Proskauer Funds Seminar Series 9 July 2020 Under the Microscope: Fundraising Terms and Trends Webinar Agenda

• Key takeaways from our European buy-out and terms survey

• An update on trends in funds finance ‒ Cameron Roper, Proskauer

• A panel discussion from industry leaders on how GPs and LPs are responding to the current market disruption ‒ Tanja Lukas, Schroder Adveq ‒ Paula Langton, ‒ Luke Finch, ‒ Aranpreet Randhawa, Proskauer, Moderator

3 Housekeeping

• This webinar will be in listen only mode. If you need technical assistance, please submit your request under the Tech tab in the window on the right- hand side of your computer screen

• If you wish to submit a question during the session, please use the Q&A tab in the window on the right-hand side of your screen

• A follow up email with a link to the slides and recording will be sent after the conclusion of today’s webinar

• Upcoming webinar - The Bottom Line: Considerations for Portfolio Companies Navigating Distress | 15 July 2020

4 Key Takeaways from our European Fund Terms Survey

Presented by Ed Lee

5 Key takeaways from our analysis of terms from recent buy-out and venture fundraisings

European Funds • Jurisdiction • Term • Investment Period • Recycling

European Venture Capital Funds • Jurisdiction • GP Commitment • Recycling • Distribution Waterfall

6 European Buyout Funds

7 Methodology Funds Reviewed

50 100 200 400 800 1,600 3,200 6,400 12,800 25,600

8 Fund Size (Million Euros) Jurisdiction of formation ALL FUNDS

Sweden

Spain

Netherlands

Luxembourg

Jersey

Guernsey

Germany Jurisdiction France

England

Delaware

Cayman Islands

0 2 4 6 8 10 12 14 16

9 Number of Funds Reviewed Initial term ALL FUNDS

2% 2% 1% 3% 15 Years

13 Years

12 Years

11 Years

10 Years

92%

10 Approval required for extension of term ALL FUNDS

3%

GP Discretion 15% 16% GP Discretion, then LP Vote

GP Discretion, then LPAC Approval

LP Vote

LPAC Approval

LPAC Approval, then LP Vote 23%

20%

23%

11 Approval required for extension of term ≤€500M

6%

GP Discretion

GP Discretion, then LP Vote 23% 12%

GP Discretion, then LPAC Approval

LP Vote

LPAC Approval

LPAC Approval, then LP Vote 18%

29% 12%

12 Approval required for extension of term >€500M- 1.5B

5% 10% GP Discretion

GP Discretion, then LP Vote

GP Discretion, then LPAC Approval 15% 25% LP Vote

LPAC Approval

LPAC Approval, then LP Vote

20%

25%

13 Approval required for extension of term >€1.5B- €3.75B

GP Discretion 15% 16%

GP Discretion, then LP Vote

GP Discretion, then LPAC Approval

LP Vote

LPAC Approval

LPAC Approval, then LP Vote 23%

31%

15%

14 Approval required for extension of term >3.75B

13% 12% GP Discretion

GP Discretion, then LP Vote

GP Discretion, then LPAC Approval

LP Vote 12%

LPAC Approval 19%

LPAC Approval, then LP Vote

44%

15 Investment period ALL FUNDS

6%

6 Years

5 Years

4 Years 32%

62%

16 Investment period ≤€500M

6%

6 Years

5 Years

4 Years

94%

17 Investment period >€500M-1.5B

10% 6 Years

5 Years 30% 4 Years

60%

18 Investment period >€1.5B-€3.75B

8% 6 Years

5 Years

4 Years

46%

46%

19 Investment period >3.75B

6 Years

5 Years

4 Years

44%

56%

20 Recycling ALL FUNDS

Broad Rights to Recycle During Investment Period

Limited Specific Rights to Recycle

41%

59%

21 European Venture Capital Funds

22 Methodology Funds Reviewed

- 200 400 600 800 1,000 1,200 * Two funds do not state a target or a hard cap fund size. 23 Fund Size (Million Euros) Jurisdiction of formation

Netherlands

Luxembourg

Jersey

Guernsey

Germany Jurisdiction France

England

Delaware

Cayman Islands

0 1 2 3 4 5 6 7

24 Number of Funds Reviewed GP commitment (% of commitments)

15%

10%

8%

5% Jurisdiction

3%

2%

1%

0 2 4 6 8 10 12

25 Number of Funds Reviewed Recycling

Broad Rights to Recycle During Investment Period

Limited Specific Rights to Recycle

34%

66%

26 Distribution waterfall – Type of waterfall

6% American (Deal-by-Deal)

European (Whole Fund)

94%

27 Distribution waterfall – Preferred return (%)

14% 1.25X Funded Commitment

120% of Contributions 27% 4% 25% of Commitments 3% 20% of Commitments

10% of Commitments

8% Compounded Annually 10%

7% Compounded Annually

6% Compounded Annually 3% 5% Compounded Annually 3% No Preferred Return 23% 10% 3%

28 Distribution waterfall – percentage

30% 18%

25%

20% 35% Carry Ratchet – 20%, increased to 25% 3%

Carry Ratchet – 20%, increased to 25%, increased to 30%

Carry Ratchet – 20%, increased to 30%

23%

12%

9%

29 Looking Ahead: The Next 18 Months

30 Looking ahead: the next 18 months • ESG • Recycling • Bridge facility transparency • Return of ‘Speed bumps’

31 Fund Finance Update

Presented by Cameron Roper

32 Overview of the fund finance market and the impact of COVID-19

• Is the crisis arising from COVID-19 comparable to the 2008 financial crisis?

• Are banks still lending in the fund finance space?

• Are funding requests under uncommitted lines being honored?

33 Subscription facilities

• Are subscription facilities terms changing because of COVID-19?

• Do we expect to see borrowing base reductions as a result of investor defaults or rating changes?

• New ILPA guidelines on disclosure of subscription lines

34 NAV / asset-backed facilities

• What is the outlook for NAV facilities as a result of COVID-19?

• Are we seeing defaults or do we expect defaults as part of June reporting?

• Amendments to LPAs may be needed to permit new NAV facilities

• Preferred equity may be an option to consider

35 Industry Panel

Luke Finch Paula Langton Hg Capital Campbell Lutyens

Tanja Lukas Aranpreet Randhawa Schroder Adveq Proskauer

How GPs and LPs are responding to the current market disruption

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