2010 Preqin Buyout Review Sample Pages.Indd

1. Executive Summary - Sample Pages

Fig. A: Annual Number and Value of Buyout Funds Raised: 2003 - 2010 Executive Summary 300

250 246 248 228 228 223 220 No. of Funds Over the past 10 years, the global buyout sector has 200 undergone a number of important changes, evolving 181 into a global industry impacting ever more signifi cantly 147 on the global economic stage. After suffering a dip in 150 fundraising during the economic downturn following 121 107 Aggregate the turn of the millennium, the market grew signifi cantly 96 from 2003 onwards in terms of both the overall capital 100 90 Capital being raised and the size of funds achieving a fi nal 69 Raised ($bn) close. Fuelled by strong returns, institutional investor 44 50 36 appetite for funds reached its peak in 2008, when 31 funds raised an aggregate $248 billion – over fi ve times the $44 billion which managers garnered in 0 2003. (Fig. A). 2003 2004 2005 2006 2007 2008 2009 2010 H1

Dramatic Change Fig. B: Number and Value of Buyouts Globally: 2000 - Q2 2010 3,000 800.0 The abundance of leverage available in the markets 2,547 2,556 700.0 served to amplify the increase experienced in 2,500 658.9 Aggregate DealValue ($bn) 685.1 fundraising, and in 2006 the total deal value for 600.0 2,034 private equity-backed buyout deals reached a peak 2,000 of $685 billion worldwide – over 10 times the $66 500.0 billion in global PE-backed dealfl ow seen in 2001 1,521 1,500 400.0 (Fig. B). Consequently, when the global downturn 1,363 1,334 struck, the effect was felt especially hard by the global No. of Deals 294.6 1,050 300.0 1,000 962 buyout industry. Fund managers lacked the available 798 245.6 693 fi nancing or market stability required to undertake new 186.1 617 200.0 deals, and the value of portfolio companies bought at 500 143.6 102.3 111.1 100.0 the height of the market boom saw signifi cant write- 66.4 81.6 66.6 downs, sending fund performance deep into the red. 0 0.0 Investors that had previously been pumping money 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 H1 2010 into the asset class held back from making new No. of Deals Aggregate Deal Value ($bn) commitments. *2008-H1 2010 Preqin Data. 2000-2007 Dealogic Data. Figures exclude add-on deals.

2009 was a year of extreme uncertainty, with the Fig. C: LPs’ Plans for Their Buyout Allocations in the Next 12 Months value of global deal fl ow falling to $81.6 billion – only the second time since the turn of the millennium that private equity-backed deal fl ow was at sub-$100 billion levels. However, with fund managers having around $500 billion in equity available to them to spend in the form of uncalled commitments, this fi gure was especially concerning, and with one-year performance of buyout funds standing at -33% as of March 2009, the management fees being charged on this vast outstanding amount became a source of unrest for institutional investors, many of which were halting new fund commitments altogether as a result of poor performance, continued uncertainty and growing dissatisfaction at fund terms and conditions.

The impact can clearly be seen in the total capital that the industry was able to raise during the course of the year, with just $107 billion being raised by funds holding a fi nal close during 2009. With some of these funds having spent a considerable amount of time on the road before closing, the real amount between 2005 and 2010. With these funds typically The Road to Recovery of capital actually committed in 2009 specifi cally is employing the highest levels of leverage, they felt the likely to be signifi cantly lower than this fi gure would effects of the market downturn especially strongly, As the global economy has begun to recover, with suggest. Many fund managers had to abandon their with fund NAVs for these largest vehicles dropping by equities prices increasing and the balance sheets of fundraising efforts as conditions became increasingly more than their smaller counterparts. This prompted banks being bolstered, the global buyout industry has competitive, with the average amount of time required institutions to turn their backs on the mega fund - only started to show signs of improvement and recovery. to close a fund increasing to 18.8 months in 2010 – up two vehicles with a size exceeding $8 billion held a Fund net asset values have risen steadily following a from 11 months in 2005. fi nal close in 2009 – with a considerable proportion turning point in March 2009, and one-year performance of this capital having been raised before September for the industry turned positive as of December 2009. The Bigger They Are... 2008. Looking at deals, the proportion of private After the largest buyout funds were most affected equity-backed deals occurring at values above $1 by the downturn, they are now showing the highest A major contributing factor to the overall growth billion fell to just 3% of the total, down from 8% in recovery levels, with NAVs for mega buyout funds experienced in the global buyout industry up to 2008 2008. Smaller and mid-market deals saw their share consistently improving by the highest factor between was the increase in the number and size of both of the total number of deals grow, with deals valued at quarters. In the markets, the number and value of buyout funds and buyout deals. Following the launch less than $500 million accounting for 81% of the total private equity–backed deals has seen improvement, of Goldman Sachs’ $8.5 billion fund in 2005, 24 funds in 2009, up from 73% in 2008. with deals totalling $67 billion in value having been have been raised with a size exceeding $8 billion announced in the fi rst half of 2010, compared with

