Private Equity & Venture Capital

VOLUME 13, ISSUE 8 ■ NOVEMBER 2017

alternative assets. intelligent data. PRIVATE EQUITY & VENTURE CAPITAL SPOTLIGHT

WOMEN IN VENTURE CAPITAL IN THIS ISSUE 21% of all venture capital employees are female. We focus on women-led venture capital fundraising and deal activity, and highlight recent developments in the industry, including Reid Hoffman’s #DecencyPledge movement FEATURE 3 amid recent sexual misconduct allegations. Women in Venture Find out more on page 3 Capital

FEATURE 8 Compensation and Employment COMPENSATION AND INDUSTRY NEWS 10 EMPLOYMENT

THE FACTS 78% ■ Japan-Based Private 12 of surveyed private capital firms increased the average Equity Investors firm-wide base salary in 2016/2017, and another 68% project a further increase in 2017/2018. ■ Venture Capital Fund 13 Performance Find out more on page 8 ■ Raising Private Equity 14 Funds of Funds ■ India-Based Deals and 15 Exits

CONFERENCES 16 RECENTLY RELEASED:

THE 2018 THE 2018 PREQIN PRIVATE PREQIN PRIVATE CAPITAL COMPENSATION AND EMPLOYMENT REVIEW CAPITAL COMPENSATION AND In association with:

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www.preqin.com/contact | [email protected] Global private equity fundraising Capstone Partners (www.csplp.com) is a leading independent placement agent focused on raising capital for private equity, credit, real assets and infrastructure firms. The Capstone team includes 35 experienced professionals in North America, Europe and Asia.

Platte River Equity We congratulate the Platte River Equity team on the first and final closing of Platte River Equity IV, L.P. at its hard cap.

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Americas — Europe — Middle East — Asia Pacific Securities placed through CSP Securities, LP Member FINRA/SIPC Authorised by FINMA WOMEN IN VENTURE CAPITAL WOMEN IN VENTURE CAPITAL

Expanding on data featured in Preqin’s recently released Women in Alternative Assets report, we focus on women-owned venture capital firm activity and look at the recent developments and reactions regarding initiatives to improve the gender imbalance and misconduct allegations.

ollowing recent allegations of Fig. 1: Annual Venture Capital Fundraising by Women-Owned Firms, 2007 - 2017 YTD Fdiscrimination within the venture (As at October 2017) capital industry, the issue of gender 30 3 balance has received renewed attention. 25 Aggregate ($bn) Capital Raised Women represent a mere 21% of all 25 24 2.4 venture capital employees, with the 2.1 largest proportion (36%) of women in 20 18 2 1.8 venture capital in junior-level positions, 1.5 15 15 13 followed by 29% in mid-level positions 12 12 1.0 and 11% in senior-level positions. The 9 9 10 8 1.0 1 proportions of female board members 7 No. of Funds Closed of Funds No. 0.8 0.6 are even smaller: just 6% of all venture 5 0.7 0.6 capital board representatives are women. 0.3 Geographically, the ratio of total women 0 0 employees in the industry lingers at around 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD a fifth across all regions, although North Year of Final Close America has a greater percentage (13%) No. of Funds Closed Aggregate Capital Raised ($bn) of women in senior positions compared to Europe (9%). In this feature, we look at the Source: Preqin Venture Capital Online members of the industry working to raise industry standards of conduct, the impact capitalists have sounded a call for action. First Round Capital and General Catalyst of women deal-makers, the relationships of Reid Hoffman, LinkedIn co-founder and Partners, some in the industry argued institutional investors with women-owned partner at Greylock Partners, suggested that moral decency should not have to firms and women-led fundraising activity. that those in the industry adopt a set of be pledged, and others argued that the moral guidelines, which he has dubbed pledge alone is not enough to motivate DECENCY PLEDGE the “decency pledge”. While many firms change in the industry. In the wake of recent sexual misconduct quickly adopted the pledge, such as allegations, many prominent venture Sequoia Capital, Norwest Venture Partners,

Fig. 2: Largest Women-Owned Venture Capital Funds in Market (As at October 2017) Primary Fund Target Fund Firm Vintage Type Geographic Focus Status Size ($mn) Baidu Capital Baidu Capital 2017 Expansion/Late Stage Asia First Close 2,950 AMBI Film Fund AMBI Pictures 2017 Venture Capital (All Stages) US Raising 200 Arbor Ventures Fund II Arbor Ventures 2017 Early Stage: Start-up Asia First Close 200 Ariadne Ecosystem Economics Fund Ariadne Capital 2017 Venture Capital (All Stages) Europe Raising 195 Aspect Ventures Fund II Aspect Ventures 2017 Early Stage US Raising 175 Glasswing Ventures Glasswing Ventures 2017 Early Stage US First Close 150 Hummer Winblad Venture Partners VII HWVP 2017 Venture Capital (All Stages) US Raising 125 iBionext Growth Fund iBionext 2016 Early Stage: Start-up Europe First Close 111 Agent Capital Fund I Agent Capital 2017 Venture Capital (All Stages) US Raising 100 iGlobe Platinum Fund II iGlobe Partners 2015 Early Stage Asia First Close 100 Imaginary Venture Capital Partners I Imaginary Ventures 2017 Early Stage Europe Raising 100 Nautilus Venture Partners Fund I Nautilus Venture Partners 2015 Venture Capital (All Stages) US First Close 100 Venture City Fund I Venture City 2017 Early Stage: Start-up US Raising 100

