PM 2012 Sample Pages.Indd

Executive Summary - Sample Pages

The 2012 Preqin Private Equity Performance Monitor Fig. 1.1: PrEQIn Index: All Strategies

1. Executive Summary 300

250 PrEQIn All Private Equity 200

Despite challenging conditions in wider In the latter part of 2011, however, the ability PrEQIn Buyout fi nancial markets, private equity has of private equity funds to deliver attractive 150 weathered the crisis well. The onset of the returns was tested yet again, with wider Index Returns 100 PrEQIn fi nancial downturn and the introduction of fi nancial markets experiencing volatility Venture Capital mark-to-market valuations in 2008 saw brought on in part by an escalation of the 50 steep losses in the short term; however, sovereign debt crisis in Europe. This has (rebased to 100 as of 31-Dec-2000) since that time the asset class as a whole led to two important questions – how have 0 has been in a state of recovery. private equity funds fared, and can such investments provide returns to investors in

The PrEQIn Index, shown in Fig. 1.1, times of economic uncertainty? 31-Dec-00 31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04 31-Dec-05 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 tracks the quarterly movements in the performance of the private equity industry Private Equity Performance: The Emerging since December 2000, illustrating the Picture Fig. 1.2: All Private Equity - J-Curve: Annual Median Net IRRs by Vintage Year downturn as well as the subsequent rebound of private equity fund returns. The immediate impact of the fi nancial crisis 0.15 can be seen in the “J-curves” of funds of The index shows that private equity returns vintages 2005-2009, shown in Fig. 1.2. 0.1 bottomed out in Q1 2009, but following this Traditionally these curves are shaped the industry showed quarter-on-quarter as a “J”, demonstrating how net IRR 0.05 Vintage 2005 increases for the rest of that year and into declines then subsequently improves as 0 Vintage 2006 2010. Moving into 2011 the year began well a fund advances through its life-cycle and 01234567 for private equity, with deal fl ow picking up value is added to investments. For these -0.05 Vintage 2007 signifi cantly in H1. Additionally, the fi rst half vintage years, however, the trajectories Vintage 2008 of the year saw private equity-backed exits were effectively reversed and the IRR -0.1 reach an all-time high, which translated into paths took on more of a “W” shape due Vintage 2009 -0.15 record distributions across the industry. In to the widespread portfolio devaluations Median Net IRRs Since Inception total, an estimated $392bn was returned to experienced at the end of 2008. investors over the course of the year. -0.2 Since Q2 2009 the recovery of the industry -0.25 is apparent, with the median net Investment Year

IRRs of private equity funds of all vintage In addition, performance also varies Fig. 1.3: Private Equity Horizon IRRs as of 31 Dec 2011 years showing consistent improvement. signifi cantly across different geographies. Signifi cantly, preliminary data reveals that Fig. 1.4 looks at the returns earned by 20% vintage 2009 funds showed higher returns investors across the three main regions: 18% and also moved back into the black a full North America, Europe and Asia. While 16% year earlier than most of the other vintage China and other Asian countries began to All Private Equity years. At the height of the global fi nancial experience a slowdown in their economies 14% Buyout crisis there was an element of optimism in H2 2011, private equity returns across 12% in the private equity industry, with the the region over the one-year period to 10% Venture Capital knowledge that investments made during December 2011 stood at -1.8%. The return a recession often go on to generate strong for funds with a primary focus on investment 8% Fund of Funds Annualized Returns returns for investors. It is early days for in Europe stood at 7.4% over the same 6% Mezzanine vintage 2009 funds, as these vehicles are period, while North America-focused funds 4% at the beginning of their fund lives and still generated a return of 10.9%. The returns have many years to go before they liquidate. are higher over the three-year period across 2% However, our preliminary data suggests that all three regions and lower over the fi ve- 0% 1 year to Dec 2011 3 years to Dec 5 years to Dec 10 years to Dec investors can be cautiously optimistic about year time frame. 2011 2011 2011 the returns made for this vintage year. Identifying Top Performing Funds How Has Private Equity Performed over the Fig. 1.4: Regional Horizon IRRs as of 31 Dec 2011 Long Term? While private equity investment can offer

long-term rewards to investors, there is a 18% Private equity is a long horizon investment signiﬁ cant spread between the performance 16% type, with investors locked into funds for 10 of individual funds, with a particularly large years or longer. Consequently, while it can gulf between the returns generated by the 14% be interesting to look at short- and medium- best and worst performing funds. 12% North term performance, it is most important to America 10% assess the returns of funds over a longer Despite the fact that past performance is not period of time. a guarantee of future success, there is clear 8% Europe evidence to suggest that managers of top- 6% Horizon IRR Asia Across all private equity fund types for the tier funds are more likely than their peers 4% 10 years through 31st December 2011, the to continue to produce top performing funds annualized returns stand at 11.9%. The in the future. While 15% of managers of 2% returns generated by the different private bottom quartile funds subsequently improve 0% 1 year to Dec 2011 3 years to Dec 2011 5 years to Dec 2011 equity strategies vary signiﬁ cantly, with and manage top quartile successor funds, -2% buyout funds reporting an annualized IRR many more do not. Therefore, it is important -4% of 19.0%, mezzanine 10.8%, fund of funds to recognize that despite the importance of 5.0% and venture capital 0.3%. a fund manager’s track record, each new

