Wednesday July 13, 2016

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DPE Said to Plan Biggest Growth Fund Yet QUOTED BY AINSLIE CHANDLER, BLOOMBERG BRIEFS Deutsche Private Equity GmbH is trying to gather its biggest private equity growth "There was no real fund yet, according to two people with knowledge of the fundraising. investment opportunity. It was DPE has put a 475 million euro ($526.59 million) target on the new fund, one of the just a way for me to get people said, while the other said it could be as high as 500 million euros. If 500 million money to feed a gambling euros are secured, the fund will be 43 percent bigger than its predecessor DPE II, which addiction that was all- closed in 2013 with 350 million euros, according to data compiled by Bloomberg. The firm is seeking capital in what is expected to be a stronger fundraising year for the consuming at the time." German private equity market after a slower 2015. German private equity firms raised — Former Park Hill Group Partner Andrew 1.33 billion euros last year, down from 2.78 billion euros in 2014, according to the Caspersen, who pleaded guilty to wire and German Private Equity and Association, BVK. The group expects strong securities fraud fundraising in 2016, with 28 German firms in the market or planning to raise funds this year, according to a March 2 statement. Those firms plan to raise a combined 3.1 billion THE WEEK IN NUMBERS euros. Investors in DPE's prior fund include several vehicles managed by German fund of $14B — amount raised by funds manager RWB Group, according to data compiled by Bloomberg. Performance Brookfield Asset Management for data for that fund was not available. its latest infrastructure fund. Munich, Germany-based DPE in February sold its stake in shipping-industry software 57% — proportion of real estate company Interschalt Maritime Systems AG to Finland-based Cargotec Corp., investors planning to cut exposure to according to a statement. Terms on the deal were not disclosed. U.K. real estate in the next 12 DPE was founded in 2007 as an independent German investment company to deploy months, following the British vote to capital in Germany, Austria and Switzerland and has about 600 million euros under leave the EU, according to a survey. management, according to its website. DPE founder and managing partner Volker Hichert declined to comment on the fundraising. MEETING TO WATCH

More Managers Met, Beat Fundraising Targets in First Half Kern County Employees' Retirement Association's board is due to consider boosting its real estate allocation and setting a first target allocation to private credit at a July 13 meeting.

IN THIS ISSUE

FUNDRAISING. Hidden Harbor is said to be preparing to raise a debut fund.

REAL ESTATE. The Brexit vote should create real estate debt investment opportunities, according to DRC Capital Managing Partner Dale Lattanzio.

Q&A. GPs are getting aggressive with fundraising timelines, according Fundraising was strong in the first half of 2016, with 89 percent of all private funds that to Commonfund Capital's Miriam closed in the period meeting or exceeding their target sizes, according to data compiled Schmitter. by Bloomberg. That's up from 84 percent in the first half of 2015. A total of 1,127 funds were raised during the half, gathering $295.5 billion in commitments. — April Kim, Bloomberg Data Analyst

FROM THE MINUTES COMPILED BY AINSLIE CHANDLER, BLOOMBERG BRIEFS July 13, 2016 Bloomberg Brief Private Equity 2

