Qualitative Due Diligence 201: Developing an Effective GP Due Diligence Process

Qualitative Due Diligence 201: Developing An Effective GP Due Diligence Process

Mark Benedetti, Managing Director & Vladimir Colas, Managing Director, Ardian TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

2 Introduction

. The goal of this presentation is to provide a comprehensive framework in order to develop an effective qualitative GP due diligence process through: • Scoring Matrix: An in-depth due diligence tool allowing one to meticulously grade GPs and compare them on specific criteria • Monitoring: A bottom up analysis performed on the unrealized portfolio of a fund on a quarterly basis allowing to build strong conviction on the potential upside of previous generations • Track Record: A methodical approach to track funds’ historical and current performances while comparing them to their peers • Team: Keeping track of team dynamics and departures as well as identifying key investment professionals and their individual performances • Strategy: Assessing the GP’s strategy, its consistency and its future potential in terms of added-value • Terms: A cross-check analysis to ensure the GP is in line with current market practices

3 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

4 Proprietary Scoring Matrix

. In-Depth Due Diligence Tool

Scoring Matrix summary

Fund Name

• Internally developed tool to assess quality of a general Fund size: 1,000.02,000.0 Ardian potential commitment: $20m Currency: USD Ardian Existing exposure to the GP: 68.5 partner Main Strategy: Buyout - Primary platforms: 52.5 Key expertise: US Mid-Market - Secondary project: 16.0 Generalist • 6 sections: performance (weight of 25%), investment Main region: USA Typical deal size (EV): $150m$25m-$500m - $500m strategy (25%), investment team (20%), legal & fund Min ticket: $20m$10m Max ticket: $100m$60m

terms (10%), ESG (10%) and management & operational Summary of Matrix Scoring

topics (10%) Rating Weight

1. Performance / Track Record 1.24 25%

2. Investment Strategy 1.60 20%

• Each of the 6 sections has underlying rating factors with a 3. Investment team 1.27 25%

ranking from 1 to 5 (1 = the highest) 4. Legals / Fund terms 1.80 10%

5. ESG 2.00 10%

6. Miscellaneous 2.00 10%

Overall rating* 1.49 * Rating from 1 to 5, 1 being the best possible grade

Conclusion: - Very strong track record and investment team - Reasonable Fund Terms although given our commitment AXA PE would not have board seat -… Overall recommandation to invest

5 Proprietary Scoring Matrix . In-Depth Due Diligence Tool

1. Performance / Track Record Rating Weight Weigh 2. Investment Strategy Rating t ■ Consolidated net absolute return (x) 1 4% - 1: > 1.90x ■ Sourcing capabilities 2 4% - 2: > 1.70x - 1: Mainly proprietary - 3: > 1.50x - 2: Mix of proprietary & limited auctions - 4: > 1.25x - 3: Mainly limited auctions but some large auctions - 5: <1.25x - 4: Mainly large auctions but some limited auctions and club deals - 5: Mainly secondary transactions, follower in club deals and large ■ Consolidated net absolute return (IRR) 1 4% auctions - 1: > 20% - 2: > 15% ■ Focus on key expertise (key sector or strategies) 2 4% - 3: > 10% - 1: Extremely strong performance in its key expertise - 4: > 8% - 2: Strong performance in its key expertise - 5: < 8% - 3: Mixed performance in its key expertise - 4: Average performance in its key expertise ■ Previous fund gross cash on cash (CoC) 1 4% - 5: Weak performance in most of its key expertise - 1: > 70% - 2: > 50% ■ Coverage of its key markets and firm positionning 1 4% - 3: > 30% - 1: Extremely strong performance in its key market - 4: > 20% - 2: Strong performance - 5: < 20% - 3: Good performance - 4: Average performance ■ Benchmarking (based on Cambridge Associates and secondary analysis) 1 4% - 5: Weak performance - 1: All past Funds are Top Quartile - 2: Past Funds are a mix of Top and 2nd Quartile ■ Value creation 2 4% - 3: Past Funds are a mix of 2nd and 3rd Quartile - 1: Real hands-on approach and strong strategic vision - 4: Past Funds are mainly 3rd Quartile - 2: Performance relies mainly on various value creation initiatives - 5: Past Funds are mainly 4th Quartile (operational, strategic, financial) - 3: Performance relies on some various value creation initiatives ■ Average historical exit values versus reported NAV in the precedent quarter 1 3% (operational, strategic, financial) - 1: Above 1.2x NAV - 4: Performance relies mainly on financial engeneering - 2: Between 1.1x to 1.2x NAV - 5: Passive shareholder - 3: Around NAV - 4: Between 0.8x to 1.0x NAV ■ Attractiveness in overall ARDIAN portfolio construction strategy 1 4% - 5: Below 0.8x NAV - 1: GP's main sectors/markets create very good diversification for ARDIAN overall portfolio strategy ■ Consistency of performance 2 3% - 2: GP's main sectors/markets create good diversification for ARDIAN overall - 1: Very consistent over time and throughout a fund, no write-off portfolio strategy - 2: Strong and reliable but not 100% perfect - 3: GP's main sectors/markets fit well into ARDIAN overall - 3: Mixed performance throughout time (e.g. dependency on cycles,...) portfolio strategy - 4: Relatively high number of write off and ok performer in good time - 4: GP's main sectors/markets can create over-allocation/bad diversification for - 5: No consistencies, high number of write off, limited number of stars ARDIAN overall portfolio strategy - 5: GP's main sectors/markets create over-allocation/bad diversification for ARDIAN ■ Average holding period 2 3% overall portfolio strategy - 1: Strong (<5 years on average) - 2: Good (5 years on average) Total score Investment Strategy 1.60 20% - 3: Relatively long holding period (5-6 years on average) - 4: Long holding period (6 years on average) - 5: Very long holding period (> 6 years)

6 Total score Performance / Track Record 1.24 25% Proprietary Scoring Matrix . In-Depth Due Diligence Tool

3. Investment team Rating Weight 4. Legals / Fund terms Rating Weight

■ Team stability 1 4% ■ Management fees (to be put in relation with the fund size) 3 2% - 1: Extremely stable - limited change in the last 5 years - 1: 1.5% - 2: Stable - very few senior people left but no key people - 2: 1.5% < x < 1.75% - 3: Departures of few people and 1-2 key partners - 4: Relatively new team or some key departures in the last 3 years - 3: 1.75% - 5: Part of the team span-out or first time team - 4: 1.75% < x < 2.0% - 5: 2% or above ■ Result of reference calls 1 4% - 1: Extremely good - all positive ■ Performance fee 3 2% - 2: Strong - 3: Mixed - 1: >8% hurdle and/or <20% carried interest - 4: Relatively poor - 2: 8% Hurdle, 20% carried interest - 5: Nearly all negative - 3: Hurdle on multiple, 20% carried interest - 4: No Hurdle, 20% carried interest ■ Succession issue 3 4% - 5: No Hurdle, >20% carried interest - 1: Succession is not a problem or has been managed for at least 5 years - 2: Succession unlikely to be an issue or has happened in the last 3 years ■ Overall terms (transaction fees offset, no fault divorce, key man clause, expenses) 1 2% - 3: Succession has not happened yet but could be an issue for the subsequent generation - 4: Succession issue and no process put in place to deal with it - 1: LPs friendly terms - 5: Real succession issue with no strong inspirational people at the next level to take leadership - 2: Terms offering good legal protection and acceptable terms - 3: Terms in line with current market standards ■ Team size 1 4% - 4: Issues on some clauses - 1: Strong team with the number of offices and people to cover effectively its markets - 5: Terms not in line with market standards - 2: Relatively strong team - 3: Team potentially under-staffed or over-staffed ■ GP commitment 1 2% - 4: Mixed team (very strong but also very weak ones) - 1: >3% - 5: Team does not have the capacity to be pro-active or does not have local expertise in its key markets - 2: >2% ■ Team members track record 1 3% - 3: 1% of total commitment - 1: Very consistent among all Partners - 4: <1% of total fund - 2: Quite consistent among all Partners - 5: None - 3: Mixed among Partners - 4: Concentrated on very few Partners ■ Advisory board seat 1 2% - 5: Concentrated on one key Partner - 1: Yes ■ Carried interest distribution in the team 1 3% - 3: No - 1: Well distributed and incentivising all members at their fair value - 2: Well distributed Total score Legals 1.80 10% - 3: Some un-explainable differences - 4: Wide and un-explainable differences in allocation - 5: Carry in the hand of very limited number of people

