WURTS ASSOCIATES

MEMORANDUM To: Fresno County Employees’ Retirement Association From: Wade Millen, Manager Research Group Date: June 13, 2007 Re: Recommendations

In connection with the Board of Trustees meeting in April 2007, Wurts & Associates has conducted due diligence on the most recent fund offerings for several of FCERA’s existing private equity general partner relationships including ’s Blackstone Capital Partners V (Add- On fund), New Mountain Capital Group’s New Mountain Capital Partners III, and Warburg Pincus’ Private Equity Fund X.

Recommendations:

At the April 2007 Board of Trustees meeting, Wurts & Associates proposed a private equity commitment pace of approximately $190 million over the next five years in order to reach the plan’s target private equity allocation of 6%. A suggested initial pace to cover at least the first three vintage years is as follows:

• Commit $15 million to New Mountain Partners III, L.P. (Vintage 2007) • Commit $20 million to Warburg Pincus Private Equity X, L.P. (Vintage 2007) • Commit $70 million to a broadly diversified private equity fund-of-funds offering (likely to have exposure to at least three vintage years)

New Mountain: FCERA invested $25 million in New Mountain’s first fund offering New Mountain Partners I, L.P. (vintage 2000). We believe the significant depth of experience, the stability of the management team, continuation of their strong track record, ability to execute successfully in the middle market across economic cycles, proven ability to add value post-investment and advantage in identifying attractive “defensive growth” industries warrants consideration for reinvestment in Fund III. The minimum investment for the fund is $10 million. A firm and fund review is provided in appendix section I.

Warburg Pincus: FCERA has invested $20 million in Warburg Pincus’ 1998 vintage fund (Warburg Private Equity Partners L.P.) as well as $25 million in Warburg Pincus Private Equity VIII, L.P. (vintage 2001). We believe the firm’s flexible and broadly diversified private/venture mandate, core competency in investing globally, significant private equity experience, depth in sector expertise, continuation of their strong track record and proven ability to add-value post- investment warrants consideration for reinvestment in Fund X. The minimum for the fund is $25 WURTS ASSOCIATES

million; although, Warburg is willing to consider a $20 million commitment. A firm and fund review is provided in appendix section II.

The Blackstone Group: Blackstone is a proven leader in investing in the large to “mega” space, has exceptionally talented investment professionals and has provided consistent and very strong historical returns for limited partners. However, we have some concerns regarding the firm’s / simultaneous sale of a portion of the management company to the People’s Republic of as well as the larger end of the buyout market in general. We have questions as to whether a possible “dilution of focus” among key investment professionals might occur that could result in a misalignment of general partner and limited partner best interests. Regarding the larger end of the buyout space, while many factors such as access to debt, liquidity, favorable financing terms, deal pricing, massive capital flows, the level of risk aversion and economic profitability may be systematic to varying degrees across the private equity landscape, we do have concerns that the ability to do favorable deals on the “mega” end of the market and to exit these may be disproportionately impacted should there be a significant negative reversal in any of the factors indicated above. It is important to highlight that investors in the Add-On fund raise of BCP V are only eligible for investments made after investment (i.e. investors do not have exposure to existing investments in BCP V). Although, FCERA has historically benefited from exposure to this segment through BCP III (vintage 1997) and BCP IV (vintage 2002), we recommend passing on the additional capital raise of BCP V at this time.

