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1. Executive Summary - Sample Pages

Fig. 1.1: Fundraising for Funds of Funds as a Proportion of Overall Private Equity Fundraising, 2005-2010 Executive Summary 14%

12% 12% 12% 11% Funds of funds have long acted as an important 10% conduit for the fl ow of capital into the private equity 10% industry. They provide a means of accessing the asset 9% class for investors that lack the fi nance, knowledge or 8% experience required to select and participate in funds 6% directly. They also represent a key and signifi cant 6% source of capital for private equity fund managers, often making repeat investments with the same 4% fi rm. This duality has meant that in the wake of the fi nancial crisis and a slump in overall private equity 2%

fundraising, the importance of funds of funds has All Fundraising Funds of as a % grown while the managers of such vehicles have themselves faced difﬁ culties in raising capital. 0% 2005 2006 2007 2008 2009 Jan - Nov 2010 Fundraising Market Year

The fundraising environment for all private equity by year-end, with December traditionally being a attraction of fund of funds managers as providers of vehicles remains tough, with diffi cult conditions seen comparatively strong month for closes of funds of exposure to top-tier and diffi cult-to-access funds, for in 2009 persisting throughout 2010. Managers are funds, it is unlikely to match the market share (12%) example, is no longer as relevant. The oversubscription bringing fewer vehicles to market and targeting less these vehicles held in 2009. of private equity funds that was seen in the asset class capital than during the industry’s peak years of 2006- a few years ago is rare in today’s market, making it 08, while the number of funds closing and the amount The 2011 Preqin Private Equity Fund of Funds Review easier for investors to participate directly in their of capital secured have also declined in the past presents detailed analysis of the current and recent chosen funds without the need to invest via fund of couple of years. global fundraising market for funds of funds, as well funds vehicles. Some managers are also dropping as comprehensive listings of the vehicles that are the minimum commitment levels, allowing smaller A drop in the market share of funds of funds in currently seeking capital and those that have closed investors to adequately diversify their portfolio without 2010 indicates that it has been a particularly diffi cult since 2009. using funds of funds. year of fundraising for managers of these vehicles (see Fig. 1.1). The capital raised by funds of funds Changes in Investor Motivation The pool of new fund of funds investors is also smaller represented just 6% of the 2010 market total at the than in recent years. Some investors that invested time of publication in November 2010, compared to an In the current market, some of the key reasons for in fund of funds in the past to gain experience of the average of almost 11% over the previous fi ve years. investors participating in funds of funds are less asset class now feel that they have the necessary Although the current market share is likely to increase compelling than they have been in the past. The knowledge to commit to private equity funds directly,

© 2010 Preqin Ltd 1 1. Executive Summary - Sample Pages avoiding the additional fees attached to fund of funds investments. At the same time, fewer new investors, Fig. 1.2: Breakdown of Underlying Fund Investments Made by Fund of Funds Managers which have historically represented a strong source of by Quartile Ranking capital for fund of funds, are entering the asset class for the ﬁ rst time as a result of market uncertainty. Conditions are therefore very challenging, and ﬁ rms are having to work harder than ever in order to identify and attract new limited partners.

Within the Review we present 150 institutions that are investing in funds of funds, including those seeking to make maiden commitments, plus highlights for the plans of 25 investors that are expecting to be particularly active in 2011.

Performance of Funds of Funds

The performance of funds of funds has improved recently – the one-year horizon IRR to March 2010 was 10.5% compared to 0.2% and -12.0% to December 2009 and December 2008 respectively – but the long-term returns offered by these vehicles are considerably less attractive compared to those of of bottom quartile managers fail to beat the median of funds in the next three years, while an additional direct investment funds: as at March 2010, the fi ve- benchmark with their next fund of funds. quarter will consider making new commitments in year horizon return for funds of funds was 5.5%, while this period. As evidenced by the current fundraising the average across all private equity fund types was This demonstrates that there is a considerable degree market, however, investors are generally being more 16.8%. of skill among the most successful managers. It cautious than ever when making new commitments. also suggests that funds of funds are a compelling One-third of survey respondents that plan to commit It is interesting to note, however, that there is a investment solution for investors if they can establish to a fund of funds in the next three years expect signifi cant gap between the best and worst fund of relationships with the right managers. This is supported to do so in 2011, but 51% are yet to decide on the funds performers, and there is strong evidence that by Fig. 1.2, which shows that 55% of the vehicles that timing of any new activity (see Fig. 1.3). Firms that the top performing managers are successful across fund of funds fi rms invest in are ranked in the top two are seeking to raise new funds, therefore, will need multiple funds. Analysis in this year’s Fund of Funds performance quartiles. to persuade investors of their attributes and to Review (which presents fund-level performance data differentiate themselves in a market that offers plenty for over 600 fund of funds vehicles) shows that 39% Investor Appetite – Existing Investors of alternatives. Given that the past performance of of managers of top quartile funds of funds go on to fund of funds managers has traditionally been a strong manage a top quartile follow-on vehicle, while 66% Preqin’s October 2010 survey of 148 fund of funds indicator of future performance, limited partners are of top quartile managers outperform the median investors (presented in this publication) indicates also reviewing track records extensively, adding to the benchmark with their next offering. Conversely, 64% that half intend to make new commitments to funds challenge faced by fi rms looking to secure capital.

