Firm Synopsis and Macro Notes, April 2023

• Recharge Capital and its subsidiary strategies are pleased to observe the momentum of our  interest-aligned and creative investment structure in the current economic environment. The  environment has allowed people to re-evaluate investment approaches and gave us a more  attentive stage to present our investment philosophies and strategies.
• We are excited to seize the opportunity to onboard more like-minded investment talents and  firms to partner and create more sector-specialized investment strategies.

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In April 2023, Recharge Capital has made progress in several key areas:

• Recharge Thematic Ventures: RTV II/Vintage IV is launching, with a particular focus on  engaging with Founder’s Secondaries and Structured Equity for the vintage to take  advantage of the price resetting as well as personal finance liquidity constraints of top  quality founders/management team. RTV II is also expanding its sector focus from  fintech/healthcare by rolling up additional sector specialized small-scale GPs, in the long tail macro themes of Energy & Defense and Enterprise Infrastructure. RTV II aims to  become a thematic-specialized, institutional-grade investment and operation early-stage  venture platform.

• Recharge Thematic Strategies: Our private equity practice, in the form of our proprietary  Sector Integration Vehicles (SIVs), is experiencing strong partnership interests in the  current economic environment. Investors are less inclined to take sourcing and ideation  risks, and therefore clear execution plans for sector-specific lower middle market roll-ups  along value chains are gaining momentum. Some notable updates include:

• Women’s Healthcare: Our women’s healthcare vehicle, Recharge RHEA Holdings,  conducted its close of its first tranche in March 2023. The underlying assets across Southeast Asia, LatAm and the US are performing above expectation, leading to potential smaller cash deployment/lower dilution than previously underwrote.  

• Semiconductor: Following the IPO of RMTek I/Airoha, we are creating RMTek II  Holdings in Singapore to consolidate assets from Taiwan, Korea, and Japan, focusing on memory technologies. The Singapore structure will allow us to continue to capitalize on the trend of de-conglomeration of Asian semiconductor  powerhouses while capitalizing favorable on the geopolitical tensions in the semiconductor industry.

• Synthetic Biology (New): Following our co-incubated synthetic biology company,  Bota Bio, becoming scalable and mature in manufacturing with significant cost advantages, Recharge is partnering with Bota Bio to create a new holding company, ReArch. ReArch will open a physical lab space in Boston, Massachusetts at 101 Mass Ave, and will acquire and roll-up consumer facing self-care, personal-care companies who can then rely on Bota Bio to manage all  the product development (by choosing from a menu of sustainable and clean synbio products) and supply chain management.

• Recharge Omakase: Our digital asset team is pleased to announce the launch of our first  real-world-asset strategy, on-chain MSR (mortgage servicing rights) strategy. Our  engineering-led market-maker will bring more liquidity, transparency, and efficiency in  the trading of MSR while benefiting from enhanced yield of the MSR assets from the  rising interest rate.  

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Macro Notes - April 2023

As we step into a new quarter, one of the noticeable factors in 2023 so far is the frequency of  changes in the macro narrative. With the market dictating the narrative more than anything else,  themes are short-lived. From disinflation to higher-for-longer to an acute banking crisis, and now,  a fresh narrative is surfacing. It's one that calls for stubborn core inflation and a Fed that must  carry on with hiking. Recent inflation data backs this story, specifically in the Core and Super Core  segments. Nevertheless, market conviction and positioning are not set in stone. Any signs of labor  market weakness could result in the market reverting to anticipating a more accommodative Fed.

Regarding inflation, our projections indicate that core CPI could increase by approximately 0.5%  MoM. This is attributed to the continued surprising upside of used car prices, which means a May  hike is still probable. The current market conditions suggest that a slowdown in the US economy  could lead to a recession by the end of this year, and the market will also have to tackle the debt  ceiling debate at the same time.

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Macro Notes - April 2023 In Spotlight: Internationalization of RMB, again?

There has been much speculation about the potential decline of the USD in light of recent  developments, including the Chinese RMB becoming the most traded currency in Russia and  Brazil and the BRICS collective's efforts to establish a common currency in order to move away  from the USD hegemony. However, we believe that this concern may be overstated, as the  purpose of a trading currency is to facilitate the exchange of goods. When foreign countries  receive RMB through trading activities, their exchange interactions are predominantly limited to  China alone. When these countries wish to acquire or trade goods outside of the China  ecosystem, they will need to convert RMB to USD again, subject to China's own currency  exchange control.