2014 Preqin Private Equity Performance Monitor Sample Pages.Indd

Executive Summary - Sample Pages

The 2014 Preqin Private Equity Performance Monitor Fig. 1.1: All Private Equity - Assets Under Management, 2000 - 2013 4,000 1. Executive Summary 3,500 1,174 3,000 941 Dry Powder 2,500 1,007 ($bn) Record Highs Furthermore, and perhaps most notably 993 for investors, performance data shows that 2,000 1,067 1,011 In last year’s Preqin Private Equity distributions have increased considerably Unrealized 1,500 1,075 Performance Monitor, we acknowledged over the past year, from $381bn in 2012 to 2,546 Portfolio Value 806 2,332 the economic turmoil that was endured by $568bn in 2013, making it the highest level ($bn) 1,000 563 2,029 the industry following the crash of 2008, of capital LPs have ever received back from 1,783 402 409 298 377 407 1,265 1,413 the onset of the European sovereign debt their private equity investments in a year. 500 898 1,204 Assets under Management ($bn) 675 crisis, and the fl uctuations around these Fig. 1.2 displays the new peak, and more 418 374 360 465 554 events. All-in-all, the progress of the private trends in private equity dry powder and 0 equity market since the downturn six years AUM are discussed in Chapter 11. ago has been encouraging, refl ected in the ever increasing amounts of capital investors Risk and Return Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 around the world commit to the asset class. Also revealed in the 2014 Private Equity Fig. 1.2: All Private Equity - Annual Amount Called-Up, Distributed and Unrealized As confi rmed in Preqin’s latest Investor Performance Monitor is Preqin’s latest Value Outlook survey, LPs are still looking analysis of risk-return trade-offs, broken 600 3,000 to increase their allocations to private out by geographic focus, fund strategy and equity, and as upticks are seen in annual vintage year. By plotting the median against 500 2,500 fundraising fi gures, the industry’s assets the standard deviation of net IRRs, we are Capital under management (AUM) have continued able to examine which fund types have Unrealized Value ($bn) Called to climb ever higher. In fact, since the turn of the most attractive risk-return profi le. As 400 2,000 ($bn) the millennium, the private equity industry’s explained in Chapter 12, and seen in Fig. AUM have risen year on year, and have 1.3, a signifi cant range is displayed across Capital 300 1,500 Distributed attained the highest fi gure to date of $3.7tn both axes for the different private equity ($bn) as of 31 December 2013. Preqin calculates investment strategies. Though there are AUM by adding the uncalled capital risks inherent in any illiquid market such as 200 1,000 Unrealized commitments (dry powder) to the unrealized private equity, the level of risk between the Value value of portfolio assets, as displayed in Fig. different fund types varies by some margin. ($bn) 100 500 1.1, which illustrates the steady incremental increases in unrealized portfolio value each Secondaries funds emerge as the best year, and the record amount of private performing fund type, with the highest Annual Amount Called/Distributed ($bn) 0 0 equity dry powder available as of December median net IRR and a relatively low risk

2013. measure. The private equity secondary 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

1 © 2014 Preqin Ltd Executive Summary - Sample Pages market has gone from strength to strength, The increase from previous quarters can be Fig. 1.3: Risk and Return by Strategy (Vintage 2001 - 2011) breaking records for fundraising and linked to the improved exit opportunities and transaction volume year on year. The high valuations in recent times. 25% growth and maturation of the secondary Balanced market has been tracked by Preqin over Consistent Performers Buyout time, as has the increasing number of 20% Distressed Private Equity investors that have expressed an interest The importance of fi nding consistent Fund of Funds in buying or selling fund stakes in order to performing fund managers is crucial for any Growth reap a range of benefi ts. For sellers, this investor that wants maximum reassurance 15% includes meeting liquidity requirements, that their fund commitment will be in safe Infrastructure portfolio rebalancing, and the opportunity hands. Though past performance is no Mezzanine to exit poor performing funds. For buyers, guarantee of future returns, data such 10% Natural Resources secondary market purchases will help as the performance metrics available on Real Estate mitigate the J-curve effect inherent in private Preqin’s Performance Analyst are highly equity commitments, and provide access to valuable tools to help benchmark funds and 5% Secondaries top performing managers and chances to inform LP decisions. Venture Capital acquire fund stakes at a good discount to Risk - Standard Deviation of Net IRR (%) Risk - Standard Early Stage NAV. Preqin’s tables of consistent performing 0% managers, featured in the 2014 Preqin 0% 5% 10% 15% 20% Highs and Lows of Venture Capital Private Equity Performance Monitor, can Return - Median Net IRR (%) Performance help with this task. Each fund that Preqin Fig. 1.4: Rolling One-Year Horizon IRRs by Fund Type has performance data for is assigned a On the other side of the spectrum, we fi nd quartile ranking using Preqin’s Performance 30% early stage funds with a much less attractive Analyst online service, which contains risk-return profi le. However, the high performance data for over 7,000 private 25% standard deviation in the chart highlights equity funds worldwide. These rankings are All Private the wide range of net IRRs that can be based upon the peer group of each vehicle 20% Equity attained, and therefore suggests that early and take into account vintage year, strategy Buyout 15% stage funds still offer the potential of hitting and geographic focus. Both the multiple and a lucrative ‘home run’ investment. IRR are used as key indicators and equal 10% Horizon IRR Venture emphasis is placed on both metrics. Capital 2013 saw an uptick in venture capital 5% performance as a whole. Fig. 1.4 depicts Fig 1.5 shows a list of the top six consistent 0% the rolling one-year horizon IRRs for the performing buyout fund managers and their whole private equity industry, as well as average quartile rank. Funds ranked in the buyout and venture capital. Venture capital top quartile are given a score of one, funds outperforms its buyout counterparts and the in the second quartile are scored a two, whole private equity asset class with a return and so on. The table is compiled using only of 19.7% in one year to December 2013. funds for which Preqin holds performance 1 Year to Jun 2013 1 Year to Jun 2012 1 Year to Jun 2011 1 Year to Sep 2013 1 Year to Sep 2012 1 Year to Mar 2013 1 Year to Mar 2012 1 Year to Mar 2011 1 Year to Dec 2013 1 Year to Dec 2012 1 Year to Dec 2011 1 Year to Dec 2010 1 Year to Sep 2011