Even for those fund of funds managers that do not have a new fund in the market, the indication is that Fig. 1.3: Investors’ Expected Timeframe for Next Commitment to a Fund of Funds they will need to carefully consider investor relations in order to secure re-up commitments in the future. Although investors commonly have long-established relationships with fund of funds managers, our survey also shows that just over half of respondents will remain open to investing with teams they have not made allocations to in the past.

With so much variation in the performance of fund of funds managers, and with a large number of ﬁ rms offering strategically similar vehicles, investors are going to have to make their investment decisions carefully to ensure they make the right choice. As fund of funds managers work harder to identify the best prospects, managers of direct investment funds may also ﬁ nd that automatic re-ups are no longer guaranteed.

Fund of Funds Managers: Changes in the Market

Mergers, acquisitions and spin-outs of management New regulations, such as the Dodd-Frank Act in the The Road Ahead teams are themes that are not unfamiliar in the private US, that place constraints on alternative investment equity fund of funds market (a number of the currently activities of banks have been introduced in 2010. Despite recent changes in the market, funds of funds active fi rms were formed following such transactions), Although regulations have proved less severe than continue to play an important role in the private equity but 2010 has seen more activity than usual, with many expected, some banks have sought to dispose industry. The best managers of these vehicles will several prominent players involved. Consolidation of private equity fund of funds arms. continue to attract capital in future and we expect the was inevitable given the market contraction that has market to improve over the coming years. As in the followed several years of considerable growth. The As the fundraising climate remains uncertain, further past, the structure and inherent advantages of funds of tough fundraising environment of the last two years consolidation is likely to occur in 2011. Similarly, as funds mean that they will attract investors entering the has intensifi ed competition for investor commitments, fi nancial institutions continue to restructure and adapt asset class for the fi rst time, as well as small investors with the number of fund of funds previously coming to to new legislation, further sales of fund of funds units that start to think about returning to the market after the market now unsustainable (196 vehicles targeting to management teams and external parties could be fi rst participating during the boom years. $67 billion were on the road in Q4 2008, compared to seen. Fig. 1.4 provides a sample of the consolidation, 146 vehicles targeting $45 billion in November 2010). spin-out and buyout activity that has occurred in 2010. Other benefi ts that derive from participating in funds Changes in the ownership of some fund of funds units of funds, including diversifi cation and superior fund have also occurred as a result of fi nancial groups selection, are diffi cult for investors to successfully increasingly seeking to focus on core operations. replicate when acting alone and are particularly

© 2010 Preqin Ltd 3 1. Executive Summary - Sample Pages important amid continuing fi nancial and economic uncertainty. Fig. 1.4: 10 Examples of Consolidation and Spin-Out Transactions in the Private Equity Fund of Funds Market in 2010 The ability of top managers to provide exposure to niche and emerging markets is also something that Fund of Funds Managers Transaction Summary continues to be valued by investors. Funds of funds AIG Investments The purchase of PineBridge Investments was completed in March 2010 by Hong Kong-based are likely to place greater emphasis on regions outside - now known as PineBridge Pacifi c Century Group. The fund of funds unit was previously part of AIG Investments, the of North America and Europe in the next few years as Investments investment advisory and asset management business of American International Group (AIG). Gartmore Private Equity, Hermes GPE was established as an independent private equity fund of funds manager and they seek to expand their client base while benefi ting Hermes Private Equity advisor in April 2010 following the merger of Hermes Private Equity and Gartmore Private Equity, from the attractive long-term growth rates anticipated the respective fund of funds arms of London-based fi rms Hermes and Gartmore. in some markets, such as China and India. Sal. Oppenheim Private DB Private Equity was established in April 2010 when the operations of RREEF Private Equity, Equity Partners, RREEF Sal. Oppenheim Private Equity Partners (SOPEP) and Deutsche Bank’s private equity division of The 2011 Preqin Private Equity Fund of Funds Private Equity, DB Private its wealth management business were brought together. The bank had completed the €1 billion Equity purchase of Sal. Oppenheim Group, a European private bank, in March 2010. Review AGF Private Equity France-based private equity fi rm Groupe IDI completed the purchase of Idinvest Partners from the - now known as Idinvest Allianz France group in May 2010. The management team of the fund of funds business, which For this year’s publication we have sought to include Partners had been known as AGF Private Equity, retains a 49% stake in the fi rm. data, listings, profi les and analysis on every aspect LODH Private Equity A management buyout of Zurich-based LODH Private Equity was concluded in May 2010. The - now know as Akina fund of funds manager had been a member of the Lombard Odier private banking group and is of the private equity fund of funds industry worldwide, now known as Akina. including fund managers, fundraising, fund terms and Citi Private Equity, US-based StepStone Group assumed the management of Citi Private Equity’s $4 billion fund conditions, fund performance, institutional investors in StepStone Group of funds operations in October 2010. As part of the deal that was fi rst announced in July 2010, funds of funds and more. For the fi rst time we present secondary fund manager Lexington Partners bought a portion of the proprietary interests Citigroup listed funds of funds and analysis of listed vehicles previously held in the funds now managed by StepStone. GKM Newport, Macquarie Australia-based Macquarie Funds Group (MFG) completed a takeover of fund of funds manager in separate chapters. We have gone to considerable Funds Group GKM Newport in October 2010. Several members of the California-based fi rm subsequently lengths to ensure that the publication is as accurate moved to MFG. as possible, gathering intelligence through a number PCGI The managers of PCGI bought out Pacifi c Corporate Group’s (PCG) shareholding in the fund of different channels, primarily and most importantly of funds fi rm in October 2010. The management team, which had been known as Aviva Capital, established the fi rm as a joint venture with PCG in 2005. It expects to adopt a new identity in the from fund managers and investors themselves. We near future. hope that you fi nd this year’s edition to be a valuable Piper Jaffray Private US investment bank Piper Jaffray announced in October 2010 that its private capital group would resource and as ever we welcome any comments and Capital Group become an independent entity following a management buyout. Piper Jaffray Private Capital feedback that you may have. - now known as North Sky Group was expected to assume its new identity, North Sky Capital, in December 2010. Capital Pohjola Private Equity Paris-based fund of funds manager Access Capital Partners (ACP) acquired Finnish counterpart Funds, Access Capital Pohjola Private Equity Funds (PPEF) in November 2010, increasing its assets under management Partners to €4.5 billion. As part of the transaction, alternative investment fi rm Capman sold the majority of its 35% stake in ACP to Pohjola Bank.