Below is a summary of the aforementioned recommended funds and terms for review:

New Mountain Fund III Warburg Pincus Fund X Target Raise $3 billion (capped at $5 billion) $12 billion (capped at $15 billion) Focus Small / Middle Market Buyout / Growth Equity (60-70%) Buyout (30-40%) General Deal Size Range $100 million - $1 billion $100 million - $15 billion (Total Enterprise Value) Geography North America North America (60-70%) (15-25%) Asia (15-20%) Investment Period 5 years following close 6 years following close Portfolio Companies 10 - 15 70 - 100 Investment Minimum $10 million $25 million 1.75% through investment period, 1.5% through year 6, then tails down 1% post-investment period 20% of Net Profit 20% of Net Profit Preferred Return 8% per year No Transaction Fees 65/35 LP/GP Split No transaction fees charged to portfolio companies Fund Term 10 years 12 years GP Clawback Yes Yes Key Man Clause Yes Yes

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APPENDIX SECTION I:

New Mountain Capital Group, LLC

New Mountain Capital Group, LLC was established in 1999 by co-founder Steven Klinsky. Mr. Klinsky was previously co-founder of Goldman Sachs & Co’s Leverage Buyout Group (1981- 1984) and later the most senior partner of Forstmann Little & Co. outside of the Forstmann family for a majority of the 1990’s. New Mountain’s first private equity fund, New Mountain Partners, L.P. began its investment period in January 2000 with a total capitalization of $770 million. New Mountain’s second private equity fund, the $1.55 billion New Mountain Partners II, L.P. began its investment period in January 2005. In January 2006, the firm launched a public equity fund managed by New Mountain Vantage Advisers and currently has over $1.0 billion of . Vantage is designed to apply New Mountain’s established strengths as an acquirer and builder of businesses toward non-control positions in the U.S. public equity markets. In total, New Mountain manages over $3.3 billion in assets.

New Mountain Capital Group, LLC, is organizing New Mountain Partners III, L.P. to seek significant long-term capital appreciation through direct private equity and equity related investments. Fund III was formed in January 2007 and has a target capitalization of $3 billion. The fund intends to pursue the same “middle market” strategy and style that New Mountain has pursued with its predecessor funds. The fund will seek to invest in leveraged acquisitions, build- ups, recapitalizations, control restructurings, management , pre-public offering opportunities and growth equity transactions. The fund expects to target North American companies with enterprise values ranging from $100 million to $1 billion and will typically invest between $100 million and $500 million of equity per transaction. The fund will not participate in hostile investments.

New Mountain’s investment strategy emphasizes growth and investor value added, rather than debt, as the correct way to generate exceptional returns. The firm chiefly pursues the highest quality growth companies in carefully selected industries and then works intensively with management to build the value of these companies. Their search process has emphasized defensive growth industries (i.e., sectors which can succeed in both robust and weak economic environments but which are also sufficiently large and growing to achieve high valuations and returns at exit). To date, the firm has developed particular skills in areas of post-secondary working adult education, health care, business services, federal IT services, transaction processing, media, software, , logistics and consumer products.

The fund expects to target a gross annual internal rate of return (“IRR”) for its investments of 30%. The investment professionals of the firm have committed over $100 million to all the firm’s investment activities to date and will commit a minimum of $50 million to New Mountain III. Firm founder, Steve Klinsky will commit at least $30 million of this amount. These commitments can be through the General Partner, through the fund or side-by-side with the fund.

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New Mountain is led by twenty-six professionals, including fifteen senior professionals (10 managing directors and five senior advisors), plus eleven vice presidents and associates. The firm has approximately forty members in total including support staff. The firm has not lost any senior investment professionals since inception of the firm.

All members of the firm participate, either formally or informally, in carry from New Mountain funds. In general, the fifteen senior professionals (managing directors and senior advisors) and four vice presidents are formal members of the general partner. In addition, all associates and support staff participate in “phantom carry” that allows them to earn significant income over and above their base pay and bonus.

The General Partner of Fund III will be owned by New Mountain’s managing directors, senior advisors and vice-presidents. No outside entity or individual will have any ownership stake or economic interest in the General Partner of Fund III. The carried interest vests on an investment- by-investment basis over three years following that specific investment. Managing directors and staff share in the carry on all investments made by the fund and allocations are based on perceived contribution to the team as a whole as determined by the Managing Member.

