Building an ESG Business Case in the Food Sector: The Food Institute

Michael Torrance:

Welcome to Sustainability Leaders. I am Michael Torrance, Chief Sustainability Officer with BMO Financial Group. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment business practices and our world.

Speaker 2:

The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates or subsidiaries.

Michael Torrance:

Today we share a recent podcast episode hosted by The Food Institute where BMO's Head of Sustainable Finance, Jonathan Hackett, and Marc Khouzami, Managing Director of BMO's Impact Investment Fund join Erica Kuhlmann, Head of BMO's US Food, Consumer and Agribusiness Group to offer their perspectives on how ESG impacts everything from agricultural production to employee recruitment and access to capital for companies across the food sector.

Michael Torrance:

A special thanks to the Food Institute Podcast for sharing this audio. The Food Institute Podcast hosts authentic actionable discussions with food industry leaders and a weekly short form news show called the Food Institute Fast Break.

Brian Choi:

Hi everyone. This is Brian Choi, CEO of the Food Institute. This week on the Food Institute Podcast, we're going to be talking about how ESG... environmental, social and governance... is taking center stage in food and beverage companies from a corporate policy, capital markets and investing perspective. To help us understand ESG, we have three leaders from BMO Harris Bank who will share their insights on how they're advising clients on this topic and how ESG has impacted their own organization from an investing and business practice perspective.

Brian Choi:

I'd like to thank our sponsor, BMO Harris Bank's Food, Consumer and Agribusiness Group. Whether you're a producer, processor, retailer or distributor, every company throughout the food continuum needs a financial partner that understands the factors that can impact their business. To learn more about how BMO can help, please take a look at the link in the description of this episode.

Brian Choi:

Well, I'd like to welcome Erica Kuhlmann, Jonathan Hackett and Marc Khouzami from BMO Harris Bank to the Food Institute Podcast. To kick things off, Erica, can you share a little bit about yourself, your role and BMO's commitment to ESG?

Erica Kuhlmann:

Sure. And first, Brian, thank you for having us and hosting this discussion. It's really interesting. It is increasingly a major topic for all the clients and prospective clients that our group certainly has been visiting I would say over the past year. I head up our Food, Consumer and Agribusiness Group at BMO Harris, and it is a group of about 60 people that are just solely dedicated to working with food, beverage and agribusiness companies across the country. I've been doing this long enough that I don't even want to say how long I've been doing it. So let's just leave it at that.

Erica Kuhlmann:

But for BMO, I mean, ESG is really a very important initiative, not just for our clients but as well for the bank. We had some incredibly great news over the weekend. We were ranked the top bank, Corporate Knights 2022 Global 100, the top bank for ESG, and that was for the third year in a row. So we can talk a lot about ESG and how we're committed to it, which we are, but I think when you're recognized by third parties, that really speaks volumes to, I think, the bank's commitment.

Erica Kuhlmann:

Just more broadly, BMO Capital Markets has committed almost $300 billion to financing companies and sustainability and sustainable finance. We have a dedicated team and really, I think all the resources to help our clients to develop their strategy as it relates to ESG and sustainable finance.

Erica Kuhlmann:

So with that, I am going to hand it over to the experts in this. Jonathan Hackett, he is a Managing Director and is the Head of BMO's Sustainable Finance Group. And then we'll hear from Marc Khouzami, who is a Managing Director and heads up our Impact Investment Fund, which is about $250 million that's dedicated to investments in ESG, early growth companies. So with that, I'll turn it over to you.

Brian Choi:

All right. Well, first of all, congratulations on winning that award on ESG. That's a huge accomplishment. And so, Jonathan, welcome to the show and can you share a little bit about your background, your role within BMO and how you help companies?

Jonathan Hackett:

Yeah. So our sustainable finance team really is there to help make sure that we're giving clients advice around how both ESG and sustainable finance impacts them and their access to capital. So we think about ESG as an opportunity, but also a risk that all of our clients face as they think about long term how they're perceived in the market, and I would expand even beyond how they're seen in the market, but really how they're perceived by customers. We're increasing seeing people making buying decisions, people making relationship decisions on the basis of ESG, not just on the core impact, but also are you aligned on practices? Are you aligned on social impact in a way that reflects how they want to interact with the world?