The 2011 Preqin Private Equity Fund of Funds Review - Sample Pages

1. Executive Summary 7 12. Private Equity Fund of Funds Managers 91 2. Data Sources and Contributors 15 - Proﬁ les for 230 active ﬁ rms

3. Fundraising Analysis 19 13. Listed Fund of Funds Analysis 213 - Historic fundraising, market share, funds closed by geography, funds closed by - Share prices for listed funds, discount/premium to net asset value, changes in GP location, average fund size evolution, funds closed by fund size, ﬁ rst-time net asset value, breakdown by geographic focus and location, allocations to fund funds of funds fundraising types, strategies of listed funds of funds

4. Closed Fund of Funds: 2009-2010 27 14. Listed Fund of Funds 221 - Profi les for 25 listed fund of funds vehicles 5. Current Fundraising Market 43 - Evolution of fundraising market, funds raising by geography, funds raising by GP 15. Investors in Fund of Funds Analysis 249 location, funds raising by fund size, largest funds on the road, fi rst-time funds - Investors’ motivations for investing in funds of funds, investor experience, investor raising sizes, make-up of investors in closed funds, investor base by GP location and fund focus, investor types, survey of investor appetite going forwards 6. Fund of Funds Currently Raising 49 16. Investors to Watch 257 7. Fund of Funds Terms and Conditions Analysis 61 - The most important 25 institutional investors to watch in 2011 - Management fees during investment period, mechanisms for reducing management fees after the investment period, carried interest, basis for charging 17. Investor Profi les 265 carried interest, hurdle rates, manager commitments, minimum LP commitments - Profi les of 150 key investors in funds of funds

9. Fund of Funds Performance Analysis 67 18. Index 301 Net IRR dispersion, median benchmark deviation, private equity horizon IRRs, - Fund of Funds Managers DPI, RVPI and TVPI, median net IRRs and quartile boundaries, DPI ratio - Investors in Funds of Funds - dispersion, net multiples, net IRR J-curve, fund selection performance, top managers, synthetic IRR benchmarks, relationship of predecessor and successor - Figure Index fund quartiles 19. Other Preqin Products 313 10. Fund of Funds Managers as Investors 75 - Regional breakdown of fund of funds managers, attitudes to ﬁ rst-time funds, attitudes to emerging markets, allocations to fund types, allocations by primary commitments, secondary purchases and co-investments

11. Fund of Funds Managers as Investment Consultants 83 - Overview of investment consulting services offered, proportion of managers offering investment consulting services, geographic breakdown, number of employees, age of ﬁ rms, breakdown by assets under management/advisement

Data Sources

The 2011 Preqin Private Equity Fund of Funds Review fund investments and GP relationships, current The Review is based upon the latest information has brought together several of Preqin’s data sources investment plans and funds available, and key contacts. available at the time of going to press in November to give a unique perspective on the worldwide market GPs, placement agents and secondary specialists 2010. Preqin will continue to monitor the market for private equity funds of funds. These include our use it as a vital resource for their fundraising, investor during the course of the year, and to serve clients market-leading online databases plus signifi cant relations and deal sourcing activities. Being online with our online information services, publications, and additional research conducted specifi cally for the and updated on a regular basis, Investor Intelligence bespoke research projects. Please contact us if you Review. provides the up-to-date information that no printed have additional information requirements that we can directory can. assist you with: Performance Analyst: [email protected] Gives detailed fi nancial information for over 13,800 LP Interviews: private equity funds globally, including net-to-LP In addition to the information from Investor Intelligence, performance data for 5,200 funds. The database lists our analysts interviewed over 150 LPs during the 1,424 private equity funds of funds, with performance research for the Review, and their responses have data for 621. Performance Analyst is a unique given vital insights into their investment intentions and resource that has enabled us to analyse key data for hence the prospects for the fund of funds market in the performance of funds of funds. 2011.

