Private Equity Spotlight

Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin Private Equity Spotlight providing insights into private equity performance, investors, deals and November 2015 fundraising. Private Equity Spotlight combines information from our online services Performance Analyst, Commentary Investor Intelligence, Fund Manager Profi les, Funds in Market, Secondary Market Monitor, Buyout Deals Analyst Return Characteristics of Mature Secondary Fund Investments and Venture Deals Analyst. In light of the signifi cant growth of the private equity secondary market over the last decade, Prof. Oliver Gottschalg, founder of PERACS, uses Preqin data on over 800 global buyout November 2015 funds to analyze the risk/return profi le of tail-end secondary investments and distinguish Volume 11 - Issue 8 their defi ning characteristics. Page 3

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The 2016 Preqin Private Equity 2016 Preqin Private Equity Compensation and Employment Review: Executive Compensation and Employment Summary Review

The 2016 Here we present the Executive Summary of the newly released 2016 Preqin Private Equity Preqin Private Equity Compensation and Employment Review Compensation and Employment Review, the industry’s leading guide to compensation practice, featuring detailed benchmark remuneration data for over 70 positions. Page 7

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alternative assets. intelligent data The deal landscape in Asian venture capital has seen its best ever year in 2015, topping all To find out more, or to download previous records. We take a look at the latest news stories for Asian venture capital deals sample pages, please visit: and fundraising. Page 11

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Featured new private equity research from Preqin this month. Page 12 New York: One Grand Central Place The Facts 60 E 42nd Street Suite 630 LP Survey: Co-Investments - Analysis of LPs’ current activity and future plans. Page 14 New York, NY 10165 +1 212 350 0100 GP Survey: Co-Investments - Survey results reveal GPs’ perceptions and plans. Page 15 London: 3rd Floor, Vintners’ Place Nordic Venture Capital Deals - We examine the deal landscape of the region. Page 17 68 Upper Thames Street London Large Cap Buyout Deals - Latest statistics for large cap deals in a record year. Page 18 EC4V 3BJ +44 (0)203 207 0200 Q1 2015 Performance Update - The latest data up to 31 March 2015. Page 20

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For all bookings & enquiries, please contact the SuperReturn Africa Team Tel: +44 (0) 20 7017 7200 Email: [email protected] Book Online Quote VIP code: FKR2375PNSL to claim a 15% discount Commentary Return Characteristics of Mature Secondary Fund Investments Download Data

Return Characteristics of Mature Secondary Fund Investments Prof. Oliver Gottschalg of HEC Paris Founder, PERACS

Introduction and Methodology We measure performance in aggregate terms through the TVPI of each simulated secondary fund, as well as based on an The private equity secondary market has witnessed signifi cant annualized performance measure. To avoid the problems with the growth in the past decade. This is largely due to the sizeable volume traditional IRR measure, which leads to a distortion and often an of commitments made to primary funds, combined with portfolio overstatement of performance for secondary funds, we applied the reshaping by private equity investors. The growth trajectory has improved PERACS rate of return as our measure of annual returns. been accelerated in recent years by fi nancial institution asset sales This is defi ned as: PERACS Rate of Return = (TVPI^(1/Duration for regulatory and capital reasons. in years))-1), and is used in the following whenever we speak of annualized returns. Tail-end secondary fund investments have developed over recent years as a distinctive sub-segment of the secondary market. On Each simulated secondary fund has a typical four-year investment the one hand LPs engaged in active portfolio management look at period, and targets primary funds of different ages (less than corresponding transactions to “weed out” the mature parts of their four years old, four to seven years old or eight years and older), portfolio and trade-in possible future upside for immediate cash of different quality (measured as the actual future performance fl ow and reduced portfolio monitoring complexity. On the other side quartile of the investment opportunity) and at a specifi c price of these transactions are often specialized investors who focus relative to the most recent NAV. on specifi c approaches to unlock the value in portfolios of mature investments. Yet, investors know little about this specifi c risk and This technique enables us to identify several distinguishing features return profi le of such tail-end secondary investments, which led of late secondary funds in terms of their return profi le. First of all, us to perform some dedicated analyses to better understand their we show evidence that late secondaries have ceteris paribus (i.e. distinguishing features. simulating the same price and the same available GP quality) a less attractive return profi le for investors in terms of TVPI (see Fig. 1). Our study uses Preqin’s performance data on over 800 global Across all eleven simulated secondary fund vintages, the TVPI of buyout funds with 1980 to 2013 vintages. The dataset contains the late secondaries lies below that of their younger counterparts. detailed cash fl ows and net asset values (NAVs) over time and for the purpose of our analysis is considered as the universe of If we replicate the analysis based on our measure of annualized primary funds that secondary acquirers target. Based on this data, performance (PERACS Rate of Return), one would expect a we can simulate the performance of a hypothetical secondary reduced effect, as the mature secondaries are by design more investor buying a given subset of these funds at a given age and advanced along the J-curve and should hence have a more at a given price (relative to NAV), then compare the performance favourable annual performance. However, it turns out that this is of these investments to a primary commitment to the same sample the case only for simulated secondary vintages from more than 10 of funds. years ago, while for the more recent vintages, younger secondary

Fig. 1: Secondary Strategies Compared by TVPI (Vintage Fig. 2: Secondary Strategies Compared by PERACS RoR 2000-2010 Funds) (Vintage 2000-2010 Funds)

2.0 0.25 1.9 1.8 0.20 1.7 1.6 0.15 1.5

TVPI 1.4 0.10

1.3 PERACS RoR (%) 1.2 0.05 1.1 1.0 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Vintage Year Vintage Year Early Secondaries Mid Secondaries Late Secondaries Early Secondaries Mid Secondaries Late Secondaries Source: Preqin Secondary Market Monitor Source: Preqin Secondary Market Monitor

Fig. 3: TVPI Assuming Pricing Discount of 20% for Late Fig. 4: PERACS RoR Assuming Pricing Discount of 20% for Late Secondaries (Vintage 2000-2010 Funds) Secondaries (Vintage 2000-2010 Funds)

2.0 0.40

1.9 0.35 1.8 0.30 1.7 1.6 0.25 1.5 0.20 TVPI 1.4 0.15

1.3 PERACS RoR (%) 0.10 1.2 1.1 0.05 1.0 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Vintage Year Vintage Year Early Secondaries Mid Secondaries Late Secondaries Early Secondaries Mid Secondaries Late Secondaries Source: Preqin Secondary Market Monitor Source: Preqin Secondary Market Monitor investments perform better even on an annualized basis (see Fig. where for the two upper quartiles, the simulated late secondary 2). funds outperform their younger counterparts (Figs. 5 and 6)

In a next step we look at the impact of pricing on the attractiveness Case Study: Benchmarking Secondary Fund Investment of mature secondary fund investments. Generally, one observes Opportunities that mature funds are often trading at steeper discounts in the secondary market, which leads to the expectation that the pricing The PERACS Performance Benchmark, which allows investors differential is likely to overcompensate for the aforementioned return to benchmark actual secondary investments against the effect. Our results conﬁ rm that this is indeed the case. Already at simulated performance of hypothetical secondary fund investment a simulated 20% greater discount, mature funds outperform their opportunities based on the method used for this research, makes younger peers on a TVPI basis and even more so on an annualized it possible to dig deeper into the performance of mature secondary basis (see Figs. 3 and 4). investments with speciﬁ c characteristics. Consider the case of an investor who performs due diligence on two fund managers The last dimension we explore is the quality of the underlying specialized in mature secondary funds. Both managers are primary funds, measured as the actual performance quartiles of specialized in the purchase of mature stakes in US buyout funds, each primary fund investment opportunity relative to its peers. i.e. funds of at least eight years of age. Manager A acquires stakes Initially going back to an investment at par for all quality categories, in funds of all performance quartiles, with an average discount of we observe that the initially described underperformance of late 30%, i.e. an entry pricing of 0.7x of NAV. Manager B focuses on secondary investments is driven only by the funds from lower stakes of poorly performing funds, i.e. the lowest two performance performance quartiles. For top-quartile funds, mature secondary quartiles, with an average discount of 50%, i.e. an entry pricing investment (at par) are more attractive than their counterparts, while of 0.5x of NAV. The track record of the two managers is shown in the opposite is the case for funds from the lower three quartiles. Fig. 7. This is true for TVPI and even more so for annualized returns,