FROM THE MINUTES COMPILED BY AINSLIE CHANDLER, BLOOMBERG BRIEFS

Kern County Considers Credit; Calstrs Channels Bachman-Turner Overdrive Kern County Employees' Retirement $125 million to CVC Growth Fund I LP, private equity investment at its July 7 Association's board is due to consider $31 million to CVC Growth Co- meeting. The board was also due to have boosting its real estate allocation and Investment Fund LP, $400 million to education on the topic of infrastructure. setting its first target allocation to private Vista Foundation Fund II LP, $250 million >Click here for the agenda. credit at a July 13 meeting, according to to Oak Hill Advisors Strategic Credit the meeting agenda. Consultants Verus Fund II and $300 million to Brookfield Stanislaus County Employees' have suggested the pension reduce its Infrastructure Fund II LP, according to Retirement Association plans to start a allocation to domestic and international the statement. search for private credit, value-add real equities and to commodities, while >Click here for the full statement. estate and private equity managers in allocating 5 percent to private credit and early 2017, according to a report from boosting real estate to 10 percent from 5 Pontiac General Employees' consultants Verus for a June 28 meeting. percent. Under the Verus Retirement System is planning to The searches come as the pension rolls recommendation, the pension's private commit between $20 million and $45 out a new six-year asset allocation plan equity allocation would stay at 5 percent. million to open and/ or closed-end real approved in May. Meanwhile, Raven >Click here for the agenda. estate funds, according to a Request For Capital Management has secured $330 Proposal on Dahab Associates' website. million in commitments for Raven Asset- California State Teachers' The Michigan pension, which has about Based Opportunities Fund III LP, Retirement System plans to maintain its $458 million in total assets, will consider according to a separate June 28 report. long-term investment private equity domestic and international-focused core, >Click here for the reports. pacing goals despite high valuations and core-plus and value-add managers, according to the RFP. high levels of dry powder in the sector, California Public Employees' >Click here for the RFP. according to its Investments Branch Retirement System's board of Business Plans report. The report, due to administration and executives are due to be discussed at its July 14 investment Los Angeles City Employees' discuss fiscal year-end results at a July committee meeting, is themed "Takin' Retirement System's emerging 18 to 20 offsite meeting, according to the Care of Business," a reference to managers program committed to seven agenda. They will hear a presentation Bachman-Turner Overdrive's hit song. private equity managers and one real called "2035 Vision: Investing in the "Past experience has proven many times estate manager in the three years to Future" from R. Jesse McWaters, who over that attempting to time private equity Dec. 31, 2015, according to a staff report leads the World Economic Forum's work markets to any large degree is difficult to its July 12 board meeting. In 2015, the on innovation in financial services. and probably unwise," according to the pension committed $10 million apiece to >Click here for the agenda. report. "Past experience also dictates 1315 Capital LP, Angeles Equity that it is also unwise to be fully swept Partners LP, CenterGate Capital away by the momentum of rising Partners I LP and New Water Capital Milwaukee Employes' Retirement valuations, shortened fund raising cycles Partners LP. It committed $20 million to System's investment committee is and rapidly increasing fund sizes." real estate fund Gerrity Retail Fund 2 LP. scheduled to hear a presentation from Calstrs' private equity portfolio was worth The pension's real estate committee is Cornerstone Investment Partners at its $17.6 billion at March 31, the report said. expected to hear reports on real estate July 14 meeting, according to the agenda. >Click here for the report. debt investors Cornerstone Real Estate >Click here for the agenda. Advisers and Quadrant Real Estate New York State Common Retirement Advisors LLC at its July 13 meeting. Louisiana School Employees' Fund has committed $500 million to New- >Click here for the staff report. Retirement System's board of trustees York focused co-investment funds >Click here for the July 13 agenda. is due to hear presentations from managed by Hamilton Lane, according to Orleans Capital Management and a statement from state comptroller Meketa Investment Group is now Kleinwort Benson Investors at its July 18 Thomas DiNapoli. The pension system Orange County Employees Retirement meeting. committed $200 million to New York System's general investment consultant, >Click here for the agenda. Credit Co-Investment Fund II, a credit taking over from NEPC on July 1, fund which will invest in lower middle according to a report from the pension's Municipal Fire and Police Retirement market New York State-based Chief Investment Officer Girard Miller. System of Iowa's board of trustees businesses, according to the statement. >Click here for the report. committed $30 million to Adams Street It committed $300 million to Hudson US Small Market Buyout Fund and $30 River Co-Investment Fund III LP, which million to Siguler Guff Hawkeye will invest in small and middle-market Municipal Fire & Police Retirement Opportunities Fund at its July 7 meeting, companies. The pension also committed System of Iowa's board of trustees was expected to consider an unspecified according to a flash report. >Click here for the report. REAL ESTATE July 13, 2016 Bloomberg Brief Private Equity 3

REAL ESTATE

DRC’s Lattanzio Sees Real Estate Debt Opportunities Post-Brexit

BY AINSLIE CHANDLER, BLOOMBERG BRIEFS Investors Plan to Cut U.K., EU Property Exposure Britain’s decision to leave the European Union should create opportunities for real estate debt investors once the short term uncertainty is resolved, according to DRC Capital managing partner Dale Lattanzio. London-based DRC is trying to gather its biggest fund yet, putting a 500 million pound target and 750 million pound cap on DRC European Real Estate Debt Fund III. The firm is about to hold a second close on the fund, Lattanzio said. The Brexit vote came mid-fundraising for DRC, which means the firm is in the "nice position" of having a fresh pool of capital to invest across Europe in the post-vote market, he said. Investment opportunities will come from a "a further retrenchment by the banks and a renewed pull back from commercial property lending," which will More than half of the 90 institutional real estate investors that responded to a sentiment survey mean more financing is required from by data provider Preqin in the wake of the British vote to exit the EU plan to cut their exposure to non-bank lenders, Lattanzio said. the U.K. real estate sector in the next year. "Even if CRE acquisition volumes decline in the market due to post Brexit struggled to meet demand after the estimate by PricewaterhouseCoopers uncertainty we would expect to see many Brexit vote. Henderson Global LLP. requests to facilitate refinancings as a Investors, M&G Investments, Aviva DRC has no equity exposure to real significant portion of the outstanding debt Investors and Standard Life estate and its average loan-to-value ratio in the European market is due to Investments stopped withdrawals in is around 70 percent, so the firm can refinance over the next two years," he their funds. weather a drop in values of as much as said. “Investor redemptions in the fund have 30 percent before losses are incurred, DRC will "probably take a wait-and-see risen markedly because of the high levels Lattanzio said. approach in terms of the London office of uncertainty in the U.K. commercial The firm, which spun out of Duet Group market," Lattanzio said, noting the property market since the outcome of the in 2012, formed to take advantage of a potential drop in occupier demand if European Union referendum,” M&G said gap left by banks withdrawing from employers shift jobs away from the city to on its website on July 5 about the commercial property lending amid tighter the continent. However, he said temporary suspension of trading. regulation. The new fund will originate fundamentals in London are currently Central London office prices could drop loans secured by core European solid. as much as 20 percent after Britain properties. DRC has previously invested in London leaves the EU as companies consider "Right now we have a political crisis, and has some exposure in its first two moving to Europe or delay expansion not an economic crisis," Lattanzio said. funds but the first investment in its new plans in the U.K., according to Green "This could take years. We are all fund is in continental Europe, he said. Street Advisors LLC. And as many as wondering what form it takes. It could Several asset managers suspended 100,000 financial-services jobs could be throw up some dislocation." redemptions on about $23 billion dollars lost in the U.K. by 2020 because of of open-ended real estate funds as they Brexit, according to an

