INVESTOR REPORT FULL YEAR 2020

Buyouts' interactive and downloadable review of the investor environment

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Nicole Douglas Adrian Glean Head of Investor Research Senior Research Associate [email protected] [email protected]

Largest known private equity fund commitments made in 2020

Institution Fund Manager Commitment Region Strategies $12bn raised by top 20 ($m)

California Multi- largest commitments Public Employees' LongRange Capital Fund I LongRange Capital 1500.0 regional / Corporate PE Retirement System

California Public Employees' Oaktree Latigo Investment Oaktree Capital 1000.0 North Buyout / Corporate PE Retirement System Fund Management America California Public Employees' CVC Capital Partners VIII CVC Capital Partners 919.1 Multi- Buyout / Corporate PE Fundraising for the year remained strong. Retirement System regional California Public Employees' Silver Lake Partners VI Silver Lake 800.0 Multi- Buyout / Corporate PE GPs amassed over $530 billion in 2020, Retirement System regional despite travel bans and global lockdowns, California Public Employees' EQT IX EQT 750.0 Multi- Buyout / Corporate PE Retirement System regional and investors continued to back brand-name Canada Pension Plan Multi- Investment CVC Capital Partners VIII CVC Capital Partners 612.7 regional Buyout / Corporate PE fund managers. Board

New York State Common CVC Capital Partners VIII CVC Capital Partners 612.7 Multi- Buyout / Corporate PE California LPs accounted for half of the Retirement Fund regional California Public Employees' New Mountain Partners VI New Mountain Capital 600.0 North Buyout / Corporate PE largest disclosed fund commitments in 2020. Retirement System America

The California Public Employees' Retirement Washington State Investment GTCR Fund XIII GTCR 600.0 North Buyout / Corporate PE Board America System was the most active of these with California Public Employees' Clayton, Dubilier & Rice Fund XI Clayton, Dubilier & 500.0 North Buyout / Corporate PE eight sizeable commitments. Retirement System Rice America Oregon State Treasury Pathway Private Equity Fund III- Pathway Capital 500.0 Multi- / Co- Co Management regional Investment

Texas Municipal Retirement H.I.G. Strategic Partners Fund II H.I.G. Capital 500.0 North Buyout / Corporate PE System America

California State Teachers' CVC Capital Partners VIII CVC Capital Partners 450.0 Multi- Buyout / Corporate PE Retirement System regional

New York State Common Fund XIV Thoma Bravo 400.0 North Buyout / Corporate PE Retirement Fund America

Texas Municipal Retirement HarbourVest/TMRS Co-Invest H b V P 400 0 North Fund of Funds / Co-

To view ' 2020 fundraising report Download data

PE commitment activity remains strong Top 10 most active investors based on known PE fund commitments made in 2020

Of the top 10 most active investors in private Institution Regional HQ Number of 2020 commitments Regional appetite equity, the majority are agnostic when it European Western 41 Central/Eastern comes to regional appetite. Investment Fund Europe, Western Europe Texas County and District North America 30 All regions considered Retirement System European Investment Fund, the most active San Francisco Employees' North America 26 All regions considered investor, committed mostly to buyout and Retirement System State of Wisconsin Investment North America 25 All regions considered funds in Western Europe. Board New York State Common North America 23 All regions considered Combined, the top 10 most active investors Retirement Fund made 258 fund commitments to 2020- Cathay Life -Pacific 22 Asia-Pacific, North America, Western Europe vintage funds. Maryland State Retirement and North America 20 All regions considered Pension System

California Public Employees' North America 19 All regions considered Retirement System

Los Angeles Fire & Police North America 18 All regions considered Pension System

California State Teachers' North America 17 All regions considered Retirement System

Florida Retirement System North America 17 All regions considered Trust Fund

To view Texas County and District Retirement System's recent commitments Download data Historical private equity allocation by institution type

PE represents 8.7% of the 12 average investor portfolio P rivate equity continues to represent a 10 notable proportion of portfolios and is often the alternative asset 8 class to which investors allocate the most ) % ( capital. n io t ca o l l 6 a y

On average, private equity constituted 8.7% it u q

of an LP's investment portfolio in 2020. With e e t a the exception of private pensions, average iv r

P 4 allocation has increased since 2016.

Foundations and endowments dedicate an 2 above-average proportion: 11.61% Since 2019, the average allocation to private equity has increased from 8.58%, indicating 0 continued appetite for, and confidence in, 2016 2017 2018 2019 2020 the asset class Foundation / Endowment Private Public Pension Fund Insurance Company All Investors

To view the Buyouts database of investors and fund managers Download data Percentage of institutions increasing, maintaining or decreasing private equity allocations from 2019 to 2020 Investors want a larger piece of PE pie Foundation / Endowment 57.0% 22.0% 21.0%

As mentioned on the previous slide, the average allocation to private equity has Insurance Company 31.0% 50.0% 19.0% increased in recent years. Our data show that, globally, 75% of institutional investors maintained or shifted more capital into the Private Pension Fund 32.6% 29.5% 37.9% asset class over the course of 2020.

Breaking this down by institution type, foundations and endowments were the most Public Pension Fund 46.0% 23.0% 31.0% likely to increase their allocation to the asset class (57%), while 22% maintained their allocation to PE. All investors 47.9% 27.0% 25.1%

Increased allocation Maintained allocation Decreased allocation

To view the Buyouts database of investors and fund managers Download data Investors' private equity allocation position The majority of investors remain underweight in PE

While investors continue to shift more capital 27% 31% 4% 31% into private equity, nearly 60% of investors’ 33% 35% 6% 5% allocations to private equity remain below 6% target. 7%

61% 63% 69% 64% 58% 2016 2017 2018 2019 2020

Underallocated At target Overallocated

To view the Buyouts database of investors and fund managers Download data Historical regional appetite of investors globally

Appetite is strongest for 80 North America n

io 70 g e r In recent years, investor appetite on a t a h t r

regional level has remained relatively o f e it consistent, with LPs displaying the greatest t e

p 60 appetite for North America- and Western p a h it

Europe-focused funds. It follows that North w y l l a

America-focused funds continue to lead by b o l g

capital raised, accounting for over one-third s 50 r o t s

of the total in 2020. e v

in f

o n

Just over half (54%) of investors have io t r

o 40 appetite for Asia-Pacific focused funds, which p o r accounted for approximately 10% of P overall fundraising in 2020.

30 2016 2017 2018 2019 2020

Asia-Pacific Central/Eastern Europe Latin America Middle East/Africa North America Western Europe

To view the Buyouts database of investors and fund managers Download data Historical strategy appetite of investors globally

Strategy appetite 80 remains varied 70 y g e t a r t s e h

In recent years, investor strategy appetite has t 60 r o f remained relatively consistent, with LPs e it t e displaying the greatest appetite for venture p p 50 a h

capital/growth equity and buyout/corporate it w y l private equity funds. l a b

o 40

l g

Since 2017, there has been a decline in s r o t s

investors' appetite for distressed/turnaround e v 30 in funds. f o n io t r o

p 20 o r P

10 2016 2017 2018 2019 2020

Buyout / Corporate Private Equity Venture Capital / Growth Equity Fund of Funds / Co-Investment Secondaries

Distressed / Turnaround Mezzanine / Debt

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