Source: Preqin Venture Capital Online

3 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com WOMEN IN VENTURE CAPITAL

The pledge states that when venture and entrepreneurs should not consider the way to a more inclusive and diverse capitalists are engaging with their funding offers. industry. XFactor Ventures, a pre-seed entrepreneurs, they have the same and seed stage fund, was created to help moral position to them as a manager to One example of this pledge in action make a difference for the next generation an employee or a college professor to a can be found in Y Combinator’s (YC) of female-led businesses. The firm has student. Moreover, once potential business long-standing tracking of investors eight female founders and nine female relationships are underway, the pursuit of with a history of poor conduct within investment partners, and has raised $3mn any romantic or sexual relationship must the YC network, known by some as the to make pre-seed and seed investments be forfeited. The pledge also maintains “Silicon Valley Blacklist,” and its more in 30 female-led companies over the next that industry peers have a duty to report recent anonymous submission system couple of years. XFactor Ventures is one of behaviour that is not up to standard and for YC network founders to report any the few firms in the industry that strives to that gender discrimination should be misconduct they have experienced have female representation on both the treated with zero tolerance; that fellow personally, observed themselves or been investment and founder side. venture capitalists should not do business told as a confidant of a victim. with peers who engage in discriminatory BBG Ventures is another example of a or predatory behaviour; and that WOMEN DRIVING CHANGE firm founded on the principles of driving institutional investors should not invest By incorporating gender diversity values and developing female talent in the with those particular individuals or firms, into their business models, firms are paving industry. Founded by Susan Lyne, the early

Fig. 3: Most Active Female Board Representatives at Venture Fig. 4: Proportion of Venture Capital Deals Led by Female Capital-Backed Portfolio Companies, 2017 YTD Partners, 2010 - 2017 YTD (As at October 2017) No. of Board 10% Name Firm(s) 9.0% Seats 9% Cindy Padnos Illuminate Ventures 11 8% 7.2% Vani Kola Kalaari Capital 10 6.9% 7.1% 7% 6.4% 6.7% Hilary Gosher Insight Venture Partners 10 6.1% 6% SV Health Investors, Roche Venture Tracy Saxton 9 5% Fund, Pivotal BioVenture Partners 4%

Wende Hutton Canaan Partners 9 of DealsProportion 3% Jenny Lee GGV Capital 8 2% Elaine Jones Pfizer Venture Investments 8 1% Dana Settle Greycroft Partners 7 0% Nilanjana Bhowmik Longworth Venture Partners 7 2010 2011 2012 2014 2015 2016 2017 YTD Stacey Bishop Scale Venture Partners 7 Source: Preqin Venture Capital Online Source: Preqin Venture Capital Online

Fig. 5: Venture Capital Deals Led by Female Partners, Fig. 6: Women-Owned Venture Capital Firms: Deals by Portfolio 2010 - 2017 YTD (As at October 2017) Company Location (As at October 2017) 350 6 400 5 366 4.6 307 350 4.5

300 286 5.1 Aggregate Deal Value ($bn)

276 5 Aggregate Deal Value ($bn) 4 249 300 250 3.5 224 4 4.4 250 3.7 190 3 200 177 176 2.9 3 200 2.5 150 2.9 2.9 2.9 2 No. of Deals No. 150 2.0 2 of Deals No. 100 1.5 100 76 0.7 0.9 1 50 1 43 50 25 0.2 0.5 0 0 0 0 2010 2011 2012 2013 2014 2015 2016 2017 North America Europe Asia Rest of World YTD Location No. of Deals Aggregate Deal Size ($bn) No. of Deals Aggregate Deal Value ($bn) Source: Preqin Venture Capital Online Source: Preqin Venture Capital Online

4 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com WOMEN IN VENTURE CAPITAL

stage fund is focused on investments in Fig. 7: Women-Owned Venture Capital Firms: Deals by Portfolio Company Industry, technology companies with at least one 2017 YTD(As at October 2017) female founder. The firm is backed by 30% AOL as a part of its #BuiltByGirls initiative; 25% 25% started by BBG Ventures’ partner Nisha 22% Dua, it challenges young women to take 20% part in the tech-enabled economy through 15% a series of offline and online programs, to 15% 12% teach girls the fundamentals of venture capital and prepare them for a career in 10% 9% technology. The BBG Ventures portfolio of DealsProportion 6% 5% 4% 4% currently holds over 30 investments in 2% 2% women-led firms. 0% IT

