G L O B A L F U N D E X C H A N G E . C O M

INDUSTRY OVERVIEW

2

P O P U L A T I O N & E N E R G Y D E M A N D

Population and income growth are the two most powerful forces behind the demand for energy

Over the last 20 years..Population increased by 1.6 billion people

Real income rose by 87%

Over the next 20 years…1.4 billion projected increase in population

100% projected increase in real income

As a result, by 2030…Primary energy use expected to grow 40%

93% of growth to come from non-OECD economies

Developing countries to consume 2/3 of all global energy

We believe “Investing in the Future of Energy” is the most significant investment opportunity of our time.

We are witnessing a paradigm shift in global energy

New opportunities in both clean and traditional energy as

efficiencies improveFossil fuel energy sources are diversifying

1990-2010: Fossil fuels made up 83% of energy growth

2010-2030: Contribution projected to fall to 64%

Rise of coal & natural gasChina is building a new coal plant every week, tripling its consumption and becoming a net importer of coal

New drilling techniques are “revolutionizing” natural gas industry

Growing impact of climate concerns

Source: Sigma Xi

#1 USA

#2 China

#3 Japan

#4 India

#5 Germany

#6 UK

#7 France

#8 Italy

#9 Brazil

#10 Russia

0 5,000,000 10,000,000 15,000,000 20,000,000

19,500,000

7,999,000

4,785,000

2,670,000

2,569,000

1,710,000

1,986,000

1,639,000

2,520,000

2,800,000

8,068,000

3,790,000

133,100

3,720,000

150,800

1,584,000

70,800

162,200

1,973,000

9,920,000

13,470,000

4,393,000

5,263,000

2,900,000

2,777,000

1,651,000

2,346,000

2,205,000

632,900

48,000

9 of 10 Largest Economies are Dependent on Foreign Oil

Oil Imports Oil Production Oil Consumption Volume (bbl/day)

Eco

nom

y Si

ze (

GD

P/P

PP

)O I L D E P E N D E N C Y

Source: CIA World Factbook

By 2025, global oil demand likely to be 60% greater than today

Annual rate of oil consumption growing in developing powers: China - 7.5% & India - 5.5%

Both expected to take a “quantum leap” over the next decade

“Peak Oil” concernsExperts say many of the Middle East oil nations, including Saudi Arabia, are already pumping oil from known “post peak” fields

Once an oil field has reached “peak oil” – the rate of decline is dramatic and can be as much as 10% per year

Growing interest in ‘unconventional’ oil plays‘Big Oil’ shifting focus to shale gas, tar sands, offshore fields

2004 2006 2008 2010 2015 2020 2025 2030

$46 bn

$110 bn

$173 bn

$243 bn

$373 bn

$502 bn

$548 bn

$590 bn

I N V E S T M E N T I N C L E A N E N E R G Y

Source: Bloomberg New Energy Finance, 2010

Annual Required Clean Energy Capital (projected)

The International Energy Agency (IEA) predicts low carbon energy investments will reach $1.6 trillion by 2050.

Global New Investment in Clean Energy (actual)

C L E A N E N E R G Y I N V E S T M E N T T R E N D S

Source: The Pew Charitable Trusts, 2010

Clean energy resources will affect all technologies and

have an impact on every region of the globe

Significant contributor to future energy demandTotal clean energy generating capacity nearly doubled over past 3 years due to strong incentives and falling costs

Projected sector growth to 934MW by 2020 – a 431% increase over 10 years

Technology advancements increasing cost competitiveness

Wind turbine costs have fallen 15-20% over past few years

Energy storage and smart grid systems increasing energy

efficiency

Investing in clean energy is a top priority around the world.

Worldwide investment topped $243 billion in 2010 - a 630% increase from 2004 levels

China:

As a percentage of GDP, China’s investment in alternative energy is already 10X that of the U.S.