Fig. 5: TVPI for Secondaries Strategies across Underlying Fund Fig. 6: PERACS RoR for Secondaries Strategies across Quartiles Underlying Fund Quartiles

2.5 0.5

0.4 2.0 0.3

1.5 0.2

TVPI 0.1 1.0

PERACS RoR (%) 0.0 0.5 -0.1

0.0 -0.2 Top Quartile Second Best Third Best Lowest Quartile Top Quartile Second Best Third Best Lowest Quartile Average Quartile Quartile Average Average Quartile Quartile Average Average Average Average Average Early Secondaries Mid Secondaries Late Secondaries Early Secondaries Mid Secondaries Late Secondaries Source: Preqin Secondary Market Monitor Source: Preqin Secondary Market Monitor

These two track records are difﬁ cult to compare indeed. Considering This analysis shows that the managers differ in their ability to likely timing effects, Manager A tends to have higher IRRs and make such favourable choices. While none of their funds beats TVPIs and also a higher PERACS Alpha (an unbiased measure the PERACS benchmark in terms of IRR, both funds of Manager B of outperformance over public markets). We can gain further outperform this benchmark based on the more relevant PERACS insight into the actual skills of the two managers by comparing Alpha and TVPI measures, while Manager A can point to such their performance fund-by-fund to the PERACS Performance of outperformance in terms of TVPI for only two of his three funds – simulated performance of hypothetical secondary fund investment and all three of his funds underperform in terms of PERACS Alpha. opportunities with comparable characteristics. The corresponding As such, this analysis sheds light on two different elements that PERACS Benchmarks are shown in Fig. 8. investors may want to consider. First, the structural attractiveness of a given investment approach in the secondary space: in our This makes it possible to compare, fund-by-fund, the actual example this would be the choice between a mature secondary secondary investments against the simulated performance of strategy that maximizes the discount to NAV while accepting poor hypothetical secondary fund investment opportunities with the quality managers versus a strategy that accepts a lower discount exact same characteristics in terms of secondary vintage, strategy to obtain a mix of primary funds of all performance categories. (stage, geography and age of the target primary funds), pricing Second, the ability of given managers to make choices among and the quality of the acquired funds. Such a comparison makes it theoretically available investment opportunities that enhanced the possible to identify to what extent a given manager made choices returns above the simulated averages of their chosen strategy. among theoretically available investment opportunities that enhanced the returns above the simulated averages. Fig. 9 shows the results of such a comparison for each of the ﬁ ve funds that are relevant to our example.

Fig. 7: Secondaries Fund Performance of Two Hypothetical Managers

Manager A Secondary Vintage TVPI PERACS Alpha IRR A 2007 2.10 19% 24% A 2009 1.90 16% 30% A 2011 1.50 35% 41% B 2008 1.75 18% 21% B 2010 1.80 30% 29%

Fig. 8: PERACS Benchmark Data for Secondaries Strategy Employed by Two Hypothetical Managers

Quartile PERACS Secondary Vintage Pricings Min. Age Region Stage TVPI IRR Range Alpha 2007 0.7 8 All US Buyout 1.83 20% 25% 2009 0.7 8 All US Buyout 1.79 17% 33% 2011 0.7 8 All US Buyout 1.61 37% 45% 2008 0.5 8 <3Q US Buyout 1.70 17% 24% 2010 0.5 8 <3Q US Buyout 1.75 28% 38% Source: Preqin Secondary Market Monitor

Fig. 9: Comparison of Secondaries Fund Performance of Hypothetical Managers to PERACS Benchmark

Outperf. in Secondary Outperf. in Outperf. in Manager A TVPI PERACS Alpha IRR Terms of Vintage Terms of TVPI Terms of IRR Peracs Alpha A 2007 2.10 19% 24% TRUE FALSE FALSE A 2009 1.90 16% 30% TRUE FALSE FALSE A 2011 1.50 35% 41% FALSE FALSE FALSE B 2008 1.75 18% 21% TRUE TRUE FALSE B 2010 1.80 30% 29% TRUE TRUE FALSE Source: Preqin Secondary Market Monitor

PERACS is a leading provider of quantitative analytics for the private equity industry. We help investors achieve a better understanding of the value drivers behind private equity investments and, subsequently, to make better investment decisions. Peracs offers specialized consulting services to institutional and other sophisticated investors by providing detailed insights into the key aspects of private equity investment performance.

The PERACS Secondaries Benchmark is available through Preqin’s Secondary Market Monitor. Create benchmarks for secondaries strategies, varying the age of underlying investments (early, mid and late secondaries), price paid for the funds as a % of NAV, quartile of the underlying funds and fund types (buyout, venture capital and fund of funds). For more information, or to arrange a demonstration, please visit:

www.preqin.com/smm

5 Private Equity Spotlight / November 2015 © 2014 Preqin Ltd. / www.preqin.com Global private equity fundraising Capstone Partners (www.csplp.com) is a leading independent placement agent focused on raising capital for private equity, credit, real assets and infrastructure firms. The Capstone team includes 25 experienced professionals in North America, Europe and Asia.

Fondi Italiani per le Infrastrutture II We congratulate the F2i team on the successful closing of F2i II above target.

www.csplp.com Americas — Europe — Middle East — Asia Pacific

Securities placed through CSP Securities, LP Member FINRA/SIPC Authorised by FINMA Lead Article The 2016 Preqin Private Equity Compensation and Employment Download Data Review

The 2016 Preqin Private Equity Compensation and Employment Review

Here we present the Executive Summary of the newly released 2016 Preqin Private Equity Compensation and Employment Review, the industry’s leading guide to compensation practice, featuring detailed benchmark remuneration data for over 70 positions.

The 2016 Preqin Private Equity Compensation and Fig. 1: Annual Private Equity Fundraising, 2000 - 2015 YTD (As Employment Review at September 2015)

1,600 In order to analyze the latest trends in compensation within the 1,5061,489 private equity and private debt industry, Preqin (in conjunction with 1,400 1,321 1,315 1,240 1,292 FPL Associates) conducted a survey of just under 200 leading ﬁ rms 1,146 1,200 1,096 in this space to collect data on their compensation practices and 1,012 1,000 966 No. of Funds remuneration levels. This has allowed us to compile meaningful 866 855 statistics covering a wide range of positions at these ﬁ rms, from 800 707 688 693 senior executives through to junior-level professionals. The book 634 669 Aggregate 600 557 544 541552 Capital encompasses all of the major private equity fund strategies (buyout, 401 Raised ($bn) 362 350 362 distressed private equity, private equity fund of funds, growth, 400 320298 238 219 mezzanine, natural resources and venture capital) as well as closed- 172 200 136105 end private real estate and infrastructure. New for this edition, the 2016 Preqin Private Equity Compensation and Employment Review 0

also considers compensation and employment at ﬁ rms employing 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 private debt strategies. 2015 YTD