opportunity should be judged on its own ranking, with the exception of more recent Fig. 1.5: All Private Equity - Relationship between Predecessor and Successor Fund Quartiles individual merits. vintages that do not yet show meaningful performance. These rankings are based 100% Fig. 1.5 shows that 36% of fund managers upon the peer group of each vehicle, taking 14% 90% 18% 20% with a top quartile fund go on to manage into account vintage, strategy and region 36% 80% Bottom Quartile a top quartile successor fund, and 66% focus. Both the multiple and IRR are used 20% Successor Fund outperform the median benchmark. as key indicators and equal emphasis is 70% 27% 31% Conversely, the graph also shows that 36% placed on both metrics. 60% Third Quartile of bottom quartile managers remain in that Successor Fund 50% 30% 29% quartile with their next offering, while 65% Fig. 1.6 lists the top ﬁ ve consistent Second Quartile underperform the benchmark. performing buyout fund managers. A fund 40% 29% Successor Fund 29% Proportion of Funds manager’s average score is determined 30% Top Quartile As institutional investors look to construct by awarding each top quartile fund a score 20% Successor Fund 20% 36% their private equity portfolios and commit of one, each second quartile fund a score 26% 10% 20% to funds that meet their requirements, of two, and so on. The list shows that the 15% the ability to identify, select and evaluate top three managers - Altor, Lovell Minnick 0% Top Quartile Second Quartile Third Quartile Bottom Quartile these top performing funds is of paramount Partners and Southern Cross Group - Predecessor Fund Predecessor Fund Predecessor Fund Predecessor Fund concern. By providing access to transparent have all of their funds ranked in the top and accurate fund-by-fund returns data for quartile and therefore have achieved the over 6,000 vehicles, the 2012 Preqin Private best possible score of 1.00. Israeli-based Fig. 1.6: Top Five Consistent Performing Buyout Fund Managers Equity Performance Monitor can assist in FIMI and Netherlands-based Waterland this challenging task. follow next, each with a score of 1.25. For Overall Number Number of Number of Average extended lists of consistent performers, Firm Location of Funds with Funds in Top Funds in Second Quartile Consistent Performers broken out by fund strategy and vintage Quartile Ranking Quartile Quartile Rank year, please see the Consistent Performers Altor Sweden 3 3 0 1.00 The ability to ﬁ nd consistent performing chapter that follows. Lovell Minnick US 3 3 0 1.00 managers is no easy task, particularly in an Partners industry known for its lack of transparency. The 2012 Preqin Private Equity Performance Southern Argentina 3 3 0 1.00 Despite improvements made in the level of Monitor Cross Group disclosure across the private equity space, FIMI Israel 4 3 1 1.25 it remains a challenge for LPs and GPs Now in its ninth edition, the new Performance Waterland Netherlands 4 3 1 1.25 to access the reliable, accurate and fully Monitor contains key metrics for more than transparent data necessary to effectively 6,000 private equity funds, which in terms of benchmark funds. capitalization equates to 70% of all industry funds raised historically. To help with this, all funds that Preqin holds performance data for are assigned a quartile

For the new edition we are also pleased to introduce a number of new areas of analysis, covering the PrEQIn Private Equity Quarterly Index, regional performance of private equity funds, 10-year horizon IRRs, horizon IRRs for North America, Europe and Asia, as well as the returns generated by growth funds. In addition, the 2012 Monitor includes analysis of performance by fund type, size and region, the risk/ return proﬁ les of the different strategies, performance benchmarks across different fund types, regions and vintage years, as well as chapters devoted to listed private equity performance, dry powder and assets under managements, and more.

Preqin sources its performance information directly from both GPs and LPs, ensuring that the full spectrum of private equity fund performance is observed - be it positive or negative. By using multiple sources for each fund, we can ensure that our data remains as accurate as possible. We hope you ﬁ nd this year’s edition of the Performance Monitor a useful and effective tool, and as ever we welcome any feedback or comments that you may have.

Contents 1. Executive Summary 5 13. Performance of Listed Private Equity 75 Overview of listed private equity; share prices; discounts and 2. Methodology 9 premiums to net asset value; performance listings. 3. Consistent Performing Fund Managers 13 14. Market Benchmarks 77 All Private Equity: All Regions; US; Europe Buyout managers, venture managers and other fund managers that Buyout: All Regions; US; Europe; by fund size have consistently produced top quartile returns. Fund of Funds Mezzanine 4 Top Performing Funds 19 Infrastructure Distressed Private Equity Rankings of top performing funds by fund type and vintage year. Growth Real Estate 5. PrEQIn - Private Equity Quarterly Index 41 Venture Capital: All Regions; US; Europe; Early Stage Secondaries PrEQIn Quarterly Private Equity Index: All Strategies; Buyout by fund size; Venture Capital by investment stage; fund quartile indices. 15. Data Coverage 95

6. Effects of Past Performance on Private Equity Fundraising 45 Fund universe; Preqin performance coverage by type and region.

Effect of predecessor fund performance on time spent on road by 16. How to Interpret Private Equity Returns 99 funds closed in 2010/11; effect of predecessor fund performance on subsequent fundraise vs. initial fundraising target; effect of Explanation of ratios and data used in the graphs. predecessor fund performance on time spent on the road for funds currently in market. 17. Overall Performance of Private Equity 101

7. Performance Data in a Global Context 47 Called-up capital, distributed capital and remaining value; median North America-focused funds; Europe-focused funds; Asia-focused net IRRs and quartile boundaries; money-weighted and pooled IRRs; funds; Africa-, Latin America and Caribbean-, Australasia- and Middle IRRs by geographic focus; fund IRR deviations from benchmark; cash East and Israel-focused funds. ﬂ ows; J-curves; relationship between quartile ranking and manager experience; relationship between predecessor and successor fund 8. How Much Have Investors Gained Historically? 53 quartiles.