FUNDRAISING July 13, 2016 Bloomberg Brief Private Equity 4

FUNDRAISING

Hidden Harbor Planning to Raise First Fund BRIEFLY NOTED Private equity firm Hidden Harbor Capital Partners is preparing to raise its first buyout fund, just two months after the firm was established, according to two people with knowledge of the fundraising. Blumberg Said to Close Co-founder and managing partner John Caple, who declined to comment on the $200M Fund This Month fundraising, said the firm is currently focused on finding deals and has received backing Blumberg Capital is expected to from high net worth investors. close a venture fund of about $200 Boca Raton, Florida-based Hidden Harbor plans to make equity investments of $10 million by the end of the month, a million to $50 million, mostly in family owned businesses. It is focused on the person familiar with the matter said. transportation and logistics, retail and consumer, industrial and business services The venture capital firm typically sectors. invests in young cybersecurity and "Increasingly, investors are starting to understand that there is real money to be made financial-services companies. in the lower-middle market and so many of the existing quality firms have gotten bigger, However, two of its highest-profile so it's hard to find good quality managers that are still raising smaller funds and looking bets diverged from those fields: at sub-$10 million Ebitda businesses," Caple said in a phone interview. Hootsuite Media Inc., a Canadian Sixty-one percent of limited partners surveyed by data provider Preqin in December startup that makes social-media said they considered small to mid-market buyout funds as the best investment software, and Nutanix Inc., a maker opportunity in the market and 73 percent of investors surveyed said they plan to invest of software and hardware for data in those funds this year. centers. "A lot of the larger institutions are looking for ways to get back into that lower middle Nutanix filed for an initial public market," he said. offering last year but delayed its Limited partners remain split on their views of first-time funds, according to Kelly plans amid volatile public markets. DePonte, a managing director and head of research at placement agents Probitas Gloria Hui, director of operations at Partners. Some prohibit it in their investment policies. Others welcome first-time Blumberg Capital, didn’t immediately managers with emerging-managers programs and others to invest opportunistically. respond to a request for comment on First-time fund managers tend to be "hungry" as they need strong performance in the firm’s fundraising plans. order to raise their second and third funds, DePonte said. In the first half of 2016, venture Top quartile returns in first-time funds have been shown to outperform those of more funds raised $22.5 billion, according established managers, DePonte said. However, the gap between top and bottom to the National Venture Capital quartile returns is far greater in first-time managers, so there is more risk. Association, a trade group. While that Hidden Harbor started in May, with Caple and David Block as managing partners. puts the industry on track for its — Ainslie Chandler, Bloomberg Briefs biggest year in a decade, it falls short of the record $102 billion raised in Perella Weinberg Unit Said to Plan Second Fund 2000. — Sarah McBride, Bloomberg News PWP Growth Equity, the private equity arm of boutique investment bank Perella Weinberg Partners, is in the early stages of raising its second fund, a person with knowledge of the matter said. The firm has held preliminary talks with existing backers about starting to raise money for its second pool as soon as the end of this year, said the person, who asked not to be identified because the information is private. PWP Growth Equity is targeting $600 million for the new fund, the person said, the same size as its predecessor, which closed in 2014. The private equity division is a bright spot in Perella Weinberg’s asset management unit, which last year agreed to wind down a $1.7 billion asset-based value strategy fund. It has since sought to expand and has added talent from Goldman Sachs and Harvard Management Company in the past year. Perella Weinberg’s first fund, which exceeded its initial fundraising target by $200 million, invests in lower middle-market companies across consumer, services and industrial sectors. Its current portfolio includes stakes in Black Bear Diner, MSA Security and MOD Pizza, a “fast casual” dining company, according to data compiled by Bloomberg. A spokeswoman for Perella Weinberg declined to comment. — Sonali Basak and Kiel Porter, Bloomberg News

