PARVEST AQUA MARKETING COMMUNICATION Q1 2017 FOR PROFESSIONAL - PowerPoint PPT Presentation

PARVEST AQUA MARKETING COMMUNICATION Q1 2017 FOR PROFESSIONAL INVESTORS

Impax is a global leader in Environmental Markets investing ASSETS UNDER MANAGEMENT AND ADVICE 1 €6.2bn Listed Equities  Dedicated to environmental markets since 1998 €6.7bn €439m Renewable  Global institutional client base Energy Infrastructure AUM €26m Sustainable  Established thought leaders Property  Offices in London, Hong Kong, New York, and Portland (Oregon) WINNER OF NUMEROUS AWARDS  30 experienced investment team members 2016 UNPRI assessment: A Policies, Processes, Practices, and Governance 1 Source: Impax, as at 31 March 2017. Assets under advice represent ~4% of total AUM. 23/05/2017 2

Powerful drivers for environmental products and services Clean energy Water Increasing population Rising living standards Infrastructure deficit Waste/Resource Sustainable food, Recovery Agriculture & Forestry Finite natural resources Pollution Impax’s universe and underlying sector classification system is used by FTSE as the basis for FTSE’s Environmental Technologies and E nvironmental Markets series of indices. 23/05/2017 3

Impax’s classification of Environmental Markets Clean energy Water Energy Efficiency Alternative Energy Water Infrastructure/ Pollution Control Technologies • Power Network • Developers/IPPs • Infrastructure • Pollution Control Solutions • Industrials • Solar • Treatment • Testing & Gas Sensing • Buildings • Wind • Utilities • Public Transportation • Transport • Biofuels • Consumer • Other Sustainable food, Waste/Resource recovery Agriculture & Forestry Waste Management & Environmental Support Technologies Services • Sustainable & Efficient Agriculture • Tech Equipment • Consultancies • Logistics, Food Safety & Packaging Recycling & Processing Carbon & Asset Trading • • • Sustainable Forestry • Hazardous • Diversified Environmental • Nutrition General • Adopted by FTSE as a basis for Environmental Technologies and Environmental Markets index series since 2007 23/05/2017 4

Investing globally in a water equity portfolio LONG-TERM DRIVERS SUPPORT CONTINUED SUPERIOR GROWTH  Globally, clean water supply and demand imbalances persist  Inadequate infrastructure and required spending on maintenance  Continued tightening of water regulations WATER OPPORTUNITY RUNS THROUGH THE GLOBAL ECONOMY  Across many end markets and sectors  Across diverse geographies  Through all economic cycles EXPERIENCED INVESTORS WITH PROVEN ABILITY TO ADD VALUE AND MANAGE RISK  Large global team with significant water equity expertise in under researched themes  Long track record of outperformance 1  Risk comparable to global markets 1 Past performances or achievement is not indicative of current or future performance. 23/05/2017 5

Water: the major resource challenge of our times In 15 years the planet may meet only 60% of the global demand for water 1bn people lack access to clean water, 2.5bn to sanitation Asia: 60% of global population but only 36% of freshwater resources Global water infrastructure spending needs from 2005-2030: $22.6trn 56% of the world’s irrigated crop production takes place in regions with “high” or “extremely high” water stress 52% of the world’s population live in water -stressed areas worldwide Climate change predicted to lead to further extreme weather events – flooding and drought Water is scarce – and too cheap! Source: Impax Asset Management. 23/05/2017 6

Trump administration: reasons to be optimistic Source: iStock and Shutterstock. 23/05/2017 7

Global trends propel long-term growth in water opportunities GLOBAL TREND RESPONSE Demand for clean water Water scarcity is a top risk identified by governments, outpaces supply corporations, and academia 1 Required investment in $7.5 trillion projected spending globally over next 15 years in water infrastructure 2 global infrastructure $300 billion directed to address water pollution by China’s Tightening global water Water 10 Plan 3 regulation Adaptation to changing Increasing incidence of both drought and flooding cause weather patterns investment requirements in water systems Innovation and evolving New technology and upgrades to existing systems create technology further investment opportunities 1 World Economic Forum | Global Risks 2015; 2 McKinsey Global Institute | Bridging Global Infrastructure Gaps – June 2016; 3 China Water Risk | New Water Ten Plan to Safeguard China’s Waters. 23/05/2017 8

