INVESTMENT FUND DESIGN

Transcription

1 INVESTMENT FUND DESIGN Financing Energy Efficiency Investments for Climate Change Mitigation Presented by Deltcho Vitchev of Renaissance Finance International (UK) 0

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3 Platform Overview Introduction to Conning Industry Positioning Investment Capabilities Publicly traded, investment grade securities U.S. Treasury/U.S. Agency Bonds Treasury Inflation-Protected Securities (TIPS) U.S. Corporate Bonds Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Municipal Securities (Taxable and Tax-Exempt) Foreign Government/Provincial/Corporate Bonds Non-USD investment grade securities Government Bonds Agency Bonds Covered Bonds Inflation-linked Bonds Investment grade Corporate Bonds Speciality Asset Classes High Yield Private Placements Convertibles Alternative Investments Mezzanine Power Structured Products Private Equity Public / Private Financing Equity High Dividend Income Equity Replication approach Exchange-Traded Funds (ETF) approach AUM Growth (USD Billions) as of 31 December 2010 Source: Conning 2

4 Geographic Presence Introduction to Conning Cologne $76.4b AUM 117 Clients 269 Professionals 5 Countries Hartford, CT Our Corporate headquarters provides global coordination of our business activities and strategic initiatives Develops the GEMS economic scenario generator and stochastic dynamic financial analysis software ADVISE Dublin Manages GBP and EUR investments: $1.6 billion of fixed income securities as of 12/31/2010 London Provides client management and business development services Conning is expanding its international presence to address proactively the needs of a global insurance industry 3

5 Conning - Market Leader Introduction to Conning Investment capabilities provide multiple sources of value and performance $ Billion Assets Under Management* Private Placements $1.8 Tax-Advantaged Securities $7.1 US Treasuries $5.8 Equity Products $1.1 High Yield Bonds $0.2 Non-US Govt. & Agencies $0.7 Short-Term Obligations $2.9 US Govt. Sponsored Assets*** $8.6 Asset-Backed Securities $1.6 Mortgage-Backed Securities $15.5 Corporate Bonds** $31.1 As of 31/12/10 *Includes Conning s U.S. and Dublin Investment Centers ** Includes Convertible Securities *** Includes Agencies, Taxable Municipals and Government related assets 4

6 Conning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onning ) 678%)*, ** #$%&'"( $0*+,2.)27,91, /,**1, 879":) *** #$%&'",. "$.)+1 ":,*.-.+, 97*)/);"%).,.0+ ) :0-7<"2-.+" 5

7 Leading Edge Investor Opportunities Introduction to Conning Socially Responsible Investments Renewable Energy & Energy Efficiency (Climate Change Mitigation) Structural Hedging (Portfolio Management) Energy (Niche-Generation Demand Management) Inflation (Natural Hedge) Conning creates liability driven investor solutions Participating Countries (Higher Returns) Private Equity (Long Term Investments) Infrastructure (Anti-cyclical in nature) 6

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9 Alternative Investment Track Record Introduction to Conning! 1989: In response to growing climate change risks, Swiss Re establishes the greenhouse gas unit! 2001: Swiss Re invited to the UN in Geneva on climate change mitigation! 2003: Conning, with Swiss Re develop a commercial climate mitigation private equity fund for the United Nations Economic Commission for Europe! 2005: Conning is a leader in Europe in marketing a broad based clean energy investment! 2006: Conning launches EUR 354m fund with TCW, targeted to EU27! 2007: Conning tenders and wins mandate to manage EUR 125m Post 2012 Carbon Credit Fund for five European development banks (CDC, EIB, ICO, KfW & NIB)! 2008: Post 2012 launched. Conning tenders and wins UNECE fund design contract! 2009: UNECE accepts Conning Financing Coordination Unit proposal; supporting a private equity fund! 2010: Post 2012 fund fully invested: ECEF fund substantially invested! 2011: Conning secures UN support to launch a renewable energy & energy efficiency fund Conning has specialist expertise in developing partnerships with leading investment managers to create long term investment opportunities to suit specific client investment aims. 8