Another key feature of this publication is the information on Year of Final Close Source: 2016 Preqin Private Equity Compensation and Employment Review employment within the private equity and private debt industries worldwide. Preqin’s databases cover a wide range of asset $541bn and $552bn respectively (Fig. 1). Such levels of fundraising classes and allow us to provide meaningful estimates on levels of have not been seen since around the time of the Global Financial employment, and to break this down by primary fi rm strategy and Crisis (GFC) in 2008, when $688bn was raised by 1,489 funds. fi rm size. In the immediate aftermath of the GFC, private equity fi rms and their employees struggled with a slowdown in the fundraising Private Equity Fundraising Gains Momentum environment, and in 2009, just $320bn was raised by 966 funds. Nevertheless, with more funds expected to close by the end of 2015, There has been a notable uptick in aggregate capital raised within and given that over $360bn has already been secured, 2015 looks the private equity (including private real estate) industry in recent set to be another strong year for private equity fundraising. years, with funds closed in 2013 and 2014 raising total amounts of

Fig. 2: Number of Active Private Equity Firms over Time (By Fig. 3: Average Number of Employees by Firm Assets under Vintage of First Fund Raised) Management

8,000 180 160 160 7,000 140 122 Average No. 6,000 120 105 of Employees 100 per $1bn AUM 5,000 New 80 71 Average No. 4,000 60 55 of Employees Existing 40 40 3,000 25 28 28 16 20 14 10 No. of Active Firms 2,000 0

1,000 $10bn or More $250mn $1-4.9bn $5-9.9bn 0 Less than $250-499mn $500-999mn

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Firm Assets under Management Source: 2016 Preqin Private Equity Compensation and Employment Review Source: 2016 Preqin Private Equity Compensation and Employment Review

This is an extract from The 2016 Preqin Private Equity Compensation and Employment Review. For more information, to download sample pages or to order your copy, please visit: www.preqin.com/compensation

Significant Numbers of Private Equity Firms Enter the Market in fi rms worldwide. There are currently over 600 fi rms worldwide that 2015 actively manage private debt funds (defi ned in this book as utilizing any of the following as a primary strategy: direct lending, distressed While there has been a continuous increase in the number of private debt, mezzanine, private debt fund of funds, special situations and equity fi rms active over time, the GFC had a signifi cant impact venture debt). on the pace of this growth, as illustrated in Fig. 2. The number of active fi rms in the industry grew by as little as 1% in 2009 from In total, private equity and private debt fi rms employ an estimated the year before, compared with 14% in 2006 for the same one- 145,000 people worldwide. Buyout, real estate and venture capital year timeframe. However, over the course of 2015 so far, 625 new fi rms represent an estimated 68% of the total employment of the fi rms have entered the market, representing the highest number industry. of new fi rms entering the market in a single year on record. The 2015 data includes only fi rms that have reached a fi nal close or at Preqin’s analysis of employment in the industry shows the positive least one interim close on their debut funds in order to begin making correlation between the number of staff employed by a fi rm and its investments. Continued LP appetite for the private equity asset class assets under management (AUM). Fig. 3 shows that fi rms with the may be a driving force behind the sudden growth of active fi rms largest AUM ($10bn or more) have an average of 160 staff, and have entering the industry as new fi rms look to meet the demand shown an average of 10 employees per $1bn of AUM. The staff costs are by investors and take their share of the marketplace. The robustness covered by the income received from charging management fees to of the private equity industry as a whole and the stabilization of the their investors, which are usually based on a percentage of investor asset class are indicative of the continuous increase in the number commitments. of active fi rms worldwide. As in previous years, funds with smaller AUM have a signifi cantly Chapter 3 of the Review contains more information about the higher average number of staff per $1bn in AUM, despite having evolution of the industry and the number of active fi rms by geographic lower average numbers of staff overall. Preqin’s latest data shows location and primary fi rm strategy over the years. that fi rms with AUM of less than $250mn have 14 employees on average, but an average of 122 staff members per $1bn in AUM. Employment Levels at Private Equity and Private Debt Firms Smaller fi rms may have fewer employees, but with management fees charged on smaller amounts of investor commitments (compared There are currently over 7,400 fi rms actively managing private equity with the larger private equity fi rms), the operating economics of the and private debt funds worldwide (i.e. currently raising funds or that largest funds, with higher income from management fees, are often have raised a fund in the past 10 years). Should those that manage more favourable for their managers. corporate or personal capital and those that manage third-party capital without pooling into commingled private investment vehicles Compensation on an Individual Level be included, the total number of active fi rms under consideration increases to approximately 10,000. The operating economics, which vary according to a fi rm’s AUM or location, also impact the remuneration available to individuals at each New for this edition, the 2016 Preqin Private Equity Compensation fi rm. For example, a Chief Executive Offi cer at a fi rm participating in and Employment Review takes a look at the private debt industry and the survey could have a median base salary at a large fi rm (with compensation and employment practices observed at private debt AUM of $1bn or more) that is more than twice as much the median

Fig. 4: Changes to Company Staff Numbers in 2014 by Fig. 5: Breakdown of Average Firm-Wide Changes in Base Headcount Salaries of Participating Firms between 2014 and 2015

60% 53%

11% 50%

Added to 40% Headcount 30% Flat Headcount (No Net Additions or 19% 20% 33% Reductions) 57% Reduced 13% Headcount 8% 10% 6% Proportion of Participating Firms 1% 0% Decrease No Increase 0.1-10% 11-20% More than Change (Did Not Increase Increase 20% State %) Increase Change in Firm-Wide Base Salary Source: 2016 Preqin Private Equity Compensation and Employment Review Source: 2016 Preqin Private Equity Compensation and Employment Review

base salary of an individual in the same position at a smaller fi rm Fig. 6: Proportion of Participating Firms Reporting an (with AUM of less than $150mn). Similarly, a Chief Executive Offi cer Increase, Decrease or No Change in Cash Bonus Payouts of a fi rm headquartered in the US makes on average approximately for Performance in Calendar/Fiscal Year 2014 Compared to $86,000 more a year (base salary) than the same position in a Previous Year Europe-based fund manager.

Chapter 7 of the Review lists detailed benchmark compensation fi gures for different positions at participating fi rms. The tables 16% in this chapter include fi gures for base salary, total annual cash compensation, long-term incentive/carried interest awarded and Increase in Cash Bonus Payouts total remuneration data for 71 different positions, including all levels of seniority for deal-making positions, as well as senior executive, 46% No Change in Cash administrative/corporate positions and positions specifi c to real Bonus Payouts estate management, including asset and portfolio management and transactions. Where possible, in addition to the aggregate fi gures, Decrease in Cash Bonus Payouts the information is broken out by AUM, geographic market and the 39% strategy employed (buyout, venture capital, infrastructure etc.). Figures are provided for the 25th percentile, median, average and 75th percentile benchmarks in each case.

Changes in Compensation and Employment on a Firm Level Source: 2016 Preqin Private Equity Compensation and Employment Review In addition to compensation data on an individual level, the 2016 their respective fi rms. However, this is not the case across the entire Preqin Private Equity Compensation and Employment Review market, with 19% and 6% of fi rms reporting no change or a decrease contains analysis of fi rm-level data. For example, Fig. 4 shows the in the fi rm-wide base salary respectively between 2014 and 2015. proportion of fi rms that increased, reduced or made no changes to the number of staff they had at their company in 2014. The majority Bonus payouts make up an important part of the compensation (57%) of participating fi rms reported that they added to the staff package of employees at private equity and private debt fi rms; they headcount within their company, while the smallest proportion (11%) are based not only on individual performance, but also on fund or made reductions during the year. fi rm-wide performance. Fig. 6 shows the proportion of participating fi rms that saw an increase, decrease or no change in cash bonus Furthermore, Fig. 5 shows the breakdown of average fi rm-wide payouts for performance in 2014 compared with 2013. The largest changes in base salaries at participating fi rms between 2014 and proportion of fi rms (46%) saw an increase in cash bonus payouts 2015. The majority (53%) of fi rms made small increases in the in the defi ned time period, which perhaps illustrates such fi rms’ fi rm-wide base salary of 0.1-10%, and overall, three-quarters of success during that year which, consequently, saw an increase in participating fi rms made increases in the fi rm-wide base salary the bonus pool to compensate the best performers. Meanwhile, 39% during this time. This is encouraging and indicative of the relatively of participating fi rms saw no change in the bonus pool, and 16% resilient health of the industry, with most companies looking to reported a decrease in cash bonus payouts for performance in 2014 incentivize their staff and provide better compensation packages at compared with the year before.

