Quarterly Report Q2 2009

PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

Quarterly report for the period from 1 April 2009 to 30 June 2009 2 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

PEARL HOLDING LIMITED

The convertible bond issued by Pearl Holding Limited provides access to the private equity asset class. For the ﬁ rst time, investors have the opportunity to buy into the earnings potential of a broadly diversiﬁ ed private equity portfolio, while enjoying capital protection and a 2% coupon. Its tailor-made structure makes the convertible bond suitable for German private and institutional investors (i.e. “sicherungsvermögens- und spezialfondsfähig”).

This document is not intended to be an investment ad- vertisement or sales instrument; it constitutes neither an offer nor an attempt to solicit offers for the product described herein. This report was prepared using ﬁ nancial information contained in the company’s books and records as of the reporting date. This information is be- lieved to be accurate but has not been audited by any third party. This report describes past performance, which may not be indicative of future results. The company does not accept any liability for actions taken on the basis of the information provided. 3

TABLE OF CONTENTS

1 Investment manager´s report 4 2 Private equity market environment 8 3 Portfolio allocation 10 4 Portfolio 12 5 Portfolio overview 14 6 Financial figures 17 4 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

1 INVESTMENT MANAGER´S REPORT

NAV in the context of the economic were offset to a certain extent by IFRS va- downturn luation methods used by the investment manager to refl ect the “fair value” of Pearl’s Against the backdrop of a persistently dif- portfolio. fi cult macroeconomic environment, the net asset value (NAV) of Pearl declined by During the second quarter, the greatest 6.99 % to 85.92 % in the second quarter of negative infl uence of – 2.6 % on Pearl’s NAV 2009, an amount that was within the range came from the depreciation of the US dollar of expectations. Among other things, this versus the Euro. On the other hand, price was due to value adjustments in the under- movements in listed private equity compa- lying portfolio, which in total exerted a neg- nies in the Pearl portfolio – the proportion of ative impact of 2.4 % on Pearl’s NAV. The which was reduced during the past quarter price developments of public comparables, and now accounts for less than 1.0 % of the as well as the operating results of a number total – had only an insignifi cant infl uence on of underlying portfolio companies, forced NAV. Financing and operating expenses, general partners to record similar valuation after deduction of various revenues, were adjustments in their year-end 2008 and responsible for the remaining variance in end-March 2009 fi nancial statements. How- NAV for the quarter. ever, in the case of Pearl, those writedowns

MID-MARKET PRICE AND NAV DEVELOPMENT

150

140

130 NAV 120 Mid-market price

110 NAV incl. paid

in % and accrued interest 100

70 06-02 06-03 06-04 06-05 06-06 06-07 06-08 06-09

Source: Partners Group 5

Mid-market price at 89.00 % tageous environment for exits: Pearl received distributions stemming from sales of The mid-market price of Pearl’s convertible roughly EUR 8.0 million in the months April bonds for the period ending 30 June 2009 through June 2009, an increase to the EUR was 89.00 %, clearly higher than in the pre- 4.7 million of the previous quarter. The most vious quarter. Therefore, since the begin- signifi cant distributions came from Warburg ning of the year, the price of the convertible Pincus Private Equity VIII, which divested a bonds has outperformed the overall listed portion of its holding in portfolio company private equity market. Bridgepoint Education, a provider of corre- spondence courses and classroom instruc- Investment activities continue at a tion, by means of an initial public offering. modest pace Also, Avista Capital Partners (Offshore) in conjunction with an investor group sold From April through June, conventional buy- portfolio company Medserve Inc. for USD out activities in the private equity industry 185 million after having paid USD 70 million as a whole remained tentative because of to acquire it in 2006. Medserve is a Hous- the ongoing diffi culty in obtaining the neces- ton-based services company specialized in sary fi nancing. Nonetheless, transactions the disposal of medical and toxic waste. fi nanced with private equity continue to be concluded, albeit mainly in the small- and Active portfolio management mid-cap areas as such transactions require less debt capital. Because on the whole more money was called for investment than the amount dis- Capital called during the second quarter for tributed from exits, the level of investment investment on the part of Pearl amounted to (the current value of the private equity EUR 13.0 million, which was noticeably less holdings expressed as a proportion of NAV) than in the comparable prior-year period, rose to 94.8 % during the course of the past but represents a slight increase over the to- quarter. Thus in view of outstanding coupon tal for the fi rst quarter. During the quarter payments, Pearl is fully invested at present. capital calls stemmed from, among others, Advent International GPE VI, which acquired In order to provide the Pearl portfolio with a 51 % interest in the payment transactions suffi cient liquidity and thereby be able to division of America’s Fifth Third Bancorp. meet capital calls of the underlying general Advent will afford the company access to partners in the coming quarters, Pearl ap- additional capital and in turn be in a position plied its active portfolio management ap- to support the further growth of Fifth Third proach to selectively sell certain partnership Bancorp. In addition, Carlyle Partners IV commitments during the second quarter. and Clayton, Dubilier & Rice Fund VII also Instead of using the secondary market to issued capital calls in order to bolster port- exit at exaggerated discounts those partner- folio company Hertz, the world’s largest car ships, that are already invested to the rental fi rm, by means of a follow-on invest- greatest extent and thereby are forced to ment: Hertz acquired insolvent Advantage accept a sharply negative infl uence on NAV, Rent A Car at an attractive price and will Pearl has sold partnerships that have called combine its top-notch business processes little capital to date and thus were able to and cost-consciousness with Advantage’s be divested in the current market environ- focus on the leisure market in order to gain ment at a price that only had a marginal im- market share among thrifty travelers. pact on NAV. Outstanding called payment commitments of EUR 42.7 million were re- Thanks to Pearl’s broad diversifi cation across duced by these active portfolio management various investment holding periods, it was measures and, as a result, Pearl had a rela- possible to sell select portfolio companies in tively moderate level of commitments at the spite of the otherwise persistently disadvan- end of June when compared to similar listed companies. 6 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

Apart from that, the further reduction of lis-ted private equity companies supplied Pearl with additional liquidity to meet future capital calls of general partners while simul- taneously enabling Pearl to beneﬁ t from the higher share prices recorded in recent months.

