Infrastructure Investments Fund (“IIF”)
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0903c02a813894a7 For the exclusive use of the City of Fresno Employees Retirement System only STRICTLY PRIVATE | CONFIDENTIAL Infrastructure Investments Fund (“IIF”) City of Fresno Employees Retirement System August 9th, 2017 1 | FOR INSTITUTIONAL/WHOLESALE/PROFESSIONAL CLIENTS AND QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION For the exclusive use of the City of Fresno Employees Retirement System only STRICTLY PRIVATE | CONFIDENTIAL Biographies Paul Ryan, Managing Director,isthePortfolio Manager of the J.P. Morgan Asset Management Infrastructure Investments Group. The combined strategies represent over $12 billion of assets under management. Paul currently serves on the boards of Southern Water Services, Electricity North West, North Queensland Airports Noatum Ports and Corridor Energy. Prior to his current role, Paul was the co-head of Public Finance Banking at J.P. Morgan with primary coverage for transport and energy infrastructure. In that role, Paul structured and financed many of the largest deals in the infrastructure sector. He advised governments, municipalities and infrastructure funds on acquisitions, disposals, equity and debt raises, advising on and raising capital for over $25 billion of U.S. infrastructure transactions. Earlier in his career, Paul ran Equity Capital Markets for JPMorgan in Australia, with a strong focus on the real estate and infrastructure sectors. Paul received an undergraduate degree in economics from Macquarie University and an MBA from Yale University. Matthew LeBlanc, Managing Director,istheChief Investment Officer of J.P. Morgan Asset Management Infrastructure Investments Group. Matt is responsible for identifying, executing and managing investments for the OECD infrastructure equity platform. Matt has 23 years of power, utility and energy finance and private equity experience in the development and acquisition of power generation facilities, natural resources production, distributed cogeneration assets, regulated distribution assets, alternative fuels companies, as well as pipelines, midstream and other transportation, storage and logistics assets. Matt currently serves on the boards for Sonnedix, Nieuport Aviation Infrastructure Partners, Summit Utilities, Zephyr Wind, SouthWest Water Company and Southwest Generation.PriortoJ.P. Morgan, Matt spent nearly eleven years at ArcLight Capital Partners, LLC where he was a Principal and responsible for the origination, execution and management of power and energy investments in the U.S. and Europe. Prior to ArcLight, Matt was a Vice President at Berenson Minella & Company's energy advisory practice, where he focused on mergers and acquisitions and private equity transactions. From 1998 to 2000, Matt was an Associate in the GlobalPower Group at Salomon Smith Barney. He began his career at The NorthBridge Group, an economic and strategic consulting firm serving the electric power and natural gas industries. Matt earned a Bachelor of Arts in Government and Economics from Dartmouth College and a Master of Business Administration from the Yale School of Management. In addition to his responsibilities for the infrastructure investment portfolio, he also serves on the Advisory Board of the Yale Center for Business and the Environment. Nicholas Moller, Executive Director,isaClient Portfolio Manager (Product Specialist) within the Infrastructure Investments Group (“IIG”) at J.P. Morgan Asset Management focused on informing clients regarding the opportunities, risks and considerations with investing in infrastructure. Nick has over 10 years of experience in the infrastructure sector. Prior to joining IIG Nick was a member of the J.P. Morgan Investment Bank’s Public Finance Transportation and Infrastructure Group. In that role Nick advised both public sector and private sector clients on executing infrastructure and Public Private Partnership transactions. In addition, Nick structured and executed several billion dollars of taxable and tax-exempt financings both for publicly and privately owned infrastructure assets. Earlier in his career Nick was a member of J.P. Morgan Australia’s Equity Capital Markets team which included a strong focus on the Real Estate and Infrastructure sectors. Nick graduated from the University of Auckland (New Zealand) with a Bachelor of Commerce in Finance (First Class Honors). Todd Evans, Executive Director, is a Relationship Manager within J.P. Morgan Asset Management, where he works with defined benefit, defined contribution, operating asset, union labor and endowment/foundation clients. Prior to joining JPMAM in 2013, Todd was a Vice President within BlackRock's Global Institutional business, specializing in designing and implementing investment strategies for multinational corporate pension plans and union-labor organizations. Todd joined BlackRock via its merger with Barclays Global Investors (BGI) in 2009, and worked for Barclays in both San Francisco and London during his tenure with the firm. Prior to BGI, Todd was a graduate research fellow with the California Public Employees Retirement System (CalPERS) and the manager of investor relations for an NYSE-listed software company in Southern California. Todd received a B.A. in Communications and a MBA from the Haas School of Business in finance and capital markets, both from the University of California, Berkeley. 