2006 Private Equity Fundraising: a Record Breaking Year in the Making

Press Release - 7th July 2006

For immediate release

2006 Private Equity Fundraising: A Record Breaking Year in the Making

As of 7th July 2006, 263 new private equity funds have raised $167 billion worldwide. This is an increase of 12% on funds raised in the first half of 2005.

¾ 143 new US-based funds have raised $108 billion ¾ 65 new European-based funds have raised $41 billion ¾ 55 funds based in Asia and elsewhere have raised $18 billion

Buyout funds have continued to gain the highest levels of support this year, but other fund types have also done well:

¾ 74 buyout funds have raised $84 billion between them (and over $44 billion from just 7 mega- funds of above $3 billion.) ¾ 87 venture funds have raised $23 billion ¾ 24 real estate funds have raised $19 billion ¾ 26 fund of funds have raised $8 billion ¾ 21 mezzanine funds have raised $12 billion ¾ 8 infrastructure funds have raised $5 billion ¾ 7 distressed debt funds have raised $3 billion

Investor demand remains strong, with no fewer than 787 new funds still actively on the road, aiming to raise an unprecedented further $342 billion. The conditions for fundraising have remained strong throughout the year, and Private Equity Intelligence is forecasting that private equity fundraising for 2006 will exceed $300 billion for the first time in its history.

The Pages following contain the Private Equity Intelligence Q2 Global Fund Raising Update. This report is taken from Spotlight – the Private Equity Intelligence monthly newsletter.

For more information please contact Mark O’Hare or Nick Arnott on +44 (0)20 7038 1650

ENDS

Private Equity Intelligence Ltd., 10 Old Bailey, London, EC4M 7NG +44 (0)20 7038 1650 www.preqin.com Global Fund Raising Update - Q2 2006

2006 - A Record Breaking Year in the Making? 2005 was a record breaking year for private equity in terms of fundraising, with the industry gathering $283 billion in aggregate commitments. With funds continuing to close at a steady rate, and with an excellent stock of funds on the road, all the signs are pointing towards 2006 not only matching the levels of 2005, but going on to exceed them to become the second record breaking year in a row. $75 billion raised in Q2 2006 Global Quarterly Fund Raising: 2005 - 2006 Q2 124 Funds closed during Q2 2006, raising an aggregate $75 billion. This 180 No. Funds Closed Aggregate Commitments ($ bn) represents an increase of 6% on the $71 billion raised during Q2 2005. It 160 163 is interesting to note that although the amount of capital being raised

140 145 remains stable, there is evidence of a slight decline in the number of funds 129 132 being closed. The aggregate total of 124 closed funds is lower than that of 120 124 any quarter during 2005 and Q1 2006. 100

80 86 There has been a slight decline in aggregate capital raised in comparison 78 75 71 74 to Q1 2006, with the total raised during Q2 2006 being 13% less than 60 commitments garnered in the early part of the year. Although this might 40 suggest a slowing in the fundraising market, when the stock of funds due

20 to close is examined a more positive scenario emerges. With a number of mega buyout funds from firms such as Blackstone, KKR, Permira and 0 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Texas Pacific close to wrapping up their fundraising efforts, Q3 2006 is shaping up to be an exceptional quarter for fundraising. Q2 2006 Fund Raising by Type Number and Value ($bn) Funds Raised Q2 2006

45 • 34 Buyout funds raised an No. Funds Closed 40 42 Aggregate Commitments ($ bn) aggregate $33 billion, with 35 $18 billion coming from US 34 33 30 focused funds and over $11 25

billion coming from Europe 20

focused funds. 15 13 13 10 12 12 9 5 2 2 2 2 • 42 Venture funds raised an 6 1 1.5 0.9 0.6 1 0.3 1 0.1 4 4 3 aggregate $13 billion, with 0 Buyout / Venture Real Estate Mezzanine Fund of Distressed Infrastructure Natural Balanced Secondaries General Forestry over $8 billion coming from Buyin (General) Funds Debt Resources Special Sit. US focused funds alone.

