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Going Public Abroad How, Where and When. November 2006. Infinity II $64M (2001) 19 investments 5% Net IRR Top Quartile!. Infinity I + Annex $91M (1999) 21 investments (16%) Net IRR. Infinity MS $75M (2002) 13 investments 29.4% Net IRR Top Quartile!. Nitzanim $27M (1993)

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Going Public Abroad

How, Where and When

November 2006


Assets and track record

Infinity II

$64M (2001)

19 investments

5% Net IRR

Top Quartile!

Infinity I + Annex

$91M (1999)

21 investments

(16%) Net IRR

Infinity MS

$75M (2002)

13 investments

29.4% Net IRR

Top Quartile!

Nitzanim

$27M (1993)

13 investments

121% Net IRR

Top Quartile!

Infinity-CSVC

(China Fund)

$15M (2005)

5 investments

26.21% Net IRR

Top Quartile!

Assets and Track Record

Infinity has managed over $270M* since 1993

Track Record: Average IRR Net/Gross: 33%/48%

Top quartile (In the top 25% of comparable U.S. Vintage Funds )**

*All figures include committed capital values

** Cambridge Associates March 31, 2006


Recent exits

Company

Industry

Exit Type

Deal Value

Industrial

Equipment

51%acquiredby Johnson Electric

Nanomotion

$20M

Acquired by eBay

Internet

Shopping. com

$620M

Scitex Vision

Acquired by HP

Printing

$230M

Native Networks

Acquired by Alcatel

Telecom

$55M

IP was acquired by Tessera

Shellcase

Semiconductor

$33M

IPO (Nasdaq: SFUN)

Saifun

Semiconductor

$800M

Maayan

IPO (TASE: MAYN)

Incubator

$22M

Iomai

IPO (Nasdaq: IOMI)

Medical Device

$90M

Acquired by Stryker

Sightline

Medical Device

$140M

Acquired by BMC

$150M

Identify

Software

Acquired by EMC

ProActivity

Software

$22.5M

$2.2B

Total deal value

Recent Exits


Infinity s portfolio

Communications

Bianatech

Unity Wireless

Teledata

Whole Optics

Life Science

Nicast

Brainsgate

Iomai

Proneuron

Glucon

Visioncare

Applisonix

Galil Medical

OpthtoCare

Redent-Nova

Diagnostica

Intumed

Semiconductor

Shellcase

Genesis-OS

Cerel

Smart Link

Yitran

Lucid

Expert Dynamics

Industrial Equipment

Cognitens

Nanomotion

Power Paper

Pulsar

Microheat

Software

Red Bend

Next Nine

Prosight

ProActivity

Orsus

Viryanet

Cosmocom

Telemessage

Oridian –

Online Media Solutions

Revolver

Tegrity

Security

CyberArk

Mavix

Mate

Beepcard

Other

Bio-Sense Technologies

Magink

Infinity’s Portfolio


The list of the world s largest economies may look quite different in 2050
The list of the world’s largest economies may look quite different in 2050

The BRICs economies currently account for less than 15% of the combined GDPs of the G6.

BRICs could become four of the top seven largest economies by 2050, with China leading the way.

GDP 2050 US$ bn

50,000

40,000

30,000

20,000

10,000

0

US

UK

Iran

Italy

India

Brazil

Egypt

China

Korea

Japan

Turkey

Russia

France

Mexico

Nigeria

Canada

Vietnam

Pakistan

Germany

Indonesia

Philippines

Bangladesh

Source: Goldman Sachs

For illustrative purposes only


Infinity first in china
Infinity: First in China different in 2050

In May 2004, Infinity and IDB/Clal co-

founded the first Chinese registered

foreign-invested VC fund (No. 00001).

Infinity/Clal’s partner is the Chinese

Government via investment

arms: CSVC (China Singapore Venture

Capital) and SIP (Suzhou Industrial Park).

The event was monumental for pioneering

venture capital in China and international

business relations between Israel and China.

The signing ceremony was attended by

government leaders Ehud Olmert from Israel

and the Deputy Prime Minister of China.


Key china partnership sip csvc
Key China Partnership different in 2050 – SIP/CSVC

China-Singapore Suzhou Industrial Park

(SIP) and Venture Capital (CSVC)

  • CSVC is a $455M VC fund, investment arm of SIP (Suzhou Industrial Park ).

  • Most advanced hi-tech park in China, created in 1994 by the Chinese and Singapore governments.

  • Four thousand companies operating in the park including 100 Fortune 500 companies.

  • Total land area of the park is 300 sq km.

  • Ten universities established campuses with post graduate school and hi-tech R&D industrial park.

  • Has its own government and tax authority.


China partnership achievements
China Partnership Achievements different in 2050

  • Five investments in Israel-related companies

  • one profitable exit.