■ Ownership of the management company 1 3% - 1: All key partners are part of the management company with equity well spread - 2: All key partners are part of the management company but equity not well spread - 3: Management company owned by few senior partners - 4: Management company owned by partners for less than 50% - 5: Captive management company

Total score Investment Team 1.32 25%

7 Proprietary Scoring Matrix

. Environmental, Social and Corporate Governance Policy Assessment • Ardian’s ESG scoring matrix

5. ESG Rating Weight

■ Answered to the ARDIAN's ESG survey - Attributed rating 1 5% - 1: First quartile rating - 2: Second quartile rating - 3: New relationship / Not included in the survey so far - 3: Third quartile rating - 4: Fourth quartile rating - 5: Received the survey. Did not answer

■ Signatory of UNPRI or equivalent 1 5% - 1: Yes - 3: No but has developed its own internal ESG policy, consistent with the UNPRI principles - 5: No

Total score ESG 1.00 10% • Corporate Responsibility analysis

• GP’s Sustainability and ESG Program supports the firm’s consideration of environmental, health and safety practices

• Ardian verifies whether the sustainability issues have influence on the GP’s assessment of risk, valuation, profitability and opportunity, and if the GP is a signatory to:

• The Principles for Responsible Investment • The Responsible Investment Guidelines by the Private Equity Council • The Guidelines for Disclosure and Transparency in Private Equity • The Invest Europe Association Code of Conduct

TIPS: Send out an ESG questionnaire(1) every year to assess a GP’s efforts in addressing ESG issues 1. If you use ESG research from external providers, how do you integrate this into your investment decisions? 2. Do you have a full time ESG dedicated professional?

(1) Please refer to the Appendix II for further detail

8 Proprietary Scoring Matrix . In-Depth Due Diligence Tool

6. Miscellaneous Rating Weight

■ ARDIAN relationship 2 5% - 1: Very strong (long term relationship, trusted) - 2: Strong - 3: Average (relatively new relationship or some issue in the past) - 4: New - 5: Complicated / Faced issues

■ Quality of reporting 1 3% - 1: Excellent - 2: Good - 3: Average - 4: Mixed - 5: Poor

■ Quality of investor base 1 2% - 1: Excellent names with people having long and trusted relationship with ARDIAN - 2: Strong names - 3: More than half are good names - 4: Mixed - 5: Very few sophisticated investors

Total score Miscellaneous 1.50 10%

Total 1.39 100%

TIPS: Develop a scoring matrix to quantify some of the qualitative aspects of the due diligence process

9 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

10 Monitoring Of The Unrealized Track Record . Overview • Performing a bottom-up monitoring of the unrealized portfolio of a GP’s previous generations on an ongoing basis allows to build strong conviction on the potential upside or downside of the GP’s track record

• Permanent Due Diligence • Gather information on a quarterly basis during several years in order to develop high conviction on a GP over time well in advance of fundraising

• Same contact person during the whole process • Having the same contact on the LP-side regardless of the transaction type (either primary, secondary or monitorings) to ensure a relationship of trust with an optimized flow of information

• Same questions asked for quarterly monitorings • Same set of questions are assessed quarterly, allowing to systematically compare GP feedback over time

Commit. Date Incorp. into database

Due Diligence Holding Period Exit

• Collecting relevant investment information and Max.10 • Quarterly call GPs • Support of the Information & • Secondary synergies documentation d • Advisory Board Team Records • Possible re-ups • Creation of the Monitoring Sheets • Monitoring at Fund level and • Quarterly controls • End-of-life of the Monitoring Portfolio company level Sheets • Update on a quarterly basis

11 Monitoring Of The Unrealized Track Record . Calls With GP

• Recurring key questions on the GP’s underlying companies are asked during the quarterly monitoring calls on the following topics:

• Recent portfolio company developments (including recent company performance and events) and economic environment updates

• New expected performances and latest assumed exit dates

• Any expected liquidity events (e.g. dividend recap, partial/full sale)

• Guidance on cash flow available for deleveraging going forward (including feedback on expected revenue growth, EBITDA margin, CAPEX spending, etc.)

• Important departures or arrivals and shifts in the management team

TIPS: Keep quarterly updates of underlying companies’ metrics evolution post commitment to gather data for future re-up decisions

12 Monitoring Of The Unrealized Track Record . Focus On Unrealized - AGM Slide 1/2

All figures in USD at: Dec-15 Fund A Company data (LTM) as at: Dec-15

Fund Metrics Overview Investor Key Terms Performance

Fund Size: 13,800 Investor Commitment: 50.0 Fee - Invest. Period: 1.2% Commitment End of Investment Period: 2013.0 At expectation At expectation Vintage: 2007 NAV: 29.7 Fee - Divest. Period: 0.6% Capital under mgt End of Fund Term: 2018.0 Quartile 2nd Type: Buyout Unfunded: 9.7 Carried Interest: 20.0% Extensions: 1 x 2 Geography: North America Distributed: 53.2 Hurdle rate: 8.0% GP commitment: 0.1 Scoring 1.4 Currency: USD 50.91607 % Funded 81% Catch up: Yes ESG Compliant yes

The U.S. Buyout Group is the GP's largest and most experienced investment discipline. With more than 26 years of experience in the private equity industry, the group has established itself as a leading player in the U.S. leveraged buyout market. Since the firm’s inception, the U.S. buyout group has grown to encompass #Z U.S. focused funds with more than $Xbn in total equity invested (including co-investments). Fund A will use the same strategy as previous funds and invest in large buyout investments, primarily in industries for which the team has extensive knowledge and experience such as: - Aerospace, Defense, and Government Services - Industrial and Transportation - Consumer and Retail - Healthcare - Technology, Media and Telecommunications

Historic and Projected Fund Cash Flow Net Multiple History Capital Position

20m Capital call 1.70x 15m Distribution 1.60x 10m Annual cash flow 1.50x 5m Cumulative Cash Flow 1.40x 1.30x 0m Unf., 9.7 Dist., 53.2 1.20x 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 -5m 1.10x -10m 1.00x -15m 0.90x -20m 0.80x Funded, 50.9 -25m 0.70x 2007 2008 2009 2010 2011 2012 2013 2014 -30m NAV, 29.7 -35m

Fund Portfolio - Company Statistics At Entry As of RD

Investment Initial Proceeds Total Value / % of EV / Net Debt / EV / Net Debt / Name ID Geography Investment Type Sector Date % Ownership Cost Received NAV Cost Total NAV EBITDA EBITDA EBITDA EBITDA #begin Company A South America Buyout Healthcare Sep-10 499.5 1,050.1 - 2.1x - Company B North America Buyout Consumer Product Oct-13 513.9 756.6 71.4 1.6x 1% Company C North America Buyout Transport Oct-12 200.0 340.0 - 1.7x - #end Total Fully Realized Investments 2,936.8 5,291.4 71.4 1.8x 1% #begin Compnay D #N/A North America Buyout Manufacturing Feb-13 22.5% 862.8 2,468.5 1,190.8 4.2x 15% 7.4x 5.6x 10.9x 3.4x Compnay E #N/A North America Buyout Telecoms Jan-11 20.1% 100.0 180.0 110.0 2.9x 1% 7.9x 5.0x 12.5x 6.1x

