Alpinvest Annual Review 2013 02

1 AlpInvest Annual Review 2013 02 04 Our business 29 Remuneration policy 08 Chairman’s statement 30 Risk management 10 Strategic review 32 Financial performance and investment overview 14 Fund Investments 34 Fund Investments overview 16 Secondary Investments 37 Secondary Investments overview 18 Co-Investments 38 Equity Co-Investments overview 23 Governance 40 Mezzanine Co-Investments overview 24 Firm leadership 41 Private equity 27 Responsible investment 42 Important information 28 Human resources AlpInvest Annual Review 2013 Throughout this document, ‘AlpInvest’ or ‘AlpInvest Partners’ refers to AlpInvest Partners B.V. and its subsidiaries. In considering the past, targeted or projected performance and other financial information contained herein, readers should bear in mind that past, targeted or projected performance is not necessarily indicative of future results and there can be no assurance that targeted or projected returns will be achieved, that any AlpInvest fund or other investment will achieve comparable results or that the returns generated by an AlpInvest fund or other investment will equal or exceed those of other investment activities of AlpInvest. 033 AlpInvest is one of the largest We aim to offer clients a private equity investors in the customized approach to their world, with a 14-year track record investment needs, underpinned of consistent success. by a disciplined and discerning investment strategy. We invest in primary funds, secondaries and co-investments Our 72 investment professionals for investors across the globe. are dedicated to applying their collective skills, insights and Through our on-the-ground knowledge to maximize value presence in three continents, we for our investors. have built a deep understanding of the market and developed an extensive network of relationships that spans the world. 04 AlpInvest is a leading private equity Amsterdam, Hong Kong, Indianapolis Our business investor, with more than €34bn of assets and New York. Within each of our core Trusted investors under management and a longstanding segments, a large, dedicated global team track record of successful investment. We ensures a strong focus on the sourcing invest across the globe, specializing in the and selection of the most attractive primary, secondary and co-investment investment opportunities. segments. We believe that our large and integrated global platform gives us a unique We believe that our size, extensive network perspective on the private equity market. of relationships and proactive approach to investment often allow us to access the We have managed customized portfolios best opportunities before other managers across the private equity spectrum for 14 in our peer group. It also provides us with years, working closely with our investors information insights that improve our to ensure that the portfolios we build for selection capabilities. them are tailored to their needs. In 2013, we closed our first commingled fund so that a Our approach wider range of investors could benefit from Through our diligence, dedication and our investment expertise. understanding, we believe that we have earned a solid reputation within the Over the past years, we significantly 1 industry. We have a rigorous approach to increased our investor base from seven investing, with strong senior involvement. AlpInvest in 2011 to 28 as per December 31, 2013. This has remained unchanged since we Annual Review In terms of commitments received since were founded at the turn of the millennium. 2013 inception, 97.7% came from investors in Europe, the Middle East and Africa, 2.0% Initially set up by Dutch pension funds APG from investors in North and South America and PGGM to manage their private equity and 0.3% from investors in Asia. investments, we spent more than ten years working closely with both investors and We have 157 employees, including tailoring our expertise to their requirements. 17 Managing Directors, many of whom In 2011, AlpInvest management and The have worked together for more than a Carlyle Group, one of the largest and most decade. We are a close-knit, stable and highly respected alternative asset managers highly focused team, based in offices in in the world, jointly acquired AlpInvest from APG and PGGM. In 2013, our firm became fully owned by The Carlyle Group, further solidifying the strong relationship built since 2011. Today, we are an integral part of Carlyle Solutions, a single platform that offers investors access to a range of alternative assets, including private equity, real estate and hedge funds. Our investment decisions are made entirely independently of The Carlyle Group, but its ownership provides support, encouragement and guidance as we grow. Reaping tangible benefits from The Carlyle Group’s