ROIC 2017E P/E 2019E*

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1 Letter 3 September 29, 2017 Dear investors, In the year of 2017, the BC FUND reported an accumulated gain of 32.5% and during the same period the MSCI Brazil retuned +22.4%. Returns 9M17 12M 24M 36M ITD 1 BC FUND 32.5% 18.7% 33.2% 5.1% 414.4% MSCI BZ 22.4% 13.7% 3.5% -28.9% -12.3% Source: Brasil Capital and Bloomberg Along 3Q17, the Government managed to muster some ability to react and bring certain stability to the political environment after the volatility caused by the announcement that Joesley Batista had turned state's evidence in May. In the early weeks of the quarter, Labor Reform was approved. Despite its limited implications on fiscal policy, we see this as an enormous microeconomic advance towards catalysing gains in competitiveness and efficiency for Brazilian businesses; mainly for businesses with more intensive human capital. Due to the premature stage of these changes, we have not yet embedded this impact in our forecasts, but are confident that it will gradually lead to relevant increased profitability at the businesses in our portfolio. In September, the Government also approved the creation of the long-term rate (TLP), which substituted the long-term interest rate (TJLP) on BNDES loans. This step will enhance visibility on awarding credit subsidies and the efficacy of monetary policy. Besides favoring the Government's fiscal adjustment, this measure is also essential to sustaining reduced interests for all companies in the medium and long term. In light of these gains, market expectations were positively impacted along the quarter by lower projections for interest rates (SELIC falling at the end of 2018 to 7.0% vs. 8.25% early in the quarter), greater growth (GDP 2018: +2.38% vs. +2.0%) and inflation under control (IPCA 2018: 4.06% vs. 4.25%). As for the main positive contributions in the quarter, CVC appears as one of the highlights again. Despite posting an accumulated gain of 73% in the first 9 months of 2017, we uphold the opinion that CVC is still one of the best investment options in the retail/consumer sector. The reasoning is simple: when we look at the main companies in the sector (companies with good liquidity, sound competitive positioning in their markets and a solid track record of results), despite CVC having one of the highest ROICs and great growth potential (both organically, as well as from new acquisitions), it has wielded one of the lowest P/E multiples. We subscribe to the opinion that this distortion will be fixed in time. ROIC 2017E 9% Source: Brasil Capital and Bloomberg P/E 2019E* 19% 20% 20% 21% 24% 25% 26% Source: Brasil Capital and Capital IQ *Values as of 09/30/2017 closing 27% 30% 34% 35% 20,8 22,6 22,7 23,9 25,0 25,7 18,0 15,0 15,9 16,0 16,2 16,8 After being one of the negative performance highlights in 2Q17, Cosan Limited, the holding responsible for managing Cosan assets, rebounded beyond the losses posted in the previous quarter. We believe that the following factors explain the robust stock performance in 3Q17: a) sound operating results reported by all Company business areas Rumo, Comgas, Raízen Energia, Raízen Combustíveis and Moove crystallizing the strength and resilience of this assets portfolio; and b) reduced discount of Cosan Limited in relation to the market value of this portfolio, consequently to announcing the capitalization of Rumo. We see Rumo's 1 As of 09/30/2017. Performance net of all fees. The performance corresponds to the BC FICFIA Fund in USD until Aug/2010. From Sep/2010 onwards, the performance corresponds to the portfolio of the Brasil Capital Equity Fund. BRASIL CAPITAL 1

2 operational development as a validation of Cosan Limited's ability to allocate capital and manage assets. Since its initial investment in 2009, we estimate that the business has recorded returns above 30% a year with Rumo. Even with the good quarterly performance, we still see the holding company trading at a 35% discount on the market value of its assets, which we still consider excessive. B3's performance was not only benefited by a sound performing Ibovespa Index in the quarter, but also by the accelerating growth of volumes in its main markets. The integration between BM&F and Cetip remains on course, to which the restructuring of the Company's commercial area has become one of the main focuses of the current management. The big goal is to engage B3 more with its main clients, which should translate into a better service