Total Current & Partially Realized (Listed) 2,059.1 5,819.3 2,340.3 4.0x 29% 5.8x 3.7x 7.8x 2.3x #begin Compnay F #N/A North America Buyout Healthcare Services Dec-11 45.3% 844.1 797.1 1,196.1 2.4x 15% 10.7x 5.5x 10.9x 6.2x Compnay G #N/A North America Buyout Telecoms Jan-11 85.0% 1,079.6 - 1,079.6 1.0x 14% 9.3x 5.4x 10.9x 6.4x Compnay H #N/A North America Buyout Consumer Product Oct-10 65.2% 1,010.5 760.7 909.5 1.7x 11% 7.3x 4.5x 8.6x 5.8x Compnay I #N/A North America Buyout Manufacturing Dec-12 49.8% 650.0 - 422.5 0.7x 5% 10.0x 6.7x 11.8x 8.3x Compnay J #N/A North America Buyout Aerospace Oct-12 85.0% 307.1 - 844.4 2.7x 11% 9.4x 5.9x 11.1x 5.3x Compnay K #N/A North America Buyout Financial Services Feb-13 27.5% 150.0 26.6 483.0 3.4x 6% 5.8x 2.2x 8.7x 0.5x Compnay L #N/A Asia Expansion Transport Jul-11 61.7% 232.9 - 256.2 1.1x 3% n/a n/a n/a n/a Compnay M #N/A North America Buyout Healthcare Dec-07 59.3% 200.0 240.0 40.0 1.4x 1% 11.1x 9.3x n/a n/a #end Total Current & Partially Realized (Private) 6,178.4 1,834.5 5,519.4 1.2x 69% 11.1x 6.7x 13.8x 5.7x Net other Assets 50.0 - 50.0 1.0x 1%

Total Fund Portfolio 11,224.3 12,945.2 7,981.1 1.86x 100% 6.0x 3.5x 7.1x 3.3x 11,174.34 12,945.24 Fund Update and Recent News As of December 30, 2015 Post Record Date: The Fund had committed 97% of total commitments (excluding recycled capital) and experienced a -6.0% decrease in valuation Following the end of the quarter, Fund A distributed over $1.4bn coming mainly from: over Q2 (net at investor level), mainly driven by: - Company A:: $637m distributed from a share sale - Company A (0.65x vs 0.75x) - Company B: $394m distributed from a share sale - Company B (1.00x vs 1.10x) - Company C: $224m distributed from a full refinancing - Company C (0.10x vs 0.20x) - Company D: $154m distributed from a share sale

- In Q4, the Fund experienced a -6% increase of valuation over the previous quarter, mainly driven by valuation decreases for Companies A, B, C and D.

- Based on our latest discussions with Name 1, co-head of the Fund (in Nov. 2015), in addition to the sale of listed shares, the next liquidity events should come from Company L (IPO most likely) and Company F in 2017/2018.

- In December 2015, Fund A agreed to sell Company H to Company X for ~$1bn. Net proceeds to Fund A are expected to be approximately $Xbn, representing 2.4x initial cost. The transaction is subject to regulatory approval and is expected to close in the first half of 2016.

13 Monitoring Of The Unrealized Track Record

. Focus On Unrealized - AGM Slide 2/2

All figures in at: Dec-15 Fund A Company data (LTM) as at: Dec-15

Gross Performance as of RD Expected Portfolio Performance Net Performances as of RD Expected Net Performances Benchmark

Ardian GP Ardian GP Top Quartile Median Multiple 1.86x Multiple 2.1x 2.2x Multiple 1.63x Multiple 1.80x 1.90x Net Multiple 1.82x 1.55x IRR 17.8% IRR 13.4% IRR 14.0% 17.0% Net IRR 18.6% 11.5% Cash on Cash 104.5% Source: Cambridge Associates as of latest available RD.

NAV Evolution One-year Net Multiple History Sector Diversification Geographic Diversification

-2.3% Other , 10.4% Net multiple: Asia, 3.2% Manufacturing, 1.80x $32.6m $0.1m $2.2m $30.4m $29.7m Aerospace, 11.3% 21.7% South America, 1.75x 5.4% 1.70x Transport, 3.2% 1.65x Healthcare 1.60x Services, 15.1%

1.55x

1.50x North America, Consumer 94.5% 1.45x Product, 10.3% NAV Q3 2015 Capital Calls Distributions Adjusted NAV Reported NAV 1.40x Telecoms, 15.0% Q4 2015 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Services, 10.9%

LTM as of Date Exit Assumptions Since Acquisition EBITDA Revenue EBITDA EV / Net Debt / Holding Period Total Value / Exit Value / Name ID Revenue EBITDA % margin % growth % Growth Net Debt EBITDA EBITDA Exit Date (Yrs) Cost NAV Exit Way

Total Realized 1.8x #begin Compnay A #N/A 4,087 867 21.2% -1.3% 11.4% 2,971 11.2x 3.1x 2016.5 3.5 4.3x 1.1x Sec. offering Compnay B #N/A 3,808 790 20.8% 4.0% 11.7% 4,782 13.9x 5.9x 2016.5 5.5 13.0x 1.1x Sec. offering Compnay C #N/A 5,324 495 9.3% 5.3% 11.0% 1,512 12.3x 2.6x 2016.5 8.5 4.4x 1.0x Sec. offering Compnay D #N/A 6,194 446 7.2% 15.3% 21.2% 98 4.9x 0.2x 2016.5 7.5 1.8x 1.3x Sec. offering #end Total Unrealized Listed 4.5x 1.1x #begin Compnay E #N/A 2,070 541 26.1% 7.8% 11.4% 3,330 12.0x 5.6x 2017.0 6.0 2.9x 1.4x Trade Sale / IPO Compnay F #N/A 862 292 33.9% 6.6% 1.9% 1,884 10.0x 4.4x 2018.5 7.5 1.6x 1.6x Trade Sale / IPO Compnay G #N/A 3,202 507 15.8% 2.3% 0.3% 2,928 7.5x 4.5x 2017.5 7.5 1.8x 1.2x Trade Sale / IPO Compnay H #N/A 1,149 243 21.1% -4.5% -9.1% 2,005 11.0x 6.4x 2018.5 6.5 1.0x 1.5x Trade Sale / IPO Compnay I #N/A 769 166 21.6% 12.7% 30.0% 878 n/a n/a 2017.0 4.0 3.3x 1.2x SOLD Compnay J #N/A 650 231 35.6% 14.7% 24.0% 125 8.0x -0.3x 2017.5 4.5 4.1x 1.2x Trade Sale / IPO Compnay K #N/A n/a n/a n/a n/a n/a n/a 1.9x n/a 2018.5 7.5 1.9x 1.7x Trade Sale / IPO Compnay L #N/A 4,080 553 13.5% n/a n/a 261 1.2x n/a 2017.0 10.0 2.0x 1.2x IPO #end Total Unrealized Private 1.5x 1.4x Total Portfolio 2.2x 1.3x Track Record Overall Ardian Private Equity exposure to the GP

As of December 31, 2015 Fund A in USDm GP U.S. Buyout Funds in USDm Remaining Fund Gross Vintage Size Funded Proceeds NAV Multiple Net IRR Vehicle Commitment NAV distributionsUnfunded Fund Project Type Name Commitment #begin Fund C 2000 3,400 4,000 10,000 0 2.5x 21% Investor 50 30 10 Fund A Secondary Project 1, 2 and 3 29 Fund D 2005 8,000 8,000 17,000 1,000 2.3x 13% Investor 19 11 4 Fund B Primary Project 4 84 Fund A 2007 13,800 13,000 16,000 8,500 1.9x 13% Fund C Secondary Project 1, 181 Fund B 2013 13,000 5,000 400 5,000 1.1x -2%

LP Vehicle Overall 30,000 43,400 14,500 1.93x Overall 69 41 0 13 Overall 293 Fundraising Outlook - Upcoming Meetings - Active Discussions Key Team Members

VC, DL and LC went to the last New York AGM in October 2015. Name Title Joined in Location Background Team Member A Founder 1995 Office 1 The GP finished raising Fund B at a total size of $13bn. ARDIAN has invested $Xm in the fund. Team Member B Founder 1995 Office 2 Team Member C Founder 1995 Office 3

