Private Equity Spotlight November/December 2006 / Volume 2 - Issue 11

Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Private Equity Intelligence, providing insights into private equity performance, investors and fund raising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence and Funds in Market.

FEATURE ARTICLE page 01 No. of Funds on US Europe ROW Fund of funds have grown from a Road small niche in the early 1990's to a key Venture 199 88 95 382 tool for accessing private equity. Fund Buyout 109 54 36 199 of funds are now the biggest single Funds of Funds 73 47 11 131 category of investor in private equity Other 114 29 29 172 funds, and are especially important investors for emerging managers and first-time funds. We examine how the Total 495 218 171 884 market has changed.

PERFORMANCE SPOTLIGHT page 04 INVESTOR SPOTLIGHT page 09 Fund of funds offer their LPs the prospect of diversification as The favourable market and difficulty of getting allocations for well as the potential for enhanced performance through top quartile funds has led to increased LP interest in superior selection of underlying funds. We examine the emerging managers and first time funds. We look at LPs investing in these funds. evidence looking at the track record of fund of funds compared to direct funds. • How do LPs perceive first-time funds? FUND RAISING page 05 • Are their commitments increasing to these types of funds. Fund-raising remains strong. Since the start of the year 533 • Who is making the most significant investments? funds have raised over $343 billion in aggregate commitments. In addition to buyout and venture funds we also examine the INVESTOR NEWS page 11 fund raising market in the Middle Eastern and North African (MENA) region, which has been enjoying a strong year. All the latest news on investors in private equity: • Zurich launches ZAAM

• Teachers Retirement System of Texas hires new CIO

SUBSCRIPTIONS • Arizona State Retirement System seeks new private equity If you would like to receive Private Equity Spotlight each month advisor for its maiden investment into the asset class. please email [email protected]. Subscribers to Performance Analyst and Investor Intelligence receive additional information not available in the free version. NEW If you would like further details please email [email protected] The 2007 Fund of Funds Review Publisher: Private Equity Intelligence Ltd More information available at: Fleet House, 8-12 New Bridge Street, London. 4V 6AL www.preqin.com/FOF Tel: +44 (0)207 822 8500

• PERFORMANCE • INVESTORS • FUND RAISING …fund of funds has grown from a small, niche investment into an Private Equity integral part of the private equity Spotlight universe

Feature Article: In 1996 just over $1bn was raised by fund of funds managers globally, with firms such as Abbott Capital Management, and Pathway Capital Management closing their first vehicles to offer investors access to a wider portfolio of private equity funds.

Early investors included foundations and endowments such as of funds managers, with an aggregate allocation to private the Dana Foundation and Regents of the University of equity of approximately $500bn. This figure includes in house California. Public pension funds were also investing, with Contra fund of funds programs from managers such as Alpinvest, which Costa County Employees' Retirement Association committing to manage fund of fund structured products for a limited captive Pathway’s first ever vehicle. client base.

Ten years on and fund of funds has grown from a small, niche In order to evaluate investment patterns amongst fund of funds investment into an integral part of the private equity universe, managers we examined the specific investment focus of over providing institutional investors of all types from around the 500 fund of funds vehicles over the last five years that are globe access to the private equity market. In 2005 an aggregate actively or recently investing. The investment preferences and $24bn was raised by over 70 fund of funds achieving a final practices of fund of funds managers serve as an excellent close, with managers providing access to a variety of different barometer for investor appetite in underlying funds. Investor regions and fund types. demand for specific fund types and regions influences the focus of fund of funds vehicles, and also the overall size of In the 2006 Limited Partner Universe, a publication examining commitments that they are able to garner. and listing the top global investors in private equity funds, fund of funds emerged as the leading source of capital for new As shown in Fig. 1, of those funds that cover a balanced portfolio private equity funds, accounting for 38% of global assets of investments the average fund make-up was dominated by allocated to private equity, nearly double that contributed by the buyout commitments – which make up 51% of the average fund next largest investor group (public pension funds). Investor of funds. 37% was dedicated to venture, leaving 12% for other Intelligence, our online LP database, identifies 257 active fund fund types such as mezzanine and special situations. The