$81.6 billion for the whole of 2009. Although some way Fig. D: Number and Value of Exits by Type: Q1 2008 – Q2 2010 short of the near $700 billion levels being seen in 2006- 2007, it is a positive and encouraging trend that suggests 140 60.0 that the industry is on its way to recovery. 120 Problems in the Fundraising Market 50.0

100 Aggregate DealValue ($bn) One area where the buyout sector continues to struggle 40.0 is with new fundraising. The fi rst half of 2010 saw just $31 80 billion being raised by new funds achieving a fi nal close. 30.0 So with performance improving and deal fl ow picking up, 60

what are the reasons behind the sluggishness still being No. of Deals seen in the fundraising market? 20.0 40 Although investors are still somewhat cautious when 20 10.0 considering making new investments, the results of Preqin’s survey of 300 leading LPs does indicate that the 0 0.0 majority of investors (60%) are still seeking to maintain Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 their allocations to private equity in the next twelve months. There is even evidence of some investors Trade Sale Secondary Buyout Sale Restructuring IPO Aggregate Exit Value ($bn) seeking to increase their allocations to private equity, with 18% of those polled indicating a planned rise in private equity investments compared with only 10% that 2010 saw $40.5 billion in exits, representing the second- their existing relationships and closely examining all new plan to reduce their exposure (the remaining 12% are highest quarter since the onset of the fi nancial downturn. opportunities. There has been a growth in appetite for investing opportunistically) (Fig. C). Capital is once again beginning to churn through the mid-market deals as opposed to mega-sized deals, and private equity machine, and as a result an upturn in this has been refl ected in a growing number of smaller The main contributing factor behind the drop off in private equity fundraising is looking increasingly likely for deals taking place, both from dedicated mid-market new commitments being made to buyout funds is the end of 2010 and into 2011. players and also from some of the larger fund managers therefore the cash fl ow position that investors are fi nding with mega-sized funds. themselves in. With the majority of investors seeking A Changed Industry? to simply maintain allocations for the time being, their In this ever-changing landscape, it is more important commitments to new vehicles will be driven by both the After emerging from the most dramatic global fi nancial than ever before for investors, fund managers, advisors, amount of capital that they have called up in their funds downturn in living memory, the buyout industry does placement agents, consultants, law fi rms and other and the distributions that they have been receiving from look somewhat different, and has undergone changes private equity professionals to access a comprehensive maturing investments, as they will have to reinvest this as a result of the experiences of the past two years. resource detailing all the latest trends affecting this capital in order to maintain their allocations. An increase Investor attitudes to funds have changed signifi cantly, global market. in fundraising will therefore only really be seen once the with institutions now taking far more time and care when number of exits in the market begins to increase, and selecting fund managers to commit to. Automatic re-ups there is certainly encouraging news on this front. Q2 are a thing of the past as institutions are scrutinizing

The 2010 Preqin Buyout Review

The 2010 Preqin Buyout Review is the most detailed, comprehensive overview of the buyout industry ever created.

The publication includes detailed profi les for the 500 most signifi cant and active GPs involved in the buyout industry, including information on their deals, investment preferences, fund performance, funds raised, funds in market, direct contact details for key personnel and much more. It also profi les 600 LPs that invest in buyout vehicles, their investment preferences and key personnel contact details. All fi rms featured in the Review have been contacted directly by our analysts, ensuring that the information held is both accurate and far-reaching.

In addition, the Review contains analysis on all aspects of the market, including an in-depth look at trends in deals, fundraising, performance, fund terms and conditions and much more. We hope that you ﬁ nd the Review to be a useful and informative tool, and as ever we welcome any feedback and suggestions for future editions that you may have.

The 2010 Preqin Buyout Review - Sample Pages

Contents

1. Executive Summary 9. Fund Terms and Conditions Overview - Management fees, hurdle rates, carried interest, fee rebates to investors, manager 2. Data Sources commitments, key-man provisions, no-fault divorce clauses, GP catch-up rate.

3. Buyout Market Overview 10. Global Buyout Deal Activity Overview Large Buyouts - Market Overview - Global buyout deal fl ow 2000-present, global buyout activity by quarter - History and evolution of the large buyout market, top 10 buyout funds raised, top 2008-present, deal fl ow by region, type, value and industry. 10 buyout funds in market, fundraising by geographic focus and industry focus, breakdown of fundraising market by fund size. 11. Largest Deals, Fund Managers and Most Active Service Providers Mid-Market Buyouts - Market Overview - Largest 20 deals in H1 2010, 2009 and 2008, largest deals by geographic region, most active fi rms by aggregate transaction size, most active fi nancial advisors, law - History and evolution of the mid-market buyout market, fundraising by geographic fi rms and debt fi nancing providers. focus and industry focus, breakdown of fundraising market by fund size. Small Buyouts - Market Overview 12. Buyout-Backed Exit Activity Overview - History and evolution of the small buyout market, fundraising by geographic focus - Exit activity 2008-present, exits by region and industry, notable exits. and industry focus, breakdown of fundraising market by size. 13. Fund Performance Overview 4. Historic Fundraising Overview: 2005 – H1 2010 - Median, money-weighted and pooled IRRs, IRRs by fund size, geographic - History and evolution of the buyout market, fundraising by geographic focus and focus, net cash fl ow, net cash fl ow by vintage year, J-curve, relationship between industry focus, breakdown of fundraising market by fund size, average time spent predecessor and successor fund quartile. on the road, success at reaching initial fundraising targets. 14. Fund Performance Listings 5. Funds Closed Historically Listings 15. Market Benchmarks 6. Placement Agent Overview - Key placement agents, sample of funds using placement agents. 16. Firm Investment Preferences - Matrix showing fi rm preferences by geographic focus and industry focus. 7. Current Fundraising Overview - Buyout funds on the road, fundraising by geographic focus and industry focus, 17. Top 50 Buyout Fund Managers fundraising market by fund size, interim closes, fi rst-time funds on the road, length - League table of top 50 buyout managers by buyout funds raised in the last 10 of time spent on the road. years.

