Private Equity

Private Equity Spotlight www.preqin.com September 2008 / Volume 4 - Issue 9 Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin, providing insights into private equity performance, investors and fundraising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence, Fund Manager Profiles & Funds in Market.

Feature Article page 2 Investor Article page 12

Distressed Private Equity: This month we take a This month’s feature article examines the effect that close look at investors in the credit crunch has had on the distressed private the infrastructure asset equity market and its effect on investors’ attitudes to class, and identify some the asset class. of the key players in this Performance Article page 6 important investor class.

Predicting Future Cash Flow: Using cash flow data for over 1,500 private equity funds, we analyse the rate at which buyout funds are investing their capital and how quickly they distribute Investor News page 18 money back to their investors. All the latest news on investors in private equity: Fundraising Article page 9 • AIG Investments appoints new Vice President for Asian private equity funds group. This month’s Fundraising Spotlight takes an in-depth look at buyout, venture and fund of funds fundraising. • SUVA plans to commit CHF 400-600 million over the next 12 months. No. of Funds US Europe ROW Total on Road • Teachers’ Retirement System of the State of Illinois (TRS) Venture 229 96 132 457 commits to distressed debt vehicle Buyout 157 75 60 292 Fund of Funds 110 82 19 211 • London Borough of Tower Hamlets Pension Scheme Real Estate 233 122 60 415 considering maiden private equity investment. Other 111 59 55 225

Total 840 434 326 1,600 • Texas Permanent School Fund issues an RFP for a general consultant. If you would like to receive Private Equity Spotlight each month please email [email protected]. OUT NOW Subscribers to Performance Analyst and Investor Intelligence receive additional information not available The 2008 Preqin Distressed in the free version. If you would like further details please Private Equity Review email [email protected] More information available at: Publisher: Preqin Ltd. www.preqin.com/distressed Scotia House, 33 Finsbury Square, London. EC2A 1BB

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PERFORMANCE • INVESTORS • FUNDRAISING

Feature Article: Distressed Private Equity Funds

Buoyed by strong returns, high levels of Fig. A: investor support have pushed the level of capital raised by the overall private equity Will increased activity in distressed debt lead to a reduction in the number of industry to new heights in recent years. new buyout investments? Until 2007, this growth was largely driven by the buyout sector, with mega funds of increasingly large size closing consistently in excess of their original targets as a result of institutional investors’ conﬁ dence in the ability of these managers to create value.

Private equity fundraising reached its peak in Q2 2007, when a total of $207 billion was raised, with $87 billion of this coming from buyout funds. However, the change in conditions brought on by the diffi culties in the global credit markets surprising given the slowdown in deal excellent investment opportunities will led to a signifi cant change in investor activity between the two periods. When continue to present themselves. sentiment. Although undoubtedly satisfi ed the results are examined in further detail by past performance, many industry it becomes apparent that it is the rise Investors have shown themselves to commentators questioned whether buyout in fundraising for distressed and debt be adaptable in the face of economic fi rms would be able to create value at the related funds that has kept the level of change, and although there is still strong same rate as in recent times as deals capital being garnered at record levels, support for the buyout market, many became harder to fi nance, and fi rms were with buyout fundraising actually dropping investors are now turning to distressed not able to leverage their deals to the by 18% between the two periods, and private equity in order to take advantage same extent. distressed private equity fundraising rising of the potential increase in opportunities by 28%. A total of $33 billion had already in this segment. Our survey of investors in In such a challenging environment it was been raised by the mid-year point, and all the sector reveals that 35% have already conceivable that despite the fact that the indications are pointing towards a record increased or are planning to increase number of funds on the road seeking year for the distressed sector in 2008. their exposure to distressed private equity capital had reached record levels, investor at the expense of buyout funds, and 13% appetite for the asset class could be Although the credit crunch has had a are still unsure as to the effect that their affected, and that fundraising would drop. negative effect on the cost and availability activity in the distressed market will have However, despite these fears, the fi rst of credit, it has also led to a potential on their buyout investments. Only 52% half of 2008 provided the most successful increase in opportunities for distressed say it will have no effect on their allocation fundraising fi gures in the history of the private equity fi rms. The troubles in the to buyout funds. (Fig. A) private equity asset class, with a total lending market and threat of impending of $324.4 billion being raised, narrowly recession has led many to draw parallels In addition, we surveyed investors as eclipsing the previous record held by H1 with previous boom times for the distressed to how they envisaged their allocation 2007, which saw a total of $323.8 billion market, such as 1991 and 2003. The to distressed private equity changing being raised. excellent returns achieved by fi rms active in the future. Half of investors foresaw in this area has boosted confi dence in this their allocations to distressed debt These headline results seem somewhat latest market, with many believing that remaining the same, although additional

