Private Equity Spotlight May 2007 / Volume 3 - Issue 5

Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin, providing insights into private equity performance, investors and fundraising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence & Funds in Market.

FEATURE ARTICLE page 01 INVESTOR SPOTLIGHT page 11 Private Equity - Superior Returns This month’s feature article examines the performance of private equity funds vs. This month we examine the top Canadian LPs: listed stocks, based upon analysis taken from our latest • How has the Canadian publication, The 2007 Private Equity Performance Monitor - market grown? the most in-depth study of private equity performance ever • Is there potential for further undertaken. growth?

• Who are the biggest investors in the region? FUNDRAISING page 05 This month’s Fundraising Spotlight looks at the latest news • What are the latest trends? for venture, buyout and private equity real estate funds, as well as examining the market for private equity mega funds.

INVESTOR NEWS page 13 No. of Funds on Road US Europe ROW All the latest news on investors in private equity: Venture 233 102 101 436 • Helvetia Patria Versicherungen selling portfolio of private equity fund interests on the secondary market. Buyout 132 51 28 211 Funds of Funds 75 51 14 140 • TMNFI aiming to increase its exposure to private equity Real Estate 87 18 19 124 opportunities in Japan and the rest of the world Other 69 18 23 110 • SBCERA commits to distressed debt funds Total 618 248 190 1056 • OTPP sees high returns from private equity investments

• Albany Ventures is set to start making private equity fund investments on behalf of the Alliance Trust SUBSCRIPTIONS If you would like to receive Private Equity Spotlight each month please email [email protected]. Subscribers to Performance Analyst and Investor Intelligence OUT NOW receive additional information not available in the free version. If you would like further details please email [email protected] The 2007 Private Equity Performance Monitor Publisher: Private Equity Intelligence Ltd Fleet House, 8-12 New Bridge Street, London. EC4V 6AL More information available at: Tel: +44 (0)207 822 8500 w: www.preqin.com www.preqin.com/PM

• PERFORMANCE • INVESTORS • FUNDRAISING ...the data points to a clear and unambiguous conclusion: investors’ Private Equity returns from private equity have far Spotlight exceeded the stock market.

Feature Article: This month’s feature article is based upon analysis taken from our latest publication, The 2007 Private Equity Performance Monitor. The analysis and listings in this year’s Monitor are based upon data from our largest ever sample of funds, with net returns data for over 3,400 private equity funds of all types being used in order to produce the most in-depth study of private equity performance ever undertaken.

A History of Superior Returns indices to track their performance. These indices – in particular the flagship LPX50 - demonstrate that total The industry’s growth has been driven by its investment returns from listed private equity have been good performance, and the resulting LP appetite for greater compared to returns from other leading indices (see allocations. Despite this, debate continues in academic Fig. A), whether measured on an absolute or risk and financial circles as to how LPs’ private equity adjusted basis. returns compare with those from listed equities. Part of the debate is clearly generated by the challenges of Most private equity investments are, of course, made comparing a long term, illiquid investment like private through limited partnerships, not listed vehicles. Preqin equity with listed stocks. However, at Preqin we believe compared the performance of these limited that the data points to a clear and unambiguous partnerships with listed private equity investments on conclusion: investors’ returns from private equity have the basis of IRRs from inception to date. Our total far exceeded the stock market. sample of limited partnerships now includes net returns data for more than 3,400 private equity funds of all The most direct comparison is to compare listed private types and sizes globally, accounting for just over 70% equity with other listed stocks. Although only a small of the total universe of private equity funds by value. proportion of private equity investment vehicles are listed (perhaps 5% of the total), they nevertheless now The money-weighted benchmark gives the best have an aggregate capitalization of around EUR 85 estimate of the returns that an LP is likely to earn on a billion, and Swiss company LPX has created a family of well-diversified portfolio of fund interests, and this was

Fig. A: Return of LPX vs Selected Global Incides (Dec 1993 - Dec 2006)

