Water and Power Employees’ Retirement Plan (WPERP)

Private Equity Portfolio

Performance Report as of: September 30, 2012

Presented: February 27, 2013

This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Pension Consulting Alliance, Inc.

Nothing herein is intended to serve as investment advice, a recommendation of any particular investment or type of investment, a suggestion of the merits of purchasing or selling securities, or an invitation or inducement to engage in investment activity.

Pension Consulting Alliance, Inc. 0

Quarterly Report Q3-2012

Table of Contents

Section Tab

Program Detail 2

Review of Investment Performance 5

Review of Portfolio Structure 8

Partnership Summaries 14

Private Equity Market Overview 15

Appendices Individual Partnership Pages A Health Benefits Fund Overview B

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Quarterly Report Q3-2012

1.0 Program Detail

As of September 30, 2012, the Water and Power Employees’ Retirement Plan Private Equity Program (the Program) had $255.5 million in commitments across 11 partnerships. As of the end of the third quarter of 2012, $152.0 million in capital had been drawn down, $51.1 million in distributions had been made, and the Program had a reported value of $127.7 million. The net since inception internal rate of return (IRR) was 7.0% as of September 30, 2012, down from 7.1% as of June 30, 2012.

Portfolio Detail (as of September 30, 2012) Since Peer Top Vintage Committed Invested Distributed Reported Partnership Type Age Inception Median Quartile Year Capital Capital Capital Value 1 1 Net IRR IRR IRR Lexington Capital Partners VI (LCP VI) Secondary Fund-of-Funds 2006 6.3 yrs. $30.0 M $30.6 M $16.0 M $20.3 M 5.5% 3.7% 8.9% Landmark Equity Partners XIII (LEP XIII) Secondary Fund-of-Funds 2006 5.8 yrs. $30.0 M $27.7 M $17.0 M $15.2 M 4.7% 3.7% 8.9% HRJ Capital Special Opportunities Fund II (SOF II) Primary Fund-of-Funds 2007 4.6 yrs. $20.0 M $18.0 M $6.0 M $16.4 M 5.7% 10.7% 16.3% Fisher Lynch Venture Fund II (FL II) Primary Fund-of-Funds 2008 4.4 yrs. $20.0 M $14.3 M $0.9 M $15.7 M 7.8% 3.4% 17.5% Landmark Equity Partners XIV (LEP XIV) Secondary Fund-of-Funds 2008 4.0 yrs. $30.0 M $17.4 M $4.7 M $16.6 M 17.7% 9.3% 17.5% Oaktree Principal Fund V (OPF V) Distressed Debt 2009 3.6 yrs. $16.0 M $11.8 M $0.9 M $12.1 M 6.3% 7.8% 10.8% Lexington Capital Partners VII (LCP VII) Secondary Fund-of-Funds 2009 2.8 yrs. $30.0 M $14.1 M $3.8 M $14.6 M 20.7% 9.3% 15.4% EnCap Energy Capital Fund VIII (ECF VIII) Growth: oil and gas 2011 1.6 yrs $12.5 M $4.4 M $1.5 M $3.6 M 26.2% NM NM Audax Mezzanine Fund III (AMF III) Mezzanine 2011 1.6 yrs $17.0 M $5.6 M $0.2 M $5.5 M 4.8% NM NM Vista Equity Partners Fund IV (VEP IV) Buyout 2011 0.8 yrs $25.0 M $8.1 M $0.0 M $7.7 M NM NM NM Ares Corporate Opportunities IV (ACOF IV) Special Situations 2012 --- $25.0 M ------Total Program ------$255.5 M $152.0 M $51.1 M $127.7 M 7.0% ------

o Despite deploying a significant proportion of contributions prior to the economic crisis, the Program has generated an attractive net since inception return of 7.0% as of September 30, 2012. However the public equity markets exhibited a stronger rebound since the crisis including a very high one-year return, resulting in the Program underperforming its policy benchmark (the Russell 3000 Index + 300 basis points) over the latest one-year, three-year, five-year, and since inception time periods.

o The Program’s reported value represents 1.7% of total Plan assets as of the end of the third quarter 2012. Including unfunded commitments of $104.1 million results in an approximate allocation of 3.0%. WPERP’s current target allocation to private equity is 4% with a long-term target of 5%.

o Overall the Program is diversified across investment strategies based on net asset value, including buyouts (44%), (23%), special situations (23%), mezzanine (6%), and (4%).

1 Source: Thomson Reuters, by comparable universe (All Private Equity, Buyout, or Venture) and vintage year. 2

Quarterly Report Q3-2012

1.1 Program Evolution Initial commitments to the Program began in 2006 and focused on secondary fund-of-funds, given their unique diversification and cash flow characteristics. Additional commitments have been made to primary fund-of-funds targeting “special situations” (i.e. distressed strategies) and venture capital. The Program’s first commitment to a direct partnership (Oaktree Principal Fund V) began investing capital during the first quarter of 2009.

The chart below highlights the evolution of the Program in terms of quarterly cash flows and since inception net IRRs at each quarter end. The Program is in the funding/portfolio construction stage as contributions (blue bars) represent the largest proportion of cash flows. The decline in the IRR in 2008 highlights the material valuation declines due to the financial crisis and the initial funding of the Program’s two primary fund-of-funds. During much of the financial crisis in 2009, contribution and distribution activity declined materially. Distribution activity increased significantly in 2011 as $17.2 million was returned to the Program, compared to $6.2 million during the full 2010 calendar year. Through the nine months of 2012, $14.4 million has been returned in the form of distributions, on pace to exceed 2011 ($17.2 million). Contribution activity in the first nine months of 2012 has increased as $27.3 million of capital was drawn, on pace to significantly exceed 2011 ($29.6 million). After strong increases in 2009 and 2010, the net since inception IRR has remained relatively stable since late 2010.

Program's Quarterly Cash Flows and IRR

$15.0 25% 20% $10.0 15% 10% $5.0 5% $0.0 0% IRR

Millions ‐5% ‐$5.0 ‐10% ‐15% ‐$10.0 ‐20% ‐$15.0 ‐25% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12

Contributions Distributions IRR

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Quarterly Report Q3-2012

1.2 Quarter Valuation Change During the third quarter of 2012, the Program increased in value by a net $2.4 million. Approximately $6.5 million of capital was contributed to underlying partnerships during the quarter while $5.8 million was distributed from underlying partnerships. The holdings appreciated by approximately $1.7 million resulting in an aggregate valuation of $127.7 million as of September 30, 2012.

Quarterly Reported Value Activity $140.0

$135.0 $6.5

$130.0 $1.7 $127.7 $125.3 $125.0 $5.8 $120.0

Millions $115.0 $110.0 $105.0 $100.0 6/30/2012 Contributions Distributions Valuation Change 9/30/2012

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Quarterly Report Q3-2012

2.0 Review of Investment Performance

This section examines the Program’s performance results from a variety of viewpoints, including: horizon IRR, investment multiple, and current payback.

2.1 Horizon IRR To compare performance across shorter time periods relative to policy benchmarks, PCA calculated customized “cash flow adjusted” benchmark returns. The actual cash flows (contributions and distributions) of WPERP’s private equity portfolio are assumed to be invested in the policy benchmark to arrive at a comparative performance measurement. As highlighted in the table below, the WPERP portfolio has underperformed the policy benchmark (Russell 3000 Index plus 300 basis points) over all periods evaluated. Over the latest year, the Russell 3000 posted a 30.2% return (not accounting for WPERP’s cash flows) which is well above long-term expectations for the public equity markets. In addition, the Program is in funding mode with many of the underlying partnerships still relatively immature and therefore valued more conservatively.