8. Funds on the Road Listings 18. Firm Proﬁ les - Proﬁ les for over 500 private equity buyout fund managers.

19. Dry Powder Overview - Dry powder by region and fund sizes, ﬁ rms with the most dry powder available.

20. Fund Manager Overview - Buyout fund managers by size, location, industry focus, investment criteria (equity investment size, transaction investment size, target company – annual revenue, target company – enterprise value, holding period), shareholding preferences, board representation, applied strategies and expertise provided.

21. Institutional Investors in Buyout Funds – Survey - Results of a survey of over 300 LPs covering their attitudes to buyout funds in the wake of the ﬁ nancial crisis, fund returns, size preferences, LP-GP relationships and future plans for buyout allocations.

22. Institutional Investors in Buyout Funds Listings - Listings for 600 institutional investors in buyout funds, including sample investments and fund size preferences.

23. Index - Buyout Firms - Investors - Figure Index

24. Glossary

25. Other Publications - Other Preqin products.

Regulatory Filings: We regularly review regulatory ﬁ lings in the US, the UK and other regions in order to uncover additional fund Data Sources information and the identity of institutional investors in funds.

FOIA Requests: The 2010 Preqin Buyout Review has drawn upon We make Freedom of Information Act Requests of many different sources of data in order to provide public investors in buyout funds in both the US and a unique perspective on the worldwide market for the UK in order to calculate fund performance and buyout funds. sample investments made by investors.

Fund Managers: Information contained in The 2010 Private Equity We have directly contacted over 500 private equity Buyout Review is available on our online services, buyout ﬁ rms from around the world in order to where subscribers beneﬁ t from constantly updated collect information on fundraising and investment information on all aspects of the buyout sector. preferences. We also undertook questionnaires with fund managers regarding the terms and conditions of For more information on the private equity buyout their funds. sector please contact our client support service: [email protected] Investors: We have surveyed over 600 investors from around the world in order to ascertain their investment preferences, past history within the asset class and plans for the future.

Placement Agents: We have regular contact with placement agents in order to ascertain their involvement in the private equity buyout market, and also to gain information on funds that they are working on where applicable.

Law Firms: We have made enquiries with numerous law ﬁ rms that have provided us with information on funds they have provided fund formation services to.

Fig. 3.3: Large Buyout Fundraising: 2005 - 2010 200 Large Buyouts - 179.0 180 170.2

160 No. of Funds Market Overview 147.1 140

120

As Fig. 3.3 shows, fundraising for large buyout funds 100 91.6 between 2005 and H1 2010 mirrors fundraising for 80.7 80 the entire buyout industry during this period. Between Aggregate Capital Raised 2005 and 2008 the aggregate capital raised by large 60 buyout funds increased year-on-year, reaching its ($bn) 40 peak in 2008 when 31 vehicles raised an aggregate 29 32 31 $179 billion and accounted for 72% of all buyout 23 20 18 16.3 capital raised that year. However, the turmoil in the 6 fi nancial markets impacted on fundraising for large 0 buyout funds, as it did on the entire private equity 2005 2006 2007 2008 2009 H1 2010 fundraising market, and the aggregate capital raised Fig. 3.4: Large Buyout Quarterly Fundraising: Q1 2005 - Q2 2010 in 2009 dropped by 55% from the previous year. This decrease was caused by a number of factors. The 70 contraction in the credit markets, led to a dramatic 61.2 60 56.5 decrease in private equity deal fl ow. Large buyout 54.3 51.8 50.7 No. of Funds deals, which are typically reliant on high proportions of 50 48.4 leverage, were particularly affected and consequently capital call-ups slowed considerably. This meant 40 36.5 37.7 35.9 that investors did not have to invest in new funds to 34.2 maintain their allocations, and those investors that did 30 28.2 25.5 25.7 have capital to invest were being very cautious. 22.523.2 20 18.7 18.7 Aggregate 15.1 As Fig. 3.4 demonstrates, fundraising reached its 14.4 Capital 11 10 11 10 8 8 9 9.3 8.0 8.3 Raised ($bn) lowest level since 2005 in the fi rst quarter of 2010, 10 7 6 7 7 4 4 5 5 5 5 4 5 when three large buyout funds secured an aggregate 2 3 3 $8 billion. 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010