10 Alternative Investment Track Record Introduction to Conning European Clean Energy Fund (ECEF) Target Projects Fund Size Clean energy projects in EU 27 including wind energy, solar energy, hydroelectric, biomass, cogeneration, combined-cycle, fuel switching, geothermal, clean coal, waste-to-energy, district heating and electric, waste fuel, combined heat & power (CHP), efficiency retrofit and related projects and companies EUR354 million Investment Period Four years from Final Closing (Dec 2006) Term Investment Manager Investors Management Fee Ten years, with two one-year renewal options Trust Company of the West Swiss Re EUR40 million; TCW EUR5 million; public pension schemes, commercial fund investors, foundations and international financial institutions 2% of committed capital during investment period and afterwards 2% on par value of investments Preferred Return 7% Performance Fee 20% to the Investment Manager and 80% to the Investors after the Preferred Return 9

11 Conning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rust Company of the West Swiss Re 40 #*&. H-4"; TCW 5 #*&. H-4"; 5"06.%402-,&&7, $,&0'"&&7, 08,#7, :"##,4+,0:', '&-,02"47, /"&.7 ' #,E.6&%4".&7, /'&%&0"-7, 6+4,E.,&'( 2% "2 -*"E,&&"5" :%$'2%*% &% '&-,02'A'"&&71 $,4'".,.%*,, 2% "2 &"#'&%*3&"1 02"'#"02' '&-,02'A'1 8G)2",@"4 &'2"B" 7% H$,@)4 20% '&-,02'A'"&&"#6 #,&,.E,46, 80% '&-,02"4%# $"0*, -7+,2% "2.%+' $" '&-,02'A'(# 10

12 Alternative Investment Track Record Introduction to Conning Post 2012 Carbon Credit Fund Target Projects Fund Size Projects generating a recognised carbon credit stream Post-2012 EUR125 million Investment Period Two years from First Closing (Feb 2008) Term December 2012 Investment Manager Investors Management Fee Preferred Return Performance Fee First Climate European Investment Bank with Caisse des dépôts et consignations, Instituto de Crédito Oficial, KfW and Nordic Investment Bank 2% of committed capital during investment period and 2% on par value of outstanding investments following the investment period 7% (with a catch-up in certain circumstances) 20% to the Investment Manager and 80% to the Investors after the Preferred Return 11

13 Conning >;?"4 <4",:2"- >;?"4 :&*2 A>3,$&2*/0 ($,2)'&+ ;&-3, 2012 C,3,+/, 1&*2" <4",:27, ";,0$,+'-%PF', $".2-,4E.,&&71 ";QR# 65*,4".&78 :4,.'2"-, 5,&,4'46,#78 $"0*, ".% 125 #'**'"&"- H-4" D*+,-').)&**/E ;,$)&2 L-% 5".% $"0*, $,4-"5"?%:472'( (S,-4%*3 2008) F$&(.,:%; First Climate D*+,-'&$/ H-4"$,10:'1 '&-,02'A'"&&71 ;%&:, -:*P+%( Caisse des depots et consignations, Instituto de Credito Oficial, KfW ' Nordic Investment Bank #" A;$"+3,*), 2% "2 -*"E,&&"5" :%$'2%*% &% '&-,02'A'"&&71 $,4'".,.%*,, 2% "2 &"#'&%*3&"1 02"'#"02' &,$"5%B,&&78 '&-,02'A'1 $"0*, ":"&+%&'( '&-,02'A'"&&"5" $,4'".% &'2"B" 7% -:*P+%(."$"*&'2,*3&7, &%+'0*,&'( - "$4,.,*,&&78 ";02"(2,*302-%8 H$,@)4 20% '&-,02'A'"&&"#6 #,&,.E,46 ' 80% '&-,02"4%# $"0*, -7+,2% "2.%+'!" '&-,02'A'(# 12