Source: LPX

compared with the cumulative return from the LPX over The conclusions are clear: investment in private equity the same period. The results are shown in Fig. B, with limited partnerships has delivered better returns than returns from limited partnerships generally exceeding listed private equity, which in turn has done very well in those from listed private equity by a significant 5 – 10% comparison with other listed stocks. per annum in most years. (The unlisted benchmark lags a year or so behind the LPX50 for the simple reason that partnership investments are made over a Performance Persistence and Manager Selection period of years. The most recent vintage years are also affected by the well known J-curve.) Average returns are only part of the story, however. The most successful LPs manage to consistently earn superior returns by investing with the best private equity

Fig. B: LPX50 Annualised Return vs. Preqin All Private Equity Money Weighted IRR

Source: LPX

Fig. C: All Private Equity - Relationship between Predecessor and Successor Fund Quartile

firms. Their success hinges on two factors unique to the In conclusion, private equity has delivered excellent net private equity asset class: returns to its investors, and continues to do so. LPs’ target allocations are growing, and new investors •Dispersion of returns: the gap between the best continue to enter the asset class. Effective manager private equity funds and the rest is huge, around 10% selection is vital for success, and the track record of per year between the median and first / third quartiles. funds and firms is therefore a necessary ingredient of In other words, a fund needs to beat the median return LPs’ planning and due diligence. by at least 10% per year to make it into the first quartile, or to fall short by 10% per year to fall into the bottom We are grateful to LPX for their assistance with quartile. The leverage from choosing the right funds – performance information on the LPX50 index. or the penalty for choosing the wrong ones – is large. For more information please visit: www.lpx.ch •Persistence of returns: not only is the gap between the best funds and the rest very high, but these differences tend to persist over time. Preqin analyzed This month’s feature article draws upon the 2007 the odds on a firm’s next fund being Q1 / Q2 / etc. Performance Monitor. This year’s Monitor gives our based upon the performance of the firm’s current fund. most comprehensive ever analysis of private equity There is a consistent pattern across all types of private performance, with vital returns data for over 1,000 equity fund, including fund of funds: the best firms are firms and over 3,400 funds. remarkably consistent in their ability to produce superior performance fund after fund. Conversely, it is For further details please visit quite unlikely for a firm whose current fund is performing poorly to turn this around to a Q1 www.preqin.com/PM performance next time. (See Fig. C)

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BUYOUT FUNDS ON THE ROAD FINAL CLOSES BAROMETER

US Europe ROW Total No. on Road 132 51 28 211 Total Target 146 51 13 210 Value ($bn) Average Target 1,109 990 466 995 Size ($mn)

BUYOUT FUNDS ON THE ROAD

Fund Manager Target Size (mn) GP Location KKR Fund 2006 Kohlberg Kravis Roberts 16,625 USD US Apollo Investment Fund VII Apollo Management 15,000 USD US Carlyle Partners V Carlyle Group 15,000 USD US Apax Europe VII Apax Partners 8,500 EUR UK PAI Europe V PAI Partners 7,000 EUR France Thomas H Lee VI Thomas H Lee Partners 9,000 USD US Silver Lake Partners III Silver Lake 8,000 USD US Carlyle Europe Partners III Carlyle Group 5,000 EUR US Terra Firma Capital Partners III Terra Firma Capital 4,000 EUR UK Fortress Investment Fund V Fortress Investment 5,000 USD US

RECENTLY CLOSED BUYOUT FUNDS Hellman & Friedman VI: Manager: Hellman & Friedman GS Capital Partners VI: Target Size (mn): 8,000 USD Manager: Goldman Sachs Private Equity Group First Close (mn): 2,700 USD (November-2006) Target Size (mn): 19,000 USD Final Close (mn): 8,400 USD (April-2007) First Close (mn): 12,000 USD (January-2007) Geographic Focus: US, Europe Final Close (mn): 20,000 USD (April-2007) Industry Focus: Communications, Media, Financial Services, Geographic Focus: Global Software, Information Services Industry Focus: Any Lawyer: Simpson, Thacher & Bartlett Sun Capital Partners V: Sample Investors: Alaska Permanent Fund Corporation, CalPERS, Manager: Sun Capital Partners IPERF, Irish NPRF, Kentucky Retirement Systems, LACERS, New Target Size (mn): 6,000 USD Mexico Public Employees' Retirement Association, PA SERS, Final Close (mn): 6,000 USD (April-2007) Washington State Investment Board Geographic Focus: North America, West Europe Quadrant Private Equity No.2: Industry Focus: Technology, Telecoms, Industrial, Retail, Manager: Quadrant Capital Manufacturing, Construction, Media, Entertainment, Food Target Size (mn): 400 AUD Lawyer: Kirkland & Ellis Final Close (mn): 500 AUD (April-2007) Sample Investors: CalPERS, Ohio State University Geographic Focus: Australia, New Zealand Endowment, SFERS, Sports Venture Partners, Mexico Industry Focus: Any Public Employees' Retirement Association Sample Investors: Vantage Private Equity Growth

