A Delaware Limited Partnership 2008 No.1 SUGAR-BASED ETHANOL FUND, L.P. Sugar Cane, Brazil - ©Nair Benedicto/F4.

a Delaware Limited Partnership

2008 No.1

SUGAR-BASED ETHANOL FUND, L.P.

Sugar Cane, Brazil - ©Nair Benedicto/F4

2008 No.1



Fund Structure

General Partner: Cavaliere Capital Corporation

Administrator: Jose Cavaliere

Broker: Interactive Brokers LLC

Counsel: Aaron Keiter

Auditor: Johnston Harrington, PC

2008 No.1

Fund Structure

General Partner: Cavaliere Capital Corporation

Administrator: Jose Cavaliere

Broker: Interactive Brokers LLC

Counsel: Aaron Keiter

Auditor: Johnston Harrington, PC



Minimum Investment: $ 0.050 million

Management Fee: 1.50 %

Incentive Fee: 20 % of any appreciation over 6 %

Inception Date: 03-01-2008

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Return Statistics

Highest 12 Month return :

Lowest 12 Month Return :

Average Annual Return : 80.236

Average Monthly Return :6.364

Highest Monthly Return : 20.67

Lowest Monthly Return : -13.75

Average Gain : 9.674

Average Loss : -6.875


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The specific goal of Cavaliere Capital Corporation (CCC) is to generate an attractive return on equity investments in the Brazilian ethanol production industry for our investor clients.

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It has been widely acknowledged that alternative and renewable fuels will have a significant future role to play in the world's energy future.


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CCC intends to position our investors to take full advantage of the structural changes now taking place in the world's energy markets.


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CCC intends to position our investors to take full advantage of the structural changes now taking place in the world's energy markets.

We see these ongoing changes as a great source of opportunities for our discerning client investors.


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Today, Brazil is the world’s largest biofuel market and Brazilian ethanol from sugarcane is arguably the first renewable fuel to be cost-competitive with petroleum fuel for transport.

The Brazilian Sugarcane Ethanol Experience

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Biofuels are attracting increasing interest around the world.


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Governments have announced strong commitments to biofuel programs as a way to both reduce greenhouse gas emissions and diversify energy sources.


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Advocates of biofuel subsidies and mandates frequently cite Brazil’s experience with sugarcane-based biomass ethanol as a success story and model for increasing energy security.


Advocates of biofuel subsidies and mandates frequently cite Brazil’s experience with sugarcane-based biomass ethanol as a success story...

A worker cuts sugar cane in São Tomé, Brazil, to be transformed into ethanol.

By Victor R. Caivano, AP

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Advocates of biofuel subsidies and mandates frequently cite Brazil’s experience with sugarcane-based biomass ethanol as a success story and model for increasing energy security.

Today, Brazil is the world’s largest biofuel market and Brazilian ethanol from sugarcane is arguably the first renewable fuel to be cost-competitive with petroleum fuel for transport.


The United States, where most ethanol is produced from corn, is the second largest biofuel market.

A worker cuts sugar cane in São Tomé, Brazil, to be transformed into ethanol.

By Victor R. Caivano, AP

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Ethanol production is more cost-effective in Brazil than in the United States.


The Sao Martinho refinery makes ethanol out of sugar cane. The process is cheaper than the U.S. method, which uses corn. (By Joshua Cogan For The Washington Post)

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This is due to several factors:



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This is due to several factors:1. The superiority of sugarcane to corn as an ethanol feedstock.



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2. Brazil’s large unskilled labor force (sugarcane production is very labor intensive).



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2. Brazil’s large unskilled labor force (sugarcane production is very labor intensive).

3. A climate ideally suited to growing sugarcane.


The U.S. uses almost twice as much land to cultivate corn for ethanol as Brazil does to cultivate sugarcane.


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Given Brazil’s natural and acquired advantages for ethanol production, it is difficult to imagine the United States matching Brazil’s level of ethanol consumption at a reasonable economic cost.


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American taxpayers pay twice for ethanol: once in crop subsidies to corn farmers and again in a 51-cent subsidy for every gallon of ethanol.


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Corn-based ethanol produced in large quantities could have significant environmental impacts.