The 2016 Preqin Private Equity Compensation and Employment Review

The 2016 Preqin Private Equity Compensation and Employment Review is the industry’s The 2016 leading guide to compensation practice, featuring detailed benchmark remuneration data for over Preqin Private Equity Compensation and Employment Review 70 positions, including 16 real estate-speciﬁ c positions.

Produced in collaboration with leading compensation specialists FPL Associates, the 2016 Preqin Private Equity Compensation and Employment Review is the industry’s most comprehensive guide to compensation practices. New for this year’s edition, the analysis covers ﬁ rms with primary

In association with:

focus on private debt and natural resources alongside our existing range of ﬁ rm types, including buyout, venture capital, real estate, infrastructure, mezzanine and more. alternative assets. intelligent data

The Review uses data on thousands of employees actively employed by just under 200 leading private equity and private debt ﬁ rms worldwide that have contributed data. It also includes the results of our detailed survey on all aspects of compensation practices.

For more information, to download sample pages or to order your copy, please visit:

www.preqin.com/compensation

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The deal landscape in Asian venture capital has seen its best ever year in 2015, topping all previous records. Matthew Morris takes a look at the latest news stories for Asian venture capital deals and fundraising.

Asian venture capital has seen a bumper 2015 in terms of both the number of venture capital deals completed and the aggregate Chart of the Month value these transactions have generated. With two months remaining in the year, aggregate deal value is already 87% higher Annual Number and Aggregate Deal Value of Asian than that for the whole of 2014, at $43bn. In contrast, Europe and Venture Capital Deals*, 2007 – 2015 YTD (As at 27 North America have both witnessed fewer venture capital deals October 2015) in 2015, with the number of North American deals currently 34% 2,500 45 lower than in 2014. However, European venture capital deal value has already surpassed the $9.6bn seen in 2014, currently standing 40 Aggregate Deal Value ($bn) at $11bn this year so far, and North American deal value is already 2,000 35 higher in 2015 YTD ($61bn) than for the whole of 2014 ($57bn). 30 1,500 According to Preqin’s Venture Deals Analyst, there have been four 25 Asia-based deals valued at $1bn or more in 2015 so far, with the 20 two largest venture capital deals globally this year taking place in 1,000 No. of Deals China. The $2bn investment round for China-based Didi Kuaidi, a 15 mobile application provider for booking taxis, is the largest venture 500 10 capital deal so far this year, with investors including Alibaba Group, 5 Temasek Holdings and Ping An Ventures. Outside of China, South Korean Coupang was involved in one of the largest Asian 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 venture capital deals in 2015 YTD, with Softbank leading a $1bn YTD investment. No. of Deals Aggregate Deal Value ($bn)

Source: Preqin Venture Deals Analyst Asian Venture Capital Deals *Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt In October 2015, LeTV acquired a 70% stake for $700mn in China- based Yongche.com. The company operates as an e-commerce website for special car rental services, and was valued at a post- Asian Venture Capital Funds money valuation of $1bn following the transaction. Established in 2010, previous backers in Yongche include Baidu, CBC Capital Venturra Fund I, an Indonesia-focused early stage vehicle that and GIC. closed on $150mn in October 2015, will look to invest across a range of industries including the technology, healthcare, internet, India-based One97 Communications raised $680mn in September education, consumer services and retail sectors. The fund is a 2015 from investors Alibaba Group and Ant Financial. As a debut vehicle from Venturra Capital and is sponsored by Indonesia- result, the company, which offers services to businesses and based real estate development group Lippo. organizations to leverage the telecom opportunities in India, is now valued at $4bn. Previously, the company had raised venture capital China-focused Gobi Yingzhi II held a fi nal close in September 2015, fi nancing from SVB Capital, Intel Capital and SAIF Partners India, completing fundraising on CNY 600mn. The fund looks to invest among others. in China-based start-ups, focusing on software, cloud computing, fi ntech, smart hardware and online travel booking. The fund follows Welspun Renewables Energy Pvt. Ltd., an India-based company the CNY 300mn vehicle closed in 2011, Gobi Yingzhi, which solely that offers renewable energy generation services operating in targets IT-related industries in China. solar and wind power projects, raised $452mn in venture debt in October 2015 from GE Energy Financial Services. The company Kalaari Capital closed its third venture capital fund in September has previously raised capital from the Asian Development Bank 2015, raising $290mn to invest exclusively in India. Kalaari Capital and has been in existence since 2009. Partners III targets early stage investments operating in a wide range of industries, including the technology sector. This third fund represents a sizeable increase on the fi rm’s second vehicle, Kalaari Capital Partners II, which collected $160mn in September 2012.

Do you have any news you would like to share with the readers of Spotlight? Perhaps you’re about to launch a new fund, have implemented a new investment strategy, or are considering investments beyond your usual geographic focus?

Send your updates to [email protected] and we will endeavour to publish them in the next issue.

In addition to our monthly Spotlight newsletters and publications, Preqin also publishes special reports and daily blogs covering all alternative asset classes. Read on to see what’s new from Preqin this month in the private equity universe.

Blog of the Month  The Make-up of Newly Established Private Equity Firms – October 2015

According to Preqin’s Fund Manager Profi les online service, 475 private equity fi rms that are active today have been established since the start of 2014, with 320 setting up in 2014 and a further 155 in 2015 so far. Despite the short time these fi rms have been active in private equity, a considerable amount of fundraising has taken place; since January 2014, these fi rms have raised $13bn in aggregate capital commitments.

In terms of primary fi rm strategy, venture capital vastly outnumbers other approaches among newly established private equity fi rms. Sixty-one percent of all private equity fi rms established since 2014 employ a venture capital strategy. Venture capital investments are inherently small, so with lesser amounts of capital needed for deals and funds relative to other private equity strategies such as buyout, it is not surprising that venture capital fi rms are the most numerous.

Click here to read the full blog by Luke Goldsmith. To view the full archive of Preqin blogs, please visit www.preqin.com/blog.

New Research ASEAN Private Equity Preqin Quarterly Update: Deal Activity Private Equity, Q3 2015

The Facts ASEAN Private Equity Deal Activity alternative assets. intelligent data. The Q3 2015 ASEAN Private Equity Deal Activity Preqin Quarterly Update

Start-ups in ASEAN are drawing increasing attention from venture capital ﬁ rms and several countries have put in place measures to Private Equity encourage such activities. The appetite for venture capital investments has seen a growth in both the number of deals and aggregate value transacted between 2014 and 2015 YTD. On the other hand, buyout activity has yet to match the peak seen in 2014. Insight on the quarter from the leading provider of alternative assets data

In 2014-2015 YTD, there were 401 venture capital deals completed in ASEAN, totalling $2.2bn in aggregate value. When looking at buyout activities in the same timeframe, a total of 81 private equity-backed buyout deals were transacted at $10.1bn. Singapore accounted for more than half of the aggregate value in both venture capital ﬁ nancings and private equity-backed buyouts. Content includes...

Here, we provide a breakdown of the 10 most prominent ﬁ rms, largest deals, notable exits and deals split by industry in both the venture capital and buyout space in ASEAN. Fundraising Lowest number funds to Fig. 1: 10 Most Prominent Buyout Firms Investing in ASEAN Fig. 2: Proportion of Number and Aggregate Value of Private by Aggregate Transaction Value*, 2014-2015 YTD (As at 15 Equity-Backed Buyout Deals in ASEAN by Industry, 2014-2015 close in a quarter since October 2015) YTD (As at 15 October 2015) 2006.