TIPS: Compile information quarterly on historical and current fund performance for closer monitoring

14 Monitoring Of The Unrealized Track Record . Focus On Unrealized – Company Sheet 1/2

COMPANY LOGO

Investment . Leading market position with highlydefensible niche products Company A Fund A Rationale: . Strong and sustainable margins and excellent cash flow characteristics Loc a tion: USA Total Cost: $650m . Revenue growth opportunities through exposure to growing end markets and emerging markets S e c tor: Manufacturing Proceeds to Date: $0m Carlyle V owns 50% Remaining cost: $650m . Geographic and end market diversity with a mix of early, mid and late cycle exposure Other Investors: Fund B (50%) Unrealized Value: $423m . Large installed base and recurring, high margin aftermarket revenues Current Multiple: 0.7x S ourc ing: Proprietary . Opportunities to grow revenues and profits from operational improvements and capital acquisition Investment at Entry At RD ARDIAN Base Case at Exit . Multiple sources ofdownside protection Da te : Dec- 12 Dec- 15 Timing: Dec- 18 . Management team that has delivered excellent results EV: $3,398m $2,852m EV: $3,023m #begin 100% Eq. Value: $1,300m $847m 100% Eq. Value: $1,252m Historical & BP1 ARDIAN Base Case LT M Re ve nue : $1,348m $1,149m Re ve nue : $1,274m Projected FY end: Dec. 2011 2012 2013 2014 2015 2016e 2017e 2018e at R D EBITDA: $338m $243m EBITDA: $275m Financials: Sales 1,328 1,331 1,351 1,255 1,149 1,189 1,231 1,274 1,149 Ne t De bt: $2,269m $2,005m Ne t De bt: $1,771m (in USDm) Growth 0.2% 1.5% -7.1% -8.5% 3.5% 3.5% 3.5% -8.5% EBITDA x: 10.0x 11.8x EBITDA x: 11.0x ND /EBITDA x: 6.7x 8.3x ND /EBITDA x: 6.4x EBITDA 328 330 327 287 243 252 263 275 243 Fund Eq. Value: $650m $423m Fund Eq. Value: $624m M argin 24.7% 24.8% 24.2% 22.9% 21.1% 21.2% 21.4% 21.6% 21.1% Total Cost Multiple: 0.7x Total Cost Multiple: 1.0x Growth 0.8% -1.1% -12.1% -15.5% 3.7% 4.5% 4.5% -15.5% Multiple on NAV : 1.5x N et debt 2,260 2,179 2,077 2,005 1,956 1,870 1,771 2,005 Business Company A (or the “Company”), formerly known as Company B, was previously a division of Group C and is Net debt / EBITDA 6.8x 6.7x 7.2x 8.3x 7.8x 7.1x 6.4x 8.3x Description: Deleveraging in % of EBITDA 25.0% 35.5% 29.6% 19.3% 32.7% 36.1% a leading manufacturer of high technology, mission critical pumps and compressors for the industrial, #begin#end infrastructure and energy markets. Company A offers a diversified array of premier, highly‐engineered products in a variety of large and growing end markets. The Company generates approximately two‐thirds of its BP2 GP C ase LT M sales from markets in which itholds a top three market share position. FY end: Dec. 2011 2012 2013 2014 2015 2016e 2017e 2018e at R D Sales 1,328 1,331 1,351 1,255 1,149 1,195 1,243 1,293 1,149 Company A is comprised of two strategic business platforms, Flow Control and Industrial Air Growth 0.2% 1.5% -7.1% -8.5% 4.0% 4.0% 4.0% -8.5% Compressors. The Company sells its Flow Control and Industrial Air Compressors products under a highly recognized portfolio of brands, including Companies C and D, that supports its strong market position and EBITDA 328 330 327 287 243 255 267 281 243 premium pricing. M argin 24.7% 24.8% 24.2% 22.9% 21.1% 21.3% 21.5% 21.7% 21.1% Growth 0.8% -1.1% -12.1% -15.5% 5.0% 5.0% 5.0% -15.5% The Flow Control business (60% of 2015 sales) designs, manufactures and supports specialized pumps and other niche flow control products such as high‐speed centrifugal pumps, gas compressors, sealless pumps, N et debt 2,260 2,179 2,077 2,005 1,908 1,796 1,669 2,005 metering pumps, high‐pressure pumps and valves, odor injection systems, and dosing pumps. Net debt / EBITDA 6.8x 6.7x 7.2x 8.3x 7.5x 6.7x 5.9x 8.3x Deleveraging in % of EBITDA 25.0% 35.5% 29.6% 37.9% 41.7% 45.6% Industrial Air Compressors (40% of 2015 sales) designs, manufactures and supports stationary and portable air compressors and maintains leading market positions in its core markets of North America, China and Australia.

Company A is poised for continued growth due to favorable global trends in its large end‐markets, including oil & gas, chemical, power, manufacturing and water treatment. These trends include growing global energy demand and the increasing need to access unconventional energy sources, the build‐out and retrofitting of refining and petro‐chemical infrastructure, urbanization and related infrastructure development, growing requirements for water treatment and increasing industrial manufacturing activity. TIPS: 1. Why do you expect a sales growth rate of 7% when the industry is Transaction . On December 13, 2012, Fund A, in partnership with Fund B completed the acquisition of Company A Description: from Company E. The purchase price (excluding fees and expenses) was $3.4bn, representing approximately 10.0x LTM September 30, 2012 adjusted EBITDA (or 9.2x EBITDA net of tax benefits). currently growing at 1-2% max?

. The transaction was financed with: . $1,675m 7-year Term Loan B; 2. Why do you expect further EBITDA margin expansion after 4 years of . $650m of 8-year Senior Subordinated Notes; . $300m Revolver (undrawn at close) and; . $1,300m Equity (from the Fund A and Fund B). ownership; when most operating improvements have been achieved . For the transaction, Fund A and Fund B each contributed equity of $650m and hold equal economic already? interests.

15 Monitoring Of The Unrealized Track Record . Focus On Unrealized – Company Sheet 2/2

Transaction Comps ARDIAN Comps Table 2013 2014 2015e T rans. EV / N et N et N et T arget A cquirer Seller EB IT D A EB IT D A EB IT D A D ate EBITDA C o mpany Inv. D ate D ebt/ D ebt/ D ebt/ # begin Gro wth Gro wth Gro wth EBITDA EBITDA EBITDA Company F Aug-04 D G 11.8x

Company I Aug-04 3% 8.0x 3% 7.0x 3% 6.5x Company G Aug-05 E H 8.9x

Company P Aug-10 4% 7.0x 4% 6.0x 4% 5.5x #Company e nd U Sep-12 F I 10.8x Company Q Sep-12 5% 6.0x 5% 5.0x 5% 4.5x M ean 10.5x M ean 4.0% 7.0x 4.0% 6.0x 4.0% 5.5x M edian 10.8x M edian 4.0% 7.0x 4.0% 6.0x 4.0% 5.5x

