1) GAS is a leading Brazilian asset management firm with $1B AUM and a 19.2% annualized return over 11 years. 2) They focus on long-term value investing in Brazilian equities using fundamental analysis and meeting with management. 3) Two investment opportunities presented are AGRA, a homebuilder trading at a discount to its net tangible assets, and PDG Realty, a residential developer with a strong track record and competitive advantages.

1. Value Investing Forum
Luiz Liuzzi, CFA - Managing Partner
December-2009
1

2. About US
• One of the largest independent equity asset managers in Brazil with
approximately US$1 billion of assets under management.
• History: A consistent track record. Annualized net return of 19,2% p.a. in
dollar terms over the last 11 years.
• Balanced Management Team: GAS combines experience and expertise. The
founding partners have over 30 years of successful investing in Brazilian
stocks, while our young research team has been trained in Brazil’s best
business schools and the world’s best investment banks.
2

3. Performance
EXPRESS FUND INTERNATIONAL, SPC RESEARCH CLASS
Accumulated Performance since Inception (Jul,98 to November,09) - (July, 98 = 100)
1.000
900
800
645,6%
700
600
500 330,3%
400 306,3%
300
51,8%
200
100 12,75%
0
Jul-98 Jul-00 Jul-02 Jul-04 Jul-06 Jul-08
Research M SCI - B r Ibo vespa Libo r 6M Do w Jo nes
Returns obtained in the past do not constitute a guarantee of future returns. We recommend investors to
carefully read the regulation of investment funds when utilizing resources.
3

4. History
• GAS’s founding partners started as entrepreneurs, but since the 1960s they
have been investing their own capital in Brazilian equities.
• In 1998, the founding partners created the Express Research Class in
partnership with Hedging-Griffo.
• In 2003, GAS was created in order to structure and grow this asset
management venture.
4

5. Our Strategy
• Independence:
• We are an independent asset manager
• Focus:
• One Market - Brazilian equities
• One Strategy - Long only
• One Approach - Value investing
5

6. Investment Cases
WHAT DO WE LOOK FOR? HOW DO WE CONTROL RISK?
Attractive opportunities: • Knowledge is our most important risk.
• History of superior return on capital • Magin of safety concept on valuation.
• Sustainability of superior returns • Although we do not have a volatility
target, our historical volatility has been
• Competitive advantages
lower than the Ibovespa's
• Competent and honest management
• Alignment of interest with shareholders
• Reasonable price (high margin of safety)
6

7. Company Research
Steps
Stock Idea to assess the sustainability of company return
> Study company's fundamentals, build a DCF model, read sell side reports,
due diligence
> Meetings with management and on-site visits
> Identify, research and discuss with suppliers, peers, customers
> Presentation of case studies by research team to portfolio managers at
weekly meetings
> Investment Committee meets once a week to define changes in portfolio
> Invested companies are closely monitored by research team and portfolio
managers
7

8. Investment Cases
Brazilian Home Building Industry
• 1st case: Clearly Undervalued Stock (AGRA)
• 2nd case: Company with superior returns discounted to fair value (PDG
Realty)
8

9. Below net tangible asset opportunities
Bovespa: companies trading below its net tangible assets
12%
10%
8%
6%
4%
2%
0%
nov-08
jul-08
set-08
jan-09
mar-09
mai-09
jul-09
set-09
Usually hard to find,
in crises times it becomes reality
9
Source: GAS Investimentos

10. Brazilian Demographics
2008 Population Profile 2018 Population Profile
The Brazilian population is in the process of aging
This structural change will last decades.
10
Fonte: IBGE

11. Heading to a fast growing market
População na faixa de 25-60 anos
Population between 25-60 years old
100
95
Annual Increase: 1.4 mn people
90
85
MM de pessoas
80
75
70
65
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
11