45% of funds currently raising are intending to invest Fig. 7.2: Industry Focus of Buyout Funds in Market a proportion of their capital in the industrials sector, 50% which includes areas such as shipping, distribution, 45% 45% transportation, construction and manufacturing. Consumer discretionary is the second most targeted 40% 37% 35% sector, with 37% of buyout funds in market looking 35% 30% to invest in this industry. 35% of buyout funds will 30% be looking to invest in business services, which has 25% 21% become a popular and proﬁ table area as ﬁ rms look to 20% 20% 20% 18% cut costs by outsourcing various services as a result 15% of the economic downturn. 15% 14% 10% Funds on the Road by Fund Size 5% 0% Fig. 7.3 shows a breakdown of the buyout fundraising

market by target fund size. 26% of aggregate capital Any is being targeted by small-cap funds with 68% of Services Materials Business Business Utilities Food and Food and Industrials and and funds falling into this category. Mid-market funds Agriculture Information Information Technology Energy and and Energy Consumer Health CareHealth are targeting capital commitments of $40 billion and Discretionary Communications account for a further 26% of funds raising at present. Media Telecoms, There are signiﬁ cantly fewer large funds on the road, Fig. 7.3: Breakdown of Buyout Funds in Market by Fund Size but these funds are targeting the largest amount of 140 capital, with 11 such funds seeking an aggregate 128 $42.6 billion, or 38% of the total capital being sought. 120

Funds on the Road by Fund Status No. of 100 Funds 46% of buyout funds currently on the road have reached an interim close. One-third of these have 80 held a ﬁ rst close, having raised, on average, 55% of their total targeted capital. A further 6% have reached 60 a second close having raised, on average, 52% of 49 Aggregate their targeted capital. Funds that have held a third 40.0 42.6 Target 40 Size ($bn) and fourth close have raised 53% and 60% of target 28.9 capital and account for 5% and 2% of funds in market 20 respectively. 11

0 Small Mid-Market Large

Fund / Firm Target Size Interim Closes (mn) Geographic Placement Agent Law Firm Sample LPs (mn) Focus ICICI Venture Capital Fund III (Balanced) 500 USD First Close: 250 USD (Oct-2009) Used But Not Specified Clifford Chance ICICI Venture Funds Management India KKR China Growth Fund 800 USD First Close (Expected): (Sep-2010) Greater China Kohlberg Kravis Roberts China, Hong Kong, Taiwan Lake Pacific II 200 USD North America Not Used Kirkland & Ellis SWIB Lake Pacific Partners US Leeds Equity Partners V 1,000 USD First Close: 500 USD (Dec-2009) Goodwin Procter CalPERS, General Electric Pension Trust, New Mexico Educational Leeds Equity Partners US Retirement Board, New York City Employees' Retirement System, New York City Teachers’ Retirement System, State of Connecticut Retirement Plans and Trust Funds, Time Warner Littlejohn Fund IV 1,350 USD First Close: 398 USD (Sep-2009), Fourth Europe, North Park Hill Group Morrison Cohen MSRPS, OPERF, Illinois TRS, WSIB Close: 800 USD (Feb-2010) America Littlejohn & Co. Canada, US Morgan Stanley Capital Partners V 6,000 USD First Close: 2,500 USD (Jul-2008) Global Regents of the University of California Morgan Stanley Private Equity Navis Asia Fund VI 1,000 USD First Close: 360 USD (Jun-2009), Asia Campbell Lutyens Debevoise & Plimpton Employees' Retirement System of Texas, MSRPS Navis Capital Partners Second Close: 450 USD (Jul-2009), Australia, Third Close: 776 USD (Mar-2010), Hong Kong, Fourth Close: 1,070 USD (Jun-2010), India Final Close (Expected): 1,250 USD (Aug-2010) North Castle Partners 2007 300 USD First Close: 100 USD (Feb-2009) North America Merrill Lynch Private North Castle Partners US Equity Placements Group Spectrum Equity Investors VI 1,000 USD First Close: 625 USD (Nov-2008) North APFC, Employees' Retirement System of the State of Hawaii, Illinois America, Municipal Retirement Fund, Iowa Public Employees' Retirement West Europe System Spectrum Equity Investors SunTx Capital Partners II 350 USD First Close: 210 USD (Jul-2008) North America UBS Investment Bank Akin Gump Strauss COPERA, Constitution Capital Partners SunTx Capital Partners US Private Funds Group Hauer & Feld Riverside Asia Fund I 100 USD First Close: 25 USD (Sep-2008), Second Asia Riverside Company Close: 27 USD (Aug-2009) Riverside Europe Fund IV 550 EUR First Close: 100 EUR (Dec-2008), Europe Jones Day Employees' Retirement System of Texas, MSRPS Riverside Company Second Close: (May-2009) Veritas Capital Fund IV 950 USD First Close: 300 USD (Dec-2009), UBS Investment Bank Illinois TRS Veritas Capital Second Close: 500 USD (Feb-2010) US Private Funds Group US Equity Partners III 500 USD Used But Not Specified Paul, Weiss, Rifkind, Pennsylvania Public School Employees' Retirement System Wasserstein & Co US Wharton & Garrison Wellspring Capital Partners V 1,500 USD First Close: 205 USD (Apr-2009), North America Credit Suisse Private Paul, Weiss, Rifkind, FSBA, OPERF Wellspring Capital Management Second Close: 600 USD (Apr-2010) Canada, US Fund Group Wharton & Garrison Whitney VII 750 USD Los Angeles City Employees’ Retirement System, Pennsylvania SERS J.H. Whitney & Co US Seidler Equity Partners IV 400 USD First Close: 125 USD (Apr-2009) Seidler Equity Partners US Yucaipa American Alliance Fund II 2,000 USD First Close: 1,500 USD (Feb-2009) North America Atlantic-Pacific Capital American Beacon Advisors, ASRS, CalPERS, Los Angeles City Yucaipa Companies Employees’ Retirement System, MSRPS, Pennsylvania SERS