Brian Choi:

All right, great. So at the Food Institute, we cover a wide variety of food and beverage companies from agriculture, food manufacturing, food retail, food service. So why is it imperative for them to think about ESG? Why is it so important now compared to what it was maybe even like 3, 4, 5 years ago?

Jonathan Hackett:

Yeah. So I think some of it is just a relabeling. Some of these things were material factors before, but never had been captured under a single headline that really would reflect the full impact for a company. So I'll go to one... labor practices, labor relations. This is something that I don't think is a surprise for people when they say it's an important factor, but seeing it through the lens of ESG, you can see it as part of a broader set of concerns in the S, the social factors that really drive performance of a company and that for consumers can really be a factor. We've seen boycotts related to labor practices in the food space over the last year, people saying that they didn't want to cross the proverbial picket line. And that's one where you can see an impact that really says it's not just do you have labor stoppages, but it's also your overall communication of your approach around ESG, around your approach with your employees, how does that impact your perception?

Jonathan Hackett:

And so when we think about those factors that have always been there, obviously they're material, obviously they are things that people think about. Integrating them into what I'll call just the awareness question of do you understand the risks that you're taking on, is I think where investors are really pushing on ESG and pushing that as a label. It's really a way of saying, look, we know that every industry has different factors, whether it be [inaudible 00:07:43] or whether it be any of these other frameworks, you can look up and see what are the important things that I should be concerned about just as a participant in an industry?

Jonathan Hackett:

But the question that I think investors are asking management teams is, “Do you know what's important for you, for your industry, for your consumers, for your customers, wherever you are in the value chain?” “Are you thinking through those factors and do I know that you know what you don't know? Do I know that you're on a journey of improvement?” And that's where a lot of these standards and expectations around increased disclosure aren't just to check a lot of boxes, but are to make sure that there's no surprises waiting for people, that there's nothing that when they get deeper into your business, they're going to find something out that you don't know within your business.

Brian Choi:

Right. That's very interesting. I'd love to delve a little bit more into the business case. So you mentioned both the opportunities and the risks. You've spent a lot of time in the mining industry and advising also. So it's very clear from an ESG perspective why these types of companies are very focused on ESG. But for food and beverage, can you explain a little bit more about these risks and these opportunities from a F&B perspective?

Jonathan Hackett:

Yeah. So I'll expand to agriculture first because it's, I think, everyone's favorite place to go in this area and it has a few really useful analogies or proof points. One is just ESG risks occur at different time horizons. So you can think about acute near-term ESG risks. Do you have the right safety practices in place? Do you have a near-term risk of water scarcity if you're in a drought-prone area and you're suddenly not going to be able to water your crops? That is something that is really important, to understand how you're managing those near-term risks. There are also longer-term ESG risks, factors like changes in dietary consumption, changes in buying patterns in the end consumer and what exposure you have there. Are you thinking through my product or what I'm working on today, is that going to mean demand in five years or is there going to be a material drop off?

Jonathan Hackett:

And likewise for growers, in general, the question of climate change. Is there going to be a material impact that says, what I grow today may not work in the future in the environment I'm in, and therefore, I might have to change what I have from the land I have.

Jonathan Hackett:

I think if you switch it onto the opportunity side, we're seeing more and more people thinking across the value chain and saying, is there a way I can draw differentiation, draw distinction, create new consumer affiliation from an ESG lens? Can I be the environmentally-conscious option? And I'll go to the far extreme. If I'm growing grain and somebody wants to sell a zero carbon grain product, they need me to be delivering a lower carbon footprint or a negative carbon footprint that they can integrate into their supply chain. So I'm looking at regenerative practices if I'm looking at carbon sequestration and the ability to get credit for what I'm doing, and that can be a new revenue stream within what I'm doing. It can be a greater sales tool in how I'm pursuing those customers. And I think if you go through the entire value chain, you see different things that play into this.

Jonathan Hackett:

Waste avoidance is one that can sound like you're talking about avoiding a downside risk, and we think about methane release and waste from food all the time. But when I say waste avoidance, that's just revenue. Right?

Brian Choi:

Right.

