CD PRIVATE EQUITY FUND II — Investor Presentation 2016

Feb 14, 2016

Disclaimer

This presentation has been prepared by Walsh & Company Asset Management Pty Ltd (Walsh AM) for US Select Private Opportunities Fund, and US Select Private Opportunities Fund II (Fund).

An investment in the Fund is subject to various risks, many of which are beyond the control of Walsh AM and the Fund. The past performance of the Fund is not a guarantee of the future performance of the Fund.

This presentation may contain statements, opinions, projections, forecasts and other material (forward looking statements), based on various assumptions. Those assumptions may or may not prove to be correct. None of Walsh AM and the Fund, their officers, employees, agents, advisers nor any other person named in this presentation makes any representation as to the accuracy or likelihood of fulfilment of the forward looking statements or any of the assumptions upon which they are based.

This presentation may contain general advice. Any general advice provided has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice with regard to your objectives, financial situation and needs. Where the presentation relates to the purchase of a particular product, you should obtain a copy of the relevant PDS or offer document before making any decisionsin relation to the product.

To the extent permitted by law, Walsh AM and the Fund or their respective officers, employees, agents and advisers give no warranty, representation or guarantee as to the accuracy or completeness or reliability of the information contained in this presentation. Further, none of Walsh AM and the Fund or their respective officers, employees, agents and advisers accept, except to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation. Any recipient of this presentation should independently satisfy themselves as to the accuracy of all information contained herein.

Executive Summary

A Unique Joint Venture

Established in 2012 to provide access to attractive US private investments

• Partnership with an experienced US based family office investor: Cordish Private Ventures, LLC
• Provides exposure to top tier private investment managers, typically reserved for institutions and high net worth families
• Provides exposure to US companies with less volatility and greater control than public equities
• Two ASX listed funds raised to date:
• USF (2012): 85.5% interest in US Select I (US\$70m)
• USG (2013/2014): 87.3% interest in US Select II (US\$95m)

Cordish Private Ventures

• CPV is the private equity investment arm of the Cordish family of Baltimore, Maryland, owners of The Cordish Companies
• Fourth-generation family-owned and managed real estate development company, specialising in large scale, mixed-use projects and entertainment districts
• CPV was founded in 1999 and has a demonstrated track record of successful US private market investments through multiple economic cycles
• US Select has been CPV's exclusive vehicle for smallcap private equity investments since 2012
• We hope to continue investing together now that Fund I and II are fully committed

Investment Strategy

Exclusive focus on investments in small, private equity funds and small privately-held businesses in the US

Fund Investments (~80% of current portfolios)

Specialised, hard-to-access funds with expertise in acquiring and growing small, private operating businesses 1 • Focus on funds less than US\$500 million

US Select Direct (~20% of current portfolios)

Equity co-investments in small, private operating businesses, made alongside partner and other suitable funds 2• Focus on profitable, founder/family owned businesses

Investment Update

	US Select I	US Select II
Committed Capital	100%	100%
Underlying Funds (#)	9	12
Called Capital1	76%	56%
Underlying Funds' Investments (#)	68	62
Exits/Realisations	5	4
Distributions	US\$4m	US\$4m

• 130 investments across both portfolios as at 30 September 2015
• 9 partial or complete exits to date returning US\$10.7m in aggregate on US\$6.2m cost basis ~ 72% gain

Investment Team

Jonathan Cordish President, Cordish Private Ventures

• Partner of The Cordish Companies
• 20+ years investment experience
• BA (Brandeis Univ.); MBA (Wharton)

Jonathan Sinex Principal, Cordish Private Ventures

• 12 years investment experience
• Prior experience at Goldman Sachs and Bear Stearns
• BA (Middlebury College); MBA (Univ. of Virginia)

Paul Simon CFO, Cordish Private Ventures

• CPA
• Significant fund accounting and admin. experience

Alex MacLachlan Managing Director, Dixon Advisory

• 20+ years investment experience
• BA (Cornell); MBA (Wharton)

Alan Dixon Managing Director, Dixon Advisory

• 20+years investment experience
• BCom (ANU), CA

Max Walsh Chairman, Walsh and Co. Asset Management.