© 2010 Preqin Ltd 11 12. Buyout-Backed Exit Activity - Sample Pages backed fund managers in Q1 2010, and 31% of exits Fig. 14.2: Number of Exits by Region: H1 2008 - H1 2010 in Q2 2010. The value of secondary buyouts has also surged in 2010 compared to the previous year, with 300 $18.5 million in secondary buyouts announced during H1 2010, double the value of secondary buyouts in 250 22 2009. 18 Asia and Rest of Exits by Region 200 World 37 103 Figs. 14.2 and 14.3 show the number and aggregate 8 150 104 value of private equity buyout-backed exits by region. 54 Europe The economic downturn impacted the number and 67 18 value of exits in all regions during H2 2008 and H1 100 43 2009 and the aggregate value of exits fell by 77% between H1 2008 and H1 2009. However, in the 136 North America 121 second half of 2009 deal fl ow picked up and the 50 104 95 78 aggregate value of exits increased three-fold between H1 2009 and H2 2009. 0 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 North American exits make up a signifi cant proportion of all exits globally, accounting for the largest number Fig. 14.3: Aggregate Value of Exits: H1 2008 - H1 2010 and aggregate value of exits for each of the years 70 shown. Between H1 2008 and H2 2009 the aggregate 2.1 6.4 value of deals in the region increased signifi cantly 60 from $2.1 billion to $12.5 billion. The aggregate deal 14.9 value of European exits has remained the most Asia and Rest of 50 22.0 stable during this period, but the proportion of global World deal value accounted for by deals in this region has 12.5 fl uctuated the most. During the economic downturn, 40 in H2 2008 and H1 2009, European deals accounted Europe 30 18.2 for nearly half of the global aggregate deal value, but 0.1 in H1 2010 this proportion decreased, with exits in the 49.2 region accounting for one-third of global deal value. 20 13.4 37.7

Aggregate Exit Value ($bn)Aggregate Exit Value No. of Exits North America 1.9 During the ﬁ rst half of 2010, global exit activity increased 10 6.3 19.7 13.6 substantially from H1 2009, with the aggregate value 6.7 of exits standing at $66.1 billion, almost identical to 0 the aggregate deal value in H1 2008. H1 2008 H2 2008 H1 2009 H2 2009 H1 2010