Cash Flow Adjusted Benchmark Comparison: periods ending September 30, 2012

40.0% 35.8% 35.0%

30.0%

25.0% IRR 20.0% 17.6% 15.0% Horizon 13.0% 10.4% 10.8% 10.0% 7.5% 6.2% 7.0% 5.0%

0.0% One‐Year Three‐Year Five‐Year Since Inception* WPERP Portfolio Russell 3000 Index + 300 bps *initial capital call made in June of 2006

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Quarterly Report Q3-2012

2.2 Investment Multiple: contributed capital vs. total value Another way to view a program’s progress is to examine the contributions, distributions, and reported value of a portfolio. Given the nature of private market investing, it is not uncommon for contributions to exceed distributions and reported value as investments are initially held at cost and management fees are assessed early in the partnership. The Program’s initial commitments had provided an attractive start as distributions combined with reported value of investments exceeded contributions through the calendar year 2007. However, funding of the primary funds-of-funds and valuation declines at year-end 2008 resulted in an investment multiple below 1.0x. The Program’s investment multiple has improved to 1.18x as of September 30, 2012. The following chart portrays the historical trend of these since-inception components. Program Investment Multiple

$200.0 1.18x $180.0 1.17x 1.17x $160.0 1.16x $140.0 $120.0 1.13x $100.0 0.99x

Millions $80.0 $60.0 0.85x 1.14x $40.0 1.02x $20.0 $0.0

Contributions Program Reported Value Distributions

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Quarterly Report Q3-2012

2.3 Payback An additional metric that PCA examines as a measure of a private market portfolio’s progress is the payback. This measure highlights the amount of distributions made to the limited partners as a function of contributions (i.e. distributions divided by contributions). Payback 120%

100%

80%

60%

40% 31.1% 33.6% 27.2% 29.6% 29.5% 29.3% 20.0% 23.4% 18.3% 20% 16.6% 16.2%

0.0% 1.5% 0% Q2 06 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Total Portfolio Payback Return of Contributed Capital (100% payback)

This measure is relatively high (at 33.6%) given the portfolio’s immaturity, but this is representative of secondary fund-of-funds that return distributions to investors more rapidly than traditional private equity partnerships. Increased distribution activity since late 2010 has increased the payback of the Program. However, as recent commitments continue to draw capital to fund investments the payback is expected to decline. Therefore, a Program that is actively committing capital to new opportunities is not expected to achieve a payback of 100%.

2.4 Investment Performance Summary The net since inception IRR dipped slightly to 7.0% in the third quarter of 2012, down from 7.1% in the second quarter of 2012. As valuations rose and distribution activity increased over the past several years, performance and portfolio metrics have improved. The Program has seen its IRR improve from a low of minus (17.0%) to 7.0%, the investment multiple increase from 0.85x to 1.18x, and the payout increase steadily to 33.6%.

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Quarterly Report Q3-2012

3.0 Review of Portfolio Structure

This section examines the Program’s portfolio structure and diversification from a variety of viewpoints, including: number of holdings, investment structures, sector exposures, geographic, industry, vintage year diversification, and firm diversification.

3.1 Holdings Diversification The Plan’s initial commitments to secondary fund-of-funds are providing “core” exposures as they are highly diversified across partnerships and number of underlying holdings. In aggregate, the secondary market funds have exposure to over 1,200 partnership interests while the primary market fund-of-funds have exposure to an additional 26 partnerships.

3.2 Investment Structure Exposures As of September 30, 2012, the Fund’s portfolio is invested across primary fund-of-funds, secondary fund-of-funds, and direct partnerships. Secondary fund-of-funds represent the largest proportion of reported value at 52%, followed by primary fund-of-funds at 25% while the direct partnerships represent 23%.

Investment Structure Diversification: Investment Structure Diversification: market value total exposure

Secondary Direct fund‐of‐funds Partnerships 42% 23%

Secondary fund‐of‐funds 52% Direct Partnerships 41% Primary fund‐ Primary fund‐ of‐funds of‐funds 25% 17%

Including unfunded commitments as of September 30, 2012, the total exposure (market value plus unfunded commitments) resulted in a decrease in secondary fund-of-funds exposure to 42% and a decrease in the primary fund-of-funds exposure to 17% while the direct exposure increased to 41%. This includes the $25 million commitment to Ares Corporate Opportunities Fund IV that made its initial capital call on November 5, 2012.

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Quarterly Report Q3-2012

3.3 Sector Exposures Based on reported value, the Plan’s portfolio is diversified across buyout (44%), venture capital (23%), special situations (23%), mezzanine (6%), and growth capital (4%).

Sector Diversification: market value

Venture 23%

Special Situations 23%

Buyout Mezzanine 44% 6% Growth 4% These exposures are an aggregation of the underlying partnerships within the secondary fund-of-funds as defined by each of the firms, while SOF II and OPF V are entirely categorized as special situations (i.e., distressed), FL II as venture capital, ECF VIII as growth, AMF III as mezzanine, and VEP IV as buyout. Sector diversification is expected to be maintained as the Plan’s current partnerships continue to invest capital and additional partnerships are added to the Program and begin funding.

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Quarterly Report Q3-2012

3.4 Geographic Diversification Based on reported value, the Plan’s portfolio is diversified across geographies, including North America (76%), Europe (21%), Asia (2%), and “Rest of World” (ROW) at 1%.

Geographic Diversification: market value

Europe 21%

North America Asia 76% 2% ROW 1%

The geographic classification is primarily based on the location of the underlying partnership for the fund-of-funds and therefore the exposure to North America may be somewhat overstated. For example, a fund may be classified as North America since the fund is located in the U.S. and emphasizes U.S. portfolio companies, but may also have some portfolio companies outside of the U.S.

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Quarterly Report Q3-2012

3.5 Industry Diversification Based on reported value, the Plan’s portfolio is diversified across industry. The largest exposures are to information technology (24%), followed by consumer (20%), industrials (13%), healthcare (13%) and financials (10%).

Industry Diversification: market value

Industrials 13% Healthcare 13%

Consumer Financials 20% 10%

Energy 8% Other 6% Information Materials Technology Telecom 4% 24% 2%

The Russell 3000 Index, with slightly different classifications, has similar exposures, with the five largest sectors being consumer staples/discretionary (22%), financial services (17%), information technology (17%), healthcare (12%) and producer durables (11%).

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Quarterly Report Q3-2012

3.6 Vintage Year Diversification Due to the Plan’s initial commitments to secondary funds, the Program is diversified across vintage years with meaningful exposures beginning in the 2005 vintage year. Going forward, commitments are expected to continue to be diversified across vintage years to gain exposure to investments made at varying points of an economic cycle. WPERP’s 2012 commitments had not begun investing capital as of September 30, 2012 resulting in a lack of 2012 vintage year exposure as of the Q3 2012 report. Vintage Year Diversification $30.0

$25.0

$20.0

$15.0

Millions $10.0

$5.0

$0.0

Reported Value

All but one of HRJ SOF II’s partnerships have a 2007 vintage year, and this primarily accounts for the significant exposure to the 2007 vintage year. In addition, in some secondary transactions where new investment vehicles are created, a specific vintage year is applied even though the underlying partnerships are actually diversified across a broader spectrum of vintage years. The exposure to the 2011 vintage year has increased over recent quarters as the three 2011 vintage year partnerships deploy capital. A commitment to Ares Corporate Opportunities Fund IV, a 2012 vintage, had not drawn any capital as of September 30, 2012. As the Program matures and evolves there are expected to be variations in vintage year exposure, but the primary goal is to gain exposure across multiple years and the Program has successfully achieved this diversification to date.

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Quarterly Report Q3-2012

3.7 Firm Diversification The Program has committed capital to partnerships managed by nine different investment firms. Based on total exposure (market value plus unfunded commitments), the Plan’s largest allocations are to Lexington Capital (22%) and Landmark Partners (20%). Both these firms construct highly diversified underlying portfolios through the purchase of partnership interests on the secondary market. The next two largest exposures are to direct partnerships: Ares Management (11%), which had not begun to drawdown capital as of September 30, 2012 and Vista Equity Partners (11%) which began investing capital in 2011.