Outlook

Due to the fact that the majority of general partners in the Pearl portfolio have already submitted their end-March 2009 fi nancial reports, in combination with the additional IFRS-based adjustments that were account- ed for as per end of June 2009, the investment manager is convinced that Pearl’s NAV refl ects the fair and current value of the portfolio. Taking into consideration the way markets have evolved during past economic crises, the investment advisor is going on the assumption that capital calls from general partners will outpace distributions from exits. In order to have suffi cient liquidity on hand to cope with that situation, the investment advisor is currently involved in the fi - nal negotiations for a credit line and expects that the signing of the related contracts can be announced within the next several weeks. 7

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QUARTERLY REPORT Q2 2009

2 PRIVATE EQUITY MARKET ENVIRONMENT

Attractive conditions for private equity Similarly, ever more big conglomerates fac- value creation ing liquidity constraints are considering spinning off divisions in order to raise capi- The success of a private equity investment tal. Such assets are usually well developed is dependent on the general partner’s ability in terms of their operations and infrastruc- to drive operational improvements, to pro- ture and employ a highly trained workforce. vide guidance and fi nancial backing, as well The increase in this kind of deal fl ow is as to put in place a strong management providing private equity fi rms with a further team that is capable of implementing effec- stream of high quality opportunities that tive business strategies to develop the in- could be benefi cial to their underlying investment’s potential. Besides achieving or- vestments. ganic growth through ways such as driving sales initiatives and improving operational Private equity firms in strong position effi ciencies, a private equity owner can also to acquire bolt-ons turn to bolt-on acquisitions to merge expertise, to expand the scale of the company’s The buy-and-build strategy is one of the operations and to prepare it for a profi table value-adding approaches private equity exit. fi rms use to improve their portfolio companies. Having a deep knowledge of their com- The bolt-on or buy-and-build strategy refers panies, private equity fi rms understand the to a private equity fi rm doing an acquisition kind of businesses that would best comple- in order to enhance the value of an existing ment their portfolio companies. In addition, portfolio company. Bolt-on acquisitions can private equity fi rms have the necessary skills well include a company’s industry competi- to integrate the human capital and resour- tor or a business which has a complementa- ces as well to create synergies within the ry product or technology to offer. combined entity.

Recessionary climate conducive to Furthermore, in a world where even promi- bolt-on acquisitions sing and operationally sound companies are having diffi culty gaining access to capital, private equity fi rms are one of the few fi - In the present recessionary environment, nancial actors left with abundant liquidity. the availability of attractively priced compa- According to research group Preqin, private nies is on the increase. The downturn in the equity fi rms had more than USD 1 trillion global economy has caused consumer and available for deal-making at the beginning corporate spending to decline, putting many of 2009. Thanks to this strong fi nancial po- companies under cash fl ow pressures. To sition, private equity fi rms can support their worsen the situation, a tight global credit portfolio companies in consolidating their situation has prevented companies from ob- market positions by acquiring industry com- taining favorable fi nancing. Raising capital in petitors or businesses which offer comple- the public market is also challenging in the mentary products or services. present economic climate given that stock market investors are facing similar liquidity woes. As a result of the environment, an Bolt-on acquisitions as a way to increasing number of operationally sound increase market share … companies are considering partnering with private equity fi rms for fi nancial backing. The benefi ts of bolt-on investments are manifold. The most obvious advantage that 9