3 ◄ Feature Article ... Although the credit crunch has had a negative effect “ on the cost and availability of credit, it has also led to a potential increase in opportunities for distressed “ private equity ﬁ rms. ...

commitments may be made to maintain Fig. B: this level of exposure depending upon the rate of distributions from their existing What are your future distressed private equity allocation plans? portfolios. A quarter of all investors in distressed private equity anticipated increasing their exposure to this area of the market, encouraging evidence for the further growth of the distressed debt fundraising market. An additional 22% will be approaching such investments on an opportunistic basis, leaving just 3% of investors considering reducing their exposure to this sector of the private equity market in the future. (Fig. B)

Although the boom in fundraising for distressed debt has been a relatively recent occurrence, the sector has been providing strong returns for many years, Fig. C: with median net IRRs consistently exceeding 15% for most vintage years, and How satisfi ed are investors in distressed private equity with the performance of it is this in conjunction with the changing existing investments? economic climate that has led to investor enthusiasm for the fund type growing. This is refl ected in Preqin’s survey of investors when we enquired of participants as to their satisfaction with the returns achieved from previous investments in the sector. Only 12% of respondents indicated a low level of satisfaction, with 24% responding that they were fairly satisfi ed. A signifi cant 47% of respondents were very satisfi ed with their returns, with a further 18% falling into the highest category of extremely satisfi ed. (Fig. C) billion in 2007. Cerberus also far eclipsed enter the market. Carlyle closed on $1.35 The rise in opportunities in the distressed their previous fund size with their latest billion for their Strategic Partners II fund market, and the increase in support from vehicle, closing on $7.5 billion, which is a in 2008, far exceeding the initial target of investors for the sector has enabled signifi cant increase on the $1.3 billion they $500 million. This contrasts sharply with specialists to raise funds of sizes far raised in 2003. It is not only distressed their previous foray into the distressed exceeding their previous offerings. Oaktree specialists that are achieving such debt market, which saw them raising only Capital Management’s latest fund closed levels of success, as market conditions $210 million for Strategic Partners I in Q1 at $10.9 billion, triple the size of their have prompted names more commonly 2007. previous offering which closed on $3.5 associated with the buyout market to

Feature Article: Distressed Private Equity Funds

The rise in the number of fi rms now instigating organisational and strategic effectively in this challenging market, it active in the distressed space, many of changes, in addition to taking a position in is these specialist fi rms that can provide which have large pools of capital to draw debt related assets. relief to companies, as well as providing from, has been mirrored by a growth in excellent returns to institutional investors. distressed focused investment vehicles It is this expertise in restructuring on Preqin’s fi gures indicate that distressed in other areas of fi nance, principally in many different levels that has led to such debt players have already amassed $40 the hedge fund market. This has led to strong returns being created by this sector billion of committed but as yet uncalled many voicing concerns over the industry’s in recent years, and it is this approach capital (dry powder), and with a decent ability to create value, as increased that is buoying investor appetite for stock of funds on the road, this is likely competition for debt could lead to infl ated distressed private equity. Contrary to the to increase further in the coming months. prices. The key strategic advantage for connotations aroused by descriptions of If this capital is effectively deployed then distressed private equity players is that distressed private equity fi rms as being it could prove to be an effective tool in the controlling positions that they seek to ‘vultures’ and ‘locusts’, this sector of the helping to return stability and liquidity to take in distressed companies means that fi nance industry is currently serving an the global economy. they are able to take a much more pro- important function. As more traditional Tim Friedman active role in the restructuring process, avenues for restructuring cease to function

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With exclusive information on over 100 ﬁ rms, 233 funds and over 150 investors in the sector, plus detailed analysis reviewing every aspect of the market, the 2008 Preqin Distressed Private Equity Review is a vital purchase for fund managers, fund raising professionals, advisors, consultants, legal ﬁ rms, investors and anyone involved in this rapidly growing market. Features of this year’s publication includes:

• Detailed analysis examining the history and development of the distressed market, recent funds closed, the current fundraising market, performance, fund terms and conditions and investors.

• Proﬁ les for over 100 ﬁ rms including fund by fund performance information, details on investment focus and contact details.