  • Three years of Israeli and Chinese team experience and cooperation.

  • Leveraging both government and corporate relationships.

  • Full risk sharing and alignment of interests with Chinese Government partners.

  • Both onshore and offshore financial flexibility.

  • Infinity’s portfolio company received the first ever direct equity investment by the Chinese government in an Israeli company.

  • Exclusive $30M commitment from the China Development Bank to co-investment with us.


A shares the most liquid equity market in china
A-shares: the most liquid equity market in China different in 2050

As at 20-Jan-06 for A shares and for other markets.

1 Qualified Foreign Institutional Investor

2 Companies traded on the Hong Kong Stock Exchange that have a Mainland Chinese corporate shareholder owning at least 35%

3 As at 20-Jan-06.

4 As at 20-Jan-06.

5 Average for 6 months to 31-Dec-05. Liquidity in the China A share market is better than the H-shares over the past 1-2 years in terms of daily turnover.

Source: Bloomberg, CEIC.


Valuations are more attractive

The correction of P/E is due to both declining stock prices and growing earnings

When fully implemented, the reform of non-tradable shares will potentially give existing shareholders 20-30% free shares and, we believe, therefore, will bring P/E down further

Valuations are more attractive

Shanghai A-share Composite Index Trailing P/E

Source: CEIC


Shellcase infinity led recovery wafer level electronic product packaging technologies

  • Then (2004) and growing earnings

  • On the verge of shutdown

  • $20million debt

  • Lack of focus, investors losing faith

  • Problem with order fulfillment

  • Problematic capital structure

Now

Shellcase - Infinity-led RecoveryWafer-level electronic product packaging technologies

  • Change of business model to an IP

    company separated from

    manufacturing

  • Build a manufacturing facility in

    China – profitable, a leader in wafer

    level manufacturing, received $20M

    China government support

  • Sale of the company’s patents to

    Tessera (NASDAQ –TSRA) for $33M

  • Created $80M value in one year

“Infinity’s leadership and creativity saved Shellcase. It created and boosted a new industry”

Shalom Daskal, CEO Shellcase


Nanomotion the infinity difference small silent precise ceramic servo motors

Then (2003) and growing earnings

  • Numerous challenges relating to production and attainment of strategic goals

  • Explore the option to bring Johnson Electric (the leading Chinese manufacture of motors and related products) as a strategic partner

  • Complex capital structure and difficult decision making processes

Now

  • Sale of 51% to the Chinese Johnson

    Electric

  • 80% product cost reduction

  • Distribution channels opened

    alongside new innovative products

  • New management, clean capital

    structure, new strategy

  • Massive rise in expected sales and

    two new product releases

Nanomotion – The Infinity DifferenceSmall, silent, precise ceramic servo motors

“Infinity’s vision and execution capabilities enabled the paradigm shift in Nanomotion”

Jim Dick, JE


Infinity israel china fund investment strategy
Infinity Israel China Fund and growing earningsInvestment Strategy

  • The Infinity Israel China Fund will invest primarily in late stage/pre exit Israeli companies with strong technology IP and grow them into global companies with a China focus.

  • Sector focus: medical devices, semiconductor, telecom, software, and materials arenas.

  • Pragmatic exit and return oriented strategywith an activist approach.

  • Prime investment criteria are quality of management & Infinity’s added value mainly in China.


Why our china strategy wins
Why Our China Strategy Wins…. and growing earnings

  • Alignment of interests - our Chinese partners invest with us both in the Israeli company (minority) and in the Chinese companies (majority).

  • We operate in China as “Chinese” as opposed to foreigners - the result is significant government support (financial , regulations, customers, first license).

  • We create value by structuring companies which bring together real businesses and proven technologies at attractive valuations.

  • We create Chinese IP and get government IP protection.

  • We have a government ruling enabling the fund to transfer capital in and out of China as needed.

  • We have the China Development Bank and SIP as our true partners along side top government support.

  • We already have two exits (Nanomotion- 2X, Shellcase - 2X).


Investment business model preferred option
Investment Business Model – and growing earningsPreferred Option

A

China Partners

& Co-Investors

Israel China

Fund

Majority investment

Majority investment

* Minority investment

Minority investment

Chinese company

Israeli company

License

Royalties, License fee/shares

Exit - Global IPO/M&A

Exit – China IPO/M&A

* Minority investments in Chinese companies can be direct or conducted via a co-investing fund with Chinese partners




Suzhou jurisdiction

Municipality Area and growing earnings:8,488 sq km

City Area:1,649 sq km

Total population:6.92 million

City population:2.07 million

Wu Xi

Suzhou Jurisdiction


Shellcase s entrance in china
Shellcase's Entrance in China and growing earnings


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