Firm Diversification: total exposure Ares Landmark Management Partners 11% 20% Vista Equity Partners 11% Fisher Lynch 9%

Lexington Capital Capital Dynamics 22% 8% EnCap Oaktree Investments Audax Group 7% 5% 7%

3.8 Portfolio Structure Summary As of September 30, 2012, approximately 60% of the Plan’s committed capital had been invested and the Program has developed a diversified portfolio of underlying private equity investments. The secondary market commitments have provided the desired diversification benefits (including sector, geography, manager, holdings, and vintage year) to date and are expected to continue to provide these diversified exposures as the remaining commitments are drawn and invested. These positions represent attractive core holdings that should allow the Plan to continue to opportunistically commit capital to additional segments.

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Quarterly Report Q3-2012

4.0 Partnership Summaries The Program’s underlying partnerships are at various stages of their respective investment cycles and longer-term results are expected to feel the impact of varying factors. The following table and discussion is intended to provide additional insights into the progress and longer-term outlook for each of the underlying partnerships.

Partnership Status Update Partnership/ Sector/ % Invested/ Investment Commitment Progress Note Vintage Type % Returned Multiple LCP VI / Diversified/ $30.0 M 102%/52% 1.2x Fully invested with material distributions to date. Long-term results will be driven 2006 Secondary by the return of exit opportunities in the marketplace and the associated valuations fund-of-funds achieved. LEP XIII / Diversified/ $30.0 M 92%/61% 1.2x Significantly invested with material distributions to date. Long-term results will be 2006 Secondary driven by the return of exit opportunities in the marketplace and the associated fund-of-funds valuations achieved. SOF II / Distressed/ $20.0 M 90%/33% 1.2x Significantly invested. Valuations rebounded from lows experienced in the 2008 Primary fund- financial crisis and distribution activity has increased. Long-term returns to be of-funds driven by managers’ ability to implement their respective distressed/restructuring investment strategies and profitably exit transactions. FL II / Venture/ $20.0 M 71%/7% 1.2x Underlying portfolio has been fully constructed and material capital has been 2008 Primary fund- drawn down. The fund has experienced relatively attractive unrealized valuation of-funds gains to date and has recently made initial distributions to investors. LEP XIV / Diversified/ $30.0 M 58%/27% 1.2x Transaction activity was initially slow in 2009 as buyer/seller pricing was out of 2008 Secondary equilibrium but increased in 2010, 2011 and 2012 as pricing came more into fund-of-funds equilibrium with an increase in bid pricing. Exhibiting strong early results to date. OPF V / Distressed/ $16.0 M 74%/8% 1.1x The portfolio is materially constructed with 74% of committed capital drawn down 2009 Direct and is beginning to exhibit liquidity events. Subsequent to quarter end, the portfolio’s second largest investment was sold with this liquidation reflected in subsequent reports. LCP VII / Diversified/ $30.0 M 47%/27% 1.3x Transaction activity was initially slow in 2009 as buyer/seller pricing was out of 2009 Secondary equilibrium but increased in 2010, 2011 and 2012 as pricing came more into fund-of-funds equilibrium with an increase in bid pricing. Exhibiting strong early results to date. ECF VIII / Growth: $12.5 M 35%/35% 1.2x The majority of capital has been committed to underlying management teams that 2011 oil and gas will be funded over time with 35% of capital called to date. Experiencing early gains, both realized and unrealized. AMF III / Mezzanine $17.0 M 33%/4% 1.0x Approximately a third of committed capital has been drawn down and the portfolio 2011 has been constructed with 12 portfolio companies to date. Quarterly distributions have been increasing from the mezzanine investments as the portfolio is constructed. VEP IV / Buyout $25.0 M 33%/0% 0.9x Approximately a third of committed capital has been drawn down and the portfolio 2011 has been constructed with 4 portfolio companies to date. The majority of assets are still held at cost.

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Quarterly Report Q3-2012

5.0 Private Equity Market Overview

Fund Raising Trends

Commitments to U.S. Private Equity Partnerships

$350

$300  During 2012, approximately $160 billion of domestic commitments were raised exceeding the $133 billion raised in 2011. $250

 Buyouts led fundraising activities in 2012 raising $114 billion of $200 commitments, followed by venture capital at $20 billion, mezzanine at $11 billion, secondary and “other” at $10 billion, and at $5 Billions $150 billion. $100

 After experiencing year-over-year declines in 2009 and 2010, fundraising $50 activity has increased over the past two calendar years. Capital raised in 2012 is similar to the level of capital raised in 2005. $0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year Buyouts Venture Mezzanine Secondary and Other Fund‐of‐funds Source: Private Equity Analyst through December 2012

Commitments to Non-U.S. Private Equity

$350  Commitments to private equity partnerships outside of the U.S. have exhibited similar fund raising trends over the past several years. $300

 Commitments to European funds outpaced those to Asian private equity $250 funds over most periods with both regions trailing the activity of the U.S. markets. $200

 In 2010 and 2011 Asia ended with this trend, as commitment levels to Billions $150 Asia exceeded the capital raised by the European markets, according to $100 Thomson Reuters’ data. However in 2012, European markets raised more capital than Asian markets, returning to the long term trend. $50

$0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year Asia Private Equity Fundraising European Fund Private Equity Fundraising Source: Thomson Reuters

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Quarterly Report Q3-2012

U.S. Buyout Market Trends

Disclosed U.S. Quarterly LBO Deal Value*  Total U.S. buyout deal volume was $43.6 billion in Q4 2012, slightly 80 above Q2 2012 and Q3 2012 activity. Better credit markets, pressure to exit portfolio companies, and potential tax increases are believed to have 70 contributed to increased activity. 60 ($)  Q4 2012 saw platform investments representing the largest proportion of 50 transactions followed by add-on acquisitions, carve-outs, sponsor-to- 40

sponsor, and take-privates. Billions  2012 exhibited a slight increase, at $135 billion of disclosed deal volume, 30 from 2011, which had $126 billion of disclosed deal volume. However, 20 these levels still remain well below the 2007 peak of $597 billion. 10  Exit activity increased slightly towards the end of the calendar year possibly due to regulatory uncertainty (i.e. change in tax codes, including 0 carried interest, etc.). Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12

* Total deal size (both equity and debt). Source: Thomson Reuters Buyouts

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Quarterly Report Q3-2012

Purchase Price Multiples

Average Purchase Price Multiples

12.0  Purchase price multiples (as represented by total enterprise value divided by earnings before interest, taxes, depreciation and amortization or 9.7x 10.0 9.1x 8.8x 9.1x “EBITDA”) have exhibited volatility over the past several years. Purchase 8.4x 8.4x 8.5x 8.7x 7.7x price multiples initially declined from their 2007 peak to a near-term low in 8.0 7.1x 7.3x 6.7x 6.6x 2009, but rebounded to 8.8x in 2011 and dipped slightly to 8.7x in 2012. 6.0x  The average purchase price multiple for 2012, at 8.7x, is slightly above 6.0 the ten-year average of 8.4x. The second half of 2012 exhibited an increase in purchase price multiple to 9.1x in the fourth quarter, in line TEV/EBITDA 4.0 with 2008 levels. 2.0

0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q4 12 Year Source: S&P Capital IQ

Purchase Price Multiples: Large vs Middle Market

12.0

 Purchase price multiples for larger transactions (EBITDAs >$50 million 10.0 and represented by the blue bars) have historically been higher than the purchase price multiples exhibited in the smaller and middle market 8.0 (EBITDAs <$50 million and represented by the red bars). 6.0  Given the anticipated focus on commitments to smaller/middle market

opportunities, there could be additional competition for deals going TEV/EBITDA 4.0 forward that could influence the purchase price multiple in the smaller end of the market. The pricing gap between larger transactions and 2.0 smaller transactions narrowed in the fourth quarter of 2012. 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q4 12

