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Private Equity Fund - Investment Livestock

Private Equity Fund “Investment

Livestock”

With a strategy which is based in promoting Colombia’s economic growth, Profesionales de Bolsa impulses the new way of doing business, under the creation of its Private Equity Funds, successfully administrating a figure greater than COP $550.000.000.000.

PROFESIONALES DE BOLSA entered in the Agribusiness Market with the Private Equity Fund - Livestock Investments.

The fund investment focus is on feeder cattle and its commercialization.

Currently has 30 compartments created and successfully administered in five years. This give us the knowledge and capacity to continue working on the most important project for feeder cattle in Colombia.

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Private Equity Fund

The Investment Livestock Fund is constituted under a private equity fund, representing a novel model in Colombia: a figure that allows the participation of several investors in the same project and its whole value chain, expecting to generate higher yields than the market average. Advantages: • Independent equity, legally separated from the assets

owned by the managing company • Administered by a highly qualified professional

manager • Supervised by a market regulator (Superintendenia

Financiera de Colombia) under a legal framework, watching over adequate structuring and management

• A collective investment vehicle, allowing for economies of scale

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Period for receipt of contributions :

15 working days from receipt of the first contribution for each compartment

Portfolio Composition:

90% of the portfolio will be invested in cattle for breeding and marketing, 10% remaining in bank

accounts and liquidity operations.

Duration:

14 months for compartment

Development Fund for cattle and sheep breeding, marketing or production, to impulse the

Colombian livestock sector

Expected return :

Between 9%* and 10,5%* E.A.

Minimum investment: $ 400 million COP

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The Fund, a reality

Currently has 30 compartments created by a

managed COP $ 195 billion with over 164,000

headcount of cattle.

Our experience has enabled us to:

• Identify best farming areas

• Suitably selected farmers, minimizing risk

• Design strategies for purchase, maintenance and

marketing of livestock

• Checking and adjustment of processes of

breeding cattle, which by way of participation

accounts have been delivered to farmers

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Optimal Areas for Livestock

There are several optimal areas in Colombia for

livestock, being Córdoba one of the most

productive ones for breeding of cattle.

To prevent weight loss and optimize the breeding of

cattle, different areas of long lasting livestock

tradition will be located within Colombia, such as

Casanare, Córdoba, Antioquia, Cesar and

Magdalena, among others.

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Location by Regions

June 30 2015

Total No Animales

Departamento Total %

Casanare 7.268 34%

Cordoba 6.447 30%

Antioquia 4.774 22%

cesar 2.131 10%

Magdalena 260 1%

Meta 477 2%

Tolima 8 0%

Total general 21.365 100%

0

2.000

4.000

6.000

8.000

Cas

anar

e

Cor

doba

Ant

ioqu

ia

cesa

r

Mag

dale

na

Met

a

Tol

ima

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Distribution by cattle breeding

The Livestock Breeding Fund , has 21,515 headcount of

cattle, with 21 estates in operation.

The distribution of the livestock acquired by the

Livestock Breeding Fund within different estates is:

34%

13% 13%

10%

8%

5%

3% 3%

11%

DISTRIBUCIÓN POR GANADEROS

GANADERO 1 GANADERO 2 GANADERO 3

GANADERO 4 GANADERO 5 GANADERO 6

GANADERO 7 GANADERO 8 OTROS GANADEROS

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0

50

100

150

200

250

300

350

400

450

500

0 5 10 15 20 25 30 35 40

Process of Livestock

Traditionally, the process of livestock for meat consumption has been divided into five basic activities:

1. Weaning: By 8 months the calf is separated from the mother while having an approximate weight of 180 Kg

2. Stress: Once weaned, the calf enters a stage of stress, in which its body undergoes hormonal changes that end up producing positive changes in the vital functions, while loosing approximately 15 Kg

3. Raising: When the stress stage is over, the animals enter the raising process and are separated by sex to prevent premature pregnancy, until achieving maturity with an approximate weight of 300 Kg.