WOMEN DEAL-MAKERS Other Internet Services Business Clean Software Since 2010, there has been steady growth Telecoms Industrials Healthcare Technology Consumer

in both the number of women in lead Discretionary partner positions and the aggregate size Source: Preqin Venture Capital Online of venture capital deals led by women. Compared to 2016, this year so far has seen financings by women-owned firms in 2017 most active investors in women-owned over 83 more deals with women acting as valued at $0.7bn. firms, seven are pension funds, six are fund lead partners, with over $2.0bn more in of funds managers and one is a foundation. deal value (Fig. 5). Female deal-makers are active in a wide range of industries: the largest proportions Three-quarters (74%) of investors in North America is the most active region of deals completed by women-owned women-owned venture firms over the for venture capital deals completed by firms in 2017 year to date are in the same period are North America based, women-owned firms in 2017 YTD by software (25%), internet (22%) and more than triple the proportion based both number and aggregate value: there telecoms (15%) sectors (Fig. 7). in Europe (20%, Fig. 9). North America is have been 366 investments in the region home to 12 of the 14 most active investors totalling over $4.6bn, more than 2.5x INVESTORS IN WOMEN-OWNED FIRMS in women-owned firms, including US- more than all other regions combined (Fig. For the period 2000-2017 YTD, funds of based Illinois Municipal Retirement Fund 6). Asia is the second most active region funds account for the greatest proportion and HarbourVest Partners, along with for women-owned firms in terms of the (29%) of investors in women-owned firms, Europe-based Pantheon, which are tied for number of deals (76). Nonetheless, Europe followed by public pension funds (22%) the most active global investor in women- is not far behind, with 43 venture capital and foundations (15%, Fig. 8). Of the 14 owned venture capital firms, having each

Fig. 8: Proportion of Investor Commitments to Women-Owned Fig. 9: Proportion of Investor Commitments to Women-Owned Venture Capital Firms by Investor Type, 2000 - 2017 YTD Venture Capital Firms by Investor Location, 2000 - 2017 YTD (As at October 2017) (As at October 2017) 35%

30% 29% 5%1% 25% 22% 20% 20% North America 15% 15% 13% Europe 11% 10% Asia 5% 5%

Proportion of Commitments Proportion 5% Rest of World 0% 74% Other Funds Fund of Plan Company Insurance Public Foundation Endowment Pension Fund Pension Fund Private Sector Private Source: Preqin Venture Capital Online Source: Preqin Venture Capital Online

5 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com WOMEN IN VENTURE CAPITAL

made seven known commitments in the final close and aggregate capital raised. raised by Baidu Capital; a self-named late 21st century. Fundraising this year is led by Baidu Fund stage technology fund targeting $2.9bn, Partnership, a $1bn joint venture between almost half the total capital targeted by WOMEN-LED FUNDRAISING China Life Insurance Company and led women-owned venture capital funds in As at October 2017, annual venture capital by Baidu’s CEO Jennifer Li, CFO Zhang market ($6.0bn). The remaining 57 funds in fundraising by women-owned funds has Jinling and managing partner Wenjie Wu, market are seeking an aggregate $3.1bn in reached a new record high of $2.4bn, with targeting late stage internet investments capital. The majority (69%) of women-led two months still to go until the end of the in China. funds on the road are early stage vehicles, year. Fundraising by women-owned firms followed by general venture capital (24%), has grown steadily over the past 10 years, The largest women-owned venture capital expansion (5%) and growth (2%). both in the number of funds to reach a fund currently in market is also being

Fig. 10: Top Investors in Women-Owned Venture Capital Firms by Number of Fund Commitments, 2000-2017 YTD Assets under No. of Investor Type Location Management Commitments ($bn) Illinois Municipal Retirement Fund Public Pension Fund North America 38.6 7 Pantheon PE Fund of Funds Manager Europe 36.6 7 HarbourVest Partners PE Fund of Funds Manager North America 40.0 7 Michigan Department of Treasury Public Pension Fund North America 64.2 6 Alcatel-Lucent Pension Fund Private Sector Pension Fund North America 30.9 6 Greenspring Associates PE Fund of Funds Manager North America 5.9 6 Los Angeles Fire and Police Pension System Public Pension Fund North America 20.6 6 Hamilton Lane PE Fund of Funds Manager North America 41.8 5 California Public Employees' Retirement System Public Pension Fund North America 339.1 5 (CalPERS) Oregon State Treasury Public Pension Fund North America 73.6 5

GCM Grosvenor Private Markets PE Fund of Funds Manager North America 50.0 5

Pearl Holding Listed Fund of Funds Europe 0.5 5

Meyer Memorial Trust Foundation North America 0.7 5

Alaska Retirement Management Board Public Pension Fund North America 31.6 5

Source: Preqin Venture Capital Online

PREQIN SPECIAL REPORT: WOMEN IN ALTERNATIVE ASSETS

Across all private capital and hedge fund industries, women are underrepresented: just one in every five alternative assets professionals is female.