Cape Natixis Established: 1999 GP Investments Established: 1993 88 Via Monte Rosa, Milan, 20149, Italy Avenue Brigadeiro Faria Lima, nº 3900, 7th floor, Itaim Bibi, Sao Paulo, 04538-132, Brazil Tel: +39 02 7636131 Web: www.cape.it Tel: +55 11 3556 5505 Web: www.gp-investments.com Fax: +39 02 7733 1617 Email: [email protected] Fax: +55 11 3556 5566 Cape Natixis is a Milan-based firm positioned at the smaller end of the buyout market. The firm’s investments focus GP Investments is a Latin American private equity company focused on the acquisition of mature companies with on controlling stakes in profitable small and mid-market firms. Its target companies typically face generational high potential for value creation. The company targets opportunities that allow for enhancement of shareholder value succession issues and operate in traditional manufacturing industries, in the north of Italy. In addition to buyouts the through improved management and operating techniques and by leveraging proven international business models firm can also provide development capital in specific circumstances. Since 1999, Cape Natixis has made more than adapted to the Latin American marketplace. GP Investments does not concentrate on any particular sector, nor is the 50 investments. With offices in China (Shanghai) and India (Bangalore) Cape help its portfolio companies to expand company bound by macroeconomic considerations. GP Investments acquires only control or joint-control in into those geographies, by creating local commercial or procurement offices or even production sites. companies to ensure that its proven strategy can be implemented. Key Investment Criteria Key Investment Criteria Buyout Industry Focus: Business Services, Clean Technology, Consumer Services, Manufacturing Buyout Industry Focus: Diversified Geographic Preferences: Europe, West Europe, Croatia, France, Greece, Italy, Portugal, Spain Geographic Preferences: Central America, South America, Brazil Transaction Investment Size (mn): EUR 8 to 10 Transaction Investment Size (mn): USD 100 to 200 Equity Investment Size (mn): EUR 5 to 7 Equity Investment Size (mn): USD 100 to 200 Target Company - Annual Revenue (mn): EUR 10 to 50 Target Company - Annual Revenue (mn): At least USD 100 Target Company - Enterprise Value (mn): EUR 10 to 50 Holding Period (Years): At least 5 Holding Period (Years): 3 to 5 Board Representation: Required Board Representation: Prefer Shareholding: Prefer Controlling Shareholding: Prefer Controlling Funds Raised Fund Size (mn) Vintage Status Funds Raised Fund Size (mn) Vintage Status GP Capital Partners V 1,100 USD 2008 Closed Cape Natixis Private Equity Fund II 195 EUR 2007 Closed GP Capital Partners IV 1,300 USD 2007 Closed Cape Natexis Private Equity Fund 120 EUR 2004 Closed GP Capital Partners III 250 USD 2005 Closed Notable Recent Investments Date Type Size (mn) Industry Location GP Capital Partners II 800 USD 1997 Liquidated Duplomatic Automazione Nov-08 Buyout EUR 4 Industrial Italy GP Capital Partners 500 USD 1994 Liquidated Trafomec Nov-08 Buyout EUR 62 Energy Italy Notable Recent Investments Date Type Size (mn) Industry Location Gruppo ITP Oct-08 Buyout EUR 29 Manufacturing Italy Magnesita SA Sep-07 Public to Private USD 641 Mining Brazil AMF Aug-08 Buyout EUR 11 Retail Italy Pride International Land Drilling and Aug-07 Buyout USD 1,000 Industrial US Garioni Naval Jul-08 Buyout EUR 16 Energy Italy E&P Services Business BBI Electric Jul-08 Buyout EUR 5 Industrial Italy Contact Name Position Tel Email Antonio Co-Chairman, Co-CEO & IR antonio.bonchristiano Contact Name Position Tel Email +55 11 3556 5505 Simone Cimino Founder & Managing Partner +39 02 7636131 [email protected] Bonchristiano Officer @gp-investments.com Mayra Gabriele mayra.fregonesi Maddalena de Liso CFO +39 02 7636131 [email protected] Investor Relations +55 11 3556 5509 Guido de Vecchi Managing Partner +39 02 7636131 [email protected] Fregonesi @gp-investments.com Fersen Lamas fersen.lambranho Marco Vismara Managing Partner & CEO +39 02 7636131 [email protected] Co-Chairman & Co-CEO +55 11 3556 5505 Lambranho @gp-investments.com thiago.rodrigues Thiago Rodrigues CFO +55 11 3556 5505 @gp-investments.com

Thomas H. Lee Partners Established: 1974 100 Federal Street, Boston, MA, 02110, US Tel: +1 617 227 1050 Web: www.thl.com Fax: +1 617 227 3514 Thomas H. Lee Partners invests in growth-oriented global enterprises, headquartered principally in North America, within three broad sectors: business and financial services, consumer and healthcare, and media and information services. Since its founding in 1974, the firm has acquired more than 100 portfolio companies and completed over 200 add-on acquisitions, with a combined value of more than USD 150 billion. Key Investment Criteria Buyout Industry Focus: Business Services, Consumer Services, Financial Services, Healthcare, Information Services, Media Geographic Preferences: Global, North America, West Europe, UK Transaction Investment Size (mn): USD 750 to 10,000 Equity Investment Size (mn): USD 250 to 1,000 Target Company - Annual Revenue (mn): At least USD 250 Target Company - Enterprise Value (mn): USD 750 to 10,000 Holding Period (Years): Up to 5 Board Representation: Required Shareholding: Controlling Funds Raised Fund Size (mn) Vintage Status Thomas H Lee VI 10,100 USD 2006 Closed Thomas H Lee V 6,114 USD 2000 Closed Thomas H Lee IV 3,350 USD 1998 Closed Thomas H Lee III 1,350 USD 1996 Liquidated Thomas H Lee II 568 USD 1989 Liquidated Thomas H Lee I 66 USD 1984 Liquidated Notable Recent Investments Date Type Size (mn) Industry Location InVentiv Health May-10 Public to Private USD 1,100 Healthcare US Sterling Financial Corp Apr-10 PIPE USD 850 Financial Services US MoneyGram Mar-08 Recapitalization USD 1,510 Financial Services US Ceridian Corporation May-07 Public to Private USD 5,300 Outsourcing US Contact Name Position Tel Email Charles Brizius Managing Director +1 617 227 1050 [email protected] Anthony DiNovi Co-President +1 617 227 1050 [email protected] Scott Sperling Co-President +1 617 227 1050 [email protected] Gregory White Managing Director +1 617 227 1050 [email protected]