12. Huge Home Deficit
Necessidade Demanda Potencial
imediata: 5 milhões de Potential Demand
Número de famílias por classe de renda
5 mln unidades
families
0,1
100% 0,9 Renda
0,4 3,3 Family
(Salários
95%
income
mínimos)
90% 0,69
13 mln 1,5
85% 4,4 >10
families 80%
75% 5-10
1,6 4,4
70% 3-5
65% 5,6
60% <3
7,4 21,2
55%
50%
Déficit habitacional Locatários Proprietários
Defict Rent Owners
Million Units
Total 7 11 33
Above 3 ms 1 4 12
Bellow 3 ms 6 7 21
Potential Demand = 18 million
12
Fontes: Fundação João Pinheiro Neto, IBGE e Itaú

13. Affordability: Commercial banks
2005: Income > R$ 2009: Income > R$
Hoje:
Antes:
6.213 = Renda > R$ 6.200
2,4 mln 2.797 = R$ 2.797
Renda > 7,1 mln
14,9% população
5,1 % da Populac.
families pessoas families
7,12 mi pessoas
2,4 mi
100% Credit demand
R$ 6.000
90% Better financing conditions
R$ 3.000
80%
70%
60% R$ 1.200 Credit Offer
Legal improvement
50%
Savings Acc Obligation
40%
Bank competition
30%
2005
2005
2005 2009
2008
Unit Price 100.000 100.000
Tenor 100 360
Interest 18% 10%
Installment 1.864 839
Min Income 6.213 2.797
13
Source: GAS e IBGE

14. Minha casa minha vida – Govt. Plan
2008 MCMV
Unit Value 90.000 90.000 • Launched in 2Q09 - Crisis
Subsidy (23.000) • Target = 1 million units
• Through CAIXA = Official bank
Down payment 10,0% 6,50%
• Subsidy of home buyer
Residual Value 81.000 62.645
• Caixa takes the client risk
Interest rates 8,16% 4,50%
Tenor 25 30 • Financing of construction
• Challenge: approval process
Installment 711 335
Family Income 2.844 1.342
Number of families 12 mi 25 mi
14

15. Market Reaction before and after the
crisis
New Mortgage Loans
35
30
25
Growth trend sustained
20 • Strong growth last 7 years
R$ BI
15 • Very short deceleration
period
10
• Robust recovery
5
0
Sales Speed
Sales Velocity
08
09
01
02
04
05
06
07
8
9
03
08
t/0
t/0
20
20
20
20
20
20
20
20
9M
9M
se
se
35,0%
30,0%
25,0%
Reason for deceleration
20,0%
• More because of consumer 15,0%
confidence 10,0%
5,0%
• Less on credit availability 0,0% 15
07
08
m 7
no 7
m 8
no 8
m 9
9
m 7
m 8
7
8
9
7
8
9
m 9
/0
/0
/0
/0
/0
0
t/0
0
t/0
0
t/0
l/0
l/0
l/0
/0
v/
v/
n/
n/
n/
ar
ar
ai
ai
ai
ar
se
se
se
ju
ju
ju
ja
ja
ja

16. AGRE
• AGRE = AGRA + Klabin + Abyara
• Control = Spanish Investor + AGRA Mgt
• AGRE´s Land Bank = R$ 19 bi
100%
• Market CAP: R$ 2,4 bi
• Liquidity over R$ 50 mln
• Focus on medium to high income
residential
• Results oriented culture
16

17. Recent Performance
200
180
160
Crises +
140
Cyrela Event
120
100 Abyara +
Klabin P/NTA = 0,7
80 Acquisitions
60
40
P/NTA = 0,2
20
0
7
09
7
08
8
09
9
07
08
09
08
08
7
08
9
07
r-0
t-0
t-0
t-0
-0
-0
r-
o-
v-
v-
r-
n-
o-
o-
z-
z-
n
n
ab
ou
ou
ou
ab
ab
fe
de
de
ag
fe
ju
ag
ag
ju
ju
No solvency problems = very undervalued
17

18. Net Tangible Assets Analysis
AGRE Relative Valuation
P/NTA
AGRE 2,00
Net Tangible Assets Analysis 1,80
1,60
Net Receivables from Sold Units 2.379
1,40
Net Mkt Value of Units for Sale 1.227
Net Book Value of Land 837 1,20
Other Assets 340 1,00
0,80
Net Debt + Other liabilities (1.350)
0,60
Net Asset Value 3.433 0,40
Market Value 2.399 0,20
Market/Tangible 69,9% 0,00
Cyrela PDG MRV Rossi Gafisa AGRE
18