ARDIAN Comps Table A t R D * A t Entry #end T rans. EV / EV / C o mpany F und EV EBITDA Recent D ate EBITDA EBITDA Recent Performance: # begin Performances Company I Aug-04 M 8,000.0 680.0 11.8x 8.0x & Events: . For the LTM period ended at RD, the Company generated revenue of $1,149m and EBITDA of Company P Aug-10 N 5,100.0 450.0 11.3x 9.0x $243m, representing a 8.5% decrease in revenue and a 15.5% decrease in EBITDA compared to the Company Q Sep-12 P 4,800.0 380.0 12.6x 8.4x previous year. # end M ean 11.9x 8.5x . Company A's Flow Control business declined compared to the prior year, primarily driven by the M edian 11.8x 8.4x stronger dollar and a reduction in spending by its oil and gas customers as a result of lower commodity prices. Company A's Air Compressor business experienced weak performance driven primarily * As of latest available Record Date by softness in mining and infrastructure‐related end markets in China and Australia offset by positive momentum in US manufacturing end markets and aftermarket. ARDIAN Dow n- Base GP Case side . EBITDA was negatively impacted by higher investment in sales, marketing and engineering, Case Case consistent with the GP's investment strategy, offset by continued cost savings activities at the Company, ARDIAN primarilyfocused on improving manufacturing efficiencyand sourcing. Exit Assumptions: (in USDm) Timing of exit : 2018.5 2018.0 2019.0 Recent Events: EBITDA at valuation date: 243 243 243 EBITDA Grow th: 4.2% 5.0% 3.6% . Company K introduced its Shop‐Tek line of 5‐100 HP lubricated rotary screw compressors into Latin EBITDA at exit : 275 274 275 America. ARDIAN's Multiple : 11.0x 11.5x 10.0x . The Company recently hired a Vice President of Strategic Marketing at Company N, a position created to EV @ exit: 3,023 3,152 2,746 enhance the business’ commercial efforts. Debt @ valuation date: 2,005 2,005 2,005 . Company J introduced its new Product A metering pump, which provides 20,000 psig to withstand the Debt repayment in % of EBITDA 30% 42% 26% extreme pressures ofoperating atdeep depths. Debt @ exit: 1,771 1,732 1,771 Fund's ow nership 50% 50% 50% Debt Situation: . At RD, the Company's Net Debt was $2,005m. Fund's Value @ exit 624 707 486 Fund performance: Multiple of Cost: 1.0x 1.1x 0.7x Comps: in $m Multiple of NAV: 1.5x 1.7x 1.1x % EV / EV / A s o f 2 5- M ar- 16 EV Sales EBITDA margin Sales EBITDA Overall performance: # begin Multiple on Initial Cost : 1.0x 1.1x 0.7x Company V 7,159 4,561 762 16.7% 1.6x 9.4x Company W 4,846 3,967 485 12.2% 1.2x 10.0x Company T 7,389 3,653 602 16.5% 2.0x 12.3x

#Company end S 3,903 1,996 324 16.2% 2.0x 12.1x

M ean 1.7x 10.9x M edian 1.8x 11.0x TIPS: 1. What are your latest expectations in terms of timing and MoC at exit? 2. How do you anticipate exiting your assets (strategic buyer, financial buyer or through IPO)?

16 Monitoring Of The Unrealized Track Record . Benchmarking

Previous Funds NET Performances as of Q3 2015 Previous Funds NET Performances as of Q3 2015

% Net Net % Net Quartile Quartile Quartile % Net Net % Net Quartile Quartile Quartile Fund Vintage Fund Vintage Funded Mult. IRR CoC X % CoC Funded Mult. IRR CoC X % CoC In USDm GP A Fund II 2013 65% 1.2x 15.7% n/a 1st 1st n.a. GP C Fund II 2006 94% 1.6x 10.0% 146% 3rd 3rd 1st GP B Fund IV 2013 70% 1.2x 20.7% 13% 1st 1st 1st GP B Fund III 2005 106% 1.9x 14.6% 168% 2nd 2nd 1st GP C Fund III 2012 69% 1.2x 12.0% 10% 2nd 2nd 2nd GP J Fund V 2005 106% 1.6x 10.5% 145% 3rd 2nd 2nd GP D Fund I 2011 87% 1.5x 29.0% 129% 1st 1st 1st GP L Fund IV 2004 97% 1.0x n/a 85% 4th n.a. 4th GP E Fund IV 2011 73% 1.1x 3.0% 5% 4th 4th 3rd GP I Fund III 2003 96% 1.5x 8.3% 136% 3rd 3rd 3rd GP F Fund VI 2011 83% 1.4x 20.0% 36% 1st 1st 1st GP J Fund IV 2003 110% 1.4x 6.6% 145% 3rd 4th 3rd GP G Fund III 2011 74% 1.5x 20.0% 6% 1st 1st 3rd GP K Fund II 2004 86% 1.8x 13.0% 140% 2nd 2nd 2nd

GP H Fund IV 2010 65% 1.5x 19.0% 23% 2nd 2nd 3rd GP C Fund I 2002 93% 1.8x 18.0% 164% 3rd 2nd 3rd GP I Fund IV 2009 85% 1.8x 33.4% 108% 2nd 1st 1st GP F Fund IV 2002 93% 2.2x 35.2% 216% 2nd 1st 2nd GP J Fund VI 2009 110% 1.8x 24.0% 73% 2nd 2nd 1st GP E Fund II 2002 83% 2.1x 30.8% 214% 2nd 1st 2nd GP K Fund III 2008 106% 1.3x 8.0% 50% 4th 4th 3rd GP H Fund II 2000 92% 2.1x 12.0% 197% 2nd 3rd 2nd GP A Fund I 2007 90% 1.4x 9.5% n/a 3rd 3rd n.a. GP Fund V 2000 84% 2.1x 17.3% 204% 2nd 2nd 2nd GP L Fund V 2007 91% 1.6x 13.1% 78% 3rd 2nd 2nd GP B Fund I 2000 100% 1.5x 12.1% 151% 3rd 3rd 3rd

GP B Fund III 2007 113% 1.8x 14.4% 98% 2nd 2nd 2nd GP K Fund I 1999 108% 2.8x 34.2% 250% 1st 1st 1st GP M Fund VI 2007 94% 2.2x 17.4% 125% 1st 2nd 1st GP L Fund III 1999 101% 1.9x 16.0% 190% 2nd 2nd 2nd GP F Fund V 2007 96% 1.7x 19.3% 137% 2nd 1st 1st GP I Fund II 1999 100% 2.4x 12.6% 236% 1st 2nd 1st GP E Fund III 2007 86% 2.4x 29.6% 240% 1st 1st 1st GP G Fund I 1999 100% 3.1x 33.3% 310% 1st 1st 1st GP G Fund II 2006 99% 2.6x 22.0% 207% 1st 1st 1st GP J Fund III 1998 110% 1.6x 11.0% 156% 2nd 2nd 2nd GP H Fund III 2006 93% 2.0x 14.0% 148% 1st 2nd 1st GP E Fund I 1997 85% 1.6x 14.7% 162% 2nd 1st 2nd

TIPS: Compare selected funds’ performances not just to industry benchmarks but also to known peers

17 Monitoring Of The Unrealized Track Record . Cross-sectional Analysis 1/2

Aggregate Performance Performance by Geography Overview Since inception, the GP has invested $Xbn in Y portfolio companies. The GP was one of the first U.S. based private equity funds to The firm currently has Z portfolio companies across six funds invest outside of the U.S.

