MEXICO ADVOCACY DAY

May 5th, 2015

• Fondo de Fondos was created to serve as an

economic policy instrument exclusively focused in the

PE Investments. FdeF’s goal is to create

shareholder´s value, to drive the development of the

industry in Mexico and participate in the development

of small and medium-sized enterprises.

• The Mexican Development Banks participate on a

third-floor scheme, having an independent and

professional administration and achieving risk

diversification with a multiplier effect on their

investments.

The origin of Fondo de Fondos

Before Fondo de Fondos creation, the Mexican

Development Banks supported companies through “Equity

Investment Programs”. However, the market was presenting

the following problems:

• Management deficiencies at different stages of investment

processes

• Lack of institutional investors

• High administrative expenses

• Insufficient exit options

• Inefficient tax regime

• Few companies supported

The origin of Fondo de Fondos

In 2003, the Mexican Development Banks along with the Trade

Development Agency (TDA-USA) conducted a study to

improve the Private Equity market in Mexico. The results

included:

Appropriate legal framework Reform to the Securities

Market Law

Tax transparent vehicles FICAP

Tax incentives for capital gains Reform to the Income Tax

Law

Corporate governance and protection to minority shareholders

SAPI

Alternative exits schemes www.

negociosextrabursátiles.com

More institutional investors Afores – CKD’s

The origin of Fondo de Fondos

Venture Growth LBO Mezzanine Special Infrastructure Real State Secondary

Large

Large + Medium

Medium

Medium & Small

Small

Darby

O’Connor

Latin Idea

AdventInt’l

Valanza

Discovery

Wamex

IGS

LaSallePrudentialHines

CorporateProperties

GECapital

MexicoRetail

Nexxus

JPMorgan

Latin America

Enterprise

Barings

MonterreyCapital

NaftaFund

Fondelec

PYMEX

SinaloaTijuana

Guanajuato

Carlyle

FomedeIntel

Capital

2005

Mexico-onlyFunds

Pan-regionalFunds

The market in Mexico had few players

Private Equity in Mexico

Large

Large + Medium

Medium

Medium + Small

Small

IGNIA

CapitalÍndigo

Venture Growth LBO Mezzanine Special Infrastructure Real State Secondary

Guanajuato

2014 – with CKDs

Mexico-onlyFunds

Pan-regional Funds

CKD

CAMIF

Darby

EMX

Discovery

Aureos CitiVentur

e

ConduitCapital

Rock-Wood

RE

CorporateProperties

GECapital

Hines

Prud-ential

Darby

Nexxus

KimcoRealty

Northgate

Evercore

MexicoRetail

INGClarion

NewGrowth

CapitalÍndigo

AdventInt’l

SouthernCross

Capital I

Central Valley

Fun

ARC Fund

IGSAlta

V

PYMEX

NaftaFund

SierraV.

Sevin Rosen

ThayerV.

Excel V.

Arzentia

Tresalia

RLD

RW Capital

Sterling Partners

JPMorgan

Actis

GreenTekClean

Tech

PaulCapital

Península

TRG Lapef

Valanza

Linzor

Proequity

GerberaFica

Logistics

Paladin

WaltonStreet

O’Connor

Latin Idea

Plani GrupoVertex

Promecap

Marh-nos

Navix

AMBProperty

PLA

ArthaMac-quarie

MRP

I2Acon

Mex. VC.

Angel V.Adobe Capital

Insignia

IGNIA

Sinaloa

Guanajuato

Ingenia

AltaGrowth

Acción

Alia

Aureos

Beamonte

Clarum

CordiantPineBridge

DWM

GEE

GramercyAlisios

Wamex

Alta crece

ThorLaSalle

Black Creek

Generationmining USRG

Private Equity in Mexico

Today it has a broader range of options

Private Equity in MexicoBillions of dollars

Nu

mb

er

of

GP

´s

Acc

um

ula

ted

fu

nd

rai

sed

in b

illio

n d

olla

rs

125

Source : AMEXCAP

Private Equity in Mexico

2007

786.0 MDD in 67 Funds and 11 co-investments, and 434 companies

2010 2012

Pension

Funds and

other

investors

3% 50% De 80 a 70%

De 20 a 30% 50% 97% 100%

Other Other

Legacy

portfolio

and others.

Up to 2006 ANEXO

2014 2014 2014

Corporación Mexicana de Inversiones de Capital

9

Private equity in Mexico

Source: PRIVATE EQUITY IN MEXICO Primed for significant growth, BAIN & COMPANY, 2013

10

Private equity in Mexico

Source: PRIVATE EQUITY IN MEXICO Primed for significant growth, BAIN & COMPANY, 2013

11

Private equity in Mexico

Source: PRIVATE EQUITY IN MEXICO Primed for significant growth, BAIN & COMPANY, 2013

12

Fund diversification

Type of Funds

InvestmentStage

Industry

Region

Vintage

Number of funds

in Portfolio

Our diversification policy

13

Corporación Mexicana de

Inversiones de Capital

Country allocation of capital invested by regional funds*

*Statistics based on the history of regional funds that are part of the portfolio of Fund of Funds, including 3,412 invested in the

region

33%

27%

8%7%

6% 6%

2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 0% 0%0

200

400

600

800

1,000

1,200

Bra

zil

Me

xico

Par

agu

ay

Co

lom

bia

Arg

enti

na

USA

Bo

livia

Ven

ezu

ela

Ch

ile

Tri

nid

ad

& T

ob

ago

Pe

ru

Do

min

ican

Re

pu

blic

Gu

ate

mal

a

Ho

nd

ura

s

Pan

am

a

Uru

gua

y

Ecu

ad

or

Spa

in

Ch

ina

Co

sta

Ric

a

54%

46%

National Funds

Regional Funds

MD

D

Corporación Mexicana de Inversiones de Capital

Source: CMIC.

