1. Executive Summary - Sample Pages

1. Executive Summary Fig. 1.1: Length of Time Taken to Raise Capital for Funds of Funds Compared to 12 Months Ago

Increased

Executive Summary fi nal closes dropping from $369mn in 2007 49% to $234mn in 2011. Fund of funds managers have long played a 46% Stayed the Same signifi cant role in providing the private equity In addition to garnering smaller pools market with a fl ow of capital. They supply of capital from investors, fund of funds investors that possess insuffi cient knowledge managers are also taking longer to raise or experience to invest directly in private capital for their funds. In October 2011 equity funds with a way of accessing the Preqin surveyed 103 private equity fund of Decreased asset class, and are therefore an important funds managers to determine their current source of capital for fund managers. Despite views on the market and, as shown in Fig. the key position of multi-managers within 1.1, 49% of managers stated that the time the industry, the ongoing global economic taken to raise a vehicle has increased this volatility has left fund of funds managers year compared to 12 months ago. A further Fig. 1.2: Proportion of Investors in Funds of Funds that Anticipate Making a New Commitment to feeling the strain and under pressure to fi nd 46% stated that they have not seen an a Fund of Funds in the Next Three Years ways to maintain their position in the market. improvement in time taken to raise funds in Adapting to these uncertain fi nancial times 2011 compared to 2010, suggesting that the will be vital for fund of funds managers in the market is still sluggish and investors remain months ahead. cautious. Fund of funds managers were also 22% Will Make New asked to express which factors they thought Fund of Funds Commitments in Fundraising Market were currently of the most importance to the Next Three the private equity industry. It is unsurprising Years Private equity fundraising markets have that economic uncertainty came out on top, Will Consider been tough over recent years, and it has receiving an average importance rating of 58% New Fund of been no exception for funds of funds. Diffi cult 4.1 out of 5. 20% Funds market conditions have seen fundraising Commitments in the Next Three fi gures for funds of funds drop signifi cantly in The 2012 Preqin Private Equity Fund of Years 2009-2011; $11.3bn has been raised during Funds Review presents detailed analysis Will Not Make Jan-Nov 2011, compared with $60.2bn when of the current and recent global fundraising New Fund of Funds fund of funds fundraising reached its zenith market for funds of funds, as well as Commitments in in 2007. We have also seen a decline in the comprehensive listings of the vehicles that the Next Three Years amount of capital fund of funds managers are currently seeking capital and those that are targeting for their funds, with average have closed since 2010.