• Proﬁ les for over 150 investors, including investment plans and key contact details. Order before Wednesday 24th Sept & receive 25% Spotlight Reader Discount! • Listings of funds closed (1995-2008) and funds currently in the market.

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Performance Spotlight: Predicting Future Cash Flow

Any LP will confi rm that the cash fl ow of their private equity investments is diffi cult to predict and varies widely from one fund to another. The timing and size of capital calls are often announced only a few days or weeks prior to payment, and distributions are diffi cult to predict. The irregularity of capital calls and cash distributions between one fund and another necessitate the need for standardised models in order to understand the typical cash fl ow of a fund portfolio and assist LPs in predicting future cash fl ows.

Preqin holds cash ﬂ ow data for over 1,500 private equity funds representing Fig. 1: a market capitalisation of $1.4 trillion. Using this extensive information, we are Buyout - Yearly Contribution and Distribution with Net Cash Flow able to create different cash ﬂ ow models (LP with $10mn Commitment) showing the trends and characteristics of the private equity industry.

Using data available for over 500 buyout funds, we created a typical buyout cash fl ow in order to analyse the rate at which buyout fund managers call up commitments to invest their funds and the rate at which they return capital to their investors. Fig. 1 shows the average annual amount of capital called and distributed as well as the resulting cumulative net cash fl ow of Contribution/Distribution/Net Cash Flow ($mn) a typical buyout fund. As the chart shows, a buyout fund is calling most of its investors’ commitments during Fig. 2: the fi rst four to fi ve years of its life. In terms of distributions, the annual size Buyout - Net Cash Flow by Vintage Year (LP with $10mn Commitment) of the distributions rapidly increases from the very fi rst investment year to the seventh year, when the typical size of distributions reaches its peak. After that year, the annual distributions gradually decrease from year to year though the amount distributed each year remains signifi cant.

Investors have their lowest net cash ﬂ ow Net Cash Flow ($mn) position during the fourth investment year. At that point, an LP with a $10 million commitment will typically have contributed $6.8 million and received distributions of $2 million and therefore will have a net cash ﬂ ow position of

Performance Spotlight: Predicting Future Cash Flow

-$4.8 million. The typical buyout fund than buyout funds of previous vintages. to be the case for the most recent breaks even between the seventh and The graph reveals that recent buyout vintages remains to be seen but careful eighth years of its life. By the tenth year, funds are reaching their cash fl ow monitoring of cash fl ows will assist our typical investor with a $10 million break-even points much earlier than investors in predicting and planning for commitment has a net cash fl ow of $3.5 funds of earlier vintages. Buyout funds future cash fl ows within their portfolio. million, having made a net return of 35%. of vintages 1998 and 1999 broke even during their eighth investment year, The performance of buyout funds has vintage 2000 during their seventh year Etienne Parésys varied considerably in the last decade and vintage 2001 as early as their sixth and therefore vintage years need to year. Buyout funds of vintage 2003 have be taken into account when analysing not yet broken even; however, they Users of our Performance Analyst the industry. Fig. 2 shows the net cash look set to break all previous records. Product can now see cash fl ow fl ows of buyouts for the vintages 1995 Buyout performance has signifi cantly graphs for over 1,500 private to 2006. This representation helps in improved for funds with more recent equity funds. The cash fl ow data is also available as a spreadsheet distinguishing which vintage years have vintages and LPs looking to maintain download for users needing to returned the most money to investors the same level of cash exposure to the conduct further analysis. Please and how quickly they distributed it back. asset class may need to increase the contact us for more information: Analysing the chart, it is clear that buyout rate at which they make commitments as [email protected] funds of more recent vintages are both distributions continue to be made earlier using and returning cash more quickly in a fund’s life. Whether this continues

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Fundraising Spotlight Buyout

Buyout Funds on the Road Final Closes Barometer

Funds on Road US Europe ROW Total

Number 175 83 45 303 Total Target 141 70 80 291 Value ($bn) Average Target 1,239 1,184 565 1,041 Size ($mn)

