JOHN SMALL<br/>SENIOR ASSET MANAGER AND PRESIDENT<br/>GLG PARTNERS

GLG is a hedge fund but you have participated in several solar venture financing rounds including two for Nanosolar. Where does this venture investing fit into GLG's business model?
When you manage $23 billion there is room to make some highly strategic, highly riskreward oriented investments of a private nature. We encourage portfolio managers at GLG when they see private investments that fit into their fundamental view and research with a high degree of confidence to pursue such opportunities. I happen to have be en lucky enough to be focussing on alternative energy at the beginning of a multi-decade move changing the landscape of electricity generation around the world.

What level of active management does GLG exercise in its private investments?
I try not to compete with venture capital firms that have a long history in developing companies and creating ideas.

If you can create PV panels that generate electricity at very low cost and can manufacture them at a high enough volume you will have access to an enormous end market

The perfect private investment for GLG is one where the idea has been identified, the technology has been proven to the company but not to the market, and my capital will help accelerate the business plan. I can be useful to those companies in trying to help them shape the next evolution of their company toward an IPO. I know what a public company looks like. I understand how the business should be shaped and talked about to the public markets and know how the public markets will value these businesses.

How did the investment in Nanosolar come about?
When I first met the company at an industry conference they weren't looking to raise capital but a few months later they reached out to me. We invested in the Series C round in June 2006 and we invested our pro rata share in the Series D round finalised in March.

The Series D round was a strategic round looking to potential buyers of their product, not necessarily straight financial investors, although there were some new and repeat financial investors like ourselves.

What attracted you to Nanosolar?
Electricity is a commodity so you want to invest in the lowest cost producers. I was attracted to Nanosolar because of their claims and industry claims that they have the lowest cost way to produce electricity from photovoltaics (PV). If you can create PV panels that generate electricity at very low cost and can manufacture them at a high enough volume you will have access to an enormous end market. Electricity is the second-largest market in the world, second only to food, and it's probably going to double in the next 30 years because of the developing economies around the world. While these companies may be seen as technology companies, they truly are manufacturing companies that need factories and infrastructure global ly. Therefore, they need hundreds of millions of dollars in capital to achieve their business plans.