FEATURE July 13, 2016 Bloomberg Brief Private Equity 5

FEATURE

Brookfield Raises $14 Billion for Largest Infrastructure Fund, Plans Bigger Deals BY SCOTT DEVEAU, BLOOMBERG NEWS Brookfield Asset Management Inc. The 10 Biggest Private Real Assets Funds raised $14 billion for its latest FUND GENERAL PARTNER VINTAGE SIZE ($B) infrastructure fund, topping its target, as Canada’s largest alternative asset Brookfield Infrastructure Fund III LP Brookfield Asset Management Inc. 2016 14 manager goes on the prowl for larger Global Infrastructure Partners III LP Global Infrastructure Partners 2016 10.8* acquisitions. Global Infrastructure Partners II LP Global Infrastructure Partners 2011 8.3 The pool, known as Brookfield Global Strategic Investment Alliance Borealis Infrastructure Management Inc 2012 7.5 Infrastructure Fund III, will be the largest private infrastructure fund ever raised in Brookfield Infrastructure Fund II LP Brookfield Asset Management Inc. 2013 7 the industry, according to an interview EnCap Energy Capital Fund X LP EnCap Investments LP 2015 6.5 with Brookfield, and data compiled by GS Infrastructure Partners I LP GS Infrastructure Partners 2006 6.5 Bloomberg. Its original target was $10 billion. Global Infrastructure Partners LP Global Infrastructure Partners 2006 5.6 It took the Toronto-based firm nine ArcLight Energy Partners Fund VI LP ArcLight Capital Partners LLC 2014 5.6 months to raise the money, according to Macquarie European Infrastructure Fund 2 LP Macquarie Group Ltd 2006 5.5 Sam Pollock, the head of Brookfield Source: Bloomberg LP * Still fundraising Infrastructure Partners, the company’s publicly traded infrastructure arm. That’s more significant. It’s probably almost a hydroelectric facilities and a Colombian just one month longer than it took its quarter of our fund.” power generation company. predecessor, which closed in 2013, to Pension plans are also allocating more A push to privatize infrastructure assets amass $7 billion, despite the new fund money to infrastructure, he said. in regions such as South America and being twice as big. Brookfield is targeting an internal rate of Australia has helped create bigger Including the latest fund, Brookfield has return of more than 13 percent from its targets, Pollock said. He’s hopeful that raised $27 billion in the past 18 months investments, Pollock said. the Canadian government will adopt a for its property, renewable energy and “These assets are basically the similar policy, as Ottawa rethinks how it private equity subsidiaries, underscoring backbone of the economy, he said. “One can court private firms to encourage surging demand for investments outside day, it wouldn’t surprise me if the invest in the country’s infrastructure. volatile equity markets and bonds, where infrastructure sector as a whole was “Governments realize they don’t have yields have sunk to record lows. bigger than the real-estate sector.” the capital to invest in their “I realize that it probably seems large to The larger fund size will give infrastructure,” Pollock said. “They need the outside world,” Pollock said in a Brookfield, which has $240 billion in new sources of capital and I think it has phone interview. “But given the amount , the capital it been widely recognized that the private of deal flow that we’ve seen and the fact needs to chase big acquisitions, Pollock sector not only has the capital to fund it, that the transactions are larger, it’s said. but also to improve the asset,” he said. actually the perfect size for us.” Brookfield and its partners agreed in Brookfield is seeing big opportunities in The firm committed $4 billion of its own March to acquire Australian rail and port Brazil, where the political and economic money to Brookfield Infrastructure Fund company Asciano Ltd. for A$9 billion situation is putting some “once-in-a- III, according to the statement. ($6.8 billion). The firm is also leading a lifetime” assets on the block, Pollock Brookfield’s fund may not be the group of investors in exclusive talks to said. North American midstream oil and largest for long. Global Infrastructure acquire an 81 percent stake in a natural gas assets, including pipelines, Partners LP is seeking as much as $15 gas pipeline network being sold by Brazil’ processing plants, and other assets, are billion for its third flagship fund, people s troubled state-run oil company, also on the firm’s radar, having dropped familiar with the matter said in November. Petrobras, which is expected to fetch in valuation due to the oil price rout. Brookfield Infrastructure Fund III nearly $6 billion. “It’s a large market and up until 12 attracted about 80 new institutional A typical transaction in the previous months ago, we just couldn’t find value investors, in particular from Asia in fund would be less than $1 billion, there,” Pollock said. “With the change in China, Japan and South Korea, Pollock Pollock said. The new fund will invest in oil prices and just the reevaluation of the said. a handful of deals valued at more than cash flows in the business, it became re- “We would have had one or two really $1 billion apiece, he said. It has already rated and values have come down large investors in fund one or fund two,” committed more than $3 billion, dramatically,” Pollock said. “That will be a he said. “Now, both the number and the according to the statement, including to a place where we’re going to invest a great scale of capital coming from Asia is much portfolio of U.S. deal of capital." July 13, 2016 Bloomberg Brief Private Equity 6

