The AES Corporation Investor Presentation — July 2021

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SECOND QUARTER 2021 LETTER TO INVESTORS

Dear Friends and Investors,

The core portfolio for Massif Capital was up 3.1% net of fees during the second quarter of

2021. Year-to-date, the portfolio has returned 6.7%.

PORTFOLIO ATTRIBUTION1

The dispersion of daily returns for the core portfolio settled down significantly in the sec -

ond quarter2, along with a continued decline in daily liquidity for many positions following

a seemingly frantic level of trading that grew from October 2020 through February 2021.

Our mining investments continue to outperform, generating an aggregate 4% return to

the portfolio. Notable contributors include Ivanhoe Mines, Kazatomprom, and Alphamin

Resources. Our allocation to utilities, comprised of positions in AES, RWE, and Polaris In -

frastructure, dragged on returns, contributing -0.74%. Equinox and Vestas had particu -

larly challenging quarters. Both positions are discussed below in further detail.

Stretching back to the beginning of 2020, we are fortunate to have many of our positions

exceed our time-adjusted performance expectations. This is a great situation to be in but

not one without complications. Nearly 100% of our underwriting is concerned with funda -

mental changes to a business. On average, fundamental company change is a multi-year

process. Upside volatility that takes stock prices to our expected fundamental value raise

challenging questions about sell decisions. Do we sell because the firm’s price has hit our

expected value even though few of the fundamental factors necessary to justify that value

have yet to unfolded?

Complicating matters further, many of our businesses are cyclical, making them behav -

iorally challenging to hold for extended periods. As such, we need to be willing to handle

periods of higher multiples and accept drawdowns in route to a successful secular thesis.

One of the ways we can structurally build in patience is to measure the earnings power

of the portfolio constantly.3 For example, in the calendar year 2020, AES saw an 18% gain

in its share price. More than 100% of that price appreciation was attributable to pricing

multiple expansion, as profit margins and top-line revenue contracted. However, AES also

grew its per-share earnings power by roughly 25% over the course of 2020. THURSDAY, JULY 15, 2021

Top 5 Positive Contributors 2 n d Q t r

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