Net LP gain by vintage year; horizon returns by asset class of public 18. Buyout 105 pension funds; one-year returns to December 2011; private equity vs. total investment portfolio. Called-up capital, distributed capital and remaining value; median 9. Private Equity Horizon IRRs 57 net IRRs and quartile boundaries; money-weighted and pooled IRRs; IRRs by fund size; fund IRR deviations from benchmark; cash ﬂ ows; One-, three-, ﬁ ve- and ten-year horizon IRRs as of 31 December J-curves; relationship between predecessor and successor fund 2011; private equity horizon IRRs vs. public indices; performance of quartiles; fund performance listings. private equity industry vs. MCSI World index. 10. Change in Fund Valuations 61 19. Distressed Private Equity 141 Annual change in NAV; quarterly change in NAV for all private equity Called-up capital, distributed capital and remaining value; median and buyout by fund size; quarterly change in NAV by fund type. net IRRs and quartile boundaries; IRR dispersion; distributions to paid-in capital ratios – median and quartile boundaries; residual 11. Dry Powder and Assets under Management 65 value to paid-in capital ratios – median and quartile boundaries; fund Private equity assets under management; dry powder by region performance listings. focus; buyout dry powder by fund size; venture capital dry powder by investment stage. 12. Risk and Investment Selection 69 Risk and return by fund strategy; IRR deviation from benchmark; risk and return for buyout, distressed private equity, real estate, venture capital, fund of funds and secondaries.

20. Fund of Funds 149 27. Other Fund Types Performance Listing 271

Called-up capital, distributed capital and remaining value; median net Balanced; co-investment; direct secondaries; natural resources; IRRs and quartile boundaries; fund IRR deviations from benchmark; timber cash ﬂ ows; J-curves; relationship between predecessor and Index 281 successor fund quartiles; fund performance listings. 28. Firm Index 21. Growth 169 Figure Index Called-up capital, distributed capital and remaining value; 29. Glossary 307 median net IRRs and quartile boundaries; median multiples and quartile boundaries; IRR dispersion; money-weighted IRRs; fund 30. Performance Analyst Online 313 performance listings.

22. Infrastructure 177

Called-up capital, distributed capital and remaining value; minimum, median and maximum IRRs; median multiples and quartile boundaries; fund performance listings.

23. Mezzanine 183 Called-up capital, distributed capital and remaining value; median net IRRs and quartile boundaries; fund IRR deviations from benchmark; cash fl ows; IRR dispersion; fund performance listings. 24. Real Estate 191 Called-up capital, distributed capital and remaining value; median net IRRs and quartile boundaries; IRR dispersion; fund IRR deviations from benchmark; value added vs. opportunistic multiples; cash fl ows; relationship between quartile ranking and manager experience; relationship between predecessor and successor fund quartiles; fund performance listings. 25. Secondaries 219 Called-up capital, distributed capital and remaining value; median net IRRs and quartile boundaries; money-weighted IRRs; cash fl ows; IRR dispersion; fund performance listings. 26. Venture Capital 225

Called-up capital, distributed capital and remaining value; median net IRRs and quartile boundaries; money-weighted and pooled IRRs; early stage vs. other venture IRRs; healthcare vs. IT IRRs; fund IRR deviations from benchmark; cash ﬂ ows; J-curves; relationship between quartile ranking and manager experience; relationship between predecessor and successor fund quartiles; fund performance listings.

2. Methodology

The content of the 2012 Preqin Private metrics used in the Monitor show the net metrics defi nitions, in order to represent The date for which the performance fi gures Equity Performance Monitor is focused position to the investor with all returns their funds in the most accurate way in line are valid is provided in the fund listings and on the performance of private equity information based on the position of the with our methodologies. is an important consideration for the reader funds available to institutional investors. institutional investor before tax but after the in order to correctly interpret the data. As such, direct investments in unlisted GP’s management and carried interest fees Our wide range of data sources and our The Monitor shows the most up-to-date corporate securities are not included in this have been deducted. extensive research program allows us to information available at the time of going to publication. verify data for individual funds, ensuring press in July 2012. The majority of the data The performance data we hold is gathered a high level of confi dence in the accuracy presented in this book is as of the fourth The fund-level performance data and all from many different sources and using a of the data we hold. At Preqin we greatly quarter of 2011 or the fi rst quarter of 2012. related analysis contained in the Monitor variety of means. The majority of our data appreciate GPs that have contributed is collated from our online database – is obtained through Freedom of Information data on their funds and therefore we are The instances when the data is older than Performance Analyst – the world’s most Act (FOIA) requests to institutional investors. happy to offer those GPs free access to this will mostly relate to funds with more extensive and transparent database of These include CalPERS, Washington State our Performance Benchmark module of mature vintages that have distributed most private equity fund performance. At its Investment Board, Florida State Board of Performance Analyst as well as offering of their capital back to the investors and launch in 2003, Performance Analyst Administration and many others in the US a discount on access to the full version. therefore the data will not change too much. provided data for 1,086 individual funds. and the UK. To date there are over 300 Should you wish to receive further details Performance Analyst now holds fund-level public pension funds and endowments about contributing data please contact us In order to make the most appropriate fund- performance data for 6,096 funds, which contributing data. or visit our website at www.preqin.com/pa level comparisons, percentages have been represents an 8% increase from last year’s for further details. used to represent all performance metrics. total. In terms of capital raised, Performance While limited partners are our initial source The chart overleaf gives an overview of Analyst contains data for over 70% of all of performance data, our other highly At Preqin we realize the value of GP the performance metrics displayed in the funds raised historically. Subscribers to signifi cant and very important source of feedback on each fund and prior to the fund listings sections of the Monitor. ‘Called this online service can view all of the data performance fi gures is from GPs. Our GP release of the Monitor we invited GPs %’ will refer to the ratio of called capital at present in the Monitor and gain access to contributors now total over 1,300 and have to comment on their individual fund the date provided against the total amount regularly updated fund-level performance wide-ranging investment strategies and performance to ensure that the data we committed to the fund, whereas ‘distributed data. Further information can be found at geographic focuses. As many of our online include in this publication is as accurate as (%) DPI’ refl ects the amount received by www.preqin.com/pa. subscribers are prospective investors who possible. This took place during May and the investor as a percentage of the paid-in can view performance data on a fund level, June 2012 and we still welcome any further capital to date. The ‘Rem. Value (%) RVPI’ The fund-level performance data we show GPs recognize the importance of providing feedback, which can be incorporated onto is a measure of the remaining value of the is representative of the investor experience the most accurate and up-to-date data, the database when it is received. portfolio expressed as a percentage of paid- of each fund. Therefore, all performance consistent with our net-to-LP performance in capital to date. The multiple is the sum