• 12 Real estate funds raised an aggregate of $ 12 billion. Over 41% of % Market Share by Fund Type Commitments 2% 3% this total comes from Blackstone Real Estate Partners V alone, a $5 3% billion fund focusing on property investments on a global scale. 3% 5% Buyout / Buyin • 13 Fund of funds raised a total of $ 4 billion. Morgan Stanley Private Venture (General) 8% Markets Fund III contributed around a third of total commitments Real Estate gathered during the period. 43% Mezzanine Fund of Funds

• A total of $6 billion was garnered by 9 mezzanine funds that closed 16% Distressed Debt during Q2 2006, a slight increase on the $5 billion raised during Q1. Infrastructure Natural Resources Other Number and Aggregate Target Value ($bn) Funds on the Road 2005 - Q2 2006 17%

900 Funds on the Road 787 800 700 • The number of funds on the road seeking capital 600 continues to grow as 2006 progresses. There are 500 508 Number of Funds on Road currently 787 private equity funds on the road, seeking $342 bn 400 Target Value ($bn) an aggregate $342 billion; a 12% increase in the aggregate target at the close of Q1, and a significant 300 55% more than funds were seeking at the start of 2006. 200 $138 bn 100 • Of the 787 funds on the road 33% are venture funds 0 and 24% buyout. The bulk of the $342 billion aggregate y y y r r y y h y ul ust be c ul target comprises buyout funds, which account for 48% April May June J ber be April May June J March ug tober em Mar Januar A tem em Januar Februar Oc ov ec Februar of all capital currently being raised within the industry 2005 ep N D 2006 S as a whole.

Market Share by Region 2005 - 2006 Geographic Focus: (Sorted by Aggregate Commitments) 100% 10% 10% 13% In terms of fund geographic focus, the US has continued to attract the largest 90% 80% 20% proportion of commitments from LPs. The aggregate $46 billion of commitments 31% 26% that the region attracted accounts for 61% of the overall total raised. This figure is 70% a slight increase from the 59% share seen in 2005, and a slight decrease from 60% ROW the 70% market share experienced by US funds during Q1 2006. This decline in 50% Europe 40% US market share can be explained by the lack of mega buyout funds closing during 70% the quarter, with Madison Dearborn VI the only US fund over $2 billion in size to 30% 59% 61% close during Q2. 20% 10% 0% Europe has continued to perform well, collecting $19 billion in aggregate All 2005 Q1 2006 Q2 2006 commitments from 28 funds closed during the second financial quarter. The European focused fund share of the overall global market is 26% in terms of Aggregate Commitments by commitments. This figure represents a moderate decline when compared to the Geographic Region ($ bn) 2005 share of 31%, but an increase from the 20% of Q1 2006. US In 2005, commitments garnered by fund managers focusing on the Rest of World 10 Europe ROW market were a significant 300% up on 2004’s aggregate commitments for the region. Interest in the region has shown no signs of slowing, with 22 funds gathering $10 billion during the second quarter of 2006, $2 billion more than the region attracted during the first quarter of the year. The overall market share is 19 now at its highest levels ever; 13% for Q2 2006. 46

Number and Value of Funds Raised Q2 2006 - ROW US:

7 7 No. Funds Closed Aggregate Commitments ($bn) 6 • Although buyout fund raising did not match the sizeable

5 5 levels witnessed during Q1 2006, the fund type still dominates the US with 22 funds raising $18 billion. 4 4 3.6 • Blackstone’s $5 billion fifth fund helped the real estate 3 3 sector raise the second largest amount in terms of 2.3 2 2 aggregate commitments during Q2 2006, with 8 funds 1.5

1 1 1 1 raising a total of $8 billion. 0.1 0.3 0.2 0 • Venture fund raising performance remains strong, with 25 Buyout / Buyin Venture (General) Infrastructure Fund of Funds Balanced Real Estate Forestry funds raising an aggregate $8 billion during Q2, an increase of around $1 billion on the Q1 total. Number and Value of Funds Raised Q2 2006 - Europe 12 Europe: No. Funds Closed 11.2 Aggregate Commitments ($bn) 10 10 • 58% of the European fundraising market is taken up by 8 8 buyout funds; the most successful fund type in terms of 6 fund raising during Q2 2006.