IN THE NEWS July 13, 2016 Bloomberg Brief Private Equity 7

IN THE NEWS

Unicorns Snag Most Venture Capital in 1H of 2016 IN BRIEF Uber Technologies Inc., Snapchat Inc. and other unicorns snagged the most funding from venture capitalists in the first half of 2016 as the industry sets pace for another record year. In total, venture investors plowed $40 billion into U.S. startups during the H.I.G Invests in first half of this year, according to a report Thursday from PitchBook Data Inc., an Distressed Italian Debt amount on track to match the $79 billion invested in 2015. H.I.G. Bayside is working with While plenty of money is up for grabs, most of it is going to large, late-stage Italy's banks to help restructure the companies including unicorns, private companies valued at $1 billion or more. Uber’s country's distressed corporate debt. $5.6 billion Series G round, for example, accounted for 28 percent of all venture capital The international investment firm, deployed during the second quarter, according to PitchBook. Finance rounds that were together with Milan-based private $25 million or more have accounted for more than 66 percent of all venture capital equity Idea Capital Funds, have set invested so far this year. up a new vehicle that will take the Click here for full story. lenders’ non-performing loans and — Lizette Chapman, Bloomberg News invest new money to help turn around the businesses. The banks will own China's IDG, Breyer Capital Raise $1 Billion units of the 260 million-euro ($288 million) Idea CCR fund and participate in any recovery of the Chinese venture capital firm IDG Capital Partners and Silicon Valley investor Breyer underlying credits, said Giuseppe Capital raised a $1 billion fund to back startups in China, showing there’s still appetite Mirante, a managing director at H.I. for significant investment in the country even as overall funding has slowed. G. Bayside in London. Click here for The new IDG Capital Fund III will invest in technology, media, health care, energy and full story. consumer-product startups in China, as well as companies based elsewhere that are — Luca Casiraghi, Bloomberg News looking to enter the country. The fundraising by IDG and Breyer Capital extends a partnership between the two firms that began more than a decade ago, Jim Breyer, co-founder and chief executive Bain Capital Ventures officer of the eponymous firm, said in a statement Tuesday. Click here for full story Raises $600 Million — Melissa Mittelman and Lizette Chapman, Bloomberg News Bain Capital Ventures closed a $600 million fund to back technology startups, showing investors continue to pour money into the industry Fed Grants Final Delay for Volcker Ban on Funds despite anemic exits and hand- Banks got their final 12-month reprieve from a Volcker Rule restriction on holding wringing over bloated valuations. investments in private-equity firms and hedge funds. The industry has until July 21 of Bain’s fund, which was disclosed next year to shed stakes in private funds, the Federal Reserve said in a statement Friday in a filing with the Securities Thursday. and Exchange Commission, comes The extension had already been announced in 2014, but bankers had been waiting for as investors have buoyed total the agency to confirm it before the previous extension was set to expire later this month. venture fundraising to $22.5 billion The Fed said it will also “provide more information in the near term” about whether it will during the first half of 2016. If that take further action on banks’ most illiquid investments in private funds. Dodd-Frank pace continues, this year will easily provided banks a chance to win 5-year delays for funds that would be the most difficult outstrip the $36 billion raised by to sell. funds in 2015 and mark a high not — Jesse Hamilton, Bloomberg News seen in more than a decade. “We’re seeing successful investors essentially re-raise again and again Caspersen of PJT's Park Hill Group Pleads Guilty because they can -- they’ve still been Andrew Caspersen admitted to scamming friends, family and a charitable foundation successful, especially over the past out of millions of dollars, telling a judge it was all due to a gambling habit that spiraled couple years,” said Garrett Black, a out of control. senior analyst at industry research Caspersen’s victims, including the foundation of billionaire Louis Bacon, lost $38.5 firm PitchBook Data. Limited partners million, according to prosecutors. Paul J. Taubman’s PJT Partners Inc. fired “still want that allocation to VCs in Caspersen, 39, after disclosing the fraud to the government. Caspersen pleaded guilty their portfolio as a sliver of high-risk, Wednesday to securities fraud and wire fraud. He told U.S. District Judge Jed Rakoff high reward.” Click here for full story. that he tricked people into giving him money for investments he claimed would return 15 — Lizette Chapman and Melissa Mittelman, to 20 percent interest. Click here for full story. Bloomberg News — Bob Van Voris, Sonali Basak and Patricia Hurtado, Bloomberg News

