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Private Equity & Venture Capital

Private Equity & Venture Capital

■ VOLUME 13, ISSUE 1 ■ JANUARY 2017

alternative assets. intelligent data. & VENTURE SPOTLIGHT The free monthly newsletter providing insights into private equity performance, , deals, fundraising and more using information from Preqin’s Private Equity Online.

EXCLUSIVE FIRST LOOK AT THE 2017 PREQIN GLOBAL alternative assets. intelligent data. PRIVATE EQUITY & VENTURE 2017 CAPITAL REPORT PREQIN GLOBAL This month’s Private Equity PRIVATE EQUITY & & Spotlight VENTURE CAPITAL features a preview of the most REPORT comprehensive review of the asset class ever undertaken, including:

■ 2016 Fundraising Market ■ First-Time Fund Managers ■ Performance Benchmarks ■ Appetite ■ Venture Capital Deals ■ Largest Deals and Exits

ISBN: 978-1-907012-97-6 $175 / £125 / €150 www.preqin.com ...and much more!

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Bringingtogetherprivateequityleadersfromaroundtheworld,including: •2000topprivateequityandventurecapitalattendees •400+LPs, includingdecisionmakersfrompensionplans,familyoffices,sovereignwealthfunds,foundations andfundoffunds •400+speakers,includingglobalindustrytitansfromtheworld’sbiggestprivateequityhousesandspecial guestspeakers.  AswellasofferingyoutheperfectopportunitytoconnectwithLPsviaanetworking appandotherfacilities, theconferencewilldigdeeperintocoͲinvestmentsandexplorethecurrentdynamicsoftheLP/GPrelationship pluscoverthehottesttopicsinprivateequity.

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Andremember,SuperVentureiscoͲlocatedwithSuperReturnInternational.Thismeansthatifyouregisterfor SuperVenture,youcanattendwhicheverpartsofdayoneofSuperReturnInternationalyouwant.Andhave theopportunitytomeetthe450+LPs attendingbothevents.  2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT - SAMPLE PAGES CONTENTS

CEO’s Foreword - Mark O’Hare 4 5: FUND MANAGERS A Fast-Evolving Landscape - Moose Guen, MVision 44 1: 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE Fund Manager Outlook for 2017 46 CAPITAL REPORT Fund Manager Views on Investor Appetite 49 6 Keynote Address - Joseph Bae, KKR The Case for First-Time Funds 50 Keynote Address - Capturing Megatrends Growth through 8 - Michael Murphy, Suisse Private Fund Group Minority Stakes - Stanislas Cuny, Amundi First-Time Fund Managers 52 Largest Fund Managers 54 2: OVERVIEW OF THE PRIVATE EQUITY INDUSTRY Compensation and Employment 56 Private Equity in Context 12 Women in Private Equity 58 Private Equity: 2016 in Numbers 16 Private Equity in 2017 - Christopher Elvin, Preqin 17 6: ALTERNATIVE STRUCTURES Private Equity and Public Image 18 Co-Investments 60 - Bronwyn Bailey, American Investment Council Investor and Fund Manager Use of Separate Accounts 63 Brexit and the UK’s Private Equity & Venture Capital 20 Industry - Gurpreet Manku, BVCA 7: PERFORMANCE Emerging Markets in a Trump Administration 21 - Robert W. van Zwieten, EMPEA Chasing - “Heading into The Unknown” 66 Addressing LP Concerns 22 - Leon Sinclair, IHS Markit - Peter Freire, Institutional Limited Partners Association (ILPA) Building the Infrastructure for Repeatable Value Creation 67 - Niclas Thelander, Outsized 3: ASSETS UNDER AND DRY POWDER Performance Overview 69 and Dry Powder 24 PrEQIn Private Equity Quarterly Index 72 Horizon Returns 73 4: FUNDRAISING Private Equity Returns for Public Pension Funds 74 Private Equity Performance Benchmarks 75 Marketing Your Fund II - Clay Deniger, Capstone Partners 28 Consistent Performing Managers 77 2016 Fundraising Market 30 Funds in Market 33 8: INVESTORS In Focus: Regional Fundraising 36 North American Fundraising 37 The LP Perspective: Accessing Private Equity Funds 80 - Maurice Gordon, Guardian Life SMid Cap: Focus and Growth - Eric Bismuth, Montefi ore 38 81 Investment Evolution of the Investor Universe European Fundraising 39 Investors in Recently Closed Funds 83 Asian Fundraising 40 Investor Appetite for Private Equity in 2017 85 Rest of World Fundraising 41 Sample Investors to Watch in 2017 88 How Investors Source and Select Funds 90

PRIVATE EQUITY ONLINE

Private Equity Online is Preqin’s fl agship online private equity information resource and encompasses all of Preqin’s private equity and venture capital databases, with unrivalled data and intelligence on all aspects of the asset class, including fund terms and conditions, fundraising, fund managers, institutional investors, fund performance, deals and exits and more.

Constantly updated by our teams of dedicated researchers strategically located in industry centres around the globe, Private Equity Online represents the most comprehensive source of industry intelligence available today.

www.preqin.com/privateequity

3 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT - SAMPLE PAGES

Largest Investors by Region 91 Global Venture Capital Exit Overview 130 Largest Investors by Type 92 Industry Focus: 131 Industry Focus: Software & Gaming 132 9: INVESTMENT CONSULTANTS Industry Focus: Healthcare 133 Most Active Firms, Largest Deals and Notable Exits 134 Investment Consultant Outlook for 2017 94

13: GROWTH 10: FUND TERMS AND CONDITIONS Growth Fundraising 138 Fund Terms and Conditions Overview 98 Growth Fund Managers 139 Investor Attitudes towards Fund Terms and Conditions 100 Growth Performance Benchmarks 140 Leading Law Firms 102 Growth Deals 141 11: BUYOUT 14: FUNDS OF FUNDS Private Equity in Australia 104 - Shannon Wolfers, Pacifi c Equity Partners Fundraising 144 Buyout Fundraising 106 Fund of Funds Managers 145 Buyout Fund Managers 107 Fund of Funds Performance Benchmarks 146 Buyout Performance Benchmarks 108 Private Equity-Backed Buyout Deals 110 15: SECONDARY MARKET 112 by Type, Value and Industry Public Equity & Political Uncertainty Drive 2016 Volume 148 Global Buyout Exit Overview 114 - Ian Charles & John Stott, Industry Focus: Industrials 116 Overview of the Secondary Market 149 Industry Focus: 117 Secondaries Fundraising 152 Industry Focus: Consumer & Retail 118 Secondary Fund of Funds Managers 154 Direct Secondaries 155 Most Active Private Equity Firms, Providers and Deal 119 Advisors Intermediaries 156 Largest Buyout Deals and Exits 120 16: TURNAROUND 12: VENTURE CAPITAL Turnaround Overview 158 Venture Capital Fundraising 122 Venture Capital Fund Managers 123 17: SERVICE PROVIDERS Venture Capital Performance Benchmarks 124 Placement Agents 160 Venture Capital Deals 126 Fund Administrators 163 Deal Flow by Stage and Industry 128 Fund Auditors 164

DATA PACK FOR 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT

The data behind all of the charts featured in the Report is available to purchase in Excel format.