4 • In contrast with Q1 2006, there has been an upturn in

2.8 3 commitments garnered by European venture fund 2 2 2 2 1 0.4 managers, with the $2.8 billion raised a 280% increase 1.2 1 0.4 0.4 0.7 1 0 from the aggregate funds raised during the early part of Buyout / Buyin Venture Mezzanine Real Estate Balanced Distressed Fund of Funds Secondaries (General) Debt the year.

Rest of World Number and Value of Funds Raised Q2 2006 - US

25 25 No. Funds Closed • Venture funds have been popular amongst Aggregate Commitments ($bn) 22 investors, with $2.3 billion being raised 20 during Q2 2006, around double that of the 18 first quarter. 15 • Buyout and infrastructure funds have

10 10.8 continued the strong fundraising

8 8.2 performance witnessed during Q1 into the 7 5 6 second quarter of the year, with buyout 3.9 1 1 1 firms raising an aggregate $3.6 billion, and 3 0.3 0.2 1.8 1.6 1.5 0 infrastructure funds attracting $2 billion in Buyout / Buyin Real Estate Venture Mezzanine Fund of Distressed Natural General Secondaries (General) Funds Debt Resources Special Sit. commitments.

Buyout Buyout Fund Raising by Quarter - Last 12 months

50 Number of Buyout Funds Closed During Q1 2006 $47 billion was raised from a total of 36 Aggregate Commitments ($ bn) 47 funds. The data for Q2 2006 indicates a moderate decline in 45 42 terms of fundraising, with $33 billion being raised. This can 40 40 36 35 35 36 be explained by the relative lack of mega buyout funds 33 34 33 closing during the quarter in comparison to Q1. With a clutch 30 30 of mega funds likely to achieve a final close in the next 25 quarter from managers such as Blackstone, Texas Pacific, 20 and Permira, the buyout fundraising market remains 15 buoyant, and that Q3 could provide the highest levels of 10 fundraising ever seen by the buyout sector. 5 0 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Regional Split of Buyout Funds Sorted by Aggregate Commitments • The largest fund closed during Q2 2006 was Cinven IV, which closed €1.5 billion above its original target on €6.5 billion without the aid of a US placement agent. Investors in this fund include the Bank of Scotland, Europe 11% ROW and the University of Texas Investment Management Company. • Carlyle Japan Partners II was the largest fund raised for investment outside of Europe and North America. The $2 billion raised by the fund is double the original target set at $1 billion.

34% 55% • The majority of capital raised during Q2 2006 (55%) was committed to US focused funds. Europe focused funds accounted for 34% of commitments, with the Rest of World taking 11%, a 7% increase from Q1 in terms of market share. LARGEST BUYOUT FUNDS CLOSED DURING Q2 2006 ______Fund Manager Fund Size (Mn) Location

Cinven IV Cinven 6,500 EUR UK

Madison Dearborn Capital Partners V Madison Dearborn Partners 6,500 USD US

TDR Capital II TDR Capital 1,750 EUR UK

Carlyle Japan Partners II Carlyle Group 2,000 USD Japan

Francisco Partners II Francisco Partners 2,000 USD US

Bain Capital Fund IX Coinvestment Fund Bain Capital 2,000 USD US

Catterton Partners VI Catterton Partners 1,000 USD US

Perella Weinberg Partners I Perella Weinberg Partners 1,000 USD US

Funds on the Road Make Up of Buyout Funds in Market Sorted by Fund Size There are currently 192 buyout funds in the market, seeking an • No. Of Funds 120 aggregate $165 billion. 114 Aggregate Value $bn 100 • The majority of these funds are US focused (66%) with 21% being 91 European, and 13% focusing on the Rest of World. 80 79 60 • The average size of buyout funds in the market currently stands at 40 $868 million. The disparity between this figure and the median figure of 40 20 22 $280 million shows the large influence of the mega buyout fund on the 13 market. 0 Above $1 billion $251 million - $1 billion Less than $250 LARGEST BUYOUT FUNDS ON THE ROAD ______Fund Size ($bn) Fund Manager Target Size (Mn) Location