average geographic focus shows that the US market is managers indicated that they definitely invest, or would consider collecting the most in fund commitments from fund of funds investing in a first time fund, and 10% indicated that they would managers, with 50% of the overall market. European allocation invest in a first time vehicle only if the vehicle was a spin off. is 37% on average, and Rest of World focused funds, principally Markedly higher figures than for active investors as a whole. in Asia and Australasia make up the remaining 13%. As private equity fundraising as a whole has escalated In order to satisfy the demand for investors wishing to gain dramatically year on year since 2003, fund of funds have exposure to a more specific market, there are also a number of maintained a relatively steady level of fund raising over this multi manager vehicles that invest overwhelmingly or entirely in period, with the average fund size consistently around $300mn one specific fund type or region. Of all the funds examined in our over the past 3 years. study 47% stated a specific fund type focus (where 90% or more of the fund of funds was dedicated towards a single fund type), One area of the fund of funds market that has undergone quite and 58% of funds were focusing on one specific region – the substantial growth is amongst firms introducing vehicles most popular being the US. focusing on emerging regions. With the growth of interest in markets such as Asia and Eastern Europe, there exist more Although conventional fund of funds vehicles focus opportunities for firms to offer multi manager vehicles as predominately on committing to new funds, they often have investors without expertise in these regions seek to gain small allocations to secondary funds and direct investments. exposure. It is also likely that fund managers raising traditional The secondary market has become more competitive of late, fund of funds may increase their allocation towards these newer but it is still possible for fund managers to take advantage of markets, but looking forward the biggest change in the industry some excellent opportunities from investors seeking to sell their could well be an increase in the number of fund of funds existing fund commitments. Along with direct investments, focusing exclusively on opportunities in these regions. secondaries provide further means of diversification for LPs in fund of funds, and including such investments in a portfolio can It appears that traditional fund of funds are never likely to to an extent negate the effects of the j-curve, and potentially undergo the same boom in aggregate commitments as other improve overall performance. fund types such as real estate and buyout. Relatively few new fund of funds firms are being established, and those that do find Our analysis shows that 65% of active fund of funds have some it relatively challenging to raise capital (of the 54 funds closed to allocation towards either secondary fund purchases, direct date in 2006, only 4 are first time funds). However, fund of funds investments or both. As fig. 2 shows, of the fund of funds market will remain a key source of capital for the industry, and should as a whole, 83% of investments are made into new funds, 11% be high on the target list for firms raising capital – especially consist of secondary purchases, and the remaining 6% into those firms with limited experience or track history. direct or co-investments. When making commitments 72% of

Private Equity Intelligence Has Moved The above analysis is taken from the 2007 Fund of Funds Review which examines all apects of the fund of funds We are delighted to announce that Private Equity market: performance, fundraising, fund terms, LP Intelligence has moved to new and larger offices at: investors and fund of funds as investors - looking not only at firm preferences, but also profiling individual vehicles Fleet House, 8 – 12 New Bridge Street, themselves in order to provide the most extensive and London. EC4V 6AL comprehensive review of the industry ever undertaken. Tel: +44 (0)20 7822 8500 Fax: +44 (0)87 0330 5892 More details are available on our website at We hope that we may have an opportunity to www.preqin.com/FOF. welcome you at our new offices.

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• Comprehensive profiles for over 200 fund of funds managers from around the globe including sample investments and detailed, individual investment plans for their most recent funds. • Fund by fund performance information for 280 fund of funds including IRRs and multiples • Profiles of over 200 LP investors actively investing in fund of funds including current investment intentions • Listings of all fund of funds closed since 2005, and all fund of funds currently raising / likely to be raising in the near future • Typical fund terms for fund of funds: management fees, carry, hurdle, fee rebates etc • Detailed analysis of the fund of funds market

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Performance Spotlight is your monthly update on Private Equity Performance. Each month we look at the performance for a particular type of fund and give you information on some of the top performing funds. This month: fund of funds.

