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Arctaris Opportunity Zone Fund Arctaris Opportunity Zone Fund Arctaris.com ARCTARIS OPPORTUNITY ZONE FUND 2 Table of Contents About Arctaris Impact Investors........................................................3 Leaders in Economic Development Arctaris Strengths Core Investment Team Board of Advisors Initiative for a Competitive Inner City (ICIC) Partnership Arctaris Opportunity Zone Fund........................................................11 Doing Well By Doing Good Mechanics and Tax Benefits of Qualified Opportunity Funds Principal Protection and Risk Mitigation First-Loss Capital Guaranty from Kresge Foundation and other Foundation/Government Partners Creating Jobs and Driving Impact Across Multiple Asset Classes Arctaris Opportunity Zone Fund Structure Return Benefits of OZ Fund Representative Investments.............................................................19 PE Platform Acquisition of a Middle Market Company Development of a Solar Farm Investment in Non-Profit Infrastructure Summary Fund Terms......................................................................25 STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 3 About Arctaris Impact Investors STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 4 Leaders in Economic Development Arctaris has launched 5 investment funds during the last 10 years with a focus on high-quality opportunities in low-income communities throughout the U.S. Arctaris launched in Boston Government and Income (Fund II) Impact (Fund IV) philanthropic Launched Arctaris Income Launched Arctaris Impact relationships Fund featuring innovative Fund with new Public-Private established revenue-linked security Partnerships nationwide 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Royalty Ventures (Fund I) Michigan (Fund III) OZ (Fund V) Launched Arctaris Royalty Ventures Launched Arctaris Michigan, a Strong pipeline of OZ deals Fund with focus on underserved regions Public-Private Partnership with U.S. leads to launch of Arctaris Treasury and the State of Michigan Opportunity Zone Fund STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 5 Arctaris Strengths History • Founded in 2009, based in Boston, 4 predecessor funds • Focuses on economic development via investment in growth-oriented businesses in underserved areas • Partners with U.S. Treasury and the State of Michigan (Fund III) Experience • Launched Arctaris Impact Fund (Fund IV) in 2018, targeting $500M in loan originations • Focuses on inner cities and select rural areas • Partners with multiple states, cities and foundation partners • Principal protection through foundation/government first loss position Opportunity Zone Focused • Current portfolio focuses on Opportunity Zones (OZs) and CRA-qualified areas • Expansive network of government and philanthropic relationships • Robust pipeline of attractive OZ deals underserved by institutional capital STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 6 Core Investment Team Jonathan Tower Benjamin Bornstein Uche Osuji James Robinson Founder and Managing Partner Managing Director Managing Director Managing Director • Co-founder of Arctaris and managed • Prospero Capital Management, • Bear Stearns; The Royal Bank • CEO of Munder Capital with $40B 4 predecessor Arctaris funds President; Omega Advisors, partner of Scotland; Towerview Partners; of fixed-income with Leon Cooperman; Orbis Sumitomo Mitsui Banking Corp • Fidelity Ventures; IBM Venture • Founder, CEO & CIO of Robinson Investment (London/Bermuda) Capital • Opportunity Zones: Serve on EIG Capital; CEO of Telemus • MBA Harvard Business School Federal Policy Working Group • Opportunity Zones: Serve on EIG • MBA Carnegie Mellon University (Baker Scholar) Federal Policy Working Group • Operations Manager at Procter • JD Harvard Law School & Gamble • MBA Harvard Business School • AB Princeton University • MBA/BSE Duke University • BA Georgetown University STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 7 Core Investment Team (cont’d) Anita Graham Jason Sanders Patrick Mullen Neil Katz Derek DeAndrade Maryland Market Manager Michigan Market Manager Vice President Vice President Senior Associate • Partner, Opportunity Capital Partners • Fifth Third Bank Market President; • Former Executive Director of • PricewaterhouseCoopers; Deloitte & • BrightSphere Investment Group; LaSalle Bank President; Citizens Sorenson Impact Foundation; Touche State Street Corporation; CAN Capital • President, Renaissance Capital Corp Bank VP; Lansing Economic Area Appointed by Utah Governor’s • MS/BBA Eastern Michigan • CFA Charterholder Partnership • Pacific Community Ventures – office as Chair of Opportunity University Board member Zone Marketplace; University • MBA MIT Sloan (Ford Fellowship) • 20+ years of commercial banking Venture Fund; Goldman