Large LBOs Middle Market LBOs Source: S&P Capital IQ

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Quarterly Report Q3-2012

Debt Multiples

Average Debt Multiples 7.0 6.0x 6.0 5.4x 5.1x 5.1x 5.0x 4.8x 4.9x  The average debt multiple has increased from a low in 2009 of 3.7x, up to 5.0 4.6x 4.6x 4.1x 3.9x 4.1x 5.1x in 2012 as risk appears to be increasing in buyout transactions. 4.0 3.5x 3.7x  The second half of 2012 exhibited an increase in the average debt multiple 3.0 at 5.6x in the third quarter and 5.4x in the fourth quarter. Debt/EBITDA 2.0 1.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q4 12

Year

Source: S&P Capital IQ

Equity Contribution

60%  The increase in average debt multiple since 2009 has resulted in a decrease in the average equity component of a transaction to 38% in 50% 2012. The equity contribution had a recent peak in 2009 at 46% up from 31% in 2007. 40%

 Lower equity contributions result in less conservative capital structures for 30% Contribution transactions. The long-term impact on performance results remains uncertain. 20% Equity

% 10%

0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year Source: S&P Capital IQ

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Quarterly Report Q3-2012

Recaps and Stock Repurchases

Dividend/Stock Repurchase Loan Volume

90

80

 The private equity market saw a re-emergence of dividend recaps and 70 stock repurchase activity in 2010, which had virtually disappeared post 60

credit bubble. ($)

50  Dividend recaps result in increasing leverage, and ultimately risk, at the portfolio company level. 40 Billions  $77.2 billion in dividend recaps/stock repurchases occurred in 2012, well 30 above the $56.9 billion in 2011. 20

10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: S&P Capital IQ LCD, Merrill Lynch

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Quarterly Report Q3-2012

Distressed Debt

Leveraged Loan Index 110

100  Interest in the leveraged loan market pushed the price of leveraged loans back towards par after lows seen in 2009, easing the opportunity set for 90

trading strategies. However, pricing volatility over the past couple of years Level has provided trading opportunities. 80 Bid

70 Avg.

60

50

12 11 10 09 08 12 11 10 09 08 12 11 10 09 08 13 12 11 10 09 08 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Jul Jul Jul Jul Jul Jan Jan Jan Jan Jan Jan Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr

Source: Loan Syndications and Trading Association (LSTA)

U.S. High-Yield and Leveraged Loan Maturities

363 $400 369 $350  The opportunity set for debt-for-control strategies remains unclear. There appears to be an attractive pending opportunity set over the longer-term. $300 275 With the magnitude of debt that was “amended and extended” during the $250 ($) 226

crisis, a significant volume of debt issues are now maturing several years $200 160 out. $150 145 Billions

$100 65 $50 $0 2013 2014 2015 2016 2017 2018 2019 Year Leveraged Loan and High Yield Bond Maturities Source: JP Morgan, S&P LCD, and GSO

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Quarterly Report Q3-2012

U.S. Venture Capital Trends

Quarterly U.S. Venture Capital Deal Volume*

 In the fourth quarter of 2012, 968 companies received approximately $6.4 $9 1,200 1,073 1,0541,1031,046 billion of capital down slightly from the third quarter of 2012. $8 1,019 999 968 960 941 968 955919 1,000 881 906 897 $7 856  After year over year increases in venture capital investment activity from 816

760 Number 2009 through 2011, 2012 exhibited a slight decrease of investment activity. $6 761 800 Approximately $26.5 billion was invested across 3,698 transactions in 678 ($)

$5

2012, down from $29.5 billion invested across 3,937 transactions in 2011. 600 of

$4 Companies Billions  Several favorable dynamics in the industry suggest potential for attractive $3 400 long-term results going forward, including: reduced $2 commitments to venture capital; ability for entrepreneurs to create new 200 companies at a lower cost due to ongoing technological enhancements; $1

embedded value within existing venture capital portfolios that have yet to $0 0 be realized. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12

* Only includes equity portion of deal value. Source: Thomson Reuters

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Quarterly Report Q3-2012

Venture Capital Exit Environment

Quarterly U.S. Venture Capital M&A Activity $20 160 137 136139 137  M&A value for venture-backed companies decreased in the fourth $18 132 140 121 123 123 quarter of 2012, as 95 transactions were completed representing $16 119 118 Number 108110107 120 $14 102 104 $4.6 billion of value. 97 94 96 94 95 90 100

($) $12

of 78

73 74  Exit opportunities for venture-backed companies have leveled off $10 80 Companies

over the past two years. In 2011, 481 venture-backed M&A Billions $8 60 transactions representing $31.4 billion in value were completed, $6 40 above the $30.6 billion in value transacted across 420 companies in $4 2012. These levels are well above the $15.1 billion in value raised $2 20 across 383 companies in 2008. $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 Source: Thomson Reuters

Quarterly U.S. Venture Capital IPO Activity $20 25 22 $18

$16 18 20 Number 17 16  Ten venture-backed companies went public in the fourth quarter of $14 15 15 2012, raising $1.4 billion after 12 companies went public in the third $12 15 ($) of 12

quarter raising the same amount. 11 11 Companies $10 10 10 9

Billions $8 10  The spike in Q2 2012 IPO activity was from the Facebook IPO. 7 $6 6 4 $4 5 2 1 $2 0 00 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12

Source: Thomson Reuters

22

Quarterly Report Q3-2012

Private Equity Market Performance

Thomson Reuters' U.S. Private Equity Performance Index as of September 30, 2012  According to the Thomson Reuters’ U.S. Private Equity Performance Fund Type 1 Yr 3 Yr 5 Yr 10 Yr 20 Yr Index as of September 30, 2012, recent private equity results remained relatively strong with a three-year return of 11.0% per year. Seed/Early Stage VC 16.2% 4.3% 0.6% 1.6% 29.2% Balanced VC 4.2% 5.7% 1.2% 6.2% 14.5%  However, the latest five-year results remain disappointing on an absolute Later Stage VC 3.0% 10.8% 5.8% 7.7% 16.7% return basis as these results continue to reflect the financial crisis. All Venture 7.1% 6.1% 1.8% 4.6% 19.6%  The 20-year performance is more in-line with long-term expectations Small Buyouts 18.7% 6.4% 4.1% 8.0% 12.2% despite the inclusion of the challenges over the latest 10-year period. Med. Buyouts 23.1% 9.3% 4.9% 9.0% 12.9%

Large Buyouts 17.4% 9.8% 5.7% 10.5% 11.8% Mega Buyouts 14.7% 13.1% 4.5% 10.1% 8.9% All Buyouts 15.1% 12.4% 4.7% 10.0% 9.9% Generalist 17.7% 16.4% 7.1% 10.9% 9.4% All Private Equity 14.3% 11.0% 4.6% 8.9% 11.6%

 On an opportunity cost basis, domestic private market returns have Public Market Performance Comparision, as of September 30, 2012 outperformed versus the broad public market (as represented by the Fund Type 1 Yr 3 Yr 5 Yr 10 Yr 20 Yr Russell 3000) over the longer periods evaluated (i.e. five-years and beyond). All Private Equity 14.3% 11.0% 4.6% 8.9% 11.6% Russell 3000 30.2% 13.3% 1.3% 8.5% 8.7%  Private market returns have either matched or outperformed Non-U.S. Russell 2000 31.9% 13.0% 2.2% 10.2% 9.1% public markets (as represented by the MSCI EAFE) over all periods evaluated. MSCI EAFE 14.3% 2.6% ‐4.8% 8.7% 5.9% BC Aggregate 5.2%6.2%6.5%5.3%6.3%

23

Los Angeles Department of Water and Power Employees' Retirement Plan Private Equity Tracking Schedule

Date of Total Total Rpt. Value As of: Investment Initial Age Capital Contribution Percent Remaining Distribution Reported Plus Net 9/30/2012 Group Focus Investment (Years) Committed to Date* Invested* Contribution to Date Value Rem. Contr. Multiple IRR