Ready-made charts are also included that can be used for presentations, marketing materials and company reports.

To purchase the data pack, please visit:

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4 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com

2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 1. 2017 PREQIN GLOBAL PRIVATE EQUITY & - SAMPLE PAGES VENTURE CAPITAL REPORT

KEYNOTE ADDRESS - Joseph Bae, KKR

Since launching in Asia over a decade Where are you seeing attractive risk/ complex operationally, but where we are ago, how has KKR’s strategy evolved in return opportunities in Asia in light able to provide a solution in addition to the region? of emerging market declines and the supplying capital. Over the last 10 years, KKR has built a large general concern about Asia’s slowdown? regional footprint in Asia in a systematic The current macro growth environment is Where do you see the best investment and disciplined way. As a result, today very diff erent from when we fi rst entered opportunities in Asia in terms of we have one of the largest private equity the market in 2005. In certain emerging geography? platforms in Asia, with seven offi ces, more markets, like , we are seeing a From a pipeline standpoint, one of our than 120 KKR executives and more than deceleration of growth and a slowdown busiest markets today is and there $10bn of capital deployed. In addition, 15 in global overall. Given these are a number of reasons for that. The executives from KKR Capstone support our headwinds, we are most inclined to buy country’s focus on , eff orts. In fact, some of our best returns complexity and sell simplicity. on corporate reform and the divestiture globally in private eq uity at the fi rm have of non-core assets is creating signifi cant come out of Asia. Particularly in China, we want to opportunities for fi rms like us to partner invest behind opportunities where with leading Japanese corporates While we have grown in size, our strategy our diff erentiator is not our capital but and acquire non-core to has – at a high level – stayed the same: rather our ability to provide a solution. fundamentally reposition their growth maintain highly localized teams that For example, we have made multiple trajectory. Our carve-out of Panasonic’s are fully integrated with our global investments in Chinese agricultural healthcare and its subsequent platform. Asia is not one big market – companies that focus on food safety and acquisition of Bayer’s global diabetes care it is a collection of diff erent markets. security for everything from poultry to business is a prime example of this. By localizing our investment teams, milk, beef to fee d. As the government executives can focus on unique origination works to ensure the country’s food safety Japan is also interesting in that valuations channels in the local markets we want to practices keep pace with economic on a relative basis are quite low in do business in. At the same time, KKR’s expansion, gaps in operations and quality comparison to other mature markets, global network is critically important as it control have led to a number of large, such as the US and . The fi nancing off ers companies access to our operational food-related incidents in the country, markets are among the most liquid in capabilities, industry expertise and shaking consumers’ confi dence in the the world for Japanese and the network of US or European nco tacts, all of safety of their food. In the aftermath of potential for operational improvement is which can help accelerate the growth of such events, companies are looking for hi gh. Finally, the competitive landscape the local businesses we partner with. a partner who can add value and help within private equity is much more them implement global best practeics limited in the area given how diffi cult it In the next fi ve years, do you see KKR’s to emerge even stronger and safer than is to penetrate the Japanese market. The Asia strategy continuing to change? before. This is one way we have integrated combination of these factors – and the We think there is an increasing advantage Environmental, Social and Governance way KKR’s franchise is uniquely positioned to having multiple pools of capital. To (ESG) principles into our investment in the region – makes Japan an attractive succeed in Asia -term, it is not simply process. geography for us. about how big your private equity fund is, but rather about the fl exibility you have We also see unique opportunities in And with regards to sector? to partner with key entrepreneurs and markets such as Japan, and Australia We continue to be attracted to sectors tied stakeholders in the region. At KKR, we are where we believe we can create large- to domestic consumption in emerging fortunate to have many pools of fl exible scale corporate carve-outs, taking our markets. This includes longer-term trends capital beyond private equity, whether operational approach to investing and around a rising middle class, urbanization, through special situations, , helping drive meaningful improvements services and consumption, and means we real estate, or even our Firm’s balance at the companies we invest behind. In are spending a lot of time in healthcare, sheet. Our ability to take advantage of emerging markets such as , we food, consumer and fi nancial services diff erent investment opportunities up and see a shift to more control-oriented sectors. Nonetheless, a lot of those sectors down the will be a critical opportunities and, therefore, do not focus today are overvalued, so we need to be piece in how we continue to succeed in on small minority growth deals. Instead, quite disciplined about how we deploy Asia. we are looking to invest in larger-scale capital into them. More recen tly, we have opportunities which might be more started investing in markets like Indonesia

7 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 1. 2017 PREQIN GLOBAL PRIVATE EQUITY & - SAMPLE PAGES VENTURE CAPITAL REPORT