IRR Comparative in dollars at March 31, 2015

n.d.

8.4%

10.0%

8.6%

12.7%

8.2%

2.4%

4.0%

0.5%

4.0%

-1.8%

9.32%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Vintage 96-01 Vintage 02-06

FdeF CalPERs Preqin Dow Jones Industrial S&P 500 Nasdaq 100

Vintage 1996 - 2001 december 2007

IRR 9.4%

Vintage 2002 - 2006december 2012

IRR 10.0%

FdeFMex I december 2017

Estimated IRR 13.5%

FdeF Mex II december 2023

Estimated IRR 17.1%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%1 5 9 13 17 21 25 29 33 37 41 45

IRR

J CURVE REAL & PROJECTED

Quarter

Projected yields of Fondo de Fondos

16

PE / VC Environment

improvement

0

20

40

60

80

100

120

1. EconomicActivity

2. Capital Market

3. Taxaction

4. Investorprotection and

CorporateGovernance

5. Human andsocial enviroment

6. Entreprenurialopportunities

México 2014 USA Brasil

China México 2008 Latinoamerica

Evolution of ReturnsFondo de Fondos

(IRR in dollars)

Source: CMIC

Source : The Global Venture Capital and Private Equity Country Attractiveness Index 2014, Ernst and Young.

8.4%

10.0%

13.5%

17.10%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

1996-2001 2002-2006 2007-2011 2012 - 2016

Our reporting model

Investors get reliable and on time information each quarter

FONDO (Fecha primer cierre – vencimiento)% de participación del FdeF

1 - VALUACIÓN 2 - ESTADISTICAS

3 – PORTAFOLIO (MDD)

Plusvalía derivada principalmente al incremento de

valuación de Empresa 5 en $ 1,980 MDD que se compensa

con la minusvalía de Empresa 3 en $ 1.250 MDD. Las

demás Cías presentan ligero cambio en su valuación.

Tir Hist 14% Tir Hist 14%

$7,451,540

$196,350$132,777

$7,122,413

FMV 2013-I Llamados Dist Plusval Minusval FMV 2013-II

Comprometido 6,865,385

Aportado 6,328,189

Distribuido 3,055,449 0.5x

Distribuido + FMV 10,506,989 1.7x

Retorno Tesis Admon % de Bateo

80%

Part. Fecha +/- valía

dic-12 entrada Total Rem. + dist. T-1 Total

Empresa 1 - SAPI 2% Dec-07 MEX 4.2 3.2 10.6 4% 2.5x

Aumento en ventas y EBITDA. Entrada de dos nuevos inversionistas

en colocación primaria y secundaria (con descuento). Decidieron no

salir.

Empresa 2 - SAPI 20% Jun-08 MEX 3.0 6.3 6.3 0% 2.1x Valor Presente de la fórmula de salida considerado situación de la Cía.

Empresa 3 47% Mar-09 MEX 3.4 1.6 1.6 -44% 0.5x Castigo en valuación por ventas mínimas y EBITDA negativo.

Empresa 4 - SAPI 34% Feb-10 MEX 1.3 1.7 1.7 4% 1.3x Valor Presente de la fórmula de salida considerado situación de la Cía.

Empresa 5 - SAPI 25% May-10 MEX 4.0 9.9 11.9 25% 3.0xAumento en ventas y EBITDA. Adquisición de 16 pantallas digitales

publicitarias.

15.9 22.5 32.0 4.4% 2.0x

FMVCostoPaís

Total Fondo

FondoComentarios de

Plusvalías/Minusvalías

Múlt.

FUND ( Date of first closing – Maturity)FdeF % of participation

CommitmentCapital CallsDistributionsDistributions + FMV

Batting Score

80%

Return Thesis Administration

Fund performance comment

Company performance comment

Our Benchmark model

With more than 7 years of investment operations, Fondo de Fondos is one of the most experienced investor in Mexico and LatAm Private Equity industry

Fondo de Fondos created its own benchmark system, going ahead of global best practices

Grade

Return Investment thesis Reports Diversification

28 variables considered

Etapa

dic-2014Benchmark

Ret

urn

varia

bles

Quality Variables

QUARTER

Average, 6.39

Median, 5.92

Median, 8.19Average, 7.71

0

1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

INSURGENTES SUR 863 PISO 11-1COL. NÁPOLES, C.P. 03810

t. + 52 (55) 44334500 f. + 52 (55) 44334530

www.fondodefondos.com.mx