Gross Net Gross Benchmark GP Private Equity Funds - Track Record Summary GP Private Equity Funds - Track Record Summary Performances Performances Performances As of March 31, 2015 # of Total Quartile As of March 31, 2015 # of Total Vintage Size Cost Proceeds NAV Multiple IRR Multiple IRR Quartile x Cost Proceeds NAV Multiple IRR (in $m) deals Value IRR (in $m) deals Value Unrealized 51 5,615 165 6,664 6,829 1.2x n/a Fund A 2012 11,213 Americas Unrealized 44 6,596 141 6,854 6,996 1.1x 2% Realized 9 665 621 1,685 2,306 3.5x n/a Realized 131 17,642 30,597 9,843 40,440 2.3x 23% 60 6,280 786 8,349 9,135 1.5x 35% 1.3x 21% 1st 1st 175 24,238 30,739 16,697 47,435 2.0x 21% Fund B 2007 15,107 Unrealized 38 5,419 89 6,117 6,206 1.1x n/a Realized 63 9,834 11,707 7,676 19,383 2.0x n/a EMEA Unrealized 13 1,627 15 1,376 1,392 0.9x (6%) 101 15,253 11,796 13,793 25,589 1.7x 14% 1.5x 9% 2nd 3rd Realized 51 4,813 7,080 1,752 8,832 1.8x 14% Fund C 2005 8,000 Unrealized 4 490 4 826 830 1.7x n/a 64 6,439 7,095 3,128 10,223 1.6x 12% Realized 60 7,983 14,577 1,648 16,225 2.0x n/a Unrealized 37 3,354 101 5,486 5,587 1.7x 18% 64 8,473 14,581 2,474 17,055 2.0x 15% 1.8x 10% 2nd 2nd Asia Realized 95 4,950 7,779 2,444 10,223 2.1x 21% Fund D 2001 5,340 Unrealized 1 53 0 110 110 2.1x n/a Realized 81 5,946 13,060 2,219 15,279 2.6x n/a 132 8,304 7,880 7,930 15,810 1.9x 20% 82 5,998 13,060 2,329 15,389 2.6x 20% 2.3x 15% 1st 2nd Overall Unrealized 94 11,577 258 13,717 13,974 1.2x 7% Unrealized ------n/a Fund E 2000 2,500 Realized 277 27,404 45,456 14,038 59,495 2.2x 21% Realized 64 2,977 5,491 810 6,301 2.1x n/a Total 371 38,981 45,714 27,755 73,469 1.9x 19% 64 2,977 5,491 810 6,301 2.1x 17% 1.9x 11% 1st 2nd Overall 2000 - 2012 42,160 Unrealized 94 11,577 258 13,717 13,974 1.2x Realized 277 27,404 45,456 14,038 59,495 2.2x Total 371 38,981 45,714 27,755 73,469 1.9x 19% 1.8x 15% Performance by Industry Overview The GP has followed an industry-specific approach with specialized Performance by Investment Stage Overview investment professionals organized into industry sector teams While the GP is primarily a growth-oriented investor, it has sought the GP Private Equity Funds - Track Record Summary Gross Performances

# of Total flexibility to invest in transactions of various sizes and types, from start-up As of March 31, 2015 (in $m) Cost Proceeds NAV Multiple IRR deals Value

and venture capital companies to larger transactions TMT Unrealized 19 1,273 7 1,757 1,764 1.4x 13% Realized 100 5,721 11,439 1,887 13,326 2.3x 27% GP Private Equity Funds - Track Record Summary Gross 119 6,994 11,446 3,644 15,089 2.2x 26% Performances Financial Services Unrealized 10 2,139 10 2,123 2,133 1.0x (0%) As of March 31, # of Total Cost Proceeds NAV Multiple IRR Realized 21 3,347 6,438 769 7,208 2.2x 25% 2015 (in $m) deals Value 31 5,486 6,449 2,892 9,341 1.7x 19%

Early Stage Unrealized 33 3,144 23 3,980 4,003 1.3x 8% Healthcare & Consumer Unrealized 18 1,806 19 2,802 2,820 1.6x 18% Realized 105 4,435 4,949 4,173 9,122 2.1x 23% Realized 67 6,568 10,094 1,554 11,648 1.8x 16% 85 8,374 10,113 4,355 14,468 1.7x 16% 138 7,579 4,972 8,153 13,125 1.7x 20% Industrial & Business Services Unrealized 14 2,401 116 2,669 2,785 1.2x 5% Growth Unrealized 51 5,161 130 7,149 7,278 1.4x 13% Realized 48 6,220 10,189 3,525 13,714 2.2x 20% Realized 130 12,332 20,786 6,798 27,584 2.2x 23% 62 8,621 10,306 6,194 16,500 1.9x 17% 181 17,493 20,915 13,947 34,862 2.0x 21% Energy Unrealized 25 3,170 25 3,414 3,439 1.1x 3% Realized 28 4,393 6,046 5,866 11,912 2.7x 21% Unrealized 10 3,272 105 2,588 2,693 0.8x (5%) Buyout 53 7,564 6,072 9,280 15,351 2.0x 17% Realized 42 10,637 19,722 3,067 22,789 2.1x 19% Real Estate Unrealized 8 788 80 953 1,033 1.3x 9% 52 13,909 19,827 5,655 25,482 1.8x 16% Realized 13 1,155 1,250 437 1,687 1.5x 15% 21 1,943 1,330 1,390 2,720 1.4x 13% Overall Unrealized 94 11,577 258 13,717 13,974 1.2x 7% Overall Unrealized 94 11,577 258 13,717 13,974 1.2x 7% Realized 277 27,404 45,456 14,038 2.2x 21% 59,495 Realized 277 27,404 45,456 14,038 59,495 2.2x 21% Total 371 38,981 45,714 27,755 73,469 1.9x 19% Total 371 38,981 45,714 27,755 73,469 1.9x 19%

TIPS: Could you please provide us with your detailed track record by sector, geography and investment stage?

18 Monitoring Of The Unrealized Track Record . Cross-sectional Analysis 2/2

Analysis of Post-2009 Investments Sector performance for investments made since 2009 Since 2009, subsequent to the global financial crisis, the GP has invested $18bn in 60 investments, generating a 1.9x gross multiple and a 32% The performance is overall consistent across the sectors, ranging gross IRR on fully realized investments. from 2.3x to 1.3x cost with outperformance in Energy and Healthcare over the past 5 years. Overall, the performance for all post-2009 investments stands at 1.7x cost and 24% gross IRR, including some recent deals still marked at cost. GP X - Sector Performance for post-2009 Investments As of September 2015 Total Gross (in $m) Cost Proceeds NAV x Cost Value IRR As of Sept. 2015 Equity Realized Unrealize Total Gross Gross (in $m) Invested Value d Value Value M-o-M IRR Energy Unrealized 1,078 185 1,488 1,673 1.6x 17% Realized & Publicly Traded 398 1,442 - 1,442 3.6x 57% Since Inception Total 1,476 1,627 1,488 3,115 2.1x 32% Healthcare Unrealized 1,635 - 2,752 2,752 1.7x 26% Fully realized 16,212 38,136 6 38,142 2.4x 33% Realized & Publicly Traded 1,888 1,602 3,897 5,499 2.9x 30% Publicly Traded 8,489 4,233 13,907 18,140 2.1x 16% Total 3,523 1,602 6,649 8,251 2.3x 29% Realized and Publicly Traded 24,701 42,369 13,913 56,282 2.3x 31% Industrials Unrealized 2,147 112 2,666 2,778 1.3x 9% Realized & Publicly Traded 200 622 - 622 3.1x 45% Unrealized 20,560 5,712 19,222 24,934 1.2x 5% Total 2,347 734 2,666 3,400 1.4x 13% Total Since Inception 45,261 48,081 33,135 81,216 1.8x 25% Retail/Consumer Unrealized 1,509 366 1,234 1,600 1.1x 3% Since 2009 Realized & Publicly Traded 1,173 668 2,131 2,799 2.4x 28% Total 2,682 1,034 3,365 4,399 1.6x 20% Fully realized 1,411 2,635 0 2,635 1.9x 32% Technology Unrealized 2,403 429 3,300 3,729 1.6x 16% Publicly Traded 3,813 2,581 7,753 10,334 2.7x 37% Realized & Publicly Traded 284 355 135 490 1.7x 24% Realized and Publicly Traded 5,224 5,216 7,753 12,969 2.5x 36% Total 2,687 784 3,435 4,219 1.6x 17% Other Unrealized 2,173 609 2,038 2,647 1.2x 10% Unrealized 13,131 3,967 14,530 18,497 1.4x 16% Realized & Publicly Traded 1,099 442 1,310 1,752 1.6x 23% Total Since 2009 18,355 9,183 22,283 31,466 1.7x 24% Total 3,272 1,051 3,348 4,399 1.3x 15%

TIPS: 1. For each write-off, please provide investment rationale and explain the difficulties faced by the company and/or management? 2. Explain the relatively high loss ratio of Fund III and what concrete steps were taken to avoid a similar situation in subsequent funds?

19 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

20 Team . Understanding Internal Dynamics and Incentives

• Decision Making Process

• One to one interviews are organized with both the GP’s senior and junior investment professionals to better understand some of the following points: • Who is the conservative voice on the IC? • Who on the IC ultimately makes the decision to invest or not? • Give an example of a transaction that was turned down at IC level, who voted against, and why? • What are the plans in place to address succession issues?