a private equity-backed company gains over nursing customers. The addition of Concept its competitors is a stronger market position Media’s more than 500 programs to with a bigger market share achieved either Delmar’s existing offering of nursing educa- through acquiring other competing fi rms or tion programs will provide an even greater by expanding vertically. choice of content and media format to stu- dents and instructors within the core nurs- A recent example of a traditional buy-and- ing and allied health subject areas. This has build strategy to increase market share is helped to boost Cengage Learning’s position the purchase of ten bolt-on companies by as the leading provider of state-of-the-art Pearl partnership August Equity Partners customized learning solutions and as the II-A for its portfolio company Enara Group, leading publisher in the higher education a London-based home care provider. The ac- publishing and reference market. quisition of multiple smaller competitors has enabled Enara to access new markets and Making the right choices in the current to extend its geographical reach across the economic climate United Kingdom. Despite a wealth of investment opportuni- … and reduce costs … ties, private equity owners are all too aware of the importance of only buying businesses Besides achieving a stronger market posi- that truly complement their existing com- tion within the industry, the benefi ts of inte- panies. Private equity fi rms use stringent grating the two companies’ resources are due diligence processes to fi lter out good in- considerable. Synergies are generated by vestments and focus not just on the lower combining the production processes through valuations for companies but more so on sharing resources and platforms which can long-term profi tability and the creation of boost effi ciency and thus lower production synergies through their merger with existing costs. A combined entity can also streamline portfolio companies. the back-offi ce operations and reduce inven- tory expenses, resulting in more effi cient More importantly, private equity fi rms pos- processes in the long run. Overall, the great- sess the know-how and skills necessary to er economies of scale will lead to lower be able to integrate companies and develop operational costs, while greater market in- the combined entity to its full potential. The fl uence will result in stronger negotiating recessionary environment has increased the power with vendors. number of high quality investments that are being offered at attractive prices, while pri- … and broaden product offerings vate equity fi rms have the buying power to cherry-pick the investments that should add A company can also use the particular pro- most value to their existing investments. ducts, services and skill sets offered by the bolt-on company in order to broaden its own With private equity fi rms’ expertise in build- product or service offering. One such exam- ing up their companies through bolt-on ac- ple is the acquisition of healthcare education quisitions, plus the opportunities arising in content provider Concept Media by Delmar, the current economic climate, private equi- an underlying company of direct investment ty-owned companies can increasingly expect Cengage Learning and a leading provider to benefi t from this method of value crea- of lifelong learning products and services for tion. the healthcare education market.

Concept Media’s digital media library of education materials will be integrated into Delmar to complement its existing product line of training materials for health and 10 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

3 PORTFOLIO ALLOCATION

NAV PERFORMANCE ATTRIBUTION IN 2009

+ EUR 0.1m Dividend + EUR 0.1m and interest Net income income + EUR 33.9m from cash and – EUR 6.6m IFRS cash equi- Interest revaluations valents payments – EUR 1.4m – EUR 115.6m – EUR – EUR LPE and other GP 16.8m 5.1m short term Fees and other EUR revaluations Foreign investments expenses 678m exchange EUR 567m

NAV NAV 31 December 2008 30 June 2009

INVESTMENTS* BY VINTAGE YEARS

81 80 79

60 60 60 57 55 55 50 50

40 in EUR m

20 18 13 10 5 3 0 0 0 0 pre 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1996 YTD

Source: Partners Group

* Allocation by unrealized value of private equity investments 11

INVESTMENTS* BY TYPE OF INVESTMENTS INVESTMENTS* BY GEOGRAPHIC REGIONS

Direct Asia & investments rest of world 11% 7%

Secondaries 11%

North America 45% Europe 48% Primaries 78%

INVESTMENTS* BY FINANCING STAGES INVESTMENTS* BY INDUSTRY SECTORS

Special situations Communication & Other 12% media 17% 16%

Venture capital IT & 22% Retail high-tech 17% 14%

Buyout 66% Life Industrial sciences/ production/ healthcare manufacturing Financial 18% 12% services 6%

* Allocation by unrealized value of private equity investments 12 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

4 PORTFOLIO

Selected investments TPG Partners IV, L.P.

Navis Asia Fund V, L.P. Pearl partnership TPG Partners IV’s portfolio company Fidelity National Information Ser- In April, Pearl partnership Navis Asia Fund V vices (FIS) announced in April that it was acquired a controlling stake in Edutech, an acquiring Metavante Technologies, a Wis- education company offering post-graduate consin-based company that provides bank- and part-time executive programs at seven ing and payment technology services world- campuses across India, for USD 30 million. wide, for approximately USD 2.9 billion in Edutech has a strong brand name, and cur- stock. FIS, a global leader in processing and rently demand for its courses exceeds avail- technology solutions for ﬁ nancial institu- ability. The capital will therefore be used to tions, intends to combine the complemen- increase Edutech’s number of campuses tary customer bases and product capabili- and to expand its range of courses. Educa- ties as well as use the market breadth of tion is generally a defensive business with both companies. This transaction will further limited downside risk with respect to the strengthen FIS’s competitive position as a economic cycle and as such is considered a leading global provider of technology solu- suitable investment in the current market tions and lift organic revenue by two percent. environment. The acquisition is expected to be ﬁ nalized during the fourth quarter of 2009, subject to Carlyle Partners IV, L.P. customary conditions. Clayton, Dubilier & Rice Fund VII, L.P.

In April, Hertz, the world’s largest general Selected exits use car rental brand and a portfolio company of Pearl partnerships Carlyle Partners IV Warburg Pincus Private Equity VIII, L.P. and Clayton, Dubilier & Rice Fund VII, acquired Advantage Rent A Car out of bank- In April, Pearl partnership Warburg Pincus ruptcy for approximately USD 33 million. Private Equity VIII partially exited portfolio Advantage is a popular brand for price-ori- company Bridgepoint Education, a San ented customers at key US leisure travel Diego-based provider of online and in-class destinations. Hertz will combine its opera- education services, in an initial public offer- tions excellence and expense discipline with ing (IPO). The shares of Bridgepoint were Advantage’s leisure market focus in order to priced at USD 10.5 each, raising about USD expand its market share in the price-orient- 141.8 million. In its market debut on 15 ed travel demographic. In addition, the April, the shares rose as much as 7 % above transaction will allow Hertz to increase its the IPO price. The majority of the shares penetration of the third-party online book- were offered by the existing shareholders, ings market. including Warburg Pincus which owned 89.5 % of the shares. After the IPO, War- burg Pincus still owned about 68.5 % of Bridgepoint. 13

Avista Capital Partners (Offshore), L.P.