level, as well as greater agility in the development of new products. Main Positive Contributions in 3Q17 Source: Brasil Capital and Bloomberg CVC +2.2% COSAN +1.7% B3 +1.5% In this 3rd quarter, the main change in the portfolio was the increased position at Rumo. Our investment in the company came about in 1H16, during the first capital increase led by the then new controlling company, the Cosan Group. The following elements attracted us at that moment: a) irreplaceable business model connecting the Rondonópolis region by railroad to the Port in Santos, where the company has terminals; b) low demand risk; c) absolute superiority over its main competitor, the railroad transport; d) dominance of main export routes; e) great cost-cutting opportunity with gain in economies of scale; f) deleveraging due to capitalization; g) attractive valuation with broad security margin. Since our initial investment, the stocks have shown substantial appreciation. With time, as the company was able to deliver the important stages of its initial plan, we have felt increasingly comfortable with its operational risk. However, the company remains shadowed by high financial risk due to high debt. Therefore, we have gradually reduced our investment insomuch as the appreciation of stocks has reduced the safety margin. That said, we see the recent capital increase as a manner of accelerating the reduction of this financial risk (our debt estimates fell from 3.7x to 2.7x net debt / EBITDA by the end of 2017), to again make the risk x return on assets ratio very attractive and consistent with a larger position in the portfolio. Investment Case Aliansce: Despite having studied the shopping-center companies for several years, we invested in the sector for the first time only at the end of We have held recent positions in three of the four companies leading the sector and, currently, continue investing in two of them: Aliansce and Iguatemi. On keeping the relevance of the first company in our portfolio and the ongoing changes at the company and in the sector in mind, we think it is worthwhile to more thoroughly explore our argument for investing at Aliansce. Market: The shopping center business unites a series of characteristics that make this market extremely attractive. First of all, it affords us with the possibility of obtaining retail exposure with a highly controlled risk level. On average, a mall has 178 stores and, thus, ends up encompassing a series of segments with distinct drivers of results: apparel, services, appliances, dining and entertainment, among others. 2 Furthermore, the internal dynamics of each mall in which more productive shopkeepers are forever taking the place of less productive shopkeepers ensuring that the competitive nature of retail is always benefiting mall operators. Secondly, the contracts defined between the mall and shopkeepers bestow significant predictability and stability to the business. The inflation-adjusted contracts endure, on average, 5 years and establish the payment of the larger value between the minimum instalment and the percentage instalment (if sales surpass a previously determined limit). The third characteristic we like in this market pertains to its competitive dynamics. Once you are the first mover in a certain region, a competitor will hardly find attractive returns in the surrounding areas on keeping in mind that they will have to offer very attractive conditions in order for the already established shopkeepers to move to their mall or to open a second store at a location nearby. Moreover, it is likely that the property value in the region around the shopping mall will have appreciated, thus making land more expensive and scarce. Finally, we like the various forms of growth the business offers: a) Organic growth via increased sales / rents or improvement of shopkeeper mix; b) Expansions to the area of existing assets; c) Greenfields (developments); d) Multiuse projects around the mall (commercial, residential, hotel and other towers); e) Acquisitions of additional stakes in assets where interests already exist; and f) Acquisitions of new malls or a portfolio of malls. 2 Total number of stores divided by total malls according to ABRASCE (Brazilian Association of Shopping Centers) 2016 data BRASIL CAPITAL 2

