“PRIMEVEST SMART CITY FUND” IMPACT INVESTMENT IN SOCIAL INFRASTRUCTURE Utrecht, July 2018
WHY INVESTING IN THE PRIMEVEST SMART CITY INFRASTRUCTURE FUND? • Cash Flows driven by essential communication services resilient to the economic cycle • Urban areas increasingly depend on mobile communication infrastructure (5G) and the Internet of Things • Assets with long economic life cycle & high barriers to entry • SMART City infrastructure comprises SMART streetlights of which a part is connected to an inner-city fiber backhaul network (the latter referred to as SMART Public Nodes) • Average lifetime of SMART streetlights / SMART Public Nodes 20-35 years • Long-term lease agreements with municipalities (minimum 15-20 years) that control city lighting and climate measurement • Long-term stable cash flow return combined with upside potential • Investing in SMART Lighting provides a long term stable cash return with (fixed revenues & fixed OPEX) • Higher estimated return resulting from investing in further upgrade assets to SMART Public Nodes; extra revenues shared with municipalities • Diversified end-user base reduces operator risk • Higher risk-profile of the active and content & services business layers mitigated by only investing in the passive infrastructure components • Open-access infrastructure model with diversified tenant base • Impact investments with important social return • Investors together with municipalities can play important role in realizing sustainability (Climate Treaty) & social responsibility targets • Experienced international Primevest CP communication infrastructure team • In depth fixed & mobile communication infrastructure experience • Extensive network within local governmental organizations and technology partners in public domain 2
ABOUT PRIMEVEST CAPITAL PARTNERS - HISTORY Further growth on the back of Management buy out of major existing strategy, business principles, Rabobank acquires parts of Bouwfonds IM policies and procedures, backed by a Establishment of Bouwfonds IM supported by CommonWealth strong equity partner with long term Investments investment horizon Bouwfonds IM FUTURE 2001 2006 2017 3
ABOUT PRIMEVEST CAPITAL PARTNERS – PAN EUROPEAN PRESENCE FIN We manage a portfolio of EUR 1.3 billion across Europe 28M NO 26M DEN 126M € 1.3 billion assets under management IRL NL 28M Activities in 10 countries in Europe UK 505M 200M DE 264M Dedicated teams supported by local offices in the AUT Netherlands and Germany 11M FR 101M Total staff of 35 employees based on existing funds & mandates ES 15M 4
STRATEGIC RATIONALE FROM STREETLIGHT TO SMART PUBLIC NODE INVESTMENT STRATEGY OUR 3-STEP INVESTMENT APPROACH NEXT STEPS 5
A NEW ERA IN MOBILE COMMUNICATIONS BEGINS WITH THE ROLL-OUT OF 5G “As the telecommunications sector continues to build on the momentum of 2017, a new mobile era will emerge with the initial commercial rollout of fifth generation wireless network technology (5G). One of the most anticipated mobile technology platforms, 5G will be the connective tissue that blends nascent uses of mobile technology, such as the Internet of Things (IoT), autonomous vehicles, and mobile media, just to name a few”. Industry Outlook, Deloitte, 2018 6
CONVERTING 4G MOBILE NETWORKS TO 5G LTE NETWORKS REQUIRES EXTENSIVE EXPANSION OF INNER- CITY ACCESS POINTS… Introduction of 5G will transform the public space of cities: • Up to 8 times more mobile access points in inner city areas • Mobile access points placing needed every 500 - 800 meters (versus 6.000 meters for 4G macro towers) • Connection to sufficient electricity is needed (24/7 instead of switched power grid) • Connection to fiber fixed internet access is needed to deliver high- bandwidth speeds • Data transfer speeds up to 1 Gb/s (versus 50-100 Mb/s based on 4G networks) 7
…AND ACCELERATES THE GROWTH OF INTERNET OF THINGS BY CONNECTING OBJECTS IN THE INNER-CITY THROUGH SENSORS AND ANTENNAS 50 BN. 22 BN. 1 BN. 1992 2018 2022 8
TO IMPLEMENT 5G AND CONNECTING OBJECTS IN THE PUBLIC DOMAIN, A MOBILE NETWORK INFRASTRUCTURE OF SMART PUBLIC NODES IS NEEDED What is a SMART PUBLIC NODE? Like macro communication towers used for 4G, Smart Public Nodes are outdoor inner-city access points for mobile communication (5G & Wi-Fi) enabling at the same time connectivity for various devices including cameras, wireless broadband radios, and IoT sensors for SMART City applications and can be considered as an expansion of today’s mobile communications network 9
