Investor Presentation September, 2018
VEF Investor Presentation Figures included in this presentation are dated from 30 June 2018 / 2Q18 results. Changes to the portfolio after this period are listed below: • On July 9, Finja closed a new funding round, in which VEF invested an additional USD 1 mln. • During July 2018, VEF sold 245k shares in TCS Group Holding PLC, at a value of in total USD 5.01 mln. • On July 17 2018, VEF extended a convertible loan note to REVO/Sorsdata in the amount of USD 2.13 mln. 2
Fintech Continues to Grow and Create Value Fintech represents the intersection of financial services and technology. This includes technology solutions that enable and improve the creation, implementation, distribution and management of all financial products and services – FT Partners Source: Capgemini Financial Services Analysis 3
Fintech Funding Trends and Benchmark Names Company Region Business type Commentary $1.7bn valuation Europe Digital bank $9.2bn valuation as of Global Online payments November 2016 Acquired by PayPal for Global Offline payments $2.2bn Company Region Business type Commentary Electronic India $10bn valuation payments Raised $150mn in Brazil Digital bank March 2018 $150bn valuation as of Asia Online payments June 2018 4
“VEF - Investing in Leading Private Fintech Companies Across Emerging Markets” Within emerging and frontier markets, we focus on the more populous and scalable markets, referenced Geography against competition for opportunities. We target all lines of financial services inclusive of payments, credit, mobile money and financial Sector marketplaces. The “right” target sector is very market -dependent. VEF targets sizeable minority stakes of 10 – 20% with board representation and tends to be an active, Minority stakes and supportive shareholder. board seat Private equity VEF is structured as a listed investment company while our mandate is to invest in emerging private access vehicle companies. Unique Fintech There are very few ways to play the growing fintech investment theme in public markets and even less Investment in the emerging world. VEF is a unique access asset in this regard. 5
Where Fintech Meets Emerging Markets CREDIT PAYMENTS OTHER FINTECH Consumer Offline Accounting SaaS SME Online Wealth Management P2P Mobile Digital Banks Credit Scoring Remittances Mobile Wallets Comparison Websites Personal Finance Managers Insurance 6
VEF Portfolio Gross Invested June '18 Fair Value Investment Company Geography Business Type % Ownership Amount ($ mn) ($ mn) Date Russia Digital Bank 1,6% 19,0 62,2 2007 Brazil Personal Finance Management 10,9% 30,0 30,0 Oct-17 Brazil Secured Lending Platform 10,0% 25,0 25,0 Dec-17 Turkey Payment Processing 20,1% 9,00 17,6 Jan-17 Mexico SME Lending 11,7% 15,0 15,0 Jun-18 1 Russia Payments & Consumer Credit 25,0% 6,66 14,0 Sep-15 Africa Mobile Money Marketplace 7,6% 11,6 13,4 Oct-15 Emerging Europe Cross-Border Remittances 17,5% 8,82 13,0 Jun-16 Brazil Consumer Credit Marketplace 23,7% 2,58 5,04 Mar-16 Brazil Accounting Saas 15,5% 3,30 3,30 Apr-17 Brazil Digital Investment Advisor 16,9% 3,00 3,00 Sep-17 Pakistan Mobile Wallet 20,4% 1,00 1,15 Jul-16 202,7 1 committed follow on of $3.3mn not yet included 7
Portfolio Commentary • At the end of Q2, we had 12 holdings in the portfolio, plus cash and liquid assets. • TCS is our largest holding while there is a clear divide between our 8 larger and 4 smaller holdings today. • Strong cash position (USD 18.1m) leaves us well positioned. • We would expect the number of holdings and their relative size to grow over time. VEF Portfolio as at June 30, 2018. NAV: USD 220.7 mn 8
Portfolio Distribution By Geography (ex cash) Excluding listed investments Including all investments 9
VEF Share Price and NAV/Share evolution NAV/Share Share Price 3.10 2.90 2.70 2.50 2.30 2.10 SEK 1.90 1.70 1.50 1.30 Rights issue 1.10 0.90 5 6 6 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - c n b r r y n l g p t v c n b r r y n l g p t v c n b r r y n l a u a u a u e p a u u c o e p a u u c o e p a u a e e a e e a e D M A J O D M A J O D M A J J F M J A S N J F M J A S N J F M J Date NAV / Share Discount NAV Market Cap Market Cap Latest Share Price, Aug (SEK) (USD mln) (SEK mln) (USD mln) 31, 2018 (SEK) June 30, 2018 2.98 32.8% 220.2 1,329.6 148.4 1.99 10