Investment Process & Performance Overview:

New Mountain believes it is particularly strong in its ability to identify highly attractive and undervalued industries sectors “top down”; to build competitive advantages in these sectors; to proactively seek out and acquire the best available companies in these chosen sectors at attractive prices and without auctions; and then to work intensively with management to build the value of these companies. New Mountain favors industries: 1) that are being driven by clear and sustainable secular growth factors; 2) that have high barriers to competitive entry, minimal capital expenditure and minimal working capital growth needs; and 3) that have high return on assets and opportunities for niche market dominance. New Mountain also favors sectors which are fragmented enough that the firm has a good probability of finding an under-managed or undervalued company if it applies its time and resources. As noted earlier, the firm has developed skills in areas of post-secondary working adult education, health care, business services, federal IT services, transaction processing, media, software, financial services, logistics and consumer products.

Once a sector opportunity is identified, an internal working team is assigned to each project. Each project will have one or two managing directors designated as “team leader”, except for Mr. Klinsky who provides general quality control and does not typically act as “team leader”. The team may spend months confirming the sector thesis and building the firm’s leadership in this sector. New Mountain seeks to construct proprietary databases and to hire the best specialized industry consultants, brokers and bankers on exclusive retainers when applicable.

The firm typically seeks to acquire companies in its chosen sectors that are already “safe and successful” but where New Mountain sees an opportunity to rapidly increase enterprise value due to special circumstances existing at the time of the purchase or through value that New Mountain

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can add. New Mountain has been successful in targeting companies with leading market shares, rapid growth, high free cash flow, high operating margins, high barriers to entry and which produce goods or services that are of real positive value to their customers. Some examples of portfolio companies include MailSouth which according to New Mountain holds de facto monopoly or majority market share positions for its industry in over 200 suburban and rural markets, serving 17 million U.S. homes. Deltek is the leader in enterprise software for the federal IT services industry and other selected project focused industries, with ongoing software maintenance contract revenues from approximately 11,000 customers each year. Connextions, Inc. is a rapidly growing leader in the “front end” of consumer driven health care pursuant to recurring multi-year contracts with major health care payers and providers.

Once New Mountain identifies the best acquisition targets in a sector, the firm moves to acquire the company proactively. While the firm is free to participate in competitive situations, it has not acquired any company in a sealed bid auction since inception of the firm. The firm has never had a bankruptcy or writedown in any of its portfolio companies. While the firm will use debt as it deems prudent, New Mountain has generally used leverage conservatively by traditional private equity standards. In nine of its twelve portfolio companies, New Mountain used little or no third party debt to fund its initial investment and the firm has not yet used debt greater than 4x trailing EBITDA in any of them. Of these nine investments, the securities themselves have been structured as debt or preferred stock, generally with a yield and with a position in the that is senior to common shareholders.

Once acquired, New Mountain adds value to its portfolio companies in a wide variety of ways and has a proven track record of success. An example is Strayer Education, Inc. which was an investment in Fund I. Strayer was the industry leader in the Washington D.C. area but did not have the internal capabilities to expand rapidly. New Mountain purchased control of Strayer, installed a new CEO and COO for Strayer from the firm’s own in-house “executives in residence” and instituted a new five-part growth strategy written for the company during the firm’s period of due diligence. As a result of these efforts and strategy, Strayer grew from 12,000 students to 24,000, from 14 campuses to 29, from the Washington D.C./Richmond area only into nine states, and from a 12% growth rate in revenues to a 25% rate. Strayer’s market value increased from approximately $400 million to a high of $1.8 billion during the period of New Mountain’s leadership (and the company was debt free the entire period of New Mountain’s investment). Excluding options, $115 million of capital was initially invested and upon realization New Mountain generated 3.7x multiple of cost on Strayer and a 77.6% gross IRR.