Investments Lexington Capital Partners VI Secondary Diversified Jun-06 6.3 30,000,000 30,597,106 102.0% 0 15,960,219 20,345,618 20,345,618 1.2x 5.5% Landmark Equity Partners XIII Secondary Diversified Nov-06 5.8 30,000,000 27,724,607 92.4% 2,275,393 17,005,202 15,165,923 17,441,316 1.2x 4.7% HRJ Capital Special Opportunities II Primary Distressed Mar-08 4.6 20,000,000 17,950,000 89.8% 2,050,000 6,000,000 16,377,547 18,427,547 1.2x 5.7% Fisher Lynch Venture Fund II Primary Venture Capital May-08 4.4 20,000,000 14,280,000 71.4% 5,720,000 947,281 15,710,678 21,430,678 1.2x 7.8% Landmark Equity Partners XIV Secondary Diversified Sep-08 4.0 30,000,000 17,441,672 58.1% 12,558,328 4,717,159 16,566,663 29,124,991 1.2x 17.7% Oaktree Principal Fund V Direct Distressed Debt Feb-09 3.6 16,000,000 11,840,000 74.0% 4,160,000 939,397 12,065,653 16,225,653 1.1x 6.3% Lexington Capital Partners VII Secondary Diversified Dec-09 2.8 30,000,000 14,062,608 46.9% 15,937,392 3,762,851 14,589,429 30,526,821 1.3x 20.7% EnCap Energy Capital Fund VIII Direct Growth: Oil and Gas Feb-11 1.6 12,500,000 4,363,479 34.9% 8,136,521 1,542,807 3,610,908 11,747,430 1.2x 26.2% Audax Mezzanine Fund III Direct Mezzanine Feb-11 1.6 17,000,000 5,591,569 32.9% 11,408,431 238,673 5,539,727 16,948,158 1.0x 4.8% Vista Equity Partners Fund IV Direct Buyout Nov-11 0.8 25,000,000 8,121,286 32.5% 16,878,714 0 7,714,630 24,593,344 0.9x NM Ares Corporate Opportunities Fund IV Direct Special Situations ------25,000,000 - 0.0% 25,000,000 0 - 25,000,000 ------

Established Portfolio** 4.5 146,000,000 119,833,385 82.1% 26,763,721 45,569,258 96,232,082 122,995,803 1.2x 6.3% Total Portfolio 3.4 255,500,000 151,972,327 59.5% 104,124,779 51,113,589 127,686,776 231,811,555 1.2x 7.0% * includes reinvestment of recallable distributions ** over three years old

Alternative Inv. subtotals: Primary Fund of Funds 40,000,000 32,230,000 80.6% 7,770,000 6,947,281 32,088,225 39,858,225 1.2x Secondary Fund of Funds 120,000,000 89,825,993 74.9% 30,771,113 41,445,431 66,667,633 97,438,746 1.2x Direct Partnerships 95,500,000 29,916,334 31.3% 65,583,666 2,720,877 28,930,918 94,514,585 1.1x

% in Primary Fund of Funds 16% 21% 7% 14% 25% 17% % in Secondary Fund of Funds 47% 59% 30% 81% 52% 42% % in Direct Partnerships 37% 20% 63% 5% 23% 41% % in Private Equity 3.3% 2.0% 1.4% 1.7% 3.0% Total Fund Value: $7,666,768,294 Long-Term Target 5.0% 5.0% 5.0% 5.0% 5.0%

difference in % -1.7% -3.0% -3.6% -3.3% -2.0% difference in $ (127,838,415) (231,366,088) (279,213,636) (255,651,638) (151,526,859)

A-1 Audax Mezzanine Fund III, L.P.

Investment Strategy Audax Mezzanine implements an investment strategy, targeting middle market companies in change of control transactions sponsored by leading private equity firms. The Fund is expected to continue to construct a portfolio with debt and equity components that may include senior debt, subordinated debt, convertible debt, preferred stock, common stock and/or common stock warrants. Target companies will have $10 million to $60 million of EBITDA and be diversified across size and industry.

Investment Review Portfolio Profile

Reported Value$ 5,539,727 # of investments: 12 Distributions$ 238,673 Top 10 Portfolio Investments Investment Date Industry Amount Contributed$ 5,591,569 Original commitment$ 17,000,000 Royall & Company Dec-11 Services Remaining to be invested $ 11,408,431 Integrated Power Service HoldingsJul-12 Services Age of fund (in years) 1.6 IntrPac International Corp. Dec-11 Manufacturing Internal rate of return to date 4.8% Chromalox Midco, Inc Mar-11 Manufacturing Total Value Multiple 1.0X Archway Marketing Services Jul-12 Services Percent of capital returned 4% AllPoints Holdings Jan-11 Industrials Time to full payback (in years) 36.5 Sunless, Inc. Jul-11 Manufacturing QualaWash Holdings Jun-12 Services Fund Profile Network Global Logistics Jul-12 Services WPERP Initial Investment Feb-11 High Pressure Equipment Co. Jun-12 Industrials Target termination date Jan-21 General Partner Recent Activity: Audax Mezzanine business III, LP Called $139.5 million in capital from investors in the third quarter of 2012. Investment strategy Mezzanine Distributed $4.2 million to investors during the third quarter of 2012. Market Value of Partners Capital$ 326,599,495 Partners Capital in Cash$ 6,365,918 Total capital contributed$ 325,678,675 Total capital commitment $ 1,002,250,000 General Partner's contribution (% tot.) 1.0% WPERP % ownership 1.7%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 1.5% of commitments during the investment period. 25,000,000 20,000,000 Thereafter, 1.0% of invested capital. 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs until return of contributed capital on realized transactions plus 8% preferred return. Contributions Fair Value Distributions 80% to the GP/20% to LPs during "catch-up" period 20% thereafter.

A-2 EnCap Energy Capital Fund VIII, L.P.

Investment Strategy EnCap VIII’s investment strategy focuses on providing growth capital, typically making investments of $50 million to $200 million per transaction, on a paced and incremental basis. The EnCap investment team looks to provide growth capital to proven management teams who focus on creating value through opportunities in the United States and Canada by: acquiring and exploiting oil and gas reserves; developing low risk drilling opportunities in areas that are known to be producing and using advanced drilling and completion technologies to both conventional and non-conventional reservoirs; and implementing operational enhancement to portfolio companies.

Investment Review Portfolio Profile

Reported Value$ 3,610,908 # of investments: 21 Distributions$ 1,542,807 Top 10 Portfolio InvestmentsInvestment Date Focus Amount Contributed$ 4,363,479 Original commitment$ 12,500,000 Halcon Resources Feb-12 oil and gas Remaining to be invested $ 8,136,521 Eclipse Resources Feb-11 oil and gas Age of fund (in years) 1.6 Enduring Resources II May-11 oil and gas Internal rate of return to date 26.2% Tracker Resource Development III Apr-11 oil and gas Total Value Multiple 1.2X Caiman Energy Nov-10 oil and gas Percent of capital returned 35% PennEnergy Recources LLC Sep-11 oil and gas Time to full payback (in years) 3.0 Venado Oil & Gas Feb-11 oil and gas FireWheel Energy, LLC Aug-11 oil and gas Fund Profile Silver Oak Energy Partners May-11 oil and gas WPERP Initial Investment Feb-11 Plantation Petroleum Company Dec-11 oil and gas Target termination date Oct-20 General Partner Recent Activity: EnCap Equity Fund VIII GP, LP Called $125.2 million in capital from investors in the third quarter of 2012. Investment strategy Growth: oil and gas Distributed $310.1 million in capital to investors in the third quarter of 2012. Market Value of Partners Capital$ 1,504,500,000 Partners Capital in Cash$ 62,200,000 Total capital contributed$ 1,103,300,000 Total capital commitment $ 3,953,200,000 General Partner's contribution (% tot.) 3.0% WPERP % ownership 0.3%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 1.5% of commitments during the investment period. 25,000,000 20,000,000 Thereafter based on net cash investment remaining in portfolio less writedowns 15,000,000 or writeoffs. 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs until return of contributed capital on realized transactions plus 8% preferred return. Contributions Fair Value Distributions 80% to the GP/20% to LPs during "catch-up" period 20% thereafter.

