AMERICAN INVESTMENT COUNCIL

2017-Q4 Private Equity Industry Investment Report 2

Table of Contents

Page

Executive Summary 3 Business Products & Services 5 Consumer Products & Services 7 Information Technology 9 Financial Services 11 Healthcare 13 Materials & Resources 15 Energy 17

PAGE 2 3

Executive Summary

In 2017, nearly two thirds of U.S. private equity investment targeted companies in the Business Products and Services (B2B), Consumer Products and Services (B2C), and Information Technology sectors. These sectors accounted for approximately $341 billion of the $542 billion invested last year. These sectors were followed by Healthcare, which received $83 billion, while Energy, Financial Services and Materials and Resources collectively received $118 billion in investment.

Overall, investment in 2017 declined, falling from $646 billion in 2016 to $542 billion in 2017, despite record high levels of callable capital. Each sector, with the exception of Healthcare, received less investment in 2017 than the previous year. The largest decline in investment was in the Information Technology sector falling $71 billion to $94 billion from the previous year. Financial Services also experienced significant declines in investment, dropping to $45 billion from $62 billion in 2016. Other sectors— Business Products and Services, Consumer Products and Services, Energy, and Materials and Resources saw modest declines. In contrast Healthcare companies received $11 billion more investment in 2017, rising to $83 billion.

PAGE 3 4

2017 Industry Investment

PAGE 4 5

Business Products & Services (B2B) Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Apollo Investment, Avantor Performance VWR International 11/21/2017 $6.40 Materials, et al* United States Infrastructure 12/01/2017 $2.00 Partners Group Corporation West 10/10/2017 $2.00

*Goldman Sachs Merchant Banking Division, New Mountain Capital

PAGE 5

Source: PitchBook 6

Business Products & Services Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20 deals. TVPI is as of December 2017.

PAGE 6 7

Consumer Products & Services (B2C) Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Ten-X 10/03/2017 $1.60 Thomas H. Lee Partners General Atlantic, Red Ventures, Silver Lake Bankrate 11/08/2017 $1.44 Management

Stratford School 12/09/2017 $0.50 Primavera Capital Group

PAGE 7

Source: PitchBook 8

Consumer Products & Services Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20 deals. TVPI is as of December 2017.

PAGE 8 9

Information Technology Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Elliot Management, Juna Equity Partners, Gigamon 12/27/2017 $1.60 Qatar Investment Authority Securus Technologies 11/01/2017 $1.50 Platinum Equity

IntraLinks 11/04/2017 $1.00 Siris Capital

PAGE 9

Source: PitchBook 10

Information Technology Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20 deals. TVPI is as of December 2017.

PAGE 10 11

Financial Services Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Canada Pension Plan Investment Board, NewStar Financial 12/22/2017 $2.37 Corsair Capital, et al* Caisse de dépôt et placement du Québec, Wells Fargo 12/04/2017 $2.00 , USI Insurance Services Fidelity National Financial, The Blackstone Fidelity & Guaranty Life 11/30/2017 $1.84 Group

*First Eagle Investment Management, Sofina,

PAGE 11

Source: PitchBook 12

Financial Services Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. 2012 and 2017 medians are based on samples with less than 20 deals. TVPI is as of December 2017.

PAGE 12 13

Healthcare Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Kohlberg Kravis Roberts, Walgreens Boots PharMerica 12/07/2017 $0.91 Alliance Young Innovations 10/30/2017 $0.77 Linden Capital Partners, The Jordan Company

ZirMed 11/01/2017 $0.75 , Navicure

PAGE 13

Source: PitchBook 14

Healthcare Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is based on samples with less than 20 deals. TVPI is as of December 2017.

PAGE 14 15

Materials & Resources Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Tekni-Plex 10/17/2017 $1.50 Genstar Capital

Vantage Specialty Chemicals 10/26/2017 $1.00 H.I.G. Capital, The Jordan Company Encapsys, Sherman Capital Holdings, T. Rowe IPS (California) 11/7/2017 $0.70 Price

PAGE 15

Source: PitchBook 16

Materials & Resources Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. 2002, 2008, 2011, 2012, 2014, 2016 and 2017 medians are based on samples with less than 20 deals. TVPI is as of December 2017.

PAGE 16 17

Energy Deals

Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Medallion Gathering & Processing 10/30/2017 $1.83 Global Infrastructure Partners

TerraForm Global 12/28/2017 $0.75 Brookfield Asset Management

TerraForm Power (TERP) 10/16/2017 $0.65 Brookfield Asset Management

PAGE 17

Source: PitchBook 18

Energy Performance

TVPI by year of Investment

Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is based on samples with less than 20 deals. TVPI is as of December 2017.

PAGE 18 19

Energy Fundraising

PAGE 19

Source: PitchBook 799 9th Street NW, Suite 200 Washington, DC 20001

Investmentcouncil.org 202.465.7700 @Americalnvests