2 © 2014 Preqin Ltd Executive Summary - Sample Pages data and has assigned a quartile ranking. celebrating over a decade of providing Additionally, multiple sources are used to Additionally, 2012, 2013 and 2014 vintage net-to-LP returns data to the private equity ensure accuracy. We hope that you ﬁ nd this funds have been excluded as these funds community. This edition contains key metrics year’s edition of the Performance Monitor to are too early in their fund lives to generate for over 7,000 funds, representing 70% of be a useful and effective tool and, as ever, meaningful IRRs. The list only includes fund the total capital raised by the industry. welcome any feedback that you may have. managers that have raised at least three funds of a similar strategy. This edition of the Performance Monitor features the PrEQIn Private Equity Four buyout fund managers, Rhone Quarterly Index, regional performance of Capital, Altor, Wynnchurch Capital Partners private equity funds, and 10-year horizon and Trilantic Capital Partners have all IRRs, as well as analysis of private equity of their funds ranked in the top quartile, performance by fund type, size and region. and therefore have achieved the best In addition, the Monitor explores the effects possible average quartile rank of 1.00. of past performance on private equity Morgan Stanley Global Private Equity and fundraising, performance benchmarks for Waterland follow, each with a score of 1.20. the different fund types, regions and vintage Extended lists of consistent performing fund years, as well as an analysis of listed private managers, broken out into various fund equity performance, synthetic IRRs for types, are available in Chapter 3 of the private equity funds of funds, dry powder Performance Monitor. and assets under management, and more.

The 2014 Preqin Private Equity Preqin gathers its performance information Performance Monitor directly from both fund managers and investors, ensuring that the full spectrum We are proud to be launching the eleventh of private equity fund performance is edition of the Performance Monitor, observed, be it positive or negative.

Fig. 1.5: Top Six Consistent Performing Buyout Fund Managers Firm Location Overall Number of Funds Number of Funds in Top Number of Funds in Average Quartile Rank with Quartile Ranking Quartile Second Quartile Rhone Capital US 3 3 0 1.00 Altor Sweden 3 3 0 1.00 Wynnchurch Capital Partners US 3 3 0 1.00 Trilantic Capital Partners US 3 3 0 1.00 Morgan Stanley Global Private Equity US 5 4 1 1.20 Waterland Netherlands 5 4 1 1.20

Contents 1. Executive Summary 5 12. Risk and Investment Selection 71 Risk and return by fund strategy; IRR deviation from benchmark; risk 2. Methodology 9 and return for buyout, distressed private equity, real estate, venture capital, fund of funds and secondaries. 3. Consistent Performing Fund Managers 13 13. Performance of Listed Private Equity 75 Buyout, venture capital, fund of funds, real estate and other fund Overview of listed private equity; share prices; discounts and managers that have consistently produced top quartile returns. premiums to net asset value; performance listings. 4. Top Performing Funds 19 14. Market Benchmarks 77 All Private Equity: All Regions; North America; Europe; Asia. Rankings of top performing funds by fund type and vintage year. Buyout: All Regions; North America; Europe; by fund size Fund of Funds 5. PrEQIn - Private Equity Quarterly Index 43 Mezzanine Infrastructure PrEQIn Quarterly Private Equity Index: all strategies; buyout by fund Distressed Private Equity size; venture capital by investment stage; fund quartile indices. Growth Real Estate 6. Effects of Past Performance on Private Equity Fundraising 47 Venture Capital: All Regions; North America; Europe; Early Stage Secondaries Effect of predecessor fund performance on time spent on road by funds closed in 2012/13; effect of predecessor fund performance 15. Data Coverage 95 on subsequent fundraise vs. initial fundraising target; effect of predecessor fund performance on time spent on the road for funds Fund universe; Preqin performance coverage by type and region. currently in market. 16. How to Interpret Performance Ratios for Private Equity Funds 99 7. Performance Data in a Global Context 49 Explanation of ratios and data used in the graphs.

