows later on as start as manager calls capital managers generate returns from to make investments investments

Risk of Loss Historically, portfolios of mature funds have demonstrated lower risk of loss – • – only ~1.4% of such funds experienced a loss Of the loss-making funds, the worst performing fund experienced a ~15% loss • With a conservative LTV, the risk of loss to bondholders is low • Astrea PE Bonds are issued at conservative LTVs Portfolios of mature funds Worst Bonds issued at performing conservative portfolio lost Astrea Bonds ~45% ~15% of its Portfolio Loan-to-Value value Ratio Portfolio needs to lose 55% of Equity value before Bondholders are impacted Portfolio Capital Structure Portfolios of mature funds Source: Preqin, May 2019. Data as of the latest available performance per fund, obtained from https://www.preqin.com/user/PE/product_menu_pa_advanced.aspx, last accessed on 8 May 2019. Each strategy is comprised of the following Preqin fund classifications; PE Fund (Preqin Classification: Buyout, Distressed Debt, Growth, Mezzanine, Venture (All), Real Estate). Primary FoF (Preqin Classification: Fund of Funds). Secondary FoF (Preqin Classification: Secondaries) obtained from Preqin Performance Analyst.

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Product Highlights Sheet (PHS)

Product Highlights Sheet (PHS)

Prospectus

Prospectus

What are Astrea PE Bonds? Innovative bond to provide exposure to private equity Backed by cash flows from private equity fund investments Listed on SGX to address illiquidity Shorter holding period compared to traditional private equity

Astrea PE Bonds Mitigate Barriers to Investing in PE Funds Barriers to High Investing J-Curve Effect Long Holding Investment in PE Funds Period Capital Diversified Capital tied up More bite-sized PE Bonds portfolio of for shorter investment seasoned funds durations lots available mitigates initial cash outflow

Transaction Structure 5.4 years Issuer Weighted Average Fund Age Flow through Priority of Payments 38 862 Diversified portfolio PE Funds Investee Companies ……………………………………… ……………………………………… PE Fund 2 PE Fund 3 PE Fund 4 PE Fund 5 PE Fund 38 PE Fund 1

Transaction Structure Payments for: Clause 1: Taxes and expenses Clause 3: Manager Clause 4: Credit Facility Priority of Payments Interest for: Clause 5: Class A-1 Bonds and Class A-2 Bonds Pay Bon ond- Clause 6: Class B Bonds hol olders rs Payments for Reserves Accounts: Clause 8: Reserve Amount Payments to: Clause 13: Sponsor

Structural Safeguards Reserves Accounts Regular cash build-up to repay principal of Class A Bonds Sponsor Sharing To enable a faster build-up of reserves Maximum Loan-to-Value Ratio Debt limit at 50%, crossing this limit triggers lowering of Total Net Debt Credit Facility Allows Issuer to draw down from bank to pay key expenses, interest payments of Bonds and capital calls in the event of shortfall

21 JUN 2019 12 JUN 2019 LISTING DATE LAUNCH DATE Stock Code: 5A1B | Astrea V3.85%B290620 1.07 1.06 1.05 1.04 1.03 1.02 1.01 Jun ‘ 19 Jul ‘ 19 Aug ‘ 19 Sep ‘ 19 Oct ‘ 19 Nov ‘ 19 Dec ‘ 19 Jan ‘20 18 JUN 2019 20 DEC 2019 1 st INTEREST PAYMENT CLOSING DATE & DISTRIBUTION REPORT www.astrea.com.sg/a5

Bond Summary (All amounts are in US$m unless otherwise stated) Bonds Total Interest Rate Scheduled Call Ratings (1) Bonds Outstanding Reserves (p.a.) Date (Fitch / S&P) Class A-1 S$315 3.85% 20 June 2024 Asf / A+ (sf) $47 Class A-2 $230 4.50% 20 June 2024 Asf / Not rated BBBsf / Not Class B $140 N/A 5.75% N/A rated Note: (1) Ratings as of 20 December 2019.

Key Highlights Semi-annual interest $46.7m reserved Maximum Portfolio value paid to bondholders for Class A as Loan-to-Value Ratio $1,366m on 20 Dec 2019 scheduled of 50% not Class A-1 – 3.85% p.a. exceeded Class A-2 – 4.50% p.a. Class B – 5.75% p.a.

Portfolio NAV by Fund Region (All amounts are in US$m unless otherwise stated) 58.7% 19.3% 56.1% 22.0% 21.6% 22.3% Amounts reflect values as of 31 Mar 2019 Amounts reflect values as of 6 Dec 2019

Portfolio NAV by Fund Strategy (All amounts are in US$m unless otherwise stated) Fund Strategy (% of NAV) 31 Mar 2019 6 Dec 2019 79.7% Buyout 81.0% 79.7% Growth Equity 19.0% 20.3% Buyout Funds The majority of the portfolio comprised buyout funds As of 6 Dec 2019 As of 6 Dec 2019 Top3PEFundManagers(GPs) %of NAV Top3FundInvestments %of NAV KKR 8.7% Silver LakePartners IV, L.P . 5.6% Warburg Pincus 6.5% KKR North America Fund XI L.P. 4.4% TPG 6.1% General Atlantic, L.P. 4.3%

Portfolio NAV by Vintage Year US$m 400 26.3% 350 25.2% 22.3% 300 20.8% 18.0% 250 17.9% 17.0% 15.6% 200 12.1% 150 10.2% 7.4% 7.2% 100 50 0 2011 2012 2013 2014 2015 2016 Vintage Year 8 7 6 5 4 3 Fund Age (years) Portfolio NAV by Vintage Year as of 31 Mar 2019 Portfolio NAV by Vintage Year as of 6 Dec 2019

Portfolio Activity (All amounts are in US$m unless otherwise stated) Private Equity Portfolio Appreciation Private Equity Portfolio Cash Flow Activity 1,484 118 1,366 Net Distributions = 118 1,324 Fair Value 6 Dec 2019 Distributions Capital Calls 6 Dec 2019 31 Mar 2019 31 Mar 2019 Gains Portfolio NAV Ending Portfolio Portfolio NAV Starting NAV + Cumulative Net Portfolio NAV Distributions Cumulative Net Distributions Portfolio NAV

Priority of Payments for First Distribution Date (All amounts are in US$m unless otherwise stated) i Net Distributions + $118m ii Beginning Cash + $ 69m Balance and net receivables 1 iii Residual balance from + $ 7m Settlement Accounts 2 iv Retained Amount for -$ 10m the next period $184m

Priority of Payments for Third Distribution Date (All amounts are in US$m unless otherwise stated) Available Cash Flow for Payments for: Priority of Payments Clause 1: Taxes and expenses $3m $184m Clause 3: Manager Clause 4: Credit Facility Interest for: Clause 5: Class A-1 Bonds and $14m Class A-2 Bonds Pay Bon ond- Clause 6: Class B Bonds hol olders rs Payments for Reserves Accounts: $47m Clause 8: Reserve Amount LTV Test Performed 0.5% bonus payment upon Payments to: $120m redemption of Class A-1 Bonds Clause 13: Sponsor triggered when Sponsor receives US$407m Notes: 1. Other inflows includes interest income and prior period distributions from PE Funds received in current period after deducting certain operating expenses. 2. US$15m was set aside from the gross proceeds of the Bonds in the Issuer’s Settlement Accounts for payment of fees and expenses incurred in connection with the issue and offering of the Bonds. The residual balance after transaction and related fees and expenses was US$7m.