In May, Pearl portfolio partnership Avista Capital Partners (Offshore) sold portfolio company Medserve Inc, a Houston-based company specializing in medical and hazard- ous waste management services, to Nas- daq-listed Stericycle for USD 185 million. Medserve had been acquired by a group of investors led by Avista in 2006 for USD 70 million. As a result of the private owners’ clear growth strategy for the company, Medserve grew rapidly, integrating more than 20 companies into its operations and making signiﬁ cant inroads in consolidating its position in the waste management sec- tor. The completion of the transaction is subject to standard regulatory clearances.

Permira Europe III, L.P.

In June, hotel and conference venue group Principal Hayley, a portfolio company of Pearl partnership Permira III, acquired two properties for over GBP 40 million, taking the group’s European assets to 24 hotels and approximately 500 meeting rooms. Since acquiring Principal Hayley in 2006, Permira has actively developed and expanded the company’s portfolio of properties across the UK and Northern Europe. These latest acquisitions provide a strong strategic ﬁ t with the company’s dedicated conference hotels in popular tourism and conference destinations and complement its existing service offering. 14 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

5 PORTFOLIO OVERVIEW

Primary partnerships European Equity Partners (IV), L.P. Europe – Buyout Global Life Science Ventures Fund II, L.P. Anonymized European Buyout Fund 3* GMT Communications Partners II, L.P. Anonymized European Buyout Fund 7* Index Ventures II (Jersey), L.P. 3i Europartners IV, L.P. Index Venture Partners III, L.P. 3i Eurofund Vb Index Ventures IV (Jersey), L.P. Activa Capital Fund FCPR Sofi nnova Capital IV, L.P. Advent International GPE V, L.P. Sofi nnova Capital Partners V, L.P. Advent International GPE VI, L.P. Sofi nnova Capital Partners VI FCPR Apax Europe V, L.P. Zweite TechnoStart Ventures Apax Europe VI, L.P. Fonds GmbH & Co. KG Apax Europe VII, L.P. AXA LBO Fund III-A Europe – Special situations BC European Capital VII Top Up Fund Coller International Partners IV, L.P. BC European Capital VIII, L.P. ICG Mezzanine Fund 2003, L.P. No. Bridgepoint Europe III, L.P. Indigo Capital IV, L.P. Bridgepoint Europe II “C”, L.P. Special Situations Venture Partners, L.P. Candover 2008 Fund Limited Partnership STAR II UK Limited Partnership No. 1 CapVis Equity II, L.P. The Rutland Fund Cognetas European Fund II LP Value Enhancement Partners Special Situations Fund I, L.P. CVC European Equity Partners IV, L.P. Tandem Fund CVC European Equity Partners V, L.P. North America – Buyout Doughty Hanson & Co Fund IV, L.P. Anonymized US Buyout Fund 1* Doughty Hanson & Co Fund V Anonymized US Buyout Fund 2* EQT IV, L.P. Anonymized US Buyout Fund 6* EQT V, L.P. Anonymized US Buyout Fund 8* ECI 8, L.P. American Industrial Partners Capital Fund IV, L.P. GMT Communications Partners III, L.P. Apax US VII, L.P. Global Private Equity Fund IV-D, L.P. Apollo Investment Fund VI, L.P. Graphite Capital Partners VI, L.P. Apollo Overseas Partners VII, L.P. Industri Kapital 2000, L.P. Ares Corporate Opportunities Fund III, L.P. Investitori Associati IV, L.P. Avista Capital Partners (Offshore), L.P. Italian Private Equity Fund IV, L.P. Avista Capital Partners (Offshore) II, L.P. Mercapital Spanish Private Equity Fund II, L.P. Irving Place Capital Montagu III, L.P. Carlyle Partners V, L.P. Nmás1 Private Equity Fund US No. 1, L.P. Clayton, Dubilier & Rice Fund VII, L.P. Nordic Capital V, L.P. Clayton, Dubilier & Rice Fund VIII, L.P. Permira Europe III, L.P. JP Morgan Partners Global Investors Permira IV, L.P. (Cayman), L.P. Segulah III, L.P. Kohlberg TE Investors V, L.P. Terra Firma Capital Partners II, L.P. Providence Equity Partners IV-A, L.P. Third Cinven Fund (No. 4), L.P. Ripplewood Partners II Parallel Fund, L.P. Silver Lake Partners II, L.P. Europe – Venture capital Silver Lake Partners III, L.P. Abingworth Bioventures III, L.P. Thomas H. Lee Parallel Fund VI, L.P. Abingworth Bioventures V, L.P. TPG Partners IV, L.P. ACT 2001 Venture Capital Fund, L.P. No. 2 TPG Partners V, L.P. Advent Private Equity Fund III “D”, L.P. TPG Partners VI, L.P. Amadeus II C, L.P. Warburg Pincus Private Equity VIII, L.P. Amadeus III, L.P. Warburg Pincus Private Equity IX, L.P. BrainHeart Capital, L.P. Warburg Pincus Private Equity X, L.P. BrainHeart Capital Annex Fund, L.P. William Blair Capital Partners VII QP, L.P. 15