Jonathan Hackett:

Like if I take 10% of my product and I don't throw it in the garbage at the end of the day or 10% of my inputs and I don't throw it in the garbage, that is a net growth opportunity that's really material. I used to be a management consultant, and we always looked at these types of waste lines and said, well, in a thin-margin business, if you've got something where you've got 5% profit margins and you throw out 10% of your product, there is a massive opportunity in that 10% to really meaningfully impact that profit margin. And if you can take 10% of your waste and reduce it and change that to a revenue line, you're suddenly talking about a 20% increase in profits.

Brian Choi:

Right. It's interesting. I think a lot of the companies that I talk to, when you bring up the topic of ESG, it's somewhere in the ether. Right? It's hard to quantify and, as you know, many management teams are focused on near-term bottom line results. But we're getting to the point now where cost of capital, access to capital, these things are in part driven by adopting to an ESG mandate. So can you talk a little bit about the cost of capital, access to capital and what that may mean for food and beverage companies today?

Jonathan Hackett:

Yeah. So look, I'll start with the place where it's easiest to measure. Within the world of fixed income and especially investment grade bonds, we see increasingly a clear market signal on a willingness to pay for a green bond or a willingness to pay for a sustainability linked bond. The ability to get those investors that are showing up into a deal to write larger checks into it or place larger orders and to get more investors that wouldn't necessarily spend time [inaudible 00:12:46]. But because they have a sustainability mandate that is really proliferated across that space, they're willing to spend the time to do diligence of credit that they've not spent time with and to try and participate in a deal.

Jonathan Hackett:

And so there, we see very clear outcomes. It doesn't sound like a lot when you say, well, five basis points of execution benefit. But when you first put that across the life of a bond and say, well, five basis points every year on that full amount and then second, compare it to the baseline cost of capital that you're getting in that space, that's a pretty material improvement.

Jonathan Hackett:

I think when you go beyond that though, and you say, well, look, it's not just within the bond market that we see this. We are seeing equity investors really changing and reallocating as they integrate ESG. Certainly, if you think about those large asset managers, large capital allocators that are making those decisions, it can really change the access to capital from a public market's perspective. And then we've also seen it play into the private equity market, where I think two years ago is the first time I started getting questions from private equity investors, and it works the exact same way as it does on the consumer side where their end consumers as private equity are asset owners. And as those asset owners have signed up to the principles for responsible investing, to all of these other things, they've started pushing down on the private equity teams and saying, how do I know you're not taking risks that I don't know about? How do I know you're pursuing all these opportunities?

Jonathan Hackett:

And so those same players are asking those same questions and making sure that they're integrated into their investment approach. And at the most extreme versions, if you get into something where there's a risk that they just aren't able to get comfortable with because they're asking questions and as a management team, you're not prepared to answer them because you just don't know, that can be a deal breaker. That's the most extreme version is when we say access to capital, there is yes, you have access to capital and no, you don't.

Jonathan Hackett:

But across that spectrum, there are lots of ways that it can just unlock passive investors that are really passionate about the space. And if you have a positive impact thesis, the ability to bring them into the fold, or across all of those areas where there are just little screening factors that might say, look, we don't want the following type of exposure. The ability to know and to give the information is really imperative because so many of these places, because it's about risk, if you say I don't know, all they hear is the last word. All they hear is “no.”

Brian Choi:

Right. Very, very interesting. Jonathan, you spoke a little bit about the agricultural part of ESG. Can you share a little bit about what your experience has been with food manufacturers, food retail, and food service and what an effective policy might look like for those particular types of businesses?

Jonathan Hackett:

Yeah. So look, obviously for each industry, there's a full view of what are the relevant factors? What are the key drivers on an ESG scorecard? I'll touch on a few that I think about just from where we've worked with different entities. Within manufacturing, energy cost and energy efficiency are very related. Right? And so it's not just the, hey, “Are you paying attention to carbon? Are you paying attention to water intensity?” These are factors that everyone worries about when it comes to the environmental factors. But certainly when you think about the energy inputs you have, that's one where if you're running things off of natural gas that you could electrify, those are material ESG factors.

Jonathan Hackett:

And then the one that definitely plays into that space is waste. You're paying often for [inaudible 00:16:20] waste. You're paying for what is essentially a downside. And the more you can get towards a zero waste outcome, you get environmental benefits, you get a social license benefit. Nobody likes the picture of waste. But you also get, obviously, the cost benefit of not throwing it out.