Performance: Invested Realized Unrealized Total Real. & Total Value / Fund Vintage Capital Value Value Unreal. Value Paid-In (TVPI) Gross IRR Net IRR NMP I 2000 $562 $722 $377 $1,099 1.96 39.4% 20.0% NMP II 2005 $1,796 $90 $839 $929 0.52 42.0% 30.8%

* FCERA is invested in highlighted fund (NMP I)

Source: New Mountain

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Fund I achieved notable success even during the severe public equity market downturn of 2000 to 2002, establishing or acquiring five platform companies diversified across a range of carefully selected high growth and noncyclical industries. As of December 31, 2006, Fund I had achieved a 63.6% gross IRR and a 3.0x multiple of cost on fully realized investments and a 39.4% gross IRR on all investments (assuming no benefit for hypothetical merger market valuations or other favorable exits). Fund II has invested, or has reserved or agreed to invest, approximately $1.23 billion of fund capital. Three of the five companies in which Fund II invested during 2005 and 2006 have already filed to go public and one of these three companies has already paid back a substantial portion of Fund II’s initial investment in cash. As of December 31, 2006, Fund II had achieved a 51.7% gross IRR (excluding potential additional valuation benefits from these planned public offerings or from hypothetical merger market valuations).

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New Mountain Investment Professionals:

Industry Name of Principal Role PE Experience Yrs w/ Firm Education Prior Work Experience Experience Seve Klinsky Co-Founder, 26 years 26 years Co-Founder JD Harvard Law (81') Forstmann Little & Co. CEO MBA Harvard (79') Goldman Sachs & Co. B.A. Michigan (76') Dave Wargo Co-Founder, 22 years 22 years Co-Founder MS MIT (78') Wargo & Company Managing BS MIT (76') Putnam Director Marble Arch Partners Bob Grusky Senior Advisor 23 years 29 years Co-Founder MS Harvard (85') Department of Defense (Co-Founder & BA Union College (79') Goldman Sachs MD 00'-05') Michael Ajouz Managing 22 years 22 years 7 years BS U. Penn (95') KKR Director BA U. of Texas (92') Goldman Sachs

Tom Morgan Managing 16 years 16 years 7 years MS Harvard (98') Director BA Williams College (91') CSFB

Alok Singh Managing 29 years 29 years 5 years MS U (75') Deutsche Bank Director BA New York U (74') Barclays Capital

Doug Londal Managing 23 years 23 years 4 years MBA U of Chicago (91') Goldman Sachs Director BA U of Michigan (87') Nuveen & Co.

Peter Masucci Vice President 10 years 13 years 3 years MBA Stanford (04') KKR BA U of Iowa (97') Goldman Sachs

Dan Riley Vice President 6 years 6 years 4 years BA Princeton (00') CSFB

Matt Holt Vice President 7 years 7 years 5 years AB Harvard Lehman Brothers

Matt Ebbel Vice President 6 years 6 years 3 years BA Harvard McKinsey & Co.

Average 15 years 16 years 5 years

Industry Senior Advisors Role PE Experience Yrs w/ Firm Education Prior Work Experience Experience Bob Grusky Senior Advisor 23 years 29 years Co-Founder MS Harvard (85') Department of Defense (Co-Founder & BA Union College (79') Goldman Sachs MD 00'-05') David Shaw Senior Advisor 23 years 32 years 3 years Exec. Program Harvard (86') Venrock Associates MBA U of Maine (76') Harvard University BA U of New Hampshire (73') Black Point Partners Fdr & CEO IDEXX Labs Harry Durity Senior Advisor 37 years 37 years 2 years MA Washington State (70') ADP, Inc. BA Western Maryland (68') Revlon RJR Nabisco Arthur Little, Inc. Fred Salerno Senior Advisor 22 years 22 years 1 year MBA Adelphi U (71') Verizon BS Manhattan College (65') Bell Atlantic NYNEX New England Telephone Frank Carolan, CPA Senior Advisor 46 years 46 years 3 years BS Villanova Deloitte & Touche

Average 30 years 33 years 3 years

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APPPENDEX SECTION II:

Warburg Pincus & Co.