As the leading source of intelligence on alternative assets, Preqin has compiled the inaugural PREQIN SPECIAL REPORT: Women in Alternative Assets Report using a database of over 200,000 industry professionals to WOMEN IN ALTERNATIVE ASSETS highlight the trends in the workforces of active fund managers and investors. OCTOBER 2017

To download this exclusive report, please visit:

alternative assets. intelligent data. www.preqin.com/rcp

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trong fundraising and healthy fund Fig. 1: Private Capital - Annual Capital Called, Distributed and Unrealized Value, Sperformance have contributed to the 2000 - 2016 rise in assets under management (AUM) 1,000 3,500 of the private capital industry, which 900 amounts to $4.6tn globally as at December 3,000 800 Unrealized($bn) Value 2016. Recent years have seen year-on-year 2,500 increases in private capital fundraising in 700 terms of aggregate capital raised; in 2017 600 2,000 so far (to September), $482bn has been 500 1,500 raised by 885 private capital funds, with the 400 figures set to increase as managers look to 300 1,000 close out their vehicles before year-end. 200 500 Capital Called/Distributed ($bn) Called/Distributed Capital 100 The growth of the industry has also been 0 0 attributed to the healthy performance of

private capital funds, which has driven 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 significant capital distributions back to Annual Called Annual Distributed Unrealized Value LPs in recent years, with 2015 and 2016 witnessing the highest capital distributions Source: The 2018 Preqin Private Capital Compensation and Employment Review on record ($858bn and $909bn increases compared to the accelerated market globally. Preqin estimates that respectively, Fig. 1). growth in the number of firms seen in private capital firms worldwide employ previous years. nearly 200,000 people (Fig. 3). In private A GROWING NUMBER OF ACTIVE equity alone, there are an estimated PRIVATE CAPITAL FIRMS OVER TIME The number of firms in the industry has 108,400 people working within the The overall picture for the number of started to pick up again over the past few industry. active firms over time shows a clear years – notably, 500 new firms were added trend of growth, reflective of the positive in 2016, and 309 new firms have been AVERAGE NUMBER OF EMPLOYEES AT developments in the private capital added in 2017 so far (as at September). FIRMS industry as a whole (Fig. 2). However, the This represents over 7,500 firms currently The number of employees at private rate of growth has not been constant over active in the market and is indicative capital firms naturally varies significantly the years, and has slowed, particularly from of the demand and opportunities for with the AUM of the firms in question, as 2008 onwards, with gradual year-on-year employment and staff in the private capital Fig. 4 shows. The smallest firms (with less

Fig. 2: Number of Active Private Capital Firms over Time (By Vintage of First Fund Raised) Fig. 3: Estimated Employment at Most Prominent Firm Types 8,000 Firm Type Estimated Employment Real Estate 51,600 7,000 Venture Capital 50,300 6,000 Buyout 35,400 5,000 New Growth 16,500 4,000 Private Debt 13,900 Existing 3,000 Infrastructure 9,900

No. of Active Firms of Active No. Natural Resources 6,600 2,000 Private Equity Fund of Funds 6,200 1,000 Source: The 2018 Preqin Private Capital Compensation & Employment Review 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Source: The 2018 Preqin Private Capital Compensation & Employment Review

8 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com COMPENSATION AND EMPLOYMENT

than $250mn in AUM) have an average of Fig. 4: Average Number of Employees by Firm Assets under Management 13 employees, while the largest firms (with 250 $10bn or more) employ an average of 199 199 people. 200 176 Average No. of Employees Larger firms tend to have fewer employees 150 per $1bn in AUM than smaller firms, and therefore benefit from economies 96 100 Average No. of of scale which, when managing larger Employees per pools of capital are then passed onto 59 51 $1bn in AUM 50 41 investors through lower management fees 21 28 26 on larger funds. The largest firms have 13 13 10 an average of 10 members of staff per 0

$1bn in assets or approximately $115bn $5- 9.9bn $250- $500- 499mn 999mn $10bn managed per employee. For smaller firms or More $250mn $1-4.9bn the figure rises to 176 employees per $1bn than Less Firm Assets under Management or approximately $1.9bn managed per Return - Median Net IRR employee. Source: The 2018 Preqin Private Capital Compensation and Employment Review

EMPLOYMENT LEVELS the period 2017-2018: 65% of participating wide base salary, suggestive of significant Fig. 5 shows the mean and median firms expect the size of their workforce increases in the base salary at some of number of employees from participating to increase over the period, with 7% of these firms. firms based in various regions globally, participating firms in particular reporting including consolidated entities, and only that their workforce would increase by The year ahead reveals more good news includes markets in which the firm is more than 20%. for staff at such firms: 68% of survey active. Looking at the average statistics participants have projected an increase in for each named region, participating firms CHANGES IN COMPENSATION AND the firm-wide base salary for the period reported the highest median number of PROJECTIONS FOR THE YEAR AHEAD 2017-2018. While the largest proportion employees in Asia-Pacific (18) and the Fig. 6 shows that the largest proportion (54%) of firms predict an increase of 0.1- highest mean in the US (53). (78%) of firms that participated in 10%, a small proportion (3%) are looking the most recent compensation and to increase the firm-wide base salary by Participating firms were asked about employment survey saw an increase in more than 20% during the period. This changes to their staff headcount over the firm-wide base salary over the past suggests that firms are more inclined 2016; the majority (61%) of participating year. This is indicative of the wider health to increase the base salary in smaller firms reported that they added to the staff of the industry, as fundraising continues increments than in large raises. headcount within their company, while the to gain momentum and more firms smallest proportion (8%) made reductions enter the marketplace, presenting more For more information, to view sample during the year. Furthermore, participating employment opportunities for private pages or purchase a copy, please visit: firms were asked about the projected capital professionals. Notably, 5% of firms www.preqin.com/compensation change in the size of their workforce for saw a rise of more than 20% in the firm-