Private Equity The Private Equity IC reviews all private equity investment proposals globally, implements due diligence practices and works with the deal Investment Committee team to set pricing and negotiation tactics ("IC") The Private Equity IC meetings occur at least once a week and more as necessary

 The PMC plays a significant role in portfolio management decisions, such as deploying investment professionals where needed, making Portfolio Management decisions when companies are underperforming, and monitoring and advising on exit strategies Committee ("PMC")  The PMC meets monthly, designating a number of investment teams on a rotating basis for presentation of their respective portfolio companies • Incentive Program – Ownership & Carry Allocation Shareholders' name % Total Name Global Carry Pool % of Carry Allocation Institution 1 8.2% Name 1 10.0% Institution 2 3.4% Name 2 5.0% Institution 3 2.1% Other 15 Investment Committee members* 45.0% Institution 4 1.9% Total Investment Committee members 60.0% Institution 5 1.1% Non-Investment Committee members ** 16.5% Top 5 Institutional Owners 16.7% Principals + VPs 12.5% Treasury *** 11.0% Remaining Equity Float 44.2% Total 100.0% Non-Floating Equity 39.1% * Group Heads have the most allocation with ~2.0% to 3.5% each Owner 1 17.3% ** Other 20 M Ds Total Equity 100.0% *** Split pro rata between the team members and reserved for new hires

21 Team . Departures • Departures vs. Remaining Team

The GP has seen 8 departures of senior members since the fundraising of Fund X. Correspondingly, the private equity team has restructured its industry teams slightly to combine its technology group with its media and communications team, as well as its retail team with its consumer group

While these departures are worth noting, most of them were wished by the GP to facilitate the changes, stemming from early underperformance of Fund Y

Deals Investment Date Realized Date MoC Name 1 – Individual Track Record Deal 1 Apr-06 Nov-10 0.7x Partner – 9 years with GP Deal 2 May-07 May-11 1.4x Left in Dec. 2015 for Company 1 (Partner) Deal 3 Dec-08 Sep-10 WO Deal 4 Feb-09 May-14 1.2x TOTAL 1.1x

Investment Professional Title # years with GP # Deals MoC Remaining Team Track Record Name 2 Partner 15 8 2.1x (without Name 1) Name 3 Partner 12 7 1.5x Name 4 MD 9 4 1.7x TOTAL 1.8x

TIPS: 1. As of today, do any of the firm’s key people suffer from any particular condition that could undermine their ability to perform their responsibilities? 2. Since the inception of the firm, have there been any significant senior staff departures? Can we please have a reference call with these team members?

22 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

23 Strategy

. Consistency

Continuing Strategy for Fund III: Changes vs. Prior Funds of GP X: Out of the 144 investments completed over 26 years, 11 deals have Fund III’s investment strategy will be a continuation of the strategy required equity checks above $800m for a total performance of 1.0x cost deployed for the past 5 years. Since 2009, the GP has invested and a -1% gross IRR. Excluding these large deals that will not be $18bn of equity across 60 different investments with the following considered for Fund III, the performances stands at 2.1x cost and 31% characteristics:

gross IRR Deal Performance: Equity <$800m Upper middle-market check size: $69bn Since 2009, the GP has reduced its average equity tickets to $350m $32bn and refocused on upper mid-market companies. Following the financial Deal Count by Equity Check Size crisis, the GP has only participated in 1 of the 40 largest buyout Equity invested Current Value 11 deals (NAV + Proceeds) transactions: Company B 7% of total -1% IRR x Cost 2.1x Gross IRR 31% Limit consortium deals: Deal Performance: Equity The GP has not participated in a broad consortium deal with more than >$800m one additional large GP since 2009: in the 2009-2014 portfolio of 155 deals $13bn 93% of total investments, only 3% of equity invested overlapped with other 31% IRR $12bn large buyout firms

Equity invested Current Value Very selective on public-to-privates: (NAV + Proceeds)

x Cost 1.0x The Team is also selective in choosing which public-to-private Gross IRR -1% transactions are executed: unusual value due to temporary dislocations; differentiated perspective Portfolio Construction since 2009 Average check size across Fund A1 and A2 $310m Prudent use of leverage and lower purchase multiples: Limit consortium deals >1 GP Partner: 0 The GP has maintained a focus on buying companies at attractive Very selective on public-to-privates 27% valuations and capitalizing them with a view for coming changes in the Prudent use of leverage at entry 4.6x avg. Net debt / EBITDA macroeconomic cycle And low er purchase multiples 8.1x avg. EV / EBITDA Focus on core sectors 81% TIPS: 1. What are the different focus areas of the Fund? Is there a segment you are interested in getting more exposure to or that you wish to stay away from? 2. Explain how you differentiate yourself from your competitors on the sourcing side?

24 Strategy . Value Creation

• Value Creation Team

• The private equity team works with the Value Creation Team, a team of ~50 global operational professionals that provides an integral resource for portfolio operations. The Value Creation Team works closely with deal teams from the due diligence and includes strong partnership with portfolio company management teams, active governance and leveraging internal operational capabilities. Operational initiatives include:

• Long term sales growth: through new market entry, product innovation, improved sales force effectiveness, price optimization, etc.

• Upgrading and strengthening business processes and operating metrics: implementation of robust processes and systems related to sales, operations, finance, human resources, information technology and legal

• Portfolio management through M&A: by helping integrate strategic add-on acquisitions

• Support carve-out transactions: set up carve-out acquisitions on a standalone basis

• Cost and efficiency improvements, including turnarounds: related to purchasing and procurement, manufacturing strategies, discretionary spending and overhead expenses

• Industry deal teams utilize Value Creation Team to varying degrees, with the Industrial team’s strategy strongly geared towards operational improvements.

• Value creation

• Through its 168 investments, the value creation is mainly coming from Earnings Growth, accounting for 65% of total value creation. The 2 other contributors are split as follows: 18% from Multiple Expansion and 17% from Debt Pay down Value Creation by Fund Earnings Multiple Debt Fund Growth Expansion Paydown Fund A 105% -5% 0% Fund B 77% 20% 3% Fund C 67% 22% 11% Fund D 73% 11% 16% Fund E 62% 13% 25% Fund F 77% 6% 17% Fund G 39% 44% 17% Total 65% 18% 17% TIPS: Do you have a centralized procurement system across your portfolio companies and if so what savings have you been able to achieve?

25 Strategy

• Market Opportunity

Investment Strategy and Market Opportunities As mentioned above, thanks to modest use of leverage, the GP has weathered the financial crisis very well. Between Q3 2007 and Q3 2009, Fund A’s Gross ROI held steady and even achieved gains compared to the beginning of the crisis. Geographic Focus Throughout the crisis, gross ROI only briefly fell below 1.00x The GP sees significant opportunities to invest in Region D and believes that Country A will continue to be one of the top contributors to global growth in 2015. This country has also become a more Fund I Historical Performance competitive industrial destination given the low cost of natural gas and oil. This, coupled with 2.00x Financial Country B’s low-cost labor market and Country C’s natural resources, has created a strong Crisis 1.75x environment for continued industrial growth in the region 1.50x

Value focus 1.25x

Gross ROI Gross 1.00x

Purchase Multiples Leverage Multiple 0.75x 10x 6x 9x 8.6x 5.1x 0.50x 5x 8x 6.9x Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 7x 4x 3.7x 6x 5x 3x Despite having begun investing at the tail end of the financial crisis, Fund XX has 4x also weathered the crisis well. Throughout 2009, the fund’s Gross ROI did not fall 2x 3x 2x below 1.00x. 1x 1x 0x 0x Industry Average* Fund I, II & III Average Industry Average* Fund I, II & III Average Fund II Historical Performance 2.00x Financial Crisis

The GP acquires companies at lower purchase prices and with less leverage. While the average LBO 1.75x purchase multiple is 8.6x, the GP’s average is 6.9x. Lower prices require less leverage; the industry average leverage multiple stands at 5.1x while GP portfolio companies’ leverage is 3.7x. This 1.50x discipline in purchase and leverage multiples has allowed the GP to achieve low volatility versus ROI Gross other buyout funds 1.25x

1.00x Dec-09 Dec 10 Dec 11 Dec 12

TIPS: What type of market opportunities are you trying to exploit? What is the typical size of your equity investments?