Warburg Pincus & Co. was founded in 1966 as Lionel I. Pincus joined E.M. Warburg and redirected the firm’s activities to emphasize private equity. The firm is headquartered in New York with nine additional offices around the world. Warburg Pincus raised its first fund in 1971 ($41 million in EMW Ventures) and throughout its history has sponsored twelve private equity funds that have invested over $25 billion in 560 companies in over 30 countries (these funds include nine prior global private equity funds, two private equity funds that have invested exclusively outside the U.S. and a global real estate fund). The firm also has extensive experience investing internationally with the first non-U.S. investment in 1983. They opened their London office in 1987 and a Hong Kong office in 1994. The opening of the Tokyo office followed in 1998, Mumbai in 2001, Beijing in 2003 and a Frankfurt and Shanghai office in 2005. Since 1983, the firm has invested over $8.2 billion in more than 160 companies across more than 25 countries outside of North America.

Fund Year Raised Capital Commitments EMWV 1971 $41 million WPA 1980 $101 million WPCP 1983 $343 million WPCC 1986 $1.2 billion WP I 1989 $1.8 billion WP V 1994 $2.0 billion WP VI 1997 $800 million WPEP 1998 $5.0 billion WPIP 2000 $2.5 billion WP VIII 2001 $5.3 billion WP IX 2005 $8.0 billion

Source: Warburg Pincus

Warburg Pincus LLC is organizing Warburg Pincus Private Equity X, L.P. to invest in venture capital transactions, transactions, buyouts, recapitalizations and other special situations. Fund X was formed in 2007 and has a target capitalization of $12 billion with a hard cap of $15 billion. The first closing is expected to be held September 2007 with a final closing in November 2007. The fund will be managed in a similar fashion to prior funds and is expected to invest generally in 60-70% venture/growth capital deals and 30-40% LBO/special situation opportunities. Portfolios have typically been invested 60-70% North America, 15-25% Europe and 15-20% Asia. Over the past three years, the average investment size has been approximately $125 million in equity with at the high end of the range at $600 million and $30 million at the bottom end of the range. Warburg expects to invest the fund in a range of 75 to 100 portfolio companies. The investment professionals of the firm have invested over $700 million in Warburg’s active funds and will commit a minimum of $300 million in WP X. According to

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Warburg Pincus, this amount could increase to $500 million or total between 2-3% of the total fund raise. The fund itself targets a gross IRR of 25%.

Warburg’s investing strategy emphasizes growth investing in companies across all stages from conceiving and creating venture capital opportunities, to providing capital for existing businesses, to investing in later-stage buyout transactions and special situations with unique characteristics. Warburg focuses on generating profits from increasing operating earnings at its portfolio companies, rather than exclusively through financial engineering or multiple expansion, in an attempt to position a firm for attractive long-term returns throughout economic and capital market cycles. The firm’s view of growth investing extends to transactions where the firm has been engaged for over thirty years. In the buyout space, the firm takes a selective approach focusing on high-quality companies with unique angles for organic growth, expansion or add-on acquisitions. Warburg is differentiated from firms focusing exclusively on leveraged transactions, given its flexible business model, sector expertise and geographic reach. In addition, compared to the industry as a whole, the firm has invested in fewer “club deals” and has relied less on leveraged recapitalizations to return capital. In terms of industry exposure, the core sectors that the firm has developed specialized skill sets include Energy, Financial Services, Healthcare/Life Sciences, Industry/Consumer and Technology/Media/Telecommunications.

Warburg Pincus employs 350 people, including 59 Managing Directors and 150 investment professionals. The firm’s investment activities are coordinated by a 17-person Executive Management Group. See personnel overview in appendix section. Approximately 40% of professionals are located outside of the U.S. Of the Executive Management Group, four members or 23% are located outside of U.S. The 59 Managing Directors of the firm average over 14 years of private equity experience and nine years with the firm. Since 2000, the firm has averaged roughly four Managing Director departures per year.