PERFORMANCE OF FUND OF FUNDS

PERFORMANCE COMMENTARY

To introduce the newly released 2007 Fund of Funds Review, following the same trend, median fund of funds were nearly this month Performance Spotlight looks at the performance of always outperformed by the all private equity benchmark, with fund of funds against other private equity segments. the fund of funds IRRs being just underneath the median IRRs calculated for the whole industry. Fund of funds invest across a range of different types of funds, but most of their investments are made in either buyout Most fund of funds invest in a mix of buyout and venture or venture. Logic suggests that fund of funds performance funds, so it makes perfect sense that their performance should track the performance of some combination of buyout correlates with the all private equity benchmark. Fund of and venture funds. The chart above compares net median funds tracking the average industry benchmark is evidence IRRs for fund of funds, buyout, venture and private equity that fund of funds fulfill their role of diversification and risk taken as a whole for the vintages 1996 to 2003. reduction.

As the chart shows, fund of funds generated returns which sit A benefit frequently claimed for fund of funds is that they offer just between those of buyout and venture and follow the all improved returns by superior selection. i.e. Skewing their portfolio private equity benchmark very closely. For most vintages the of investee funds towards 1st and 2nd quartile funds. However, fund of funds benchmark is just below the all private equity given that the average fund of funds performance benchmark benchmark which can be accounted for in the additional fees paid to a fund of funds manager. tracks (and indeed lags behind) the all private equity benchmark, there is little evidence that they succeed in achieving this The venture segment has experienced a very difficult time, objective. with negative IRRs from 1998 to today. On the other hand during that period, buyout funds have generated high returns seeing their IRRs constantly improving. Although they are

BUYOUT FUNDS ON THE ROAD FINAL CLOSES BAROMETER

US Europe ROW Total No. on Road 110 54 36 200 Total Target 116 51 20 187 Value ($bn) Average Target 1,054 946 565 937 Size ($mn)

BUYOUT FUNDS ON THE ROAD

Fund Manager Target Size (mn) Location KKR Fund 2006 Kohlberg Kravis Roberts 15,000 USD US Apax Europe VII Apax Partners 8,500 EUR UK GS Capital Partners VI Goldman Sachs 10,000 USD US Gulf One Fund Gulf One 10,000 USD Middle East Thomas H Lee VI Thomas H Lee Partners 9,000 USD US Hellman & Friedman VI Hellman & Friedman 8,000 USD US Silver Lake Partners III Silver Lake Partners 8,000 USD US 3i Europe Partners V 3i 5,000 EUR UK JC Flowers II JC Flowers & Co 6,000 USD US EQT Northern Europe Fund V EQT 5,340 USD Sweden

RECENTLY CLOSED BUYOUT FUNDS Ethos Private Equity Fund V: Golder Thoma Cressey Rauner IX: Manager: Ethos Private Equity Manager: GTCR Golder Rauner Target Size (mn): 600 USD Target Size (mn): 2,250 USD Final Close (mn): 750 USD (October-2006) Final Close (mn): 2,750 USD (October-2006) Geographic Focus: South Africa Geographic Focus: US Industry Focus: Industrial, Distribution, Manufacturing Industry Focus: Technology, Healthcare, Consumer Products, Sample Investors: CDC Group, Metropolitan Asset Managers, Consumer Services, Business Services, Outsourcing New York State Common Retirement Fund, Ontario Teachers' Sample Investors: Alaska Permanent Fund Corporation, Pension Plan, Overseas Private Investment Corporation, New Jersey State Investment Council Proparco Quantum Resource Fund & Energy Partners IV: DLJ Merchant Banking Partners IV: Manager: Quantum Energy Partners Manager: Credit Suisse Customized Fund Investment Group Target Size (mn): 750 USD Target Size (mn): 2,000 USD Final Close (mn): 1,200 USD (October-2006) Final Close (mn): 2,100USD (October-2006) Geographic Focus: US Geographic Focus: US Industry Focus: Energy Industry Focus: Any Sample Investors: Capricorn Management, Park Street Capital, Sample Investors: New Jersey State Investment Council Paul Capital Partners