Buyout Funds on the Road

Fund Manager Size (Mn) GP Location Fund Focus Blackstone Capital Partners VI Blackstone Group 20,000 USD US US CVC European Equity Partners V CVC Capital Partners 11,000 EUR UK Europe Apollo Investment Fund VII Apollo Management 15,000 USD US US Carlyle Partners V Carlyle Group 15,000 USD US US Charterhouse Capital Partners IX Charterhouse Capital Partners 6,000 EUR UK Europe KKR European Fund III Kohlberg Kravis Roberts 6,000 EUR US Europe Candover 2008 Candover Partners 5,000 EUR UK Europe Clayton Dubilier & Rice VIII Clayton Dubilier & Rice 7,500 USD US US Madison Dearborn Capital Partners VI Madison Dearborn Partners 7,500 USD US US Bridgepoint Europe IV Bridgepoint Capital 4,000 EUR UK Europe

Recently Closed Buyout Funds

American Securities Partners V Accel-KKR Capital Partners III Manager: American Securities Capital Partners Manager: Accel-KKR Target Size (mn): 2,000 USD Target Size (mn): 500 USD Hard Cap Target: 2500.00 USD Hard Cap Target: 600.00 USD Closings (mn): First Close: 1,800 USD, Fourth Close: 2,000 USD Closings (mn): First Close: 450 USD (Jun-2008), Final Close: 600 (Jun-2008), Final Close: 2,300 USD (Sep-2008) USD (Sep-2008) Geographic Focus: North America Geographic Focus: US Industry Focus: Any Industry Focus: Technology Placement Agent: Credit Suisse Private Fund Group (Placement Sample Investors: Nikko Cordial Alternative Investments Agents) Lawyer: Weil Gotshal & Manges Altor Fund III Sample Investors: MassPRIM Hamilton Lane, CAM Private Equity Manager: Altor Equity Partners Fund Type: Buyout TPG Partners VI Target Size (mn): 2,000 EUR Manager: TPG Closings (mn): Final Close: 2,000 EUR (Aug-2008) Target Size (mn): 18,000 USD Geographic Focus: Denmark, Finland, Norway, Sweden Closings (mn): Final Close: 19,800 USD (Sep-2008) Industry Focus: Any Geographic Focus: North America, Europe, Asia, Global Placement Agent: Monument Group Industry Focus: Technology, Telecoms, Any Lawyer: Ashurst Sample Investors: State Administration of Foreign Exchange, Sample Investors: Skandia Liv, Harvard Management Company, CalPERS, CalSTRS, New York State Common Retirement Fund, AlpInvest Partners, Pantheon Ventures, Länsförsäkringar Teacher Retirement System of Texas Mihai Catalin Ghiorghies

Fundraising Spotlight Venture

Venture Funds on the Road Final Closes Barometer

Funds on Road US Europe ROW Total

Number 209 85 161 455 Total Target 39 16 30 85 Value ($bn) Average Target 188 184 187 187 Size ($mn)

Venture Funds on the Road

Fund Manager Type Size (Mn) GP Location Fund Focus Cyrte Investments TMT Fund Cyrte Investments Venture (General) 1,500 EUR Netherlands Europe

Pine Brook Road Partners I Pine Brook Road Partners Expansion 2,000 USD US US AgriCapital Abu Dhabi Investment House Venture (General) 1,000 EUR UAE ROW ICICI Venture Capital Fund III ICICI Venture Funds Management Venture (General) 1,500 USD India ROW China-Singapore Hi-tech Industrial China-Singapore Suzhou Industrial Venture (General) 1,330 USD China ROW Investment Fund Park DIC/First Eastern Investment China First Eastern Investment Expansion 1,000 USD Hong Kong ROW Dubai Capital Essex Woodlands Health Ventures VIII Essex Woodlands Health Ventures Venture (General) 1,000 USD US US Hudson Clean Energy Partners Hudson Capital Management Expansion 1,000 USD US US Invention Development Fund I Intellectual Ventures Early Stage: Seed 1,000 USD US US Millennium Private Equity Media & Millennium Private Equity Venture (General) 1,000 USD UAE ROW Telecommunicatio