Fig. 1.3: Relationship between Predecessor and Successor Fund of Funds Performance Investor Appetite For Funds of Funds year period to March 2011, where funds of Quartiles funds produced a horizon IRR of 14.8%, 100% Despite a poor fundraising environment and compared to 10.5% reported one-year to 14% 90% increasing numbers of investors choosing to March 2010. The fi ve-year horizon returns 24% 26% invest directly in private equity funds in order have also improved for funds of funds, Bottom Quartile 80% 37% Successor Fund to avoid the double of layer of fees, there with the fund type showing returns of 8.4% 16% is still a healthy appetite for funds of funds as at March 2011, which is substantially 70% among a large portion of investors. Of 121 higher than the 5.5% posted as at March 20% Third Quartile 60% 32% Successor Fund investors in funds of funds interviewed by 2010. It is important to bear in mind that the 27% 50% Preqin in October 2011, 78% advised that performance data for funds of funds generally 30% they are likely to consider making a new lag by one quarter, due to the reporting of the Second Quartile 40% Successor Fund commitment to a fund of funds within the underlying funds compared to other private 32% 21% next three years. Many investors feel that the equity fund types. 30% private equity market is still presenting good 20% Top Quartile 20% 43% investment opportunities despite the current Due to the disparity in returns between Successor Fund economic instability, due to the long-term the best and worst performing managers, 10% 23% 22% 13% nature of the asset class and ability of the manager selection is of the utmost 0% best managers to take advantage of market importance to investors, and examining Top Quartile Predecessor Second Quartile Third Quartile Bottom Quartile volatility to provide attractive returns. the fund manager’s track record of past Fund Predecessor Fund Predecessor Fund Predecessor Fund funds can be a useful indicator. While Fig. 1.4: Five Largest Funds of Funds Currently Raising While investors are still expressing an interest past performance cannot be a guarantee in funds of funds, the market is competitive of future performance, an examination of Fund Firm Target Size (mn) GP Location and it has become more challenging for the relationship between fund managers’ HarbourVest International VI HarbourVest Partners 3,000 USD US fund of funds managers to identify potential predecessor and successor funds of funds Partnership investors. Consequently, intelligence is a demonstrates that there is some correlation more vital part of the fundraising process for between the quartile ranking of a fund of Guochuang Kaiyuan Fund China Development Bank 10,000 CNY China fund managers than ever. Within the Review funds manager’s last fund and its current of Funds Capital we present details of 150 institutions that are fund. Fig. 1.3 shows that 43% of fund of HarbourVest Partners IX - HarbourVest Partners 1,500 USD US investing in funds of funds, plus highlights funds managers with a top quartile fund go Buyout of the plans of 25 key investors that are on to produce a top quartile follow-on fund Morgan Stanley Private Morgan Stanley Alterna- 1,250 USD US expected to be particularly active in 2012. of funds, while only 14% go on to produce Markets Fund V tive Investment Partners a vehicle in the bottom quartile. Conversely, Euro Choice V Akina 720 EUR Switzerland Performance of Funds of Funds of the managers who administer a bottom quartile vehicle, 37% go on to manage a Horizon IRRs provide a good indication of follow-on fund that is also in the bottom how the private equity industry is performing quartile of performance. over a defi ned period, such as over one year or fi ve years. The recent performance of This demonstrates how important it is for funds of funds has improved over the one- investors to build strong relationships with

the top performing fund of funds managers, Consequently, fund of funds managers as they are more likely than their peers to will have to continue to work hard to continue to perform well and provide their attract capital, market their funds correctly limited partners with consistently high and strive to meet potential investors’ returns. requirements.

What Does the Future Hold for the Fund of The 2012 Preqin Private Equity Fund of Funds Funds Market? Review

Funds of funds continue to play an The 2012 Preqin Private Equity Fund of important role in the private equity industry, Funds Review – an annual publication in its and the fundraising environment – while sixth year – is a vital guide to the private depressed – shows that the top managers equity fund of funds universe, featuring have adapted well to market conditions and 240 profi les of fund of funds managers, will likely continue to attract capital going with information on their investment forward. As Fig. 1.4 illustrates, several strategies and the performance of their managers remain confi dent about raising funds; 25 listed funds of funds; over 150 large amounts of capital for their vehicles, investors, including important investors to with HarbourVest Partners seeking $3bn for watch in 2012 and their key contacts. The its latest fund of funds. Review also contains listings of funds of funds raised over 2010 and 2011, vehicles It is unlikely that the core investor base of currently seeking capital and analysis on all funds of funds will change in the short term. aspects of the industry. Funds of funds are still essential to investors looking to access the asset class for the fi rst We have gone to considerable lengths to time and for small investors that lack the in- ensure that the publication is as accurate as house resources to seek meaningful direct possible, gathering intelligence through a fund exposure. Institutions will also continue number of different channels, primarily and to invest with fund of funds managers to most importantly via direct communication further diversify their portfolios into sectors, with fund managers and investors or niche markets, where they have little or themselves. We hope that you fi nd this no experience. Likewise, funds of funds are year’s edition to be a valuable resource and often the vehicle of choice for investors that as ever we welcome any comments and intend to return to private equity after fi rst feedback that you may have. participating during the boom years.

However, while there is still considerable investor appetite for funds of funds, the fundraising marketplace is overcrowded.