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Corn-based ethanol produced in large quantities could have significant environmental impacts.

Currently it takes 500 gallons of fresh water to produce one gallon of corn based ethanol.


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Brazil is the world’s largest biofuel market.


The productivity and efficiency of Brazilian sugarcane ethanol production are virtually unmatched by any other country.

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In Brazil, there are 23 million vehicles and 49.1 million households.



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an average of 0.47 vehicles per household



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In the United States, there are 204 million vehicles for 107 million U.S. households.



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In the United States, there are 204 million vehicles for 107 million U.S. households.

an average of 1.9 vehicle per household



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Ethanol Car Manufacturing in Brazil 1997-2007 (selected years)

Year Alcohol E100 Manufactured

Flex fuel Cars Manufactured

Total Cars Manufactured

% Ethanol Cars

1997 3,328 - 912,018 0.4

1980 239,251 - 933,152 25.6

1986 619,854 - 815,152 76.0

1990 71,523 - 663,084 10.8

1998 1,188 - 1,254,016 0.1

2000 9,428 - 1,361,361 0.7

2002 48,022 - 1,521,431 3.2

2003 31,728 39,853 1,361,361 4.8

2004 49,796 282,706 1,862,780 17.8

2005 43,278 776,164 2,011,817 40.7

2006 758 1,249,062 2,092,003 59.7

2007 3 1,716,716 2,388,402 71.9

Source: Brazilian Automakers Association (ANFAVEA), 2007 and 2008.

Data shown for FFs does not include light commercial vehicles.

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Brazil’s National Alcohol Program, PROALCOOL, was launched in 1975.

Brazil’s Ethanol Program

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PROALCOOL was both an energy security program and an agricultural price support program.


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It aimed to increase production of sugarcane alcohol for use as a gasoline substitute.


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It aimed to increase production of sugarcane alcohol for use as a gasoline substitute.

The government began using the state oil company PETROBRAS to make infrastructure investments for ethanol distribution and to keep the cost of ethanol to consumers significantly cheaper than the cost of gasoline.


In 1984, ethanol-powered cars accounted for 94.4 percent of automobile production for the Brazilian market.

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During 1975-1989 the Brazilian government spent a total of $12.3 billion in the National Alcohol Program.


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Toward the end of the 1990s, some Brazilian engineers and policy makers sought to revive the ethanol fuel program.


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Ford launched its first flex-fuel prototype in 2002, with Volkswagen following in 2003.


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Flex-fuel cars able to run on ethanol, gasoline, or any mixture of the two caught on quickly. In March 2004, flex-fuel vehicles represented 16 percent of new cars sold in Brazil. By February 2006, the figure was 73 percent.


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Flex-fuel cars able to run on ethanol, gasoline, or any mixture of the two caught on quickly. In March 2004, flex-fuel vehicles represented 16 percent of new cars sold in Brazil. By February 2006, the figure was 73 percent. (See Figure 1 on the next slide)

The success of flex-fuel cars has led some automakers to announce plans to extend the technology for the production of all light vehicles in Brazil.


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The dramatic increase in flex-fuel vehicles has helped fuel the Brazilian sugarcane industry’s recent expansion.

Ethanol in Brazil Today

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Today, Brazil is the world’s biggest sugar producer and exporter.


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As well as the world’s largest producer and consumer of sugarcane ethanol as a transportation fuel.


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In 2006, Brazil produced about 590,000 bd of ethanol.


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In 2006, Brazil produced about 590,000 bd of ethanol.

About 85 percent of the domestic production is concentrated in the Center South of the country and more than half of it is located in the state of São Paulo.


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About 80 percent of the country’s total ethanol production is for domestic consumption.


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Exports have been growing for several years.


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By 2010, Brazilian companies are expected to invest about $10 billion in dozens of new sugar mills to boost ethanol production, while aiming to double exports.


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Currently, there are 306 operational mills producing 55 million tons of sugar or ethanol.


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Currently, there are 306 operational mills producing 55 million tons of sugar or ethanol.

Today, Brazilian mills and distilleries are nearly entirely self-sufficient in energy supply, and a few even sell surplus electricity.


Under conditions in Brazil, sugarcane’s productivity is roughly twice that of corn-basedethanol.