United States:

$94.1 billion in U.S. stimulus funding dedicated to renewable energy sector over the next decade

Europe:

Germany, Spain, Italy focusing on solar energy

UK and Scotland developing significant off-shore wind and tidal resources

Middle East:

New programs to promote and develop solar and wind farms and solar-powered desalination

Using oil more efficiently through fuel cells, carbon sequestration, oil gasification, and green building.

City of Masdar in Abu Dhabi:

Aims to be the first carbon-neutral metropolis in the world and the center of global renewable energy research

R E N E W A B L E E N E R G Y O L Y M P I C S

Investments 2010 Gold Silver Bronze

Total Clean Energy Investments China Germany USA

Clean Energy Installed Capacity China USA Germany

Wind China USA EU

Geothermal USA Philippines Indonesia

Solar Germany Italy USA

Biofuels Brazil USA EU

Efficiency USA China Germany

Other Renewables China USA Brazil

Hybrid Electric Vehicles Japan USA EU

Sources: The Pew Charitable Trusts, 2011; SOPAC Applied Geoscience and Technology Division, 2011; Reuters; JDPower & Associates, 2011

With 17.5 million gallons used every second…

Water is our most critical resource.

G L O B A L D E M A N D F O R F R E S H W A T E R

Reservoir, Southern Spain Lake Mead Reservoir, USAReservoir, Queensland, Australia Miyun Reservoir Beijing, China Neyyar Reservoir Trivandrum, India

Humans are extracting freshwater at rates up to 100X the natural replacement rate (World Water Council)

The British non-profit International Alert released a study identifying 46 countries home to 2.7 billion people where water and climate stresses could ignite violent conflict by 2025

UN Secretary-General Ban Ki-moon: “The consequences for humanity are grave. Water scarcity threatens economic and social gains and is a potent fuel for wars and conflict.”

"We think there'll be world wars fought about water in the future," predicts the aptly named Peter Spillett of RWE/Thames Water, one of the three largest water companies in the world.

World Bank reports global demand for water is doubling every 21 years – supplies cannot remotely keep up with demand as population soars, nations develop and agriculture expands

Freshwater consumption has doubled since World War II and is expected to increase another 25% by 2030.

T H E C A S E F O R I N V E S T I N G I N W A T E R

The Water / Energy Conundrum

Energy and water are inextricably linked It requires energy to produce and treat water, and vast water supplies to generate energy

Fossil fuel power plants consume more than 500 billion liters of freshwater every day in the U.S. alone

China’s reliance on coal will increase demand for water to 215 trillion gallons by 2030, 52 trillion more than currently available

Strain on global infrastructure will catalyze

new investment Estimated $1 trillion needed over next 20 years to meet global demand for clean water

U.S.: $150 billion required to upgrade aging water infrastructure

China: $125 billion new funding to build wastewater treatment plants and expand distribution

Sector poised for tremendous growth Global water sector currently valued at $425 billion

Over next 20 years expected to reach $6 trillion, with an annual growth rate of 14%.

On average, water costs are less than 1% of disposable income, making price increases inevitable

285 public water stocks / $750 billion market cap

Profit opportunities in:

Infrastructure

Smart meters

Water rights

Desalination

Purification

New technologies

Energy efficiency

Wastewater reclamation

G L O B A L A G R I C U L T U R E C H A L L E N G E S

Population, rising income and urbanization are shifting global dietary patterns

World population to top 9 billion by 2050

Agricultural output needs to grow 70% to meet new demand

Newfound prosperity will catalyze a “historic shift” in global dietary patterns

Growing middle class shifts away from grains and vegetables to a more meat-centric (and more energy-intensive) diet.

FAO statistics show “remarkable” increase in consumption of livestock products in East Asia, mainly due to China.