TODAY’S CITIES CONTROL MANY EXISTING OBJECTS WHICH CAN BE USED T O TRANSFORM INTO “SMART PUBLIC NODES” Existing public assets are crucial in the transition to a smart city and can be used as a ‘node’ between the new digital infrastructure, energy grids and end-user applications in a city 10
STREETLIGHTS ARE CONSIDERED TO BE THE MOST APPROPRIATE EXISTING OBJECTS TO CONVERT TO SMART PUBLIC NODES… • Density: 3.5 million streetlights in the Netherlands • Accommodated with electricity • Always close to communication infrastructure • Elevation: makes it very suitable for antenna, camera and sensor placement • Modularity: physically expandable with equipment, sensors, etc. 11
… SERVICING A BROAD RANGE OF POTENTIAL OF FUTURE SMART CITY APPLICATIONS … From single-purpose lighting to multi- purpose SMART Public Node < Fiber > < Electricity transport network (3*25A) > 12
… BUT CITIES ARE ACTIVELY ASSESSING AN “OUTSOURCING MODEL” FOR T HE PHYSICAL REPLACEMENT OF STREETLIGHTS OFFERING OPPORTUNITIES FOR (SEMI-) INSTITUTIONAL INVESTORS TO INVEST • Climate Treaty and End-of- life drive transition to SMART Lighting… • the Dutch Government and cities agreed a binding Climate Treaty with the objective that 20% of total energy consumption is from sustainable (renewable) sources and energy consumption is lowered by 20% by 2020 → implementing SMART Lighting is a top priority for cities & municipalities • At the same time municipalities are implementing the new 'Omgevingswet' in 2019 by adding sensors (IoT) to the smart lighting lamppost. • replacement driven by physical or economical end-of-life of the streetlights (100.000 - 175.000> per year in NL) • …whereas a combination of the lack of financial resources and knowledge & expertise drives the “outsourcing model”: • Replacement and transition to ‘smart city’ to make the city more attractive go hand -in-hand to facilitate IoT sensors, autonomous driving, EV-charging, WiFI in city hotspots, 5G mobile internet, security surveillance camera’s, etc. • However, “ smartization ” requires specific expertise often not at hand and higher investment budgets (with already many other tasks delegated to cities / municipalities requiring financial budget). 13
CONCLUSION: INVESTING IN LAMPPOSTS IS A SMART INVESTMENT Contributing to the necessary CO 2 reduction… …and providing the infrastructure backbone for 5G & Internet of Things 14
STRATEGIC RATIONALE FROM STREETLIGHT TO SMART PUBLIC NODE INVESTMENT STRATEGY OUR 3-STEP INVESTMENT APPROACH NEXT STEPS 15
INVESTMENT STRATEGY Building-up a SMART City Asset Portfolio in 3 steps SMART LIGHTING SMART Public Nodes SMART CITY STEP 1 STEP 2 STEP 3 Type of investment Replacing traditional lampposts + implement Upgrade approx. xx% of traditional Connecting homes and/or office/community new luminaires for SMART Lighting lampposts to SMART Public Nodes for 5G + buildings (libraries, schools, etc.) to the fiber/electricity to the lamppost and build inner-city fiber-ring inner-city fiber-ring Earnings model Long-term rent contract (20 years) for renting Upgrade to SMART Public Nodes upon signed Expand inner-city fiber-ring by connecting lampposts to city/municipality + renting long term rent agreements with mobile new homes and/or buildings related services (sensors, billboards) to operators + renting related additional private companies + fixed maintenance costs services (camera surveillance, EV charging) to municipality / private companies) 16
STRATEGIC RATIONALE FROM STREETLIGHT TO SMART PUBLIC NODE INVESTMENT STRATEGY OUR 3-STEP INVESTMENT APPROACH NEXT STEPS 17
PRIMEVEST HAS BUILT UP STRONG RELATIONSHIPS WITH MUNICIPALITIES, ECONOMIC BOARDS AND TECHNOLOGY PARTNERS…. Application Partners Technology Partners Municipalities Acquisition pipeline 18
… TO INTRODUCE THE PRIMEVEST’S “SMART CITY ” BUSINESS PROPOSITION Investors Rent agreements Supplier/partner agreements “Primevest Smart City Fund” Public & Private tenants Technology & Service partners • Long-term rent agreements for • Infrastructure separated from Smart lighting, Telecommunication services • Best-in-class technology partners for (5G), Electric vehicle charging, Wifi, Camera surveillance, Billboards, etc. maintenance Smart City Asset Portfolio 19
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