VEF Shareholder Structure, Largest Shareholders 11
Governance Structure Voria Fattahi Ranjan Tandon Lars O Grönstedt Chairman of the Board Board Member Milena Ivanova Per Brillioth Board Member Experience: Experience: Experience: Board Member • Chairman and MD of Board Member • Investment Director at • Founder and Chairman, Experience: Experience: Handelsbanken Volati AB Libra Advisors • MD of Vostok New • Renaissance Capital • Vice Chairman of • Investment AB Kinnevik • Merril Lynch, DCM, Ventures Deputy Head of • Apax Partners Swedish National Debt Halliburton • Chairman of Research Office Pomegranate AB • UniCredit Markets & • EM investing 22 yrs. Investment Banking David Nangle Managing Director and Board Member Board of Directors Experience: • Renaissance Capital Head of Research and Fin. Sector Research • ING Barings Head of EMEA Financials Research Management Alexis Koumoudos Éire Smith Henrik Stenlund Elisabet Hultén Helena Caan Mattsson General Counsel Investment Manager Research Associate CFO/COO Deputy CFO Investment team/IR Finance & Legal 12
Our Portfolio Companies
VEF Portfolio Gross Invested June '18 Fair Value Investment Company Geography Business Type % Ownership Amount ($ mn) ($ mn) Date Russia Digital Bank 1,6% 19,0 62,2 2007 Brazil Personal Finance Management 10,9% 30,0 30,0 Oct-17 Brazil Secured Lending Platform 10,0% 25,0 25,0 Dec-17 Turkey Payment Processing 20,1% 9,00 17,6 Jan-17 Mexico SME Lending 11,7% 15,0 15,0 Jun-18 1 Russia Payments & Consumer Credit 25,0% 6,66 14,0 Sep-15 Africa Mobile Money Marketplace 7,6% 11,6 13,4 Oct-15 Emerging Europe Cross-Border Remittances 17,5% 8,82 13,0 Jun-16 Brazil Consumer Credit Marketplace 23,7% 2,58 5,04 Mar-16 Brazil Accounting Saas 15,5% 3,30 3,30 Apr-17 Brazil Digital Investment Advisor 16,9% 3,00 3,00 Sep-17 Pakistan Mobile Wallet 20,4% 1,00 1,15 Jul-16 202,7 1 committed follow on of $3.3mn not yet included 14
Tinkoff Bank • Business Type : Digital Banking • Founded : 2006 Year of investment: 2007 Key Facts • Ownership Stake: 1.6% • Key region: Russia • 2Q’18 net income up to RUB 6 bn for a 43% growth YoY • Growing income with stable equity boosts 1H’18 ROE to 69.3 % 15 All currency data are in RUB bn unless otherwise stated
Tinkoff Bank Value coming through in New Business Lines Current Accounts SME Investments Mortgages 16 All currency data are in RUB bn unless otherwise stated
Tinkoff Bank 17
Tinkoff Bank Share Price Evolution Sold down in Various Tranches: • 2017 – Sold 2.3m shares, avg price $16.81 (range $11.47-$20.10), yielding $33.9m. • 2018 – Sold 1.3m shares, avg net price $20.47 (range $19.94-$22.00), yielding $26.7m. Tinkoff – Our First Exit Summary of TCS position: Cost of position USD 10.8 mn • H1 2017 – 6.38m shares (100%) Total proceeds from exited position USD 63.8 mn • Date entered position 09/06/2015 Sold – 3.6m shares (57%) Date exited last shares 02/07/2018 • Today we hold – 2.8m shares (43%) Years in position 3.06 IRR 79% CoC return 5.9x 18
GuiaBolso • Type: Personal finance management • Founded: 2012 Year of investment: 2017 Key Facts • Ownership Stake: 10.9% • Key region: Brazil Personal finance manager with the mission of 1 transforming the financial well being of Brazilians. The Credit Karma of Brazil. Leverage proprietary bank data aggregation technology to 2 better inform and offer the most appropriate financial services suited to individuals. Have 3.5mn customers today of which more than 2.4mn 3 have linked their bank data to GuiaBolso. Principal revenue generation drive through their consumer 4 credit marketplace. More segments to follow. Very strong founding team, mix of former consultants and Implemented 5 from successful startups. Future 19
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