Contents 1. Executive Summary 5 10. Profiles for 240 Active Private Equity Fund of Funds 61 Managers

2. Data Sources 9 11. Listed Fund of Funds Analysis 269

Share prices for listed funds; discount/premium to net asset value; 3. Review of Historical Fund of Funds Fundraising Market 11 changes in net asset value; breakdown by geographic focus and location; allocations to fund types; strategies of listed funds of Historic fundraising; market share; funds closed by geography; funds. funds closed by GP location; average fund size evolution; funds closed by fund size; ﬁ rst-time funds of funds fundraising. 12. Profiles of Listed Funds of Funds 273

4. Listings of Funds of Funds Closed 2010 - November 2011 21

13. Analysis of Investors in Funds of Funds 293

5. Review of Current Fund of Funds Fundraising Market 31 Investors’ motivations for investing in funds of funds; investor experience; investor sizes; make-up of investors in closed funds; Evolution of fundraising market; funds raising by geography; funds survey of investor appetite going forwards. raising by GP location; funds raising by fund size; largest funds on the road; ﬁ rst-time funds raising. 14. Investors to Watch 299

6. Listings of Funds of Funds Currently Raising 35 Important investors to look out for that intend to be active in 2012

15. Profiles of Investors in Private Equity Funds of Funds 305

7. Review of the Performance of Funds of Funds 45

Net IRR dispersion; median benchmark deviation; private 16. Index 351 equity horizon IRRs; DPI, RVPI and TVPI; median net IRRs and quartile boundaries; net multiples; net IRR J-curve; fund selection performance; top managers; synthetic IRR benchmarks; relationship of predecessor and successor fund quartiles.

8. Fund of Funds Managers as Investors 51

Regional breakdown of fund of funds managers; attitudes to ﬁ rst- time funds; allocations to fund types and geographies; allocations by primary commitments, secondary purchases and co- investments; opinions on the outlook for the private equity market.

9. Fund of Funds Managers as Investment Consultants 57

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.

Fig. 5.5: Proportion of First-Time Funds of Funds vs. Non First-Time Funds of Funds in Market by As displayed in Fig. 5.4, the majority of the First-Time Funds of Funds in Market Number of Funds (as at November 2011) largest 10 fund of funds vehicles currently fundraising are focused primarily on As shown in Fig. 5.5, 10% of funds of funds investing in North America; however the in market are being raised by fi rst-time largest fund of funds vehicle – HarbourVest managers. This is a smaller proportion 10% International VI Partnership – has a than in 2010, when fi rst-time funds of funds First-Time Funds of Funds primary focus on Europe. The fund of funds accounted for 12% of all funds of funds in manager, HarbourVest, also has two other market. The absolute number of fi rst-time vehicles in the top 10 largest multi-manager fund vehicles has increased, however, from vehicles currently on the road. Elsewhere, 12 to 15 vehicles. two of the largest 10 vehicles focus on Asia and Rest of the World; Guochuang In terms of contributions to the aggregate Kaiyuan Fund of Funds will invest in China- target of funds of funds in market, fi rst-time focused funds exclusively, while Siguler funds currently on the road account for the Guff BRIC Opportunities Fund III will focus same proportion of the total as in November Non First-Time Funds of on opportunities in Brazil, Russia, India and 2010 (8%), as shown in Fig. 5.6. Funds 90% China. Just over half (53%) of fi rst-time fund managers raising capital as of November

Fig. 5.6: Proportion of First-Time Funds of Funds vs. Non First-Time Funds of Funds in Market by Fig. 5.7: Funds of Funds in Market by Fund Types Targeted (as at November 2011) Aggregate Capital Sought (as at November 2011) 70%

63%

8% 60% 53% First-Time Funds of Funds 50%

40% 34%

30%

20% Proportion of Funds of Funds 14% Non First-Time Funds of Funds 10% 10% 92%

0% Buyout Venture Growth Mezzanine Distressed Debt

Fig. 7.11: Synthetic IRRs for Funds of Funds of Different Allocation Mixes their venture-focused counterparts. Vintage Relationship between Predecessor and 2001 funds of funds with a 100% allocation Successor Fund Quartiles 60% to buyout funds have generated a median