– where we made our fi rst two private from around the world has also been a take care of itself, either through the IPO equity investments this year – because big reason for our achieving of premium market or through a strategic sale of the we can get access to very signifi cant prices for assets we are selling out of our business. The key is being nimble, fl exible domestic consumption trends at a much portfolio. and ensuring you hit the windows for exit more interesting than we can in at the right time. markets like China and India. What is your approach to deal sourcing in Asia? What are the main challenges heading Are you seeing more buyout and control First and foremost, it is being positioned into 2017 and what is your advice to deals across Asia-Pacifi c? in the market as solutions providers, and navigate these? Absolutely. In markets like Korea and not simply as fi nancial investors. We want Given the global political movement Japan, that has always been our core to be chosen as a partner in order to towards populism, I expect to see target deal. In India, there has been a fundamentally help improve companies more volatility in addition to continued meaningful shift in opportunity to do and grow businesses. headwinds facing global trade. Another interesting control deals and we are challenge would be the signifi cant hoping to see more buyout and control We have a highly localized approach to structural changes needing to take place deals becoming available in China, deal sourcing. Maintaining a deep local in the Chinese markets to rebalance their especially given the succession issues network of relationships and teams is a . To navigate these properly, entrepreneurs are facing in the region and key element of how we source deals. In the I would stress the need to be fl exible, the slowing growth environment. last decade, the majori ty of what we have opportunistic and focused on the risk- done in Asia has been on a proprietary reward you are looking to take in the We are seeing a record level of cross- basis, participating in very few secondaries marketplace. Investing across Asia today border M&A activity from companies and auctions. We also try to develop a is not a simple bet. To succeed, you must from markets such as China. What specialized expertise in certain areas, such have a very specifi c strategy in terms of is driving this activity, and what as food safety and speci alty agriculture, to how you are going to create value above opportunities are you seeing? diff erentiate ourselves in terms of industry and beyond what the macro market is One of the distinct developments in the knowledge. doing. global M&A market over the last fi ve years is the emergence of Asian strategic Valuations in Asia have only corrected buyers. Of all cross-border M&A deals to a moderate extent in light of market today, approximately 25% involve Chinese uncertainty. How do you source deals in KKR buyers and 11% involve Japanese buyers. this environment? Founded in 1976, KKR is a leading So, over one-third of today’s global M&A Equity markets have performed very global investment fi rm that invests in multiple asset classes. In our private market is being dominated by Chinese diff erently in emerging markets over the equity business, we invest our own and Japanese buyers. A big reason for last fi ve years than they have in the US and capital alongside third-party capital this is the excess liquidity on-she aornd Europe. While valuations in those regions through a group of private equity companies’ fundamental desire to gain are very high, Asia has been in a 72-month funds and co-investment vehicles, access to technologies, customers and downturn in equities. This is mostly driven for long-term appreciation, generally through controlling ownership of new channels of growth abroad. This by concerns around a slowdown in China a company or strategic minority is especially true in the manufacturing as well as weakness in foreign currency positions. In our investments, we aim sector, where Chinese companies with the expectation that the US dollar to grow and build long-term value, want to migrate to higher value-added will rise. We believe we are close to where which we believe ultimately benefi ts manufacturing and away from we think the market is stabilizing in the our fund investors as well as the companies in which we invest, their manufacturing. emerging markets. Therefore, now is an employees, and the communities in interesting vintage for us to be more which the companies operate. This is an opportunity for global fi rms like aggressive in deploying capital as we ours that are integrated across the US, believe we are closer to the bottom of the JOSEPH BAE Europe and Asia. For example, in the last cycle than the top. Mr. Bae has been with KKR for over 20 years and is the Managing Partner year we executed on transformational of KKR Asia and the Global Head cross-border deals with two of our With the low valuation environment in of KKR’s Infrastructure and Energy portfolio companies: Haier, which acquired Asia today, how diffi cult has it been to Real Asset businesses. He is the GE’s global home appliance business, and monetize your investments at attractive Chairman of KKR’s Asia Private Equity Panasonic Healthcare, which acquedir prices? Investment Committee. He also serves as a member of KKR’s Americas and Bayer’s global diabetes care unit. These In the last 10 years, we have invested European Private Equity Investment acquisitions repositioned the companies $10bn and returned over $11bn back to Committees and KKR’s Energy, as dominant global businesses and helped our investors, with $9bn being returned Infrastructure and Special Situations fulfi l a long-term strategic desire of the in the last fi ve years alone. We have found Investment Committees. management teams to expand abroad. that if you have a high-quality business www.kkr.com Being able to connect buyers and sellers in Asia that is growing, the exit will likely

8 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 2. OVERVIEW OF THE PRIVATE EQUITY - SAMPLE PAGES INDUSTRY PRIVATE EQUITY: 2016 IN NUMBERS

THE INDUSTRY IS LARGER THAN EVER ANOTHER ROBUST YEAR FOR FUNDRAISING

$2.49tn $820bn $347bn $10.8bn Private equity assets under Dry powder held by private Aggregate capital raised by raised the largest management as of June 2016, equity funds as of December 830 private equity funds secondaries fund ever closed, an all-time high. 2016, up from $755bn at the closed in 2016. Ardian Secondary Fund VII. end of 2015.

CAPITAL IS INCREASINGLY CONCENTRATED HIGH VALUATIONS ARE A CONCERN

$471mn 26% 70% 38% Average size of private equity of aggregate capital raised of investors consider of fund managers believe that funds closed in 2016, an all- was secured by the 10 largest valuations to be one of the key pricing for portfolio companies time high. funds closed in 2016, up from issues facing the private equity is higher than 12 months ago, 19% in 2014. industry. compared to 19% that believe pricing is lower.

STRONG RETURNS AND DISTRIBUTIONS LP APPETITE REMAINS HEALTHY

95% $257bn 84% 48% of investors believe that their Total capital distributions in of investors have a positive of investors plan to increase private equity portfolios have H1 2016, following the record perception of private equity, their allocation to private met or exceeded performance $472bn distributed in 2015. the greatest proportion equity over the long term, expectations over the past among alternative asset compared with only 6% that 12 months, up from 81% in classes. plan to decrease exposure. December 2011.

9 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 2. OVERVIEW OF THE PRIVATE EQUITY - SAMPLE PAGES INDUSTRY

PRIVATE EQUITY IN 2017 - Christopher Elvin, Preqin

2016 was another stellar year for private private equity fundraising surpassed Despite 2016 being the second equity and the total AUM for the industry $300bn. However, there is a clear trend consecutive year in which both buyout now stands at $2.49tn as of June 2016 (the towards greater concentration of capital and venture capital exit activity has fallen latest data available), an all-time high. The among fewer funds – 12% fewer funds (see pages 114 and 130), it is still very question on many people’s minds is ‘how closed in 2016 than in 2015, resulting much a seller’s market, and exit activity is much longer will it continue?’ While the in the average fund size increasing to higher than all years prior to 2013. Thirty reality is that only time will tell, private $471mn, an all-time high. Private equity percent of fund managers expect exit equity is well positioned for another accounted for 57% of all private capital activ ity to increase in 2017, and a further strong year in 2017, despite continuing raised in 2016, up from 52% the previous 46% expect it to remain at current levels. economic concerns and wider political year. volatility. OUTLOOK FOR 2017 Perhaps the greatest indication of the The private equity model is working and PRIVATE EQUITY CONTINUES TO liquidity LPs currently have, as a result in a low environment the DELIVER FOR INVESTORS of the wave of distributions they have asset class will continue to appeal to Ine the thre years to June 2016, private received over the past few years, is the investors looking for high absolute returns equity investors have seen annualized fact that 76% of private equity funds and portfolio diversifi cation. returns of 16.4%, the highest among closed in 2016 met or exceeded their all private capital strategies. As a result target size. This represents the largest A record number of private equity funds of this strong performance, investors proportion of funds meeting or exceeding are currently in market: 1,829 funds are have continued to see distributions their target size in any year over the seeking an aggregate $620bn. This will signifi cantly surpass capital calls: $257bn period 2009-2016, with the proportion bring challenges, particularly for fi rst- was distributed in the fi rst half of 2016 failing to meet their target decreasing time and emerging markets managers, in compared with $129bn in capital calls – so from 63% in 2009 to 25% in 2016. competing for investor capital as well as in a net fl ow of $128bn back to LPs. The meeting the demands of an increasingly trend of capital distributions surpassing STILL A SELLER’S MARKET sophisticated investor community. capital calls is now in its sixth year, and it While the volume of private equity backed However, with the majority of LPs sitting is the third year in which net cash fl ows in 2016 (3,986) is expected to very liquid as a result of continuing to investors have been well in excess of surpass the record number of transactions distributions and looking to maintain, if $100bn. seen in 2014 (4,006) as more data not increase, their exposure to the asset becomes available, aggregate deal value class, fundraising has rarely looked so Fifty-s even percent of institutional ($319bn) was 25% lower than in 2015 appealing. investors now have an allocation to and reached the lowest level seen since private equity, and as a result of high 2013 ($313bn). Venture capital deal fl ow A signifi cant proportion of assets invested distribution levels, investor satisfaction in 2016 saw the opposite trend: 9,719 prior to the Global Financial Crisis (GFC) is at an all-time high – 95% of investors deals were recorded during the year, are yet to be realized, so should market recently surveyed (see pages 85-87) stated the lowest number since 2013, but the conditions remain favourable it is likely that private equity had met or exceeded aggregate value of deals reached $134bn, that the fervent exit activity will continue their expectations in the past year; 48% just behind the record amount achieved in 2017. While pricing remains a very real of respondents plan to increase their in 2015 ($140bn). concern, fund managers have record allocations to private equity over the long levels of capital available to them and term, while a further 46% will maintain Fund managers are clearly fi nding it our survey results indicate that many are their allocations. Similarly, 49% of LPs tough going due to the current high entry looking to increase the amount of capital are looking to invest the same amount prices for assets. They are also clearly they deploy over the next 12 months. of capital and 40% are looking to invest seeing more competition for assets: more capital in private equity in the next Preqin’s latest survey found that 42% of 12 months than they did during 2016. fund managers feel that there is currently more competition for transactions, and A THRIVING FUNDRAISING 38% of respondents feel that pricing for ENVIRONMENT portfolio companies is higher than it was D riven by LP demand and liquidity, 2016 12 months ago. was the fourth consecutive year in which