North America-focused funds; Europe-focused funds; Asia-focused 17. Overall Performance of Private Equity 101 funds; Africa-, Latin America and Caribbean-, Australasia- and Middle Called-up capital, distributed capital and residual value; median net East and Israel-focused funds. IRRs and quartile boundaries; money-weighted and pooled IRRs; 8. How Much Have Investors Gained Historically? 55 IRRs by geographic focus; fund IRR deviations from benchmark; cash fl ows; J-curves; relationship between quartile ranking and manager Net LP gain by vintage year; horizon returns by asset class of public experience; relationship between predecessor and successor fund pension funds; one-year returns to December 2013; private equity vs. quartiles. total investment portfolio and listed equity. 18. Buyout 105 9. Private Equity Horizon IRRs 59 Called-up capital, distributed capital and residual value; median net One-, three-, fi ve- and 10-year horizon IRRs as of 31 December IRRs and quartile boundaries; money-weighted and pooled IRRs; 2013; private equity horizon IRRs vs. public indices; buyout fund IRRs by fund size; fund IRR deviations from benchmark; cash fl ows; horizon IRRs by size; regional IRRs; rolling one-year and three-year J-curves; relationship between predecessor and successor fund horizon IRRs by fund type. quartiles; fund performance listings. 10. Change in Fund Valuations 63 19. Distressed Private Equity 147 Annual change in NAV; quarterly change in NAV for all private equity Called-up capital, distributed capital and residual value; median net and buyout by fund size; quarterly change in NAV by fund type; IRRs and quartile boundaries; IRR dispersion; distributions to paid- capital appreciation/depreciation of NAV during 2013. in capital ratios – median and quartile boundaries; residual value 11. Dry Powder and Assets under Management 67 to paid-in capital ratios – median and quartile boundaries; fund performance listings. Private equity assets under management; dry powder by region focus; buyout dry powder by fund size; venture capital dry powder by investment stage; annual amount called, distributed and unrealized value.

20. Fund of Funds 157 Called-up capital, distributed capital and residual value; median net IRRs and quartile boundaries; fund IRR deviations from benchmark; cash fl ows; J-curves; relationship between predecessor and successor fund quartiles; fund performance listings; synthetic IRRs for private equity funds of funds of different allocation mixes. 21. Growth 183 Called-up capital, distributed capital and residual value; median net IRRs and quartile boundaries; median multiples and quartile boundaries; IRR dispersion; money-weighted IRRs; fund performance listings. 22. Infrastructure 193 Called-up capital, distributed capital and residual value; minimum, median and maximum IRRs; median multiples and quartile boundaries; fund performance listings. 23. Mezzanine 201 Called-up capital, distributed capital and residual value; median net IRRs and quartile boundaries; fund IRR deviations from benchmark; cash fl ows; IRR dispersion; fund performance listings. 24. Real Estate 211 Called-up capital, distributed capital and residual 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 249 Called-up capital, distributed capital and residual value; median net IRRs and quartile boundaries; money-weighted IRRs; cash fl ows; IRR dispersion; fund performance listings. 26. Venture Capital 255 Called-up capital, distributed capital and residual 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. 27. Other Fund Types Performance Listings 307 Balanced; co-investment; co-investment multi-manager; direct secondaries; natural resources; timber 28. Index 321 Firm Index Figure Index 29. Glossary 349 30. Performance Analyst Online 351

