Annual Investor Presentation November 2017 NE NEXU XUS S UP - PowerPoint PPT Presentation

Portfolio Management & Financial Counsel Annual Investor Presentation November 2017

NE NEXU XUS S UP UPDATE ATE Portfolio Management & Financial Counsel Team am Growth th From incept ption ion, , Nexus us has been n committe ted to superior ior clie ient t servic ice  Two additions to the Nexus Team in 2017  Team will continue to grow Terence Tse Nancy Cruz 1

NE NEXU XUS S UP UPDATE ATE Portfolio Management & Financial Counsel Client t Portfoli olio o Growth th Clients ts have enjoyed yed good long-te term rm portfolio olio growth th 8.5% 8.1% 6.3% 5.8% 5.5% 5.1% Nexus Market Nexus Market Nexus Market Equity Benchmark (2) Balanced Benchmark (3) Income Benchmark (4) Fund (1) Fund (1) Fund (1) Average Annual Returns for Nexus Funds 17 (5) January 1, 200 000 0 to October er 31, , 2017 (1) Nexus return is the compound average annual return shown prior to the deduction of management fees, but after deduction of all other expenses. Past performance is not indicative of future results. (2) Equity Fund market benchmark is 5% FTSE TMX Canada 91 Day TBill Index, 50% TSX, and 45% S&P 500 (in C$); rebalanced monthly. (3) Balanced Fund market benchmark is 5% FTSE TMX Canada 91 Day TBill Index, 30% FTSE TMX Canada Universe Bond Index, 40% TSX, and 25% S&P 500 (in C$); rebalanced monthly. (4) Income Fund market benchmark is the FTSE TMX Canada Universe Bond Index. Note that in addition to bonds, up to 20% of the Income Fund portfolio may be invested in equity securities. 2 (5) Return data for the Income Fund is from its inception date of September 30, 2002.

NE NEXU XUS S UP UPDATE ATE Portfolio Management & Financial Counsel Firm Growt wth Thanks nks to the support of our clie ients ts, Nexu xus contin inue ues to grow $1,800 $660 $250 2000 2010 Now Nexus Assets Under Management ($ millions) 3

Portfolio Management & Financial Counsel Age of Disrupt ption on

AGE GENDA NDA Portfolio Management & Financial Counsel Unsettled Times 1. The Age of Disruption 2. • Overview • From Cars to Transportation-as-a- Service (“ TaaS ”) Investment Implications 3. 5

UN UNSETTLED ETTLED TIM IMES ES Portfolio Management & Financial Counsel We live in unsettled times… North Korea Brexit Trade Protectionism High Consumer Debt Bubbly Markets 6

UNSETTLED UN ETTLED TIM IMES ES Portfolio Management & Financial Counsel …and businesses are experiencing major change RETAIL APOCALYPSE CONTINUES AT DEPARTMENT STORES Fox Business, September 2017 BANKS MAY FACE KODAK-STYLE OBSOLESCENCE IN 5 YEARS FRANCE WILL ‘BAN ALL PETROL AND Bloomberg, July 2017 DIESEL VEHICLES BY 2040’ The Independent, July 2017 CABLE TV CORD-CUTTING IN CANADA EXPECTED TO ACCELERATE PRAGUE TAXI DRIVERS ROUGHING CBC, April 2017 UP UBER DRIVERS AT AIRPORT Tripadvisor.ca, September 2017 7

UN UNSETTLED ETTLED TIM IMES ES Portfolio Management & Financial Counsel Nobody y wants ts to b be a K Kodak ak 1990s 1990s 2012 2012 Dominant market share in film and photographic paper 140,000 employees 1999 profits peak at US$1.4 billion Kodak developed the first digital camera in 1975! 8

UN UNSETTLED ETTLED TIM IMES ES Portfolio Management & Financial Counsel Newcomers have mushroomed… Uber is a good example 2011 2011 2017 2017 Taxi industry heavily regulated Uber is the #1 ride company globally • Cars inspected and drivers licenced • Operates in 674 cities in 83 countries • NYC licences sell for > US $1 million (1) • Net revenue of $7 billion Social norms • “Never accept a ride from a stranger” • “Don’t share your credit card on the internet” Uber launches in San Francisco • Unlicensed private cars Part-time, untrained (2) drivers • (1) In 2017, NYC licenses trade for under $250,000. 9 (2) Uber drivers get less than an hour of training… on the internet.