10 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 4. FUNDRAISING - SAMPLE PAGES 2016 FUNDRAISING MARKET

n aggregate $347bn was raised by Fig. 4.1: Annual Global Private Equity Fundraising, 1996 - 2016 A830 private equity funds closed in 1,200 2016, marking the fourth consecutive 1,009 1,001 1,019 year in which fundraising has surpassed 1,000 908 939 945 $300bn (Fig. 4.1). This fi gure is likely to 851 862 830 800 750 765 increase as more data becomes available, 706 742 and the fundraising total for 2016 is 603 618 600 expected to exceed the level seen in 516 500 2014 ($348bn), therefore representing 410 418 413 408 400 350 350 348 347 the largest amount of capital raised since 310 329 248 213 225 the GFC. Private equity accounted for 209 207 208 173 200 107 135 135 137 70 101 74 57% of all private capital raised in 2016, 31 up from 52% the previous year. The 0 increased demand has been supported by continued high net distributions 1996 1997 1998 1999 2000 2001 2002 200 3 200 4 2005 2006 2007 2008 2009 2010 2011 2012 201 3 201 4 2015 2016 (see page 26), which have caused LPs to Year of Final Close reinvest capital back into private equity in No. of Funds Closed Aggregate Capital Raised ($bn) order to maintain their allocations. Source: Preqin Private Equity Online

Alongside the large sums of capital shows the capital raised each quarter via CAPITAL CONCENTRATION being invested through traditional fund interim and fi nal closes, highlighting the nThe tre d towards greater concentration structures, a substantial amount of capital strong fundraising in recent quarters. The of capital among fewer funds continued is being invested via alternative structures methodology to calculate this involves in 2016: 12% fewer funds closed than in such as co-investments and separate analyzing the capital raised for each 2015, resulting in the average fund size account mandates. Among LPs profi led close that takes place in each quarter; increasing to $471mn, an all-time high. on Preqin’s Private Equity Online, 42% only fresh capital is counted, with capital LPs appear to be investing more capital actively make co-investments and a that has been raised via previous closes with a smaller number of proven and further 12% are considering doing so; 30% held in an earlier quarter excluded. The well-known GPs, with the largest funds make use of separate accounts, with 9% second quarter of 2016 was a particularly for a greater proportion of considering this route. successful period, with $117bn secured, overall fundraising. The 10 largest private the largest sum of capital raised in a single equity funds closed in 2014 accounted for QUARTERLY FUNDRAISING quarter since Q2 2008, when $137bn was 19% of overall fundraising for that year; The fl ow of capital into private equity raised. in 2016, the fi gure is 26%. Similarly, the funds is presented in Fig. 4.2, which proportion of capital accounted for by

Fig. 4.2: Quarterly Global Private Equity Fundraising (Includes Fig. 4.3: Proportion of Aggregate Capital Raised by Largest Final and Interim Closes), Q1 2010 - Q4 2016 Funds Closed, 2014 - 2016 140 45%

120 117 40% 38% 100 103 100 35% 34% 100 9296 94 88 30%

83 pi tal Ra i s e d 83 82 79 30% 2014 80 73 76 26% 73 69 72 72 70 e Ca 65 65 25% 24% gat pi tal Ra i s e d ( $ b n ) 62 61 2015

60 54 re 49 20% 19% e Ca

gat 2016 40 34 36

re 32 15% t ion o f Agg Agg 20 10% ropor 0 P 5% 1 2 1 2 1 2 1 2 1 2 1 2 1 2

Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 0% 2010 2011 2012 2013 2014 2015 2016 10 Largest Funds Closed 20 Largest Funds Closed Source: Preqin Private Equity Online Source: Preqin Private Equity Online

11 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com EUROPEAN WINTER SYMPOSIUM 1 - 2 February 2017 One Great George Street, London, UK

As a part of our Private Wealth Series, this conference will be attended by High Net-Worth Individuals, Family kþÏåŸØ ±ĹÚ FĹƴåŸƋĵåĹƋ FĹÚƚŸƋųƼ {ųŅü域ĜŅűĬŸ üųŅĵ around the world. Our mission is to provide an intimate setting for the free exchange of ideas along with ŞƚųŞŅŸåüƚĬ ÏŅĹĹåÏƋĜŅĹŸţ ‰Ęå )ƚųŅŞå±Ĺ 8±ĵĜĬƼ kþÏå winter symposium will include a blend of educational discussion panels, workshops, presentations, and pre-arranged one-to-one meetings.

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Ref Code: PEFOWS17

NORTH AMERICAN PENSIONS SUMMIT

March 20-21, 2017 | The Drake Hotel | Chicago, IL

The North American Pensions Summit is the premium forum bringing elite buyers and sellers together. As an invitation-only event, taking place behind closed doors, the Summit offers senior investment executives and service providers an intimate environment for a focused discussion of key new drivers shaping asset allocations.

NETWORK WITH INDUSTRY EXPERTS LIKE: Chairperson: Larisa Mueller, Senior Investment Manager, The Ministers and Missionaries Benefit Board Jim Maloney, Director, Illinois Public THE POLICY OF BEING TOO Association and Trustee-Chairman of the Investment Committee, Chicago Policemen’s Annuity and Benefit Fund CAUTIOUS IS THE GREATEST Aoifinn Devitt, Chief Investment Officer, Chicago Policemen’s Annuity and Benefit Fund RISK OF ALL. Kathleen Gallagher, Former Chief Investment Officer,Ford Motor Company Paul Benjamin, Director, Pension Investments, Alcoa, Inc.