Fig. 5: Average Total Number of Employees at Participating Firms in Each Geographic Market, Including Consolidated Fig. 6: Firm-Wide Changes in Base Salary at Participating Firms, Entities (Only Includes Markets in Which Firm is Active) 2016/2017 vs. Projected 2017/2018 60 100% 5% 3% More than 53 8% 51 90% 14% 20% Increase 50 80% 42 11-20% Increase 40 37 70% Median 54% 60% 0.1-10% Increase 30 56% 50% Firms Mean 40% 20 18 Increase 3% (Did Not State %) 13 13 12 13 30% 9 Firms of Participating Proportion 3% 10 20% No Change 31%

Average No. of Employees at Participating Participating at of Employees No. Average 10% 20% 0 Decrease US Europe Asia-Pacific Other Total 0% 2% 1% (Global) 2016/2017 Projected 2017/2018 Source: The 2018 Preqin Private Capital Compensation and Employment Review Source: The 2018 Preqin Private Capital Compensation and Employment Review

9 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com INDUSTRY NEWS INDUSTRY NEWS

This month’s industry news provides a sample of venture capital investor mandates for the year ahead, summarizes deal activity in Q3 2017 and examines fundraising in the ASEAN region.

$1.5bn $9.5bn $14bn $1.4bn Final size of Institutional was raised by the 10 largest Total venture capital exit value Exit value of Mango TV, the Venture Partners XVI, the venture capital funds closed for Q3 2017. There were 270 largest venture capital exit of largest fund closed in Q3 2017. in Q3 2017, representing 43% exits. the quarter. of the total for the quarter ($22bn).

INVESTOR MANDATES VENTURE CAPITAL DEALS ASEAN FUNDRAISING

According to Preqin’s H2 2017 Investor Q3 2017 saw aggregate deal value rise to So far in 2017, a total of 24 ASEAN-focused Outlook, 85% of investors are looking record highs of more than $49bn; yet, the venture capital vehicles have reached a to increase or maintain their venture total number of deals fell for the fourth final close. The funds secured an aggregate capital allocations in the next 12 months. consecutive quarter. North America $5.4bn in capital, surpassing the total Below is a selection of recent investor accounted for 44% of venture capital deal capital raised in all of 2016 by 25%. Three profile updates onVenture Capital value, followed by 29% for Asia and 19% ASEAN-focused funds have reached a final Online, where Preqin provides exclusive for Europe. close in October and all are managed by information from investors across the Singapore-based firms. The largest of these globe regarding their investment plans: The two largest deals in Q3 each reached funds is Vickers Venture Fund V, which ■■ AgDevCo, a social impact investor $2bn: Grab Holdings and Toutiao both surpassed its target by $20mn, reaching a based in the UK, will look to invest in secured funding for an unspecified round. final close on $250mn. social venture capital projects to aid Grab Holdings, based in Singapore, in the development of agribusiness in operates a mobile application that enables Vertex SEA & India Fund III targets early low-income nations in Africa over the users to find and book cabs, private cars stage opportunities within ASEAN. The next year. They will focus on early- and motorbikes. The company has received fund reached a final close on $210mn and stage and growth fund types, and a total of $4bn in known funding. Toutiao, invests in portfolio companies operating invest $2-3mn per fund. an online news platform, has acquired in the e-commerce, fintech and enterprise ■■ Active Investments Capital, a Hong $3.1bn in total funding since 2012. industries. Kong-based family office, will make new commitments to venture capital WeWork Companies Inc., a provider of Wavemaker SEA Fund II, the smallest of the and growth vehicles in the coming shared working spaces, was involved in three funds, raised $66mn to make seed year. The family office focuses on the the largest deal made in Q3 involving a and Series A investments in Southeast technology sector and will invest in US-based company: it received $1.9bn in Asia, with a preference for opportunities first-time managers and spin-offs. venture funding from returning investors in Indonesia, the Philippines, Thailand and ■■ Woori Bank, with KRW 297tn in AUM, Softbank Capital and SB Investment Malaysia. will invest $100mn across 10 venture Advisers in an unspecified round. vehicles targeting its domestic market, South Korea. ■■ Andina Family Offices, located in SHARE YOUR NEWS California, is considering investing Do you have any news you would like to share with the readers of Spotlight? more capital with existing managers Perhaps you are about to launch a new fund, have implemented a new investment in the next 12 months. The family strategy, or are considering investments beyond your usual geographic focus? office has previously shown a preference for early stage investments Send your updates to [email protected] and we will endeavour to publish in North America. them in the next issue.

10 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com 3rd edition

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www.ipem-market.com [email protected] THE FACTS JAPAN-BASED PRIVATE EQUITY INVESTORS We take a look at the make-up of private equity investors based in Japan, including their current and target allocations to the asset class and investment plans for the next 12 months.