A-3 Fisher Lynch Venture Partnership II, L.P.

Investment Strategy Fisher Lynch Capital invests in venture capital partnerships (10 to 15 firms) focusing on making venture capital investments primarily in information technology and life sciences companies. The targeted venture funds are based, chiefly, in the U.S. The Fund targets outstanding returns by adhering to the following objectives: investing with the leading private equity venture capital firms that have demonstrated historically successful investment performances, judicious diversification of the Fund’s portfolio, and by continuing the use of a rigorous investment process.

Investment Review Portfolio Profile

Reported Value$ 15,710,678 # of partnerships: 17 Distributions$ 947,281 Top 10 Portfolio Investments Vintage Focus Amount Contributed$ 14,280,000 Original commitment$ 20,000,000 Austin Ventures X, LP 2008 Venture Capital Remaining to be invested $ 5,720,000 Lightspeed Venture Partners VIII, LP 2008 Venture Capital Age of fund (in years) 4.4 New Enterprise Associates 13, LP 2008 Venture Capital Internal rate of return to date 7.8% U.S. Venture Partners X, LP 2008 Venture Capital Total Value Multiple 1.2X Khosla Ventures III 2009 Venture Capital Percent of capital returned 7% Accel Growth Fund, LP 2008 Venture Capital Time to full payback (in years) 62.0 Versant Venture Capital IV, LP 2008 Venture Capital Charles River Partnership XIV, LP 2009 Venture Capital Fund Profile Redpoint Ventures IV, LP 2010 Venture Capital WPERP Initial Investment May-08 KPCB Digital Growth Fund 2011 Venture Capital Target termination date Dec-19 General Partner Recent Activity: Fisher Lynch GP II, LP Called $8.6 million in capital from investors in the third quarter of 2012. Investment strategy Primary (Venture) Distributed $3.0 million in capital to investors in the thrid quarter of 2012. Market Value of Partners Capital$ 65,529,400 Partners Capital in Cash$ 2,584,718 Total capital contributed$ 58,420,579 Total capital commitments$ 81,799,182 General Partner's contribution (% tot.) 1.0% WPERP % ownership 24.5%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 1% of aggregate commitments during the investment period. 25,000,000 20,000,000 Thereafter, reduced at a rate of 10% per year. 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs until return of contributed capital plus 8% preferred return. 5% carried interest allocation after achieving 8% IRR Contributions Fair Value Distributions 10% carried interest allocation after achieving 20% IRR

A-4 HRJ Special Opportunities II (U.S.), L.P.

Investment Strategy SOF II constructed a portfolio of special opportunities fund managers who have the expertise to pursue unique transactions during periods of instability and distress, as well as having the expertise to pursue more traditional buyout related private equity transactions during more stable periods or periods of growth. These transactions commonly include turnaround-oriented transactions and distressed investments.

Investment Review Portfolio Profile

Reported Value$ 16,377,547 # of partnerships: 9 Distributions$ 6,000,000 Top 10 Portfolio Investments Vintage Focus Amount Contributed$ 17,950,000 Original commitment$ 20,000,000 Wayzata Opportunities Fund II, LP 2007 Control/Opportunistic Remaining to be invested $ 3,650,000 Wexford Partners 11, LP 2007 Control/Hard Assets Age of fund (in years) 4.4 Sun Capital Partners V, LP 2007 Control Internal rate of return to date 5.7% Fortress V, LP 2007 Control/Hard Assets Total Value Multiple 1.2X OCM Opportunities Fund VIIb, LP 2007 Non-Control Percent of capital returned 33% H.I.G Bayside Debt & LBO Fund II 2008 Control Time to full payback (in years) 8.8 Fortress Co-Investment, LP 2007 Control/Hard Assets OCM Opportunities Fund VII, LP 2007 Non-Control Fund Profile Avenue Special Situations Fund V, LP 2007 Non-Control WPERP Initial Investment Mar-08 Target termination date Dec-19 General Partner Recent Activity: CDHRJ SO II GP, L.P. Distributed $3.0 million to investors during the thrid quarter of 2012. Investment strategy Primary (distressed) No capital was called in the third quarter of 2012. Market Value of Partners Capital$ 123,895,189 Partners Capital in Cash$ 5,763,408 Total capital contributed$ 137,398,272 Total capital commitments$ 153,976,916 General Partner's contribution (% tot.) 1.0% WPERP % ownership 13.0%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 0.9% of aggregate commitments 25,000,000 20,000,000 40% of management fees were deferred during "over-commitment" status. 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ Distributions can be recycled while an over-commitment status remains. Then, 100% to LPs. After return of contributions and a 10% preferred return, Contributions Fair Value Distributions 100% to GP until "catch-up" at 5%. Thereafter, 95% to LPs and 5% to GP.

A-5 Landmark Equity Partners XIII, L.P.

Investment Strategy Landmark XIII acquires interests in established private equity investments through secondary market transactions. The Partnership has assembled a diversified portfolio of private equity interests with the objectives of achieving superior returns at lower risk for this asset class and generating early cash distributions back to investors.

Investment Review Portfolio Profile

Reported Value$ 15,165,923 # of partnerships: 128 Distributions$ 17,005,202 Top 10 Portfolio Investments Vintage Focus Amount Contributed$ 27,724,607 Original commitment$ 30,000,000 Royalty Pharma US Partners I 1997 Expansion Remaining to be invested $ 2,275,393 Vision Capital Partners VI, LP 2006 Buyout Age of fund (in years) 5.8 Landmark Acquisition Fund II, LLC 2007 Diversified Internal rate of return to date 4.7% American Capital Equity II 2007 Diversified Total Value Multiple 1.2X Landmark Portfolio Advisors Fund I, LLC 2006 Diversified Percent of capital returned 61% MP II Preferred Partners, LP 2008 Distressed Time to full payback (in years) 3.7 Hunt Ventures Fund I 2004 Venture Capital Thomas H. Lee Equity Partners VI, L.P. 2006 Buyout Fund Profile Gryphon Partners III, L.P. 2004 Buyout WPERP Initial Investment Nov-06 Liberty Partners II 2005 Buyout Target termination date Nov-19 General Partner Recent Activity: Landmark Partners XIII, LLC Called $4.4 million in capital from investors in the third quarter of 2012. Investment strategy Secondary Distributed $25.5 million back to investors during the third quarter of 2012. Market Value of Partners Capital$ 604,118,631 Partners Capital in Cash$ 5,375,265 Total capital contributed$ 1,102,865,993 Total capital committed$ 1,194,454,545 General Partner's contribution (% tot.) 1.0% WPERP % ownership 2.5%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 Of aggregate commitments: 0.5% in year 1, 0.75% in year 2, and 1.0% years 3-7 25,000,000 20,000,000 1.0% of reported value thereafter. 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs for primary investments. After return of capital and 8% preferred return, 90% to LPs Contributions Fair Value Distributions and 10% to GPs for secondaries.

A-6 Landmark Equity Partners XIV, L.P.

Investment Strategy Landmark XIV is acquiring interests in established private equity investments through secondary market transactions. The Partnership is expected to assemble a diversified portfolio of private equity interests with the objectives of achieving superior returns at lower risk for this asset class and generating cash distributions to its partners early in the Partnership’s life cycle.