Aggregate Transaction 100% Clean Technology Investor No. of Deals Size ($mn) 90% Energy & Utilities EQT 1 2,673 80% Materials China Development Bank Capital 1 2,518 Investors in Private 70% Healthcare Boyu Capital 1 2,518 Equity 60% Real Estate Hopu Investment Management 1 2,518 50% Information Over half of investors are KKR 3 1,174 Technology 40% Telecoms & Media currently below their target Blackstone Group 1 800 30% Industrials Proportion of Total allocation to private equity. Standard Chartered Private Equity 7 570 20% Business Services Carlyle Group 1 459 10% Food & Agriculture Warburg Pincus 3 259 0% Consumer & Retail Advent International 1 235 No. of Deals Aggregate No. of Deals Aggregate Deals Source: Preqin Buyout Deals Analyst Value Value *Includes multi-investor deals. 2014 2015 YTD Venture capital investment Source: Preqin Buyout Deals Analyst reached record levels in Fig. 3: Five Largest Private Equity-Backed Buyout Deals in ASEAN, 2014-2015 YTD (As at 15 October 2015) Q3.

Deal Size Portfolio Company Investment Type Deal Date Investor(s) Location Industry ($mn) Sivantos Buyout Nov-14 2,673 EQT, Santo Holding Singapore Medical Devices Bank of China Group Investment, Boyu Capital, China Fund Performance Global Logistic Properties PIPE Feb-14 2,518 Development Bank Capital, China Life Insurance Singapore Logistics Limited Company, Hopu Investment Management and Dry Powder Goodpack Ltd Public-to-Private May-14 1,120 KKR Singapore Logistics Investors received record Tamarind Energy Buyout Jul-14 800 Blackstone Group Malaysia Oil & Gas distributions in 2014. PT XL Axiata TBK Telecom Add-on Oct-14 459 Carlyle Group, PT Solusi Tunas Pratama Tbk Indonesia Telecoms Towers

Source: Preqin Buyout Deals Analyst Fig. 4: Notable Private Equity-Backed Exits in ASEAN, 2014-2015 YTD (As at 15 October 2015) Secondaries

Portfolio Investment Investment Deal Size Exit Value Acquiror Fundraising for secondaries Investors(s) (Entry) Exit Date Exit Type Location Industry Company Date Type ($mn) ($mn) (Exit) vehicles saw a significant Ashmore Investment Management, Asia Netcom, slowdown in Q3. Pacnet Jan-08 Merger - Clearwater Capital Partners, Dec-14 Trade Sale 697 Telstra Singapore Telecoms Plus, Special Guest Contributors: Paciﬁ c Internet, Spinnaker Capital Capstone Partners PT Bank Sumitomo Tabungan Private Mitsui Financial May-07 Buyout 200 Northstar Group, TPG Feb-15 461 Indonesia Fund Terms Pensiunan Placement Banking Services Nasional Corporation Average hurdle rate Growth Private Link Net Jun-11 275 CVC Capital Partners Nov-14 450 - Indonesia Telecoms has dropped for third Capital Placement Source: Preqin Buyout Deals Analyst consecutive vintage year.

Venture capital deal activity in ASEAN has seen signifi cant Q3 2015 has seen some notable dips in the level of global growth between 2014 and 2015 YTD, with Singapore private equity activity, but also some pockets of signifi cant accounting for more than half the region’s total deal value. growth. This report details the end-of-quarter stats for private In this factsheet, Preqin provides league tables of the most equity fundraising, performance and dry powder, buyout and prominent fi rms, largest deals and notable exits in both the venture capital deals, plus our latest analysis on fund terms venture capital and buyout space in ASEAN. In addition, KKR and the secondary market. Capstone Partners provide a discusses the region’s deal environment. special contributory article. Download a copy Download a copy

For more free research from Preqin available to download now, please visit our Research Center. Already a member? Login for access to Research Center Premium.

alternative assets. intelligent data.

Fund Coverage: Funds 45,657 925 Infrastructure Funds 5,410 PE Real 18,208 Private Equity* Funds 19,259 Hedge Funds Estate Funds 1,855 Private Debt Funds Firm Coverage: Firms 21,838 466 Infrastructure Firms 3,036 PERE 9,526 PE Firms 7,955 Hedge Fund Firms Firms 855 Private Debt Firms

Performance Coverage: 21,125 Funds (IRR Data for 6,086 Funds and Cash Flow Data for 2,948 Funds) 1,388 195 Infrastructure 6,119 PE Funds 12,734 Hedge Funds PERE Funds 689 Private Debt

Fundraising Coverage: 17,747 Funds Open for Investment/Launching Soon Including 2,686 Closed-Ended Funds in Market and 331 Announced or Expected Funds 969 259 Infra. Funds 2,056 PE 14,210 Hedge Funds PERE Funds Funds 253 Private Debt Funds Deals Coverage: 148,201 Deals Covered; All New Deals Tracked

43,908 Buyout Deals** 92,608 Venture Capital Deals*** 11,685 Infra. Deals

Investor Coverage: 13,555 Institutional Investors Monitored, Including 9,519 Verified Active**** in Alternatives and 99,906 LP Commitments to Partnerships

5,020 Active Hedge 2,554 Active 1,733 Active 6,121 Active PE LPs 5,068 Active RE LPs Fund Investors Infra. LPs Private Debt Investors Alternatives Investment Consultant Coverage: 515 Consultants Tracked Fund Terms Coverage: Analysis Based on Data for Around 12,660 Funds Best Contacts: Carefully Selected from Our Database of over 338,153 Active Contacts

Plus The Preqin Difference - Over 200 research, support and development staff Comprehensive coverage of: - Global presence - New York, London, Singapore, San - Placement Agents - Dry Powder Francisco and Hong Kong - Fund Administrators - Compensation - Depth and quality of data from direct contact methods - Law Firms - Plus much more... - Unlimited data downloads - Debt Providers - The most trusted name in alternative assets

New York: +1 212 350 0100 | London: +44 (0)20 3207 0200 | Singapore: +65 6305 2200 | San Francisco +1 415 316 0580 | Hong Kong +852 3958 2819 www.preqin.com

*Private Equity includes buyout, venture capital, distressed, growth, natural resources and mezzanine funds. **Buyout deals: Preqin tracks private equity-backed buyout deals globally, including LBOs, growth capital, public-to-private deals, and recapitalizations. Our coverage does not include private debt and mezzanine deals. ***Venture capital deals: Preqin tracks cash-for-equity investments by professional venture capital firms in companies globallyacross all venture capital stages, from seed to expansion phase. The deals figures provided by Preqin are based on announced venture capital rounds when the capital is committed to a company. ****Preqin contacts investors directly to ensure their alternatives programs are active. We emphasize active investors, but clients can also view profiles for investors no longer investing or with programs on hold. The Facts LP Survey: Co-Investments Download Data

LP Survey: Co-Investments

Preqin is delighted to announce the launch of the Preqin Special Report: Private Equity Co-Investment Outlook, which compiles survey results from 320 active GPs and 222 active LPs. Co-investments have been rising in prominence in recent times, and the report highlights a number of interesting trends, providing insight into activity and sentiment on both the investor and fund manager side. Click here to download the full report.