2. Methodology

The content of the 2014 Preqin Private information is based on the institutional Our wide range of data sources and our interpreted. The Monitor shows the most Equity Performance Monitor is focused on investor’s position before tax, but after the extensive research program allows us up-to-date information at the time of going the performance of private equity funds GP’s managed and carried fees have been to verify data for funds on an individual to press in July 2014. The majority of the available to institutional investors, and as deducted. basis, ensuring a high level of confi dence data presented in this book is as of the a result, excludes direct investments in in the accuracy of the data held. Preqin fourth quarter of 2013 or the fi rst quarter of unlisted corporate securities. Performance fi gures held by Preqin are greatly appreciates GPs contributing fund 2014. On occasion, data that is older than obtained from various sources and via performance data: therefore we are happy this will be included and will mostly relate to The fund-level performance data and all varying means. The majority of performance to offer those GPs complimentary access funds with more mature vintages that have related analysis herewith is taken from fi gures are attributed to institutional to our Performance Benchmark module already distributed the majority of the capital Performance Analyst, our online service and investors and are obtained via Freedom within Performance Analyst, in addition back to investors and hence the data is not the world’s most extensive and transparent of Information Act (FOIA) requests; these to discounted access to the full version of expected to change signifi cantly. source of private equity performance. requests include CalPERS, Washington Performance Analyst. Should you require Launched in 2003, Performance Analyst State Investment Board, and Florida State further information, or wish to contribute In order to ensure the most appropriate initially held data for 1,086 funds. This Board of Administration among many others performance data, please contact us at fund-level comparisons are conducted, fi gure has since grown substantially, and at both in the US and the UK. We currently have [email protected] or visit our website percentages have been used to represent present, Performance Analyst holds fund- approximately 350 (active and web-based) at www.preqin.com/pa. all performance metrics. The following chart level data for over 7,000 funds, representing public pension funds and endowments that gives a representation of performance a 7.2% increase from the previous year. In are contributing performance fi gures to Preqin acknowledges the importance of GP metrics displayed in the fund listings section terms of total capital raised, Performance Preqin. feedback on each fund. Hence, prior to the of the Monitor. ‘Called percentage’ refers Analyst contains data for over 70% of all release of the Monitor, GPs were invited to the ratio of capital called at the specifi ed funds raised historically. Subscribers to In addition to obtaining performance to comment and amend their individual date against the total amount committed Performance Analyst will be able to view fi gures via FOIA requests, Preqin also fund performance, ensuring that the data to the fund. ‘Distributed to paid-in capital all of the data contained within the Monitor receives performance data directly from included within this publication is accurate (DPI)’ refers to the amount received by the online, in addition to obtaining fund level GPs themselves. As a signifi cant proportion and up to date. This process took place investors as a percentage of the paid-in performance data updated on a regular of our online subscribers consist of during June 2014, though we are still happy capital to date. The ‘residual value to paid- basis. Further information can be found at: prospective investors viewing performance to receive any additional feedback, and this in capital (RVPI)’ percentage measures the www.preqin.com/pa. fi gures on a fund level, GPs inevitably will be incorporated onto our database once remaining value of the portfolio expressed recognize the importance of providing the received. as a percentage of paid-in capital to date. Preqin reports fund-level performance data most accurate and the most recent data, The multiple is the sum of the distribution which is representative of the investor’s consistent with our net-to-LP performance The dates to which the performance fi gures and the remaining value fi gures, expressed experience. Therefore, all the fi gures metrics defi nitions, to ensure the funds are relate are provided in the fund listings as a times factor of the total capital called to presented within the Monitor show the represented both accurately and in line with and are an important consideration for date. Finally, Preqin defi nes the vintage year net position to the investor, and all returns our methodologies. the readers to ensure the data is correctly as the year in which the fi rst investment was

7 © 2014 Preqin Ltd Methodology - Sample Pages made from the fund using LP capital (i.e. debt, special situations, turnaround, real the year of the fi rst capital call to LPs for estate, infrastructure, natural resources, investment). balanced, secondaries funds and funds of funds. Additional notes regarding our Preqin generates benchmarks for all the terminologies and methodologies can be main performance metrics - called, DPI, found in Chapter 29: Glossary, or on our RVPI, multiple and IRR - using the median, website at www.preqin.com, and should average, pooled or money-weighted value. readers of the Monitor have any further However, due to the space limitation within questions, they are most welcome to the Monitor, the Monitor only displays contact us. the median IRR benchmark fi gures. All benchmark fi gures generated by Preqin Preqin Ltd. are available to subscribers of Performance July 2014 Analyst, in addition to the feature of creating custom benchmarks from their individual user-defi ned fund universe. Preqin benchmark data is transparent and allows subscribers to view the constituent funds.

Additionally, Preqin generates quartile rankings for individual funds. Each fund universe constitutes funds with similar fund types, geographies and vintage years, enabling the quartile rankings to be assigned using a combination of both the IRR and multiple rankings of each constituent fund, with equal weights being placed on each the IRR and multiple. In instances where the sample size is small, the funds are assigned quartile rankings which are generated against the private equity industry in its entirety.

The 2014 Preqin Private Equity Performance Monitor aims to conduct analysis and provide insight into all private equity types from many different geographic regions. Preqin uses the term “private equity” to denote a variety of fund types: buyout, venture capital, mezzanine, distressed

1. Called (%): 6. Benchmark IRR (%):

Percentage of LP’s commitment contributed to date. The median IRR for the relevant peer group. We have speciﬁ c benchmarks for buyout, venture capital, early stage, fund of e.g. an LP with a $1mn commitment will have paid in funds, real estate and mezzanine funds. Funds of a different $900,000 to date. type are benchmarked against “All Private Equity”.

e.g. in this case vintage 2008 North America buyout funds.

