Parvest Green Tigers Taking part in Asia s green revolution FOR PROFESSIONAL INVESTORS
2 Contents Sustainable Thematics in Emerging Asia Investment Process Fund Performance and profile
3 SUSTAINABLE THEMATICS IN EMERGING ASIA
4 Airpocalypse
5 Waterpocalypsee STR/AFP/Gettyty
6 Landocalypsee Qiu Bo/Greenpeace
7 Air Pollution Action Plans steps up in the political agenda Jiang Zemin Hu Jintao Xi Jinping Growth first Quality first Only the strictest system and most tightknit law enforcement can ensure ecological progress LI Kegiang declares war on pollution!!! Source: BNP Paribas Exane
8 Chinese Government 2013-2017 Action Plan USD 294 bn investments approx. 3% Chinese GDP Source: Xinhua, Exane BNP Paribas
9 Environmental strategy research 6 sustainable strategies Investable universe Energy efficiency Building energy efficiency Industrial energy efficiency LED technology Power energy efficiency Renewable and transitional energy Biofuels (2 nd generation) Conventional gas Geothermal energy Hydropower Solar energy Wind energy Environmental support services Environmental services, auditing and consulting Waste management Recycling & reuse Our sustainability research team analyses the exposure of individual companies to six sustainable strategies Minimum 20% exposure of turnover for a company to be included in the fund s investable universe Companies located across a range of geographies and sectors Sustainable agriculture Sustainable production Agricultural productivity Sustainable transport Clean transport Clean transportation technologies Water Water infrastructure Water treatment Water-related technologies Companies are screened for environment, social and governance controversies ESG scoring to exclude companies with bad ESG practices from the universe
10 Investment Process The Green Tigers Handbook Sustainability and Economic analysis for each theme and technology included in Green Tigers, to ensure relevancy Analysis of the thematic value chain, in order to ensure that we are targeting the parts with more environmental relevancy and discard the parts that might be hazardous Potential ESG risks and controversies analysis ensure that the companies in our universe are consistent with the environmental focus of our fund The Green Tigers Handbook outlines the environmental strategies and technologies in detail as well as potential pitfalls
11 INVESTMENT PROCESS
Filters Socially Responsible Investments: Parvest Green Tigers 12 Investment process Overview: from the investment universe to the portfolio Environmental foundation Financial expertise Asian stocks sustainability research team SRI universe focus list stock selection portfolio manager Green Tigers A fully integrated approach with a sound sustainability base
13 Investment process 1 st step: sustainability research - thematic process Asian Stocks Part of the Solution An internal handbook outlines the activities and business models that are investable for this strategy and potential controversies that may arise in any given sector Companies must have coherent activities and a minimum 20% of turnover in the identified themes or 40% if they are suppliers in the value chain thematic analysis SRI Universe controversy screen All companies are thoroughly analysed to ensure that they have not been involved in controversies due to poor practices so that they comply with the UN Global Compact and BNPP IP sector policies OUT Companies not eligible for investment IN THEMATIC INVESTMENT UNIVERSE ESG scoring All companies are evaluated according to an ESG scoring process to ensure that they are actively involved in environmental, social and governance practices Each company will be scored for its performance on environmental practices; the scoring ranges from 0 (worst) to 10 (best). Companies that score 0 are excluded from the investment universe. Thematic SRI screening results in a universe of companies with leading qualities
14 Green Tigers recognised for its environmental attributes Novethic LuxFlag The Novethic Green Fund Label is awarded to funds that finance companies who create solutions to environmental problems. It provides investors with a guarantee of the quality and the transparency of the environmental aspects of labelled funds, and of their contribution to sustainable development. Further information on www.novethic.com The Luxflag Environment label is for funds that are at least 75% invested in environmental companies, and which generate strong performance in the management of their environmental, social and governance responsibilities. Green Tigers sustainability features have not passed unnoticed