Significant growth projected by 2030

Per capita consumption of livestock products (kg /year)

1966 1999 2030

Near East & North Africa 11.9 21.2 35

Sub-Saharan Africa 9.9 9.4 13.4

Latin America & Caribbean 31.7 53.8 76.6

East Asia 8.7 37.7 58.5

South Asia 3.9 5.3 11.7

World Totals 24.2 36.4 45.3

Decreasing availability of arable landArable land per person decreasing in Asia, where demand for food is increasing the most

‘Land grab’ phenomenonIn 2009, foreign investors purchased 111 million acres of farmland in developing world - a tenfold increase over 10 years

The biggest buyers? Sovereign wealth funds from China, India & Middle East seeking agri resources

Competition from biofuelsNew mandates will require 240 million more acres for biofuel crops; equivalent of 50% of arable land in North America and 6% of world total arable land

1 out of every 4 ears of harvested corn in the U.S. - the world’s largest producer - winds up in an ethanol plant.

Generating 1 gallon of fuel from irrigated corn requires 650 gallons of water

W H Y I N V E S T I N A G R I C U L T U R E ?

Are we witnessing the “end of cheap food?”Over next decade, Food & Agriculture Organization (FAO) predicts grain prices will remain 15-40% higher than 1997-2006 levels

Last year, the cost of total global food imports topped $1 trillion for only the second time in history.

In 2011, costs of food imports are on track to reach record highs, warns United Nations

Commodity volatility in an uncertain market Sky high food prices are nearing 2008 records, prompting U.N. to warn of pending “food crisis”

Weather anomalies have devastated crops, leading to price jumps in wheat, soybeans, corn, coffee, sugar and other basic commodities.

Agriculture has a severe water problemNearly 70% of global water consumption is used for irrigation

Agriculture can command up to 90% of domestic water resources in developing nations

Every year, the global agricultural sector wastes approximately 60% of the 2,500 trillion liters of water it uses

Irrigation and crop yield challengesDespite years of advances, gains in agriculture yield per acre have slowed down to less than 1% a year

New investment is crucialFAO says new demand requires a 47% increase in annual investment in agriculture in the developing world

Current investments levels of $189bn must reach $279 billion/year at a minimum, and $479 billion/year to combat global hunger

I N V E S T I N G I N N A T U R A L R E S O U R C E S

“ We are running a natural resources deficit. It takes 1 ½ years to replenish 1 year’s consumption of natural resources.

By 2030, meeting global resource demands will require the equivalent of two Planet Earths.” WWF, Living Planet Index Report 2010

Energetic Limits to Economic GrowthResources and energy supplies are “limiting factors” to economic growth & development

Developing economies rely upon access to industrial metals & minerals

Resource demand from developing world to exceed that of developed world by 2015

China now consumes:One-half of world’s iron oreOne-third of world’s aluminumOne-quarter of world’s copper

Increased spending on infrastructure worldwide

Resource scarcity prompts race for overseas suppliesDeveloping nations racing to make foreign acquisitions in a “global land grab” China, India & Middle Eastern nations have struck notable deals in Australia, Africa & South America

Demand increasing for rare earth elements & lithiumCrucial for clean energy technologies, advanced batteries, electric vehicles and high technology manufacturingChina dominates rare earth market with 95% of supplies

A Nuclear Energy ComebackChina has 20 new nuclear plants under construction and plans for six-fold increase over next decade.Global demand for mined uranium predicted to increase 4X over the next 30 years

ENERGY – WATER – RESOURCES – CLIMATE CONUNDRUM

Traditional energy becomes cleaner & >>> more energy efficient

<<< Clean energy becomes more cost efficient & accessibleTHE BRIDGE PERIOD

ENERGYCLEAN ENERGY WATER RESOURCES CARBONAGRICULTURE SYSTEMATIC HEDGE

INVESTING IN THE FUTURE OF ENERGY

Water scarcity & increased demand

Population growth 79 million people/year

Energy demand to increase 50% by 2030

Economic, political & social catalysts

Diversification of energy resources

Energy securityResources vs. Consumption

Significant profit opportunities

Stimulus Spending

Pollution & climate change

EQUITYSTRATEGIES

COMMODITYSTRATEGIES

TRENDSTRATEGIES

PEOPLE PLANETPROFIT

Dramatic increase in energy spending

Largest global macro theme worldwide

MACRO SNAPSHOT