VENTURE FUNDS ON THE ROAD FINAL CLOSES BAROMETER

US Europe ROW Total No. on Road 233 102 101 434 Total Target 51 21 12 84 Value ($bn) Average Target 218 206 119 194 Size ($mn)

VENTURE FUNDS ON THE ROAD

Fund Manager Target Size (mn) GP Location Citigroup International Growth II Citigroup VC International 3,500 USD UK AIG Highstar Capital III AIG Global Investment Group 2,000 USD US Pine Brook Road Partners I Pine Brook Road Partners 2,000 USD US Cyrte Investments TMT Fund Cryte Investments 1,500 EUR Netherlands Bertelsmann Bertelsmann Capital Ventures 1,000 EUR Germany InSight Capital Partners VI InSight Capital Partners 1,200 USD US Vector Fund IV Vector Capital 1,000 USD US Pangaea One Cartesian Capital Group 1,000 USD US Patenterprise Energy Fund I Patenterprise 1,000 CHF Switzerland Battery Ventures VIII Battery Ventures 750 USD US

RECENTLY CLOSED VENTURE FUNDS Draper Fisher Jurvetson IX: Charles River XIII: Manager: Draper Fisher Jurvetson Manager: Charles River Ventures Target Size (mn): 600 USD Target Size (mn): 275 USD First Close (mn): 454 USD (February-2007) First Close (mn): 186 USD (February-2007) Final Close (mn): 600 USD (April-2007) Final Close (mn): 285 USD (April-2007) Geographic Focus: North America Geographic Focus: North America Industry Focus: Telecoms, IT, Life Sciences, Internet, Industry Focus: Technology, Consumer Services, Media, IT, Nanotechnology, Clean Technology Intellectual Property Sample Investors: University of Minnesota Foundation Venrock Associates V: Manager: Venrock Associates Target Size (mn): 500 USD Kleiner Perkins Caufield & Byers China Fund: First Close (mn): 250 USD (February-2007) Manager: Kleiner Perkins Caufield & Byers Final Close (mn): 600 USD (April-2007) Final Close (mn): 360 USD (April-2007) Geographic Focus: North America, Asia Geographic Focus: Greater China Industry Focus: Technology, Healthcare, IT, Infrastructure, Industry Focus: Technology, Healthcare, Consumer Products, Medical Devices Consumer Services, Communications, Media, Internet, Wireless

REAL ESTATE FUNDS ON THE ROAD FINAL CLOSES BAROMETER

US Europe ROW Total No. on Road 87 18 19 124 Total Target 55 8 5 67 Value ($bn) Average Target 628 438 261 544 Size ($mn)

REAL ESTATE FUNDS ON THE ROAD

Fund Manager Target Size (mn) GP Location Blackstone Real Estate Partners VI Blackstone Group 10,000 USD US Morgan Stanley Real Estate Fund VI Intl Morgan Stanley Real Estate 8,000 USD US Beacon Capital Strategic Partners V Beacon Capital Partners 3,000 USD US Walton Street Real Estate VI Walton Street Capital 2,500 USD US Capri Urban Investors Capri Capital 2,000 USD US IRUS European Retail Property Fund NEINVER 1,4000 EUR Spain Carlyle Realty Partners V Carlyle Group 1,500 USD US TA Realty Associates VIII TA Associates Realty 1,500 USD US Coleyzo II Colony Capital 1,000 EUR US Aberdeen European Shopping Property Fund Aberdeen Property Investors 1,000 EUR Sweden