Jonathan Hackett:

Retail and food service, I'll say it's always a cheap one to go to over the last two years, but getting your employees to show up is a hard game when it's COVID. Right? That's the most extreme version, but it is an ESG risk to say on employees, do you have a value proposition that will get people to show up to a job day in, day out? Does that look like long-term profit sharing? Sometimes that makes sense. Sometimes it doesn't. Does it look like a set of benefits, a set of practices that are supportive?

Jonathan Hackett:

I'll go to food retail, grocery stores. I always think about shifts. There are laws that companies have been exposed to as different jurisdictions integrate requirements for notice, requirements for communication around it, practices and expectations. And if that was where your margins were, that's an ESG risk. Right?

Brian Choi:

Mm-hmm (affirmative).

Jonathan Hackett:

If you think as an investor, you could suddenly see a company that was relying on the flexibility of the workforce. I think outside of the food space, companies that were in the variable transportation, the ride hailing space, all relied on a space within the regulatory environment versus what employees were willing to accept and understanding that there were opportunities and pressures. And when those regulations change, you can see the profit margins change materially in those businesses.

Jonathan Hackett:

And I would think of about it the same way of we see stores, we see restaurants that are just not open because they are not able to attract employees. It's always cheap in the ESG world when you point to something that is a global factor and say this is ESG. But to me, it's the most extreme version, but it's something that we see at the edges even when it's not a global pandemic.

Brian Choi:

Right. Very, very interesting. I'd love to bring in Marc into the conversation. And Marc, if you can just share a little bit about your role, your background and about the funds that you manage on behalf of BMO. I think that would be another interesting part of the conversation I'd like to focus on.  So Marc, can you please introduce yourself?

Marc Khouzami:

Sure. Yeah. Thanks and it's great to be here. So as it was mentioned by Erica, we manage a $250 million impact investment fund on behalf of the bank. It's bank balance sheet that we're investing and ultimately, the overall thesis around this is one of corporate sustainability. Right? And this, again, ties in to we reference some of the broader impact and sustainability initiatives of the bank. This fits within that.

Marc Khouzami:

The idea of corporate sustainability is a very broad one which captures many areas. And we do think about broader themes around decarbonization and around circular economy, so waste management, recycling materials, and then a broad theme around food and ag generally. Right? Looking at everything from production all the way through to consumption and really thinking about how do we invest capital to drive that change toward sustainability, right, to facilitate that transition and sustainability? And that's really the main goal of our fund.

Marc Kouzami:

And one thing I will add on top of that, and maybe we dig in a little bit, “Is it is a market rate fund?”Right? When we think about our investments, we think about them as, how do I get market rate return for the risk I'm incurring alongside the impact that we are going to drive through the investment and through the business?

Brian Choi:

Yeah. No, I commend BMO for bringing together a fund. It's one thing to say that you're supportive of ESG. It's another thing to set aside your own balance sheet, $250 to $300 million, and make that commitment into investing in this type of technology in support of ESG goals. So really commend you and congratulations on the award that you guys received.

Brian Choi:

I'd love to delve a little bit more into how BMO thinks about risk and reward. So as you're looking at deploying these funds into certain companies that focus on decarbonization, recycling, food and ag tech, how do you think about risk and reward? How do you quantify the social impact, for example, or the sustainable impact as it relates to an overall investment thesis?

Marc Khouzami:

Sure. And I would say that out of the gate, my first answer is, look, we assess risk as any other investor will. Right? It is at the end of the day, businesses that we invest in have to be economically viable. They have to have a value proposition that drives profits. I think where we add some additional layers, if you will, around the way we assess risk is we do look at the ESG component. We do look at the impact that's being generated. And we do it both from a risk and a work perspective because, to Jonathan's comments earlier, we do account for a lot of these ESG risks, which are inherent in any business, by the way. Right? This is not just businesses that would deem themselves sustainable. Those risks are inherent across the board.

Marc Khouzami:

We tend to focus on them as aspects of our underwriting, and I think, again to Jonathan's point, many investors have always assessed these risks in their underwriting. They just never really understood how to label it or how to put it together in a coherent approach, right, to think about as a risk area that that needs to be addressed.

Marc Khouzami:

So we look at all of those aspects, and one of the things that we do look at is, from an impact perspective, what are we driving from an impact perspective? And so when we think about the return, yes, there's that economic component, but we're also very deliberate and very purposeful about the impact that we're going to drive. And we look at that also as a return. Right?