Recently Closed Venture Funds

Fairhaven Capital Partners Closings (mn): Final Close: 312 USD (Aug-2008) Fund Type: Early Stage Geographic Focus: China Manager: Fairhaven Capital Partners Industry Focus: Technology, Internet, Semiconductors Target Size (mn): 200 USD Closings (mn): Final Close: 200 USD (Aug-2008) Baird Venture Partners III Geographic Focus: US Manager: Baird Venture Partners Industry Focus: Technology, Materials Target Size (mn): 150 USD Sample Investors: TD Bank Financial Group Closings (mn): First Close: 125 USD (Dec-2007), Final Close: 170 USD (Aug-2008) Claremont Creek Ventures II Geographic Focus: US, North America Manager: Claremont Creek Ventures Industry Focus: Healthcare, Business Services Fund Type: Early Stage: Start-up Placement Agent: Thomas Capital Group Closings (mn): Final Close: 115 USD (Sep-2008) Lawyer: Kirkland & Ellis Geographic Focus: US Sample Investors: Northwestern Mutual Life Insurance Company, Industry Focus: IT, Life Sciences State of Wisconsin Investment Board, Thrivent Financial for Lutherans, American Family Insurance Group, Sentry Insurance GSR Ventures III Manager: GSR Ventures Fund Type: Early Stage: Start-up Mihai Catalin Ghiorghies

Fundraising Spotlight Fund of Funds

Fund of Funds on the Road Final Closes Barometer

Funds on Road US Europe ROW Total

Number 105 60 42 207 Total Target 43.1 17.1 10.5 70.7 Value ($bn) Average Target 507 372 307 428 Size ($mn)

Fund of Funds on the Road

Fund Manager Size (Mn) GP Location Fund Focus HarbourVest International VI Partnership HarbourVest Partners 3,000 USD US US AXA Capital Europe I AXA Private Equity 1,500 EUR France Europe GS Distressed Opportunities Fund IV Goldman Sachs Private Equity Group 1,750 USD US US GS Private Equity Partners X Goldman Sachs Private Equity Group 1,500 USD US US JP Morgan US Corporate Finance IV JPMorgan Asset Management 1,500 USD UK US Lehman Crossroads Series XIX Lehman Brothers 1,500 USD US US Siguler Guff Distressed Opportunities Siguler Guff & Co 1,500 USD US US Fund III Performance Venture Capital II Performance Equity Management 1,400 USD US US Adams Street US Partnership 2009 Adams Street Partners 1,260 USD US US Abbott Capital Private Equity Fund VI Abbott Capital Management 1,000 USD US US

Recently Closed Fund of Funds

SVG Asia Fund of Funds: F&C European Capital Partners: Manager: SVG Advisers Manager: F&C Asset Management Final Close (mn): 200 USD (Sep-2008) Final Close (mn): 173 EUR (Jul-2008) Geographic Focus: Asia Geographic Focus: Europe Fund Type Focus: Buyout, Expansion Fund Type Focus: Buyout (70%), Mezzanine (30%) Sample Fund Investments: Actis Emerging Markets 3, Affi nity Asia Law Firm: Dundas & Wilson Pacifi c Fund III, CVC Capital Partners Asia Pacifi c III, Navis Asia Sample Investors: Friends Provident Fund V Sample Fund Investments: Lyceum Capital II, Magnum Capital

Northern Trust Private Equity Fund III: Manager: Northern Trust Global Advisors Final Close (mn): 360 USD (Jul-2008) Geographic Focus: US, Western Europe, China, India Fund Type Focus: Buyout, Venture, Distressed Debt, Mezzanine Sample Fund Investments: Segulah IV

Sam Meakin

Investor Spotlight: Pension Funds turn to Infrastructure

Infrastructure fundraising has seen dramatic growth in recent years, and has evolved from a niche sector of the private equity industry into what is now regarded as an asset class in its own right. In this month’s investor spotlight we identify who are the prominent investors in infrastructure and examine why they are looking to invest in the sector.

If we look at fundraising in the unlisted infrastructure market over recent years, Fig. 1: as shown in Figure 1, it can be seen that $34.9 billion was committed to unlisted Make-up of Infrastructure Investor Universe by Type funds that closed in 2007, up from the $3.7 billion raised in 2004. Even in the tough current economic climate $14.1 billion has been committed to funds that have already closed in 2008.

In order to ascertain who is committing the capital which is stimulating the rapid growth in the unlisted infrastructure fund market we can utilise Preqin’s new Infrastructure Online Database, which features over 400 institutional investors profi les. The types of investor and make-up of the investor universe for infrastructure funds is shown in Figure 1 and highlights the signifi cant contribution Fig. 2: of pension funds, accounting for 52% of active investors by number. Growth of Infrastructure Fund Market Looking more closely at these pension funds it is clear that they have a great appetite for increasing their exposure to infrastructure with the vast majority having target allocation well above their existing allocations. Preqin has calculated that there is in fact a potential $15 billion of commitments to be made by public pension funds alone over the next 18 months to 2 years. This is a signifi cant fi gure in the context of the amount of money which has been raised by infrastructure funds so far this year and suggests that fund raising should in infrastructure funds because many term predictable and steady cash fl ows continue to be strong over the coming of the characteristics of infrastructure are an appropriate match for the infl ation– years. investments such as the relatively linked long-term liabilities experienced low correlation to other asset classes, by pension funds. Also, it is important to Pension funds are prominent investors infl ation-hedge characteristics and long- note that pension funds are prominent