3 With exponential e-commerce growth in the world and the impact it has on traditional retail business, many investors are second guessing the effect this dynamic factor has on the shopping center industry. Despite sharp recent impacts on the industry in the USA, we believe this effect will be less intense and slower in Brazil. First of all, logistics is a relevant factor limiting e-commerce market growth in Brazil. Unfortunately, we still do not have an adequate level of service available, especially considering that globally 30% of the merchandise is returned. 3 Furthermore, the shopping mall market in Brazil wields characteristics that partially mitigate this trend. In the USA, most shopping mall developments were built in city suburbs, causing the consumer to move about significantly in search of a specific consumer necessity. Meanwhile in Brazil, malls are located in large city centers and also serve as hubs for family leisure. According to a poll conducted by GFK in 2016, only 37% of consumers go to the mall to shop, while the remainder go for other purposes, like outings, services, leisure, cinema and dining. That said, the two markets offer a different mix of stores, with a more relevant share of dining and services in Brazil (both with less obvious risks of disruption than the other segments). Comparison USA Brazil Retail e-commerce penetration Average e-commerce order delivery time Retail shopping center penetration GLA 4 / thousands of inhabitants Mall locations 8.3% 3.5% 3.5 days 9.0 days 53.4% 19.0% 2,190 m 2 74 m 2 City centers and suburbs City centers Services (% of GLA) 11.0% 18.2% Source: Statista, ABRASCE, World Bank, JLL, ICSC and Aliansce In the past 10 years, the sector has been through periods of highs and lows in Brazil. After the 2008 economic crisis, boosted by the consumer boom in Brazil, the market enjoyed exceptionally high growth rates, rising above the double-digit threshold in real terms from 2009 to In light of this scenario, a series of projects came to be announced and the number of new shopping mall inaugurations began to grow year to year, until reaching a record in 2013 of 38 new malls in the market. A large part of these projects were developed by new players with little or no experience in the sector. Coincidentally, the peak year of inaugurations in the sector marked the beginning of the economic recession in Brazil and, thus, companies began postponing or cancelling new projects and sales fell through the floor in 2015 and Growth of Revenue in the Sector in real terms versus Number of Shopping Malls inaugurated in the year ,3% 1,6% ,3% ,7% 13,8% 22 Source: ABRASCE and Brasil Capital 2,6% 2,7% The shopping center sector in Brazil today stands on 562 developments (ABRASCE estimates that it will end 2017 at 575), 15.3 million m 2 in GLA and nearly 100,000 stores. Even with the GLA having more than doubled in the last 10 years, only 202 of the 5,561 municipalities in Brazil (3.7% of the total) have at least one shopping center. Still, the sector only represents 19% of total retail, while in the USA, for example, this number is 53.4%. Despite this apparent underpenetration, we do not think market growth will return by way of new greenfields in the short term, on keeping in mind that a longer sales recovery period is needed for shopkeepers to resume the appetite for growth. That said, we believe companies will be tuned into other growth drivers in the short and medium term, especially expansions, multiuse projects and M&As (as explained further along). Listed shopping mall companies (our investment universe) jointly hold 132 assets and represent 21.58% of the GLA in the sector. By being the oldest and most structured in the market, this ensemble of businesses performed significantly above the sector in the recent period of economic crisis. If we weigh the 5 main companies in the sector, we see that the average occupation rate remained above 96% and revenue per m 2 grew 4.5% in 2015/2016. In contrast, the market only grew 0.8% in the same period and the rate of occupation despite a majority of closed companies not reporting this number hovered in diverse cases below 90% according to our findings. This discrepancy gives us the assurance that, besides being an excellent market to allocate capital, we have the option of investing in the best companies in the sector ,4% 25-4,0% -3,0% Shoppings Malls inaugurated Growth of Revenue 20% 15% 10% 5% 0% -5% -10% -15% -20% 3 According to study by Kurt Salmon 4 GLA Gross Leasable Area BRASIL CAPITAL 3