10. Fund Speciﬁ cs: 2. Distributed (%) DPI: 8. As at:

Fund size is the total commitment received by the fund. Vintage and region focus are used for Distributions received to date as a percentage of This is the ‘as at date’ for the benchmarking. called capital. valuations and performance.

e.g. in this case, the benchmark is 2008 US buyout funds e.g. an LP with a $1mn commitment has received e.g. in this case the data is valid as of $292,500 – this is 32.5% of the $900,000 called. 31 Dec 2013.

Location Called Distributed Res. Value Net Multiple Net IRR Benchmark Firm name Fund Vintage Size (mn) Quartile As at: Focus (%) (%) DPI (%) RVPI (X) (%) IRR (%)

Mega Capital Partners Mega Fund I 2008 100 USD North America 90.0 32.5 105.1 1.38 8.0 8.0 2 31-Dec-13 Mega Fund II 2009 50 USD North America 60.0 29.7 52.7 0.82 -6.5 4.0 4 31-Dec-13 Example Capital Partners Example Fund I 2005 500 USD Europe 100.0 219.0 36.3 2.55 46.4 28.1 1 31-Dec-13 Example Fund II 2007 700 USD Europe 90.0 13.9 112.4 1.26 10.3 10.3 3 31-Dec-13

7. Quartile: 3. Residual Value (%) RVPI: This shows which quartile of the relevant Valuation of unrealized investments as percentage of peer group the fund falls into. We put called capital. equal weight on the IRR and value multiple. 9. Firm Name/Fund: e.g. an LP with a $1mn commitment has unrealized investment valued at $945,900 – which is 105.1% of e.g. Mega Fund I is a second quartile fund. The name of the fund manager and their the $900,000 called. corresponding fund. 4. Net Multiple (X): 5. Net IRR (%):

Distributions plus unrealized value. The net IRR earned by the LP to date after fees and carry. e.g. in this case 1.38 – which is (35.5%+105.4%) / 100 e.g. in this case 8.0%, counting both distributions and unrealized value.

Top Performing North American Funds Fig. 4.39: Top 10 Best Performing North American Private Equity Funds

Fund Size Called Distributed Value (%) Multiple Net IRR Date Rank Fund Firm Vintage Type Region Focus (mn) (%) (%) DPI RVPI (X) (%) Reported 1 Matrix Partners V Matrix Partners 1998 200 USD Venture Capital North America 100.0 1986.2 0.0 19.86 514.3 30-Jun-14 2 Benchmark Capital Partners II Benchmark Capital 1997 125 USD Venture Capital North America 100.0 723.6 0.0 7.24 267.8 30-Jun-14 3 Matrix Partners IV Matrix Partners 1995 125 USD Venture Capital North America 100.0 2051.1 0.0 20.51 218.3 30-Jun-14 4 Focus Ventures I Focus Ventures 1997 106 USD Venture Capital North America 100.0 539.2 0.0 5.39 213.0 30-Jun-14 5 Mayﬁ eld IX Mayﬁ eld Fund 1997 252 USD Early Stage North America 100.0 653.7 8.8 6.62 195.7 30-Sep-13 6 Accel V Accel Partners 1996 150 USD Venture Capital North America 100.0 1962.0 0.0 19.62 188.4 30-Jun-14 7 Battery Ventures IV Battery Ventures 1997 200 USD Venture Capital North America 100.0 715.3 0.0 7.15 160.3 30-Jun-14 Quantum Energy Natural 8 Quantum Energy Partners II 2000 225 USD North America 72.4 521.8 0.2 5.22 138.0 31-Dec-13 Partners Resources 9 Menlo Ventures VII Menlo Ventures 1997 253 USD Venture Capital North America 100.0 471.0 0.0 4.71 135.6 30-Jun-14 Lightspeed Venture 10 WPG Venture Associates IV 1997 212 USD Early Stage North America 100.0 390.2 3.5 3.94 123.0 31-Dec-13 Partners

Funds to Watch Fig. 4.40: Top Five Best Performing Buyout Funds (Vintage 2012 - 2014)

Fund Size Called Distributed Value (%) Multiple Net IRR Date Rank Fund Firm Vintage Type Region Focus (mn) (%) (%) DPI RVPI (X) (%) Reported 1 Thoma Bravo Fund X Thoma Bravo 2012 1,275 USD Buyout North America 87.1 62.7 81.1 1.44 n/m 31-Mar-14 Platinum Equity Capital 2 Platinum Equity 2012 3,750 USD Buyout North America 21.9 42.4 94.9 1.37 n/m 31-Dec-13 Partners Fund III Ridgemont Equity Partners Ridgemont Equity 3 2012 735 USD Buyout North America 43.5 13.8 121.8 1.36 n/m 31-Dec-13 Fund I Partners Aquiline Financial Services Aquiline Capital 4 2012 743 USD Buyout North America 65.8 2.8 129.0 1.32 n/m 31-Mar-14 Fund II Partners 5 MBK Partners III MBK Partners 2013 2,670 USD Buyout Asia 23.1 0.0 130.5 1.30 n/m 31-Dec-13