Q&A July 13, 2016 Bloomberg Brief Private Equity 8

Q&A

GPs Getting Aggressive on Fundraising Timelines: Commonfund's Schmitter really good at growth investing, then the for premium levels of carry. Is that Some general partners are trying to raise and value-oriented managers who are often becoming more common? close their funds in as little as eight weeks, very hands on operationally and then, as A: On the venture capital side, it certainly putting pressure on limited partners to act quickly, a third category, managers who are is. Most of the premium funds are according to Miriam Schmitter, a managing focused on turnarounds. charging more. On the buyout side, we director at Commonfund Capital Inc. in London. In the venture space, we re-tilted towards don't really see that. Schmitter also discusses why increasing fund early stage. We do have some later- sizes are a concern and how the Brexit vote could stage managers but the bulk is in early Q: Is there an aspect of the private affect the market. Commonfund is an asset stage and that is a response to the equity or venture capital market that manager that services the non-profit sector such valuation environment that we have had concerns you at the moment? as endowments and foundations. It had $24 over the past few year years. And we Valuations seem to be quite a big billion in assets under management at March 31. also do natural resources. concern, particularly in the U.S. Schmitter spoke to Bloomberg Briefs' Ainslie A: It is valuations. But there are Chandler on June 2 and followed up by email Q: Is it a competitive market for limited differences. If you do lower middle following the Brexit vote. Her comments have partners trying to get into funds? market investment in many places in been edited and condensed. A: It definitely is. We've seen a lot of Europe, people are still paying pretty funds turn investors away. We just reasonable valuations and a lot of that is backed a group that only admitted a being driven by the debt market. If you Q: What’s the biggest trend you have handful of new LPs … actually we were only get 2 times leverage, you won't be noticed in the current private equity in two situations like that. And these were paying 10 times Ebitda for an asset. market? managers who we had been courting Some GPs we like may be a bit too A: We are still in a very benign before. It is quite competitive, especially aggressive in terms of fundraising, in fundraising market, so a lot of GPs want for people who cannot move that quickly. terms of the amount they are raising. And to take advantage of it. We still see a lot Or for people who have to put very large there’s a lot of uncertainty at the of people coming back quite early to checks to work. Let's say you have a moment, which could have an impact on fundraise, people that we might have $400 million fund and you have a lot of capital markets and on currencies. expected later. We as a firm are focused interest, you wouldn't want to give a $100 on the lower market, the middle market, million commitment to one party. Q: What impact do you think the primarily. But there are also much bigger Brexit vote will have on fundraising firms back in the market. And many GPs Q: Have you seen any change in fees and deals? Will it have an effect on have pretty aggressive fundraising and terms, given the competitive your strategy? timelines, the sought after ones. We've environment? Are the GPs getting A: The immediate impact has been from seen timelines of eight weeks from start more aggressive in that respect? a currency and comparable company to finish. So if you have a few [to look at] A: On the margins. But we haven’t seen valuation perspective. In the mid term, at the same time, it keeps you busy. a wholesale trend towards more weaker confidence and uncertainty will aggressive fees or backtracking on the likely have an effect on exits, but could Q: As an LP, does it concern you that offsetting of transaction fees, which is also create a buying opportunity. It’s too GPs are coming back to the market so positive. early for us to make any decisions early? regarding our investment strategy, but A: Of course it's not ideal. But it's the Q: What about carried interest? We we are monitoring the situation closely. eternal push and pull of what one can get have seen some firms starting to ask away with and what investors are willing to accept in the hope of a great performance going forward. Based in: London Q: In terms of your portfolio, is there Hometown: Bayreuth, Germany any one area or sector that you are Education: PhD in Economics, Master in Business Administration focused on at the moment? Career: Managing Director and IC member at Commonfund Capital, A: We do like to have concentrated Managing Director at Cambridge Associates, Investment Manager at portfolios, many limited partners have Allianz Private Equity Partners and DB Private Equity realized that if you are over-diversified Recommended book: The Road to Little Dribbling, More Notes you eventually get an index. In those from a Small Island, by Bill Bryson concentrated portfolios, we focus on Best recent vacation: A farm in Austria three buckets. We like some managers who are

AROUND THE WORLD IN SEVEN DAYS PRIVATE EQUITY DEAL NEWS July 13, 2016 Bloomberg Brief Private Equity 9

AROUND THE WORLD IN SEVEN DAYS PRIVATE EQUITY DEAL NEWS

Silver Lake and KKR Join on UFC Purchase; HgCapital Said to Look at P&I Sale

OFF THE BALANCE SHEET July 13, 2016 Bloomberg Brief Private Equity 10

OFF THE BALANCE SHEET Hamptonites Dodge Trump Fundraiser, Roadblocks in Quest to Relax BY AMANDA GORDON, BLOOMBERG NEWS Alex Navab of KKR was invited to the Donald Trump fundraiser in Southampton on Saturday, and did not attend. "I had no interest," he said Saturday night at the Parrish Art Museum’s Midsummer Party, as he and actress Emily Mortimer dined on corn on the cob and gazpacho. Navab, who campaigned for Jeb Bush earlier this year, said he’s now backing Hillary Clinton. He wasn’t the only one at this glamorous, farm-fresh cultural event with a Trump-in-the-Hamptons anecdote. "We were out doing our daily exercise, and on the way back the road was blocked," said Morgan Stanley’s Peter Gregory of his and his wife Jamee’s close encounter with a Trump-related barricade. "Our four-mile walk turned into a six-mile walk." (That's what you get for living near billionaire Wilbur Ross, the political luncheon’s host). Joseph Cohen, a former chairman of Cowen & Co. said he Photo: Bloomberg saw Trump leaving the area — that is, he spotted a helicopter Alex Navab, Chad Leat and Mary Kathryn Navab with Trump lettering buzzing over his 18th-century barn. Others seemed triumphant that they live too far east to spot that To see Amanda Gordon's full Scene Last Night columns on the chopper, such as Citigroup’s Alan MacDonald, of East Bloomberg terminal, click here. Hampton, and the Brooklyn Academy of Music’s former president, Karen Brooks Hopkins, of Montauk.