Funds in Market: Manager Interviews: Gives detailed information for almost 1,600 new funds Our analysts are in regular contact with fund of currently on the road, plus over 500 funds that have funds managers throughout the year to get the latest closed during the past year, and over 500 follow-on information on their investment plans and on their funds likely to launch during the coming 12 months. current and prospective fundraising activities. This Complete with details on the industry and geographic ensures that 300 fi rm profi les on Investor Intelligence focus of each fund, and updated daily throughout the and nearly 1,000 raising and closed fund profi les year, the database provides its many users with an on Funds in Market are kept up-to-date with the invaluable ‘pulse’ on the global market. latest information. In addition, almost 80 managers participated in a survey in preparation for the Review, Investor Intelligence: providing an insight into current strategies and areas The premier source for LP information worldwide, of interest, as well as an indication of the important this unique online service has over 4,100 detailed issues facing the private equity industry. A signifi cant profi les for all types of institutions from all regions number of GPs also provided us with access to their worldwide, complete with information on assets under fund terms and conditions, for which we are very management, allocations to private equity, previous appreciative.

Median Called-Up, Distributed and Remaining Fig. 9.4: Fund of Funds Median Called-Up, Distributed and Remaining Value Ratios by Vintage Year Value

Fig. 9.4 shows the median called-up to committed 160% capital, distributed to paid-in capital and remaining value to paid-in capital for funds of funds of vintage 140% years between 1998 and 2009. Funds with the most Remaining Value to 120% Paid-In Capital (%) recent vintages currently have ratios of total value to paid-in capital of signiﬁ cantly less than 100% as they 100% are still making fund investments and waiting existing % commitments to be called up by the underlying funds 80% Distributed to Paid-In Capital (%) in their portfolios. Funds with vintages up to 2003 60% have median returns of between 1.2x and 1.5x the original investment. Fund of funds investment vehicles 40% Called-Up to typically mature at a slower rate compared to direct Committed Capital private equity funds. As an example, for funds of funds 20% (%) with vintage year 2002, the median value of distributed capital is 56.6% compared to 109.3% for direct buyout 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 funds with the same vintage year. However, the median percentage of remaining value for this vintage Vintage Year year is 77.7% for funds of funds compared to 46.8% Fig. 9.5: Fund of Funds Median Net IRRs and Quartile Boundaries by Vintage Year for direct buyout funds. These differences are mainly because fund of funds vehicles invest in a wide range 20.0% of funds with diverse vintage years and, as a result, it takes longer to call up capital and make distributions. 15.0%

10.0% Fund of Funds Median Net IRRs and Quartile Top Quartile IRR Boundaries 5.0% Boundary

The performance of funds of funds with underlying 0.0% Median IRR data to March 2010 can be analyzed by looking at 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 -5.0% the top quartile, median and bottom quartile IRRs by Bottom Quartile vintage for these vehicles. Fig. 9.5 shows the median -10.0% IRR Boundary net IRRs and quartile boundaries for vintages 1998 to Net IRR (%) since Inception 2008, where all ﬁ rst quartile funds have IRRs above -15.0% the top quartile line and those with IRRs below the -20.0% bottom quartile boundary are fourth quartile funds. Funds of funds with vintages before 2004 have returns -25.0% above zero, with the median IRRs ranging between Vintage Year

© 2010 Preqin Ltd 8 9. Fund of Funds Managers as Investors - Sample Pages secondaries funds, which perhaps explains the fact Fund of Funds Managers’ Attitudes to First-Time consider investing in these vehicles. Just 14% of fund that the proportion of capital set aside by funds of Funds of funds managers do not consider fi rst-time funds funds for secondary market purchases rose by just for investment, a signifi cantly lower proportion than is one percentage point from 9% of capital committed Fund of funds managers have traditionally been seen seen amongst institutional investors in private equity, to funds of funds closed in 2007-8 to 10% of capital as strong supporters of fi rst-time funds, with a number 34% of which do not consider fi rst-time funds for committed to funds of funds closed in 2009-10. of LPs using funds of funds to support emerging investment. teams in particular regions without directly investing To gain a clearer indication of fund of funds managers’ with them. Such a decision allows investors to access Fund of funds managers’ attitudes to fi rst-time funds recent activity in the secondary market and co- funds being raised by less experienced managers vary from region to region. As Fig. 10.7 shows, 74% investments, managers surveyed in October 2010 while diversifying the risk across a range of funds and of North American fund of funds managers invest were asked whether they had increased the level benefi ting from the extensive due diligence resources in or consider investing in fi rst-time funds, whereas of their investments in these areas over the past 12 at the disposal of fund of funds managers. Invesco 59% of European fund of funds managers have the months. A considerable 56% of managers informed Private Capital manages two emerging manager same attitude. The vast majority of fund of funds us that they had made more secondary market mandates on behalf of the California State Teachers’ managers located in Asia and Rest of World actively investments and 46% had made more direct co- Retirement System (CalSTRS), the most recent being invest in or consider investing in fi rst-time funds, with investments in the past 12 months than in prior years, CalSTRS New and Next Generation Manager Fund II. just 7% opting to only invest with more experienced further evidence of the growing interest in these areas It invests this capital with managers raising their fi rst, managers, perhaps a refl ection of the younger and shown by fund of funds managers and their limited second and third funds. expanding nature of the private equity industry in partners. emerging markets. As shown in Fig. 10.6, 57% of active fund of funds managers invest in fi rst-time funds. A further 12%