of the distribution and the remaining value The 2012 Preqin Private Equity expressed as a multiplying factor of the Performance Monitor aims to conduct total capital called to date. The vintage year analysis on and provide insight into all is the year in which the fi rst investment was private equity types from many different made from the perspective of the investor geographic regions. We use the term (i.e. the year of the fi rst capital call to LPs). ‘private equity’ to denote a variety of fund types such as buyout, venture, mezzanine, At Preqin, we generate benchmarks for distressed debt, special situations, all the main performance metrics – called, turnaround, real estate, infrastructure, DPI, RVPI, multiple and IRR – using natural resources, balanced, secondary the median, average, pooled or money- funds and fund of funds. Additional notes weighted value. However, owing to lack of regarding our methodologies can be found space, the only benchmark displayed in the on our website www.preqin.com and should Monitor is the median IRR. All benchmark readers have any further questions relating data generated by Preqin is available to to either the methodology or performance subscribers to Performance Analyst, which data they are welcome to contact us. also gives the user the option of creating custom benchmarks from their own user- Preqin Ltd. defi ned fund universe. All benchmarks are July 2012 transparent in terms of their constituent funds, which are accessible to the user.

Quartile rankings are also assigned to individual funds. Each fund universe constitutes funds with similar fund types, geographies and vintage years and the quartiles are assigned using a combination of the IRR and multiple rankings of each constituent fund, with an equal weight placed on each of these metrics. In cases where the sample size is small, the funds are assigned a quartile ranking generated against the private equity industry as a whole.

Distributions received to date as a percentage of called capital. e.g. an 6. Benchmark IRR: LP with a $1mn commitment has received $292,500 – this is 32.5% of The median IRR for the relevant peer group. We the $900,000 called. have speciﬁ c benchmarks for buyout, venture, early stage, fund of funds, real estate and 1. Called (%) mezzanine funds. Funds of a different type are benchmarked against “All Private Equity” . e.g. in Percentage of LP’s commitment this case vintage 2005 US buyout funds. contributed to date. e.g. an LP with a $1mn commitment will have 8. Date Reported: paid in $900,000 to date. 10. Fund Speciﬁ cs: This is the ‘as at date’ for the valuations and performance. e.g. in this case the Fund size is the total commitment received by the fund – data is valid as of 31 Dec 2011. vintage and region focus are used for benchmarking. e.g. In this case, the benchmark is 2005 US buyout funds

Fund Size Region Called Distributed Rem. Value Multiple Net IRR Benchmark Firm name Fund Vintage Quartile Date Reported (Mn) Focus (%) (%) DPI (%) RVPI (X) (%) IRR (%)

Mega Capital Partners Mega Fund I 2005 100 USD US 90.0 32.5 105.1 1.38 8.0 8.0 2 31-Dec-11 Mega Fund II 2006 50 USD US 60.0 29.7 52.7 0.82 -6.5 4.0 4 31-Dec-11 Example Capital Partners Example Fund I 2002 500 USD Europe 100.0 219.0 36.3 2.55 46.4 28.1 1 31-Dec-11 Example Fund II 2005 700 USD Europe 90.0 13.9 112.4 1.26 10.3 10.3 3 31-Dec-11

3. Value 7. Quartile Ranking: 9. Firm Name/Fund: Valuation of unrealized investments This shows which quartile of the The name of the fund manager and as percentage of called capital. e.g. relevant peer group the fund falls into. their corresponding fund. an LP with a $1mn commitment has We put equal weight on the IRR and unrealized investment valued at value multiple. E.g. this fund is a third $945,900 – which is 112.4% of the quartile fund. $900,000 called. 5. Net IRR:

4. Multiple: The net IRR earned by the LP to date after fees and carry. E.g. in this case Distributions plus unrealized value. 10.3%, counting both distributions and E.g. in this case 1.26 – which is unrealized value. (13.9%+112.4%) / 100

Fig. 4.9: Top 10 Best Performing Distressed Private Equity Funds (Vintage 2001-2005)