4 Companies Mkt Cap* (R$ Mi) Number of Assets Owned GLA (k m 2 ) Market Share (GLA) BR Malls 12, % Multiplan 14, % Iguatemi 6, % Age of portfolio 48% 42% 36% 32% 32% 59% 54% 40% Aliansce 3, % Sonae Sierra 2, % General Shopping % 14% 5% 18% 20% CCP % JHSF 1, % Total Listed 42, , % Source: Companies, Itaú BBA, ABRASCE and Brasil Capital *Values as of 09/30/2017 closing Aliansce: Aliansce was created in 2004 upon a joint venture between GGP, one of the largest Real Estate companies in the USA, and Nacional Iguatemi, a company founded by Renato Rique's (CEO and one of the main company shareholders today) father. Initially, the only company asset was Iguatemi Salvador (the 2nd mall in Brazil and known today as Shopping da Bahia) and Shopping Taboão. Then, the Company developed diverse projects and made acquisitions until its IPO in Aliansce was evaluated in the offer at R$1.26 Bi and based, at the time, on a portfolio of 13 assets. Since then, the Company has been the largest shopping mall developer in the sector, inaugurating 7 assets (13 since its foundation) and has become the 4th largest company in terms of owned GLA (454,000 m 2 of GLA) among listed companies and the 4th largest in terms of market value (R$3.74 Bi). Currently, the Company holds interests in 20 shopping malls, administrates 28 (9 for third parties) and is present in every region of Brazil, with a focus on class C consumers. Given the strong growth of recent years, Aliansce wields a series of assets still in a maturing phase and a portfolio with a low average age in comparison to its peers. This is a relevant matter from our point of view. We see Company assets to be welllocated, dominant and susceptible to relevant organic growth potential in the future. If, more recently, the economic environment injured the Company operating performance given its less consolidated portfolio and greater exposure to class C, we think that in a less hostile economic environment, the Company should perform at least in line with its peers, to even possibly surpass them, just as it did in 2011, 2012 and Source: Companies, Itaú BBA and Brasil Capital SSS 5 Aliansce versus peers 17% 12% 7% 2% -3% -8% 1-9 years years > 20 years In line SSS Aliansce Above Below SSS Others (BRML, IGTA and MULT) Another benefit of having a young portfolio is the expansion capacity assets offer as a growth option. As a general rule, developers inaugurate a mall by downsizing its true potential considering the consumer power within its influential outreach. Thus, as the mall grows and is consolidated, it is possible to conduct expansions in the sales area or multiuse projects in the surrounding areas. Aliansce wields expansion capacity in 14 of its 20 shopping malls, totaling 210,335 thousand m 2 of GLA (47% of currently owned GLA), which is significantly above its peers. As for multiuse projects, there is potential in 11 of its 20 assets. It is worth pointing out that a mall expansion provides one of the best returns weighted by the risk taking into account the various investment options available to shopping mall operators. This is because the capex/m 2 is low (ready structure), fewer anchors 6 than satellites 7 are needed due to the established flow of consumers and the condominium costs are diluted among more shopkeepers, making it possible to raise rents in a second phase. 5 SSS Same Store Sales: Year-over-year sales growth in same stores 6 Anchor Stores: Large well-known stores that attract consumers 7 Satellite Stores: Small stores located around Anchor Stores BRASIL CAPITAL 4

5 Potential GLA expansion via Brownfields % 210,336 35% 334,404 Source: Companies, Itaú BBA and Brasil Capital Perhaps, one point of disagreement we have with the rest of the market in regard to the Aliansce portfolio is connected to the exposure to Rio de Janeiro. Many see greater operational risk as opposed to their peers, in light of the Company's relevant presence in the State of Rio de Janeiro. First of all, except for Iguatemi which does not have any asset in the region, both Aliansce, as well as BR Malls and Multiplan receive a relevant part of their revenue in RJ, as represented in the following chart. Secondly, although we do understand the gravity of the economic, political and social crisis the State faces today, we understand that the assets Aliansce holds in Rio de Janeiro are among the most dominant and competitive assets in the portfolio and, therefore, should present greater resilience in the face of a more adverse scenario. As evidence, even with the State's unpaid 13th salary bonuses in regard to 2016 and delayed payment of the April and May salaries, the revenue from Aliansce assets in RJ grew rigorously in line with the revenue from