Diverse set of investment opportunities  Moves across end-markets from consumer to industrial  Captures cyclical and defensive business models, early to late cycle  Regional allocation from developed to emerging countries WATER SECTOR CATEGORIES GROWTH AREA  Network equipment  Infrastructure upgrades Water  Buildings and industry equipment  Smart applications Infrastructure  Infrastructure services  Drought resiliency  Irrigation  Filtration and advanced solutions  Tightening regulation Water Treatment  Traditional treatment  Pollution mitigation and Water  Efficiency  Water reuse Efficiency  Testing and monitoring  Europe and UK  Energy efficiency Utilities  US  Infrastructure investment  Rest of the World  Desalination 23/05/2017 9

Evolving landscape of solutions requires a specialised focus Water reuse Desalination Treated waste water used to refill depleted Efficient and more cost effective conversion aquifers easing groundwater stress of seawater into fresh water Leak detection Flow measurement Technological advances in leak detection: Hardware and software applications for less water lost, longer pipe life, lower improved measurement and distribution operating costs efficiency Flow efficiency Smart irrigation New technologies disrupting pump markets; Increased crop yields and efficiency of water utilities investing for energy savings use; use of solar power Treatment, testing and diagnostics Water conservation UV disinfection, ozone treatment, handheld New systems reduce consumer water use: instrumentation home technologies including dual flush Automated meter reading Data and software Improved water management and real time Water industry using big data to map monitoring; encouraging more efficient use inefficiencies and to develop solutions 23/05/2017 10

Higher returns with risk comparable to global equities Return vs volatility - since inception (Jan 2009) 15.0 Impax Water Strategy MSCI ACWI 10.0 Annualised return 5.0 MSCI Energy 0.0 Rogers Int’l Commodity Index Brent -5.0 -10.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Annualised standard deviation Past performance is no indication of current or future performance, and the performance data do not take account of the commissions and costs incurred on the issue and redemption of units. Source: FactSet.as at 31 December 2016. 23/05/2017 11

Experienced, multidisciplinary investment team 1 Chief Executive Portfolio Construction Team Hubert Aarts Bruce Jenkyn-Jones Sid Jha 3 Justin Winter Ian Simm Co - PM Co - PM Investment Risk Supported by Portfolio Managers and Analysts Trading & Process David Li 2 Kirsteen Morrison Simon Higgo Dean Palin Michael Landymore Jon Forster Sustainability & ESG Oscar Yang 2 Lisa Beauvilain David Winborne Agne Rackauskaite Fotis Chatzimichalakis Rupert Rink Average investment experience: 18 years; environmental: 11 years Source: Impax. 1 As at 31 March 2017. 2 Based in Hong Kong 3 Based in New York. PM: Portfolio Manager. ESG: Environmental, Social, Governance. 23/05/2017 12

A well diversified portfolio BROADLY DIVERSIFIED ACROSS WATER SUB-SECTORS ALL CAP PORTFOLIO (WEIGHTED AVERAGE MARKET CAP: $9.8BN) Cash 4% Water Utilities 28% 25% >$10bn 90% 56% Average $2bn-$10bn Water Infrastructure 10% ET 38% exposure 12% <$2bn 65% Aqua 4% MSCI World Cash Water Treatment 32% GLOBAL PORTFOLIO 1 EXPOSED TO BOTH DEFENSIVE AND CYCLICAL STOCKS 2 48% North America 63% 43% Cyclical 48% 34% Europe 23% 52% 7% Defensive Asia ex Japan 44% 5% 6% 1% Japan Commodity 9% 8% 2% Aqua ROW Aqua 4% Cash MSCI World MSCI World 4% Cash Source: FactSet, data as at 31 March 2017. Data may not add up to 100% due to rounding. 1 Geographic allocation by country of listing, MSCI classification. 2 Stability of demand during economic upturns and downturns. 23/05/2017 13

Top 10 holdings Stock Sub-sector Country % SUEZ Water Utilities France 3.5 Danaher Water Treatment and Efficiency United States 3.4 Ecolab Water Treatment and Efficiency United States 3.2 Veolia Environnement Water Utilities France 3.2 HD Supply Holdings Water Infrastructure United States 3.0 American Water Works Water Utilities United States 3.0 Agilent Technologies Water Treatment and Efficiency United States 3.0 Georg Fischer Water Infrastructure Switzerland 2.8 Rexnord Water Infrastructure United States 2.8 Xylem Water Infrastructure United States 2.7 Total allocation to top 10 holdings 30.7 The above mentioned securities are for illustrative purpose only and do not constitute any investment recommendation . Source: FactSet, as at 31 March 2017. Total subject to rounding. Data based on BNP Paribas Aqua Fund. 23/05/2017 14