FOR MORE INFORMATION, PLEASE CONTACT LEYANA DACCACHE: [email protected] 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 5. FUND MANAGERS - SAMPLE PAGES

private equity assets over 2016 (Fig. 5.4). Fig. 5.3: Fund Manager Views on the Number of Opportunities Reviewed per Furthermore, GPs were asked about the Investment Compared to 12 Months Ago level of competition in distinct parts of the 100% market: 90% ■ V enture Capital: an average of 37% 80% of surveyed GPs saw an increase 45% 42% ts Reviewing More in competition across all stages of 70% Opportunities venture capital investment over 2016, 60% although the largest proportions e s pon d en No Change across every stage had seen no 50% change. Larger proportions of GPs 40% are seeing less competition in earlier t ion o f R 41% 47% Reviewing Fewer 30% Opportunities

stages (seed: 25%; early stage: 22%), a ropor refl ection of the large pool of start-up P 20% companies these fi rms look to target. 10% ■ G rowth: more GPs have observed 14% 11% increased competition for growth 0% Nov-15 Nov-16 investments than for venture capital, Source: Preqin Fund Manager Survey, November 2015 - November 2016 making growth one of the most competitive markets in private equity; Fig. 5.4: Fund Manager Views on the Level of Competition for Transactions Compared while 45% of respondents saw no to 12 Months Ago change in competition over 2016, 100% 43% witnessed more, behind only 90% mid-market (51%) and large (44%) ts 34% 35% 80% 42% 37% 38% 39% 43% 44% 51% More Competition buyouts. 70% ■ B uyout: as expected, GPs face the 60% e s pon d en most competition for mid-market 50% No Change 38% 40% opportunities, where surveyed 40% 54% 45% 50% 45% 37%

t ion o f R 48% investors see the best opportunities 30% 43% at present (see page 87). More than 20% Less Competition ropor

P 10% 25% 22% 19% half of respondents active in the 9% 12% 16% 12% 15% 0% 5%

area saw an increase in competition t ll e e e d ty e a i g k ion r r for mid-market assets over 2016. s tag tag See q u Sm n La row th S E a Ma y e S G - p

Signifi cant levels of capital secured e rl d i Ex Lat Ea vat

by the largest private equity fi rms at M ri the higher end of the market mean P that competition for large buyout Venture CapitalBuyout transactions has intensifi ed. Source: Preqin Fund Manager Survey, November 2016

The low interest rate environment has believe exit activity will remain the same FUND MANAGER VIEWS ON PRICING reduced the cost of borrowing for GPs: over 2017, more respondents predict exit FOR PORTFOLIO COMPANIES 85% of fi rms surveyed have seen the activity will increase than decrease. Thirty- COMPARED TO 12 MONTHS AGO terms of debt fi nancing for private equity fi ve percent of fund managers surveyed investments remain the same or improve believe there will be greater ac tivity in over 2016. Combined with greater levels of the venture capital exit market over 2017, 38% Pricing higher capital raised annually and record levels of compared with 24% that believe there will dry powder available for investment (see be less; for exits in the rest of the private pages 24-26), this has pushed valuations equity market, 30% believe there will be up: 38% of surveyed GPs have seen more activity in the year ahead compared Pricing lower an increase in pricing over the past 12 to 23% that believe there will be less. 19% months, with only 19% witnessing lower entry prices. This puts pressure on GPs that MORE INVESTMENT IN THE YEAR AHEAD usually have three- to fi ve-year investment Despite more than half of GPs stating expeceaset ttho eincr amoun t of capital periods before exiting investments. that there has been no change in the they deploy in private equity assets over However, respondents are confi dent in level of diffi culty in fi nding attractive the next 12 months (Fig. 5.5). This includes the exit opportunities available in the opportunities over 2016, the majority more than a quarter of respondents based year ahead: while the largest proportion of surveyed managers across all regions in each of North America and Europe,

13 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 5. FUND MANAGERS - SAMPLE PAGES FIRST-TIME FUND MANAGERS

he private equity industry continues Furthermore, there is a widening division AVERAGE FUND SIZE ($mn): Tto grow as new entrants emerge and between the average size of funds 2010 vs. 2016 market their funds to investors. Strong rais ed by fi rst-time and established 564 investor appetite for the asset class as fund managers. Although historically well as recent high distributions have experienced fund managers have on encourag ed LPs to invest large sums of average been able to raise greater sums capital back into the industry in order to of capital than fi rst-time managers, the 313 meet their target allocations. Despite this diff erence has increased in recent years. demand, there are signs that the market The average size of a fi rst-time fund closed 149 is bifurcating, making it more diffi cult in 2010 was $114mn, compared with 114 for emerging managers launching their $313mn for non-fi rst-time funds; for funds fi rst fund as many investors seek out closed in 2016 the fi rst-time average has established managers with a proven track increased to $149mn, whereas the average 2010 2016 record. Only 195 fi rst-time funds closed size for established managers has jumped First-Time Fund Managers in 2016, the lowest number of emerging to $564mn. All Other Fund Managers funds closed since 2010, raising $25bn in aggregate capital (Fig. 5.11). There are other advantages to coming to PERFORMANCE market from an experienced , as Although emerging manager funds have FUNDRAISING can be seen in the proportion of funds generally found it more diffi cult to attract Th e recent lower levels of fi rst-time funds exceeding their target size. In 2016, 54% investor capital, they have tended to reaching a fi nal close refl ect a broader of closed non-fi rst-time funds exceeded deliver better returns to investors. Fig. 5.13 trend in which fundraising by emerging their target size, with 23% coming in shows that fi rst-time funds have higher managers as a proportion of the total under target; by comparison, only 35% of median net IRRs across most vintages private equity industry has decreased. fi rst-time funds exceeded their target size since 2000, with a signifi cant diff erence Whe fi er rst-time funds made up 27% of and 30% fell . Additionally, the need (of at least three percentage points) for funds closed in 2009, they represented to persuade investors of the benefi ts of a 2000-2003 vintage and 2010-2012 vintage 23% in 2016 (Fig. 5.12). Although the fi rst-time fund and conduct the necessary funds. The outperformance can be seen proportion of capital raised by emerging means that fi rst-time funds particularly in terms of quartile rankings: managers has varied, it has generally typically spend longer in market before when compared to similar funds, 31% of followed the same trend, with the 2016 reaching a fi nal close: fi rst-time funds fi rst-time funds fall in the top quartile, with proportion (7%) lower than that of 2009 closed in 2016 had spent an average of 15 a further 23% in the second. (12%) and signifi cantly below the recent months raising capital, compared to 14 peak of 20% in 2011. months for their established peers. Fund selection remains important, however, as there are considerable

Fig. 5.11: Annual First-Time Private Equity Fundraising, Fig. 5.12: First-Time Fundraising as a Proportion of All Private 2009 - 2016 Equity Fundraising, 2009 - 2016 300 30% 27% 26% 25% 250 243 25% 24% 24% 24% 223 222 23% 23% 210 218 20% 200 193 189 195 20% o tal