26 Strategy

• Fund Size Analysis

(in USD bn) Fund Co Invest Total

2008 Investments 1.47 - 1.47

2009 Investments 0.38 - 0.38

2010 Investments 0.86 0.15 1.01

2011 Investments 0.83 0.14 0.97

2012 Investments 0.99 - 0.99

2013 Investments 1.15 1.3 2.45

2014 Investments 1.23 - 1.23

2015 Investments 1.03 0.5 1.53

Average Since 2008 * $1.13 $0.30 $1.43 Total Capital to Deploy By 2022 $6.5

Required Deployment per Year $1.18 Shortfall / (Surplus) Capital per Year $0.25

* Average annualizes 2015 capital deployed.

TIPS: Analyze the GP’s historical pace of capital deployment to determine if its latest fund is appropriately sized

27 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

28 Terms . Term comparisons

Target Fund Target Fund Predecessor Comparison GP 1 Comparison GP 2

Fund Size : $Xbn target size ($Ybn hard cap) Fund Size : $Xbn target size ($Ybn hard cap) Fund Size : $Xbn target size ($Ybn hard cap) Fund Size : $Xbn target size ($Ybn hard cap) Management fees : During investment period: X% Management fees : During investment period: X% Management fees : During investment period: X% Management fees : During investment period: X% based on commitment based on commitment based on commitment based on commitment After investment period: Y% based After investment period: Y% based After investment period: Y% based After investment period: Y% based on cost on cost on cost on cost Carried interest : 20% on a deal by deal basis Carried interest : 20% on a deal by deal basis Carried interest : 20% on a deal by deal basis Carried interest : 20% on a deal by deal basis Preferred Return : 8% Preferred Return : 8% Preferred Return : 7% Preferred Return : 8% Catch up : Full Catch Up at a speed 80/20 Catch up : Full Catch Up at a speed 80/20 Catch up : Full Catch Up at a speed 50/50 Catch up : Full Catch Up at a speed 80/20 GP Clawback : Yes GP Clawback : Yes GP Clawback : No GP Clawback : Yes GP Commitment : W% of Fund’s size and up to a GP Commitment : W% of Fund’s size and up to a GP Commitment : W% of Fund’s size and up to a GP Commitment : W% of Fund’s size and up to a maximum of $Ym maximum of $Ym maximum of $Ym maximum of $Ym Term : 10 years + 2x1 year extension Term : 10 years + 2x1 year extension Term : 12 years + 2x1 year extension Term : 10 years + 3x1 year extension th th Commitment period : 5 anniversary of the final closing Commitment period : 5 anniversary of the final closing Commitment period : 6th anniversary of the final closing Commitment period : 5th anniversary of the final closing Transaction Fees : Transaction fees will be credited Transaction Fees : Transaction fees will be credited Transaction Fees : Transaction fees will be credited Transaction Fees : Transaction fees will be credited 100% offset against the 100% offset against the 100% offset against the 100% offset against the Management Fees Management Fees Management Fees Management Fees Diversification limits : The Fund will not invest more than Diversification limits : The Fund will not invest more than Diversification limits : The Fund will not invest more than Diversification limits : The Fund will not invest more than 20% of total commitments in any 20% of total commitments in any 15% of total commitments in any 20% of total commitments in any single investment; 20% of the fund single investment; 25% of the fund single investment; 25% of the fund single investment; 20% of the fund in portfolio companies outside of X in portfolio companies outside of X in one particular industry;15% of in portfolio companies outside of X countries;15% of the fund in countries;15% of the fund in the fund in passive, open market countries; passive, open market investments passive, open market investments investments Key Man Clause: The commitment period will Key Man Clause: The commitment period will Key Man Clause: The commitment period will Key Man Clause: The commitment period will automatically be suspended if fewer automatically be suspended if fewer automatically be suspended if fewer automatically be suspended if fewer than X of key people devote being than X of key people devote being than X of key people devote being than X of key people devote being actively involved in the activities of actively involved in the activities of actively involved in the activities of actively involved in the activities of the GP the GP the GP the GP

TIPS: 1. Can you discuss transaction fee offsets and your firm’s current and historical practices with respect to accelerated monitoring fees? 2. What % of your investments historically have been ECI/UBTI/FIRPTA generating; and do you provide a cap/opt out right for LPs that are tax sensitive? 3. Do you offer separate account structures for large LPs? If so, please disclose their terms and the precise allocation rules between them and the fund?

29 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

30 Conclusion . Comprehensive Framework To Support Investment Decisions

• The due diligence process is performed on two different levels: 1. In depth analysis of the GP

• Scoring Matrix: Developing a proprietary scoring matrix to compare GPs in a systematic way • Monitoring: Up-to-date and real time analysis of the performance at the fund and portfolio company level • Track Record: Assessing historical performance with a focus on the unrealized portfolio through cross- sectional analysis • Team: Evaluating team dynamics and identifying key team members • Strategy: Analyzing the consistency of the strategy and the value creation potential of the GP 2. Analysis of the GP within the market

• Benchmarks: Comparing the GP’s performances to peers • Market Opportunities: Assessing how the GP adapts to market conditions • Fund Terms: Evaluating consistency of fund terms

TIPS: Being in a state of permanent due diligence allows an investor to identify the remaining upside of a portfolio’s unrealized exposure, thus giving further insight into a GP’s expected performance going forward

31 TABLE OF CONTENTS

INTRODUCTION...... P.3 PROPRIETARY SCORING MATRIX...... P.5 MONITORING OF THE UNREALIZED TRACK RECORD……...... P.11 • OVERVIEW…...... ……….…...……………...... …………………...... P.11 • CALLS WITH GP………….…...……………...... …………………...... P.12 • FOCUS ON UNREALIZED…………………...... …………………...... P.13 • BENCHMARKING…...…...... …………………...... …...... ……………………...……………...... P.17 • CROSS-SECTIONAL ANALYSIS...... …………...……………...... …....…...…….....…..……...P.18 TEAM…...……....………………………………………………...…………..…...... …...…..P.21 • UNDERSTANDING INTERNAL DYNAMICS AND INCENTIVES………...... …...... …...... P.21 • DEPARTURES…...... ……...….…………...……………………...... P.22 STRATEGY………………………………………..………………...... ………………………………………...... P.24 • CONSISTENCY……..………...…….………………………………………………...... ………..…...... P.24 • VALUE CREATION…..………...... …...... ……....……………...... …………………..……...... P.25 • MARKET OPPORTUNITY...……………………………………………………………………...... …...... P.26 • FUND SIZE ANALYSIS……...... ………...... …...……………...... ……...... ……...... P.27 TERMS………………....………………………..…………………………………………..……………………..…...... …..P.29 CONCLUSION…………...………..……………………………...... …………………………………..…….…………...... P.31 APPENDIX………………………..……………………………………………………………………………………………...P.33

32 Appendix I: Primary Pipeline . Systematic GP Base Tracking

Sourcing tool

• Track the expected GP fundraising schedule • 4-5 years ahead • 3 regional pipelines: Europe, US, Asia • 3 GP preference categories: • High (dark red) • Medium (pink) • Low (light blue) • Fund classification by: • Estimated target size • Geography • Strategy (e.g. large vs. small cap) • Prior track record of each high priority GP

• Efficient targeting for top managers Systematic • Reactivity even ahead of the GPs’ fundraising sourcing • Portfolio planning for funds and mandates

33 Appendix I: Primary Pipeline

. High Priority Managers Tracked In Detail

European North GPs American Asian GPs GPs

For information purposes only. No binding contractual force.

TIPS: Keep a detailed analysis and track record of high priority managers

34 Appendix II: ESG Questionnaire . Corporate social responsibility (CSR) Survey(1)