Fig. 1: Breakdown of LPs by Current Co-Investment Activity Fig. 2: LPs’ Future Co-Investment Plans

Actively Co-Investing Increase Co- Investment Activity 24% 26% 26% Opportunistically Co- Investing Maintain Level of Co- Investment Activity Has Not Co-Invested 3% Previously, Will Consider in 49% the Future 2% Decrease Co- Has Co-Invested Previously, Investment Activity But No Future Plans

22% 24% Never Co-Invested, No 23% Uncertain on Future Plans to Co-Invest in Future Co-Investment Plans

Source: Preqin Investor Survey, September 2015 Source: Preqin Investor Survey, September 2015

Fig. 3: LPs’ Motivations for Co-Investing Alongside a Fund Fig. 4: Performance of Past Co-Investments Compared to Manager Private Equity Fund Returns

80% 50% 46% 45% 70% 67% 61% 40% 60% 35% 50% 30% 40% 25% 20% 40% 34% 31% 20% 17% 30% 14% 23% Respondents 15% Proportion of LP 20% 10% 5% 3% 0% 0% 10% 6% 0% Proportion of LP Respondents 0% Other Funds Up to -2.5% Up to +2.5% -5% or More -2.5% to -5% Same as PE +2.6% to +5% +5.1% or More Lower Fees Performed the Relationships Better Returns Companies

Strengthen GP Underperformed PE Fund Outperformed PE Fund Better Control Gain Access to Specifc Portfolio over Investments Gain Knowledge of Industry Sector Returns Returns Source: Preqin Investor Survey, September 2015 Source: Preqin Investor Survey, September 2015

Fig. 5: Notable Institutional Investors that Co-Invest

Saudi Economic & Development Company Investment Company Location: Saudi Arabia Total Assets: $3bn Target PE Allocation: 22% of Total Assets Current PE Allocation: 22% of Total Assets Saudi Economic & Development Company (SEDCO) actively targets co-investment opportunities and allocates 5% of its total assets (25% of its private equity portfolio) to direct and co-investment opportunities. It does not take a stake in a company larger than 20% and looks to make four or fi ve co-investments annually. The investment company typically commits between $10mn and $50mn to a fund in order to receive co-investment opportunities. SEDCO co-invests globally and will consider all industry sectors and investment types, excluding venture capital. It co-invests predominantly with existing managers in its portfolio and also some GPs it has not previously worked with. Netherlands Development Finance Company (FMO) Government Agency Location: Netherlands Total Assets: €7.1bn Target PE Allocation: 25% of Total Assets Current PE Allocation: 25% of Total Assets Netherlands Development Finance Company (FMO) made its fi rst co-investment alongside a GP in 1998 and dedicates approximately 33% of its private equity investments to direct and co-investments. It typically makes between 10 and 15 co-investments annually, committing €5-25mn to each opportunity. As with its other private equity commitments, FMO’s co-investments must be focused on emerging markets. It has a strong preference for fi nancial services, renewable energy and affordable housing and agribusiness services. Source: Preqin Investor Intelligence

GP Survey: Co-Investments

The benefits and drawbacks to co-investing, as perceived by fund managers, in addition to information on co- investment fund terms are outlined below.

Fig. 1: Proportion of GPs Offering Co-Investment Rights to Fig. 2: Discounts Offered to Co-Investing LPs Compared to Their LPs Usual LP Fund Commitment

60%

49% 13% Offer Co-Investment 50% 48% Rights 0% 40% 36% Considering Offering Co-Investment Rights 30% 27% 18% 25%

20% Previously Offered 16% Co-Investment Rights but Do Not Anymore 10%

69% Proportion of GP Respondents Do Not Offer Co- Investment Rights 0% No Fee Reduced Same Fee No Carry Reduced Same Fee Carry Carry Management Fees Carried Interest Source: Preqin Fund Manager Survey, August 2015 Source: Preqin Fund Manager Survey, August 2015

Fig. 3: Perceived Benefits of Offering LPs Co-Investment Fig. 4: Perceived Disadvantages of Offering LPs Rights Co-Investment Rights

90% 84% 80% 76% 80% 70% 69% 70% 60% 60% 55% 50% 50% 44% 44% 40% 40% 29% 27% 30% 30% 26% 20% 16% 20% 10% 1% 10% 6%

Proportion of GP Respondents 0% Proportion of GP Respondents 0% Other Other Process for Deals Slows Deals Differentiation Additional Opportunity to Improve the Benefits to the Chance of a Gain Access to Opportunity to Enhance Product Build a Stronger Additional Capital with Other LPs Costs/Resource Portfolio Company Terms or Rights of Co-Investors Better Manage Risk on Relationships Negative Impact Relationship with LPs Differences in the Successful Fundraise Source: Preqin Fund Manager Survey, August 2015 Source: Preqin Fund Manager Survey, August 2015

Preqin Special Report: Private Equity Co-Investment Outlook - November 2015

Preqin Special Report: Preqin surveyed 320 active GPs and 222 active LPs to delve further into the world of co-investments, in order Content Includes: Private Equity Co-Investment Outlook

Importance of Co- Investments November 2015 to produce this special report and examine industry trends past, present and future. The majority of GPs believe offering co-investments is important for fundraising success.

Offering Co-Investments

More than two-thirds of GPs surveyed currently offer co- With more and more LPs showing a desire to commit to co-investments in an increasingly competitive investment rights. Current Activity

Over half of LPs that currently have open co- investment positions have fundraising environment, we are likely to see GPs offer such opportunities more readily. This report presents more than five.

Performance of Co- Investments

Co-investments have exclusive information on both GPs’ and LPs’ current activity, their perception of co-investments and their largely outperformed fund commitments for LPs.

Co-Investment relationship with one another, plus details of performance, future plans and more. Discounts Most GPs offer reduced management fees and carried interest on co- investments.

Future Plans

Both GPs and LPs expect co-investment activity to remain strong.

For more information, and to download your free copy, please visit:

alternative assets. intelligent data. www.preqin.com/CoInv15

The 2015 Preqin Private Equity Fund Terms Advisor is the ultimate guide to private equity fund terms and conditions, featuring analysis based on over 4,500 funds – more than ever before!

• Identify typical terms and benchmark funds to see how terms compare to the market • View actual terms and conditions data for over 2,500 funds • Download data to conduct your own analysis • Model the real economic impact of various terms • Review data and analysis on the actual fees and costs incurred by LPs

Every purchase of the 2015 Preqin Private Equity Fund Terms Advisor includes a free 12-month subscription to Preqin’s Fund Terms Advisor online service.

For more information, please visit: www.preqin.com/fta alternative assets. intelligent data. The Facts Nordic Venture Capital Deals Download Data

Nordic Venture Capital Deals

The Nordic region has established itself as one of Europe’s more mature private equity landscapes, and the venture capital sector in particular has shown significant growth this year. Wilson Su presents the latest statistics on venture capital deals that have taken place in the developed economies of Denmark, Finland, Iceland, Norway and Sweden.

Fig. 1: Quarterly Number and Aggregate Value of Venture Capital Deals* in the Nordic Region, Q1 2007 - Q4 2015 TD Fig. 2: Number of Venture Capital Deals* in the Nordic (As at 27 October 2015) Region by Country, 2007 - 2015 YTD (As at 27 October 2015)

80 1,600 250 Aggregate Deal Value (€mn) 70 1,400

60 1,200 200 7 2 14 5 21 Iceland 50 1,000 6 3 36 19 3 24 44 Norway 40 800 150 24 1 50 25 33 48 30 600 3 47 Denmark No. of Deals 32 25 32 59 1 20 400 100 8

No. of Deals Finland 42 40 61 34 33 14 36 29 10 200 22 Sweden 0 0 50 29 78 67 63 71 65 71 60 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 52 37 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 YTD 2007 2008 2009 2010 2011 2012 2013 2014 2015 No. of Deals Aggregate Deal Value (€mn) YTD Source: Preqin Venture Deals Analyst Source: Preqin Venture Deals Analyst

Fig. 3: Breakdown of Aggregate Value of Venture Capital Deals* in the Nordic Region by Country, 2007 - 2015 YTD (As at 27 October 2015)

100% 1% 2% 5% 3% 4% 7% Subscriber Quicklink 90% 17% 20% 11% 5% 15% 2% 26% 14% 80% 28% 8% Subscribers to Preqin’s Venture Deals Analyst can click here 48% 18% 6% Iceland to view comprehensive information on over 2,000 venture 70% 24% 27% 14% 15% capital deals in the Nordic region. 14% 60% 17% Norway 11% 71% Deal proﬁ les detail type, location, known ﬁ nancing, known 50% 7% 20% Denmark 11% investors, deal overview, deal stages and much more. 40% 10% 70% Finland