In order to ascertain investor attitudes towards buyout portfolio companies (typically backed by large buyout funds in the current fi nancial climate, Preqin surveyed funds) do not have this problem.” 301 institutional investors in private equity funds in May LP Attitudes to 2010, and sought to establish how their allocations to Perhaps unsurprisingly, LP attitudes towards large buyout funds are set to change in the future. and mega buyout funds were more negatively Buyout Funds affected by the credit crunch. As shown in Fig. 22.2, LPs’ Attitudes towards Buyout Funds in the Wake almost half of LPs (48%) said they had become more of the Financial Crisis negative towards large and mega buyout funds after the fi nancial crisis. Just 3% of LPs told us they had Buyout funds that reached a fi nal close in 2009 raised The fi nancial crisis has had a signifi cant impact on become more positive about such funds. $107 billion, less than half the $233 billion raised the investor attitudes towards private equity and on the year before. The fi nancial crisis made conditions for areas of the market to which they are seeking to gain Investors in Asia and Rest of World are showing a buyout investments more challenging and fundraising exposure. As shown in Fig. 22.1, the majority (57%) of particular interest in the smaller end of the buyout for the sector has suffered as a result. Distributions LPs feel that their attitudes towards small and mid-cap market. More than half (57%) of the respondents from from funds to LPs have fallen due to the diffi cult exit buyout funds have not changed following the fi nancial the region stated that they felt more positive about environment meaning that LPs have not had to make crisis and more than a third, 36%, have become more small and mid-cap buyout funds following the fi nancial new commitments to maintain their allocations to the positive. Only 2% of the surveyed investors have downturn. For example, a Japanese investment sector. become more negative towards the smaller end of bank said it had seen “better performance during the the buyout market. One such investor told us that “the downturn from mid-cap funds.” This, coupled with increased caution amongst LPs, portfolio companies of small buyout fi rms will have a has meant that securing new commitments from LPs more diffi cult time accessing capital since they rely on has become a challenging prospect for many GPs. bank fi nance and not capital markets fi nance. Large

Fig. 22.1: Change in LP Attitudes towards Small and Mid-Cap Buyout Fig. 22.2: Change in LP Attitudes towards Large and Mega Buyout Funds Funds after the Financial Crisis after the Financial Crisis