Fig. 1: Japan-Based Private Equity Investors by Type 20.7% Corporate Investor Average target allocation of Japan-based 8% private equity investors (as a % of AUM). 3% Bank/Investment Bank 8% Asset Manager 39% 8% 71% Insurance Company of Japan-based investors are located in Tokyo. 10% Private Sector Pension Fund Investment Company 184 24% Japan-based institutional investors are active in Other private equity. Source: Preqin Private Equity Online Fig. 2: Japan-Based Private Equity Investors by Fund Type Fig. 3: Japan-Based Private Equity Investors by Geographic Preference and Fund Searches Issued in 2017 Preference and Fund Searches Issued in 2017 90% 86% 100% 83% 91% 80% 90% 82% 80% 70% General General 70% 68% 68% 60% 62% Preference 52% Preference 48% 60% 50% 44% 50% 45% 40% 44% Fund Searches 33% Fund Searches 40% 36% Issued in 2017 30% Issued in 2017 21% 30%

18% of Investors Proportion 24% Proportion of Investors Proportion 20% 19% 15% 14% 20% 18% 10% 4% 5% 10% 0% 0% Asia Funds Buyout Capital Growth Fund of Global Venture North Europe Balanced America Markets Turnaround Secondaries Emerging Source: Preqin Private Equity Online Source: Preqin Private Equity Online

Fig. 4: 10 Largest Japan-Based Investors by Current Allocation to Private Equity (As at November 2017) Current Investor Type Headquarters AUM ($bn) AUM (bn) Allocation ($mn) Pension Fund Association Asset Manager Tokyo 3,125 103 11,751 JPY SBI Holdings Investment Bank Tokyo 2,536 29 3,337 JPY Asahi Glass Company Corporate Investor Tokyo 1,400 18 2,066JPY Daido Life Insurance Insurance Company Tokyo 1,163 56 6,371 JPY Japan Post Bank Bank Tokyo 1,091 1,837 209,569 JPY Fujitsu Corporate Pension Fund Private Sector Pension Fund Kanagawa 764 19 19 USD Sompo Japan Nipponkoa Insurance Insurance Company Tokyo 689 523 6,012 JPY Mitsui Sumitomo Insurance Company Insurance Company Tokyo 594 59 6,777 JPY T&D Asset Management Asset Manager Tokyo 515 15 1,732 JPY Chugoku Bank Bank Okayama Prefecture 342 68 7,800 JPY

Source: Preqin Private Equity Online

12 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com THE FACTS VENTURE CAPITAL FUND PERFORMANCE Using data from the 2017 Preqin Alternative Assets Performance Monitor, we provide an overview of historical fund performance in the venture capital industry. Fig. 1: Venture Capital - Median Net IRRs and Quartile Fig. 2: Venture Capital - Median Called-up, Distributed and Boundaries by Vintage Year Residual Value Ratios by Vintage Year 80% 300% 70% 250% 60% Residual Value Top Quartile Net to Paid-in 50% IRR Boundary 200% Capital (%) 40% Median Net IRR Distributed to 30% 150% Paid-in Capital 20% (%) 100% 10% Bottom Quartile

Net IRR since Inception Net IRR since Net IRR Boundary Called-up to 0% 50% Committed -10% Capital (%) -20% 0% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Vintage Year Vintage Year Source: Preqin Venture Capital Online Source: Preqin Venture Capital Online

Fig. 3: Venture Capital - Relationship between Predecessor and Fig. 4: Venture Capital - Median Net IRRs: Early Stage vs. All Successor Fund Quartiles Venture Capital (Excl. Early Stage) 100% 35% 12% Top Quartile 90% 25% 27% 30% 36% Successor Fund 80% 21% 70% 25% 22% Second Quartile 60% Successor Fund 20% 25% 36% Early Stage 50% 31% 15% 40% 33% Third Quartile 30% Successor Fund 10% All Venture 22% Proportion of Funds Proportion 20% 42% 20% Capital (Excl. Bottom Quartile 5% 10% 21% Early Stage) 15% 13% Successor Fund Inception Net IRR since 0% 0% -5% -10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Top Quartile ThirdQuartile Second Quartile Bottom Quartile

Predecessor Fund Predecessor Fund Predecessor Fund Predecessor Fund Vintage Year Source: Preqin Venture Capital Online Source: Preqin Venture Capital Online Fig. 5: Top 10 Performing Venture Capital Funds (Vintage 2010-2014) Fund Size Geographic Net IRR Date Rank Fund Firm Vintage (mn) Focus (%) Reported Middle East & 1 Glilot Capital Partners I Glilot Capital Partners 2011 30 USD 87.4 31-Mar-17 Israel 2 Seaya Ventures Fund Seaya Ventures 2013 57 EUR Europe 81.8 31-Dec-16 3 Menlo Ventures XI Menlo Ventures 2011 400 USD N. America 75.7 31-Dec-15 4 Frazier Healthcare VII Frazier Healthcare Ventures 2013 377 USD N. America 73.6 30-Jun-16 5 Foresite Capital Fund I Foresite Capital 2012 100 USD N. America 70.8 31-Mar-16 6 DN Capital - Global Venture Capital III DN Capital 2012 144 EUR Europe 62.0 31-Mar-17 7 Heliant Ventures II Heliant Ventures 2012 1 USD N. America 60.0 31-Mar-15 8 OrbiMed Private Investments V OrbiMed Advisors 2013 735 USD N. America 58.8 31-Dec-16 9 Revel Venture Fund I Revel Partners 2011 10 USD N. America 58.7 31-Dec-16 10 Octopus Zenith Octopus Ventures 2013 39 GBP Europe 56.7 31-Dec-16

Source: Preqin Venture Capital Online

13 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com THE FACTS RAISING PRIVATE EQUITY FUNDS OF FUNDS This collation of data from the recently published Preqin Special Report: Private Equity Funds of Funds examines the current fundraising climate for these vehicles, noting their historical successes dating back to 2000.