Warburg Pincus is owned and operated by its partners. Co-President’s Charles Kaye and Joseph Landy are the managing general partners of Warburg Pincus & Co. and the managing members of Warburg Pincus LLC. The firm successfully completed a leadership transition in 2000 from the original founders of the firm, and John Vogelstein. At the time of the transition, mssrs. Pincus and Vogelstein owned more than 50% of the carried interest (the “carry”) of funds and a vast majority of the book value of the management company. Today, the founders remain partners of the firm but only total 6% of the carry. Warburg now has in place a very flat carry structure where no single partner earns more than 5% of the carry and every partner’s percentage of carry is proportional to their interest in the book value of the management company. Carry itself is not linked to investment in a specific fund either. The carried interest is shared across all deals and all geographies among team members and is available to eligible employees as soon as they join the firm. The initial percentage of carry does not have vesting requirements. From an initial allocation of carry, any future increases in carry vests over a four year period. Carry is adjusted on an annual basis by the Executive Management Group. Until two years ago, the carry was only distributed to Managing Directors. In 2005, Warburg took the carry down to the principal level (previously known as Vice President). In 2006, the carry was taken down the

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associate level in the form of “phantom equity”. The idea of this structure is to have a fully transparent process of allocating carry and to provide an incentive to help on older deals.

Investment Process & Performance Overview:

Warburg Pincus has a differentiated approach to investing focusing from the bottom-up on companies across industry, stage (early to late stage), segment (buyout vs. venture) and region (U.S. vs. non-U.S.). The theme that pulls all these together is their focus on growth equity or growth companies. As a result, the aim of the firm’s investments it to build lasting companies, with accomplished management teams that will perform well in growing industries.

To facilitate this approach, investment professionals are organized by sector and by region. Overlapping this structure is a 17 member Executive Management Group (“EMG”) that consists of the co-Presidents and each member responsible for running a geography, sector or major sub- sector. For example, Joel Ackerman runs the Healthcare / Life Sciences practice and is a member of the EMG. Each of the industry sector teams has a weekly meeting where they review new deals, existing portfolio companies, address exit questions etc. As ideas from these meetings gain more prominence, the ideas filter up to the EMG which meets at least one time per month. Despite the existence of the EMG, the actual decision making authority is not conducted via an investment committee approach. In order for a deal to get approved, approval from one of the co- Presidents, the geographic head and the sector head is needed. For example, if a healthcare services deal in Europe arises, the Europe geographic head, Dalip Pathak (who runs the London office) and the head of Healthcare Services / Life Sciences, Joel Ackerman and a co-President must approve it.

In terms of deal structure, instead of a traditional venture model of investing where you do rounds of financing, syndicate a deal and bring in partners, Warburg prefers to offer portfolio companies a line of equity financing which essentially translates to asking a company how much they need in order to become cash flow positive in their business. They selectively extend this equity to the company without bringing in additional investors over time as the company meets and exceed certain required milestones. So, instead of being a syndicated investor with other investors in rounds, Warburg tends to be the lead and often only investor in deals they do. 60- 70% of the deals they expect to do are in the venture/growth segment and 30-40% in LBO / special situations. In leveraged buyout transactions, they have more of a growth angle to them as well.

In sourcing deals, consistent with the global nature of the firm, over 40% of the firm’s current deal flow is sourced outside of the U.S. The firm’s international strategy is highly focused and it is expected that approximately one-third of their investments in Europe to be in targeted countries in Central and Eastern Europe. They expect these opportunities are likely to be growth and middle-market buyout transactions rather than venture capital investments. In Asia, the firm has concentrated its investing activities over the years in and China. The firm continues to see good opportunities for late stage and growth investments in India. In China, the firm is investing at all stages from early stage, growth and late stage/state sponsored privatizations.