14 Conning Areas of Competence Introduction to Conning! In an area where track records are short, Conning has one of the longest.! Conning has over ten years experience in managing fund platforms.! Conning s placement expertise is sought after by other third party investment managers.! Conning is able to structure and place product efficiently meeting the required market standards.! We define the Conning Advantage in three ways: " Insurance Expertise: Our in-depth knowledge of the insurance industry and other long term investors ultimately leads to solutions that improve their financial results " Client Relationships: We understand investment officer concerns and investment rationale allowing us to structure and place product of benefit to them " Investment Performance: Conning works with investment manager partners by leverage off their proven investment ability by adding complementary and non-conflicting skills to create investment opportunities for mutual benefit. 13

15 UNECE - Objectives Investment Fund Designer #$To promote market formation so that self-sustaining energy efficiency and renewable energy projects can be identified, developed, financed and implemented locally in twelve nominated countries. %$Designing a Euro denominated public-private partnership fund with contributions from both the public and private sector in the region of EUR250m, which invests exclusively in projects which have a quantifiable impact on the reduction of greenhouse gas emissions. &$The countries are Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Kazakhstan, Republic of Moldova, Romania, Russian Federation, Serbia, The former Yugoslav Republic of Macedonia and the Ukraine. 14

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17 UNECE - Key Deliverables Investment Fund Designer #$Develop PPP* fund structure %$Define fund procedures, rules, governance &$Draft legal document for investors '$Draft PPM** and fund business plan ($Identify lead investors )$Solicit public/private investors *$Determine the role and TOR*** of the fund manager * Public Private Partnership ** Private Placement Memorandum *** Terms of Reference 16

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19 UNECE Conditions to launch a fund Investment Fund Designer To develop a support structure for self-sustaining energy efficiency and renewable energy projects investments in Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Kazakhstan, Republic of Moldova, Romania, Russian Federation, Serbia, The former Yugoslav Republic of Macedonia and the Ukraine for a Euro 250m denominated public-private partnership fund which invests in projects which have a quantifiable impact on the reduction of greenhouse gas emissions Investor Risk / Reward = OK OK OK Project Demand Appetite Investor Commitments Project Pipeline Investment Manager Order

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

21 UNECE Justification for the FCA Investment Fund Designer Senior Lenders Development Banks Gap Gap PROJECT Gap Mezzanine & Equity Fund! Project document development support is key to promote bankable projects! Targeted training could be used to maximum effect here 20

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

23 UNECE Support Structure Investment Fund Designer NC NB CB NC = UNECE National Coordinator NB = National Bank/ Ministry of Finance/Ministry of Energy CB = Commercial Bank ALB BLR BIH BGR HRV KAZ MDA ROM RUS SCG MKD UKR NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB Project Doc Project Doc UNECE (Observers) Project Doc Project Doc Project Doc Project Doc Project Doc Financing Coordination Unit Project Doc Project Doc Project Doc Project Doc Consultants Project Doc Pipeline Development Energy Efficiency Finance Technical NPIs NCs IG IG IG DEVELOPMENT FINANCE (Lender) BANKS (Lender) MEZZANINE FUND (Investment Manager) Investment Decisions S Project Doc = Project Document S IG = Investment Guidelines 22

24 X%&.%2 >45%&'?%A'"&&%( C246:264% T%?4%;"2:% '&-,02'A'"&&78 /"&."- RTQ QT! QDN QTN U8! 7RV O8T!WO!: F5! O7K9 W7! NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NB CB NC NBCB NC = M%A'"&%*3&71 :""4.'&%2"4 HJ! >>M Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc Project Doc!"#$"%&'(" ;&$'1,34 )*+,-').)E NB = M%A'"&%*3&71 ;%&:/ X'&'02,402-" S'&%&0"-/J&,45,2':' CB =!"##,4+,0:'1 U%&: H&2$"#2,3,*), ;& (&&$2)*".)) 1)*"*-&+/0 &;,$".)E (&*-A3P'"*'/ ',0*)B,-(), 1)*"*-&+/, IG IG IG S Project Doc = H$&,('*"4 2&(A@,*'".)4 :)*"*-&+/, )*-')'A'/ $"#+)')4 (OQ!, 5Q!!, O:7 ) '.2.) F'"$<), #",@?)() O,#&*)**/, 1&*2/ D*+,-').)&**/, $,<,*)4 S IG =!A(&+&2-'+& 234 )*+,-').)E I Not the same 23