Investment Review Portfolio Profile

Reported Value$ 16,566,663 # of partnerships: 207 Distributions$ 4,717,159 Top 10 Portfolio Investments Vintage Focus Amount Contributed$ 17,441,672 Original commitment$ 30,000,000 LAF IV Colony, L.P. 2010 Diversified Remaining to be invested $ 12,558,328 Landmark Acquisition Fund III, L.P. 2009 Diversifed Age of fund (in years) 4.0 TCL Aventura, L.P. 2011 Diversifed Internal rate of return to date 17.7% ICG European Fund 2006 Limited Partnership 2006 Mezzanine Total Value Multiple 1.2X WS Gatsby Partners 2004 Buyout Percent of capital returned 27% Landmark Acquisition Fund V 2011 Diversifed Time to full payback (in years) 10.9 Ridgemont Partners Secondary Fund I 2005 Diversifed TDR Capital II A, L.P. 2006 Buyout Fund Profile HL Investments, LP 2011 Diversifed WPERP Initial Investment Sep-08 MP II Preferred Partners, L.P. 2004 Distressed Debt Target termination date Feb-24 General Partner Recent Activity: Landmark Partners XIV, LLC Called $150.4 million in capital from investors in the third quarter of 2012. Investment strategy Secondary Distributed $34.5 million in capital to investors in the third quarter of 2012. Market Value of Partners Capital$ 1,127,996,070 Partners Capital in Cash$ 4,159,307 Total capital contributed$ 1,159,561,980 Total capital committed$ 1,997,242,424 General Partner's contribution (% tot.) 1.0% WPERP % ownership 1.5%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 25,000,000 1.0% aggregate commitments during the first 4 years after final closing 20,000,000 based on net invested capital through year 8, declining 10% per year thereafter. 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs for primary investments . After return of capital and 8% preferred return, 90% to LPs Contributions Fair Value Distributions and 10% to GPs for secondaries.

A-7 Lexington Capital Partners VI, L.P.

Investment Strategy Lexington VI acquires interests in established , venture capital, and mezzanine funds through secondary market transactions. The Partnership has assembled a diversified portfolio of private equity partnership interests with the expectation of achieving superior returns at a well-diversified level of risk while generating cash distributions back to investors early in the partnership's life cycle.

Investment Review Portfolio Profile

Reported Value$ 20,345,618 # of partnerships: 420 Distributions$ 15,960,219 Top 10 Portfolio Investments Vintage Focus Amount Contributed $ 30,597,106 Original commitment$ 30,000,000 KKR & Co. LP 2006 Buyout Remaining to be invested $ - American Capital Equity I, LLC 2006 Buyout Age of fund (in years) 6.3 2007 Co-Investment Portfolio, L.P. 2007 Buyout Internal rate of return to date 5.5% ZM Private Equity Fund I, L.P. 2003 Diversified Total Value Multiple 1.2X AB Acquisitions MEV PLC 2007 Diversified Percent of capital returned 52% RBS Special Opportunities Fund, L.P. 2004 Diversified Time to full payback (in years) 5.8 Saints Capital Chamonix 2001 Diversified & Bessemer II, L.P. 2006 Buyout Fund Profile Permira IV, L.P. 2006 Buyout WPERP Initial Investment Jun-06 Thomas H. Lee Equity Fund VI, LP 2000 Buyout Target termination date Aug-15 General Partner Recent Activity: Lexington Associates VI, LP Called $50.0 million in capital from investors in the third quarter of 2012. Investment strategy Secondary Distributed $220.0 million to investors during the second quarter of 2012. Market Value of Partners Capital$ 2,617,152,803 Partners Capital in Cash$ 17,420,609 Total capital contributed$ 3,817,754,452 Total capital committed$ 3,773,870,707 General Partner's contribution (% tot.) 1.0% WPERP % ownership 0.8%

Portfolio Cash Flows General Partner Compensation

40,000,000 Annual Mgmt. Fee: 35,000,000 30,000,000 1.0% of commitments (0.5% of commitments to primaries) during the 25,000,000 investment period. 0.85% of reported value thereafter (0.5% for primaries). 20,000,000 15,000,000 10,000,000 Distribution priority: 5,000,000 ‐ 100% to LPs for primary investments. After return of capital, 90% to LPs and 10% to GPs for secondaries. Contributions Fair Value Distributions

A-8 Lexington Capital Partners VII, L.P.

Investment Strategy Lexington VII acquires interests in established leveraged buyout, venture capital, and mezzanine funds through secondary market transactions. The Partnership is expected to assemble a diversified portfolio of private equity partnership interests with the expectation of achieving superior returns at a well-diversified level of risk while generating cash distributions back to investors early in the partnership's life cycle.

Investment Review Portfolio Profile

Reported Value$ 14,589,429 # of partnerships: 499 Distributions$ 3,762,851 Top 10 Portfolio Investments Vintage Focus Amount Contributed $ 14,062,608 Original commitment$ 30,000,000 KKR/Lexington Co-Investments 2011 Diversified Remaining to be invested $ 15,937,392 2007 Co-Investment Portfolio, LP 2007 Diversified Age of fund (in years) 2.8 Providence Equity Partners VI, LP 2007 Buyout Internal rate of return to date 20.7% 2006 Co-Investment Portfolio, LP 2006 Diversified Total Value Multiple 1.3X CVC European Equity Partners Tandem 2007 Buyout Percent of capital returned 27% TPG Partners V, L.P. 2006 Buyout Time to full payback (in years) 7.7 AB Acquisitions MEV PLC 2007 Diversified Warburg Pincus Private Equity X, LP 2007 Buyout Fund Profile Partners II, L.P. 2008 Buyout WPERP Initial Investment Dec-09 Warburg Pincus Private Equity IX, LP 2005 Buyout Target termination date Jun-21 General Partner Recent Activity: Lexington Associates VII, LP Distributed $170.0 million to investors during the third quarter of 2012. Investment strategy Secondary No capital called during the third quarter of 2012. Market Value of Partners Capital$ 3,065,184,420 Partners Capital in Cash$ 41,404,295 Total capital contributed$ 2,834,920,314 Total capital committed$ 6,099,106,061 General Partner's contribution (% tot.) 1.0% WPERP % ownership 0.5%

Portfolio Cash Flows General Partner Compensation

35,000,000 Annual Mgmt. Fee: 30,000,000 1.0% of commitments on first $5 B (0.5% of commitments to primaries) during 25,000,000 20,000,000 the investment period and 0.85% on commitments in excess of $5 B. 15,000,000 0.85% of value and unfunded commitments thereafter (0.5% for primaries). 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs for primary investments. After return of capital, 90% to LPs and 10% to GPs for secondaries. Contributions Fair Value Distributions

A-9 Oaktree Principal Fund V, L.P.

Investment Strategy The Fund is implementing a distress-for-control investment strategy that generally involves purchasing one or more classes of a target company’s debt, at a discount, in anticipation of a financial restructuring that will allow the exchange of debt for a controlling ownership stake at an attractive valuation. In these situations, the Fund attempts to become the largest, or one of the largest, creditors of the target company, seeking at a minimum a blocking position in the fulcrum security in order to exert negative control during the restructuring process.

Investment Review Portfolio Profile

Reported Value$ 12,065,653 # of investments: 23 Distributions$ 939,397 Industry Exposures Investment Date Industry Amount Contributed$ 11,840,000 Original commitment$ 16,000,000 Jackson Square Aviation 10-Feb Financial Services Remaining to be invested $ 4,160,000 General Maritime 11-May Marine Age of fund (in years) 3.6 Isola Group 10-Sep Electical Equipment Internal rate of return to date 6.3% Diamond Foods 12-May Food Products Total Value Multiple 1.1X First BanCorp 11-Oct Commerical Banks Percent of capital returned 8% Accordion Reinsurance 11-May Time to full payback (in years) 41.7 Hanley Wood 11-Mar Media Floatel 10-Mar Auto Components Fund Profile Hanley Wood 11-Mar Media WPERP Initial Investment Feb-09 American West Bank 10-Jun Commerical Banks Target termination date Feb-19 General Partner Recent Activity: Oaktree Principal Fund V GP, LLC No capital was called or distributed in the third quarter of 2012. Investment strategy Distressed Debt Market Value of Partners Capital$ 2,130,924,000 Partners Capital in Cash$ 49,000,000 Total capital contributed$ 1,970,441,000 Total capital commitment $ 2,755,860,000 General Partner's contribution (% tot.) 2.7% WPERP % ownership 0.6%

Portfolio Cash Flows General Partner Compensation Annual Mgmt. Fee: 35,000,000 1.75% of first $2.5 B in commitments during the investment period. 30,000,000 1.50% of commitments in excess of $2.5 B during the investment period. 25,000,000 20,000,000 Thereafter lower of cost or funded commitments at the blended rate. 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs until return of contributed capital plus 8% preferred return. 80% to the GP/20% to LPs during "catch-up" period, 20% thereafter. Contributions Fair Value Distributions

A-10 Vista Equity Partners Fund IV, L.P.

