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Alternative Investments Division Click to edit Master subtitle style TCW Asset Management Company A Market Leader in Energy & Infrastructure Investing.

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Presentation on theme: "Alternative Investments Division Click to edit Master subtitle style TCW Asset Management Company A Market Leader in Energy & Infrastructure Investing."— Presentation transcript:

1 Alternative Investments Division Click to edit Master subtitle style TCW Asset Management Company A Market Leader in Energy & Infrastructure Investing

2 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 1 TCW Overview Established in 1971 in Los Angeles, California Approximately $120 billion under management or committed to management as of September 30, 2008 Approximately 1,430 institutional and private clients TCW Staff of over 655 individuals, including 390 investment and administrative professionals The TCW Group, Inc. (TCW) is an indirect subsidiary of Société Générale, S.A., and a member of the Société Générale Asset Management (SGAM) division Offices: Los Angeles New York Houston London Sydney

3 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 2 TCW Energy & Infrastructure Group Among the leading institutional providers of capital to the energy sector globally – Singular focus on energy and energy-related infrastructure – Broad offering of capital to industry (senior debt through equity) – Global investment focus (invested in 30 countries on 6 continents) – TCW’s first alternative product (1982) 27-year track record; the longest in the industry – 14 prior funds – Current assets under management of $7 billion in energy globally – 260+ portfolio investments – Demonstrated investment performance through multiple commodity and business cycles Strong and consistent performance over 27 years Global investment platform – 35 investment professionals – Operate from offices in Los Angeles, Houston, New York, London and Sydney

4 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 3 Target Market Actively investing throughout the energy value chain on a global basis UpstreamInfrastructureMidstreamGas to LiquidsTransportationGas to Electrons Reserve-based Development Production Payments Forward Oil Sales Pipeline Gathering Systems Processing Facilities Gas Storage Bunkering LNG Tankers Specialty Tankers VLCC Vessels Production Platforms Drill Ships FPSOs Drilling Rigs LNG Synfuels Processed Gas (methanol, fertilizer, DME) LNG Regasification Terminals Gas Sales, Pipelines, Gas-Fired Power Plants, Electricity T&D Renewables Wind Solar Biofuels Geothermal

5 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 4 EIG History Capital Raised:$10 billion # Funds:Currently investing 14 th fund Invested Capital:$9.7 billion # Investments:260+ Investments Current Outstanding:$4 billion Capital Available Today:$1.2 billion TCW’s Energy & Infrastructure Group has had a consistent presence in the energy markets over the last 27 years. The TCW Energy & Infrastructure Group’s History of Success in all Markets

6 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 5 EIG Product Platform Product PlatformActive Funds Mezzanine and EquityFund XIV, Cogen & ECEF Senior DebtGPF III High Yield SeniorGPF II Special SituationsTEP and Separate Accounts Broad offering of capital to industry, offering senior debt through to equity Breakdown of Committed Funds (as at December 2008)

7 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 6 EIG Investment Breakdown – FYE 2008 $2.2 Billion Investments By Sub-Sector As at Dec 2008, In $ Millions Investments By Ranking As at Dec 2008, In $ Millions

8 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 7 Oil and Gas Risk/Return Profile Equity Pref. Equity Mezzanine VPP Senior Debt TCW Sweet Spot Risk Return PDP PDNP PUD PROB/POSS Exploration Prospects Engineering RiskGeological/Geophysical Risk TCW’s focus is on engineering and development risk, not geological and exploration risk

9 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 8 Capital Markets Source: Bloomberg, Morgan Stanley

10 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 9 Recent Trends Last Few Years: Great time to be an issuer of capital Abundance of private equity, public equity, and cheap debt capital Widely syndicated debt issuances with generous credit terms New and less experienced investors/lenders Active M&A market with increasing asset valuations Today: M&A and capital markets have dried up Bank re-determinations putting pressure on corporate balance sheets – Borrowing Base reductions and overadvances coming due with little or no ability to refinance – Unappealing prospects of obtaining amendments from broad group of lenders with limited E&P experience E&P companies forced to high grade projects and live within cash flow Resource play economics largely depend on entry/acreage costs Investors/Lenders presented with appealing risk/return opportunities in the high yield debt markets

11 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 10 Disciplined, Value-Oriented Approach to Investing TCW’s Current Investment Bias Stay the course: continue to focus on quality management teams and assets Presented with opportunities that historically we would not have seen Investment Size: $ million Patience Keys to EIG investment style Hard assets with long useful life Bottom-up internal technical analysis Secured by shares or assets Transparency to cash flow Active management through covenants and board presentation Upside potential through equity participation Experienced E&P Staff Based in Houston 12 professionals with 5 petroleum engineers Senior people each have over 25 years of E&P experience

12 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division 11 Recent TCW Deals (Q4 2008) California Steam Flood – $250 million senior secured debt facility – Interest Rate + Variable NPI Resource Play Development – $200 million senior secured debt facility – Interest Rate + NPI Australian Offshore Development – $100 million subordinated debt facility – Interest Rate + Warrants

13 TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division TCW Contact Information Houston Office: 333 Clay Street, Suite 4150 Houston, TX Main Fax Kurt Patrick Curt Clay Larry Samantha Richard


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