Marc Khouzami:

For us, the impact is necessary. It's not necessarily sufficient, right, but it is necessary. So it is a component. So we can have a great economic story with no deliberate impact, and that doesn't fit for what we're doing. Right? We're [inaudible 00:22:54] of the operating principles for impact investing. That is not how we operate. We have committed ourselves to being deliberate in the impact that we generate through our investments. So that means when we think about the impact that we're driving with our capital, what is it? How are we measuring it? How do we assess it? How do we measure it? And that is paramount for us going into an investment.

Marc Khouzami:

So there are aspects... And again, Jonathan was talking about waste line items. Right? If you can reduce waste, you generate a economic benefit to the company. If the waste reduction is purely driven by a cost-cutting exercise, that doesn't technically fit what we're doing because really, yes, it's economically accretive, but we want the mission. We want the purpose of the business of what we're investing in to be that impact, right, alongside the economics. Right? So it has to be both.

Marc Khouzami:

And so we spend a lot of time with the companies that we work with and that we invest in understanding what's the impact that they're driving, how we assess it, and then ultimately how we on a regular basis, whether it's on a monthly and a quarterly basis, how do we measure that impact in order to be able to truly quantify the impact we're having?

Brian Choi:

What's the timeframe you're looking at? Are we looking at three years, five years, 10 years? Can you give us a sense of when you know that from an impact perspective that you've reached a certain goal? When will you know that you've achieved that, and how do you look at that from a time perspective?

Marc Khouzami:

Sure. We underwrite our investments to be typically as a three to six-year hold periods. But when we think about the impact, it's a bit different because we want to show quantifiable impact out of the gate. Right? We make our investment, we know what the impact is going to be, and we start measuring from day one. Ultimately, our goal is to get a company to a scale where that impact continues to scale with the company. Right? So we continue to broaden the impact and increase the impact we're having as the company scales and grows. And really part of our thesis and mission is that as that company scales and grows, the impact, because it's inherent in the business, continues to grow as well, even after we've exited. Right?

Marc Khouzami:

So again, we underwrite our holds to, let's say, a three to six-year hold period. We will exit that company, hopefully generate some profit for our investors for the bank, but we've also scaled that company and the impact not only is growing bigger, but it's become more embedded into the business itself. And again, when I talked about being deliberate and purposeful around that impact, it's part of the business itself. Right? It's part of the way that the operations and part of what the company is delivering.

Marc Khouzami:

So as it scales and that impact grows, it also becomes more embedded and so it has staying power. And so ultimately, when we think about the long-term trajectory of that impact and if we've done our job properly, it will outlast our investment in the company... again, for the life of the company itself. So that is the goal, is that it is really a long-term vision around that impact.

Brian Choi:

Great. Can you share maybe two examples of investments in the fund that you've currently invested in and maybe share some of the in terms of dollar-size amounts of investment and some of the low-hanging fruit as it relates to decarbonization, recycling, circularity in food and ag tech? Can you just maybe share a few examples?

Marc Khouzami:

Sure. Yeah. So we have one company in the portfolio that is an AgTech business. It's a company called Sound Agriculture, and this company has two sides to the business. One side is more established and the other side is a little bit more earlier stage. But the more established side of the business is really about nutrient efficiency, and they've developed a product to help effectively increase crop yield per input. Right? And ultimately, the goal here is for growers to reduce their reliance on fertilizers and for inputs. Obviously, the use of fertilizers are a necessary. Right? We need to get crop yields up in order to feed ourselves. However, there is a big impact from an environmental perspective, right, both on the land, from a carbon emission perspective. There's a lot of negative impact from the use of fertilizers. So what this product does allows, depending on what land it's being applied, up to about a third... It can reduce the need for fertilizer by up to about a third.

Marc Khouzami:

So when we think about when you start doing the calculation, okay, so for every ton of fertilizer that's removed, you're reducing the impact on the land. You're reducing the carbon emission associated with that fertilizer. And so that's one of the ways that we think about quantifying here. So the more of their product that gets sprayed, every acre that it gets sprayed on, you're reducing carbon emissions. You're reducing the leeching and the other negative effects on the soil.

Marc Khouzami:

So we think again, and this is not necessarily from how they operate the business, it's embedded in the business model itself. Right? As they grow, every sale they make of this product furthers the impact story. Right? It furthers the scale of that impact. And so when we talk about it being embedded in the business, this is a great example of it is part of the business model.