VENTURE FUNDS ON THE ROAD FINAL CLOSES BAROMETER

US Europe ROW Total No. on Road 196 88 395 379 Total Target 46 12 18 76 Value ($bn) Average Target 457 249 298 380 Size ($mn)

VENTURE FUNDS ON THE ROAD

Fund Manager Target Size (mn) Location Pine Brook Road Partners 1 Pine Brook Road Partners 2,000 USD US VantagePoint Venture Partners V VantagePoint Venture Partners 1,250 USD US DIB Media & Telecommunications Fund Dubai Islamic Bank 1,000 USD UAE Carlyle Venture Partners III Carlyle Group 700 USD US RFG Private Equity II Richardson Financial Group 750 CAD Canada MPM BioVentures IV MPM Capital 650 USD US FTVentures III FTVentures 600 USD US Pequot IV Pequot Capital Management 500 USD US Vertex India China Pre-IPO Equity Fund Vertex Venture Holdings 500 USD Singapore DIB General Industrial and Technology Fund Dubai Islamic Bank 500 USD UAE

RECENTLY CLOSED VENTURE FUNDS Alta BioPharma Partners IV: Ferd Private Equity II: Manager: Alta Partners Manager: Ferd Private Equity Target Size (mn): 425 USD Target Size (mn): 4250 DKK Final Close (mn): 500 USD (October-2006) Final Close (mn): 4250 DKK (October-2006) Geographic Focus: US Geographic Focus: Norway Industry Focus: Pharmaceuticals, Life Sciences, Biotechnology, Industry Focus: Retail Sample Investors: Adams Street Partners, California Public Sample Investors: AGF Private Equity, AP-Fonden 3, Goldman Employees' Retirement System (CalPERS), Montagu Newhall Sachs Private Equity Group, Orkla Group Pension Fund, Associates, TIAA-CREF Standard Life Investments, Vital Forsikring

Granite Global Ventures III: Innkap IV: Manager: Granite Global Ventures Manager: InnovationsKapital Target Size (mn): 400 USD Final Close (mn): 113 EUR (October-2006) Final Close (mn): 400 USD (October-2006) Geographic Focus: Scandinavia Geographic Focus: China Industry Focus: Healthcare, Communications, IT, Life Sciences Industry Focus: Technology, Healthcare, Communications, Sample Investors: Access Capital Partners, AP-Fonden 1, AP- Sample Investors: Employees' Retirement System of Rhode Fonden 3, BP Pension Fund, DnB NOR, Jacobs Capital Group, Island, Finama Private Equity KLP, W Capital Partners, Wega Support, Wellcome Trust

MENA FUNDS ON THE ROAD FINAL CLOSES BAROMETER

MENA No. on Road 45 Total Target 23 Value ($bn) Average Target 511 Size ($mn)

MENA FUNDS ON THE ROAD

Fund Manager Target Size (mn) Location Gulf One Fund Gulf One 10,000 USD Bahrain Abraaj Infrastructure and Growth Capital Fund Abraaj Capital 2,000 USD UAE Swicorp Joussour Company Fund Swicorp 1,000 USD Switzerland DIB Energy Fund Dubai Islamic Bank 1,000 USD UAE DIB Financial Institutions Fund Dubai Islamic Bank 1,000 USD UAE MENA Infrastructure Fund Dubai International Capital 500 USD UAE Constans Lebanon Recovery Investment Fund Argent Financial GroupThe GCC 500 USD US GCC Energy Fund Energy Fund Managers 300 USD UAE Sabre Abraaj Private Equity Fund Abraaj Capital 300 USD UAE Ryada Capital Islamic Fund Ryada Capital 250 USD Kuwait

RECENTLY CLOSED MENA FUNDS Global Opportunistic Fund II: Saraya Real Estate MENA: Manager: Global Investment House Manager: Atlas Investment Group Target Size (mn): 1,000 USD Target Size (mn): 250 USD Final Close (mn): 1,000 USD (May-2006) Final Close (mn): 250 USD (September-2006) Geographic Focus: Saudi Arabia, United Arab Emirates, Geographic Focus: Jordan, Lebanon, United Arab Emirates, Bahrain, Oman, Qatar Oman Industry Focus: Any Industry Focus: Property, Hotels and Offices, Production