IRR of 18.9%, while vehicles with a 100% Fund manager selection is a very important 50% 100% Buyout - allocation to venture funds produce a pooled factor in an investor’s due diligence for 0% Venture return of -1.4%. The effects of the ﬁ nancial potential fund of funds investments, and 40% crisis cause another switch in the best examining the fund manager’s track record is 75% Buyout - performing allocation mix, which is illustrated a signiﬁ cant part of this process. Examining 30% 25% Venture by the vintage 2007 funds of funds: vehicles the relationship between the performance with a 100% focus on venture have generated quartile ranking of a fund of funds manager’s 20% 50% Buyout - an IRR of 6.5%, while 100% buyout-focused previous vehicle and that of the vehicle that 50% Venture vehicles have posted an IRR of 3.4%. follows demonstrates that there is indeed 10%

some correlation between the two. Synthetic Pooled IRR 25% Buyout - 75% Venture It is important to bear in mind that the 0% ‘synthetic’ benchmarks are based upon Fig. 7.12 shows that 43% of the managers of 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 100% Venture - pooled IRRs, which in general are higher top quartile funds of funds go on to produce a -10% 0% Buyout than medians. It is also important to top quartile follow-on fund of funds, with only note that the breakdown in the timing of 14% going on to manage a bottom quartile -20% commitments we have assumed, 50/30/20, successor fund. Thirty-seven percent of Vintage Year in calculating our synthetic IRRs may not managers with a bottom quartile fund of correspond accurately to how funds of funds go on to have their next fund ranked Fig. 7.12: Fund of Funds - Relationship between Predecessor and Successor Fund Quartiles funds actually call capital. In addition there in the bottom quartile, with just 13% going 100% could be signiﬁ cant variations in the actual to manage a top quartile successor vehicle. 14% 90% implemented management fees compared 24% 26% Bottom Quartile to our assumed management fee structure, 80% 37% 16% Successor Fund which is based on data provided by funds of 70% funds managers. 20% Third Quartile 60% 32% Successor Fund 27% We believe that analyzing the synthetic IRRs 50% 30% of funds of funds puts their performance in Second 40% a fairer context. In general venture-focused 32% Quartile 21% Successor Fund funds of funds are unlikely to generate similar Proportion of Funds 30% performance to buyout-focused vehicles and 20% Top Quartile 20% 43% Successor Fund a direct comparison of funds following such strategies can be misleading. 10% 23% 22% 13% 0% Top Quartile Second Quartile Third Quartile Bottom Quartile Predecessor Fund Predecessor Fund Predecessor Fund Predecessor Fund

Mary Hornby Managing Director, General Counsel +1 212 757 2700 [email protected] Timothy Maloney Managing Director +1 212 757 2700 [email protected] Lauren Massey Managing Director, Finance & Administration +1 212 757 2700 [email protected] Paolo Parziale Managing Director, Fund Administration +1 212 757 2700 [email protected] Meredith Rerisi Managing Director +1 212 757 2700 [email protected] Jonathan Roth Managing Director, President +1 212 757 2700 [email protected] Matthew Smith Managing Director +1 212 757 2700 [email protected] Kathryn Stokel Managing Director, COO +1 212 757 2700 [email protected] Charlie Van Horne Managing Director, Marketing & Client Services +1 212 757 2700 [email protected]

Access Capital Partners Tel: +33 (0)1 56 43 61 00 www.access-capital-partners.com 121, Ave des Champs-Elysées, Paris, 75008, France Established: 1999 Fax: +33 (0)1 56 43 61 01 [email protected] Access Capital Partners (Access) is an independent private equity fund of funds management company created in 1999 that advises or manages the assets of institutional clients and high-net-worth families. Access manages or advises EUR 4.5 billion of assets under management and comprises 41 professionals located in Paris, Brussels, Helsinki, Munich and London.

Since 1999, Access has been dedicated to the selection of small and mid-market buyout and special situations funds, as well as mezzanine funds for which the key driver of value creation is growth. It has aimed to establish itself as one of the largest European teams focused on the European small and mid-market segment with an exhaustive market coverage, continual oversight, and deep relationships within the general partner universe. The firm manages co- mingled funds of funds and segregated accounts with a combination of primary and secondary investments.