Fund Size Region Called Distributed Value Multiple Net IRR Date Rank Fund Firm Vintage Type (mn) Focus (%) (%) DPI (%) RVPI (X) (%) Reported 1 WLR Recovery Fund II WL Ross & Co 2002 400 USD Distressed Debt US 100.0 221.7 15.6 2.37 78.9 31-Dec-11 2 Strukturfonden Inter IKEA Investments 2001 10 EUR Turnaround Europe 100.0 400.0 0.0 4.00 70.0 31-Mar-12 3 Resilience Fund I Resilience Capital Partners 2002 26 USD Special Situation US 100.0 281.0 13.1 2.94 62.9 31-Mar-12 4 KPS Special Situations Fund II KPS Capital Partners 2002 404 USD Special Situation US 114.2 254.0 63.9 3.18 56.5 31-Mar-12 5 Clearwater Capital Partners I Clearwater Capital Partners 2001 22 USD Special Situation Asia 100.0 818.9 168.8 9.88 49.4 31-Mar-12 6 OCM Opportunities Fund IV-B Oaktree Capital Management 2002 1,505 USD Distressed Debt US 100.0 175.3 0.0 1.75 47.8 31-Mar-12 7 Sun Capital Partners III Sun Capital Partners 2003 500 USD Turnaround US 90.1 173.2 59.5 2.33 46.3 31-Mar-12 8 Helmsman Capital Fund Helmsman Funds Management 2003 45 AUD Turnaround Australasia 77.8 213.7 0.9 2.15 37.0 31-Mar-12 9 Sun Capital Partners II Sun Capital Partners 2001 200 USD Turnaround US 96.7 195.1 24.2 2.19 33.6 31-Mar-12 10 Sapphire Special Opportunities Fund Wayzata Investment Partners 2003 55 USD Distressed Debt US 100.0 138.3 0.0 1.38 33.2 31-Mar-12

Fig. 4.10: Top 10 Best Performing Distressed Private Equity Funds (Vintage 2006-2009)

Fund Size Region Called Distributed Value Multiple Net IRR Date Rank Fund Firm Vintage Type (mn) Focus (%) (%) DPI (%) RVPI (X) (%) Reported 1 Clearlake Capital Partners II Clearlake Capital Group 2009 410 USD Special Situation US 62.2 37.0 107.4 1.44 48.4 31-Dec-11 2 Pegasus Partners IV Pegasus Capital Advisors 2007 750 USD Special Situation US 92.8 39.2 195.1 2.34 37.3 30-Jun-11 American Securities Opportunities 3 American Securities 2007 300 USD Distressed Debt US 196.0 105.7 29.0 1.35 34.5 30-Sep-11 Fund 4 Fortress Credit Opportunities Fund Fortress Investment Group 2008 3,000 USD Distressed Debt US 220.3 87.9 34.6 1.23 28.4 31-Dec-11 5 Aurora Resurgence Fund Aurora Capital Group 2007 635 USD Distressed Debt US 75.8 59.9 83.6 1.44 28.3 31-Dec-11 6 MatlinPatterson II Preferred Partners MatlinPatterson Global Advisers 2009 165 USD Distressed Debt US 100.0 83.8 98.8 1.83 27.6 31-Mar-12 7 OHA Strategic Credit Fund Oak Hill Advisors 2008 1,126 USD Distressed Debt US 66.0 0.0 171.3 1.71 25.1 31-Mar-12 8 Resilience Fund II Resilience Capital Partners 2006 55 USD Special Situation US 97.1 67.2 169.9 2.37 23.6 31-Mar-12 9 KPS Special Situations Fund III KPS Capital Partners 2007 1,204 USD Special Situation US 64.6 57.6 89.6 1.47 21.0 31-Mar-12 10 Centerbridge Capital Partners I Centerbridge Capital Partners 2006 3,200 USD Distressed Debt US 148.4 79.2 66.7 1.46 20.5 31-Dec-11

Consistent Performing Real Estate Fund Managers*

Overall Number of Funds Number of Funds in Top Number of Funds in Second Average Quartile Firm Location with Quartile Ranking Quartile Quartile Rank Carmel Partners US 3 3 0 1.00 JBG Companies US 5 5 0 1.00 Brookﬁ eld Asset Management Canada 8 6 2 1.25 Calare Properties US 3 2 1 1.33 Embarcadero Capital Partners US 3 2 1 1.33 Gaw Capital Hong Kong 3 2 1 1.33 John Buck Company US 3 2 1 1.33 Paciﬁ c Star Financial Singapore 3 2 1 1.33 Parmenter Realty Partners US 3 2 1 1.33 DRA Advisors US 7 3 4 1.57 Hines US 7 5 1 1.57 Forum Partners US 5 3 1 1.60 CapMan Real Estate Finland 3 1 2 1.67 Rockspring Capital US 6 3 2 1.67 Stoltz Real Estate Partners US 3 2 0 1.67 Covenant Capital Group US 7 3 3 1.71 Harbert Management Corporation US 7 4 1 1.71 Hearthstone US 7 5 0 1.71 Aedes Real Estate Italy 4 3 0 1.75 Arsenal Real Estate Partners US 4 2 1 1.75 RockBridge Capital US 4 1 3 1.75 USAA Real Estate Company US 13 7 3 1.77 BPG Properties US 9 5 2 1.78 Angelo, Gordon & Co US 12 5 4 1.83 Lone Star Funds US 8 3 4 1.88 Tricon Capital Group Canada 10 6 1 1.90

*Based on a universe of 114 firms and 627 funds fulfilling the selection criteria

