Your Investment Link to Colombia Colombia: Stats and Facts About Us Financial year end 2013 • Population: Above 47Mll • GDP Growth 4.2% • Inflation 2.4% • Unemployment rate 9.7% • FDI USD$15.8 Billion (4.3% of GDP) Andes Horizon Capital was founded in 2013 with offices in Medellin and Bogota. It is the first private Colombian based investment boutique with focus on Asset Based Lending (ABL), Non-Performing Loans (NPL) and Direct Investment portfolios for international investors in the Colombian market, characterized by high growth, solid economic fundamentals and market inefficiencies. All the investments offered are bespoke tax efficient solutions for international investors. Non-Performing Loans (NPL) Investor Protection Index -World Economic ForumCountry Value A Non-Performing Loan is a loan in which the debtor doesn’t pay his scheduled installments for at least 90 days. World Rank Colombia 8,3 6 Peru 7,7 13 Chile 6,3 31 6 41 Brazil 5,3 69 Argentina 4,7 100 1 - 10 1 - 146 Mexico Scale • Investment Grade: In 2013 S&P and Fitch upgraded Colombia's sovereign debt outlook to positive BBB • Colombia currently is the 3rd largest economy in Latin America (5th four years ago). • 3rd most populous country after Brazil and Mexico • Colombia will benefit with the regional integration of the Alianza Pacifico, Free Trade Economic Block between Chile, Mexico, Peru and Colombia, with 212 million people, growth approx. 5%, equivalent to 36% of LATAM, Foreign Trade USD 1.1bn, and the 8th largest economy in the world • Recent adhesion to the OECD lays the path for improvement in terms of standards, productivity, transparency and policy The NPL market in Colombia is still in early stages which represents an investment opportunity, relatively unexplored by institutional and private investors. In the banking industry, NPL collection is done either in-house or outsourced, with a later final stage of disposal (sale) of these portfolios when not recovered within a period of time. The disposal of NPL portfolios to third parties is done frequently through the year via public auctions and private invitations. Banks initiate the sale of such portfolios when those loans are from 270 days in default. Banks are bounded to sell their NPL portfolios in order to keep their capital and ratios in line with the regulations but also to generate liquidity and profits. We focus on Consumer Debt and Mortgage backed portfolios. Such portfolios contain revolving facilities, refinanced debt, overdrafts, outstanding credit card repayments and mortgage loans in distress. Product Duration Net COP Return Non-Performing Loans (NPL) 18 - 36 months 20 - 25% p.a. Risk Assessment - Price of portfolio (single digits %) - Operation to recover debts *All costs + taxes included Credit Market & Financial Industry Table: Portfolio Data of Financial Industry (USD Billion) Corporate Year Gross Consumer Distressed Gross Real Estate Distressed Gross Microcredit Distressed Gross 2000 $ 14,37 $ 1,32 $ 3,66 $ 0,51 $ 7,32 $ 1,17 $ 2005 $ 23,60 $ 0,46 $ 8,05 $ 0,36 $ 3,72 $ 0,32 Historic Foreign Direct Investment 2010 $ 52,79 $ 1,56 $ 23,23 $ 1,37 $ 6,41 $ (USD Billions) 2014 $ 91,07 $ 2,01 $ 42,05 $ 1,98 $ 13,47 $ - Total Distressed Gross Distressed $ - $ 25,35 $ 3,00 $ 0,56 $ 0,03 $ 35,93 $ 1,16 0,24 $ 2,11 $ 0,12 $ 84,54 $ 3,29 0,27 $ 4,44 $ 0,31 $ 151,02 $ 4,57 $ 20,00 $ 15,00 Total Provisions and Distressed Debt (USD Billion) $ 10,00 $ 5,00 $2000 2005 2010 The only foreign NPL operator present at Colombia entered to the market recently via an acquisition. (Encore Capital acquired 51% of Refinancia @ USD 40mll, Feb 2014). 2013 Foreign Direct Investment Distribution 2013 Our Value Proposition Contact Best of breed service providers The company is continuously screening the local market for the best qualified service providers, to deliver a unique investment advisory for the international investors looking for local investment opportunities. Kai Christian Buhofer Marlid Duque Local Presence Our presence in Colombia together with the international financial background of our key people, give us an ideal position to properly execute such investment strategies on behalf of our investors. Risk Management Proven track record and expertise to maximize returns whilst strictly mitigating downside risk. Limited Competition The resulting alpha is found in the limited access to such markets and the local supervision of the involved operations. Head Office Cra 43A 16A Sur 38, Oficina 503 Medellin, Colombia Tel: +57 (4) 313 8252 / +57 (4) 313 8544 email: [email protected] Website: www.andeshorizoncapital.com Graphs, data and figures sources: Superintendencia Financiera, Banco de la Republica and Dane.