LAUNCHES

Recently Launched/Premarketing

FUND STRATEGY REGION CURRENCY TARGET (ORIGINAL CURRENCY) IK Investment VIII LP Buyout Western Europe EUR 1,600 Partech International Ventures VII Venture Any EUR 350 ABA Hospitality Real Estate Fund LP Real Estate North America USD 300 Square Mile Partners V LP Real Estate North America USD — Standard Life Investments European Real Estate Club III LP Real Estate Western Europe EUR — Alchemy Venture Fund Venture Any AUD 200 Akkadian Ventures IV LP Secondary North America USD — Eclipse Fund II LP Venture North America USD 175 Marlin Heritage Europe LP Buyout Any EUR 200 Accession IV LP Debt Any EUR 250 Sienna Venture Fund Venture Any USD 100 Capricorn Cleantech Fund II Venture Any EUR 150 Flagship Ventures Opportunities Fund I LP Venture North America USD 350 PWP Growth Equity Fund II LP Growth North America USD 600 Source: Bloomberg Private Equity Compiled from SEC filings, Bloomberg stories and other press reports. Reports from sources other than Bloomberg have not been verified. All figures in millions.

CLOSES July 13, 2016 Bloomberg Brief Private Equity 11

CLOSES

Recently Closed

TARGET (ORIGINAL CLOSED IN TOTAL RAISED TO FUND STRATEGY REGION CURRENCY CURRENCY) 2016 ($) DATE ($) Falcon Strategic Partners V LP Debt North America USD 1,250 61 781 BioGeneration Capital Fund III CV Venture Western Europe EUR 50 — — FSN Capital V LP Buyout Western Europe SEK — 679 821 Pearlmark Mezzanine Realty Partners IV LP Debt North America USD 500 21 71 Peninsula Ventures IV LP Venture North America USD 20 5 5 Forerunner Partners II LP Venture North America USD 76 76 76 Forerunner Partners III LP Venture North America USD 122 122 122 Capital Dynamics Global Secondaries IV LP Secondary Any USD 500 564 564 InfraVia European Fund III Real Assets Any EUR 990 447 448 HIG Bayside Loan Opportunity Fund IV Debt Any USD 1,000 1,100 1,100 Leerink Transformation Fund I LP Growth North America USD 250 71 71 Farallon Asia Special Situations III LP Buyout Any USD 1,120 532 1,120 RockBridge Hospitality Fund VII LP Real Estate North America USD 500 140 140 Asia Pacific China Media Capital Partners Fund II Growth USD 1,000 350 350 Emerging Next Estate Income Fund 2 Real Estate Western Europe EUR 800 800 884 Trivest Growth Investment Fund LP Growth North America USD 100 225 225 Moneta Ventures Fund II LP Venture North America USD 40 30 30 GRP Royalty Fund LP Real Assets North America USD — 6 6 Lionbird II LP Venture Any USD 50 26 26 NextGen Growth Partners Fund I LP Buyout North America USD — — — Bain Capital Venture Fund 2016 LP Venture North America USD 604 604 604 Iberia Credit Fund II Debt Western Europe EUR 300 298 298 Arx CEE IV Buyout Eastern Europe EUR 100 60 60 Madison International Real Estate Liquidity Secondary Any USD 950 1,390 1,390 Fund VI LP Patron Capital LP V Real Estate Any EUR 1,100 758 1,050 Bencis Buyout Fund V BV Buyout Western Europe EUR 425 471 470 Raine Venture Partners II LP Venture North America USD — 102 102 Audax Mezzanine Fund IV LP Debt North America USD 1,000 1,200 1,200 Asia Pacific IDG China Capital Fund III Venture USD 1,000 1,000 1,000 Emerging CenterGate Capital Fund I Growth North America USD 300 157 157 Thomas H Lee VII LP Buyout North America USD 3,000 904 2,404 Brookfield Infrastructure Fund III LP Real Assets Any USD 12,500 14,000 14,000 Chicago Pacific Founders Fund I Buyout Any USD 500 246 440 GS Vintage VII LP Secondary Any USD 5,000 2,433 2,433 PA Direct Credit Opportunities Fund II LP Secondary North America USD — 57 162 Crestline Opportunity Fund III LLC Debt North America USD 1,250 720 720 Source: Bloomberg Private Equity Compiled from SEC filings, Bloomberg stories and other press reports. Reports from sources other than Bloomberg have not been verified. All figures in millions.