Venture Capital Bank MENA Fund: Al Tawfeek Private Equity Fund: Manager: Abraaj Capital Manager: Al Tawfeek Company Target Size (mn): 250 USD Target Size (mn): 100 USD Final Close (mn): 250 USD (August-2006) Final Close (mn): 100 USD (May-2006) Geographic Focus: Middle East Geographic Focus: Middle East Industry Focus: Any Industry Focus: Telecoms, Construction, Financial Services, IT, Energy

Each Month Spotlight takes a closer look at one of the many products and services provided by Private Equity Intelligence, exploring the features offered; how it can help you in your job; who uses it and how you can get it.

This month: Funds in Market

2006 is already a record year for private equity fund- raising, and the annual total looks likely to exceed $400 billion for the first time ever. Funds in Market is your up-to- the-minute online window on the market, giving you instant access to vital information such as:

• Listings of over 850 new funds of all types currently on the road worldwide • Profiles for each fund: investment focus, managing firm, target size, closes to date, placement agent and legal advisors, contact details • Listings of 900 funds that have achieved interim or final closes over the past 12 months • Listings of over 550 new follow-on funds likely to be launched over the coming two years • Powerful search tools to help find new funds that match User benefits: subscribers use Funds in Market to help your selection criteria by type of fund, geography, focus their investment, fund-raising, and business industry focus, size etc. development activities: • Listings of sample LPs in recently closed funds • LPs use Funds in Market to identify investment opportunities, compare different fund offerings targeting similar investment strategies, and to ensure that they are establishing relationships with the most relevant GPs ahead of time

• GPs use Funds in Market to assess the competition and to see which LPs have made commitments to which new funds

• Placement Agents, Law Firms and other advisors use Funds in Market to identify new business development opportunities and to assess competition for their services

Access: Funds in Market is available by annual subscription from only £275 / $495 / €395.

In addition, many customers come to us for one-off data downloads to meet their specific detailed information needs.

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www.preqin.com/funds_in_market.aspx

Investor Spotlight is your monthly update on investors in Private Equity. See how key investors are changing their allocations and which new investors are coming into the market. Each month we analyse investors in a specific segment - this month we look at LPs that invest in first-time funds.

LP appetite for private equity is currently high, and this is Out of the 660 LPs surveyed, 45% said that they definitely invest reflected in the increased receptiveness among institutional in first-time funds, while a further 18% said they would consider investors for first-time fund managers. It is never easy raising a doing so. 7% said they will only invest with teams that have spun first fund, and the fund-raising challenge is clearly much greater out of an existing firm, and 30% said that they would not invest than it is for established firms, nevertheless the environment for with a first-time fund at all. (Incidentally, we were also able to emerging managers trying to raise their first fund has rarely analyse information from our database of over 19,000 known been better. investments that individual LPs have made, to provide a useful check on the overall figures, and confirmation that the results to To date in 2006, LPs have committed an aggregate $32 billion the survey correspond with observations of what the LPs to 124 first-time funds. In terms of amount committed this is a actually do). 60% increase from 2005 when 82 first-time funds raised an aggregate $20 billion and GPs’ confidence in the enthusiasm of There is growing demand for private equity fund of funds LPs for first-time funds is continuing well into 2006, as more new managers to raise vehicles that are dedicated to emerging firms and spin-outs hit the fund-raising trail. As of November managers. Many of these have been in conjunction with a large 2006 there were 317 first-time funds on the road, targeting an US pension fund as a sponsor. Centinela Capital Partners was aggregate $91 billion. set up to invest in emerging managers. It is looking to invest in a wide array of funds, ranging from venture through to buyouts. For the 2006 Limited Partner Universe we analysed the Centinela is currently raising its first-fund of funds vehicle and attitudes of 660 LPs worldwide to emerging managers, ranking has recently received a substantial $400 million commitment the level of interest expressed by LPs according to four distinct from California Public Employees’ Retirement System categories: LPs stating they definitely invest in first-time funds; (CalPERS). LPs stating they consider first-time funds; LPs stating they invest solely in spin-offs but not other first-time funds; and finally LPs Grove Street Advisors has raised a number of funds dedicated who state that they categorically will not invest in first-time funds. to new managers. It has strong support from a number of large It is important to note that first-time funds are here defined as institutional investors including California Public Employees’ funds raised by firms with no previous history, rather than the Retirement System (CalPERS), Oregon Public Employees’ individuals operating the funds, who will generally have Retirement Fund (OPERF), AlpInvest Partners and the Finland extensive experience. Local Government Pensions Institution.