Proportion of Total 30% 61% Not yet a subscriber? For more information, or to arrange a 53% 47% 46% 50% Sweden demonstration, please visit: 20% 40% 30% 10% 18% www.preqin.com/vcdeals 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD Source: Preqin Venture Deals Analyst

Fig. 4: Largest Venture Capital Deal* in the Nordic Region in 2015 YTD (As at 27 October 2015)

Deal Deal Size Deal Size Portfolio Company Stage Investors Industry Location Date (mn) (€mn) Abu Dhabi Investment Council, Accel Partners, Baillie Gifford, Coca-Cola Company, Creandum, D.E. Shaw & Co, Digital Sky Capital, Discovery Capital Management, Fidelity Investment Managers, Founders Fund, Goldman Sachs, GSV Asset Spotify Jun-15 Series G/Round 7 526 USD 467 Internet Sweden Management, Halcyon, Kleiner Perkins Cauﬁ eld & Byers, Lansdowne Partners, Li Ka Shing Foundation, Northzone Ventures, Rinkelberg Capital, Schoenfeld, Senvest Capital, Technology Crossover Ventures, TeliaSonera, Wellington Partners Source: Preqin Venture Deals Analyst *Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

Large Cap Buyout Deals

With the announcement of Dell Inc., MSD Capital, Silver Lake and Temasek Holdings buying EMC for a record $67bn boosting this year’s total, aggregate deal value for large cap private equity-backed buyout deals (defined as $1bn and above) is at its highest level since 2007. Vanessa Hui provides a breakdown of deals in the top size bracket.

Fig. 1: Quarterly Number and Aggregate Value of Large Fig. 2: Breakdown of Number of Private Equity-Backed Cap Private Equity-Backed Buyout Deals, 2006 - 2015 YTD (As Buyout Deals by Value Band, 2006 - 2015 YTD (As at 27 at 27 October 2015) October 2015)

70 300 100% 5% 3% 5% 5% 7% 5%

Aggregate Deal Value ($bn) 8% 12% 12% 10% 60 90% 12% 250 15% 15% 16% 15% 18% 23% 50 80% 18% 18% 23% 200 70% 40 $1bn or More 150 60% 30 50% $250-999mn No. of Deals 100 20 85% 40% 80% 80% 79% 78% 77% Less than 50 70% 70% 69% 67% $250mn 10 Proportion of Total 30%

0 0 20%

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 0% YTD

No. of Deals Aggregate Deal Value ($bn) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Preqin Buyout Deals Analyst Source: Preqin Buyout Deals Analyst

Fig. 3: Breakdown of Number of Large Cap Private Equity- Backed Buyout Deals by Region, 2006 - 2015 YTD (As at 27 October 2015)

100% 0% 5% 5% 4% 7% 6% 4% 3% 3% 3% Subscriber Quicklink 2% 3% 6% 7% 7% 90% 21% 4% 6% 13% 12% 80% Subscribers to Preqin’s Buyout Deals Analyst can click here 26% 39% 43% 33% 36% to view comprehensive information on over 980 large cap 70% 42% 39% 29% 33% Rest of World 32% private equity-backed buyout deals worldwide. 60% Asia 50% Deal proﬁ les contain information on industry, location, entry Europe 40% deal size, investment type and much more. 30% 63% Proportion of Total North America 53% 56% 54% 56% 50% 48% 47% 48% 52% Not yet a subscriber? For more information, or to arrange a 20% demonstration, please visit: 10% 0% www.preqin.com/buyoutdeals 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD Source: Preqin Buyout Deals Analyst

Fig. 4: Five Largest Private Equity-Backed Buyout Deals, 2006 - 2015 YTD (As at 27 October 2015)

Portfolio Company Investment Type Deal Date Deal Size (mn) Deal Status Investors Location Industry Dell Inc., MSD Capital, Silver Lake, Temasek EMC Add-on Oct-15 67,000 USD Announced US IT Holdings California Public Employees' Retirement System (CalPERS), Citigroup, Energy Capital Partners, Energy Future Public-to-Private Feb-07 45,000 USD Completed Goldman Sachs Merchant Banking Division, KKR, US Energy Holdings Corporation Lehman Brothers, Morgan Stanley, Quintana Capital Group, TPG The Kraft Heinz 3G Capital, Berkshire Hathaway, H.J. Heinz Merger Mar-15 40,000 USD Completed US Food Company Company, Kraft Foods Group Bain Capital, Citigroup, KKR, Merrill Lynch Global HCA Holdings Inc. Public-to-Private Jul-06 33,000 USD Completed US Healthcare Private Equity, Ridgemont Equity Partners Citi Private Equity, Goldman Sachs Merchant First Data Public-to-Private Apr-07 29,000 USD Completed US Software Banking Division, KKR Source: Preqin Buyout Deals Analyst

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Gaining access to Preqin’s Research Center Premium is easy – to register for free, please visit: www.preqin.com/RCP alternative assets. intelligent data. The Facts Q1 2015 Performance Update Download Data

Q1 2015 Performance Update

Emma Underwood provides private equity performance data updates to 31 March 2015, comparing the returns of different investment strategies as well as using Kaplan-Schoar PME analysis to contrast private equity performance with the public market.

Fig. 1: KS PME - All Private Equity, All Regions vs. S&P 500 Total Fig. 2: PrEQIn Index - All Strategies as of 31 March 2015 Return (As of 31 March 2015) (Rebased to 100 as of 31 December 2000)

1.20 600 All Private Equity 1.15 500 Buyout 1.10 400 Venture Capital 1.05 300 Real Estate 1.00 KS PME (X) 31-Dec-2000) 200 Fund of Funds 0.95 Distressed Private 100 Equity 0.90 S&P 500 TR Index Returns (Rebased to 100 as of 0 0.85 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Vintage Year 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 31-Dec-14 Source: Preqin Performance Analyst Source: Preqin Performance Analyst If PME value (X) is >1, private equity has outperformed the public market.

Fig. 3: Private Equity - Median Net IRRs by Vintage Year and Fund Type Fig. 4: Private Equity Horizon IRRs (As of 31 March 2015)

30 25%

All Private Equity 25 All Private Equity 20% Buyout 20 Buyout Venture Capital Distressed Private 15% 15 Equity Fund of Funds Fund of Funds 10% Mezzanine 10 Horizon IRR Secondaries Real Estate

Net IRR since Inception (%) 5 Venture Capital 5% Distressed Private Equity 0 0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 Year to 3 Years to 5 Years to 10 Years to Vintage Year Mar 2015 Mar 2015 Mar 2015 Mar 2015 Source: Preqin Performance Analyst Source: Preqin Performance Analyst

Data Source

Preqin’s Performance Analyst is the industry’s most extensive source of net-to-LP private equity fund performance, with full metrics for over 7,700 named vehicles. In terms of capital raised, Performance Analyst also contains data for around 70% of all funds raised historically.

For more information, or to arrange a demonstration, please visit:

www.preqin.com/performance

The 2015 Preqin Alternative Assets Performance Monitor provides unrivalled insight into the performance of alternative assets funds, analyzing performance data for over 20,500 funds.

This year’s new and expanded edition includes:

• Top performing funds, most consistent managers and ‘funds to watch’ • Examination of risk vs. return for different asset classes and strategies • Analysis of funds across different strategies and geographies by vintage year • Public Market Equivalents (PME) – compare private equity performance relative to public markets • NEW FOR 2015! Analysis covering all alternatives, including private equity & venture capital, real estate, infrastructure, private debt, natural resources and hedge funds.