5. PrEQIn - Private Equity Quarterly Fig. 5.1: PrEQIn Index: All Strategies

400 Index PrEQIn All Private 350 Equity PrEQIn Buyout 300

250 PrEQIn Venture Capital The ability to monitor and assess the These returns are then combined to form 200 performance of an investment portfolio an index with the starting value of 100 as of PrEQIn Real Estate

Index Returns 150 is an important and challenging task for 31st December 2000. PrEQIn Fund of an investor. Many different metrics are 100 Funds required in order to assess and maintain In addition to an overall private equity rebased to 100 as of 31-Dec-2000) 50 PrEQIn Distressed an effective private equity program. The index, we have also calculated indices for Private Equity PrEQIn Private Equity Quarterly Index is the main private equity fund strategies, 0 the fi rst quarterly index covering the whole as well as buyout funds by size, venture global private equity industry and allows capital funds by investment stage, and 30-Jun-01 30-Jun-02 30-Jun-03 30-Jun-04 30-Jun-05 30-Jun-06 30-Jun-07 30-Jun-08 30-Jun-09 30-Jun-10 30-Jun-11 31-Dec-11 31-Dec-00 31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04 31-Dec-05 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09 investors to compare the returns of their private equity funds overall by performance 31-Dec-10 private equity portfolios to those from other quartile ranking. These different indices asset classes. allow investors to analyze and compare different parts of their private equity Fig. 5.2: PrEQIn Private Equity Index: All Private Equity, Buyout and Venture Capital vs. S&P The PrEQIn Private Equity Quarterly Index portfolios. At this time, the fi gures for Q2 500 is calculated on a quarterly basis using 2011 are now fi nalized; however, Q3 2011 120 data from Preqin’s Performance Analyst and Q4 2011 fi gures are preliminary and product. The models use quarterly cash will be subject to change. 100 fl ow transactions and NAVs reported PrEQIn All Private for over 4,100 individual private equity PrEQIn Private Equity Quarterly Index: All 80 Equity partnerships - these funds have raised over Strategies PrEQIn Buyout $2.8tn in aggregate capital. 60 Fig. 5.1 shows the PrEQIn All Private Equity, PrEQIn Venture Index Returns The Index is created using the following Buyout, Venture Capital, Real Estate, 40 Capital calculation: Fund of Funds and Distressed Private S&P 500 20 Equity Indices, together with the S&P 500, rebased to 100 as of 31-Dec-2007) Percentage change in quarter = [(NAV rebased to 100 as of 31st December 2000. at end of quarter + distributions during An examination of these indices gives an 0 quarter)/(NAV at start of quarter + call-ups insight into the performance of the main during quarter)] – 1. private equity fund types in comparison to 30-Jun-11 30-Jun-10 30-Jun-09 30-Jun-08 30-Sep-11 30-Sep-10 30-Sep-09 30-Sep-08 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08 each other and to the industry as a 31-Dec-07

Fund Type: Venture Capital Geographic Focus: North America Benchmark Type: Median As at: 31 December 2011

Median Fund Multiple Quartiles (X) IRR Quartiles (%) IRR Max/Min (%) Vintage No. of Funds Called (%) Dist (%) DPI Value (%) RVPI Q1 Median Q3 Q1 Median Q3 Max Min 2011 18 12.5 0.0 88.2 0.96 0.88 0.75 n/m n/m n/m n/m n/m 2010 22 33.2 0.0 99.1 1.18 1.02 0.92 n/m n/m n/m n/m n/m 2009 18 46.8 1.0 99.8 1.14 1.06 0.89 n/m n/m n/m n/m n/m 2008 28 58.5 6.1 92.8 1.36 1.11 0.93 15.6 5.8 -8.9 36.6 -33.1 2007 51 73.6 12.1 96.5 1.63 1.16 0.93 18.3 5.1 -5.7 84.2 -69.2 2006 51 87.0 16.9 81.5 1.31 1.01 0.83 7.9 -0.7 -7.3 27.5 -30.2 2005 26 90.4 19.3 73.2 1.14 1.01 0.77 4.0 0.6 -7.6 21.0 -32.9 2004 27 97.3 33.7 69.3 1.44 1.06 0.90 8.0 1.1 -2.1 76.4 -9.0 2003 17 97.9 67.0 60.0 1.35 1.18 0.94 12.1 5.5 0.2 14.1 -4.4 2002 20 100.0 38.6 34.7 1.20 0.88 0.56 3.6 -3.9 -11.2 21.1 -47.2 2001 44 100.0 59.8 34.1 1.43 1.09 0.79 7.2 1.7 -4.6 30.0 -22.8 2000 72 100.0 71.2 28.8 1.25 0.92 0.68 4.3 -1.3 -7.1 50.2 -40.0 1999 42 100.0 56.3 8.9 1.30 0.67 0.39 5.2 -6.1 -14.5 19.4 -44.2 1998 29 100.0 122.2 0.9 1.75 1.32 0.63 19.7 9.9 -7.7 514.3 -34.4 1997 34 100.0 165.8 0.0 3.62 1.79 1.16 75.9 23.3 6.2 267.8 -12.5 1996 21 100.0 186.0 0.0 4.26 1.94 1.43 68.2 24.5 3.5 136.0 -33.3 1995 23 100.0 239.6 0.0 5.26 2.27 1.18 95.4 27.3 6.4 447.4 -19.9 1994 22 100.0 218.4 0.0 5.51 2.22 0.64 47.9 25.5 -6.1 73.2 -22.0 1993 27 100.0 259.9 0.0 3.56 2.60 1.04 42.7 31.7 2.0 105.7 -14.8 1992 20 100.0 221.2 0.0 4.48 2.21 1.18 38.8 23.9 11.4 110.4 -20.1 1991 11 100.0 249.9 0.0 7.47 2.50 1.86 47.7 28.2 12.7 346.4 10.6 1990 19 100.0 221.0 0.0 3.46 2.22 1.38 27.4 20.5 6.3 74.4 -35.9 1989 40 100.0 230.8 0.0 3.26 2.31 1.59 33.5 14.8 6.9 198.5 -42.1 1988 23 100.0 261.0 0.0 3.40 2.61 1.63 34.0 23.5 10.3 54.5 1.2 1987 21 100.0 222.0 0.0 3.93 2.22 1.43 22.1 14.9 5.1 28.0 -12.4 1986 19 100.0 174.8 0.0 2.35 1.75 1.32 15.0 8.9 4.3 34.4 -0.7 1985 21 100.0 214.6 0.0 3.39 2.15 1.51 17.9 13.5 9.6 40.7 4.0 1984 16 100.0 191.3 0.0 2.34 1.92 1.54 13.7 11.4 7.2 45.7 5.7 1983 12 100.0 168.3 0.0 3.77 1.69 1.44 15.3 9.9 4.5 51.6 -3.5 1982 10 100.0 175.3 0.0 2.00 1.76 1.30 10.8 9.2 7.0 64.3 -1.6 1981 8 100.0 152.3 0.0 n/m 1.52 n/m n/m 11.3 n/m 67.4 0.5 1980 6 100.0 228.2 0.0 n/m 2.29 n/m n/m 14.0 n/m 50.6 -4.3