15 Investment process 2 nd step: idea generation 2 idea generation APAC equities team advisory Broker research Company meetings ESG analysts liaison Asia-Pacific equities team advisory Developed with the BNPP IP Asia Pacific equities team in Hong Kong They help us find new opportunities and keep us updated on events affecting our holdings and strongest convictions Incorporated their local expertise into our analysis for performance generation SRI universe focus list stock selection focus list The first step is to create a focus list based on global macroeconomic conditions, regional and sector trends and country policy. The focus list allows us to target the most attractive sectors and ensures that we are well positioned to make the most of the current conditions Sector follow-up Sector database Target price setting Stock recommendations buy discipline Unparalleled access to brokers research and analysts Constant interaction with our SRI research team Focus on target price setting and high convictions Sector database maintenance, to follow individual names and sector bias Stock recommendations integrate short, medium and long-term criteria Our focus list allows us to concentrate in the most attractive sectors
Paris Socially Responsible Investments: Parvest Green Tigers 16 Investment process 2 nd step: idea generation Paris Hong Kong link Portfolio management Universe definition Portfolio construction Risk management Final investment decisions Advisory First-hand knowledge of the company Regular commentaries and updates Local knowledge of markets Challenge existing positions Propose investment ideas Hong Kong Regular calls between the SRI team in Paris and the Asia- Pacific equities team in Hong Kong ensure that the team in Europe is up-to-date with local events and views Green Tigers leverages BNPP IP s global platform for improved performance
17 Investment process 3 rd step: portfolio management stock selection 3 portfolio management Idea generation Country/sector deviations Risk management tools portfolio managers Portfolio construction Risk management/sell discipline Client service Performance portfolios portfolio construction sell discipline risk management performance Portfolio construction takes into account the extra-financial analysis and the fund managers' high-conviction calls Portfolio managers also take into account sector and issue limits Our strict sell discipline ensures that the portfolio is composed by high-conviction calls Target price setting and risk/return profiles are constantly monitored Extra-financial considerations play a role Portfolio managers are responsible for managing the risk in their portfolios A variety of tools is used to manage risk, from standard measures such as the tracking error to proprietary tools such as Opera The whole process allows portfolio managers to deliver performance with sound sustainability credentials Portfolio managers are the final piece of the puzzle
18 FUND PERFORMANCE AND PROFILE
19 Strong performance since September 2012 vs. MSCI Asia Pacific ex Japan Source: Clientperf, BNPP IP, as at the end of April 2015 Past performance or achievement is not indicative of current or future performance For information, net performance (Classic share) in euros: 16.43 % in 2014 ; 10.69 % in 2013 : 13.26 % in 2012 ; -25.12 % in 2011 ; 14.26% in 2010.
20 A major exposure to Greater China Geographical distribution Green Tigers Custom benchmark MSCI Asia ex Japan Singapore 0.25 Philippines 1% Taiwan 21% Thailand 0% China 25% Taiwan 24% Singapore 0% Philippines 2% Malaysia 0% Thailand 1% China 23% Singapore 6% Philippines 1% Malaysia 4% Taiwan 15% Thailand 3% China 23% Korea 17% Indonesia 0% India 5% Hong Kong 31% Korea 16% Indonesia 0% India 4% Hong Kong 30% Also offering a diversified exposure to Asia emerging markets Korea 18% Indonesia 3% India 8% Hong Kong 19% Source : BNPP IP, Bloomberg, data as the end of April 2015