global distribution, reach and experience, we have extended – and continue to extend – our investor base under the new ownership structure. We now serve investors across the globe, Amsterdam Extensive network offering them a deep understanding of 86 We are one of the largest private equity investors private equity and a customized approach in the world, with over 240 general partner to their investment needs. New York relationships, an on-the-ground presence in three 54 continents and investments across the globe. Hong Kong Experienced team 15 As of December 31, 2013 we had 157 employees, We have a of whom 72 are investment professionals in funds, Indianapolis secondaries and co-investments. rigorous 2 Rigorous investment approach approach to We have a rigorous approach to investment, with strong senior involvement. We seek to use our investing, with expertise and knowledge from across our business lines to make better investment decisions. strong senior involvement. 05 Hong Kong COMMITMENTS RECEIVED China FROM INVESTORS2 Since inception BY INVESTMENT TYPE €37.6bn Fund Investments €8.8bn Secondary Investments €7.5bn Equity Co-Investments €1.8bn Mezzanine Co-Investments €1.1bn Other BY INVESTOR TYPE 98.9% Pension funds 1.1% Insurance companies and other 1 Excluding our Portfolio Management platform. 2 Total capital committed to AlpInvest includes €6.7bn of investor mandates that are managed on behalf of investors by AlpInvest Partners B.V. (or its controlled affiliates), but for which the investment decisions were made by parties other than AlpInvest or its affiliates (of which €6.5bn was committed up to 2002 and €0.2bn was committed in 2013). 06 AlpInvest Annual Review 2013 07 New York U.S. 08 Chairman’s AlpInvest delivered strong statement Strong performance, performance in 2013. An improving positive outlook macroeconomic environment provided a tailwind but I believe we are also especially witnessing the results of AlpInvest’s long-term, careful and considered investment approach, executed by our experienced and talented team. AlpInvest Annual Review 2013 We expect the outlook to continue to improve through 2014, although this will present its own challenges. In particular, we remain cautious about inflation in deal prices and will seek to be innovative in the way we source the best investments for our clients at realistic prices. Rising sentiment We witnessed a significant improvement in sentiment during 2013. At a macro level, this was driven by an improving U.S. economy and Europe’s emergence from recession in the second half of the year. Emerging- market economies – notably the BRICs – failed to perform as well as expected, partly as capital flew back to developed markets, but they did continue to grow. Volkert Doeksen, Chairman At an industry level, investors flocked to private equity in their continued search for yield, triggering a stellar pick-up in activity. Global fundraising totaled more AlpInvest delivered a strong performance than $250bn, the largest amount since in 2013. I am pleased to be able to report 2008 and a 20% increase on 2012. We saw that the year ended with a year-to-date a similar percentage rise in the value of net return of the portfolio managed by new deals, which amounted to almost AlpInvest of close to 20%. We continued to $200bn. Collectively, the industry closed commit capital to promising investment on more than 250 transactions. In 2013, opportunities, achieving a good spread we saw the resurgence of large, $20bn- in terms of geography and investment plus deals when technology firm Dell and type. Existing investors continued to food company Heinz joined forces with back us with additional commitments, private equity firms for $25bn and $23bn and our Secondary Investments division respectively. successfully closed our first ever commingled fund. Exit activity also picked up, driven by greater confidence among corporate An improving macroeconomic buyers and public market investors. For environment provided a tailwind for this 2013 as a whole, Preqin reported 1,533 positive performance across the board exits of private equity-backed companies. but I believe we are also especially IPOs gained considerable momentum as witnessing the results of AlpInvest’s an exit route, representing around 20% of long-term, careful and considered all buyout exits last year. Similarly, venture investment approach, executed by our capital-backed firms saw a significant rise experienced and talented team. in IPO activity. In the U.S. market alone, 09 81 venture-backed companies were exited through this channel, more than in any other year since the financial crisis. Year in review 2013 TOTAL INVESTMENTS Across key segments Against this upbeat backdrop, transaction Strong returns prices rose

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