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

500 PrEQIn All Private Index 450 Equity Index PrEQIn Buyout 400 Index 350 PrEQIn Venture Capital Index Assessing the performance of an investment indices for the main private equity fund 300 PrEQIn Real portfolio is an important and challenging strategies as well as buyout by fund size, 250 Estate Index task for an investor, and many different venture capital by investment stage and 200 PrEQIn Fund of metrics are required when constructing private equity by performance quartile Index Returns 150 Funds Index and maintaining an effective private equity ranking, allowing investors to analyze and PrEQIn Distressed program. The PrEQIn Private Equity compare different parts of their private 100 Private Equity Quarterly Index is the ﬁ rst index covering equity portfolios. At this time, the ﬁ gures for 50 Index

the whole private equity industry, enabling Q2 2013 are fi nalized; however, Q3 2013 (Rebased to 100 as at 31-Dec-2000) 0 S&P 500 Index investors to compare the returns from their and Q4 2013 fi gures are preliminary and private equity portfolios to those of other subject to change. asset classes. 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 PrEQIn Private Equity Quarterly Index: 30-Jun-12 30-Jun-13 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 31-Dec-12 31-Dec-13 The PrEQIn Private Equity Quarterly Index All Strategies draws on information taken from Preqin’s Fig. 5.2: PrEQIn Private Equity Index: All Private Equity, Buyout and Venture Capital Performance Analyst. It is a money- Fig. 5.1 shows the PrEQIn All Private Equity, vs. S&P 500 weighted index that uses fund-level cash Buyout, Venture Capital, Real Estate, Fund 160 fl ow transactions and net asset values of Funds and Distressed Private Equity 140 for over 7,500 individual private equity Indices together with the S&P 500 rebased PrEQIn All Private partnerships - these funds have raised over to 100 as of 31 December 2000. Examining 120 Equity Index $4.1tn in aggregate capital. these indices provides an insight into the performance of the main private equity 100 PrEQIn Buyout The Index is created using the following fund types in comparison to each other, the Index 80 calculation: industry as a whole, and public markets. The PrEQIn All Private Equity Index shows 60 PrEQIn Venture Percentage change in quarter = [(NAV an initial decline following the dot-com Index Returns Capital Index at end of quarter + distributions during crash in the early 2000s. The performance 40 quarter)/(NAV at start of quarter + call-ups of the industry subsequently improved 20 S&P 500 during quarter)] – 1. until December 2007, when the industry experienced a decrease in performance that (Rebased to 100 as of 31-Dec-2007) 0 These returns are then combined to form continued through subsequent quarters. an index with the starting value of 100 as of This resulted from the fi nancial crisis as 31 December 2000. In addition to an overall well as the introduction of mark-to-market 30-Jun-13 30-Jun-12 30-Jun-11 30-Jun-10 30-Jun-09 30-Jun-08 30-Sep-13 30-Sep-12 30-Sep-11 30-Sep-10 30-Sep-09 30-Sep-08 31-Mar-13 31-Mar-12 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Dec-13 31-Dec-12 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08 private equity index, we have calculated valuations during this time. After Q1 2009, 31-Dec-07