Investor Spotlight: Pension Funds turn to Infrastructure investors in infrastructure funds because these institutions are better suited to Fig. 3: overcome the relatively large minimum investment requirements imposed by Pension Funds: Source of Infrastructure Allocation infrastructure funds.

There is also the added incentive for public pension funds to invest in domestic infrastructure projects to fulfi l any responsible investment or domestic economic growth policies imposed. In August members of the Texan state government proposed legislation to ensure its state pensions, including the $108 billion Teachers Retirement System of Texas which has a 3% target allocation to infrastructure, invest in transport infrastructure projects within the state Partners II reached an interim close funds is highlighted in Figure 3 which to help fi nance its infrastructure funding (rumoured to be $200 million) with shows 52% of pension funds actively defi cit. commitments from a selection of US investing in infrastructure funds have pension funds including Public School established a separate allocation for the The current concerns regarding Teachers’ Pension & Retirement Fund of sector. This separate allocation implies infrastructure and the wider global Chicago, San Diego County Employees’ that pension funds are committed to economic climate have led to a degree Retirement Association and Arizona investing in infrastructure over the long- of plateauing in the fundraising market, Public Safety Personnel Retirement term. with 2008 fundraising unlikely to exceed System. the record breaking levels experienced in From our analysis it is clear that pension 2007, shown in Figure 2. A further indication of pension funds’ funds are the most prominent investors positive outlook for infrastructure funds is in this emerging asset class. This can be Does this mean that investors’ confi rmed by the procession of pension attributed to pension funds’ realisation appetite, and more specifi cally pension funds announcing maiden commitments that infrastructure funds can be strong funds’ appetite, for infrastructure is to infrastructure funds, such as Wyoming performers, with steady returns over the waning? Retirement System who last month long-term that can match their own long- announced commitments totalling $120 term liabilities. With the largest pension The long term indications in the million, equating to nearly 2% of its total funds increasing their allocations and infrastructure market are for growth, assets. Not only are we seeing more the smaller institutional investors starting and Preqin Infrastructure data would pension funds investing in infrastructure, to make maiden allocations, the asset certainly suggest that the lack of further we are also seeing an increase in the class is set to grow further as it becomes growth in 2008 is due more to investors, size of allocations to the asset class, with more established and proven as an including some pension funds, simply the mega US pension funds CalPERS integral component of a truly diversifi ed delaying making new investments and CalSTRS announcing large target alternatives portfolio. rather than investors decreasing their allocations for infrastructure in Q3 of allocations to the asset class. We are 2008. still seeing a steady fl ow of infrastructure Richard Stus fund commitments by pension funds - in Further evidence of the positive outlook September, Macquarie Infrastructure by pension funds for infrastructure

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Conferences Spotlight: Forthcoming Events:

Featured Conferences:

IVCJ’s REFs and SuperReturn Middle East Infrastructure Forum 2008

Date: 23rd - 25th September 2008 Date: 12th-15th October 2008 Location: Taj Lands End & JW Marriott, Mumbai Location: Jumeirah Emirates Towers, Dubai Sponsor: IVCJ Following its phenomenal launch event in December 2007, Real Estate Focus (Day 1) when SuperReturn Middle East attracted more than 550 senior regional and international delegates, the cream of Infrastructure Focus (Day 2) the world’s media and rave reviews in just its ﬁ rst year, Raising Funds from PEs for Realty Based Companies (Day 3) SuperReturn Middle East 2008 has returned with the most De-risking strategies for Developers & REF Managers (Day 4) phenomenal line-up of regional and international leaders - ever seen in the region. Information: www.vcindia.com/conf_infra-forum_ sept08 Information: www.icbi-events.com/superreturnme 16 ◄ Conferences Spotlight

Conferences Spotlight: Forthcoming Events:

2008 Private Equity Exchange

Date: 13th November 2008 Location: Meridien Hotel, Paris

The 2008 Private Equity Exchange will address many issues facing the private equity asset class. More than 100 international speakers will share their insights and visions of the industry through the three-track conferences: LBO for Professionals, LBO for Management teams, Restructuring & Underperformance.