RECENTLY CLOSED REAL ESTATE FUNDS AEW Value Investors II: Capman Real Estate Fund II: Manager: AEW Capital Management Manager: CapMan Real Estate Type: Value-Added Type: Opportunistic Target Size (mn): 500 USD Target Size (mn): 150 EUR Final Close (mn): 651 USD (May-2007) First Close (mn): 67 EUR (September-2006) Geographic Focus: North America Second Close (mn): 139 EUR (February-2007) Sample Investors: Los Angeles Fire and Police Pension Final Close (mn): 150 EUR (April-2007) System, Orange County Employees' Retirement System, Geographic Focus: Finland, Europe Employees' Retirement System of Rhode Island, Seattle City Employees' Retirement System Covenant Apartment Fund V: Manager: Covenant Capital Group Middle East Opportunities Fund II: Type: Value-Added Target Size (mn): 150 USD Manager: Corporate Finance House First Close (mn): 37 USD (January-2006) Type: Value-Added Second Close (mn): 62 USD (July-2006) Target Size (mn): 50 USD Final Close (mn): 160 USD (May-2007) First Close (mn): 30 USD (July-2006) Geographic Focus: North America Final Close (mn): 35 USD (March-2007) Sample Investor: State of Connecticut Retirement Plans and Geographic Focus: Jordan, Lebanon, Dubai, Qatar, Middle East Trust Funds

Over the past few years private equity mega funds have grown in terms of both fund size, and in terms of the number of mega fund vehicles that are being raised, with the ten largest funds raised in 2006 accounting for a massive 25% of the overall fundraising total for the industry during that year. Fundraising in 2007 is continuing this trend, with April seeing the largest fund ever raised: GS Capital Partners VI on $20 billion. We examine here both the biggest funds currently in market (excluding buyout and venture funds), and also the largest mega funds ever raised historically.

LARGEST PRIVATE EQUITY FUNDS CURRENTLY ON THE ROAD (other than buyout and venture funds):

Fund Manager Type Target Size (Mn) Manager Country Warburg Pincus Private Equity X Warburg Pincus Balanced 15,000 USD US Cerberus Institutional Partners (Series Four) Cerberus Capital Management Distressed Debt 6,500 USD US MatlinPatterson Global Opportunities III Matlin Patterson Global Advisors Distressed Debt 4,500 USD US Avenue Special Situations V Avenue Capital Group Distressed Debt 4,000 USD US AXA Secondary Fund IV AXA Private Equity Secondaries 2,700 EUR France Alinda Capital Partners I Alinda Capital Partners Infrastructure 3,000 USD US Morgan Stanley Infrastructure Morgan Stanley Infrastructure 3,000 USD US MHR Institutional Partners III MHR Fund Management Distressed Debt 3,000 USD US OCM Opportunities Fund VII Oaktree Capital Management Distressed Debt 3,000 USD US LS Power Equity Partners II LS Power Group Infrastructure 2,500 USD US

LARGEST PRIVATE EQUITY FUNDS EVER RAISED:

Fund Manager Type Target Size (Mn) Final Close Date Manager Country GS Capital Partners VI Goldman Sachs Private Equity Buyout 20,000 USD Apr-07 US Blackstone Capital Partners V Blackstone Group Buyout 15,600 USD Jul-06 US Texas Pacific Group Partners V Texas Pacific Group Buyout 15,000 USD Jun-06 US Permira IV Permira Buyout 11,100 USD Sep-06 UK Providence Equity Partners VI Providence Equity Partners Buyout 12,000 USD Feb-07 US Apollo Investment Fund VI Apollo Management Buyout 10,100 USD Feb-06 US Cinven IV Cinven Buyout 6,500 EUR Jun-06 UK GS Capital Partners V Goldman Sachs Private Equity Buyout 8,500 USD Apr-05 US Hellman & Friedman VI Hellman & Friedman Buyout 8,400 USD Apr-07 US Warburg Pincus IX Warburg Pincus Balanced 8,000 USD Aug-05 US Bain Capital Fund IX Bain Capital Buyout 8,000 USD Mar-06 US CVC European Equity IV CVC Capital Partners Buyout 6,000 EUR Jul-05 UK Carlyle Partners IV Carlyle Group Buyout 7,850 USD Mar-05 US First Reserve Fund XI First Reserve Corporation Natural Res. 7,800 USD Aug-06 US BC European Cap VIII BC Partners Buyout 5,800 EUR May-05 UK

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preqin.hedge.com Investor Spotlight: Canada

Investor Spotlight is your monthly update on investors in Private Equity. See how key investors are changing their allocations and which new investors are coming into the market. Each month we analyse investors in a specific segment - this month we look at Canadian LPs.

