Financial market fluctuations general instability in

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Unformatted text preview: rn of capital from the sale of such investments. Follow-On Investments Following the initial investment in a Portfolio Investment, the Partnership may be called upon to provide additional funds or have the opportunity to increase its investment in such company or to fund additional investments through such company. There is no assurance that the Partnership will make follow-on investments or that the Partnership will have sufficient funds to make all such investments. Any decision by - 25 - the Partnership not to make follow-on investments or its inability to make them may have substantial negative impact on the portfolio company in need of such investment. Minority Investments The Partnership may make non-controlling equity investments in portfolio companies. In respect of such companies, although the General Partner intends where appropriate to (i) obtain a position on the board of directors, (ii) obtain appropriate rights and covenants to protect the Partnership’s interests, and (iii) be involved in management, the General Partner may have a limited ability to protect the Partnership’s interests. Financial Market Fluctuations General instability in the public debt market and other securities markets may impede the ability of portfolio companies to raise money by offering shares for sale on a public market. Troubled and Early Stage Companies The Partnership may invest in companies that may be considered to be troubled or in early stages of growth. The performance of troubled or early-stage companies may be more volatile due to their limited product lines, markets or financial reserves or their susceptibility to major economic setbacks or downturns. Further, the Partnership's targeted companies are in sectors that are in the early stages of development. These companies may be exposed to a variety of business risks, including, but not limited to: competition from larger, more established firms; advancement of incumbent services and technologies; and the resistance of the market towards new companies, services or technologies. Environmental Sector Investment Risks Investments in companies with an environmental focus are subject to political priorities, changing government regulations, subsidies and other regulatory factors that may impact the value of the investment. There is no certainty that future governments will not change existing environmental regulations, will not provide incentives to other sectors that compete with the Environmental Sectors or will enforce environmental regulations in effect. Reducing or failing to enforce environmental regulation makes it less likely that companies with an environmental focus will prosper. In addition, each of the Environmental Sectors may have other associated risks. Before making an investment, Limited Partners should do research and be comfortable with the specific risks that might arise in each of the targeted sectors, including, but not limited to: Renewable Energy Activities in the renewable energy sector may be adversely affected by factors outside the control of sector participants including business and operating risks such as delays in obtaining or failure to obtain necessary permits, construction risks, possible failure of a project to be commercially viable, risks related to local climatic conditions, risks related to the assessment and availability of wind and hydro resources and liability for environmental damage. The demand for renewable energy sources is dependent to a certain degree on the cost of electricity generated from other sources of energy. The cost and supplies of coal, oil and other fossil fuels are important factors in determining the desirability of renewable energy sources. Further, there is no guarantee that the consuming public will immediately accept renewable energy sources. Water Public or regulated agencies represent an important part of the water industry. The contractor selection process in the public sector typically occurs through a formal bidding process that can require the commitment of greater resources and longer lead times than industrial projects. In addition, this segment is dependent upon the availability of funding at the local level, which may be the subject of increasing pressure as local governments are expected to bear a greater share of the cost of public services. Also, water investments grow when there are - 26 - water-based epidemics, regional scarcities and polluted streams, but falter when government allocations to water infrastructure are reduced. Sustainable Agriculture The performance of the agricultural industry is cyclical and seasonal, and the extent to which the agricultural industry declines, experiences a downturn or is out of season is likely to have a negative impact on the sustainable agriculture sector. Further, the sustainable agriculture sector is subject to risks inherent in the agricultural business, such as weather, insects, plant diseases and similar risks. There can be no assurance that these natural elements will not have a material adverse effect on sustainable agriculture pr...
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