North America – Venture capital ChrysCapital IV, LLC Anonymized US Venture Fund 4* CJIP II Co-Invest, L.P. Advanced Technology Ventures VII, L.P. CVC Capital Partners Asia Pacifi c II, L.P. Battery Ventures VII, L.P. Hony Capital Fund III, L.P. Boulder Ventures IV, L.P. Ironbridge Capital 2003/4 Fund Boulder Ventures V, L.P. Ironbridge Fund II, L.P. Canaan VII, L.P. IVF (Mauritius) PCC Draper Fisher Jurvetson Fund VIII, L.P. IVF III (Mauritius) Holding Limited International Life Sciences Fund III, L.P. Navis Asia Fund IV, L.P. Lightspeed Venture Partners Fund VII, L.P. Navis Asia Fund V, L.P. Mayfi eld XII, L.P. Newbridge Asia III, L.P. Menlo Ventures X, L.P. Pacifi c Equity Partners III, L.P. Morgenthaler Partners VII, L.P. Pacifi c Equity Partners Supplementary Fund III, L.P. Morgenthaler Partners VIII, L.P. Polish Enterprise Fund IV, L.P. New Enterprise Associates X, L.P. Polish Enterprise Fund V, L.P. New Enterprise Associates XI, L.P. Polish Enterprise Fund VI, L.P. New Enterprise Associates 12, L.P. UC Stand-by Facility 3, L.P. Oak Investment Partners XII, L.P. Unison Capital Partners II (F), L.P. Oxford Bioscience Partners IV, L.P. Prism Venture Partners IV, L.P. Asia & rest of world – Venture capital Prism Venture Partners V, L.P. Anonymized Emerging Markets Venture Fund 1* Prospect Venture Partners II, L.P. Carmel Ventures II, L.P. Prospect Venture Partners III, L.P. CDH Venture Partners, L.P. Prospect Venture Partners III, L.P. Crimson Velocity Fund, L.P. Sevin Rosen IX, L.P. SBCVC Fund II, L.P. Spark Capital, L.P. Summit Ventures VI-B, L.P. Summit Partners Private Equity Fund VII-B, L.P. Secondary partnerships Summit Partners Venture Capital Fund II-B, L.P. Anonymized US Buyout Fund 3* SV Life Sciences Fund IV, L.P. Affi nity Asia Pacifi c Fund II, L.P. TA Atlantic and Pacifi c VI, L.P. American Industrial Partners Capital TA Atlantic and Pacifi c V, L.P. Fund III, L.P. TCV VI, L.P. Apollo Overseas Partners III, L.P. Vortex Corporate Development Fund, L.P. AXA Private Equity Fund II Feeder, L.P. AXA Secondary Fund II, L.P. North America – Special situations BC European Capital VII (1) Ares Corporate Opportunities Fund, L.P. BC European Capital VII Top Up Fund Ares Corporate Opportunities Fund II, L.P. BE1 French Secondary FCPR Levine Leichtman Capital Partners III, L.P. Blackstone Communications Partners I, L.P. Lexington Capital Partners V, L.P. Boulder Ventures IV, L.P. MatlinPatterson Global Opportunities Partners III, L.P. Bridgepoint Europe II “C”, L.P. OCM Principal Opportunities Fund IV, L.P. CAI Capital Partners & Co. II, L.P. Paul Associates II International, L.P. CAI Capital Partners & Co. III, L.P. Peninsula Fund III, L.P. CapVis Equity II, L.P. Carlyle Europe Venture Partners, L.P. Asia & rest of world – Buyout Cognetas European Fund (fka Electra I) Advent Latin American Private Equity Fund II, L.P. Doughty Hanson & Co. Fund III, L.P. Affi nity Asia Pacifi c Fund III, L.P. EQT III Limited (formerly Northern Europe) AIF Capital Asia III, L.P. EQT Scandinavia II, L.P. AP Cayman Partners II Co-Invest, L.P. Genechem Therapeutics Venture Fund, L.P. AP Cayman Partners II, L.P. ICG Mezzanine Fund 2000, L.P. No. 2 Asia Opportunity Fund II, L.P. Lexington Capital Partners V, L.P. Capital Today China Growth Fund I, L.P. Navis Asia Fund III, L.P. Carlyle Asia Growth Partners III, L.P. Partners Group Secondary, L.P. Carlyle Japan International Partners II, L.P. Partners Group SPP1 Limited CDH Supplementary Fund III, L.P. PG Carlyle Opportunity Partnership CDH China Fund III, L.P. RBS Special Opportunities Fund F, L.P. 16 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

Saskia II Limited Partnership Inc. Siparex SPF II, FCPR T2C2 / BIO 2000, Société en Commandite

Direct investments AWAS Aviation Holding Balta Group Bodybell Brand Services Inc. BSN medical GmbH & Co. KG CellZome AG Cengage Cyneta Networks, Inc. Diagnostic Imaging Company* Direct Marketing and Sales Company* Esmertec AG Freescale Semiconductor, Inc. Gala Coral Group Limited Information Service Company* Interinfo Holdings Japanese Financial Institution* Measurement machinery company* Marquee Holdings, Inc. Media and Communications Company* Media Company* Medical Diagnostic Company* National Bedding Company NXP B.V. PARIS RE Holdings Limited Phoqus Group Limited Picard Surgeles Sanitec Oy SFO Technologies Private Limited SubmitOrder, Inc. SunGard Data Systems, Inc. Super A-Mart Pty Limited TFCP II Co-Investment 2, L.P. The Automobile Association The Readers’ Digest Association, Inc. The Sports Authority, Inc. Unity Media S.C.A. Univision Communications US Entertainment Company*