Fund Size Region Called Distributed Rem. Value Multiple Net IRR Benchmark Date Firm Name Fund Vintage Quartile (mn) Focus (%) (%) DPI (%) RVPI (X) (%) IRR (%) Reported Camden Strategic Partners III 2004 141 USD US 100.0 61.0 125.8 1.87 13.1 7.2 1 31-Mar-12 Camden Strategic Partners IV 2008 118 USD US 65.5 5.5 109.0 1.14 6.8 9.1 2 31-Mar-12 Capital Invest Capital Morocco Fund 2002 25 USD Africa 100.0 110.0 40.0 1.50 n/a 11.7 2 30-Jun-10 CapMan Capital Management CapMan Russia Fund 2007 118 EUR Europe 67.8 0.0 83.2 0.83 n/a 11.2 4 31-Mar-12 Carlyle Group Carlyle Asia Growth Partners III 2005 668 USD Asia 89.9 3.1 68.9 0.72 -7.2 19.0 4 31-Dec-11 Carlyle Asia Growth Partners IV 2009 1,040 USD Asia 39.8 0.1 94.7 0.95 -3.6 3.5 4 31-Dec-11 Catalyst Investors Catalyst Investors 2000 110 USD US 106.0 190.0 10.0 2.00 17.2 13.2 2 31-Mar-12 Catalyst Investors II 2005 170 USD US 111.0 33.0 141.0 1.74 19.0 19.0 2 31-Mar-12 Catalyst Investors III 2012 250 USD* US 7.0 0.0 0.0 0.00 n/m n/m n/m 31-Mar-12 Catterton Partners Catterton Growth Partners I 2008 300 USD US 71.5 6.6 99.8 1.06 n/m 9.1 3 31-Dec-11 Cauris Management Cauris Investissement 1996 8 EUR Africa 100.0 157.3 n/a n/a 7.0 16.1 3 31-Dec-11 Cauris Croissance 2006 15 EUR Africa 100.0 42.5 81.1 1.24 13.3 11.0 2 31-Dec-11 CDH China Management CDH China Fund 2002 102 USD Asia 95.4 353.0 0.0 3.53 93.0 11.7 1 31-Mar-12 Company CDH China Growth Capital Fund II 2005 315 USD Asia 112.0 167.0 333.0 5.00 42.0 19.0 1 31-Mar-12 CDH China Fund III 2007 1,630 USD Asia 96.0 17.0 117.0 1.34 10.0 11.2 2 31-Mar-12 Tianjin CDH Fund I 2008 3,190 CNY Asia 95.0 1.0 130.0 1.31 11.3 9.0 2 31-Mar-12 CDH China Fund IV 2010 1,458 USD Asia 57.3 0.0 95.0 0.95 n/m n/m n/m 31-Mar-12 Tianjin CDH Fund II 2011 8,000 CNY* Asia 50.0 0.0 96.0 0.96 n/m n/m n/m 31-Mar-12 China International Capital CICC Growth Capital Fund I 2011 500 USD Asia 22.0 0.0 133.0 1.33 n/m n/m n/m 31-Mar-12 Corporation Private Equity CICC Jiatai Industry Integration Fund 2011 5,000 CNY* Asia 61.0 0.0 100.0 1.00 n/m n/m n/m 31-Mar-12 ChrysCapital ChrysCapital V 2007 970 USD Asia 66.9 37.5 46.9 0.84 -7.6 11.2 4 31-Dec-11 Diversiﬁ ed Citi Venture Capital International Citigroup International Growth Partnership II 2007 4,300 USD Multi- 64.3 30.9 79.0 1.10 4.0 11.2 3 30-Jun-11 Regional Climate Change Capital Climate Change Capital Private Equity Fund 2007 200 EUR Europe 72.0 0.0 80.0 0.80 n/a 11.2 4 31-Mar-12 Crimson Capital China China Privatization Fund I 2006 Asia 69.3 0.0 102.8 1.03 0.6 11.0 4 31-Dec-11 Development Partners African Development Partners I 2008 270 EUR Africa 64.1 1.3 116.7 1.18 5.9 9.0 2 31-Dec-11 International Development Principles Group Development Partners Fund 2005 81 USD Asia 98.0 208.8 0.0 2.09 105.5 19.0 1 31-Mar-12 dfe Partners Balkan Financial Sector Equity Fund 2005 48 EUR Europe 91.0 6.3 89.0 0.95 n/a 19.0 4 31-Mar-12 DGF Investimentos DGF CAPITAL 2 (FIPAC) 2007 102 BRL Americas 88.4 74.4 106.5 1.81 30.2 11.2 1 31-Mar-12 Diana Capital Diana Capital I 2002 70 EUR Europe 100.0 92.2 30.0 1.22 3.1 11.7 3 31-Mar-12 East Capital East Capital Amber Fund 2001 85 SEK Europe 100.0 138.0 0.0 1.38 14.0 12.0 3 31-Mar-11 EDG Partners EDG Partners II 2010 178 USD US 21.7 4.1 82.6 0.87 n/m n/m n/m 30-Sep-11 Edgewater Funds Edgewater Growth Capital Partners 2002 236 USD US 99.0 67.3 68.6 1.36 8.2 11.7 3 30-Sep-11 Edgewater Growth Capital Partners II 2005 472 USD US 93.0 32.3 84.4 1.17 5.1 19.0 4 30-Sep-11 Edgewater Growth Capital Partners III 2011 714 USD US 19.0 0.0 100.0 1.00 n/m n/m n/m 30-Sep-11 Edmond de Rothschild Winch Capital 2006 165 EUR Europe 97.0 90.5 45.0 1.36 8.4 11.0 2 31-Mar-12 Investment Partners EDR PE China Fund 2008 69 EUR Asia 44.0 40.0 83.5 1.24 14.5 9.0 1 31-Mar-12 Winch Capital II 2009 250 EUR Europe 58.0 0.0 97.0 0.97 -2.8 3.5 3 31-Mar-12 Cabestan Capital 2011 112 EUR Europe 7.0 0.0 74.0 0.74 n/m n/m n/m 31-Mar-12 Enfoca Inversiones Enfoca Andean Investments 2007 110 USD Americas 100.0 0.0 n/a n/a 16.2 11.2 2 31-Mar-12 Enfoca Descubridor 1 2007 693 PEN Americas 84.0 0.0 n/a n/a 20.0 11.2 2 31-Mar-12

