LORDS LB ASSET MANAGEMENT INVESTMENT MEMORANDUM This presentation has been prepared by Lords LB Asset Management UAB Accordingly, there are or will be important factors that could cause the (“Lords LB Asset Management”, the Management Company) and for the Fund’s actual results to differ materially from those indicated in these sole purpose of providing the recipient with the background information on statements. Lords LB Asset Management and the Fund undertake no the Management Company and its managed funds (“Lords LB Fund” or obligation to review or update any forward-looking statement, whether as a DISCLAIMER “Fund”). result of new information, future developments or otherwise. The purpose of this presentation is to provide the information for further In furnishing this presentation, Lords LB Asset Management and the Fund discussions. 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All forward-looking statements address matters that involve risks and uncertainties. Furthermore, these forward- looking statements speak only as of the date of this presentation. 2 2 TABLE OF CONTENTS Executive summary 3 Overview of the Fund’s structure 6 Overview of the Fund’s performance & portfolio 12 Overview of the Project 18 Covid-19 impact 24 Terms of the Issue 27 Risk factors 29 Contact information 33 Appendices 35 UMMARY OF THE BOND TERMS Lords LB Baltic Fund IV (the “Fund”) is a closed-ended real estate S investment fund with a term of seven to nine years targeting cash flow Issuer UAB “Terseta” generating commercial real estate in the Baltic States. It is managed by one of the largest investment management companies in Lithuania – UAB “Lords Issue size 8 mEUR LB Asset Management” (the “Management Company,” the “Group”). Founded in 2015, the Fund has made five investments into developed and Issue date 10.12.2020 income-generating properties since its inception. To increase its portfolio further, an SPV, controlled by the Fund, is looking to raise 8 mEUR through Maturity date 10.06.2022 a bond issue (the “Transaction,” the “Bond Issue”). The proceeds will be used for the acquisition and reconstruction of a historic central post office building Interest rate 6% in the heart of central Vilnius – Gediminas avenue (the “Project,” the st “Property,” the “Post Office”). Collateral 1 rank mortgage on the Central Post Office EXECUTIVE SUMMARY EXECUTIVE The Project foresees the reconstruction of a three-storey commercial building Offering Non-public offering in the Baltic states of 5,429 m2 to 5,533 m2 GBA (incl. the projected 29 parking spaces in the Listing on Nasdaq First North, within 6 months basement area). The total gross leasable area is 3,627 m2. The total Listing after the issue date investment into the Project is expected to amount to 14.2 mEUR: an auction for the acquisition of the Property was won with a bid of 11.2 mEUR, whereas Subscription period 03.12.2020 – 08.12.2020 the estimated cost of reconstruction is ca 3 mEUR. The level of reconstruction cost, covered by the equity injections of the Fund, may change, depending on Financial adviser AS Redgate Capital the specific needs of the tenants. Legal adviser Ellex Valiunas Lords LB Baltic Fund IV is planning to carry out the Project through its SPV, UAB “Terseta” (the “Issuer,” “Terseta”). After the Transaction, the Issuer Collateral agent Grant Thornton Baltic is the sole owner of the Post Office. The Post Office will be the only asset Escrow agent Šiaulių Bankas in Terseta. PROPERTY: Post Office (Gedimino ave. 7, Vilnius) Acquisition target, to be owned by the Issuer 4 WELL-KNOWN BRAND WITH A STRONG TRACK RECORD OF SUCCESSFUL FUNDS • The Issuer belongs to a real estate investment property fund, managed by one of the largest investment management companies in Lithuania – Lords LB Asset Management. The brand “Lords LB” is one of the most well-known commercial real estate brands in Lithuania. The history of the Group, focusing today mostly on real estate and private equity strategies, dates back 12 years. • The Group currently manages 15 funds: 12 real estate funds, 2 private capital funds and 1 energy and infrastructure fund. The total value of assets managed by the funds