In December 2010, Access acquired Pohjola Private Equity Funds, a Nordic fund of funds manager with a similar investment focus. Access Capital Fund V - Growth Buyout Europe Fund Size: EUR 350 mn* First Close: 2009 Fund Types: Buyout, Special Situation Access Capital Fund V - Growth Buyout Europe follows a similar strategy to its predecessors. It focuses on sustainable European growth- Regions: Europe (100%) oriented small and mid-market buyouts and special situations funds, through primary and secondary investments. Strategies: Primary (60-100%), Secondary (0-40%) Sample Investments: Litorina Kapital Fund IV, Litorina Kapital Fund IV Selected Private Equity Funds II Fund Size: EUR 132 mn Closed: 2011 Fund Types: Buyout (100%) Selected Private Equity Funds II seeks to invest in 15 European lower mid-market private equity funds with sizes of between EUR 100 Regions: Europe (100%) million and EUR 500 million. Countries: Finland, Norway, Switzerland Sample Investments: Euroknights VI Strategies: Primary (100%) Invest First-Time Funds: Yes Total Planned Fund Investments: 15 to 18 Amount Typically Invested in a Fund: EUR 10 to 15 mn Next 12 Months: 3 to 6 funds Selected Mezzanine Funds I Fund Size: EUR 102 mn Closed: 2009 Fund Types: Mezzanine (100%) Selected Mezzanine Funds I invests in European mezzanine funds, particularly those with active mezzanine co-investment programs. In Regions: Europe (100%) total the fund plans to invest at least 60% of its capital in 5-10 mezzanine funds and up to 40% in 5-15 companies, mainly alongside its portfolio mezzanine fund managers. It does not have a specific industry sector focus. Strategies: Primary (60%), Direct (40%) Invest First-Time Funds: Considering As of Q4 2011, the fund was still actively committing its capital to underlying funds. Total Planned Fund Investments: 7 to 10 Sample Investments: Growth Capital Partners Fund III , Euromezzanine 6, Armada Mezzanine Fund III, Syntaxis Mezzanine Fund I Commitments Made to Date: 75% of capital Amount Typically Invested in a Fund: EUR 10 mn Next 12 Months: 2 to 3 funds Sample Buyout Fund Investments Euroknights VI (2011), GEM Benelux II (2011), Gilde Buyout Fund IV (2011), Litorina Kapital Fund IV (2011), Growth Capital Partners Fund III (2010), Polaris III (2009), Xenon V (2009), Carlyle Europe Technology Fund II (2008), Halder-Gimv Germany II (2008), Herkules Private Equity Fund III (2008), HitecVision Private Equity V (2008), Investindustrial Fund IV (2008), Lyceum Capital Fund II (2008), Segulah IV (2008), Gresham IV Fund (2007), ISIS Equity Partners IV (2007), Litorina Kapital Fund III (2007), Mercapital Spanish Buyout Fund III (2007), Realza Capital Fund I (2007), Reiten & Co Capital Partners VII (2007), TCR Capital Partners III (2007), ViewPoint Growth II (2007), Zeus Private Equity Fund I (2007), 21 Centrale Partners III (2006), Chequers Capital XV (2006), Duke Street Capital VI (2006), Gilde Buyout Fund III (2006), GMT Communications Partners III (2006), Perfectis II (2006), STAR II (2006), Segulah III (2005), Sovereign Capital II (2005), CBPE Capital Fund VII (2004), Gresham III Fund (2003), Chequers Capital (2002), Langholm Capital Partners (2002), Nmas 1 Private Equity Fund I (2002), CBPE Capital Fund VI (2001), Duke Street Capital V (2001), European Acquisition Capital Fund III (2001), Gilde Buyout Fund II (2000), GMT Communications Partners II (2000), Mercapital Spanish Private Equity Fund II (2000), Quadriga Capital Private Equity Fund II (2000), Segulah II (2000), Italian Private Equity Fund III (1999), Advent Global Private Equity III (1997), Italian Private Equity Fund II (1996)