$26bn 17 $357mn $381bn Amount secured by private private equity funds of funds The average size of private The size of the private equity equity funds of funds closed in are currently in market, equity funds of funds closed in fund of funds industry. 2016, a post-crisis high. targeting an aggregate 2016. $80bn

Fig. 1: Annual Private Equity Fund of Funds Fundraising, Fig. 2: Fundraising Success of Private Equity Funds of Funds, 2000 - 2017 YTD (As at September 2017) 2007 - 2017 YTD (As at September 2017) 180 100% 160 155 14% 18% 160 90% 22% 25% 33% 140 80% 12% 126 47% 7% 47% 45% 54% 8% 53% 55% 120 109 70% 104 102 99 18% Above Target 100 94 60% 14% 88 88 84 73 76 50% 4% 80 68 72 67 6% At Target 3% 18% 55 40% 10% 60 50 14% 74% 75% 43 42 69% Below Target 34 30% 40 31 of Funds Proportion 53% 57% 20 25 21 21 26 49% 47% 13 19 16 18 17 17 20% 42% 20 12 8 10 32% 37% 36% 0 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year of Final Close YTD 2017 2017 YTD 2017 No. of Funds Closed Aggregate Capital Raised ($bn) Year of Final Close Source: Preqin Private Equity Online Source: Preqin Private Equity Online

Fig. 3: 10 Largest Private Equity Funds of Funds Closed, 2009 - 2017 YTD (As at September 2017) Fund Size Final Close Fund Firm Headquarters Geographic Focus (mn) Date ATP Private Equity Copenhagen, North America, Europe, ATP Private Equity Partners IV 1,375 EUR Dec-10 Partners Denmark Emerging Markets Europe, Asia, Emerging HarbourVest International VII Partnership HarbourVest Partners Boston, MA, US 1,542 USD Apr-16 Markets Horsley Bridge International V Horsley Bridge Partners San Francisco, CA, US North America, Europe, Asia 1,540 USD May-09 Crown Premium V LGT Capital Partners Pfäffikon, Switzerland Europe, US 900 EUR Nov-13 Portfolio Advisors Private Equity Fund VIII Portfolio Advisors Darien, CT, US Global 1,239 USD Dec-15 Horsley Bridge XI Venture Horsley Bridge Partners San Francisco, CA, US US 1,153 USD Apr-15 Axiom Asia Private Axiom Asia III Singapore Asia 1,150 USD Mar-12 Capital SwanCap Opportunities Fund SwanCap Partners Munich, Germany Europe, North America 840 EUR Jan-14 Portfolio Advisors Private Equity Fund VI Portfolio Advisors Darien, CT, US North America, Europe, Asia 1,103 USD Mar-11 Portfolio Advisors Private Equity Fund VII Portfolio Advisors Darien, CT, US North America, Europe, Asia 1,090 USD Mar-13

Source: Preqin Private Equity Online

14 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com THE FACTS INDIA-BASED DEALS AND EXITS

Using a segment from Preqin Insight: Alternative Assets in India, the first report of its kind, we evaluate private equity deals and exits in India, breaking them down by industry and type.

Fig. 1: Private Equity-Backed Buyout Deals in India, Fig. 2: Private Equity-Backed Buyout Deals in India by Industry, 2008 - H1 2017 2012 - H1 2017

60 2.5 100% 4% Other 4% 90% 4% 50 Aggregate Deal Value ($bn) Cleantech 2.0 8% 80% Energy & Utilities 40 70% 1.5 31% Telecoms, Media & 60% Communications 30 Food & Agriculture 1.0 50% No. of Deals No. Information Technology 20 0.8 40% 15% Consumer Discretionary 10 0.5 of DealsProportion 10 30% Healthcare 20% 27% 0 0.0 10% Business Services Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 8% 0% Industrials 2008 2009 2010 2011 2012 2013 2014 2015 20162017 2012 2013 2014 2015 2016 H1 No. of Deals Aggregate Deal Value ($bn) 2017 Source: Preqin Private Equity Online Source: Preqin Private Equity Online

Fig. 4: Private Equity-Backed Buyout and Venture Capital Exits in Fig. 3: Venture Capital Deals* in India, 2008 - H1 2017 India by Type, H1 2017

350 3.8 4.0 100% 90% 15% 300 3.5 Aggregate Deal Value ($bn) 22% 3.0 80% 250 3% 3% Sale to GP 2.5 70% 200 182 2.0 60% 50% Restructuring 150

No. of Deals No. 50% 1.5 IPO & Follow-on 100 40% 1.0 73%

Proportion of Exits Proportion Trade Sale 50 0.5 30% 20% 0 0.0 35% Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 10%

2008 2009 2010 2011 2012 2013 2014 2015 20162017 0% No. of Deals Aggregate Deal Value ($bn) Buyout Venture Capital Source: Preqin Private Equity Online Source: Preqin Private Equity Online

*Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

PREQIN INSIGHT: ALTERNATIVE ASSETS IN INDIA PREQIN INSIGHT: ALTERNATIVE ASSETS IN INDIA

The alternative assets industry in India has grown significantly over the past decade, and is now November 2017 at a critical juncture of development, with huge potential for further growth.