14. Market Benchmarks

Fund Type: All Private Equity Geographic Focus: All Regions Benchmark Type: Median As at: 31 December 2013 Median Fund Multiple Quartiles (X) IRR Quartiles (%) IRR Max/Min (%) No. of Dist (%) Value (%) Vintage Called (%) Q1 Median Q3 Q1 Median Q3 Max Min Funds DPI RVPI 2013 160 12.7 0.0 94.9 1.03 0.96 0.84 n/m n/m n/m n/m n/m 2012 182 30.0 0.0 100.8 1.19 1.07 0.95 n/m n/m n/m n/m n/m 2011 255 47.4 3.6 104.5 1.27 1.13 1.02 n/m n/m n/m n/m n/m 2010 190 71.2 14.4 104.0 1.42 1.27 1.12 19.0 13.3 8.0 81.3 -95.1 2009 161 82.0 24.3 100.0 1.55 1.33 1.15 20.0 13.6 6.7 448.0 -15.1 2008 341 86.6 30.0 93.6 1.48 1.31 1.14 16.3 11.2 6.4 46.0 -25.3 2007 378 91.3 38.5 86.3 1.51 1.33 1.12 12.7 8.4 4.2 58.2 -50.9 2006 351 94.7 49.4 75.3 1.50 1.30 1.08 10.1 6.9 2.0 32.8 -100.0 2005 298 97.3 72.1 54.7 1.62 1.35 1.03 12.6 7.4 3.5 105.5 -100.0 2004 169 98.9 100.0 40.0 1.74 1.44 1.08 15.0 8.7 2.5 79.8 -26.0 2003 144 99.1 129.6 27.4 1.93 1.57 1.30 21.6 12.8 7.2 239.7 -49.9 2002 134 100.0 132.0 14.4 2.04 1.58 1.26 26.0 12.7 6.9 93.0 -47.2 2001 174 100.0 149.0 11.0 2.15 1.61 1.29 25.1 13.0 6.4 94.0 -19.4 2000 263 99.1 133.0 9.2 2.00 1.46 1.01 19.2 10.4 1.4 138.0 -96.0 1999 173 100.0 140.6 0.3 1.83 1.42 0.92 15.4 9.2 1.0 154.7 -40.6 1998 178 100.0 143.2 0.0 1.90 1.45 1.10 17.1 9.7 2.6 1015.7 -100.0 1997 161 100.0 159.3 0.0 2.33 1.63 1.22 24.1 12.8 4.8 267.8 -45.7 1996 113 100.0 165.0 0.0 2.19 1.67 1.26 25.5 13.2 6.5 188.4 -33.3 1995 103 100.0 186.8 0.0 2.48 1.87 1.38 29.2 17.9 9.4 447.4 -22.0 1994 89 100.0 188.3 0.0 2.59 1.88 1.35 36.5 18.3 10.1 94.1 -22.6 1993 82 100.0 232.4 0.0 3.40 2.32 1.53 42.7 21.7 10.9 105.7 -29.1 1992 65 100.0 176.8 0.0 2.54 1.77 1.34 28.7 18.6 7.9 87.2 -49.9 1991 40 100.0 222.4 0.0 3.01 2.23 1.74 33.0 23.4 11.9 346.4 -0.5 1990 64 100.0 207.6 0.0 2.56 2.08 1.42 25.3 16.8 8.4 74.4 -35.9 1989 70 100.0 227.2 0.0 3.26 2.27 1.55 30.5 16.0 10.9 198.5 -42.1 1988 47 100.0 221.1 0.0 3.11 2.21 1.78 30.1 15.7 10.5 54.5 -9.3 1987 42 100.0 210.2 0.0 3.30 2.10 1.36 20.3 14.5 7.2 31.3 -12.4 1986 37 100.0 193.7 0.0 2.47 1.94 1.43 16.2 12.0 5.7 279.7 -4.9 1985 35 100.0 218.6 0.0 3.00 2.19 1.51 17.8 13.0 8.5 40.7 4.0 1984 27 100.0 216.0 0.0 2.93 2.16 1.58 14.7 12.5 7.5 96.2 1.7 1983 21 100.0 175.5 0.0 2.89 1.76 1.53 25.4 10.9 5.5 51.6 -3.5 1982 15 100.0 191.3 0.0 3.06 1.91 1.70 15.8 9.7 7.0 64.3 -1.6 1981 6 100.0 150.3 0.0 n/m 1.50 n/m n/m 13.1 n/m 67.4 0.5 1980 9 100.0 234.6 0.0 3.85 2.35 1.80 22.4 14.1 9.2 31.1 -4.3