Fig. 13.7: Geographic Make-up of Investors in Funds of Funds Split by Fund Focus (Capital planning to commit to funds of funds over One United Arab Emirates-based corporate Committed to Funds of Funds Closed in 2009-2011) the next three years if they would consider investor, for example, does not invest in fi rst- 100% 2% new relationships with fund managers, and time funds because it looks for “a recognized 2% 9% just over half of respondents (51%) indicated and big organization, with a strong track 90% they will consider doing so, as Fig. 13.9 record, backed by a respected name.” Asia and Rest of World LPs 80% shows. Nevertheless, emerging managers can 70% Emerging Manager Preferences be encouraged that a quarter of LPs will 60% consider investing with fi rst-time fund of 86% Additionally, we asked investors if they would funds managers in the next three years, and 50% North American LPs consider investing with fi rst-time fund of an additional 4% will invest in a fund of funds 89% 40% funds managers over the next three years. raised by a team which has spun out of a As Fig. 13.10 shows, 71% of investors stated pre-existing fi rm. 30% that they would not invest with fi rst-time

Proportion of Committed Capital 20% fund of funds managers or spin-off teams. Current Investor Appetite for Funds of Funds European LPs This is an increase compared to a similar 10% study conducted last year, in which 61% When asked whether they would make a 12% of investors expressed a comparable view new fund of funds commitment over the 0% Europe North America towards investing in ﬁ rst-time funds of funds. Primary Fund Focus

Fig. 13.8: Average Make-up of Investors in Global Funds of Funds by Investor Type (Capital Fig. 13.9: Proportion of Investors That Will Consider Establishing New Relationships with Fund of Committed to Fund of Funds Closed 2006-2011) Funds Managers in the Next Three Years

Public Pension Funds 6% 2% Private Sector Pension Funds 6% 23% Will Consider Establishing New 10% Insurance Companies Relationships With Fund of Funds Managers Foundations & Family Offices 49% 51%

11% 15% High-Net-Worth Individuals

Bank

13% Will Only Invest With Existing 14% Endowment Plan Managers in Their Portfolios