Fig. 10.7: Attitudes of Fund of Funds Managers to First-Time Funds Split by Fig. 10.8: Factors Affecting the Private Equity Industry Ranked by Fund of Manager Location Funds Managers According to Importance 100% 7% 5.0 13% 90% 17% 7% Will Not Invest in 4.5 First-Time Funds 4.1 4.0 3.9 80% 13% 4.0 14% 3.6 3.5 3.4 3.3 70% 9% 24% 3.2 3.1 Will Only Invest in 3.0 60% Spin-Off Funds 2.5 16% 50% 2.0 Would Consider 40% 1.5 72% Investing in First- 65% Time Funds 30% 1.0 Average Importance Rating Average 0.5 20% 43% Will Invest in First-

Time Funds Important) (1 = Not Important; 5 Very 0.0

Proportion of Fund Funds Managers 10% Investor Financing Exit Economic Political Fund Terms New Deal Too Many Sentiment Opportunities Uncertainty Pressure and and Opportunities Managers 0% Legislation Conditions North America Europe Asia and Rest of World Fund of Funds Manager Location Factors Affecting the Private Equity Industry

Akina Total FoFs Capital Raised: EUR 1,388 mn Tel: +41 (0)44 214 1380 www.akinapartners.com Sihlstrasse 20, P.O. Box 2776, Zurich, 8021, Switzerland Established: 1998 Fax: +41 (0)44 214 1350 [email protected] Akina is a Zurich-based private equity manager that was founded in 1998. It was a member of the Lombard Odier private banking group and known as LODH Private Equity until a management buyout of the firm was completed at the end of May 2010. Akina manages private equity funds of funds and single client mandate investment programs that serve institutional and high-net-worth clients based in Europe, North America and the Middle East. Euro Choice V Fund Size: EUR 600 mn* Announced Fund Types: Buyout, Expansion, Special Situation, Turnaround Euro Choice V is expected to follow a similar strategy to its predecessors and is likely to be launched in the first half of 2011. It is anticipated that Regions: West Europe, East Europe the vehicle will focus on buyout, growth capital and special situations funds totalling EUR 400 million or less in size and targeting small- to mid- Strategies: Primary, Secondary, Direct sized European companies. The vehicle is also likely to purchase fund investments on the secondary market. Direct co-investments with the same strategic focus will be offered through a separate, parallel fund. Euro Choice IV Fund Size: EUR 513 mn Closed: 2009 Fund Types: Buyout, Expansion, Special Situation, Turnaround Euro Choice IV is focused on buyout, growth capital and special situations funds targeting small to mid-sized European companies, with no Regions: West Europe (80-100%), East Europe (0-20%) allocations to venture or mega-buyout funds. It considers first-time fund management teams but is more likely to accept investments with spin- Strategies: Primary (80-100%), Secondary, Direct (0-20%) out teams. It typically makes commitments of approximately EUR 20 million and targets funds of sizes between EUR 50 million and EUR 750 Invest First-Time Funds: Spin-Offs million. The vehicle also purchases fund investments on the secondary market and makes selective direct investments, typically as co- Total Planned Fund Investments: 15 to 25 investments. As of Q4 2010, Euro Choice IV had made 10-15 commitments and it was looking to invest in five to six funds in the next 12 months. Commitments Made to Date: 63% of capital, 13 funds Sample Investments: ECI 9, Innova/5, Xenon V Typical Fund Investment: EUR 20 mn Plans - Next 12 Months: 5 to 6 funds (EUR 100 to 200 mn) Sample Buyout Fund Investments ECI 9 (2010), Innova/5 (2009), Xenon V (2009), Exponent Private Equity Partners II (2008), Odin Equity Partners II (2008), Litorina Kapital Fund III (2007), Chequers Capital XV (2006), I&FI II (2006), Innova/4 (2006), Axcel III (2005), Butler France Private Equity III (2005), Riverside Europe Fund III (2005), Exponent Private Equity Fund (2004), FSN Capital II (2004), Graphite Capital Partners VI (2003), Chequers Capital (2002), Nmas 1 Private Equity Fund I (2002), ECI 7 (2000), EquiVest I (2000), Investitori Associati III (2000) Sample Venture Fund Investments Emerging Europe Accession Fund (2010), Euroventures Hungary III (2004) Other Fund Investments Special Situations Venture Partners Fund (2002) Funds Managed Fund Vintage Status Size Called % Distributed (%) Rem. Value Multiple (X) Net IRR (%) Benchmark IRR Date DPI (%) RVPI FoF Synthetic Reported Euro Choice V 2011 Announced EUR 600 mn* Euro Choice IV 2008 Closed EUR 513 mn 9.1 65.0 0.65 n/m n/m 31-Mar-10 Euro Choice III 2006 Closed EUR 493 mn 49.3 4.6 78.4 0.83 -12.2 -4.6 -9.1 31-Mar-10 Euro Choice II 2003 Closed EUR 215 mn 96.3 13.6 78.3 0.92 -3.3 12.6 11.4 31-Mar-10 Euro Choice I 2000 Closed EUR 167 mn 97.0 112.0 n/a n/a n/a 11.2 30-Jun-10 Contacts Name Job Title Tel Email Christopher Bödtker Managing Partner +41 (0)44 214 1380 [email protected] Thomas Frei Senior Partner +41 (0)44 214 1342 [email protected] Regula Mori Director, Marketing & Investor Relations +41 (0)44 214 1446 [email protected] Yvonne Stillhart Senior Partner +41 (0)44 214 1344 [email protected] Mark Zünd Senior Partner +41 (0)44 214 1347 [email protected]