• Leading economics and business journalist
• AM, BEC (Sydney)

"Small-Cap" Private Equity

Why Private Equity Investments: Superior long-term performance, added diversification, lower volatility

• The average private equity fund has consistently outperformed public equities (5.4% pa over last 10 years)
• US private equity has demonstrated its ability to outperform across market cycles (even through the GFC)

Average US Funds vs. Public Markets (annualised)

Why Small-Cap Private Equity: Large opportunity set

Source: Capital IQ

Why Small-Cap Private Equity: Lower up front purchase multiples

Median EV/EBITDA multiples by Enterprise Value (2012-2014)

Through 30 September 2015, 130 investments had been made by our managers at an average price of 6.5x TTM EBITDA

Why Small-Cap Private Equity: Operational value creation, not financial engineering

Median Capital Structure for all US Buyouts (2012-

Our managers typically use significantly less debt than most private equity

Source: Capital IQ

Why Small-Cap Private Equity: Consistent "playbook" to create value

• Acquire good businesses that have a proven product or service offering at reasonable valuations (typically between 5-7x TTM EBITDA)
• Upgrade management team
• Replace controller with real CFO
• Add additional sales/marketing staff; fix compensation structures to incentivise growth
• Invest/reinvest in new growth opportunities
• Replace older equipment or upgrade/build facilities
• Enter complimentary new product category or market
• Selectively pursue add-on acquisitions (buy and build strategies)

Goal: Double profits in 5 years and sell business to larger private equity firm or strategic buyer

Importance of Manager Selection

• There is a wide dispersion between the top and bottom quartile of funds; manager selection and access to the best funds is critical for success
• A strong predecessor fund is most often followed by a strong follow-on fund

All Private Equity - Net IRRs and Quartile Boundaries by

Life Cycle of US Select Funds

Six Stages of a Fund's Life

• Managers typically take five years to invest capital
• The average investment will be held for 5 years and the majority of the returns will come when managers sell investments (minimal current income)
• Once investments are sold, capital is returned to the limited partners
• USF and USG are already returning capital but the majority of distributions are expected during 2018-2022

Illustrative Fund Cash Flows

Hypothetical fund which achieves a 1.7x net multiple and a ~15% net IRR

• Private equity funds take a number of years before turning cash-flow positive
• The returns in the later years typically reward patient investors

USF and USG Performance Updates

Overview - US Select Fund I (USF)

• US\$69.6m of total commitments including US\$10m from the Cordish Family
• Called 76% of capital and invested 65% of its total underlying commitments¹
• Portfolio currently includes 9 underlying fund managers diversified across the US economy
• 8/9 Managers on plan or exceeding expectation

Summary Industry Exposure²

• 68 investments made through 30/9/2015
• 5 exits to date, 4 returning over 2.0x our cost basis
• 60% of current portfolio valued above cost; 27% at cost; 13% below cost

1) As at 30/1/16

2) As at September 30, 2015; Dollar weighted based on investment cost basis, not FMV

Manager Performance – Fund I

Underlying investment funds' returns, unaudited¹ As at 30 September, 2015 (US\$ in '000s)

	Capital Committed	Cash In	Cash Out	Remaining Est. Value	Total Value	Inc/(Dec) In Value
Fund A	\$5,000	\$2,638	\$0	\$5,506	\$5,506	109%
Fund B	\$10,000	\$3,511	\$1	\$4,506	\$4,507	28%
Fund C	\$10,000	\$4,346	\$1,019	\$3,961	\$4,980	15%
Fund D	\$3,000	\$1,800	\$0	\$2,039	\$2,039	13%
Fund E	\$10,000	\$8,539	\$0	\$9,533	\$9,533	12%
Fund F	\$4,000	\$1,865	\$0	\$2,004	\$2,004	7%
Fund G	\$10,000	\$7,707	\$0	\$7,242	\$7,242	(6%)
Fund H	\$4,793	\$4,338	\$2,509	\$989	\$3,497	(19%)
US Direct	\$13,000	\$6,779	\$934	\$11,760	\$12,693	87%
Total(1)	\$69,793	\$41,522	\$4,463	\$47,540	\$52,003	25%