In Q4 2006, Oak Hill Investment Management starting raising its of the world that LPs appear to be most favourably inclined to new fund of funds ‘Sacramento Private Equity Partners’. first-time funds, with 54% saying they invest with these funds, Managing Partner Rick Hayes was previously the Senior and only 27% saying they will not. There may be many reasons Investment Officer at CalPERS, and the fund has recently for this pattern, one of which is likely to be the simple fact that if received a $500 million commitment from the Retirement an LP wants to invest in private equity funds in emerging System. markets, then a relatively high proportion of the available funds will be offered by new firms anyway. Another emerging manager fund of funds that is receiving strong support from large US pension funds is Parish Capital II. There are also important differences in the attitudes of different CalPERS, Missouri State Employees' Retirement System and types of LP to first-time funds, as shown in Fig. 2. Corporate New York State Teachers' Retirement System have all opted to pension plans and foundations and family offices appear to be invest in Parish’s latest offering. the least likely LPs to invest with first time funds. Conversely, fund of funds, public pension plans and asset management Muller & Monroe’s new vehicle, ‘M2 Emerging Manager Fund’, firms appear to be the most supportive of new managers. is dedicated to funds raised by up-and-coming minority and Finally, there is also a tendency for larger LPs to be generally female-led managers. M2 has received a commitment from more interested in investing with first-time funds than are State Universities Retirement System of Illinois. smaller LPs. There are sound reasons for this: investing with first-time funds is undoubtedly higher risk than investing with Many of these LPs are looking to develop relationships with the established firms, but it can be rewarding if the LP has a good next stars of the industry who have additional ideas and new spread of funds in its portfolio and can take a long term view. methods that will enable them to outperform their peers. The data for this month’s investor article has been There appears to be a significant difference between LPs from collated from the Investor Intelligence database and the Europe, North America and the rest of the world when it comes Limited Partner Universe 2006. to whether or not they will invest with first time funds. As Fig. 1 shows, European LPs appear to be the most conservative, with For more information, please see: only 35% saying that they invest with first-time funds, and 37% www.preqin.com/II and saying they absolutely will not do so. North American LPs are www.preqin.com/lp_universe.aspx more prepared to invest with first-time funds, but it is in the rest