KKR Fund 2006 Kohlberg Kravis Roberts 15,000 USD US Texas Pacific Group Partners V Texas Pacific Group 15,000 USD US

Blackstone Capital Partners V Blackstone Group 14,500 USD US

Permira IV Permira 11,000 EUR UK Gulf One Fund Gulf One 10,000 USD UAE Thomas H Lee VI Thomas H Lee Partners 7,500 USD US

Venture European Venture Fund Raising by Quarter - Last 12 Months

During the first half of 2006, venture fund managers have 20 Number of Funds Raised 19 Aggregate Commitments ($bn) raised an aggregate $23 billion from 87 funds. This amount is 18 58% of the total raised during the whole of 2005, suggesting 16 that the conditions for venture fundraising are becoming more 14 13 favourable as 2006 progresses. 12 • US focused venture funds have been most successful in 10 10 8 8 raising capital with 25 funds raising over $8 billion during 7 6 Q2. 3.4 2.8 4 1.1 1.4 1 • 7 Rest of World focused funds attracted over $2 billion in 2 commitments, and increase of 35% from Q1. 0 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 • 10 European focused funds attracted close to $3 billion in commitments during Q2. European Venture Funds: A Recovery? After a poor start to the year, fundraising conditions for European based funds • 61% of commitments to venture funds have been made to have improved, with offerings from Waterland Private Equity Investments and funds with no specific stage focus. Early stage funds make CDC IXIS Innovation contributing to an overall aggregate Q2 total of $2.8 billion. up 22% by capital committed, whilst dedicated Regional Split of Venture Funds Venture Funds Sorted by Stage Preference expansion / late stage funds make up 17%. Sorted by Aggregate Commitments

• Q2 2006 saw the closing of Oak Investment Venture (All Stages) US Expansion / Late Stage Partners XII, which at a final size of near $2.6 Europe Early Stage 17% ROW billion is amongst the largest venture funds of 22% all time. Investors in the fund include Pennsylvania State Employees’ Retirement

Fund. The fund has a diversified industry 21% preference. 62% 17% 61%

LARGEST VENTURE FUNDS CLOSED DURING Q2 2006______Fund Manager Fund Size (Mn) Location

Oak Investment Partners XII Oak Investment Partners 2,560 USD US

Sequoia Capital Growth III Sequoia Capital 861 USD US

Carlyle Asia Growth Partners III Carlyle Group 668 USD Asia

Essex Woodlands Health Ventures VII Essex Woodlands Health Ventures 600 USD US

Waterland Private Equity Fund III Waterland Private Equity Investments 400 EUR UK

Caduceus Private Investments III OrbiMed Advisors 500 USD US

CDC Enterprises III CDC IXIS Innovation 300 EUR France

Venture Funds in Market Sorted by Regional Focus Funds on the Road Number of Funds • There are currently 342 venture funds seeking an aggregate Aggregate Target ($bn) 180 172 $54 billion in commitments. This represents an sizeable 26% 160 140

increase in terms of aggregate target from end Q1 2006. 120 • 50% of these funds are US focused, 19% European and 31% 100 105 80 65 will focus on the Rest of World. 60 40 7 32.5 20 14

0 LARGEST VENTURE FUNDS ON THE ROAD______US ROW______Europe Fund Manager Fund Size (Mn) Location DIB Media & Telecommunications Fund (TMT) Dubai Islamic Bank 1,000 USD UAE MPM BioVentures IV MPM Capital 650 USD US

FTVentures III FTVentures 600 USD US Column Group Venture Partners I Column Group 500 USD US DIB General Industrial and Technology Fund Dubai Islamic Bank 500 USD UAE DIB Health and Education Fund Dubai Islamic Bank 500 USD UAE Panorama Capital Panorama Capital 500 USD US

