Private equity milestones The PE industry history is dotted with notable deals, for both corporations bought and sold and the PE firms that have gone public for greater capital access, including today’s largest three firms: Carlyle Group, Blackstone Group and KKR.

1946 American Research and Development Corporation (ARD) founded by Georges Doriot with the objective to “… aid in the development of new or existing businesses into companies of stature and importance.” ARD’s first investment: $70,000 in Digital Equipment Corporation 1968 Digital Equipment Corporation goes public, making ARD’s stake worth $355 million 1976 Jerome Kohlberg, Henry Kravis and George Roberts found Kohlberg Kravis Roberts & Co. (KKR) 1980 Stanley Golder and Carl Thoma found Golder Thoma & Co. and popularize the “buy and build” model – a PE firm acquires a core company and subsequently expands it via add-on acquisitions 1985 Peter Peterson and Stephen Schwarzman found Blackstone Group 1987 Daniel D’Aniello, David Rubenstein and William Conway Jr. found Carlyle Group 1988 KKR’s leveraged buyout of RJR Nabisco sparks a wave of private equity acquisitions 2007 Blackstone Group goes public KKR, Texas Pacific Group and Goldman Sachs acquire TXU for $48 billion–the largest private equity buyout in history 2012 Carlyle Group goes public 2014 TXU, now known as Energy Future Holdings files for Chapter 11 bankruptcy

Striking growth since 20043 In addition to that notable history, assets under management (AUM) in the PE space are expected to maintain an impressive pace in the next half-dozen years, according to the PwC Asset and Wealth Management Research Centre.

Industry assets under management (AUM) levels (in trillions) *Figure for this year is estimated.

$12 $10.2 $10

$8 $6.4 $5.3 $6 $4.7

$4 $3.3 $2.5 $2 $1.0

$0 2004 2007 2012 2016 2017* 2020* 2025*

More private equity funds in the market4 The number of PE firms raising capital nearly tripled between 2014-19, according to Preqin. Private equity funds in the market over time (as of January each year)

3,749 4000

3000 2,296 1,829 2000 1,630 1,300 1,385 1000

0 2014 2015 2016 2017 2018 2019

Add-on volumes rising5 A key part of the “buy and build” model is the acquisition of add-on companies by existing PE holdings. Such deals have soared in recent years, according to PitchBook's 3Q 2019 U.S. PE Breakdown Report.

Private equity add-ons over time 3000 2,726

2500 2,329 2,125 2,224 2,025 2000 1,611 1,550 1,418 1500 1,203

1000 795

500 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: PitchBook

Taking external support6 To help streamline operations, PE firms are turning to third parties for myriad back-office chores, according to EY. Percentage of rms surveyed that outsource the expertise to some degree Tax 94% Regulatory reporting 71%

Fund accounting 55% Investor relations 38% Treasury 38% Valuation 30% Accounts payable and time and expenses 29% Portfolio analysis 18%