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Overvie view Many entire ire industrie ries are undergo going ing radica cal l change ge Newspapers Telecom Music Industry Travel Agents Cable Networks Retail Taxis Accommodation Power Generation Cars 10

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Overvie view Why is this happenin ning? g? Techno hnolog ogical cal Regulato latory Change ge Change ge Disrupt ruption on Social l Environmen mental l Change ge Change ge 11

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Overvie view Tech chno nolo logic gical l change ge is a m massive ve enabler ler Adoption ion Invent ntion ion Continuo uous Improve vemen ment Computer Processing 41% 41% Data Storage 38% 38% Communication 118% Digital Imaging 59% 59% Batteries 15% 15% Solar PV 11% 11% Annualized Rate of Performance Improvement (1) (1) Improvement measured as cost reduction per unit over time. 12 Source: RethinkX; Kleiner Perkins; CLSA.

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Overvie view The adoption on rate of new w products cts has acceler lerate ated Telephone 75 Years Radio 38 Years TV TV 13 Years Internet 4 Years Facebook 3.5 Years Angry Birds 35 Days Time to Reach 50 Million Users Source: Citi Digital Strategy Team. 13

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Overvie view This is a r revolu olutio tion, n, not evolut lutio ion st Industria nd Industria th Industri 1 st rial 2 nd rial 3rd Industria rial 4 th trial Revoluti tion on Revoluti tion on Revoluti tion on Revoluti tion on Mecha chaniz nizatio tion Mass Product ction ion Digital tal Automat ation ion Today 1970 - Today 1760 - 1840 1870 - 1920 3D Printing Semiconductor Steam Engine Electricity Artificial Intelligence Personal Computer Weaving Loom Internal Combustion Engine Autonomous Vehicles Internet Light Bulb 14

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Overvie view It’s tempting, but tough to predict the future  Can’t predict markets  Can’t predict the real world “There is no reason anyone would want a computer in their home.” Ken Olsen, Digital Equipment Corp.,1977 “There will be 900,000 cell phone users in the U.S. by 2000.” (1) AT&T, 1980  But investors have to look ahead • Understand and accept change Nexus November 2013 Presentation (1) In fact, there were 110 million cell phone users in the U.S. by 2000. Source: World Bank. 15

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Trans nspo port rtat ation ion-as as-a-Servic vice Could the automot otive ive industr try y be disrupte ted? d? Owned Criteria for Disrupti tion on Better Cheaper Wanted Not constrained by regulations New business model Shared 16

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Trans nspo port rtat ation ion-as as-a-Servic vice Cars are ubiquitous… 1 billion cars 16 trillion km/year • 21 million round trips to the moon 400 billion driver hours • 45 million years Note: Assumes an average of 16,000 km/year at 40 km/hour. 17 Source: Morgan Stanley.

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Trans nspo port rtat ation ion-as as-a-Servic vice …and the industry is much more than just the car manufacturers  Car manufacturers  Parts suppliers  Auto dealers  Fuel network  Service  Auto insurance  Car rental  Parking  Taxi/Ride sharing 18

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Trans nspo port rtat ation ion-as as-a-Servic vice But car ownership is very inefficient… …so Taas as would d be econo nomic icall lly y compell lling ing C$ C$ Cars are underutilize zed $0.60 Used 1 hour a day Shared ed -35% to • 4% -65% 65% 1.25% $0.20 to $0.40 1.55 seats occupied • 31% Autonomous Utilization (1) Owned Shared Drivers’ time is wasted Cost per Seat Kilometer What is the value of your time? (1) Actual usage relative to maximum possible utilization. 19 Source: Morgan Stanley, RethinkX.

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Trans nspo port rtat ation ion-as as-a-Servic vice …and TaaS aS could solve other proble lems Accidents 1.3 million deaths/year Emissions 45% of global oil demand Pollution and CO 2 • Shared • Autonomous Wasted space • Electric/Hybrid 4 billion parking places • 110,000 km 2 Source: Morgan Stanley. 20

AGE GE OF OF DIS ISRUPTI UPTION ON Portfolio Management & Financial Counsel Trans nspo port rtat ation ion-as as-a-Servic vice The speed and path to TaaS aS is unknow owable ble Enablers rs Barrier ers Electric cars Change fuel network • Reliable, long life Safety • Improving range Autonomous Behavioural change • Sensors • “Computer on Wheels” Vested interests Regulation Cheap cars and gasoline slow • Carbon conversion • Pollution • Congestion 21