This new report – the first of its kind – provides in-depth analysis of the alternatives industry in India using key datasets from Preqin’s online databases, and features exclusive commentary from industry experts located throughout India.

To download this report, please visit:

www.preqin.com/rcp alternative assets. intelligent data.

15 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com CONFERENCES CONFERENCES

NOVEMBER 2017

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JANUARY 2018

Conference Dates Location Organizer Preqin Speaker Discount Code Private Equity French Private Equity Conference 18 January 2018 Paris - - Insights IPEM 2018 24 - 26 January 2018 Cannes Europexpo TBC -

9TH GLOBAL PE BEIJING FORUM

DATE: 2 December 2017 INFORMATION: http://forum.bpea.net.cn/2017/english/ LOCATION: Shangri-la Hotel, Beijing ORGANIZER: China Association of Private Equity (CAPE) Beijing Municipal Bureau of Financial Work The People’s Government of Haidian District, Beijing Municipal Beijing Private Equity Association (BPEA) The 9th Global Pe Beijing Forum is the flagship event of Chinese private equity industry. This year, we will focus on ‘Development, contribution and innovation‘, and will includes the latest topics including: “GP Panel” ” LP Panel” “buyout fund panel” and so on.

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DATE: 3 - 5 December 2017 INFORMATION: http://events.marcusevans-events.com/private-wealth-summit-2017-preqin/ LOCATION: The Venetian, Las Vegas, NV ORGANIZER: marcus evans This Summit has become our flagship investment event in Latin America, and continues to grow substantially since we first launched it. This Summit brings leaders from Latin America’s leading single and multi-family offices and qualified service providers together and offers them an intimate environment for a focused discussion of key new drivers shaping the future of the industry in the region.

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IPEM 2018

DATE: 24 - 26 January 2018 INFORMATION: www.ipem-market.com LOCATION: Palais des Festivals, Cannes, France ORGANIZER: EUROPEXPO Join 1,400 private equity leaders at IPEM 2018. IPEM is the only international event to provide the Private Equity & Venture Capital industry with a marketplace to foster business opportunities between private and institutional investors, investment funds, service providers, and business owners seeking to support their company’s development. Benefit from a special fee thanks to Preqin.

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DATE: 22 February 2018 INFORMATION: http://pe-conference.org/polish/ LOCATION: Warsaw ORGANIZER: Private Equity Insights The Polish & CEE Private Equity Conference provides unrivalled networking opportunities in the CEE private equity market. On 22nd February 2018, meet over 60 LPs, 80 GPs and 40 CxOs at the InterContinental Hotel in Warsaw.

17 Private Equity & Venture Capital Spotlight | November 2017 © Preqin Ltd. 2017 / www.preqin.com PRIVATE WEALTH MANAGEMENT SUMMIT December 3-5, 2017 | The Venetian | Las Vegas NV

The Private Wealth Management Summit is the premium forum bringing leaders from America’s leading single and multi-family offices and service providers together. As an invitation-only event, the summit offers service providers and high-level executives from single and multi-family offices an intimate environment for a focused discussion of key new drivers shaping the future of the industry. The Great things in business Summit will allow attendees to benefit from visionary keynote presentations, real- are never done by one person. life case studies and interactive sessions! You will also have the chance to network during coffee breaks, lunch hours and cocktails, all this in a five star resort! They’re done by a team of people. • Pre-schedule one on one business meetings with qualified buyers Steve Jobs • Engage in dynamic benchmarking sessions and interact with nationally recognized leaders NETWORK WITH INDUSTRY EXPERTS LIKE: • Grow sales faster through a time efficient format • Network with high level executives in a luxurious and stimulating environment • Chairperson: Ryan Ponsford, Principal, Akili Capital • Karim Ahamed, Partner, HPM Enterprises LLC KEY TOPICS TO BE DISCUSSED INCLUDE: • Bill Cafero, Founder and Principal, RCL Advisors • Susan R. Schoenfeld, CEO and Founder, Wealth Legacy • Managing Trustee Risk Effectively Advisors LLC • Tax Reform – How it Will Impact Family Offices • John M. Simms, Jr, PhD, CFA, Chief Investment Officer, • Family Governance, Communication and Trust Piedmont Trust • Taking Family Communication to the next level • Casey Wamsley, Director, Collins Capital LLC • Asset Allocation – From a Traditional to an Innovative Approach • How Family Offices are Making Right Long-Term Investment Decisions

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