Information: www.private-equity-exchange.com

Private Equity in SEE Terrapinn MENA 08

Date: 24th - 25th November 2008 Date: 17th-19th November 2008 Location: Hotel Westin, Zagreb, Croatia Location: Dubai Sponsor: Terrapinn

Croatian Private Equity and Venture Capital Association and Now in its fourth year, Terrapinn MENA 2008 will bring Infoarena are organizing the conference Private Equity in together specialists behind the force of this rapidly expanding private equity business in the MENA markets. South East Europe (Slovenia, Rumania, Bulgaria, Croatia, Bosnia & Herzegovina, Serbia, Montenegro, Macedonia) Information: http://www.terrapinn.com/2008/pemena Information: www.infoarena.hr/pe2008/eng

Other Conferences:

CONFERENCE/EVENT DATES LOCATION ORGANISER SuperReturn Asia 2008 22 - 25 September 2008 Hong Kong ICBI The Family Ofﬁ ce & Alternative Investment Conference 22 - 23 September 2008 Boston Campden Media First Annual Beijing Private Equity Forum 22 September 2008 Beijing EMPEA The 3rd Global Distressed Debt Investor Forum 22 - 24 September 2008 New York IQPC The Private Equity International India Forum 30 Sept - 1st Oct 2008 Mumbai Private Equity International Rediscovering Southeast Asia 30 September 2008 Singapore SVCA Private Equity Gipfel: Private Equity in Emerging Markets 30 September 2008 Frankfurt ConVent Kongresse

Conferences Spotlight: Forthcoming Events: Other Conferences (continued):

CONFERENCE/EVENT DATES LOCATION ORGANISER Buyouts North 2008 01 October 2008 Toronto Buyouts Conferences Facilities And Asset Management Conference 5 - 9 October 2008 Dubai IIR Middle East Private Equity Brief Europe 2008 06 October 2008 London Private Equity News Australia Infrastructure Partnerships 7 - 8 October 2008 Sydney PFI The Private Equity International Energy Forum 7 - 8 October 2008 New York Private Equity International 12th Annual CEE Private Equity Forum 8 - 10 October 2008 London C5 SuperReturn Middle East 2008 12 - 15 October 2008 Dubai ICBI The International Islamic Finance Forum - New Markets 13 - 17 October 2008 Istanbul IIR Middle East The Private Equity International COOs and CFOs Forum 14 - 15 October 2008 London Private Equity International North America West Coast Infrastructure Partnership 14 - 15 October 2008 Los Angeles PFI Leveraged Finance Asia 2008 15 - 16 October 2008 Hong Kong IFR Wealth Management & Private Banking Asia 2008 16 - 17 October 2008 Shanghai Global Leaders Endowment & Foundation Forum 19 - 21 October 2008 Boston Opal Financial Group Alternative Investment Summit Russia 2008 20 - 23 October 2008 London Terrapinn Private Equity World Africa 2008 21 - 24 October 2008 Johannesburg, South Africa Terrapinn Financing Energy Projects in Asia 21 - 22 October 2008 Singapore PFI Cashing in on Carbon 22 October 2008 London IFR European Alternative & Institutional Investing Summit 27 - 29 October 2008 Monte Carlo Opal Financial Group Private Banking & Wealth Management Africa 2008 28 - 31 October 2008 Johannesburg, South Africa Terrapinn Private Banking Latin America 2008 28 - 30 October 2008 Miami Terrapinn Where next for European Leveraged Buyouts 28 October 2008 London IFR The Asia Paciﬁ c Family Ofﬁ ce Conference 30 - 31 October 2008 Hong Kong Campden Media Life Sciences & Healthcare Venture Summit 2008 30 October 2008 New York youngStartUp Ventures Islamic Capital Markets 4 - 5 November 2008 London IFR 4th Annual Emerging Markets Private Equity Forum 4 - 5 November 2008 London Private Equity International Subordinated Financial Institution Capital 2008 04 November 2008 London IFR Fund Forum USA 2008 10 - 12 November 2008 Key Biscayne ICBI GAIM International Fund of Funds 2008 11 - 13 November 2008 Geneva ICBI Sub-Saharan Debt Markets 12 - 13 November 2008 London IFR Private Equity World MENA 2008 17 - 20 November 2008 Dubai Terrapinn SuperInvestor 2008 18 - 21 November 2008 Paris ICBI The 5th Annual Buyouts West 2008 18 - 19 November 2008 Los Angeles Buyouts Conferences Latin American Debt Markets 19 - 20 November 2008 New York IFR Financing Renewable Energy Projects 27 November 2008 Hamburg C5 Fund Forum Middle East 1 - 4 December 2008 Bahrain ICBI Russian Infrastructure Finance 3 - 5 December 2008 London C5 Buyouts Texas 2008 11 December 2008 Dallas Buyouts Conferences Investment Consultants Forum 15 December 2008 New York Opal Financial Group