Listed Private Equity Evolvence India Holdings Plc HarbourVest Global Private Equity Limited

Some investments have been made through Partners Group pooling vehicles at no additional fees

* Names may not be disclosed for conﬁ dentiality reasons 17

6 FINANCIAL FIGURES

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QUARTERLY REPORT Q2 2009

Income statement for the period from 01 January 2009 to 30 June 2009

In thousands of EUR Notes 01.04.2009 01.01.2009 01.04.2008 01.01.2008 30.06.2009 30.06.2009 30.06.2008 30.06.2008

Net income from designated financial assets (31'785) (81'017) 4'295 5'313 at fair value through profit or loss

Private Equity (31'289) (79'692) 3'283 4'403 Interest & dividend income - - - 95 Revaluation 4 (14'723) (80'229) 2'205 28'499 Net foreign exchange gains / (losses) 4 (16'566) 537 1'078 (24'191)

Private Debt (511) (1'120) 570 465 Interest income (including PIK) 62 115 2 5 Revaluation 4 (97) (1'208) 541 1'104 Net foreign exchange gains / (losses) 4 (476) (27) 27 (644)

Private Infrastructure 15 (205) 442 445 Revaluation 4 15 (205) 442 445

Net income from financial assets at fair value 29 (1'474) (2'613) (7'618) through profit or loss held for trading Net income from opportunistic investments 29 (1'474) (2'613) (7'618) Dividend income 34 157 588 873 Revaluation 5 24 (1'516) (3'336) (6'612) Net foreign exchange gains / (losses) 5 (29) (115) 135 (1'879)

Net income from short term investments - - 258 969 Interest income - - 305 969 Revaluation 6 - - (47) -

Net income from cash & cash equivalents 199 481 305 529 and other income Interest income 41 143 534 876 Net foreign exchange gains / (losses) 158 338 (229) (347)

Total Net Income (31'557) (82'010) 2'245 (807)

Operating expenses (8'760) (16'877) (9'384) (18'925) Management fee & Insurance fee (8'226) (16'434) (8'863) (17'603) Incentive fee (280) 233 (204) (605) Administration fee (249) (498) (269) (534) Other operating expenses (33) (74) (70) (120) Other net foreign exchange gains / (losses) 28 (104) 22 (63)

Other financial activities (6'528) (20'773) (7'275) 1'865 Other finance cost (8) (54) - - Net result from hedging activities 1'007 (5'690) 151 16'691 Interest expense - convertible bond (3'300) (6'600) (3'300) (6'600) Amortization transaction costs (121) (242) (121) (242) Finance cost on convertible bond (4'106) (8'187) (4'005) (7'984)

Surplus / (loss) for the financial period (46'845) (119'660) (14'414) (17'867) Other comprehensive income for the period; net - - - - of tax

Total comprehensive income for the period (46'845) (119'660) (14'414) (17'867) 19

Balance sheet As at 30 June 2009

In thousands of EUR Notes 30.06.2009 31.12.2008

Designated assets at fair value through profit or loss Private Equity 4 525'457 595'068 Private Debt 4 10'898 12'007 Private Infrastructure 4 914 1'004

Non-current assets 537'269 608'079

Financial assets at fair value through profit or loss 192 7'027 held for trading Other short-term receivables 466 3'434 Hedging assets 7'100 15'354 Cash and cash equivalents 7 36'986 54'213

Current assets 44'744 80'028

TOTAL ASSETS 582'013 688'107

Share capital 10 10 Share premium 5'429 5'429 Reserves 150'291 150'291 Retained Earnings (244'063) (124'403)

Total Equity (88'333) 31'327

Convertible bond 9 655'439 647'010

Liabilities falling due after one year 655'439 647'010

Other short-term payables 14'907 9'770

Liabilities falling due within one year 14'907 9'770

TOTAL EQUITY AND LIABILITIES 582'013 688'107 20 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

Statement of changes in equity for the period from 01 January 2009 to 30 June 2009

Share Share Retained In thousands of EUR capital premium Reserves Earnings Total

Equity at beginning of reporting period 10 5'429 150'291 (124'403) 31'327 Other comprehensive income for the period; net of tax - - Surplus / (loss) for the financial period (119'660) (119'660)

Equity at end of reporting period 10 5'429 150'291 (244'063) (88'333)

for the period from 01 January 2008 to 30 June 2008

Share Share Retained In thousands of EUR capital premium Reserves Earnings Total

Equity at beginning of previous period 10 5'429 150'291 35'223 190'953 Other comprehensive income for the period; net of tax - - Surplus / (loss) for the financial period - (17'867) (17'867)

Equity at end of previous period 10 5'429 150'291 17'356 173'086 21

Cash flow statement for the period from 01 January 2009 to 30 June 2009

In thousands of EUR Notes 01.01.2009 01.01.2008 30.06.2009 30.06.2008 Operating activites

Surplus / (loss) for the financial period (119'660) (17'867)

Adjustments: Foreign exchange result (629) 27'124 Investment revaluation 83'158 (23'436) Net gain / (loss) on interests & dividends (415) (2'818) Amortization transaction costs 242 242 Finance cost on convertible bond 8'187 14'584

(Increase) / decrease in receivables 10'981 6'717 Increase / (decrease) in payables 5'273 3'080