150 15% t ion o f T 12% 10% 11% 100

ropor 10% P 7% 7% 6% 6% 50 43 5% 25 18 25 21 20 21 25 0 0% 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Year of Final Close Year of Final Close No. of Funds Closed Aggregate Capital Raised ($bn) No. of Funds Closed Aggregate Capital Raised Source: Preqin Private Equity Online Source: Preqin Private Equity Online

14 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 7. PERFORMANCE - SAMPLE PAGES PRIVATE EQUITY PERFORMANCE BENCHMARKS FUND STRATEGY: All Private Equity GEOGRAPHIC FOCUS: All Regions AS AT: 30 June 2016

Median Fund Net Multiple Quartiles (X) Net IRR Quartiles (%) Net IRR Max/Min (%) No. of Vintage Called Dist (%) Value Funds Q1 Median Q3 Q1 Median Q3 Max Min (%) DPI (%) RVPI 2016 74 9.1 0.0 92.8 1.00 0.93 0.84 n/m n/m n/m n/m n/m 2015 150 21.0 0.0 96.0 1.07 0.97 0.87 n/m n/m n/m n/m n/m 2014 15440.9 0.0 98.71.20 1.04 0.95 n/m n/m n/m n/m n/m 2013 155 59.7 5.2 103.0 1.271.16 1.02 20.8 12.6 6.374.8 -38.2 2012 148 76.8 11.1101.31.44 1.241.05 22.412.7 6.2 284.9 -33.6 2011 156 84.0 22.7104.0 1.60 1.131.18 19.2 13.2 8.4 90.1 -32.4 2010 100 93.5 50.0 97.31.76 1.49 1.28 20.0 13.5 9.6 80.3 -27.1 2009 81 94.3 55.4 80.41.74 1.45 1.2419.713.0 7.3 55.7 -14.4 2008 189 95.0 79.5 71.11.82 1.511.28 19.111.4 8.0 52.1 -31.2 2007198 96.3 88.6 57.5 1.85 1.55 1.31 14.710.3 6.6 53.7 -34.0 2006 213 96.0 106.6 46.0 1.85 1.56 1.28 12.6 8.5 5.0 41.0 -25.1 2005 179 98.1110.3 29.0 1.811.48 1.17 14.1 8.34.4105.5 -22.9 2004100 98.0 122.115.0 2.011.56 1.18 18.3 8.5 3.3 89.2 -79.2 2003 89 100.0 139.9 4.0 2.12 1.56 1.08 21.0 11.5 1.6 239.8 -49.9 2002 81 97.7151.7 0.2 1.971.68 1.27 21.412.1 5.7 93.0 -47.2 2001126 100.0 152.5 1.3 2.17 1.66 1.20 23.412.0 4.6 64.4 -25.1 2000 184 99.0 141.9 0.0 2.071.46 0.94 20.710.2 0.4 52.9 -96.0 1999 144 100.0 127.7 0.0 1.811.29 0.66 14.5 6.3 -3.9 154.7 -43.4 1998 152 100.0 137.7 0.0 1.841.39 0.90 15.17.4 -1.0 514.3 -100.0 1997 143 100.0 153.3 0.0 2.36 1.541.15 32.112.2 3.7 267.8 -30.0 1996 89 100.0 183.2 0.0 2.511.871.13 36.5 15.7 5.1188.4 -33.3 1995 86 100.0 190.1 0.0 2.75 1.90 1.2135.0 17.6 5.3 447.4 -22.0 1994 90 100.0 198.8 0.0 3.231.99 1.49 40.2 23.6 10.9 318.0 -22.6 199374100.0 247.4 0.0 3.52 2.48 1.59 44.8 27.312.9 105.7 -29.1 1992 65 100.0 197.8 0.0 3.17 1.98 1.35 38.5 21.0 8.7110.4 -49.9

Source: Preqin Private Equity Online

Fig. 7.16: All Private Equity - All Regions: Median Net IRRs and Fig. 7.17: All Private Equity - All Regions: Median Net Multiples Quartile Boundaries by (As at June 2016) by Vintage Year (As at June 2016) 50% 1.8 1.66 1.68 1.56 1.56 1.56 1.55 1.6 1.48 1.51 1.49 40% 1.45 1.4 1.31 Top Quartile Net 1.24

t ion 30% IRR Boundary 1.2 1.16 1.04 1.0 0.97 0.93 20% Median Net IRR 0.8 10% 0.6 Bottom Quartile e d i a n Ne t Mult ip l (X) Incep Ne t I RR s ince Net IRR Boundary M 0.4 0% 0.2 -10% 0.0 4 4 3 4 3 4 1992 199 1996 1998 2000 2002 200 2006 2008 2010 2012 2001 2002 200 200 2005 2006 2007 2008 2009 2010 2011 2012 201 201 2015 2016 Vintage Year Vintage Year Source: Preqin Private Equity Online Source: Preqin Private Equity Online

15 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com Nordic Private Capital Day Preqin members receive One-day event 60+ LPs | 60+ GPs | 50+ CEOs 20% discount on all tickets (apart from Super Early Bird). February 14 th 2017 | Grand Hotel Stockholm 250 regional The best networking opportunity in the region. Register now online: 50+ speakers, 1 Keynote and 250 attendees & international from PE Funds, Limited Partners,Fund of Funds, www.nordicprivatecapitalday.org VC, CEO of PE-backed companies, start-ups, key players Business Angels and many more. Enter code: Featured Speakers: NPCD_Preqin 50 + Speakers Thomas von Koch | EQT Partners at the checkout. Allan Polack | PFA Pension Dr Marc-Oliver Jauch | Castik Capital Sverre Flåskjer | Herkules Capital Or contact [email protected] 1 Keynote Frederik Cassel | Creandum for more information.