As a result of an asset study started last week the USD 10 billion the Texas Christian University Endowment. Ohio School Employees' Retirement System is considering increasing its allocation to alternatives. The public pension fund CalPERS has committed to its third fund of funds this year as it is thinking of investing in real estate investment trusts, private continues to focus its AIM programme on the smaller end of the equity and special situation funds, such as energy, distressed market. Feeling that there is a huge chasm between top tier and debt, mezzanine and secondary funds. A decision is likely to be second tier performers, the USD 213 billion pension fund has made in three or four months. Ohio SERS has an allocation to been on a quest to find partners that it feels can help it access private equity of 3% of which 2.7% is currently invested. It is, smaller funds that can deliver upper quartile returns. The result however, looking to increase its allocation in the asset class to of this has been the commitment of USD 500 million to around 5% by committing USD 150-250 million to new Sacramento Private Equity Partners. This fund of funds vehicle, partnerships this financial year. The pension fund recently made managed by Oak Hill Partners, is looking to invest in venture a USD 50 million commitment to Providence Equity Partners VI. funds and small middle market funds. This follows recent In addition, the pension plan is considering investing into hedge commitments to both Centinela Capital and Parish Capital II, funds, an area in which it currently has no exposure. which will offer the fund exposure to venture funds and emerging managers in the California area. Zurich Financial Services has launched Zurich Alternative Asset Management (ZAAM) to oversee its alternative asset The South Carolina Retirement System and the Arizona portfolio. ZAAM brings together an experienced team of State Retirement System are both looking to start investing in financial managers - with David Wasserman at the helm - to private equity funds according to Private Equity Insider. In South manage Zurich's alternative asset investments including single Carolina, voters approved a measure that will allow for the and multi-strategy hedge funds, buyout funds, venture capital broadening of the USD 25 billion retirement system’s investment funds, growth capital funds, mezzanine financing funds and US options. In Arizona, the State Retirement System approved a real estate funds. ZAAM also plan to make new investments in plan to begin investing in private equity funds in order to help each of the asset classes, supported by a substantial long-term diversify the pension plan’s investment portfolio. The USD 24 capital commitment from Zurich, resulting in the Group's total billion pension plan is now seeking a consultant to help with investments in these asset classes approximating $5 billion. private equity investment decisions.

AXA Private Equity is the latest investor to commit to the San Bernardino County Employees' Retirement Argantis Private Equity Fund. Fritz Graf von der Schulenburg, Association has hired Boston-based law firm Kirkpatrick & managing director at Argantis commented “We consider the Lockhart. The law firm will advise the USD 5.5 billion pension commitment made by AXA, a globally active investor, as a major system on various private equity activities, including drafting addition to our existing base of fund investors, which include agreements to invest in buyout, venture capital and mezzanine founding members Sal. Oppenheim (aka CAM Private Equity) funds. The appointment came after the retirement system’s and IKB Deutsche Industriebank, together with further decision to reduce the portion of its portfolio allocated to venture institutional investors.” The latest commitment means the capital vehicles from 20% to 15%. In contrast, this cut has led to Argantis fund has now raised EUR 151 million. an increase by 5% in the pension fund’s allocation to buyout funds from 40% to 45%. San Bernardino currently has a 6% The Teachers Retirement System of Texas has offered the target allocation to the private equity asset class and is now job of CIO to T. Britton Harris. The USD 106 billion pension fund choosing commitments for 2007, which Private Equity Insider has turned to the former president of Verizon Investment reports could include distressed-debt and energy-related funds. Management Corp to fill the role after James Hille left to manage

Each month Spotlight provides a selection of the recent news on LP More news and updates are available online for Investor Intelligence subscribers. Contact us for more information - [email protected]

Private Equity Intelligence is a financial information business focused on the private equity industry. We provide private equity and venture capital firms, fund-of-funds, investors and advisors with products and services within four main areas: Fund Performance, Investors, Fund Raising and Fund Terms.

FUND PERFORMANCE: We provide performance data for 3,000 private equity funds worldwide. For each individual fund you see the amount called, distributed, unrealised value, value multiple and net IRR. Performance is measured on a net-to-LP basis. Fund performance is available through our online database “Performance Analyst” and our publication “The 2006 Private Equity Performance Monitor”.

INVESTORS: View profiles for 3,500 global LPs complete with information on background, contact details including key people, program size, investment plans, investment preferences, current portfolio and funds previously invested with. This information is available through our online database “Investor Intelligence” and our publication “The 2006 Limited Partner Universe”.

FUND RAISING See information on over 800 private equity funds worldwide who are currently raising capital. Get details of funds likely to be raising in the near future and view funds closed over the last year including sample investors. This information is available through our online database “Funds in Market” and our annual publication “The Global Fund Raising Review”.

FUND TERMS: See valuable information on fees, costs and key terms for all types of funds, based upon an exhaustive analysis of data from over 700 funds. Ensure that negotiated terms are in line with industry best practice. This information is available through our publication “The 2006 Fund Terms Advisor”, which also gives access to our online service showing benchmark figures based upon key fund features.