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Almost all sugarcane production, which is water-intensive, grows in rain-fed cultivated areas.


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Brazilian scientists have produced cane varieties that are genetically resistant to the main crop diseases.


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Brazilian scientists have produced cane varieties that are genetically resistant to the main crop diseases.

There are more than 500 commercial varieties of cane, of which 20 varieties are used in 80 percent of the cane area.


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Production costs for ethanol in Brazil are the world’s lowest.

Production Cost of Ethanol

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The average production cost is approximately $ 0.75 per gallon, according to UNICA, the industry association.


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Factors contributing to Brazil’s competitiveness include:


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Factors contributing to Brazil’s competitiveness include:1. Favorable climate conditions


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2. Low labor costs


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2. Low labor costs

3. A mature infrastructure built over at least three decades


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Between 1975 and 2000, modernization of the sugarcane yield per hectare increased by 33 percent and ethanol yield from sugar rose by 14 percent.


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Between 1975 and 2000, modernization of the sugarcane yield per hectare increased by 33 percent and ethanol yield from sugar rose by 14 percent.

These efficiency gains achieved over a three-decade learning curve, combined with the aforementioned factors unique to the country, allow Brazil to sell ethanol below the market price of gasoline.


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We provide "accredited investors" (as defined in regulation D under the U.S. securities laws) with investment opportunities starting in the $50,000 range. We also provide "foreign individuals" (non U.S. residents or citizens) with the opportunity to invest in our offshore fund, which is not subject to U.S. taxes or reporting requirements. Our principal's extensive experience in the petroleum and related energy industries, combined with our unique experience with local culture and business protocol, gives us a distinct advantage over other investment vehicles. We believe that sugar-based ethanol is perfectly situated to successfully compete in the world energy markets. Moreover, Brazil, as the low cost producer in the world, is in a unique position to benefit from the ongoing structural changes in the world energy markets. Our only goal, is to align our investor's interests with these structural changes, in order to produce maximum long term benefits for our clients. We believe in making strategic investments that are not focused on quarterly results, but which will produce outstanding returns in the long run.

What We Do

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Our founder and president, Jose Cavaliere, was born in Brazil and emigrated to New York City in 1970. He graduated High School from Brooklyn Technical High School in 1975. Mr. Cavaliere graduated from Rensselaer Polytechnic Institute (RPI) with an MBA, a Masters in Civil (Structural) Engineering, and a B.S. in Civil Engineering with a minor in economics in 1979. He then pursued careers in refinery construction, refinery and chemical plant design, management consulting for the petroleum, engineering contractor and related industries, as well as real estate. He is fluent in both Portuguese and Spanish. With over twenty five years of investment experience, Mr. Cavaliere brings a mix of qualifications and talents uniquely suited in our target markets to benefit our investor clients.

About Us

Jose CavalierePresident41414 WoodwayMagnolia, TX 77354-1171ph: (281) 259-7121fax: (281) 259-5993alt: (832) [email protected]

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As our VP of Marketing and Information Systems, Adam oversees marketing and technology operations of the company. Adam brings to CCC more than ten years of marketing, management and information technology experience. Adam’s proven marketing and management skills will enable him to drive the Fund’s success.

Specifically, he worked for start up United Vision Group (UVG) for three years as Director of Marketing. While at UVG, Adam developed a national marketing campaign and managed the operations of the company’s marketing division. Adam also worked for Apollo Eye Associates for four years as Network Administrator / Office Manager initiating and maintaining company’s wide-area network and online presence. Additionally, Adam has worked for a major Las Vegas Casino Resort as Public Relations Coordinator.

Adam is an excellent match for this position and a strong asset to CCC. Adam is located in Fort Worth, Texas. Please fill free to contact him if you have any questions or interest in securing your future assets.

About Us

Adam R. RodriguezVP of Marketing and Information Services41414 WoodwayMagnolia, TX 77354-1171ph: (281) 259-7121fax: (281) 259-5993alt: (817) 307-3302 [email protected]

A Delaware Limited Partnership 2008 No.1 SUGAR-BASED ETHANOL FUND, L.P. Sugar Cane, Brazil - ©Nair Benedicto/F4.

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