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fallen short of expectations over the past compared to the end of 2015, from 40% months, compared with only 11% that year, while only 16% feel that they have to 33% in 2016, possibly due to strong plan to invest less. When asked about their exceeded expectations. returns over the past year. next commitment to the asset class, 76% stated that they plan to make their next There are signs that the continued strong Although there has been a long-running commitment in Q1 2017, while a further performance of private equity funds may debate between investors and fund 18% will do so later in the year; only 6% be making investors more ambitious in managers over the appropriate level and plan to wait until 2018 or later for their their return targets: the proportion of way to charge fund fees, these issues have next commitment (Fig. 8.14). investors targeting returns of 4.1% or attracted particular attention recently, more above public markets has increased with the SEC launching high-profi le Almost half (48%) of respondents plan to to 49%, up from 37% two years ago (Fig. increase their allocations to private equity 8.12). However, the fi gure remains down over the longer term, while a further 46% from the 63% of investors that targeted Forty percent of will maintain their allocations – these returns of this level in December 2011. investors surveyed are some of the highest levels seen over by Preqin intend to invest the past six years (Fig. 8.15). With net KEY ISSUES FACING INVESTORS more capital in private distributions of capital from GPs to LPs Going into 2017, valuations remain the over the past year, investors will need to greatest concern among institutional equity over the next 12 reinvest considerable sums of capital back investors, cited by 70% of respondents months than in the last into the asset class in order to meet these (Fig. 8.13). With high company valuations, 12 months targets. Finding a home for this capital record levels of dry powder and stiff may prove to be a challenge, as the most competition for assets, investors are in-demand managers often fi nd their increasingly concerned about the impact investigations of GPs that are believed funds oversubscribed: 45% of investors high pricing will have on returns in to have given insuffi cient disclosure to reported that it is harder to identify the future. The proportion of investors investors about the fees they charge. This attractive investment opportunities in concerned about the exit environment is has resulted in many LPs now paying private equity compared to a year ago, also signifi cant and has jumped from 24% closer attention to their fee arrangements: while only 5% believe it is easier. of investors at the end of 2015 to 51% in the proportion of investors citing fees as 2016. one of the major issues facing the private RE-UPS AND NEW RELATIONSHIPS equity industry has more than doubled Although there has been some discussion Investors are also concerned about the from 19% in 2015 to 39%. of larger investors looking to reduce the pipeline of available portfolio companies: number of managers in their portfolios in 41% see deal fl ow as a concern, up INVESTORS’ INTENTIONS FOR THEIR recent years, the signifi cant sums of capital from 34% at the end of 2015. This may PRIVATE EQUITY ALLOCATIONS being allocated to private equity mean be related to investors’ concerns about Despite these concerns, investors remain that a much larger proportion of investors valuations, as it is becoming harder attracted to private equity and continue are looking to increase the number of for GPs to fi nd assets at attractive to plan further investment. Forty percent fund managers they work with. Forty-one prices. Nevertheless, the degree to of investors surveyed by Preqin intend to percent of investors expect the number which investors are concerned about invest more capital in private equity over of fund managers in their portfolios to performance has lessened slightly the next 12 months than in the past 12 increase over the next two years,

Fig. 8.14: Timeframe for Investors’ Next Intended Commitment Fig. 8.15: Investors’ Intentions for Their Private Equity to a Private Equity Fund Allocations over the Long Term, 2011 - 2016 100%

90% 6% 27% 3% 33% 80% 39% 36%

8% ts 52% 48% Increase Q1 2017 70% Allocation 7% Q2 2017 60% e s pon d en Maintain 50% Q3 2017 Allocation 48% 40% 61% 49% t ion o f R Q4 2017 53% Decrease 30% 46%

ropor 43% Allocation P 2018 or Later 20% 76% 10% 19% 12% 16% 8% 6% 6% 0% Dec-11 Dec-12 Dec-13Dec-14Dec-15 Dec-16 Source: Preqin Investor Interviews, December 2016 Source: Preqin Investor Interviews, December 2011 - December 2016

17 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 11. BUYOUT - SAMPLE PAGES LARGEST BUYOUT DEALS AND EXITS Fig. 11.41: 10 Largest Private Equity-Backed Buyout Deals in 2016 Investment Deal Deal Size Bought from/ Portfolio Company Deal Status Investor(s) Location Industry Type Date (mn) Exiting Company , Koch Equity ADTc Se urity Merger Feb-16 15,000 USDCompleted Development LLC, Protection 1 / ASG - US Electronics Services, Inc. Security** AVIC Capital, CITIC Capital, Pagoda Investment, Shanghai Pudong Supercell Oy Buyout Jun-168,600 USDAnnounced Development , Sino-Rock Investment Softbank Capital FinlandGaming Management, **, Zheng Hong Capital Ardian, Partners GIC, Hellman & Friedman, Leonard Green MultiPlan, Inc. Buyout May-16 7,500 USDCompleted Group, Starr US Healthcare IT & Partners Investment Holdings Team Health Public-to- Oct-166,100 USDAnnounced Blackstone Group-US Healthcare Holdings, Inc Private Bass Pro Shops**, Goldman Sachs Merchant Cabela's Inc Add-on Oct-165,500 USDAnnounced Banking Division, Pamplona Capital - US Retail Management CDH Investments, China Minsheng Trust, Caesars Playtika Ltd Buyout Jul-16 4,400 USDAnnounced China Oceanwide Holdings Group, Giant Entertainment IsraelGaming Interactive Group, , YF Capital Corporation Rackspace Hosting, Public-to- Apollo Global Management**, Searchlight Aug-16 4,300 USDCompleted - USIT Inc. Private Capital Partners Ultimate Fighting KKR, MSD Capital, Silver Lake, William Buyout Jul-16 4,000 USDAnnounced - US Media Championship Ltd Morris Endeavor Entertainment, LLC** IT Vertiv Buyout Aug-16 4,000 USDCompleted ** Emerson US Infrastructure Air Products' CVC Capital Partners, Evonik Industries Air Products & Performance Add-on May-16 3,800 USDAnnounced US Chemicals AG** Chemicals Materials Operations

Source: Preqin Private Equity Online Fig. 11.42: 10 Largest Private Equity-Backed Buyout Exits in 2016 Portfolio Investment Investment Deal Size Exit Exit Value Investor(s) Exit Type Acquiror (Exit) Location Industry Company Date Type (mn) Date (mn) Ardian, Partners GIC, Hellman & MultiPlan, Feb-14 Buyout 4,400 USD Group**, Starr May-16Sale to GP 7,500 USD Friedman, Leonard US Healthcare IT Inc.* Investment Holdings** Green & Partners Hilton Public-to- Jul-07 26,000 USD Blackstone Group** Oct-16 Trade Sale6,500 USDHNA Group** US Leisure Worldwide* Private Fresenius Medical Quirónsalud Jan-11 Buyout 900 EUR CVC Capital Partners** Sep-16 Trade Sale5,760 EUR Spain Healthcare Care AG** CapsugelApr-11 Buyout 2,375 USD KKR** Dec-16 Trade Sale5,500 USDLonza Group Ltd** US Pharmaceuticals Blue Coat Mar-15Buyout 2,400 USD ** Jun-16 Trade Sale 4,650 USD Symantec Corp** USIT Security Systems, Inc. The Sun Consumer Products Jul-08 Buyout 2,600 USDVestar Capital PartnersJun-16 Trade Sale 3,600 USDHenkel AG** US Products Corporation Epicor Public-to- Apr-11 976 USDApax Partners** Jul-16Sale to GP 3,300 USD KKR** USSoftware Software Private , Metaldyne Grede Holdings LLC**, American Axle & Performance Aug-14 Merger - Nov-16 Merger 3,300 USD US Manufacturing Hephaestus Holdings Manufacturing** Group Inc. Inc.**, Metaldyne** Vogue Johnson & Jan-14 Buyout - Carlyle Group** Jun-16 Trade Sale 3,300 USD US Manufacturing International Johnson** BATS Global , TA CBOE Holdings, Financial Aug-13 Buyout - Sep-16 Trade Sale 3,200 USD US Markets, Inc. Associates Inc.** Services

*Denotes a partial exit. Source: Preqin Private Equity Online **Indicates lead investor(s)/acquiror(s).