4. Final Growth Stage: Once the animal has matured, the final breeding process is when the animal grows from 300 to 450 Kg.

5. Livestock slaughtering

Meses

KG

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The Business

The core business of the Fund is the purchase

of breeding cattle, which is bought with a weight

between 260 and 300 Kg and sold once

reached approximately 450 Kg, in order to

optimize their weight gain with an average of 12

Kg/month.

There is not only a profit for weight increase, but

also with the passing of time, the price of cattle

is increasing. The price is set by regional

auctions and market prices.

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“Investment Livestock” Fund

To support the management of the Fund, Profesionales de Bolsa

has an interdisciplinary group dedicated exclusively to the

management and professional agency, guaranteeing the

performance of functions under the highest quality standards:

1. Selection of farmers

2. Selective purchasing for weight range, consistent with the

process of breeding cattle

3. Inventory control: Start with individual marking each livestock

iron, chip and earplug

4. Periodic inspection and maintenance plans of farms

5. Permanent monitoring of monthly weight gain to optimize the

meal plans, nutritional supplements, pasture rotation, among

others

6. Monitoring the maturity structure of cattle to optimize the

production cycle. Livestock marketing secured through

agreements with final retailers

•Makes the decision Asset management

•Responsible for managing resources

•Manages the operation of Livestock.

•Monitors and controls the assets.

Committee on

Monitoring and Control

Professional Manager

Investments Committee

Company Administrat

or

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GENERAL DIRECTOR

AREAS COORDINATOR

SAN PEDRO DE URABA AREA ADVISOR

MONTERIA AREA ADVISOR

VALLEDUPAR AREA ADVISOR

SECRETARY

Livestock Professional Investment

Management Organizational Structure

Managing Director Andres Forero 31 years of experience in commercial, administrative and marketing in various economic and business sectors within Colombia, carrying out managerial and leadership positions Coordinator Areas Freddy Rios Extensive experience in the area of livestock farm of cattle, specifically the activities of breeding and dual purpose. 14 years of experience in managing cattle herds and generating feasibility studies of livestock projects.

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Professional Manager FIL

Advisory FIG Valledupar area Carlos Andrés Sierra 4 years in agribusiness and livestock management. FIG San Pedro Urabá zone advisor Gerardo Baqueth 6 years and herd management in San Pedro de Urabá. Advisory FIG Monteria area Víctor Argumeda 4 years managing agricultural enterprises working as management in bovine agro ecological farms and systematized approaches.

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Why to invest in livestock?

• Traditionally, the livestock sector has had a very

good performance

• It’s a tangible investment that lets you invest in the

countryside from home

• Doesn’t devaluate over time, but as the animal

grows, its value also increments

• Cattle has a high liquidity, as there is always

demand for livestock at any stage of its life

• In Colombia there are large tracts of land suitable

for livestock breeding, which makes it a strategic

business for employment generation in the

countryside

• Profesionales de Bolsa and it’s advisors on

livestock breeding have the knowledge,

experience, structure and qualifications for the

administration of the fund

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Private Equity Fund - Investment Livestock Final yield by compartment

Average Yield 9,26% A.C.

Administered Amount

Inactivos

Activos

5.278

6.451 6.143

6.698 3.062 2.079 5.994

11.591

5.669

7.376 5.208

4.236 10.633 3.717 7.423 3.132

11.257

4.257

8.631

5.817

9.603

9.005 4.846 7.152

-

8.821

6.790

6.066

5.888

8.301

4.192

Comp 01Comp 02Comp 03Comp 04Comp 05Comp 06Comp 07Comp 08Comp 09Comp 10Comp 11Comp 12Comp 13Comp 14Comp 15Comp 16Comp 17Comp 18Comp 19Comp 20Comp 21Comp 22Comp 23Comp 24Comp 25Comp 26Comp 27Comp 29Comp 30Comp 32

Total amount administered by the fund since

its creation

COP $195.321.754.031,79

9,9%

9,9%

8,2%

10,6%

10,9%

9,8%

8,4%

7,3%

6,4%

6,7%

8,7%

8,3%

11,0%

10,3%

9,5%

9,6%

10,0%

9,9%

10,0%

9,5%

9,24%

9,05%

9,38%

9,49%

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Status Quo

• We have 6 compartments in operation presently, which 5 are

dedicated to breeding and the other is dedicated to raising

cattle.