reached more than 605 mEUR at the end of June 2020. FUND WITH DIVERSIFIED PORTFOLIO CONSISTING OF HIGH-QUALITY ASSETS KEY INVESTMENT HIGHLIGHTS INVESTMENTKEY • The Issuer is owned by the real estate investment property fund Lords LB Baltic Fund IV, which owns and actively manages cash-generating objects in the capitals of the Baltic States. • Fund’s portfolio consists of a hotel, a shopping centre, office buildings, leased to EU institutions, private and state-owned companies, demonstrating an agile strategy of high diversification of its investments. A GRAND HISTORICAL BUILDING WITH A UNIQUE DESIGN AND TOP-RATE LOCATION • Upon completion of the acquisition, the Property represents a strategically good fit for the Fund that focuses on high-quality assets – the Post Office is a perfect example of the non-Renaissance architecture in the heart of Vilnius. • Central location in the heart of the Old Town increases the spectrum of potential tenants: on the one hand, the Property is an ideal spot for high-street stores and restaurants; on the other hand, it is an attractive place for opening office/co-working premises. Already several potential tenants have shown interest in the spaces. 605MEUR Assets Under Management (AUM) of Lords LB 5 5 TABLE OF CONTENTS Executive summary 3 Overview of the Fund’s structure 6 Overview of the Fund’s performance & portfolio 12 Overview of the Project 18 Covid-19 impact 24 Terms of the Issue 27 Risk factors 29 Contact information 33 Appendices 35 Established in 2008, Lords LB Asset Management is a premier provider of investment management services in the Baltic States ACTIVITY AUDITOR The main activity of the Management Company is to establish and manage the The Management Company and all of its funds are audited by a Big 4 investment funds (real estate, energy and infrastructure and private equity). Company. Current auditor of the Management Company is KPMG. Lords LB Asset Management has an experienced team consisting of over 30 real estate and finance professionals in the Baltic region. MANAGEMENT COMPANY The Management Company has local teams and offices in Vilnius, Riga and INSURANCE Tallinn. The local teams are backed by the support, contacts and know-how Lords LB Asset Management and all of its funds are insured with two types of from Vilnius team. insurance: Private Equity & Venture Capitalist Management Liability and Crime Insurance and Professional Indemnity, Directors’ & Officers’ Liability and Crime Insurance. Total Insurance amount: EUR 12 million.* LICENSE Lords LB Asset Management is an AIFM licensed fund management company, which is supervised by the Central Bank of Lithuania. FUNDS Lords LB Asset Management currently manages 15 funds: 12 real estate funds, two private capital funds and one energy and infrastructure fund. The total value of assets managed by the funds reached EUR 605 million at the end of June 2020. * The insurance is issued by one of the leading global insurance providers - Howden. 7 7 Lords LB Asset Management’s organization in core functions and other units – at the present Lords LB Asset Management controls 15 funds COMPANY COMPANY THE MANAGEMENT COMPANY: MANAGEMENT BOARD 2019.06.20 - 2023.06.19 Jan Litborn (Chairman), Mindaugas Marcinkevičius, Andrius Stonkus, Antanas Vainauskas COMPLIANCE CONFLICT OF INTEREST DEPOSITORY AUDIT AML PROCEDURES OFFICER PROCEDURES CEO Vilma Tvaronavičienė PROJECT ASSET ACQUISITIONS FUND INVESTOR MANAGEMENT / FINANCE MANAGEMENT MANAGEMENT RELATIONS / INVESTMENT DEVELOPMENT Public relations Accounting (M-Finance, EY) LORDS LB LORDS LB LORDS LB LORDS LB BGFV Analysis BALTIC FUND BALTIC FUND BALTIC SMALL BALTIC GREEN INTERCAP Reporting III IV CAP FUND FUND (V) FUND ORGANISATIONAL STRUCTURE OF MANAGEMENT THE ORGANISATIONAL LORDS LB LORDS LB LORDS LB LORDS LB LORDS LB SPECIAL FUND SPECIAL FUND SPECIAL FUND SPECIAL FUND SPECIAL FUND I I SUBFUND A I SUBFUND B II III LORDS LB LORDS LB ENERGY AND LORDS LB LORDS LB SPECIAL FUND SPECIAL FUND INFRASTRUCTURE PRIVATE EQUITY PRIVATE EQUITY IV V SME FUND FUND I FUND III 8 8 Lords LB Baltic Fund IV currently owns five INVESTORS (78 SUBJECTS) income-generating objects through its five companies.