2 | FOR INSTITUTIONAL/WHOLESALE/PROFESSIONAL CLIENTS AND QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION For the exclusive use of the City of Fresno Employees Retirement System only STRICTLY PRIVATE | CONFIDENTIAL Executive Summary - Key differentiators of Infrastructure Investments Fund (IIF) • Immediate access to an established, • Focus on typically less competitive mid- • Local assets with unique risk/return stable, and diversified $6.1B portfolio; market and platform add-ons drivers that differ from broader economy no J-curve • 29 out of 36 new acquisitions were and financial markets • IIF grew out of the JPM Real Estate sourced outside of traditional auction • Existing USD $6.1B NAV portfolio2 Group, which has many years of processes since 20132 • 214 assets (15 portfolio companies), 15 experience working with US pension countries, 9 sectors investors in open end, private market funds Open-Ended Mid-Market Immediate Platform Structure Diversification Investing • Active management of current portfolio • IIF has raised $3.4B since the start of • Visibility to 5-7% target cash assets through being largest or co- 2016, all of which has been deployed distributions (yield) with 6.2% for trailing largest shareholder in every investment1 • Currently estimated queue of 3 months 12 months2 • Comprehensive ESG approach to or less investment and management • Weighted-average queue of • Supported by over 42 independent approximately 2 months for capital board directors committed in 20163 Active Asset Management Short Queue Cash Yield 1 Excludes Coastal Winds due to the unique tax equity flip structure of the investment. 2 Forecast based upon transaction activity closed and announced, as of June 30, 2017. 3 Based on date of capital called versus commitment date in 2016. There is no guarantee that the target will be achieved. 3 | FOR INSTITUTIONAL/WHOLESALE/PROFESSIONAL CLIENTS AND QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION For the exclusive use of the City of Fresno Employees Retirement System only STRICTLY PRIVATE | CONFIDENTIAL IIF ─ Access to a diversified core OECD infrastructure portfolio 1 Overview Summary of Key statistics and Terms Net Asset Value USD 6.1 billion Founded in 2006 Open-ended Gross Asset Value USD 14.8 billion (58% LTV) USD 14.8 billion GAV, USD 6.1 billion NAV Target Return 8-12% net2 15 portfolio companies (214 assets) in 15 countries & 9 sectors Target Cash Yield 5-7% on NAV2 (Cash distributions) Five cash year yield: 5.8 % p.a. Sector Focus Utilities, Transportation & Contracted Power Five year net return: 6.9% p.a. net of management fees and taxes, excluding FX impact U.S., Canada, Western Europe, and other Geographic Focus OECD Quarterly. Can be received as cash or Existing Portfolio6 Distributions reinvested GEOGRAPHIC BREAKDOWN: SUB-SECTOR BREAKDOWN: Repurchases Semi-annual. Best efforts basis3 Other7 Canada 4.8% <USD 100mm: 100bps 3.6% Australia Contracted Management Fees Regulated USD 100mm to <USD 300mm: 90bps 6.9% United Power Utilities (Based on NAV) States 38.1% 37.4% >USD 300mm: 80bps 39.6% Europe ex 4 UK 15% over 7% return hurdle 23.9% Incentive Fee Cap of 13.5% return No catch-up United Transportation Kingdom 24.5% 21.2% Currently estimated queue of 3 months or Commitment less 1 All data as of March 31, 2017, unless otherwise noted. Queue 2 The target returns and yield are for illustrative purposes only and are subject to significant Weighted-average queue of approximately limitations. An investor should not expect to achieve actual returns or yield similar to the targets 2 months for capital committed in 20165 shown above. There is no guarantee that the target will be achieved. 3 Repurchase Requests made prior to the fourth anniversary of the final drawdown of an Investor’s Commitment shall be subject to a 4% repurchase discount. 4 Incentive fee calculation excludes the impact of currency.5 Based on date of capital called versus commitment date in 2016. 6 Pie chart may not sum to a 100% due to rounding. 7Other includes Japan, Chile, South Africa and Thailand. 4 | FOR INSTITUTIONAL/WHOLESALE/PROFESSIONAL CLIENTS AND QUALIFIED INVESTORS ONLY - NOT FOR RETAIL