• The amount administered within the 6 compartments valued at

the 25th of August 2015 is $42.731,7 million COP, distributed

according to the adjacent table:

$8.821.726.060

$6.790.102.203

$6.066.821.269

$5.888.792.240

$8.301.594.878

$4.192.754.500

Comp 25 Comp 26 Comp 27 Comp 29 Comp 30 Comp 32

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Risk Analysis

Risk mitigation mechanisms with weight gain

• Diversification by geographical areas and by workforce

• Workforce are shortlisted by the Professional

Administrator and authorized by the Investment

Committee, fulfilling a strict evaluation and selection

process

• The Professional Administrator makes a monthly follow-

up in order to verify the fulfillment of sanitary and

nutritional management plans established at the time of

cattle delivery for its safe-keeping and breeding

• The value of the remuneration to the workforce

depends on the weight gain

• In case of events that may affect cattle, the Investment

Committee may take preventive and corrective

measures, including termination of contracts with the

workforce and livestock relocation

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Risk Analysis

Risk mitigation mechanisms associated with the

mortality or loss of cattle

• In the case of losses of less than 5% of livestock, the

workforce will be liable for 50% of the purchasing

value. Starting at 5%, the workforce shall be liable

for 100% of the purchase value of the live

• Low historical indicator of mortality (below 1%).

Risk mitigation mechanisms associated with

livestock commercialization

• The channels of commercialization (refrigerated

warehouses, auctions, large supermarket chains

and the National Agricultural Exchange) will be

evaluated by the Investment Committee

• The Professional Administrator will be responsible

for determining the channels of commercialization of

livestock and its trading

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Warnings

The automatic enrollment in the National Registry of Securities and

Issuers of the securities issued by the Private Capital Fund,

according to provisions of article 1.1.2.9. of Resolution 400 of 2005,

do not imply certification by the Financial Superintendence on the

Fund´s performance or safety of their investments. The Financial

Superintendence of Colombia warns potential investors that the

Private Capital Fund is a risk product, so, before making your

investment decision it’s necessary to carefully read all the

information and make sure about its correctness, and to have a

complete and adequate understanding”.

“The obligations of the management company of collective portfolio

funds are of means and not of result obligations. The money

delivered by investors to the collective portfolio are not deposits and

do not generate for the management society the obligations of a

depositary institution, are not covered by the deposit insurance of the

Guarantee Fund of Financial Institutions (FOGAFIN), or by any other

scheme of this nature. The collective portfolio investment is subject

to the investment risks derived from the evolution of the prices of

assets comprising the portfolio of the respective collective portfolio.”

Medellín Calle 2 No 20-48

PBX: (57-4) 215 63 00 Fax: (57-4) 317 34 94

Barranquilla Carrera 53 No. 82-86 Local 602

PBX: (57-5) 356 91 44 Fax: (57-5) 356 87 71

Cali Calle 25N No. 6N-67 PBX: (57-2) 668 8100 Fax: (57-2) 668 70 90

Pereira Avenida Circunvalar No. 8B-51 Of. 302

PBX: (57-6) 333 22 95 Fax: (57-6) 333 22 86

Bogotá Calle 93B No. 12-18 Piso 2, 4 y 5

PBX: (57-1) 646 33 30 Fax: (57-1) 635 88 78

http://www.profesionalesdebolsa.com/interna.php?idnot=60&idsec=23



Presentacion eng 5

Economy & Finance

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