Overview - US Select Fund II (USG)

• US\$95.1 of total commitments including US\$12mm from the Cordish Family
• Called 56% of capital and invested 44% of its total underlying commitments¹
• Portfolio currently includes 12 underlying fund managers, diversified across the US economy
• All managers performing well, although some are just getting started

Summary Industry Exposure²

• 62 investments made through 9/30/2015
• 4 highly successful exits to date, returning 2.4x our invested cost basis in aggregate
• 46% of current portfolio valued above cost; 44% at cost; 10% below cost

1) As at 1/30/16

2) As at September 30, 2015; Dollar weighted based on investment cost basis, not FMV

Manager Performance – Fund II

Underlying investment funds' returns, unaudited¹ As at 30 September, 2015 (US\$ in '000s)

	Capital Committed	Cash In	Cash Out	Remaining Est. Value	Total Value	Inc/(Dec) in Value
Fund A	\$5,000	\$2,646	\$0	\$5,506	\$5,506	108%
Fund B	\$10,000	\$8,386	\$27	\$12,358	\$12,385	48%
Fund C	\$10,000	\$4,845	\$2,000	\$4,911	\$6,911	43%
Fund D	\$5,000	\$1,745	\$24	\$1,848	\$1,872	7%
Fund E	\$8,000	\$4,433	\$0	\$4,570	\$4,570	3%
Fund F	\$7,500	\$2,436	\$0	\$2,324	\$2,324	(5%)
Fund G	\$8,000	\$1,119	\$18	\$1,049	\$1,067	(5%)
Fund H	\$7,500	\$1,391	\$0	\$1,317	\$1,317	(5%)
Fund I	\$6,500	\$1,681	\$0	\$1,509	\$1,509	(10%)
Fund J	\$7,500	\$1,890	\$0	\$1,672	\$1,672	(12%)
Fund K	\$8,000	\$89	\$0	(\$84)	(\$84)	NM
US Direct	\$15,000	\$7,821	\$1,077	\$13,590	\$14,667	88%
Total(1)	\$98,000	\$38,482	\$3,146	\$50,569	\$53,715	40%

(1) Unaudited, underlying investment funds' returns (not USG proportionate share) after underlying manager fees and expenses but before LP and USG fees and any applicable withholding taxes

US Select Direct PE Fund

• US Select team has extensive experience sourcing, evaluating and structuring direct equity investments
• Potential for enhanced returns vs. fund investments
• Reduces "J-Curve" by deploying capital faster and shortens portfolio duration
• Typically no fees paid to the fund sponsor = lowers overall fees paid by US Select investors

US Select Direct Performance

Underlying investment fund's return, unaudited¹ As at 30 September, 2015 (US\$ in '000s)

Investment	Date	Cash In	Cash Out	Remaining Est. Value	Total Value	Inc/(Dec) in Value
Sebela	Aug-13	\$852	\$2,318	\$8,847	\$11,166	1,211%
La Colombe	Aug-14	1,000	2,017	0	2,017	102%
Subtotal		\$1,852	\$4,336	\$8,847	\$13,183	612%
ettain	Mar-14	\$2,513	\$0	\$3,033	\$3,033	21%
Van Pool	Mar-14	2,000	0	2,934	2,934	47%
Transpro	Jul-14	1,000	63	733	797	-20%
Recovery Ways	Dec-14	950	0	950	950	0%
Subtotal		\$6,463	\$63	\$7,650	\$7,713	19%
Paint Nite	Feb-15	\$1,500	\$0	\$1,500	\$1,500	0%
AFC	Mar-15	2,500	0	2,500	2,500	0%
Total		\$12,315	\$4,399	\$20,497	\$24,896	102%