19. AGRE Valuation
AGREs FCFE Yield
700 30%
600 AGRE DCF Model
25%
500 Mkt Value 2.399
20% Target Value 4.251
400 Upside 77%
15%
300
Ke 13,0%
200 10% Growth 2 yrs 8%
Growth Fw 5%
100 Growth Perp 5%
5%
-
0% AGRE Multiples
2010 2011 2012 2013 2014 2015 2016 2017
(100) PE 10 7,5
FCFE -5%
PE 11 6,0
(200)
FCFE Yield
(300) -10%
19

20. Reasons to be undervalued
Market Concerns GAS View
Solvency Acquisitions + capitalizations = over R$ 500 mi cash
Acquired companies land bank quality High quality land bank
New partner reputation Wont vote as shareholder
Liquidity Top 3 in sector
Lack of consistent earnings Still a concern
20

21. Post Consolidation Numbers
21

22. Trading at deep discount to peers
4,5
4,0
3,5
3,0
2,5
P/BV
2,0
1,5
AGRE
1,0
AGRE 0,5
-
(1.000) - 1.000 2.000 3.000 4.000 5.000 6.000 7.000
PSV
AGRE is trading bellow the P/BV of its peer group 22

23. PDG Realty
• Residential developer created by Pactual, leading IB in Brazil
• Financial discipline
• Focused on results and meritocracy culture
• Merger and acquisitions created value
• Controls real state companies (low income = Goldfarb, medium income = CHL)
• National footprint
• Market Cap R$ 6 bi
• IPO in jan-07
23

24. PDG Structure and Land Bank
PDG Land Bank Profile
Unit Price R$ Units % Financing
Low Income 0-100 31.476 47% Government Plan Eligible
100-130 11.463 17% Government Plan Eligible
130-250 19.332 29% SFH Comercial Banks financing
Total 62.271 92%
24
Medium Income Over 250 5.219 8% SFH Comercial Banks financing
67.490 100%

25. Competitive advantages
Land Bank Acquisition
Discipline
Construction Project
Results oriented conception
culture
Access to Permits
financing
25

26. Operational Performance
Sales Speed 3Q09
45,0%
40,0%
35,0%
30,0% • Sales over launchings
25,0%
• One of the highest in sector
20,0%
15,0%
10,0%
5,0%
0,0%
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30,0%
25,0%
20,0%
15,0%
• Net Margins
10,0%
• Showing operational efficiency
5,0%
0,0%
26
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27. Consistency
350 22% 25%
22%
330
300 20%
19% 20%
250 250
LL
15% ROE
200
150
10%
130
100
5%
50
43
0 0%
2006 2007 2008 2009
High earnings growth and return on equity above 20%
27

28. PDG Realty Valuation
PDG Realty
Net Tangible Assets Analysis
Net Receivables from Sold Units 2.488
Net Mkt Value of Units for Sale 968
Net Book Value of Land 376
Other Assets 1.041
Net Debt + Other liabilities (1.084)
Net Asset Value 3.788
Market Value 6.412
Market/Tangible 169%
28

29. PDG Realty Valuation
PDG FCFE Yield
1.200 20,0%
PDG DCF Model
1.000
Mkt Value 6.400
15,0% Target Value 8.964
800
Upside 40%
600
10,0%
Ke 13,0%
400 Growth 2 yrs 8%
5,0% Growth Fw 5%
200
Growth Perp 5%
-
2010 2011 2012 2013 2014 2015 2016 2017 0,0% PDG Multiples
(200) FCFE
PE 10 10,0
FCFE Yield PE 11 7,7
(400) -5,0%
29

30. Thanks
Contact information
Luiz Liuzzi, CFA
Phone: 55 11 2185-0922
e-mail: lliuzzi@gasinvestimentos.com.br
30