Back in December 2005, our Investor Spotlight article looked OMERS is set to invest between 800 million and 1 billion at the investment strategies of a handful of the largest CAD to continue with its program of focusing on private Canadian LPs investing in private equity funds. In this equity investments, believing the asset class is better month’s Investor Spotlight we focus once again on Canada positioned to generate strong, predictable returns than other and examine whether any significant changes have occurred alternative investments. in the last 18 months and who is currently investing most heavily in the private equity market. Over the last 18 months investment strategies have had to adapt to the increased competition within the asset class and Canadian private equity investors are often somewhat some investors are now turning to less developed markets overshadowed by their larger US neighbours, however, they for investment opportunities, whilst at the same time using play a significant role in the global private equity market. Our foreign investments to add further diversification to their Investor Intelligence database identifies 102 active private equity portfolios. In 2006, the Local Authorities Canadian-based investors who currently have an aggregate Pension Plan (LAPP) gave Alberta Investment Management allocation to private equity in excess of CAD 52 billion, a (AIM) a foreign investment mandate of 3% of its total assets. figure that equates to 4.8% of all private equity allocations LAPP’s separate pool of foreign private equity investment worldwide. If all of the Canadian investors on our system capital illustrates the pension fund’s global investment were to fill their current target allocations to private equity, strategy which AIM has full discretion over and can ask to they have the potential to commit a further CAD 47 billion to increase the mandate size to 5% at any time. Likewise, in the market. February of this year OMERS allocated CAD 200 million for investments in Asia in order to increase its exposure to the At the end of 2005, CPP Investment Board was top of the list region and has set a long term vision of having between 4 of Canadian LPs with the largest commitment to the asset and 8% of its private equity assets committed to Asia-focused class. Since then, the private equity market has gone from private equity funds in the future. Furthermore both PSP strength to strength, with more and more investors and Investments and the University of Toronto Asset capital entering the asset class and fund sizes growing Management Corp (UTAM) are currently employing global accordingly. CPP Investment Board has invested heavily in investment strategies in the hope of adding further the US, UK and Canada during this period of high growth, diversification to their private equity portfolios. doubling its commitment to the asset class from CAD 10 billion in 2005 to CAD 20 billion today. CPP Investment Board Not all Canadian investors have been as taken with the intentionally over commits to private equity funds and has a prospect of emerging markets as others. The Hospitals of minimum of 6.4% of its assets invested in the asset class at Ontario Pension Plan (HOPP) remains focused on the US, any one time. As can be seen in Figure 1, CPP is still the Canadian and European markets, where it still believes largest Canadian investor in private equity in terms of capital excellent investment opportunities can be found despite the committed. Ontario Teachers’ Pension Plan (OTPP) and increased competition. CDP Capital is also implementing a OMERS Capital Partners have also taken advantage of the similar geographic investment focus and although it will favourable market conditions and, like CPP Investment consider emerging market investment opportunities it is not Board, have invested steadily over the last 18 months, more likely to invest in the near future. than doubling, and in OMERS’s case trebling, their allocations from CAD 7.3 billion to CAD 15 billion and CAD 2 One Canadian LP to be especially active in the 18 months billion to CAD 6.1 billion respectively. Over the course of since we last focused on Canada is UTAM. Having only 2006 OMERS committed a massive CAD 1.4 billion to private started investing in the asset class in 2000, UTAM has equity managers, its largest ever annual amount. For 2007, managed to build relationships with a large number of private