21 The six sustainable strategies in the portfolio Strategy distribution Green Tigers Custom benchmark Energy Efficiency 35% Env Support Services 2% Sustainable Agri 0% Renewable & Transitional Energy 28% Energy Efficiency 37% Env Support Services 1% Sustainable Agri 1% Renewable & Transitional Energy 28% Water 11% Sustainable Transport 24% Water 11% Sustainable Transport 22% Source : BNPP IP, Bloomberg, data as at the end of April 2015
22 Holdings Sector and market cap distribution Sector distribution Market cap 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Mkt Cap in EUR Green Tigers Custom Index MSCI Higher than 100.000 M 4.7% 5.1% 22.8% Between 50.000 M and 100.000 M 4.4% 4.1% 6.6% Between 10.000 M and 50.000 M 20.2% 21.7% 42.0% Between 5.000 M and 10.000 M 36.2% 36.3% 16.1% Between 2.500 M and 5.000 M 12.1% 12.4% 9.2% Between 1.000 M and 2.500 M 12.9% 12.8% 3.1% Below 1.000 M 7.1% 7.5% 0.1% Green Tigers Custom Benchmark MSCI Asia ex Japan Source : BNPP IP, Bloomberg, data as at the end of April 2015
23 CONCLUSION
24 Parvest Green Tigers, a specific and unique proposition Summary Emerging markets Environmental focus Green Tigers Drivers of global growth Demographics Innovation Diversification strategy Severe environmental degradation Environment-led policy support Need to increase living standards and quality Increasing public awareness Strong growth and outlook for the sector Environmental challenges provide investment opportunities Close ties between fund managers and extra-financial analysts Strong environmental focus Ability to identify better investment opportunities Tight risk management with a proprietary index Performance Parvest Green Tigers is a specific and unique proposition with a sound process designed to maximise returns by focusing on being part of the solution
25 APPENDICES
26 BIOS
27 Alvaro Ruiz-Navajas Portfolio manager Professional experience Since September 2012: portfolio manager of Parvest Green Tigers (BNP Paribas Asset Management, Paris) Since 2011: portfolio manager and buyside analyst, Global Natural Resources (BNP Paribas Asset Management, Paris) 2009-2011: buy-side analyst, Global Equities (BNP Paribas Asset Management, Frankfurt) 2007-2009: buy-side analyst, Global Equities (Fortis Investments, Frankfurt) 2001-2002: consultant, Financial & Microfinance Institutions Latin America (German Technical Cooperation Agency, Bolivia) Education 2007: Ph.D. Economics, University of Manchester 2003: M.Sc. in Development Economics, University of Manchester
28 Pierre-Marie Piquet CIO SRI equities Professional experience Education 2015: CIO SRI equities 2011-2014: head of SRI European equity and senior portfolio manager SRI euro/european equities (BNP Paribas Asset Management, Paris) 2009-10: portfolio manager SRI best-in-class" and asset allocation, "European Equities Sectors & Thematics" (BNP Paribas Asset Management, Paris) 2006-08: portfolio manager and buy-side analyst, Cross Asset Arbitrage, CooperNeff Alternative Management (BNPP's hedge fund, Paris) 2004-06: head of convertible bond research (Calyon, Paris) 2001-04: sell-side analyst, convertible bonds, (Crédit Lyonnais Securities, Paris) 1999-2001: sell-side analyst, convertible bonds, derivatives research Department (Oddo Securities, Paris) 1998-99: fund manager assistant, European equities (Quilvest Gestion Privée, Paris) 2002: Certified International Investment Analyst ("CIIA") from the French Society of Financial Analysts ("Société Française Analystes Financiers; SFAF")
29 Helena Viñes Fiestas Head of sustainability research Professional experience Education Since Sept. 2013: head of sustainability research (BNP Paribas Investment Partners, Paris) May 2011 Sept. 2013: co-head of SRI research and head of sustainable thematic research (BNP Paribas Investment Partners, Paris), 2005-11: policy adviser, Private Sector Advocacy Team (OXFAM, London) 2004-05: SRI analyst (CoreRatings, London) 2003-04: researcher UK Sustainable Investment and Finance Group (UKSIF, London) 2002-03: part-time SRI analyst (F&C Investment, London) and Consultant (Global Witness, London) 2002: MSc in Development Studies (faculty of economics) from London School of Economics 1999: Masters in Latin American Economics and a BA in Economics from the University of Barcelona