18 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT 12. VENTURE CAPITAL - SAMPLE PAGES VENTURE CAPITAL DEALS

n 2016, 9,719 venture capital deals were Fig. 12.13: Number and Aggregate Value of Venture Capital Deals* Globally, Iannounced globally, valued at a total of Q1 2007 - Q4 2016 $134bn (Fig. 12.13). While this represents 3,500 50 the lowest number of deals in any year 45 since 2013, 2016 saw the second highest 3,000 Agg 40 aggregate deal value on record. re 2,500 35 gat

30 e D Key Findings: e als 2,000 e al Valu e ( $ b n ) ■ The rise in value was driven by a 25 high number of $1bn+ transactions, 1,500 20 o f D No. including six of the top 10 largest 1,000 15 deals in the period 2007-2016. 10 ■ High valuations have seen average 500 5 deal size rise nearly 2.5x since 2013 0 0

for transactions at Series B and later 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 stages (see pages 128-129). Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 Q Q Q3 Q4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■ Q2 2016 had the second highest aggregate deal value of any single No. of Deals Aggregate Deal Value ($bn) quarter at $42bn, trailing only Q3 Source: Preqin Private Equity Online 2015 ($43bn). CHINA’S EMERGENCE AND REGIONAL to 39%, substantially off its historical SHIFTS 62% average (2007-2014). 2016 IN CONTEXT 2016 saw a continuation of the shift ■ Whe wereile ther fewer fi nancings in 2016 saw a 13% drop in the number in venture capital activity from North Greater China in 2016 than in 2015 of fi nancings from 2015, reversing the America to Greater China, as shown in Figs. (2,047 vs. 2,202 respectively), its share upward trend of the previous six years. 12.14-12.18: of the market increased for the fourth However, it is important to note that ■ The number of fi nancings in consecutive year to represent 21% of 2015 was a record year for venture capital North America in 2016 (3,793) was transactions, well above the historical deal activity with 11,115 fi nancings, and substantially lower than the previous average (8%, 2007-2014). aggregate deal value was only 6% lower in year (5,013), causing the region’s ■ Venture capital-backed fi nancings in 2016 than in 2015. market share to decline by six North America amounted to $61bn in percentage points over the period 2016 (down 15% from 2015),

Fig. 12.14: Number of Venture Capital Deals* by Region, Fig. 12.15: Proportion of Number of Venture Capital Deals* by 2007 - 2016 Region, 2007 - 2016 12,000 100% 90% 10,000 80% 70% 8,000 e als 60% e als 6,000 50% t ion o f D 40% o f D No.

4,000 ropor P 30% 20% 2,000 10% 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 North America Europe Greater China India Israel Other North America Europe Greater China India Israel Other Source: Preqin Private Equity Online Source: Preqin Private Equity Online

*Figures exclude add-ons, grants, mergers, secondary stock purchases and .

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21 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com CONFERENCES

EUROPEAN FAMILY OFFICE WINTER SYMPOSIUM

DATE: 1 - 2 February 2017 IN FORMATION: www.opalgroup.net/trk/eff owb1705.html LOCATION: One Great George Street, London ORGANIZER: Opal Group As a part of our Private Wealth Series, this conference will be attended by high net-worth individuals, family offi ces, and invest- ment industry professionals from around the world. Our mission is to provide an intimate setting for the free exchange of ideas along with purposeful connections. The European Family Offi ce Winter Symposium will include a blend of educational discus- sion panels, workshops, presentations, and pre-arranged one-to-one meetings.

NORDIC PRIVATE CAPITAL DAY

DATE: 14 February 2017 INFORMATION: http://nordicprivatecapitalday.org/ LOCATION: Stockholm ORGANIZER: Private Equity Insights Ltd The Nordic Private Capital Day is a one-day event in Stockholm with inspirational keynote speakers, enriching panel discussions, and valuable networking opportunities. We gather 50+ speakers and 250 attendees from across the PE ecosystem. With over 60 LPs, 70 GPs and 50 CEOs, NPCD is the place to be on 14th February 2017.

SUPERVENTURE 2017

DATE: 27 - 28 February 2017 INFORMATION: https://fi nance.knect365.com/superventure/purchase/select-package/vip/FKR2436PRQSP LOCATION: Pullman Berlin Schweizerhof, Berlin ORGANIZER: KNect365 Driving . Developing opportunity. SuperVenture is co-located with SuperReturn International. This means that if you register for SuperVenture, you can attend whichever p arts of day one of SuperReturn International you want. And have the opportunity to meet the 450+ LPs attending both events.

SUPERRETURN INTERNATIONAL 2017

DATE: 27 February - 2 March 2017 INFORMATION: https://fi nance.knect365.com/superreturn-international/purchase/select-package/vip/FKR2428PRQSP LOCATION: Pullman InterContinental Hotel, Berlin ORGANIZER: KNect365 450+ LPs. 2000+ attendees. 400+ speakers. Countless opportunities. Create new contacts. Meet the key fi gures in private equity in one place at one time. 2000+ senior decision-makers will be fl ying inm fro 50+ countries. You won’t get another chance like this in 2017.

22 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com CONFERENCES

NORDIC FUNDRAISING SUMMIT

DATE: 8 - 9 March 2017 IN FORMATION: www.nordicfundraisingsummit.com LOCATION: Copenhagen, Denmark ORGANIZER: DVCA - Danish Venture Capital and Private Equity Association The Nordic Fundraising Summit is a speed-dating event that provides matchmaking between LPs and GPs in private equity. This event gives you the opportunity to meet up to 40 LPs and 50 GPs over the two-day event on March 8th and 9th 2017 in Copen- hagen, Denmark.

10TH ANNUAL WOMEN’S PRIVATE EQUITY SUMMIT (WPES)

DATE: 8 - 10 March 2017 IN FORMATION: http://www.womensprivateequitysummit.com/ LOCATION: The Ritz-Carlton, Half Moon Bay, California ORGANIZER: Falk Marques Group The 10th Annual Women’s Private Equity Summit. Every year over 450 of the world’s leading women in private equity and venture capital gather for insightful and candid discussions on fund raising, deal fl ow, portfolio management, liquidity, and more.

NORTH AMERICAN PENSIONS

DATE: a20rc - 21 M h 2017 IN FORMATION: http://events.marcusevans-events.com/nap-h1-17/ LOCATION: The Drake Hotel, Chicago ORGANIZER: marcus evans The North American Pensions Summit is the premium forum bringing elite buyers and sellers together. As an invitation-only event, taking place behind closed doors, the Summit off ers senior investment executives and service providers an intimate envi- ronment for a focused discussion of key new drivers shaping asset allocations.

23 Private Equity & Venture Capital Spotlight | January 2017 © Preqin Ltd. 2017 / www.preqin.com

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