25 UNECE - Universe of Projects Investment Fund Designer Individual projects of bankable size MARKET STANDARD Small to medium TRANSITIONAL sized projects! Solving the issues of synchronisation and of project document development allows time to develop market-standard solutions for small projects and complex projects e.g. district heating. 24

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27 UNECE - Interaction Investment Fund Designer Consultant Project Document Financing Coordination Unit Development Finance Senior Lenders Mezzanine Project Advisory Service Function National Coordinator Energy Policy Advisory Services National Participating Institution UNECE 26

28 X%&.%2 HJ! >>M - 9?%'#".,102-', T%?4%;"2:% '&-,02'A'"&&78 /"&."- 7&*-A3P'"*' :)*"*-&+/, )*-')'A'/ $"#+)')4 H$&,('*"4 2&(A@,*'".)4 H&2$"#2,3,*), ;& (&&$2)*".)) 1)*"*-&+/0 &;,$".)E F'"$<), #"X@?)() O,#&*)**/, 1&*2/ 7&*-A3P'".)&**/, A-3A>) ;& $"#+)'),@ ;$&,('&+ 9".)&*"3P*/E (&&$2)*"'&$ 9".)&*"3P*/, &$>"*)#".))-AB"-'*)() 7&*-A3P'".)&**/, A-3A>) ;& =*,$>,')B,-(&E ;&3)')(,

29 UNECE - Loan Agreement Paths Investment Fund Designer Development Finance Senior Debt Mezzanine LA LA LA LA LA LA!"#$%&' Project Project ALB BLR BIH BGR HRV KAZ MDA ROM RUS SCG MKD UKR 28

30 X%&.%2 - <4"8"E.,&',?%,#&"5" 0"5*%B,&'( T%?4%;"2:% '&-,02'A'"&&78 /"&."- :)*"*-&+/, )*-')'A'/ $"#+)')4 N3"+*/E #",@?)(, D@,Y?)E ;$)&$)',' *" +/;3"'A #"X@*/0 -$,2-'+ O,#&*)**/, 1&*2/ [C [C [C [C [C [C H$&,(' H$&,('!"#$%& RTQ QT! QDN QTN U8! 7RV O8T!WO!: F!Q O7K9 W7! VF -&>3"<,*), & #"E@, 29

31 UNECE Conclusion Investment Fund Designer! National economies benefit from greater supply efficiency i.e. lower cost! Society benefits from good resource allocation, more from less! Efficient regulatory structures permit more projects to be built! Efficient financial structures encourage asset transfers to the most efficient operators 30

32 X%&.%2 - [%:*P+,&', T%?4%;"2:% '&-,02'A'"&&78 /"&."-! M%A'"&%*3&%( I:"&"#':% -7'547-%,2 "2 ;"*3B,5" $4,.*"E,&'( $" $"-7B,&'P I//,:2'-&"02', 2.,. 0&'E,&'( ";F'8?%24%2! >;F,02-" ;"*3B, -7'547-%,2 "2 *6+B,5" 4%0$4,.,*,&'( 4,0640"-! J//,:2'-&7, &"4#%2'-&7, 0246:2647 ";,0$,+'-%P2 ;"*3B, -"?#"E&"02,1.*( 4,%*'?%A'' &"-78 $4",:2"-! J//,:2'-&7, /'&%&0"-7, 0246: '#6*'46P2 $,4,.%+6 %:2'-"- &%';"*,, I//,:2'-&7# "$,4%2"4%# 31

33 Appendix 32

34 Steps to determining a Bankable Project Bankable Projects All parties share profits Sound economics Long term contracts Owner/Operators Proven technology/ equipment Sector Country start 33

35 X%&.%2 K2" $4,.02%-*(,2 '? 0,;( $4",:2 $".8".(F'1.*( /'&%&0'4"-%&'(? 90, 02"4"&7 6+%02-6P2 - $4';7*(8 )-,4,&&"023 - I:"&"#'+,0:"1 A,*,0"";4%?&"02' $4",:2% L"*5"04"+&7, :"&24%:27 9*%.,*,A/"$,4%2"47 <4"-,4,&&7, 2,8&"*"5''/ ";"46."-%&', Sector Country C,:2"4 C24%&% C2%42 34