Mesirow Financial Private Equity Total FoFs Capital Raised: USD 2,767 mn Tel: +1 312 595 6923 www.mesirowfinancial.com 353 North Clark Street, Chicago, IL, 60654, US Established: 1982 Fax: +1 312 595 4246 [email protected] Mesirow Financial Private Equity is a leading private equity manager, providing private equity partnership fund of funds and direct co-investment funds for its diversified global client base, which includes pension funds, Taft-Hartley plans, foundations, endowments and high net worth individuals. Since its founding in 1982, Mesirow Financial Private Equity and its affiliated entities have managed approximately USD 3 billion of private equity committed capital. Mesirow Financial Private Equity Partnership Fund V Fund Size: USD 650 mn First Close: 2008 Fund Types: Buyout (40-45%), Special Situation (10-20%), Venture (40-45%) Mesirow Financial Private Equity Partnership Fund V follows a similar strategy to its predecessor. Geographically, the fund will be 75-80% Regions: North America (75-80%), Europe (20-25%) focused on the US with the remaining capital going to European investments. Primary fund investments make up 80-90% of the fund, with Countries: US (80%) around 10-20% allocated to secondary market purchases. The fund aims to make 35-40 fund commitments in total and typically commits USD Strategies: Primary (80-90%), Secondary (10-20%) 15-30 million per fund. As of Q4 2010, Mesirow Financial Private Equity Partnership Fund V expected to invest in 12-15 private equity funds Invest First-Time Funds: Spin-Offs in the next 12 months. Total Planned Fund Investments: 35 to 40 Typical Fund Investment: USD 15 to 30 mn Plans - Next 12 Months: 12 to 15 funds (USD 180 to 450 mn) Mesirow Financial Private Equity Partnership Fund IV Fund Size: USD 909 mn Closed: 2008 Fund Types: Buyout (55%), Distressed Debt, Special Situation (5-20%), Venture (30%) Mesirow Financial Private Equity Partnership Fund IV invests 75-80% of its capital in US-based funds and 20-25% in Europe-based vehicles. It Regions: North America (75-80%), Europe (20-25%) is largely focused on US buyout and venture funds, with about 40% being allocated to US buyout funds and 30% to US venture funds. A further Countries: US 15% is being allocated to special situations funds, including some exposure to distressed debt vehicles, based in the US. Internationally, the Strategies: Primary (80-90%), Secondary (10-20%) fund invests 20-25% in Western and Northern European buyout funds.It invests 80-90% in primary funds and 10-20% in secondary investments. Invest First-Time Funds: No Mesirow Financial Private Equity Partnership Fund IV aims to build a portfolio of around 55 to 60 private equity funds. The partnership generally Total Planned Fund Investments: 55 to 60 commits between USD 15 million and USD 30 million to each underlying fund. As of Q4 2010, the fund of funds was still looking to make a few Typical Fund Investment: USD 15 to 30 mn investments in the next 12 months and planned to be fully committed by mid-2011. Sample Investments: Apax Europe VII, Battery Ventures VIII, Draper Fisher Jurvetson IX, Fortress Investment Fund V, Fortress Investment Fund V Co-Investment, Hellman & Friedman VI, JMI Equity Fund VI, Jordan Resolute Fund II, Kelso Investment Associates VIII, Providence Equity Partners VI, Shansby Group 5, Sun Capital Partners V, EQT V , Green Equity Investors V , Sun Capital Partners IV Sample Buyout Fund Investments Madison Dearborn Capital Partners VI (2008), Apax Europe VII (2007), Cinven IV (2007), Hellman & Friedman VI (2007), Jordan Resolute Fund II (2007), Kelso Investment Associates VIII (2007), Providence Equity Partners VI (2007), Shansby Group 5 (2007), Sun Capital Partners V (2007), Berkshire Fund VII (2006), Blackstone Capital Partners V (2006), Brockway Moran & Partners III (2006), Charterhouse Capital Partners VIII (2006), EQT V (2006), Green Equity Investors V (2006), Madison Dearborn Capital Partners V (2006), Spectrum Equity Investors V (2006), TA X (2006), Texas Pacific Group Partners V (2006), Apax Europe VI (2005), BC European Cap VIII (2005), Sun Capital Partners IV (2005), Thoma Cressey Fund VIII (2005), Vestar Capital Partners V (2005), Kelso Investment Associates VII (2004), Blackstone Capital Partners IV (2003), Green Equity Investors IV (2003), Texas Pacific Group Partners IV (2003), Berkshire Fund VI (2002), Fremont Partners III (2002), Shansby Group 4 (2002), Wind Point Partners V (2002), BC European Cap VII (2000), Willis Stein & Partners III (2000), Berkshire Fund IV (1996) Sample Venture Fund Investments Battery Ventures VIII (2007), Doll Capital V (2007), Draper Fisher Jurvetson IX (2007), JMI Equity Fund VI (2007), Latterell Venture Partners III (2007), Media / Communications Partners VI (2006), Meritech Capital Partners III (2006), New Enterprise Associates XII (2006), Opus Capital I (2006), Battery Ventures VII (2005), Canaan Equity VII (2005), HealthCare Ventures VIII (2005), Accel IX (2004), Doll Capital IV (2004), US Venture Partners IX (2004), Globespan Capital Partners IV (2003), HealthCare Ventures VII (2002), Latterell Venture Partners II (2002), Doll Technology Investment Fund III (2000), Doll Technology Investment Fund II (1999) Other Fund Investments Fortress Investment Fund V (2007), Fortress Investment Fund V Co-Investment (2007), Apax France VII (2006), Fortress Investment Fund IV (2006), Fortress Investment Fund IV Co-Investment (2006), TA Subordinated Debt II (2006), Mesirow Financial Private Equity Partnership Fund III (2005), Peninsula Capital Fund IV (2005), Fortress Investment Fund III (2004), Apax France VI (2000) Funds Managed Fund Vintage Status Size Called % Distributed (%) Rem. Value Multiple (X) Net IRR (%) Benchmark IRR Date DPI (%) RVPI FoF Synthetic Reported Mesirow Financial Private Equity Partnership Fund V 2008 First Close USD 650 mn 7.9 94.3 0.94 n/m n/m 31-Mar-10 Mesirow Financial Private Equity Partnership Fund IV 2006 Closed USD 909 mn 30.2 1.7 82.3 0.84 -9.0 -4.3 -8.5 31-Mar-10 Mesirow Financial Private Equity Partnership Fund III 2005 Closed USD 505 mn 70.1 0.5 86.0 0.87 -7.4 -1.7 -3.3 31-Mar-10 Mesirow Partnership Fund II 2002 Closed USD 236 mn 84.0 52.3 80.6 1.33 8.8 8.3 31-Dec-09 Mesirow Partnership Fund I 1999 Closed USD 217 mn 97.4 71.4 42.5 1.14 2.4 2.8 7.2 31-Dec-09