Fig. 26.4: Venture Capital - Median Net IRRs: Early Stage Funds vs. Other Venture Capital Fig. 26.5: Venture Capital - Median Net IRRs: Healthcare Funds vs. IT Funds Funds (Excluding Early Stage)

35% 35%

30% 30%

25% 25% Early Stage Funds Healthcare- 20% Focused Funds 20% 15% 15% Other Venture IT-Focused Funds 10% Capital Funds 10% 5% Median Net IRR since Inception Median Net IRR since Inception 5% 0% 1997 2001 2002 2003 2004 2005 2006 0% -5% 1995 1996 1998 1999 2000 2007 2008 2009 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -10% -5% Investment Year Vintage Year

Fig. 26.6: Venture Capital (Excl. Early Stage) - Net IRR Deviation from Median Benchmark Fig. 26.7: Venture Capital - Annual Contributions and Distributions with Net Cash Flow (LP with $10mn Commitment)

25% 4

3 20% 19.1% 2 15.2% 15% Annualized 12.3% 1 Contribution 9.2% 10% 8.4% 0 7.1% 123456789101112 Proportion of Funds -1 Annualized 4.4% Distribution 5% 3.3% 3.9% 4.0% 2.4% 1.6% 1.6% -2 0.6%0.7%0.8%0.9%1.3% 1.0% 0.9%0.7%0.7% 0% Net Cash Flow -3

-4 0% to 4.9% 5% to 9.9%

Contributions/Distributions/Net Cash Flow ($bn) -5 -0.1% to -5% 10% to 14.9% 15% to 19.9% 20% to 24.9% 25% to 29.9% 30% to 34.9% 35% to 39.9% 40% to 44.9% 45% to 49.9% -5.1% to -10% -30.1% to -35% -35.1% to -40% -10.1% to -15% -40.1% to -45% -15.1% to -20% -45.1% to -50% -25.1% to -30% -20.1% to -25%

50% and Above -6 -50.1% and Below Net IRR Percentage Point Difference from Respective Median Benchmark Investment Year

© 2012 Preqin Ltd 16 2013 Preqin Private Equity Performance Monitor alternative assets. intelligent data. The 2012 Preqin Private Equity Performance Monitor, now in its ninth edition, includes league tables showing the top performing funds of each fund type and vintage year, as well as identifying which managers are the most consistent top performers, again broken out for all the major fund types. The 2012 Preqin Private Equity Performance Monitor contains new areas of analysis and key metrics for more funds than ever before, with over 6,000 vehicles, including more than 900 private real estate funds managed by 300 different fi rms.

This year’s expanded and fully updated edition includes:

• Top performing funds and fi rms identifi ed in extensive league tables by fund type and vintage year. • New analysis sections include the PrEQIn quarterly private equity index. • Annual and quarterly changes in fund valuations. • Examination of risk vs. return for different fund types. • Benchmarks across different fund types by vintage year and geographic focus. • Dry powder and assets under management. • Detailed analysis sections examining key trends by different fund type, size and region. • Private equity returns examined against public markets. • The performance of listed private equity. www.preqin.com/pm

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