Investor Spotlight: LP News

AIG Investments has appointed Lye-Thiam Koh as vice president make revenues, expenses, earning, taxes etc. available to the public of its Asian private equity funds group. Having joined in July 2008, on a regular basis. Due to the high return of the fi rm’s private equity Koh will primarily be responsible for managing the Asian private investments and the fact that investment offi cers have the freedom to equity fund portfolio and will oversee its investments. Additionally, invest this allocation as they see fi t, protests from Washington State AIG Investments is planning to establish an offi ce in Columbia in late Investment Board against the proposition are likely to follow. 2008 in order to pursue investments in Columbia and Peru. Florida State Board of Administration (FSBA) has issued an Swiss National Accident Insurance Institution (SUVA) plans to Invitation to Negotiate (ITN) for fi rms to actively manage USD 1.8 commit CHF 400-600 million to private equity in the next 12 months. billion in private equity and debt investments. The USD 160 billion This capital will be committed across 6-12 funds. SUVA will primarily pension system is seeking responses from general partners to invest with existing managers, however, it will selectively build new manage private equity vehicles focusing on investments in Florida- relationships with managers it has not previously invested with. The based businesses in the technology, aerospace, renewable energy, CHF 38 billion insurance company has a 5% target allocation to medical and life sciences sectors. The ITN comes as part of an private equity and expects its allocation to private equity to increase initiative to invest up to 1.5% of the board’s total assets in businesses in the long term. of this description. Responses are due by October 6th 2008, with selection expected by December 2008. Fondation Lucie et André Chagnon plans to invest CAD 35-50 million in 1-2 private equity funds over the next 12 months. The Teachers’ Retirement System of the State of Illinois (TRS) has foundation, with assets of CAD 1.45 billion, has an allocation to committed EUR 50 million to OCM European Principal Opportunities private equity of 10.2%. It invests in a variety of fund types, but Fund II. The fund is the second distressed debt vehicle to be raised predominantly focuses on fund of funds and secondaries vehicles. by Oaktree Capital Management so far in 2008; it has a target of Geographically, Fondation Lucie et André Chagnon’s investments EUR 1.25 billion and will target distressed companies in Europe. are in North America and Europe, although it will consider emerging markets for investment. London Borough of Tower Hamlets Pension Scheme is considering making a maiden investment in private equity. The Texas Permanent School Fund has issued an RFP for a general decision is to be made when its investment panel meet in September consultant. RV Kuhns & Associates is presently serving the role this year. At that time, it is also expected that the amount committed, at the USD 32 billion government agency. Responses are due by type of vehicles to which it will commit, and the timing of the October 7th 2008, with selection expected in January 2009. The new investment will all be discussed. London Borough of Tower Hamlets contract will begin in March 2009. Texas Permanent School Fund Pension Scheme was being advised on this investment by its general is also in the process of selecting a private equity advisor following consultant, Hymans Robertson. an asset allocation review which increased its private equity target allocation to 6% of its total assets. CalPERS is investing USD 2.3 billion in distressed-debt funds managed by Apollo Management. The increase in distressed debt Washington State Investment Board (WSIB) faces a possible is part of a three-year plan to hold fewer stocks as CalPERS has legislation that would require fund managers with which it invests experienced a decrease in returns from such holdings with an to provide greater transparency of information. It is the Service average of 5.6% a year for the fund in the past decade, compared Employees International Union that has proposed the Washington with 17.3% by its distressed investments from 1990 to 2006. The Community, Environment and Retirement Protection Act, which retirement fund has also forecast corporate-default rates to double if passed would force WSIB to make efforts to encourage fund within a year which makes distressed debt a better option. managers with which it invests, and their portfolio companies, to

Each month Spotlight provides a selection of the recent news on institutional investors in private equity. More news and updates are available online for Investor Intelligence subscribers. Contact us for more information - [email protected]