Fund Name Fund Manager Fund Size Regional Focus Fund of Funds Morgan Stanley III Morgan Stanley 1,000 USD US A total of 13 fund of funds raised a combined Siguler Guff BRIC Siguler Guff & Co 600 USD BRIC $4 billion during Q2 2006. Asia-Pacific 2005 Partners Group 375 USD Asia The US raised the most capital, with $1.8 European Buyout 2005 (B) Partners Group 279 EUR Europe • billion in commitments from 6 funds. Alternative Investment Trust IV Macquarie 400 AUD Australia • Rest of World fund of funds raised $1.5 Morgan Stanley’s third Private Markets Fund is the largest fund of funds to close during Q2 2006. billion, almost double the amount raised Siguler Guff BRIC Opportunities Fund was the second largest vehicle to achieve a final close in during Q1 2006. this category, exceeding its initial target of $350 million to raise $600 million. The fund will focus on investments in Brazil, Russia, India and China. Macquarie’s Alternative Investment Trust IV is • European focused funds raised $400 an Australian fund of funds that will focus on domestic fund opportunities. million from 2 funds.

Mezzanine Fund Name Fund Manager Fund Size Regional Focus European Mezzanine II GSC Partners 1,000 EUR Europe A total of 9 mezzanine funds raised $6 billion Mezzanine Partners IV Goldman Sachs 1,250 USD US during Q2 2006. Mezzanine Partners II Blackstone Group 1,060 USD US • The US raised the majority of the overall Euromezzanine 5 Euromezzanine 660 EUR France capital committed, attracting near to $4 Mezzanine Partners II ABRY Partners 650 USD US billion from 7 funds. • European based managers raised the GSC Partners raised the largest fund of Q2 2006, with its second European Fund. The fund closed over a year after an initial close on €240 million in April 2005. The final close of €1 billion is double remaining $2 billion achieved overall by the original target set at the fund’s launch. The fourth mezzanine fund raised by Goldman Sachs the fund type, with closes from GSC is the largest US focused fund closed during Q2, achieving a final close of $1.25 billion. Finama Partners, and French firm Euromezzanine. Private Equity is amongst the investors in Blackstone’s second mezzanine fund, which also significantly exceeded its original target of $667 million, closing on $1,060 million in May 2006.

Fund Name Fund Manager Fund Size Regional Focus Real Estate Real Estate V Blackstone Group 5,250 USD US Strategic Partners IV Beacon Capital Partners 2,000 USD US The real estate private equity asset class has continued to gain popularity amongst Capital Partners II KSL Capital Partners 1,000 USD US investors with 12 real estate funds raising $12 Realty Partners IV Crow Holdings 800 USD US billion in Q2 2006.

Capital Partners II Broadreach 700 USD US • 8 US funds raised a total of $11 billion, $5 Blackstone’s largest Real Estate Offering to date exceeded it’s original target of $4 billion, going billion of this coming from Blackstone Real on to raise over $5 billion in commitments. Investors in the fund include the New Jersey State Estate V. Investment Council, Pennsylvania State Employees’ Retirement System and Teachers’ Retirement System of Texas. The biggest private equity real estate fund of all time; Blackstone Real Estate V • Within Europe 3 funds raised an will invest in opportunities within the real estate sector on a global basis. aggregate $1.2 billion during the second quarter of the year.

OTHER NOTABLE FUND CLOSES DURING Q2 2006______Fund Name Fund Manager Type Fund Size Regional Focus

EnCap Energy Capital Fund VI EnCap Investments Natural Resources 1500 USD US

Urban Infrastructure Opportunity Urban Infrastructure VC Infrastructure 50000 INR India

BDCM Opportunity Fund II Black Diamond Capital Distressed Debt 1000 USD US

AXA Co-investment Fund II AXA Private Equity Balanced 550 EUR France

Vision Capital Partners VI Vision Capital (UK) Secondaries 350 EUR UK

IDFC Private Equity Fund II IDFC Private Equity Infrastructure 430 USD India

GSC European CDO III GSC Partners Distressed Debt 420 USD Europe

GSC Partners CDO Fund VI GSC Partners Distressed Debt 413 USD US