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Beyond the due diligence process, Warburg believes that much of the value added is generated by working with a company after the dollars are invested (at present the firm’s professionals have approximately 185 board seats on approximately 130 portfolio companies). Warburg works intensively in partnership with portfolio company management teams, to (i) formulate strategy and assess execution and operating performance; (ii) recruit senior management talent, drawing upon the vast Warburg Pincus network and private markets experience; (iii) provide access to technologies, systems and practices from existing or prior portfolio companies or from vast firm relationships; and (iv) conceptualize and participate in the negotiation and implementation of complex corporate transactions and financing transactions. In order to provide this level of value add to their companies, the firm has traditionally operated with a large staffing model while maintaining a ratio that exceeds 1.0 professional per company. The firm also offers a set of important shared services that portfolio companies often find of substantial value. For example, the firm has built a capital markets group that takes advantage of the firm’s role and experience in debt and equity capital markets to provide assistance to portfolio companies in the course of their external financings. In any given year the firm will engage in approximately $15 to $20 billion in financings. Their capital markets team, which consists of three professionals and is led by Managing Director Chris Turner, brings this service to each of their portfolio companies free of charge when needed.

Performance: Total Invested Realized Unrealized Total Real. & Total Value / Fund Vintage Capital Value Value Unreal. Value Paid-In (TVPI) Gross IRR Net IRR EMW Ventures 1971 $41 $170 - $170 4.15 25.4% 15.0% WPA 1980 $11 $377 - $377 34.27 41.7% 19.0% WPCP 1983 $341 $1,081 - $1,081 3.17 22.5% 14.5% WPCC 1986 $1,175 $6,123 - $6,123 5.21 24.2% 18.3% WP I 1989 $1,775 $4,793 - $4,793 2.70 19.5% 14.8% WPV 1994 $2,022 $11,797 $176 $11,973 5.92 61.0% 49.5% WP VI 1997 $800 $1,340 $340 $1,680 2.10 16.2% 11.7% WPEP 1998 $5,000 $6,781 $1,886 $8,667 1.73 15.6% 11.0% WPIP 2000 $2,500 $1,034 $4,219 $5,253 2.10 27.5% 19.3% WP VIII 2001 $5,340 $2,269 $8,235 $10,504 1.97 31.5% 22.6% WP IX 2005 $4,720 $88 $5,224 $5,312 1.13 24.0% 12.1%

* FCERA is invested in the highlighted funds.

Source: Warburg Pincus

Since the first fund was raised in 1971, distributions have totaled over $36 billion and the firm has generated a gross IRR of 28% (20.4% net). Independent of debt, equity and business cycles, the firm has been able to achieve a consistent record of distributions and performance. Warburg attributes this in large part to the diversification of the firm’s portfolios, the growth nature of their strategy and the varied drivers of returns within their portfolios.

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Warburg Pincus Investment Professionals:

Name of Principal Role PE Experience Yrs w/ Firm Education Prior Work Experience Charles Kaye Co-President 21 years 21 years BA U of Texas -