Purchase of private equity investments 4 (22'347) (53'571) Purchase of private debt investments 4 (320) (68) Purchase of private infrastructure investments 4 (150) (200) Distributions of private equity investments 4 12'266 59'034 Distributions of private debt investments 4 203 4'111 Distributions of private infrastructure investments 4 35 527 Purchase of opportunistic investments 5 - (12'736) Sale of opportunistic investments 5 5'256 5'494 Sale of short term investments 6 - 70'000 Interest & dividends received 355 4'475

Net cash from / (used in) operating activities (17'565) 84'692

Financing activities

Net increase / (decrease) in cash and cash (17'565) 84'692 equivalents

Cash and cash equivalents at beginning of 7 54'213 59'151 reporting period

Movement in exchange rates 338 (347)

Cash and cash equivalents at end of 7 36'986 143'496 reporting period 22 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

Notes to the financial statements for the period from 01 January 2009 to 30 June 2009

1 Organization and business activity

Pearl Holding Limited (the "Company") Islands. The Company invests in registered office is Tudor House, Luxembourg Stock Exchange. Pearl Holding Limited (the "Company") is a limited liability company, incorporated and domiciled in Guernsey, Channel Islands. The Company invests in a broadly diversified portfolio of private market investments. The Company's registered office is Tudor House, St. Peter Port, Guernsey, GY1 1BT. The shares of the Company are listed on the Luxembourg Stock Exchange.

2 Basis of preparation

The condensed financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The condensed financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2008. The accounting policies adopted in the preparation of the condensed financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2008, except for the adoption of the following amendments mandatory for annual periods beginning on or after 1 January 2009, with the exception of IFRS 3, 5 and IFRIC 17 and 18 that are only effective for annual periods beginning on or after 1 July 2009. IFRS 2 - Share based payments IFRS 3 - Business combinations IFRS 5 - Non-current assets held for sale and discontinued operations IFRS 7 - Financial instruments IFRS 8 - Operating segments IAS 1 - Presentation of financial statements IAS 16 - Property, plant and equipment IAS 19 - Employee benefits IAS 20 - Government grants and disclosure of government assistance IAS 23 - Borrowing costs IAS 27 - Consolidated and separate financial statements IAS 28 - Investment in associates IAS 31 - Interests in joint ventures IAS 32 - Financial instruments: presentation IAS 36 - Impairment of assets IAS 38 - Intangible assets IAS 39 - Recognition and measurement IAS 40 - Investment property IAS 41 - Agriculture IFRIC 15 - Agreements for the construction of real estate IFRIC 16 - Hedges of a net investment in a foreign operation IFRIC 17 - Distribution of non-cash assets to owners IFRIC 18 - Transfers of assets from customers The board of Directors has assessed the impact of these amendments and concluded that these standards and new interpretations will not affect the Company's results of operations or financial position. The adoption of IFRS 8 - Operating segments requires a ‘management approach’ under which segment information is presented on the same basis as that used for internal reporting purposes and therefore results in presentational changes within these financial statements. Operating segments are reported in a manner consistent with the internal reporting of Partners Group AG, the investment advisor and are based on the following segments: private equity, private debt, private real estate, private infrastructure and private resources. The investment advisor assesses the performance of the operating segments based on net income from designated financial assets at fair value through profit or loss. This measurement basis excludes additional income and expenses which are not allocated to segments but are managed by the administrator on a central basis. 23

3 Change in accounting policy

With effect from 1 January 2009, interest and dividend income received from financial assets at fair value through profit or loss, other than those derived from assets within the operating segment private debt or where the fund holds a direct interest, are recognized against the cost or fair value of the applicable financial asset in the period in which they arise or the right to receive payments is established. As in previous accounting periods, gains and losses arising from changes in the fair value of the "financial assets or financial liabilities at fair value through profit or loss" category are presented in the income statement in the period in which they arise. Interest and dividend income derived from assets within the operating segment private debt or where the fund holds a direct interest continue to be recognized in the income statement within interest and dividend income, when the right to receive payments is established.

4 Designated assets at fair value through profit or loss 4.1 Private Equity In thousands of EUR 30.06.2009 31.12.2008

Balance at beginning of period 595'068 640'286 Purchase of limited partnerships and directly held investments 22'347 117'846 Distributions from limited partnerships and directly held investments; net (12'266) (87'342) Revaluation (80'229) (86'605) Foreign exchange gains / (losses) 537 10'883

Balance at end of period 525'457 595'068

4.2 Private Debt In thousands of EUR 30.06.2009 31.12.2008

Balance at beginning of period 12'007 16'435 Purchase of limited partnerships and directly held investments 320 279 Distributions from limited partnerships and directly held investments; net (203) (5'655) Accrued Cash and PIK Interest 9 17 Revaluation (1'208) 437 Foreign exchange gains / (losses) (27) 494

Balance at end of period 10'898 12'007

4.3 Private Infrastructure In thousands of EUR 30.06.2009 31.12.2008

Balance at beginning of period 1'004 1'336 Purchase of limited partnerships and directly held investments 150 220 Distributions from limited partnerships and directly held investments; net (35) (532) Revaluation (205) (20)

Balance at end of period 914 1'004 24 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

5 Financial assets at fair value through profit or loss held for trading In thousands of EUR 30.06.2009 31.12.2008

Balance at beginning of period 7'027 36'545 Purchase of listed private equity investments - 16'210 Sale of listed private equity investments (5'256) (25'250) Stock dividends 52 - Revaluation (1'516) (18'976) Foreign exchange gains / (losses) (115) (1'132) Reclassification - (370)

Balance at end of period 192 7'027

The reclassification is due to the treatment of stock distributions which were previously disclosed as listed private equity now being shown in limited partnerships and directy held investments.