assets in other states in the 2nd quarter of Multiplan poses an even more emblematic case: revenue from Company assets in RJ grew twice as much as the assets located in other states during the same period. Estimated exposure to RJ (% of Revenue) 30% 22% 136, ,572 33,5% GLA via Brownfields (m²) 28,1% Potencial expansion 0,0% 21,8% 50% 40% 30% 20% 10% 0% -10% -20% A few important alterations were announced internally at the Company. Rafael Sales, the until then partner at Constellation Asset Management, became Executive Vice-President at the Company (one position below Renato Rique). In addition to his financial background, Rafael has studied the sector for almost 10 years and has sat on the Aliansce board for 3 years. Therefore, given his previous knowledge of the Company and the autonomy bestowed upon him, he has determined, from the get go, a new agenda for the Company, with the help of CPPIB 8, Renato Rique and Jaguar Growth Partners. 9 a) Team reinforcements: At the onset of the succession process of their COO, Délcio Lages Mendes (in operation since Aliansce was founded and the current company chairman), the Company announced the promotion of Leandro Lopes, an executive with experience in the operational, financial and executive areas of the shopping center industry since In addition to these changes, other small restructuring processes are underway in the commercial, operational and financial teams. b) Restructuring the remuneration model: The business is in the process of changing the targets and incentives of its main executives. The idea is to use the main corporate success cases as a base to develop talents from the market and set up a new structure that promotes the alignment of key-individuals at the Company in the long term. c) Implementing management processes and systems: Perhaps, due to the long-standing experience of the main executives at the Company and their large knowledge in regard to each asset, there is a lack of systems and processes today that replicate good management practices from one shopping mall to another. Currently, this exchange is either conducted informally through the exchange of ideas between shopping mall managers or by rotating managers between different assets. On keeping the current partial renewal of the team and the search to constantly maximize benefits from best practices at all Company assets in mind, systems and processes that assist this function are being implemented. d) Refitting Company capital structure: Aliansce has, historically, been the business that made the most of fixed debt on its balance sheet (until 2Q16, 80% was fixed debt and 20% was tied to inflation). This decision has shown to be spot on, in light of the recent past of the SELIC at 14.25% a year. However, with the new projected scenario of a low SELIC for some time, the Company is drastically changing its 8 CPPIB: Canada Pension Plan Investment Board a Canadian sovereign pension fund the main company shareholder today with 38.2% of the capital stock 9 Jaguar Growth Partners: Private Equity firm specialized in the global markets in growth Real Estate sector holds 5.4% of Aliansce capital stock BRASIL CAPITAL 5

6 debt structure. The Company closed the 2Q17 with 25% of the debt tied to CDI and is targeted to close 2017 at 40% and 2018 between 50%-60%, thus generating a strong bottom-line savings on interests. Furthermore, the fixed debt that will remain on the balance sheet is being renegotiated with the banks at levels more in line with new market rates. In addition to the previously mentioned agenda, which is underway, we believe the Company is well positioned today for the new consolidation phase that the sector will enjoy in the future. As mentioned at the beginning of the letter, the market enjoyed a recent greenfield growth period, which will not likely be repeated in the short term. That said, given the business generating cash profile, shopkeepers lack of appetite for new developments, high fragmentation of the sector in Brazil and clear existing synergies, we understand that both mergers and acquisitions will occur in the market from now on. The capital discipline of the main businesses in the sector can be measured by looking, historically, at investments in greenfields and acquisitions/divestments. As for the track record of acquisitions and divestments, we have surveyed all transactions with available data realized by Aliansce, BR Malls, Iguatemi and Multiplan since 2010 and have calculated the consolidated cap rate of all the purchases and all the sales for each business (the greater the cap rate, the cheaper it is). 