Contacts Name Job Title Tel Email Courtney Haynes Vice President +1 312 595 6923 [email protected]

Private Equity Funds Research and Investments Total FoFs Capital Raised: USD 126 mn Tel: +81 (0)3 6214 2240 www.pefri.co.jp/pefri Da Vinci Building 5F, 1-7-9 Nihonbashi, Chuo-ku, Tokyo, 103-0027, Japan Fax: +81 (0)3 6214 2247 [email protected] Private Equity Funds Research and Investments (PEFR&I) is a joint venture between Nomura Group, which holds a 65% stake, Norinchukin Bank, with 30%, and Development Bank of Japan, with 5%. It offers investment advisory and discretionary investment management services in private equity fund of funds. PEFRI Asia PEF I Fund Size: USD 126 mn Closed: 2010 Fund Types: Buyout (40-60%), Expansion (40-60%), Venture (0-10%) PEFRI Asia PEF I invests with managers based in various markets in the Asia region, including Japan, China, India, Australasia, South Korea Regions: Asia (100%) and South East Asian countries. Its primary focus is buyout and growth capital funds and it invests opportunistically in venture capital funds. The Countries: Australia, China, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, fund of funds only makes primary investments and may consider first-time funds. As of Q4 2010, PEFRI Asia PEF had made nine Philippines, Singapore, Taiwan, Thailand commitments and it was actively making new commitments. Strategies: Primary (100%) Invest First-Time Funds: Considering Total Planned Fund Investments: 10 to 25 Commitments Made to Date: 9 funds Typical Fund Investment: USD 5 to 20 mn Plans - Next 12 Months: 3 to 5 funds (USD 20 to 40 mn) Funds Managed Fund Vintage Status Size Called % Distributed (%) Rem. Value Multiple (X) Net IRR (%) Benchmark IRR Date DPI (%) RVPI FoF Synthetic Reported PEFRI Asia PEF I 2009 Closed USD 126 mn 20.0 n/a n/a n/a n/m n/m 30-Sep-10 Contacts Name Job Title Tel Email Takashi Futatsugi Managing Director, Portfolio Management +81 (0)3 6214 2251 [email protected] Kazuo Nishimura Managing Director, Investment Analysis +81 (0)3 6214 2240 [email protected]