COMMITMENTS July 13, 2016 Bloomberg Brief Private Equity 12

COMMITMENTS

Recently Disclosed LP Commitments

COMMITMENT TARGET (ORIGINAL LIMITED PARTNER FUND REGION STRATEGY CURRENCY (ORIGINAL CURRENCY, MILLIONS) CURRENCY) Texas County & District Retirement Asia Pacific Yuyue Capital Venture Fund Venture USD 30 200 System Emerging Armstrong South East Asia Clean Asia Pacific International Finance Corp Growth USD na 150 Energy Fund Emerging Strategic Partners Real Estate Western Real LaSalle French Fund II LP EUR na 300 Special Opportunities I LP Europe Estate Ardian Secondary Fund VII LP Bridgepoint Europe III LP Any Buyout EUR na 2,500 Texas County & District Retirement North Arbor Investments IV LP Buyout USD 50 750 System America Houston Police Officers' Pension Real Starwood Global Opportunity Fund XI LP Any USD na na System Estate San Francisco Employees' Bluescape Energy Recapitalization & North Real USD na na Retirement System Restructuring Fund III LP America Assets San Francisco Employees' Asia Pacific China Media Capital Partners Fund II Growth USD na 1,000 Retirement System Emerging Source: Bloomberg Private Equity Compiled from public disclosures by limited partners. Includes commitments that were scheduled for approval but are not yet approved or whose approval has not been confirmed. All figures in millions.

Bloomberg Brief: Private Equity

Bloomberg Brief Managing Editor Data Editors Marketing & Partnership Director Jennifer Rossa Roger Conner Johnna Ayres [email protected] [email protected] [email protected] +1-212-617-1833 Private Equity Brief Editor April Kim Ainslie Chandler [email protected] PE Terminal Sales [email protected] Jill Lewandosky Joseph Shammas [email protected] Interested in learning more about Advertising [email protected] +1-415-617-7271 Christopher Konowitz the Bloomberg terminal? Request a free demo here. [email protected] Jingya Gao Anita Khalili +1-212-617-4694 [email protected] [email protected] © 2016 Bloomberg LP. All rights +1-212-617-0207 reserved. This newsletter and its Reprints & Permissions contents may not be forwarded or Lori Husted To contact the editors: redistributed without the prior [email protected] [email protected] consent of Bloomberg. Please +1-717-505-9701 x2204 contact our reprints and permissions group listed above for more information.

LISTED PRIVATE EQUITY July 13, 2016 Bloomberg Brief Private Equity 13

LISTED PRIVATE EQUITY

British private equity fund manager 3i Group Plc rallied to trade at a one-year high on July 13, after regaining ground lost during the week following the Brexit vote. 3i lost 9.1 percent in the week following the vote, then gained 8.7 percent and 9.7 percent in the two weeks that followed. 3i is up 23.5 percent year-on-year. The FTSE 100 rose 3.3 percent from July 7 to July 12. — Ainslie Chandler, Bloomberg Briefs

Source: Bloomberg. Prices and market caps in local currencies. Updated at 8:15 a.m. NYT on 7/13

CALENDAR July 13, 2016 Bloomberg Brief Private Equity 14

CALENDAR

Upcoming Limited Partner Meetings

LIMITED PARTNER DATE NOTES Connecticut Investment Advisory Council 7/13 Essex County (U.K.) Council 7/13 Pension strategy board; report on local pension pooling Kern County Employees' Retirement Association 7/13 See From the Minutes Los Angeles County Employees' Retirement System 7/13 See From the Minutes Los Angeles Water and Power Employees' Retirement Board 7/13 Regular meeting State Employees' Retirement System of Illinois 7/13 Board meeting Lincolnshire County Council Pension Fund 7/14 Pensions meeting Merced County Employees' Retirement Association 7/14 Board meeting Milwaukee Employes' Retirement System 7/14 Board and investment committee meetings New York City Employees' Retirement System 7/14 Regular meeting Seattle City Employees Retirement System 7/14 Board of administration meeting Denver Employees Retirement Plan 7/15 Private equity review Oklahoma Firefighters Pension Board 7/15 Los Angeles Fire and Police Pensions 7/16 California Public Employees' Retirement System 7/18 Board of administration and executive offsite. See From the Minutes Louisiana School Employees' Retirement System 7/18 Investments Orange County (Calif.) Employees Retirement System 7/18 Board meeting. See From the Minutes Ventura County Employees' Retirement Association 7/18 Delaware Office of Pensions 7/19 Investment committee meeting Idaho Board of Examiners 7/19 Board meeting Maryland State Retirement and Pension System Board 7/19 Board meeting Nebraska Investment Council 7/19 Ohio Public Employees Retirement System 7/19 Board meeting Public Employee Retirement System of Idaho 7/19 Arizona Public Safety Personnel Retirement System 7/20 Boston Retirement Board 7/20 Detroit General Retirement System 7/20 Board meeting Devon County Council Pension Fund/The 7/20 Pension board meeting Firemen's Annuity and Benefit Fund of Chicago 7/20 Retirement board meeting Fort Worth Employees' Retirement Fund 7/20 New York City Employees' Retirement System 7/20 Common investment meeting; manager presentations Oklahoma Police Pension & Retirement Board 7/20 Board meeting Stanislaus County Employees' Retirement Association 7/20 See From the Minutes University of California Board of Regents 7/20 Finance committee and board meeting West Virginia Consolidated Public Retirement Board 7/20 Board meeting Source: Bloomberg Brief Compiled from limited partners' websites and press releases.