10 First of all, keeping in mind the market value of these 4 businesses, we have ascertained that Aliansce was highly active in recycling its portfolio, buying and selling R$1.8 Billion and R$379 Million in assets, respectively. On average, the Company bought assets at a 9.2% cap rate and sold them at a 8.1% cap rate (a 1.2% spread). If we had excluded the Leblon mall acquisition, purchasing cap rate would have been 9.9% (a 1.9% spread). BR Malls, in turn ranked second in active recycling, generated a spread between purchases and sales that was close to zero. Iguatemi, despite having bought more premium assets, paid dearly from our point of view, and made only one sale to an excellent multiple (Boulevard Rio). Finally, it is worth pointing out Multiplan's notable track record, which even on purchasing excellent assets, managed to pay great prices (most of their acquisitions involved the stakes of partners in assets where they already held interests). Companies Consolidated Value (R$ Mi) Cap Rate Purchase Sale Purchase Sale Dif Aliansce 1, % 8.1% 1.2% BR Malls 3, % 9.6% 0.2% Iguatemi % 5.5% 1.6% Multiplan 1, % n.a. n.m. As for greenfields, we have verified that the three companies with available data for analysis (Aliansce, Iguatemi and Multiplan), reported very similar results. All three allocated capital satisfactorily when we look at the revenue generated by the new shopping mall 3 years after its inauguration in comparison to the investment. It may also be affirmed that Aliansce and Multiplan were more consistent, considering the quantity of projects that each one inaugurated in the analyzed period (8 for Multiplan and 9 for Aliansce). Iguatemi, in turn despite having the best return in this analysis (15.9%) was more inconsistent, having developed two projects with excellent returns and two projects with mediocre returns. Revenue / invested capital Y + 1 Y + 2 Y + 3 Aliansce Parque Shopping Maceió 13.3% 16.8% 18.2% Shopping Parangaba 8.1% 9.2% 9.6% Boulevard Vila Velha 3.6% 4.6% 4.6% Boulevard Nações Bauru 10.1% 12.5% 12.9% Parque Shopping Belém 14.5% 15.6% 16.0% Boulevard Campos 8.8% 11.0% 14.3% Boulevard Belo Horizonte 15.8% 18.2% 21.1% Boulevard Belém 17.1% 23.5% 25.4% Boulevard Brasília 5.6% 11.0% 14.7% Capex Weighted Average 11.1% 13.8% 15.2% Iguatemi Shopping São José do Rio Preto 7.7% 8.7% 9.8% Shopping Ribeirão Preto 7.9% 8.3% 9.0% Iguatemi Alphaville 19.0% 19.6% 20.8% JK Iguatemi 25.0% 28.8% 30.5% Capex Weighted Average 13.4% 14.8% 15.9% Multiplan Parque Shopping Maceió 10.9% 13.9% 15.2% Jundiaí Shopping 12.0% 13.3% 14.3% Park Shopping Campo Grande 14.2% 15.0% 16.4% Village Mall 7.2% 9.5% 9.7% Park Shopping São Caetano 18.4% 19.6% 21.9% Shopping Vila Olímpia 9.4% 11.2% 12.8% Barra Shopping Sul 13.3% 15.0% 18.0% Pátio Savassi 9.9% 12.5% 14.3% Capex Weighted Average 11.8% 13.5% 15.0% 10 Cap rate (capitalization rate) Metric used in the Real Estate sector calculated by the ratio between the rent generated by a determined property and its market value BRASIL CAPITAL 6

7 Even with the good track record Aliansce has enjoyed throughout recent years, we understand the reinforcements in the management team, as previously commented, along with the presence of CPPIB, Renato Rique and Jaguar Growth Partners on the Board of Directors all benchmark shareholders with vast knowledge on the sector strengthen our assuredness as to the quality of future Company capital allocations. By our calculations, Aliansce trades on the stock exchange with a discount against its three main peers: BR Malls, Iguatemi and Multiplan. P/FFO 11 18,8-13% 19,5 19,4 17,6 16,4 17,0 17,7-16% 16,8 16,4 14,2 15,9 16,4-20% 15,7 15,6 12,6 2018E 2019E 2020E Source: Brasil Capital *Values as of 09/30/2017 closing We understand Aliansce presents the greatest FFO/stock growth potential in the sector, in addition to a series of additional optionalities to which we do not attribute any value in our projections. This insight, in addition to the fact the company is trading with a discount against its peers, makes Aliansce an investment capable of delivering returns of 20%-25% a year in the medium and long term. We appreciate your trust. Brasil Capital 11 FFO (Funds from Operation) Metric used in the Real Estate sector defined by the cash flow from operations, calculated by adding depreciation and amortization expenses to the net profit, and subtracting the gains from the sale of assets BRASIL CAPITAL 7