Investment Strategy VEP will focus on making control-oriented investments in middle-market companies that specialize in providing enterprise software and that have considerable opportunities for generating additional value. Target companies will have enterprise values of $100.0 million to $1.0 billion. These targeted transactions must have some aspect on which VEP believes material operational change can be enacted and then translated into outsized investment returns.

Investment Review Portfolio Profile

Reported Value$ 7,714,630 # of investments: 4 Distributions$ 0 Top 10 Portfolio Investments Investment Date Industry Amount Contributed$ 8,121,286 Original commitment$ 25,000,000 Misys 1/31/2012 Software Remaining to be invested $ 16,878,714 Aptean 4/11/2012 Software Age of fund (in years) 0.8 Vitera 11/10/2011 Software Internal rate of return to date NA Public Company E 6/12/2012 Software Total Value Multiple 0.9X Percent of capital returned 0% Time to full payback (in years) too early to tell

Fund Profile WPERP Initial Investment Nov-11 Target termination date Mar-22 General Partner Recent Activity: Vista Equity Partners Fund IV GP, LLC Called $4.5 million in the third quarter of 2012 Investment strategy Buyout No distributions during the third quarter of 2012 Market Value of Partners Capital$ 1,056,478,760 Partners Capital in Cash$ 6,778 Total capital contributed$ 1,084,670,277 Total capital commitment $ 3,069,540,817 General Partner's contribution (% tot.) 3.3% WPERP % ownership 0.8%

Portfolio Cash Flows General Partner Compensation Annual Mgmt. Fee: 35,000,000 1.5% of aggregate commitments during the investment period. 30,000,000 1.5% of net capital contributions thereafter. 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 Distribution priority: ‐ 100% to LPs until return of contributed capital plus 8% preferred return. 100% to the GP during "catch-up" period. Contributions Fair Value Distributions 20% of profits if cumulative proceeds are less than 3.0x contributions. 30% of profits if cumulative proceeds are greater than 3.0x contributions.

A-11 Quarterly Report Q3-2012

Executive Summary

As of September 30, 2012, the Health Program had $28.0 million in commitments across seven partnerships. Program commitments have been allocated 36% to secondary market fund-of-funds and 64% to direct partnerships. As of the third quarter of 2012, $10.6 million in capital had been drawn down, $1.9 million of distributions had been returned, and the Health Program had a reported value of $10.3 million, representing a 1.2x investment multiple and a 13.6% net since inception internal rate of return (IRR).

Portfolio Summary (as of September 30, 2012) Since Vintage Committed Invested Distributed Reported Partnership Type Age Inception Year Capital Capital Capital Value Net IRR Landmark XIV Secondary Fund-of-Funds 2008 4.0 yrs. $5.0 M $2.9 M $0.8 M $2.8 M 17.7% Oaktree PF V Direct Partnership 2009 3.6 yrs. $2.5 M $1.9 M $0.1 M $1.9 M 6.3% Lexington VII Secondary Fund-of-Funds 2009 2.8 yrs. $5.0 M $2.3 M $0.6 M $2.4 M 20.7% EnCap VIII Direct Partnership 2011 1.6 yrs. $2.5 M $0.9 M $0.3 M $0.7 M 26.2% Audax III Direct Partnership 2011 1.6 yrs. $3.0 M $1.0 M $0.0 M $1.0 M 4.8% Vista IV Buyout 2011 0.8 yrs $5.0 M $1.6 M $0.0 M $1.5 M NM ACOF IV Special Situations 2012 --- $5.0 M ------Total Program ------$28.0 M $10.6 M $1.9 M $10.3 M 13.6%

o Strong initial resuts across all partnerships.

o Approximately $10.6 million (38% of the Program’s committed capital) has been invested as of September 30, 2012. The Program’s reported value plus unfunded commitments ($17.4 million) represents an approximate allocation of 2.2% of the Health Plan assets as of the end of Q3 2012.

o The initial use of secondary market fund-of-funds is contributing to a highly diversified portfolio with exposure to a large number of partnerships diversified across investment strategy, geography, and vintage year.

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Los Angeles Department of Water and Power Retiree Health Benefits Fund Private Equity Tracking Schedule

Date of Total Actual Total Current Fair Mkt. As of: Investment Initial Age Capital Contribution Percent Remaining Distribution Fair Market Plus Net 9/30/2012 Group Focus Investment (Years) Committed to Date Invested Contribution to Date Value Rem. Contr. Multiple IRR

Investments Landmark Equity Partners XIV Secondary Diversified Sep-08 4.0 5,000,000 2,906,952 58.1% 2,093,048 786,197 2,761,116 4,854,164 1.2x 17.7% Oaktree Principal Fund V Direct Distressed Debt Feb-09 3.6 2,500,000 1,850,000 74.0% 650,000 146,781 1,885,258 2,535,258 1.1x 6.3% Lexington Capital Partners VII Secondary Diversified Dec-09 2.8 5,000,000 2,343,766 46.9% 2,656,234 627,144 2,431,566 5,087,800 1.3x 20.7% EnCap Energy Capital Fund VIII Direct Growth: Oil and Gas Feb-11 1.6 2,500,000 872,698 34.9% 1,627,302 308,562 722,184 2,349,486 1.2x 26.2% Audax Mezzanine Fund III Direct Mezzanine Feb-11 1.6 3,000,000 986,745 32.9% 2,013,255 42,119 977,597 2,990,852 1.0x 4.8% Vista Equity Partners Fund IV Direct Buyout Nov-11 0.8 5,000,000 1,624,257 32.5% 3,375,743 - 1,542,929 4,918,672 0.9x NM Ares Corporate Opportunities Fund IV Direct Special Situations ------5,000,000 - 0.0% 5,000,000 - - 5,000,000 ------

Established Portfolio* 3.9 7,500,000 4,756,952 63.4% 2,743,048 932,978 4,646,374 7,389,422 1.2x 12.7% Total Portfolio 2.0 28,000,000 10,584,418 37.8% 17,415,582 1,910,802 10,320,650 27,736,232 1.2x 13.6% * over three years old

Alternative Inv. subtotals: Primary Fund of Funds ------Secondary Fund of Funds 10,000,000 5,250,718 52.5% 4,749,282 1,413,341 5,192,682 9,941,964 1.3x Directs 18,000,000 5,333,700 29.6% 12,666,300 497,461 5,127,968 17,794,268 1.1x

% in Primary Fund of Funds 0% 0% 0% 0% 0% 0% % in Secondary Fund of Funds 36% 50% 27% 0% 50% 36% % in Directs 64% 50% 73% 0% 50% 64% % in Private Equity 2.2% 0.8% 1.4% 0.8% 2.2% Total Fund Value: $1,285,662,146 vs. Long-Term Target 5.0% 5.0% 5.0% 5.0% 5.0%

difference in % -2.8% -4.2% -3.6% -4.2% -2.8% difference in $ (36,283,107) (53,698,689) (46,867,525) (53,962,458) (36,546,876)

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