• 3 investments since 30 September 2015, investing US\$4.2m of additional fund capital
• Average purchase price of 7.7x with average revenue growth in 2015 of 41%

Recent Liquidity and Distributions

• On 12 February maiden distributions were declared. 10 cents/unit for USF and 7 cents/unit for USG
• Distributions were funded by proceeds received from selling investments and from dividends received to date
• We are extremely pleased with these early results for the Funds and expect to make distributions going forward

US Select (USF)
Investment	Manager	Cash In	Cash Out	% Gain	MOIC
La Colombe	US Direct	\$463,822	\$933,670	101%	2.0x
Sebela	DFW	262,083	713,357	172%	2.7x
Sebela	US Direct	395,069	1,069,753	171%	2.7x
EPM	Fort Point	194,096	619,846	219%	3.2x
Restaurants	Prometheus	3,291,447	3,469,442	5%	1.1x
Total			\$4,606,517 \$6,806,067	48%	1.5x

US Select II (USG)
Investment	Manager	Cash In	Cash Out	% Gain	MOIC
La Colombe	US Direct	\$535,179	\$1,077,317	101%	2.0x
Sebela	DFW	262,083	713,357	172%	2.7x
Sebela	US Direct	455,849	1,234,335	171%	2.7x
Huron	Trive	363,747	844,259	132%	2.3x
Total			\$1,616,858 \$3,869,269	139%	2.4x
Portfolio company dividends			1,124,856
Total Available Proceeds			\$4,994,125

(1) US Select and US Select II Cash In and Cash Out amounts in tables above are US\$. USF and USG distributions noted in text are Australian dollars / cents

Share Price Performance - USF

Share Price Performance - USG

Case Studies

Huron (Thrive capital)

Company Overview Investment Rationale

• Leading supplier of complex tubular assemblies, valves and precision machined components for the North American automotive market
• Focus on stable, long-life cycle powertrain programs, and differentiates itself by having vertically integrated manufacturing capabilities that allow a higher quality, lower cost product

• Established, sole source partnerships with vehicle manufacturers and Tier I suppliers such as:

• Attractive price and significant downside protection plus built-in growth from recently booked programs with long life cycles

• Multiple growth initiatives available for an owner willing to invest capital into the business
• Proven management team that had a 25-year track record of success with strong relationships and industry know-how

La Colombe (US Direct)

• Leading "3rd wave" coffee roaster, distributor and retailer, promoting ethical long-term trade with coffee growers and supporting fair trade organizations around the world
• Company sources coffee from all over the world and sells to third party retailers (hotels, restaurants, and cafes) and for its use in its own retail cafes
• Prior to closing, the Company had 8 retail cafes in Philly, NY, Chicago, and DC

Company Overview Investment Rationale

• Opportunity to partner with an experienced retail sponsor (Goode) and a talented management team to build company into the next great coffee business in the US
• Strong wholesale business delivers stable and predictable revenues and cash flows and illustrates strength of the brand
• Extremely loyal customer base
• Exceptional retail unit economics (First 8 stores average 75-80% year 1 cash-on-cash)

Robert Graham (Tengram)

• Well-known designer of premium luxury apparel for men and women
• Best well known for their men's eclectic woven shirts (66% of business in '11) and sweaters (11% of business)
• Products sold through 1 retail store and through major department stores

Company Overview Investment Rationale

• Opportunity to partner with a great designer but poor businessman to expand a brand with extremely loyal customers and large market opportunity
• Tengram knew founder Robert Stock well and sourced transaction off market
• Opportunity to expand distribution by opening retail outlets and focusing on e-commerce (DTC)
• Opportunity for licensing expansion (a key Tengram focus and strategy)
• Attractive price and structure with significantly rollover equity (49%)