Arizona State Retirement System Public Pension Fund Indiana Public Employees' Retirement Fund Public Pension Fund 3300 North Central Avenue, Phoenix, AZ, 85012-0250, US Harrison Building, Suite 800, 143 W. Market, Indianapolis, IN, 46204, US Tel: +1 602 240 2000 Web: www.azasrs.gov Tel: +1 317 233 4162 Web: www.in.gov/perf Fax: +1 602 240 2090 Fax: +1 317 232 1614 Email: [email protected] Total Assets (mn): 24,000 USD PE Allocation (mn): 1,600 USD (6.7% of Assets) Total Assets (mn): 14,200 USD PE Allocation (mn): 1,065 USD (7.5% of Assets) PE Investment Consultant: Ennis Knupp and Associates, Franklin Park, Meketa Investment Group PE Investment Consultant: Strategic Investment Solutions General Consultant: New England Pension Consultants General Consultant: Mercer Investment Consulting Small Buyout Medium Buyout Large Buyout Mega Buyout Sample Investments: Hellman & Friedman VII (2010), Triton Fund III (2009), Advent Global Private Equity VI • • (2008), Ares Corporate Opportunities Fund III (2008), CVC European Equity Partners V (2008), Herkules Private Sample Investments: Blackstone Capital Partners VI (2010), Bridgepoint Europe IV (2009), JLL Partners Fund VI Equity Fund III (2008), Lindsay Goldberg - Fund III (2008), MBK Partners II (2008), Mill Road Capital (2008), (2009), Lincolnshire Equity Fund IV (2009), Onex Partners III (2009), Accel-KKR Capital Partners III (2008), Apollo TowerBrook Investors III (2008), Actis Emerging Markets 3 (2007), Clarity Partners China (2007), Hellman & Investment Fund VII (2008), CVC European Equity Partners V (2008), Levine Leichtman Capital Partners IV (2008), Friedman VI (2007), Lion Capital Fund II (2007), New Mountain Partners III (2007), Silver Lake Partners III (2007), LLR Equity Partners III (2008), Quantum Energy Partners V (2008), Yucaipa American Alliance Fund II (2008), Terra Firma Capital Partners III (2007), Vista Equity Fund III (2007), Court Square Capital Partners II (2006), Lindsay Carlyle Partners V (2007), Jordan Resolute Fund II (2007), Nautic Partners VI (2007), New Mountain Partners III Goldberg - Fund II (2006), TowerBrook Investors II (2006) (2007), Oak Hill Capital Partners III (2007), Platinum Equity Capital Partners Fund II (2007), Silver Lake Partners III Contact Name Position Tel Email (2007), Thomas H Lee VI (2006) John Borgo Senior Investment Analyst +1 317 234 6210 [email protected] Contact Name Position Tel Email David Cooper CIO +1 317 650 0709 [email protected] Gary Dokes CIO +1 602 240 2000 [email protected] Greg Davis Director, Private Equity +1 317 234 5560 [email protected] Richard Henkel Private Equity Portfolio Manager +1 602 240 2043 [email protected] Assistant Private Equity & Real Ethan Hurley +1 602 240 2009 [email protected] National Pensions Reserve Fund Sovereign Wealth Fund Estate Portfolio Manager National Treasury Management Agency, Treasury Building, Grand Canal Street, Dublin, 2, Ireland Tel: +353 (0)1 664 0800 Web: www.nprf.ie Furuholmen Invest Family Office - Single Fax: +353 (0)1 676 6483 Email: [email protected] SØRKEDALSVEIEN 24, Postboks 94, Oslo, 0369, Norway Total Assets (mn): 17,480 EUR PE Allocation (mn): 489 EUR (2.8% of Assets) Tel: +47 2319 6280 No Website Available Small Buyout Medium Buyout Large Buyout Mega Buyout Fax: +47 2319 6299 • • Total Assets (mn): 1,500 NOK PE Allocation (mn): 75 NOK (5.0% of Assets) Sample Investments: Summit Partners Europe Private Equity (2010), Clayton Dubilier & Rice VIII (2009), CVC Small Buyout Medium Buyout Large Buyout Mega Buyout European Equity Partners V (2008), Nordic Capital Fund VII (2008), TPG Partners VI (2008), CVC European Equity • • Partners IV Tandem Fund (2007), Hellman & Friedman VI (2007), Jordan Resolute Fund II (2007), New Mountain Sample Investments: EQT V (2006) Partners III (2007), Providence Equity Partners VI (2007), TA Atlantic & Pacific VI (2007), Charterhouse Capital Partners VIII (2006), Madison Dearborn Capital Partners V (2006), Texas Pacific Group Partners V (2006), Clayton Contact Name Position Tel Email Dubilier & Rice VII (2005), CVC European Equity Partners IV (2005), Vestar Capital Partners V (2005) Hans Furuholmen Investment Manager +47 2319 6280 [email protected] Contact Name Position Tel Email Ketil Rosenlund Administrator, Investments +47 2319 6287 [email protected] +353 (0)1 664 0800 Nick Ashmore Head of Private Equity [email protected] Ext. 4162 Future Fund Sovereign Wealth Fund James Brennan Private Equity Analyst +353 (0)1 644 8450 [email protected] Future Fund Management Agency, Locked Bag 20010, Melbourne, VIC, 3001, Australia Eileen Fitzpatrick Director, Alternative Assets +353 (0)1 664 0800 [email protected] Tel: +61 (0)3 8656 6400 Web: www.futurefund.gov.au Fax: +61 (0)3 8656 6500 Email: [email protected] Sony Life Insurance Insurance Company Total Assets (mn): 67,622 AUD PE Allocation (mn): 1,482 AUD (2.2% of Assets) 1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo, 107-8585, Japan PE Investment Consultant: In-House Tel: +81 (0)3 3475 8879 Web: www.sonylife.co.jp General Consultant: In-House, Towers Watson Fax: +81 (0)3 3475 8914 Email: [email protected] Sample Investments: CDH China Fund IV (2010) Total Assets (mn): 40,000 USD PE Allocation (mn): 500 USD (1.3% of Assets) Contact Name Position Tel Email PE Investment Consultant: In-House Investment Director, Private steve.byrom Steve Byrom +61 (0)3 8656 6400 Small Buyout Medium Buyout Large Buyout Mega Buyout Markets @futurefund.gov.au • • • Gary Gabriel Head of Private Markets +61 (0)3 8656 6400 [email protected] Sample Investments: Bridgepoint Europe IV (2009), PAI Europe V (2008), Charterhouse Capital Partners VIII Senior Analyst, Fixed Interest & david.george David George +61 (0)3 8656 6441 (2006), PAI Europe IV (2005) Alternatives @futurefund.gov.au Contact Name Position Tel Email brian.watson Brian Watson Global Head, Private Equity +61 (0)3 8656 6400 mamoru_numata @futurefund.gov.au Mamoru Numata Manager, Alternative Investments +81 (0)3 3475 8879 @sonylife.co.jp

The 2010 Preqin Private Equity Buyout Review is the ultimate guide to the global buyout market, featuring detailed analysis on all aspects of the market, comprehensive fund listings, plus proﬁ les for the most prominent and active fund managers and institutional investors worldwide.

The 2010 Preqin Private Equity Key features of this publication include: Buyout Review

• Detailed analysis examining the history and development of the industry, fundraising trends, performance analysis, dealﬂ ow, fund manager universe, institutional investors, buyout service providers, fund terms and conditions and much more...

• Profi les for 500 buyout fi rms, including direct contact details, fi rm investment strategies, recent deals, fund details and more.

• Listings for over 600 investors in buyout funds, including sample investments, fund size preferences and direct contact details.

• Listings for funds raised historically, funds currently raising, performance metrics for over 1000 funds, www.preqin.com/buyoutreview league tables for biggest ﬁ rms and much more...

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