Joseph Landy Co-President 22 22 MBA New York Univ. - BS U of Penn. Joel Ackerman Managing 14 14 MA Harvard - Director BA Columbia Patrick Hackett Managing 20 17 BA & BS U of Penn Cove Capital Associates Director Acadia Partners Peter Kagan Managing 13 10 JD Univ. of Chicago Salomon Brothers Director MBA Univ of Chicago AB Harvard Kewsong Lee Managing 18 14 MBA Harvard McKinsey & Co. Director AB Harvard Jonathan Leff Managing 11 11 MBA Stanford Oliver, Wyman & Co. Director AB Harvard Nicholas Lowcock Managing 13 13 MBA U Penn (Wharton) - Director BA Oxford James Neary Managing 18 7 MBA Northwestern CSFB Director BA Tufts University Chase Securities Dalip Pathak Managing 25 13 MBA U Penn (Wharton) World Bank Group Director MA Delhi University BA Delhi University Chang Sun Managing 19 12 MBA U Penn (Wharton) Goldman Sachs Director BA Beijing FLU Christopher Turner Managing 17 2 MBA New York Univ. Goldman Sachs Director BS Cornell University Elizabeth Weatherman Managing 21 19 MBA Stanford - Director BA Mount Holyoke David Barr Managing 20 6 MBA Harvard Goldman Sachs Director BA Wesleyan Butler Capital Sean Carney Managing 10 10 MBA Harvard McKinsey & Co. Director AB Harvard Julian Cheng Managing 11 7 BA Harvard Solomon Smith Barney Director Deutsche Bank Steve Coates Managing 17 4 AMP Harvard Director MA Oxford Mark Colodny Managing 12 6 JD Harvard Law Primedia Director MBA Harvard AB Harvard David Coulter Managing 10 1 MS Carnegie Mellon JPMorgan Chase Director BS Carnegie Mellon BankAmerica Cary Davis Managing 12 12 MBA Harvard McKinsey & Co. Director BA Yale Rajiv Ghatalia Managing 16 2 MBA Harvard Goldman Sachs Director BS U of Penn BA U of Penn Michael Graff Managing 3 3 MS MIT Bombardier Aerospace Director AB Harvard McKinsey & Co. Jeffrey Harris Managing 26 24 - - Director Stewart Hen Managing 7 7 MBA U Penn (Wharton) McKinsey & Co. Director MS MIT Merck BS University of Delaware Chansoo Joung Managing 22 2 MBA Dartmouth Goldman Sachs Director AB Dartmouth Rajesh Khanna Managing 16 12 MBA Indian Instit. Of Mgmt Citibank Director B. Com. Bombay University Arthur Anderson & Co. Henry Kressel Managing 24 24 Ph.D U Penn RCA Labs Director MBA U Penn (Wharton) MS Harvard

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David Krieger Managing 7 7 MBA Harvard McKinsey & Co. Director MSc. Georgia Inst. Of Tech. BSEcon. U of Penn Kevin Kruse Managing 12 5 BA Dartmouth AEA Investors Director Bain & Co. Jeff Leng Managing 10 8 MBA U Penn (Wharton) Morgan Stanley Director BS Shanghai Jiao Tong China Southern Securities David Li Managing 15 5 MS Yale GoldmanMi i t fSachsA i ti (Chi ) Director BS Remin University of China Morgan Stanley Niten Malhan Managing 6 6 MBA Indian Instit. Of Mgmt McKinsey & Co. Director BS IIT-Delhi Philip Mintz Managing 9 2 JD Fordham Law School GE Capital Director MBA New York University Merrill Lynch AB Duke University Christoph Neizert Managing 24 2 MBA Columbia Director Bankers Trust Bilge Ogut Managing 11 9 MBA Harvard Goldman Sachs Director BS U of Penn McKinsey & Co. BA U of Penn Michael Profenius Managing 25 3 BA Yale Merrill Lynch Director Leo Puri Managing 4 1 MA Oxford McKinsey & Co. Director MA (Law) Cambridge Stan Raatz Managing 13 6 Ph.D U Penn Citigroup Director BA University of California Coopers & Lybrand Justin Sadrian Managing 11 7 MBA Harvard JPMorgan Director BA Dartmouth Joseph Schull Managing 9 9 D.Phil Oxford Ford Foundation Director MA McGill University BA McGill University Mimi Strouse Managing 13 5 BA Trinity College Partners Director CSFB Barry Taylor Managing 6 6 JD University of Virgina Wilson, Sonsini, Goodrich Director BA Dickinson College & Rosati Simon Turton Managing 7 4 Ph.D. University of London Index Ventures Director MBA INSEAD David Wenstrup Managing 12 10 MBA MIT Boston Consulting Group Director MS MIT BS Northwestern Peter Wilson Managing 11 2 MBA Harvard Electra Partners Director BA Oxford Boston Consulting Group Jeremy Young Managing 15 15 MBA Harvard Baxter Healthcare Director BA Cambridge Booz, Allen & Hamilton

Average 14 9

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