30 BNP Paribas IP Asia Pacific equities Advisory with regional expertise Arthur Kwong, CFA Head of Asia Pacific equities 15 years of investment experience, including 14 years at BNPP IP* Lead portfolio manager General team management All countries in Asia Pacific Based in Hong Kong Felix Lam, CFA Portfolio manager & senior investment analyst 9 years of investment experience Joined BNPP IP* in 2006 Primary responsibility is investment process and fundamental equity research Focus on Australia and India Based in Hong Kong Sam Lee, CFA Investment analyst 9 years of investment experience Joined BNPP IP* in 2006 Responsible for quantitative research, style-based analysis and portfolio construction Focus on Hong Kong and China Based in Hong Kong Hue Lu Investment specialist 11 years experience in financial services. Joined BNPP IP in 2014 Supports Asia Pacific and Greater China Equity investment teams Based in Hong Kong *and predecessor companies Anthony Ho Investment analyst 10 years of investment experience Joined BNPP IP* in 2005 Fundamental research Focus on Japan, Korea and Taiwan Based in Hong Kong
31 Investment process Portfolio management/sell discipline Our strict sell discipline is based on financial and extra-financial considerations Opportunity costs Fundamentals Risk Management Continuous research of investment ideas Strong convictions replace weaker ones Monitoring of target prices Risk/return profile of existing vs. new positions Change of circumstances challenges the validity of the investment case Target price decline Valuation de-rating Deterioration of extra-financial rating Risk budget control (ex-ante tracking error vs. MSCI AC Asia ex Japan within the bucket 5-8%) Strategy/geographical limits (+/-10% vs. our proprietary BNPP SRI Emerging index) Size of position (max. 1% overweight vs. proprietary index)
09/12 11/12 01/13 03/13 05/13 07/13 09/13 11/13 01/14 03/14 05/14 07/14 09/14 11/14 01/15 03/15 Socially Responsible Investments: Parvest Green Tigers 32 Investment process Portfolio management/risk management Risk control vs. our proprietary BNPP SRI Emerging index Proprietary index maintained by Standard & Poor s* to check Green Tigers risk and performance against the environmental investment universe in emerging Asia The index allows us to have an unparalleled view of the performance of the environmental universe vs. the broader market The index assists in portfolio construction and alpha generation Index comprised by all stocks eligible for inclusion in Green Tigers 220 195 170 145 120 95 BNPP Emerging Asia SRI Environment Index NTR MSCI Asia ex Japan Source : Bloomberg, May 2105; A first screening analyses the big picture and ensures that we are well positioned to make the most of the current economic climate and the outlook * Bloomberg ticker: BNPEASRI Index
33 Fund facts Sub-fund Legal form Parvest Green Tigers Sub-fund of the Parvest UCITS IV compliant sicav registered under Luxembourg law Launch date November 2008 (investment process and team change: September 2012) Risk scale Benchmark Recommended investment horizon Base currency Fund managers Management fees 6 on a scale of 1 to 7 (1: lower risk, 7: higher risk) MSCI AC Asia ex-japan (NR) Index (EUR) The higher the risk, the longer the recommended investment horizon Euro Alvaro Ruiz-Navajas Max 1,5% (Classic, C-share & D-share) Max 0,60% (Institutions, C-share) Entry fees/redemption fees Ongoing charges Management company Delegated management company ISIN codes Bloomberg code Maximum 5% / no redemption fees 2,01% (Classic, C-share) 0.96% (Institutions, C-share) BNP Paribas Investment Partners Luxembourg BNP Paribas Asset Management Paris Classic capitalisation: LU0823437925 Classic distribution: LU0823438220 Institutional: LU0823438493 FORGRTC LX (Classic capitalisation, C-share) FGRTGCD LX (Classic distribution, C-share) FORGRTI LX (Part Institutions) For a complete description and definition of risks, please consult the latest available prospectus and KIID of the fund. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay
34 Parvest Green Tigers: risk and reward profile Source: BNP Paribas Investment Partners. This key investor information is accurate at 31 March 2015.
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