For more information, please visit:

www.preqin.com/pm alternative assets. intelligent data. Conferences Conferences Download Data

Conferences Spotlight

Conference Dates Location Organizer Preqin Speaker Discount Code Endowment & Foundations 16 - 18 November 2015 Boston, MA Opal Finance Group - - Forum AIMA Alternative Investment 16 - 17 November 2015 Dubai AIMA - - Summit 15% Discount - SuperInvestor 17 - 20 November 2015 Amsterdam ICBI Mark O'Hare FKR2373PNSL

Wealth Management Americas 17 - 18 November 2015 Miami, FL Terrapinn - -

America’s Family Ofﬁ ce Forum 18 - 19 November 2015 Miami, FL Terrapinn - -

Healthcare Game Change 18 November 2015 New York Privcap - -

15% Discount - Private Equity Deal Origination 25 November 2015 London Informa - FKW53245PQL 30 November - 2 15% Discount - Global AgInvesting Europe London HighQuest Group - December 2015 Preqin 2015

AIFM Directive Conference 30 November 2015 London PE Forum - -

SuperReturn Africa 1 - 3 December 2015 Ghana ICBI - -

CLO Summit 2 - 4 December 2015 Dana Point, CA Opal Finance Group - -

Southeast Asia Institutional Haymarket Media 2 - 3 December 2015 Singapore -- Investor Forum Ltd. IP Dealmakers IP Dealmakers Forum 7 - 8 December 2015 New York -- Forum

Alternative Investing Summit 9 - 11 December 2015 Dana Point, CA Opal Finance Group - -

PE IR Conference 10 December 2015 London BIE Events Leopold Peavy -

Catalyst Cap Intro: Private Equity Catalyst Financial 14 December 2015 New York -- Fund Investing Partners

Asia Private Equity Forum 20 January 2016 Hong Kong HKVCA Mark O'Hare -

Cayman Alternative Investment 4 - 5 February 2016 Grand Cayman CAIS Ltd - - Summit

Women's Private Equity Summit 9 - 11 March 2016 California Falk Marques Group - -

Healthcare Game Change

Date: 18 November 2015 Information: http://healthcaregamechange.com/ Location: New York Althetic Club, New York, NY Organizer: Privcap Media

The Private Capital Opportunity in a Transforming Market. The premier private equity healthcare investing event connecting leading investors and fund managers. Privcap Media is proud to present the Healthcare Game Change 2015 conference in NYC on November 18th, 2015 at the New York Athletic Club. The conference will bring together senior executives from large and mid-cap private equity firms and their limited partners, as well as a range of experts from government and industry. Speakers include senior executives from TPG Capital, Bain Capital, APAX Partners and more.

AIFM Directive 2015

Date: 30 November 2015 Information: www.aifmdirective.co.uk Location: London Discount Code: PREQIN Organizer: Private Equity Forum

Through company case studies, in-depth presentations and panel discussions, Private Equity Forum’s 5th AIFM Directive 2015 Conference will provide you with clarification on the next series of changes to ensure you are aware of the necessary key actions and deadlines. Specifically timed to provide you with updates from European Securities and Markets Authority and European Commission.

Catalyst Cap Intro: Private Equity Fund Investing

Date: 14 December 2015 Information: http://catalystforum.com/node/347 Location: New York City Organizer: Catalyst Financial

Catalyst Cap Intro Events are sector focused, investor driven events that host hand-picked investment managers and investors that are introduced to each other with a view to become investment partners. This Catalyst Cap Intro Event focuses only on Private Equity Fund investing.

HKVCA 6th Asia Private Equity Forum 2016

Date: 20 January 2016 Information: http://apef.hkvca.com.hk/ Location: Hong Kong Convention and Exhibition Centre Organizer: The Hong Kong Venture Capital & Private Equity Association (HKVCA)

The Hong Kong Venture Capital & Private Equity Association (HKVCA) is pleased to announce that the Asia Private Equity Forum 2016 will be held on Wednesday, January 20, 2016. APEF 2016 will once again follow immediately the Hong Kong Government’s Asian Financial Forum and will be held in the magnificent Hong Kong Convention and Exhibition Centre.

The Hong Kong Venture Capital & Private Equity Association (HKVCA) is pleased to announce that the Asia Private Equity Forum 2016 will be held on Wednesday, January 20, 2016. APEF 2016 will once again follow immediately the Hong Kong Government’s Asian Financial Forum and will be held in the NBHOJmDFOUHong Kong Convention and Exhibition Centre.

Opening Keynote Luncheon Keynote Closing Keynote Organiser: Co-organiser: Dr. Fred Hu Daniel Mintz Charles Ong Primavera Capital Group Olympus Capital Asia RRJ Group

Barry Lau Kiki Yang Robert Petty Bing Yuan Anand Prasanna Samuel Chu Kenneth Tan Adamas Asset Bain & Company (Hong Clearwater Capital Partners Hony Capital Morgan Creek Phoenix Property Southern Capital Group Management Kong) Cyril Noerhadi Lucian Wu Homer Sun Investors Edwin Wong Robert Appleby Jim Hildebrandt Creador HQ Capital Morgan Stanley Private Yuji Kimura SSG Capital ADM Capital Bain Capital Maarten Ruijs Joseph Lee Equity Asia Polaris Capital Group Co Management Taisuke Sasanuma Chang Sun CVC Asia Pacific IMM Private Equity Mounir Guen Jonathan English Taeyub Kim Advantage Partners Black Soil Gary Doran Samir Kumar MVision Portfolio Advisors Standard Chartered Private Equity Michael M. Camacho Vish Ramaswami Deloitte Touche Tohmatsu Inventus Honorio Poblador Mark O'Hare AlpInvest Partners Cambridge Associates CK Tsang Asel Umurzakova Navegar Preqin Shin Kim Asia StepStone Group Han Kim Egon Zehnder JPMorgan Asset Bonnie Lo Lin-lin Zhou Altos Ventures Kazushige Kobayashi Robert van Zwieten Management NewQuest Capital Principle Capital Dong-IK Lee Capital Dynamics Partners Temasek Sunil Theckath EMPEA Vincent Huang Motoya Kitamura Vasudevan David Tung Eric Solberg Juntong Capital Jun Tsusaka ROC Partners Colin Sau Amicus Capital Partners The Carlyle Group NSSK TR Capital EXS Capital Group Nishant Sharma Choy-Soon Chua Jonathan Hulbert Paul Yang Yong Hak Huh Kedaara Capital Olivia Ouyang SEB Investment GmbH David Do Apollo Management China Development Advisors Ontario Teachers' VI Group First Bridge Strategy Lorna Chen Melissa Guzy Financial Holding Steven Okun Pension Plan (Asia) Ayumi Sakurai Corporation Juan Delgado-Moreira Shearman & Sterling Arbor Ventures Hamilton Lane KKR John Lee Yukon Capital Partners Rebecca Xu David Lee Ravi Thakran Orion Partners China Everbright ReinFore Hemal Mirani Asia Alternatives HarbourVest Partners (Asia) L Capital Asia David He Please quote “PREQIN2016_HKVCA” Management Asset Management PAG Asia Capital Chuan Thor Sandeep Murthy code to enjoy 20% off discount Denis Tse Eric Mason Lightbox Jie Gong The Church Pension Fund Highland Capital Partners Free LP Passes for Pension Funds, Fund of Asia-IO Advisors (China) John Huo Pantheon Ventures Joseph Wan Manulife Financial (HK) Funds, Endowments, Foundations, Family Cinven HK Bastian Wolff 0GmDFT %'*TBOE4PWFSFJHO8FBMUI'VOET Partners Group *OGPSNBUJPOJOUIJTMFBnFUJTDPSSFDUBUUIFUJNFPGQSJOUJOH),7$"SFQSFTFOUTUIFSJHIUUPBNFOEBOZEFUBJMTEVFUPVOGPSFTFFODJSDVNTUBODFT Please register at [email protected] To register, please visit apef.hkvca.com.hk Tel: +852 2167 7518 Email: [email protected]