Sachs • Executive MBA, Golden Gate University leadership • BS Elon University • BS Westminster College • BA Cornell University • Alma College STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 8 Board of Advisors Steve Glickman Michael Nutter Steve Grossman Kevin Prokop Kerry Duggan • Co-author of Opportunity Zone • Former Mayor of Philadelphia • Former State Treasurer, • Managing Partner, • Partner, Sustainability Practice at legislation Commonwealth of Massachusetts Rockbridge Growth Equity RIDGE-LANE LP • Chairman of the Council of Mayors • Co-founder of Economic Innovation at RIDGE-LANE LP • CEO of Initiative for a Competitive • Questor Management Corp • Former Deputy Director for Policy Group and Develop, LLC Inner City (www.icic.org) to Vice President Joe Biden • Former President of the United • MBA University of Chicago • Senior Economic Advisor to the States Conference of Mayors • Grossman Marketing CEO • Former Deputy Director of President • BA Georgetown Obama Administration Barack Obama’s White House Detroit • Professor at Columbia University’s • MBA Harvard Business School Federal Working Group • JD Columbia University, LLM LSE School of Int’l and Public Affairs • AB Princeton • Former U.S. Department of Energy • BA/MA Georgetown University • Senior Advisor at What Works Cities, a (DOE) Liaison to the City of Detroit program of Bloomberg Philanthropies; Advisory Board Member of Urban • Co-Founder of the national Smart Labs at University of Chicago; Senior Cities Lab Fellow at Brookings Institution STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 9 Board of Advisors (cont’d) Jeremy Katz Paul Brown • Co-Founder segTEL • Michigan eLab, Managing (acq’dby Riverside) Director • Co-Founder IRBNet • Former VP Capital Markets; (acq’dby Arsenal) Michigan Economic Development Corporation • Private Investor • Attorney, Skadden Arps • BA Dartmouth College • JD Wayne State University • MBA/BA University of Michigan STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 10 Initiative for a Competitive Inner City (ICIC) Partnership In 15 inner cities, Arctaris and Initiative for a SPONSORSHIP EDUCATION Competitive Inner City (ICIC) are driving economic COMMUNITY development through capital resources and business education for entrepreneurs. • HBS Professor Michael Porter founded ICIC in 1994 to leverage his seminal “Five Forces” strategy framework to drive economic prosperity in inner cities. Since 2005, 1,659 participants from 45 states and 475 communities have created 15,946 jobs and raised $1.5Bn of capital. ONGOING ECONOMIC DEVELOPMENT • In 2016, Arctaris and ICIC partnered on a two-year program focused on providing OUT OF 1,659 BUSINESSES executive business education for CEOs of small businesses in 15 inner cities. Arctaris is working with various city and state governments to expand this program. MINORITY-OWNED WOMEN-OWNED • As part of a broader economic development program to drive community revitalization, Arctaris and ICIC will expand their two-year “entrepreneurial boot 65% 41% camp” to 2-3 new cities in 2019. • ICIC CEO Steve Grossman joined Arctaris as Special Advisor, serving on select We are working to help women and minorities – who program Investment Committees. Grossman is former MA State Treasurer, DNC face significantly larger obstacles – obtain resources and Chairman and AIPAC President. capital to build businesses that fuel economic growth. STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 11 Arctaris Opportunity Zone Fund STRICTLY CONFIDENTIAL ARCTARIS OPPORTUNITY ZONE FUND 12 Doing Well By Doing Good Arctaris strives to create the structural alignment between private and public stakeholders while benefitting communities throughout the United States ABOVE MARKET RETURNS RISK MITIGATION COMMUNITY BENEFITS • Proprietary deal flow stemming from Arctaris’ • Fund level: Guarantees from foundations • Impact through the creation and retention of leadership in economic development, plus (i.e. Kresge) and government agencies thousands of U.S. jobs referrals from banks, community leaders, (i.e. Finance Authority of Maine) • Revitalization and development of disinvested and government partners • Investment level: New-market tax credits communities • Team of domain experts across solar, (NMTCs)/grants, first-loss capital protection • Improving infrastructure through investments telecom, and private equity verticals • 10+ year track record of proving public/ in public buildings, renewable energy and • Capped return agreements for foundation private partnership model telecommunication projects and government partners provide enhanced returns to private capital investors • Investors are eligible to receive OZ tax incentives: deferred capital gains tax, step- up in original basis • Above-market returns with principal
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