Corporate Investor

Other

Sample Fund Investments: Axiom Asia II (2010), Keyhaven Capital Partners III (2010), RCP Fund VI (2009), GS Total Assets (mn): EUR 12,000 Distressed Opportunities Fund IV (2008), Pantheon Asia Fund V (2008), RCP Fund V (2008), Wilshire Private Target Allocation to Private Equity (mn): EUR 960 (8% of Total Assets) Markets Fund VIII Asia (2008), Crown European Buyout Opportunities II (2007), GS Distressed Opportunities Fund Allocation to Private Equity (mn): EUR 857 (7.1% of Total Assets) III (2007), Keyhaven Capital Partners II (2007), Paul Capital Top Tier Investments IV (2007), RCP Fund IV (2007), Allocation to Fund of Funds (mn): EUR 857 (100% of PE Allocation) VenCap 12 (2007), Adveq Technology V (2006), Axiom Asia I (2006), Wilshire Private Markets Fund VII Asia (2006), Wilshire Private Markets Fund VII US (2006), Capital Dynamics European Venture 2005 (2005), Pantheon Asia Geographic Preferences for Fund of Funds Investments Fund IV (2005), Paul Capital Top Tier Investments III (2005), VenCap 10 (2005), Adveq Technology IV (2004), North America Europe Asia Rest of World Keyhaven Capital Partners I (2004), Crown European Buyout Opportunities I (2003), Paul Capital Top Tier • • Investments II (2002), Adveq Technology III (2001), HarbourVest International IV Partnership (2001), HarbourVest Underlying Fund Type Preferences for Fund of Funds Investments PE Partners IV - European Venture (2001), VenCap 6 (1997) Buyout Venture Distressed PE Growth Other Contact Name Position Telephone Email • Head of Alternative Bengt Hellstrom +46 (0)8 5551 7145 [email protected] Sample Fund Investments: HarbourVest Global Private Equity (2008), HarbourVest Partners Cleantech Fund I Investments (2008), HarbourVest Partners VIII - Buyout (2007), HarbourVest Partners VIII - Mezzanine (2007), HarbourVest Portfolio Manager, Private Mikael Huldt +46 (0)8 5551 7154 [email protected] Partners VIII - Venture (2007), HarbourVest International V Partnership (2005), Crown European Buyout Equity & Infrastructure Opportunities I (2003), HarbourVest Partners VII - Buyout (2003), HarbourVest Partners VII - Mezzanine (2003), HarbourVest Partners VII - Venture (2003), HarbourVest International IV (2001), HarbourVest International IV AP-Fonden 4 Public Pension Fund Partnership (2001), HarbourVest PE Partners IV - Partnership (2001), Standard Life European Private Equity Trust (2001), Castle Private Equity (1997), Pantheon International Participations (1990), Graphite Enterprise Trust (1981) Fjarde AP-fonden, PO Box 3069, Stockholm, 103 61, Sweden Contact Name Position Telephone Email Tel: +46 (0)8 7877 500 www.ap4.se Manager of Alternative Per Olofsson +46 (0)8 4122 683 [email protected] Fax: +46 (0)8 7877 525 [email protected] Investments AP-Fonden 4 has been known to invest in funds of funds in order to diversify its investment portfolio; it has previously invested in UK-focused fund of funds vehicles. The pension fund prefers to work with fund managers in its existing investment portfolio, and typically looks to commit SEK 130-320 million per fund of funds. Arkansas Teacher Retirement System Public Pension Fund Total Assets (mn): SEK 215,575 1400 West Third Street, Little Rock, AR, 72201, US Allocation to Alternatives (mn): SEK 13,861 (6.4% of Total Assets) Tel: +1 501 682 1517 www.artrs.gov Allocation to Private Equity (mn): SEK 5,174 (2.4% of Total Assets) Fax: +1 501 682 2359 [email protected] Geographic Preferences for Fund of Funds Investments Arkansas Teachers' Retirement System is an active investor in funds of funds and it invests predominantly in funds North America Europe Asia Rest of World managed by Franklin Park. It has previously gained exposure to venture funds focused on opportunities across the • globe, including emerging markets. Underlying Fund Type Preferences for Fund of Funds Investments Total Assets (mn): USD 11,300 Buyout Venture Distressed PE Growth Other Target Allocation to Private Equity (mn): USD 1,130 (10% of Total Assets) Allocation to Private Equity (mn): USD 780 (6.9% of Total Assets) • Geographic Preferences for Fund of Funds Investments Sample Fund Investments: Keyhaven Capital Partners III (2010), European Strategic Partners II (2002) North America Europe Asia Rest of World Contact Name Position Telephone Email • • • • Tobias Fransson Head of External Investments +46 (0)8 7877 500 [email protected] Underlying Fund Type Preferences for Fund of Funds Investments Buyout Venture Distressed PE Growth Other AP-Fonden 7 Public Pension Fund • P.O. Box 100, Vasagatan 11, Stockholm, 101 21, Sweden Sample Fund Investments: Franklin Park International Fund 2011 (2011), Franklin Park Venture Fund Series 2011 Tel: +46 (0)8 4122 660 www.ap7.se (2011), Franklin Park Venture Fund Series 2010 (2010), Franklin Park Venture Fund Series 2009 (2009), Franklin Park Venture Fund Series 2008 (2008) Fax: +46 (0)8 2246 66 Contact Name Position Telephone Email AP-Fonden 7 (AP7) invests in private equity solely through fund of funds vehicles due to its lack of resources. Suzanne Davenport CFO +1 501 682 5676 [email protected] Through its fund of funds investments, AP7 seeks to gain exposure to buyout funds in Europe and North America. Executive Director of The pension fund has more recently focused on cleantech investments, and as such looks to invest in fund of funds George Hopkins +1 501 682 1820 [email protected] vehicles that focus on this industry. AP7 has established relationships with fund of funds managers Hamilton Lane, Investments HarbourVest Partners and LGT Capital Partners. All relationships with fund of funds managers are secured after a Leslie Ward Head of Private Equity +1 501 682 5645 [email protected] public search has been held to find the strongest candidate. AP7 does not have a typical commitment size for fund of funds vehicles, as the commitment size depends on each individual investment opportunity.

As of Q4 2011, AP-Fonden 7 did not anticipate making any new commitments to private equity funds of funds in the next 12 months, but would consider investing at some point in the next three years. At this time, AP7 was only considering re-ups with its existing fund of funds managers.