Buyout Fund Performance Listings Fund Size Called Distributed Res. Value Multiple Net IRR Benchmark Date Firm Name Fund Vintage Region Focus Quartile (mn) (%) (%) DPI (%) RVPI (X) (%) IRR (%) Reported 3i 3i 94 LMBO Plan 1994 170 GBP Europe 98.4 140.0 0.0 1.40 11.7 30.5 4 30-Jun-14 3i Europe Partners III 1999 2,300 EUR Europe 90.5 204.0 0.0 2.04 19.3 14.0 1 31-Mar-14 3i Europe Partners IV 2003 3,000 EUR Europe 95.8 190.0 7.0 1.97 27.0 23.0 2 31-Mar-14 3i Europe Partners V 2006 5,000 EUR Europe 92.8 34.0 69.0 1.03 1.0 8.0 4 31-Mar-14 3i Japan Buyouts Fund 2000 20,000 JPY Asia 30.0 163.8 0.0 1.64 32.8 18.4 2 30-Jun-14 3i UK Investment Partners 1996 415 GBP Europe 96.8 139.0 1.0 1.40 8.1 17.2 3 31-Mar-14 3i UK Investment Partners II 1997 378 GBP Europe 95.2 114.0 0.0 1.14 2.6 10.5 3 30-Jun-14 40|86 Advisors Conseco Capital Partners II 1994 624 USD North America 12.5 279.6 0.0 2.80 92.2 19.0 1 30-Jun-14 ABN AMRO Participaties Fourth Causeway Development Capital Fund 1995 Europe 100.0 119.5 0.0 1.19 4.0 17.3 3 30-Jun-14 Second Causeway Development Capital Fund 1986 Europe 100.0 151.8 0.0 1.52 0.2 19.1 4 30-Jun-14 Third Causeway Development Capital 1990 60 GBP Europe 100.0 143.0 0.0 1.43 9.0 18.9 4 30-Jun-14 ABRY Partners ABRY I 1989 35 USD North America 71.0 492.0 0.0 4.92 64.0 30.2 1 30-Jun-14 ABRY II 1995 250 USD North America 100.0 332.8 12.6 3.45 47.3 16.1 1 30-Jun-13 ABRY III 1997 581 USD North America 90.6 124.9 5.1 1.30 4.5 9.1 3 30-Jun-13 ABRY IV 2000 776 USD North America 72.3 202.9 43.4 2.46 17.8 15.5 2 30-Jun-13 ABRY V 2005 950 USD North America 91.6 170.7 30.6 2.01 17.6 10.3 1 31-Dec-13 ABRY VI 2008 1,350 USD North America 86.0 101.4 66.5 1.68 17.7 14.8 2 31-Dec-13 ABRY VII 2011 1,600 USD North America 71.6 0.0 117.4 1.17 12.2 10.0 2 31-Dec-13 ACA Group ACA ICT I 2008 4,000 JPY Asia 100.0 82.0 25.0 1.07 25.0 11.9 2 31-Mar-14 Accel-KKR Accel - KKR Company 2000 250 USD North America 100.0 175.2 43.5 2.19 7.9 15.5 3 31-Dec-13 Accel-KKR Capital Partners III 2008 600 USD North America 86.0 46.9 79.8 1.27 11.7 14.8 3 30-Sep-13 Accel-KKR Capital Partners IV 2013 750 USD North America 3.9 0.0 46.4 0.46 n/m n/m n/m 31-Dec-13 Accent Equity Partners Accent Equity 2003 2003 250 EUR Europe 99.0 142.0 24.0 1.66 30.0 23.0 2 31-Mar-14 Accent Equity 2008 2007 380 EUR Europe 81.0 52.0 104.0 1.56 12.0 8.2 1 31-Mar-14 Accent Equity 2012 2012 3,800 SEK Europe 16.0 0.0 104.0 1.04 n/m n/m n/m 31-Mar-14 ACI Capital ACI Capital II 2006 335 USD North America 68.5 0.0 21.1 0.21 -25.1 8.7 4 30-Sep-13 ACON Investments ACON Equity Partners III 2012 751 USD North America 51.7 0.0 74.8 0.75 n/m n/m n/m 31-Mar-14 ACON Latin America Opportunities Fund 2009 173 USD Americas 92.9 94.0 145.0 2.39 15.0 13.5 1 31-Mar-14 ACON Latin America Opportunities Fund IV 2013 Americas 1.7 0.0 0.0 0.00 n/m n/m n/m 31-Mar-14 Actera Group Actera Partners 2007 475 EUR Europe 108.1 41.9 114.4 1.56 15.6 8.2 1 31-Dec-13 Actera Partners II 2012 1,073 USD Europe 29.8 0.0 85.8 0.86 n/m n/m n/m 31-Dec-13 Activa Capital Activa Capital Fund 2003 146 EUR Europe 92.4 157.0 8.0 1.65 17.0 23.0 3 31-Dec-13 Activa Capital Fund II 2008 321 EUR Europe 92.5 3.0 96.0 0.99 n/a 9.7 4 31-Dec-13 Advantage Partners AP Cayman Partners II 2007 303 USD Asia 58.4 39.2 24.1 0.63 -10.5 11.6 4 31-Dec-13 Advent International Advent Central & Eastern Europe IV 2008 1,000 EUR Europe 76.9 1.8 77.3 0.79 -8.4 9.7 4 31-Dec-13 Advent Global Private Equity II 1993 415 USD North America 100.0 n/a 0.0 n/a 20.0 23.2 3 30-Jun-14 Advent Global Private Equity III 1997 1,000 USD North America 100.0 n/a 1.6 n/a 8.9 9.1 3 31-Dec-13 Advent Global Private Equity IV 2001 1,500 USD North America 87.2 283.2 2.9 2.86 40.3 24.3 1 31-Dec-13 Advent Global Private Equity IV-A 2002 456 USD Europe 96.0 318.6 6.1 3.25 52.1 27.8 1 31-Dec-13 Advent Global Private Equity V 2005 2,500 EUR Europe 99.0 214.0 31.6 2.46 50.3 10.5 1 31-Dec-13 Advent Global Private Equity VI 2008 6,600 EUR Europe 98.9 50.5 120.0 1.71 21.1 9.7 1 31-Dec-13

The Preqin Private Equity Performance Monitor, now in its eleventh edition, features extensive analysis of private equity returns. Find out which are the top performing funds and ﬁ rms, and view net-to-LP returns for over 7,000 separate vehicles of all types and geographies, including more than 1,200 private real estate funds.

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.

• Annual and quarterly changes in fund valuations. The 2014 Preqin Private Equity Performance Monitor • 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 fund type, size and region. alternative assets. intelligent data

• Private equity returns examined against public markets. www.preqin.com/pmwww preqiin com//pm • The performance of listed private equity.

Visit www.preqin.com/pm for more information

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