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April 2015

TAU Investment Management

Introduction TAU brings capitalist solutions to capitalism’s greatest failures

• TAU is a private equity firm established to generate above-market returns by upgrading global supply chains, with the first fund focused on the $780 billion textile/apparel manufacturing industry

• TAU seeks to increase manufacturers’ profitability and scale, improve the lives of workers and the environment, and deliver superior returns to investors.

• Partnerships with leading brands and retailers in the US and Europe help to identify investable suppliers and provide secure sources of revenue for future portfolio companies.

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Intensifying global consumerism

manufacturers’ mismanagement of social

and environmental capital

Inefficient operations and high turnover

High failure to deliver ‘on time and

in full’

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….meets inadequate supply chains.

Global textile & apparel industry dynamics

High cost of capital

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higher consumer expectations for fast retailing and “on trend”

products

More product diversity and complexity

Rising baselines and customer demand for

compliance & sustainability

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Rising costs and downward price

pressure

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TAU will bring resources Capital • Long-term equity • Fresh capital injection to fund capex and • Operational improvements • Liquidity for owners • Enhanced access to credit

Expertise • Transformation/sector expertise plus a

stable of global garment experts • Proven solutions tailored to culture and

context Customers • Work with major brands to build deal pipeline

and secure investee revenues • Transformational goals align with brands’

sourcing needs

Policy • Work with advocacy groups and regulatory

bodies to support favorable supply chain policy

Consumers • Alliance with consumer movements to drive

awareness and increase demand

Investors • Strategic or control stakes in established

companies: hands-on transformation

• Active dividend policy

• Risk mitigation: holdbacks, SPVs, strong governance, relationships with revenue sources

• Exits: secondaries, rollups or IPOs with value upshift from transformation

Influence the ecosystem And create value

CHANGE MANAGEMENT AND PROJECT MANAGEMENT

CAPACITY INCREASES AND EFFICIENCY IMPROVEMENTS

MARKETING/MARKET EXPANSION

LABOR CONDITIONS/HR MANAGEMENT/ECO-EFFICIENCIES

IT AND INDUSTRIAL TECHNOLOGY SOLUTIONS (TAU-24)

STRATEGY

INVESTMENT STRATEGY

TAU’s Approach to ESG and Impact

COMPLIANCE

IMPACT PLATFORM

STRATEGIC ENVIRONMENTAL & SOCIAL INITIATIVES

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Compliance

MATERIAL ESG RISKS •  Fire and other structural safety issues •  Child and forced labor and other worker abuse •  Wage payments – minimum wage, and illegal overtime •  Unauthorized subcontracting •  Water pollution and emissions

MECHANISMS •  Allocation of capital to remediate •  Appointments of key ESG staff •  Remote monitoring through metering, sensors •  ERP systems to manage production capacity, order flow,

and ensure full transparency •  Environmentally-friendly textile dyeing techniques

COMPLIANCE

IMPACT PLATFORM

STRATEGIC E&S

As a direct investor, TAU is uniquely placed to ensure compliance with local laws and international labor and environmental standards

Strategic E&S Initiatives

•  Efficient use of energy and water: Upgrades to high efficiency boilers, and other energy-efficient machinery and servomotors can dramatically decrease energy use. Smart grids and metering monitor energy and water use and track quality of wastewater

•  Textile waste reduction: LEAN manufacturing can reduce defect ratios, and auto-CAD machines can increase productivity 10-20x while reducing material costs

•  Training and career development: Supervisor training programs in HR, production and quality management have reduced worker turnover by 52% and absenteeism by 34% in select factories

•  Health: Investments in worker healthcare education have been shown to have $4:$1 returns, and anemia interventions can increase productivity by 8%

TAU has identified a number of environmental and social initiatives that also have high returns on investment

COMPLIANCE

IMPACT PLATFORM

STRATEGIC E&S

Sources: BBW project, BSR HERhealth project, Tufts anemia study

Impact Platform

•  Family healthcare •  Financial inclusion •  Affordable housing •  Child education •  Mobile connectivity •  Transportation solutions •  Access to clean water & sanitation

TAU is engaged with one of the world’s largest pharmaceutical companies to provide comprehensive healthcare services to all of TAU suppliers’ workers

COMPLIANCE

IMPACT PLATFORM

STRATEGIC E&S

TAU sees garment factories as key development infrastructure to provide services to workers in the home and to their families

The Vision: Create a global network of leading sustainable apparel producers

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Future Vision Today