36 Conditions for a Bankable Project Bankable Projects! What is the project country?! Does the sector qualify?! Is the technology a proven technology?! Who is the owner / operator?! Who are the project owners?! Is there a cash generation source? 35

37 X%&.%2 N4,;"-%&'( : $4",:26 T%?4%;"2:% '&-,02'A'"&&78 /"&."-! C24%&"-%( $4'&%.*,E&"023 $4",:2%?! C,:2"4 I:"&"#':'?! <4"-,4,&% *' (6E, '0$72%&&%() '0$"*3?6,#%( 2,8&"*"5'(?!!2" (-*(,20( -*%.,*3A,#/6$4%-*(PF'# $4",:2%?! G#,,2 *' $4"5&"?'46,#71 $"2":.,&,E&78 04,.02-.*( 4,%*'?%A'' $4",:2%? 36

38 Does the sector qualify? Bankable Projects! For example, for power projects is it renewable or clean?! For energy efficiency, does it reduce energy consumption or shift time of use? Types of renewable and clean projects: Wind energy, solar energy, hydro-electric, biomass, cogeneration, combined-cycle, fuel switching, geothermal, clean coal, waste-to-energy, district heating and electric, waste fuel, combined heat & power (CHP), efficiency retrofit and related projects and companies. 37

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

40 What is the project country? Bankable Projects The project needs to be in: Albania Belarus Bosnia and Herzegovina Bulgaria Croatia Kazakhstan Former Yugoslav Republic of Macedonia Republic of Moldova Romania Russian Federation Serbia Ukraine 39

41 X%&.%2-9 :%:"1 024%&, &%8".'20( $4",:2? T%?4%;"2:% '&-,02'A'"&&78 /"&."- F'$"*/, *"0&2)'P-4 U,*%4603 U"0&'( ' V,4A,5"-'&% U"*5%4'( W"4-%2'(!%?%802%& U7-B%( Y5"0*%-0:%( T,0$6;*':% X%:,."&'( T,0$6;*':% X"*."-% T6#7&'( T"00'10:%( S,.,4%A'( C,4;'( ):4%'&% 40

42 Bankable Projects Which comes first? Bankable Projects III (legal) Licenses, Permits Financial Model (quantitative) II Project Description (qualitative) Feasibility Studies I 41

43 <4',#*'#7,.*( ;%&:"- $4",:2"- +2" $,4-",? III ='A,&?'', T%?4,B,&'( (P4'.'+,0:%( "A,&:%) (:"*'+,02-,&&%( "A,&:%) S'&%&0"-%( X".,*3 II >$'0%&', $4",:2% (:%+,02-,&&%( "A,&:%) N,8&':"-I:"&"#'+,0:', ";"0&"-%&'( I 42

44 What happens next? Bankable Projects! A project description is needed! A financial model will be requested What is a project description? What is a financial model? 43

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46 What is a project description? Bankable Projects! A detailed written description, including the following " The country and location of the project " The sector and how the project fits into the sector " The technology used by the project " Description of the owner/operators " Track record of the operators " Description of the long-term cash generating contracts 45

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48 What is a financial model? Bankable Projects! Summary of the project economics " Revenue! Contracted revenues! Tax incentives! Potential incremental revenue " Expenses! Operations and maintenance + Management & employees + Parts, overhaul / replacement account! Fuel! Taxes! Rent/Lease! Cost of Financing 47

49 X%&.%2 - S'&%&0"-%( #".,*3? T%?4%;"2:% '&-,02'A'"&&78 /"&."-!!4%2:", "$'0%&', I:"&"#'+,0:'8 $":%?%2,*,1 $4",:2%: "L"8".7! L"8".7-0""2-,202-'' 0 :"&24%:2%#'! M%*"5"-7, 02'#6*7! <"2,&A'%*3&7, &%4%02%PF',."8".7 "T%08".7! J:0$*6%2%A'( ' ";0*6E'-%&', + )$4%-*,&', ' 0"246.&':' + >;"46."-%&',, :%$4,#"&2/?%#,&%, ";"46."-%&'(! N"$*'-"! C2"'#"023 /'&%&0'4"-%&'( 48