equity and private debt investment managers, including a lot of direct private equity investments in order to build Blackstone Group, Centerbridge Capital Partners, Goldman relationships with GPs, with whom it can then partner later in Sachs, KKR, Madison Dearborn, Pantheon Ventures and co-investments. To build on its existing relationships, TPC Providence Equity Partners amongst others. UTAM is set to has recently opened an office in London to use as a base to commit more capital in the near future in an attempt to fill the scout for partnership commitment opportunities as well as remaining 6% of its 10% target allocation. direct investments. This strategy is also employed by both BcIMC and OMERS. As in any market, the ability to adapt investment strategies to suit the changing market is key. At the end of 2006, CDP One similar trend that is evident in all of the investment plans Capital reduced the number of GPs in its portfolio from 110 of our sample of Canadian LPs is that they regard the future to 45 in order to build stronger relationships with top- of the market positively and are set to carry on investing in performing GPs and thus invest larger amounts of money private equity vehicles. In fact, in most cases investors are with what it feels are the best managers available. The not just looking to maintain their current commitment level importance of good relationships with top flight fund but are instead set to increase their allocations to the asset managers is often emphasised as a key ingredient to class. As already mentioned earlier, OMERS is set to invest success within the industry and this is certainly a common a further CAD 500 million during 2007, and HOPP in the next feature in many of the Canadian LPs’ portfolios. British 12 months is looking to commit a further CAD 100 to 600 Columbia Investment Management Corporation (BcIMC) million in 1 to 4 new vehicles. Additionally, OTTP is set to has a long standing partnership with two of Europe’s premier continue investing to provide the retirement system with investment managers, Cinven and Advent International with access to specialist industries or markets that it would not be whom it regularly reinvests. In total BcIMC has existing able to access easily itself through its direct investments. relationships with 58 GPs, including Texas Pacific Group, Despite many of the Canadian LPs having significantly HarbourVest Partners, Pantheon Ventures, Adams Street increased the amount they have committed to the private Partners, AIG and Blackstone Group to name but a few. equity industry recently, they clearly believe that the market Likewise, Ontario Teachers’ Pension Plan places huge will continue to offer good investment opportunities and the emphasis on the importance of the LP - GP relationship and potential for high returns, and have responded accordingly through its investment arm, Teachers’ Private Capital, makes by increasing target allocations further still.

Figure 1: A sample of 10 of the largest Canadian LPs by commitment to private equity:

Commitment to PE Assets under management Current Commitment to PE Investor Name (CAD mn) (CAD mn) (% of AUM) Dec-05 May-07