Marc Khouzami:

We have another company that we're in the midst of executing now... we're working towards a closing hopefully next month... in the indoor agriculture space and in the controlled environment agriculture space. And there again, it's about the efficiencies gained. The impact that is achieved through that business is inherent in the business. Right? Because they grow indoors in a controlled environment, because they grow hydroponically, there is 98% less water use, 95% less land use. They have these just environmental positives associated with the business and, again, embedded in the business. So the more leafy greens they produce, the herbs they produce, every head of lettuce is one less head of lettuce that's being grown in an open field and using all the water, using all that arable land.

Marc Khouzami:

So again, as we scale, the impact scales as well, and we'll survive post our investment because it is inherent in the business. So that's really what we look for. And again, I think those are great examples of when we talk about embedded in the business, those are great examples of how that impact is embedded and scales by definition as the company grows.

Brian Choi:

Great. Well, thanks for sharing that. I'd love to bring Erica back into the conversation here. There are many companies out there where ESG is still very new. So as we close out this podcast, maybe you can share how these companies can implement an ESG framework and what resources that you would recommend in terms of learning about ESG, adopting an ESG policy. Can you provide a few thoughts there, Erica?

Erica Kuhlmann:

Sure. And I think it's really interesting. I mean, I have been in several meetings with clients and with prospective clients over the past couple of weeks, and the real focus of our discussion was on ESG and really that linking capital and capital providers to a company's ESG goals and their strategy. One was a public company. So clearly, I think that's more obvious, right, because ESG is an important component for stakeholders in a public company, investors and shareholders. But we've had several conversations with private companies. So I think that's really interesting because they're getting very serious about sustainability.

Erica Kuhlmann:

But we talk a lot about sustainability, and that's, I guess, easier to measure. We talked about waste and energy management. But the S in ESG is social, and so it's also about diversity and inclusion. It is about your employees' well-being. So that's a major shift and certainly with some of our basic processing companies we work with.

Erica Kuhlmann:

And I think what's interesting, too, is it's not just external, right... shareholders, access to capital, investors. I mean, you can go down the list. But it's also about making your company better for your employees. And it resonates with... We've talked so much about labor and talent, and it's as much about attracting and being the, for lack of a better term, employer of choice. But your team members want to know as a management team that you are doing something about this. And it's very important to consumers, so you see that externally, but also for employees. They want to see this.

Erica Kuhlmann:

At BMO, I mean, obviously it's important to us as an institution and where we can be helpful. I mean, you've just heard from Jonathan and Marc. I mean, we've got a whole team here that's ready to jump in, and I love listening to them because I learn so much. But we take a very proactive and an advisory approach to working with a company to understand what their goals are and really to help them work through a strategy and really their KPIs. So it's a very hands-on approach.

Erica Kuhlmann:

And this is not going away. This is important to banks. I mean, for a private company bringing capital in, whether that's senior debt or is what Marc's doing from an equity standpoint or a private equity standpoint, it's about attracting capital. And it's important to capital providers, it's important to investors, and it's really important to the employees of the company.

Brian Choi:

Great. So that brings us to the end of today's podcast. I'd like to thank BMO Harris Bank for sponsoring this week's episode. Just a reminder to follow, like and subscribe to the Food Institute Podcast. We'll catch you next time. This is Brian Choi signing off.

Michael Torrance:

Thanks for listening to Sustainability Leaders. This podcast is presented by BMO Financial Group. To access all the resources we discussed in today's episode and to see our other podcasts, visit us at bmo.com/sustainabilityleaders. You can listen and subscribe free to our show on Apple Podcasts or your favorite podcast provider, and we'll greatly appreciate a rating and review and any feedback that you might have. Our show and resources are produced with support from BMO's marketing team and Puddle Creative. Until next time, I'm Michael Torrance. Have a great week.

Speaker 2:

The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company, industry, strategy or security. This presentation may contain forward-looking statements. Investors are cautioned not to place undue reliance on such statements as actual results could vary. This presentation is for general information purposes only and does not constitute investment, legal or tax advice and is not intended as an endorsement of any specific investment product or service. Individual investors should consult with an investment, tax and/or legal professional about their personal situation. Past performance is not indicative of future results.