50 Debt Characteristics Bankable Projects! Senior Debt: " Has fixed repayment amounts " Has fixed repayment dates " Has a fixed term! Mezzanine Debt: " Has unknown repayment amounts " Has a fixed term " Has minimum repayment amounts! Equity: " Has unknown dividend payments " Has an unknown term " Has unknown residual value 49

51 X%&.%2 W%4%:2,4."*5"- T%?4%;"2:% '&-,02'A'"&&78 /"&."-! L"*5, ";*%.%PF'1 $4,'#6F,02-"# - $"5%B,&'' (-7$*%2% 5*%-&"#6?%R#F':6) " S':0'4"-%&&7, 06##7 $"5%B,&'( " S':0'4"-%&&7,.%27 $"5%B,&'( " S':0'4"-%&&71 04":! C6;"4.'&'4"-%&&71 (#,?"&'&&71)."*5 " M,'?-,02&7, 06##7 $"5%B,&'( " S':0'4"-%&&7# 04": " X'&'#%*3&7, 06##7 :%$'2%* " M,'?-,02&7, -7$*%27.'-'.,&."- " M,'?-,02&71 04": " M,'?-,02&%( "02%2"+&%( 02"'#"023 50

52 Self Amortisation Bankable Projects! What is a self amortisation cash flow? " A self amortisation cash flow is the single most important factor which allows for the financing of a project to happen, as it defines the base case, while still allowing for up-side events like an IPO* or trade sale * IPO = Initial Public Offering of shares in a company The project generates cash sufficient to repay its debts and provides an acceptable return to equity without a sale or other exceptional event or improvement in contractual terms. 51

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

54 FEEI Website General Information

55 FEEI Website

56 Contact Details General Information! Markus van der Burg! Managing Director! Tel: ! Fax: ! Markus.vanderBurg@conning.com! Skype: Markus.van.der.Burg Conning Asset Management Limited 55 King William Street LONDON EC4R 9AD United Kingdom 55

57 !"&2%:2&7,.%&&7,: Markus van der Burg )$4%-*(PF'1.'4,:2"4 N,*.: S%:0: Markus.vanderburg@conning.com Skype: Markus.van.der.Burg <"+2"-71 %.4,0: Conning Asset Management Limited 55 King William Street LONDON EC4R 9AD United Kingdom 56

58 Staff Curriculum Vitae General Information Markus van der Burg is a Managing Director at Conning Asset Management Limited based in London engaged in finance, through the development, placement and management of a range of alternative investment products, including private equity funds and private placement for institutional investors worldwide, with a focus on the European Union and United Kingdom and mainly in sustainable energy. Mr van der Burg tendered and won a mandate for Conning from the United Nations Economic Commission for Europe to create an innovative design to promote the financing of bankable projects, primarily in energy efficiency and renewable energy in twelve countries in Eastern and South Eastern Europe and Central Asia. Synchronicity of finance, the development of a viable bankable project pipeline and a multi-stakeholder problem solving forum are key areas. Mr van der Burg joined Conning in 2004 and was and is heavily involved in the tendering, negotiation and management of the EUR125m Post 2012 Carbon Credit Fund, Conning s EUR354m European Clean Energy Fund and Conning s Dublin based UCITS fund platform, which Mr van der Burg restructured and repositioned. Prior to this Mr van der Burg marketed asset management services to insurers and pension companies in Europe. Mr van der Burg worked previously in investment banking, starting in London in 1990 with the London branch of Erste Bank. From 1998 to 2000, he was Senior Manager of Syndicated Finance in mezzanine tranches of asset backed bonds. Prior to 1990 Mr van der Burg had been a commodity trader in Central and Southern Africa for five years, and spent seven years in the hotel industry both in Europe and Africa. Mr van der Burg was awarded an MBA from the London Business School with distinction in

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