BVV Private Sector Pension Fund Laird Norton Tyee Asset Manager Kurfürstendamm 111-113, Berlin, 10711, Germany 801 Second Avenue, Suite 1600, Seattle, WA, 98104, US Tel: +49 (0)30 896 0159 1 www.bvv.de Tel: +1 206 464 5100 www.lntyee.com Fax: +49 (0)30 896 0141 9 [email protected] Fax: +1 206 464 5267 [email protected] BVV actively invests in funds of funds. It allocates 85% of its private equity portfolio to fund of funds investments and Laird Norton Tyee invests its entire private equity allocation in funds of funds. The asset manager views these over the 12 months from Q4 2010, the pension fund anticipates committing EUR 25-30 million to at least one new vehicles as a way to achieve an appropriate level of strategy, geography, vintage year and manager diversification vehicle. Going forward it plans on maintaining its relationships with current managers but will also consider first-time while still achieving fund minimums. It predominantly invests in funds of funds with diversified strategies but may fund of funds managers. The pension fund primarily seeks to gain more exposure to the European market; however, invest small amounts in niche direct funds. Laird Norton Tyee anticipates making its next commitments to funds of global investment opportunities will be considered. The pension fund looks to gain access to funds of a range of funds in 2011-2012 and expects to commit approximately USD 15 million across two vehicles in the 12 months types but does not look for exposure to venture funds. Within the next three to five years, BVV anticipates following October 2010. It may consider new managers for these investments but will evaluate existing managers in decreasing its private equity fund of funds allocation as a proportion of its private equity portfolio. its portfolio for re-up investments first. In the longer term, it plans to maintain its fund of funds allocation. Total Assets (mn): EUR 22,000 Total Assets (mn): USD 3,500 Target Allocation to Private Equity (mn): EUR 330 (1.5% of Total Assets) Allocation to Private Equity (mn): USD 10 (0.3% of Total Assets) Allocation to Private Equity (mn): EUR 220 (1.0% of Total Assets) Plans for Next 12 Months: USD 15 mn (2 Funds) Plans for Next 12 Months: EUR 25 - 30 mn (At Least 1 Fund) Geographic Preferences for Fund of Funds Investments Geographic Preferences for Fund of Funds Investments North America Europe Asia Rest of World North America Europe Asia Rest of World • • • • • • • Underlying Fund Type Preferences for Fund of Funds Investments Underlying Fund Type Preferences for Fund of Funds Investments Buyout Venture Distressed PE Other Buyout Venture Distressed PE Other • • • • • Contact Name Position Telephone Email Contact Name Position Telephone Email Teresa Wells Investment Strategist +1 206 464 5217 [email protected] Uwe Hermann Portfolio Manager +49 (0)30 896 0159 1 [email protected] Bjoern Siegismund Portfolio Manager +49 (0)30 896 0144 8 [email protected] Samsung Life Insurance Insurance Company 150, Taepyongro 2-ga, Chung-gu, Seoul, 100-716, South Korea Flick Privatstiftung Family Office - Single Tel: +82 (0)2 751 8000 www.samsunglife.com Kärntnerring 11-13/7/3, Postfach 52, Vienna, 10105, Austria Fax: +82 (0)2 751 8021 Tel: +43 (0)1 515 2753 No Website Available Samsung Life Insurance allocates less than 10% of its private equity portfolio to funds of funds. It looks to invest in Fax: +43 (0)1 515 2768 funds of funds with focused strategies, targeting specific geographic regions. It finds vehicles targeting distressed private equity funds in Asia attractive. It typically commits USD 30 million per vehicle. As of Q4 2010, Samsung Life Flick Privatstiftung makes very selective investments in funds of funds and has around 4% of its private equity Insurance anticipated making new fund of funds investments in 2012. In the past it has worked with Pomona Capital portfolio allocated to these vehicles. The family office invests in funds of funds to diversify its portfolio and to gain but it will consider establishing new relationships with fund of funds managers going forward. It considers funds access to specific areas of the market, such as Asia-focused buyout and distressed funds. As of Q4 2010, Flick managed by spin-off teams. In the long term, funds of funds will play a diminishing role in its overall private equity Privatstiftung was considering making at most one new private equity fund of funds investment over the next three strategy. years. It would consider investing with a private equity fund of funds manager it had not previously worked with. In the long term, the family office anticipates its fund of funds allocation will remain the same as a proportion of its Total Assets (mn): USD 120,000 overall private equity portfolio. Allocation to Private Equity (mn): USD 400 (0.3% of Total Assets) Total Assets (mn): EUR 6,800 Geographic Preferences for Fund of Funds Investments Plans for Next 12 Months: Up to 1 Fund North America Europe Asia Rest of World Geographic Preferences for Fund of Funds Investments • North America Europe Asia Rest of World Underlying Fund Type Preferences for Fund of Funds Investments • Buyout Venture Distressed PE Other Underlying Fund Type Preferences for Fund of Funds Investments • Buyout Venture Distressed PE Other Contact Name Position Telephone Email • • • Jeryun Lee Manager, Private Equity +82 (0)2 2259 7177 [email protected] Contact Name Position Telephone Email Head of Private Equity & Markus Koenig Principal Investments +43 (0)1 515 2753 [email protected]

The 2011 Preqin Private Equity Funds of Funds Review has been completely updated to provide the most comprehensive and up to date guide available yet.

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• Manager Proﬁ les: Detailed proﬁ les for over 230 fund of funds managers

• Fund Profi les The 2011 Preqin Private Equity • Sample Investments & Fund Preferences Funds of Funds Review • Performance for over 600 individual fund of funds vehicles • Listed Vehicles: Detailed profi les for 25 listed funds of funds • LP Investors: Detailed profi les for 150 LP investors investing in funds of funds • Fundraising: In depth listings of all fund of funds closed during 2009 and 2010 and funds currently raising capital • Analysis: Detailed analysis on all aspects of the funds of funds market • Survey Results: Results from surveys of fund of funds and investors www.preqin.com/pefof

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