6 Short term investments In thousands of EUR 30.06.2009 31.12.2008

Balance at beginning of period - 69'032 Sale of short term investments - (70'000) Revaluation - 968

Balance at end of period - -

7 Cash and cash equivalents In thousands of EUR 30.06.2009 31.12.2008

Bank balances 12'986 54'213 Cash equivalents 24'000 -

Total cash and cash equivalents 36'986 54'213

8 Capital Capital In thousands of EUR 30.06.2009 31.12.2008

Authorized 1'000'000 Class A shares of EUR 0.01 each 110'001 10'000 "10'000'100 non classified shares of EUR 0.01 each (""Ordinary Shares"")" 100'001 110'001 110'001 Issued and fully paid 1'000'000 Class A shares of EUR 0.01 each 10'000 10'000 10'000 10'000 As per amended terms and conditions of the bonds, bondholders have the right to convert bonds into shares on or after 1 October 2012 and up to the close of business on 31 August 2014. Bondholders have the right to convert bonds at their option into either fully paid, ordinary non-voting Class B shares or fully paid, ordinary voting Class C shares (collectively "Ordinary Shares"). Ordinary shares will rank pari passu in all respects with all other Ordinary Shares of the issuer which are in issue on the relevant conversion date, save that Class B shares will not confer voting rights at all, and Class C shares will not confer voting rights until the earlier of the date upon which 95 per cent of the principal amount of the bonds have been converted or final maturity ("Specified Date"). From the Specified Date, but prior to the Class A shares being converted into Class C shares, the holders of Class C shares shall be entitled in aggregate to 4'000'000 votes, representing 80% of the votes available. 25

Following the Specified Date, the Class A shares issued may, at the option of the holders, be converted into Class C shares. Upon conversion of all Class A shares into Class C shares, every shareholder of Class C shares shall have one vote for every share held.

9 Long term liabilities In thousands of EUR 30.06.2009 31.12.2008

Convertible bond - beginning of period 647'010 630'458 Amortization of transaction costs 242 483 Finance cost on convertible bond 8'187 16'069

Convertible bond - end of period 655'439 647'010

At an extraordinary meeting of the bondholders on 9 December 2005, a resolution was passed to amend the terms and conditions of the Pearl convertible bond. The resolution became effective on 30 March 2006 when the respective agreements were amended and the rating of the Pearl convertible bond has been confirmed by Standard & Poor's. The terms and conditions of the Pearl convertible bond have been amended as follows:

Terms of the convertible bonds

Maturity of convertible bonds: 30 September 2014

Guaranteed redemption amount: 108% of the initial principal amount

Coupon payments: 2% p.a. on the initial principal amount up to September 2014

Conversion period: 1 October 2012 to 31 August 2014

The convertible bond is disclosed using the amended terms and conditions and the accounting of the convertible bond has been changed with effect from 30 March 2006 when the extraordinary resolution of the bondholders became effective.

As at the balance sheet date the nominal value of the convertible bond outstanding was EUR 660,000,000. The bond is not convertible into shares until on or after 1 October 2012, at the option of the investor, using the relevant conversion price. The Company has entered into an insurance policy to ensure that it is provided with sufficient funds for the repayment of 108% of the principal upon redemption of the bond on 30 September 2014.

In accordance with IAS 32, Financial Instruments: Disclosure and Presentation, the net proceeds of the bond have been split between the liability and equity option components. The fair value of the equity component has been calculated as EUR 153,058,174 using cash flows discounted at market interest rates for an equivalent period. This amount is classified as share premium and will remain part of the permanent equity of the Company. The remaining net proceeds, after the allocation of the related transaction costs, of EUR 497,711,848 are allocated to the liability component. The liability, including transaction costs, is therefore stated at a discount of 0.62892% per quarter from the first quarter of 2006 (0.84276% to 31 December 2005) to the maturity value.

The result of this requirement of IAS 32 is that the discount is amortized through the income statement as a finance cost, on a yield to maturity basis, over the life of the bonds until the beginning of the conversion period. This accounting treatment has no effect on either the economic position or the net asset value of the Company. The cumulative finance cost in retained earnings is offset by an equivalent credit in share premium. However, the required treatment clearly does have a significant impact on the net surplus or loss reported in the income statement over the period to the conversion of the bond. 26 PEARL HOLDING LIMITED

QUARTERLY REPORT Q2 2009

10 Commitments In thousands of EUR 30.06.2009 31.12.2008

Unfunded commitments translated at the rate prevailing at the balance sheet date 351'346 371'293 27

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Registered office Trading information Pearl Holding Limited Price information Tudor House German Security Number 558.527 St. Peter Port, Guernsey Swiss Security Number 1.140.571 Channel Islands ISIN XS0117871698 Phone +44 1481 711 690 Reuters DGZ07 Fascimile +44 1481 730 947 www.pearl-privateequity.net Market Maker DekaBank Registered number: 37232 Frankfurt a. M., Germany Phone +49 69 7147 1301 Investment manager Pearl Management Limited Guernsey, Channel Islands

Auditors PricewaterhouseCoopers Guernsey, Channel Islands

Investor relations E-Mail: [email protected]