CPP Investment Board 10,000 20,000 110,800 18

Ontario Teachers’ Pension Plan 7,300 15,000 105,000 13

CDP Capital – Private Equity Group 9,800 9,825 13,100 75

OMERS Capital Partners 2,000 6,147 61,472 10

Public Sector Pension Investment Board n/a 3,730 28,000 13.32

TD Capital Private Equity Investors n/a 2,331 2,331 100

British Columbia Invest. Management Corp. 1,500 1,908 76,300 2.5

The Hospitals of Ontario Pension Plan n/a 1,300 28,000 4.6

Local Authorities Pension Plan n/a 444 15,000 2.96

University of Toronto Asset Management Corp. n/a 215 5,550 4

Swiss insurance company Helvetia Patria Versicherungen is Following its acquisition in November 2006 by Alliance Trust, selling its entire portfolio of private equity fund interests on the private equity firm Albany Ventures is set to start making private secondary market. Helvetia stopped investing in private equity equity fund investments on behalf of the Trust. Albany Ventures funds in 2003/2004, and is now looking to sell CHF 200-250 will manage Alliance Trust’s private equity portfolio, currently million worth of private equity fund interests. Its advisor, Swiss- GBP 36 million in size, and is in the process of deciding on the based Strategic Capital Management (SCM), is handling the strategy that it will pursue in terms of future direct and fund sale. Helvetia stated it is selling due to a need to balance its investments for the Trust. Alliance Trust has a 15% target investment portfolio. It is possible that Helvetia will return to the allocation to private equity, which means Albany Ventures’ assets private equity asset class and make new fund commitments in under management are expected to rise by up to GBP 400 the longer term. million. A decision is expected to be made on the future strategy andtimescale of private equity investments by July 2007. The CAD 105 billion Ontario Teachers' Pension Plan (OTPP) saw returns of 26.9% from its private equity investments last New Mexico State Investment Council (SIC) has increased its year, far greater than those in other asset classes and will allocation for private equity vehicles operating in the state of continue to make significant commitments throughout 2007. New Mexico. SIC manages the private equity investments of the OTPP uses private equity funds to gain exposure to specialist USD 4.5 billion Severance Tax Permanent Fund (STPF). It is industries or markets that it cannot access through its direct through this fund that SIC makes its commitments to vehicles investment program. that are focused on acquiring or investing in New Mexico-based companies. As SIC had almost met the 6% target allocation to Tokio Marine and Nichido Fire Insurance (TMNFI) is aiming private equity and co-investments for the STPF, a new target of to increase its exposure to private equity opportunities in Japan 9% has been approved. Sun Mountain Capital acts as advisor and the rest of the world so that such investments form up to for these investments for the STPF. 60% of its portfolio. US- and Europe-focused funds currently account for 65% of its portfolio and, as a result, greater San Bernardino County Employees' Retirement exposure to Asia will be at the expense of future commitments Association (SBCERA) has committed to three distressed debt to these more traditional markets. In particular, this will affect funds. The USD 5.7 billion pension fund has committed USD 10 future investment in Europe, which will fall from its current level million each to MatlinPatterson Global Opportunities III, Catalyst of 25% to a target of 15-20% of TMNFI's portfolio. Funds Fund II and Tennenbaum Opportunities Fund V. These focused on Japan make up 30% of the portfolio but may commitments bring SBCERA closer to its aim, set in 2006, of increase to 40%. 5% of TMNFI's portfolio is currently dedicated investing USD 45 million in funds focused on distressed debt to funds focused on the rest of the world, but this section could opportunities. The remaining USD 15 million will be used for a rise to as much as 20%. TMNFI currently has a target allocation future opportunity. to private equity of 5% of its ¥3.3 trillion total assets. Newly formed joint venture CAM NewMarkets Partners has The USD 46.2 billion Boeing Company Pension Fund is launched a fund of funds focusing on emerging market private looking to increase its exposure to private equity to 6% of assets equity funds. The German based private equity fund of funds following an asset allocation study carried out last year. The shop CAM Private Equity has joined forces with the US based increased allocation will be at the expense of public equities. NewMarkets Partners to set up the new firm. The new vehicle, These changes are being made in an effort to achieve greater CAM NewMarkets Partners 1, is expected to raise USD 400 diversification of investments and to manage risk more million and will be investing in buyout funds in areas such as effectively. Asia, Eastern Europe, Latin America and South Africa.

Each month Spotlight provides a selection of the recent news on LP More news and updates are available online for Investor Intelligence subscribers. Contact us for more information - [email protected]

Private Equity Intelligence is a financial information business focused on the private equity industry. We provide private equity and venture capital firms, fund of funds, investors and advisors with products and services within four main areas: Fund Performance, Investors, Fundraising and Fund Terms.

FUND PERFORMANCE: We provide performance data for 3,400 private equity funds worldwide. For each individual fund you see the amount called, distributed, unrealised value, value multiple and net IRR. Performance is measured on a net-to-LP basis. Fund performance is available through our online database “Performance Analyst” and our publication “The 2007 Private Equity Performance Monitor”.

INVESTORS: View profiles for 3,500 global LPs complete with information on background, contact details including key people, program size, investment plans, investment preferences, current portfolio and funds previously invested with. This information is available through our online database “Investor Intelligence” and our publication “The Limited Partner Universe”.

FUND RAISING See information on over 1,000 private equity funds worldwide who are currently raising capital. Get details of funds likely to be raising in the near future and view funds closed over the last year including sample investors. This information is available through our online database “Funds in Market” and our annual publication “The Global Fundraising Review”.

FUND TERMS: See valuable information on fees, costs and key terms for all types of funds, based upon an exhaustive analysis of data from over 1,000 funds. Ensure that negotiated terms are in line with industry best practice. This information is available through our publication “The 2007 Fund Terms Advisor”, which also gives access to our online service showing benchmark figures based upon key fund features.