Strategies

Berry Energy Master Fund (?BEMF?) provides funding for upstream oil and gas production companies whereby a one-time upfront agreed investment is exchanged for a fixed percentage of oil & gas production from the Project, with no exposure to the risks of actual production operations.

Our investment is secured against the real property of the Project, is cash-flow positive from day inception whilst paying a quarterly dividend combined with in-built capital growth & minimum barrel deliverables.

Our Fund provides all the benefits of owning the cash-flow oil & gas production at the well-head without the costs, risks & overhead of the actual operations. Without having physical operations means our Fund?s investments are scalable & repeatable & we have a globally unbeatable capacity for being incredibly diversified whilst having the lowest-cost per barrel of production.

A further benefit for our Fund is the fact that most oil & gas producers go into production on a reserve calculation that is typically representative of the smaller portion of a much larger deposit whose reserves & resources are typically enhanced over time. With a fixed percentage share of future production, we are not capped on the share of the additional barrels we receive ? we get to ride the upside at NO ADDITIONAL COST.

So, if production increases over time, the win for our Fund is amplified exponentially, by benefitting in increases to:

• Reserves of oil & gas;
• Production of oil & gas;
• Price of oil & gas; and
• Life of the oil & gas Project.

It is well known that historically mining companies have focused on growth without necessarily focusing on invested capital. We believe that there should be a higher focus on generating returns on invested capital. Our agreements provides our investors with access to a diversified portfolio of Tier 1 revenue generating assets that allows us to pay a quarterly dividend based on a percentage of operating cashflow without sacrificing any of the capital growth potential inherent in producing mining companies.

With every amount of physical resource or commodity being delivered to us at a fixed price contractually, basing the dividend on operating cash-flows provides our investors with direct participation in both our enviable organic growth profile and underlying commodity prices. By targeting investment in high-quality and long-life mining production projects, we are able to provide our investors with a low risk opportunity to invest in the mining sector, as we are insulated from the expenditures and accompanying risks associated with bringing a mine into production.

For a single investment, our investors have a diverse portfolio comprised of in-production projects at different stages, owned by different mining companies and in different parts of the world. This diversification helps protect our investors from the inherent risks in mining, like labour unrest or rising costs, while simultaneously providing them with exposure to world-class projects.

With worldwide deleveraging of banks and increased regulation following the 2008 financial crisis, funds managed by Berry have a wide and growing range of opportunities to deploy investor capital with less competition and greater selectivity. While banks have been retrenching, we believe that Berry?s skills and integrated global platform leave it well-positioned to meet investors? wide range of risk and return preferences ensuring our investors benefit from our growth and wealth creation strategies.

Berry?s disciplined, creative credit investment philosophy is powered by our integrated approach using our innovative investment structures and proprietary data. We operate as one integrated global investment platform. Each area draws on, and contributes to, the firm?s deep industry sector expertise, yielding investment opportunities and unique intellectual capital.

Our liquid/performing credit vehicles utilize a range of investment strategies typically focused on income-orientated, protective lending terms, predictable payment schedules from well diversified portfolios with low default rates.?Origination platforms generating differentiated yield assets including middle-market loans, equipment finance, trade finance, asset finance all based around our expertise of Energy, Resources & Infrastructure.

Trade Finance:

• Trade Finance has low credit & default risk with short-term products particularly low-risk;
• Weighted default rates of:
  • 0.08% for Letters of Credit;
  • 0.04% for Export Letters of Credit; and
  • 0.21% for import/export loans & performance guarantees.

• As a comparison against corporate loans, Export Letters of Credit have a rough equivalence to an Aaa and Aa Moody?s Rating;
• Medium to longer term also have low risk ? in-scope transactions are covered by OECD backed ECA?s at up to 95% of their value;
• Trade Finance presents us with the opportunity to generate yield without taking excessive credit & rate risk;
• Trade Finance provides us with a significant source of low-risk alpha for generally low return ?bond-style? investment strategies;
• Trade Finance offers short-term floating rate asset with limited exposure to rate or credit duration, while generating competitive yield;
• Currently it is estimated that there is in excess of $2T in unmet Trade Finance demand.

Berry invests in assets in the infrastructure sector, to provide institutional investors with stable and attractive risk-adjusted returns. Leveraging off our integrated investment approach, Berry seeks to create a low volatility income-oriented portfolio, with a focus on investments in the commodities and utilities sectors in light of its attractive characteristics including a number of high-quality investment opportunities, stable returns and potential for strong risk mitigation. Berry also invests in additional infrastructure sub-sectors when opportunities arise to continuously improve value and portfolio diversification.

Our experienced and multi-disciplined investment team operates under a robust investment framework with the primary objective of investing in infrastructure assets which are able to deliver compelling long-term, risk-adjusted returns.

Our team?s track record, combined with an extensive network of industry relationships allows us to be best positioned to originate and access high-quality infrastructure investments. Likewise, our active asset management approach focuses on adding value through effective investment analysis, structuring and operations of a complimentary asset to ensure the extraction of maximum throughput value for our investors.

Berry?s infrastructure investment management framework is outlined below:

• Proactive origination approach leveraging off established network of relationships with industry partners, governments, co-investors, vendors and advisors
• Targeting diversification and compelling risk-adjusted returns
• Appropriate governance to deliver on active management strategy
• Pricing conservatively ? modelling assets using prudent growth and refinancing assumptions
• Active investment and asset management approach
• Apply experience from each asset to other portfolio assets as relevant
• Applying proven risk management techniques ? imposing strict risk management policies at the asset level and seeking to minimise counterparty risk

Direct Investment Mandates combine deal origination and execution with a post-closing investment management component. Berry will define an investment strategy in cooperation with with clients and execute it accordingly. Investments can be pooled in an SPV providing transparency, separability of individual investments and tax structuring. An SPV is capable of holding several investments by issuing different share classes.

Our proprietary data along with our integrated and innovative approach (including technical & operational expertise) means that we are able to target opportunities across a number related sectors, including:

• Upstream, midstream and downstream energy & resources sectors;
• Individual or integrated portfolio infrastructure assets;
• Portfolio and Specific credit opportunities.

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