Private Equity & Venture Capital Summit

28 February – 3 March 2011, Intercontinental Hotel, Berlin http://www.icbi-events.com/FKR3A7DPRSP 10% Reader Offer Quote VIP: FKR3A7DPRSP

Dear Spotlight reader

We are very pleased to be able to offer a 10% discount for Spotlight readers for places at the SuperReturn conference in Berlin 28 February – 3 March.

SuperReturn International, Europe’s premier private equity summit, brings together 220 of the most inﬂ uential speakers in a one-stop learning and networking shop, packed with interaction and high value face-to-face opportunities. 1300 global attendees have already registered to attend the 2011 event, including 350 LPs.

I’ll be giving a State Of The Union address in the morning during the Secondaries Summit, and hope to see you there.

Kindest regards

Mark O’Hare

For all bookings & enquiries, please contact the SuperReturn International 2011 Team Quote VIP: FKR3A7DPRSP for your 10% discount Tel: +44 (0) 20 7017 7200 Fax: +44 (0) 20 7017 7807 Email: [email protected] Web: http://www.icbi-events.com/FKR3A7DPRSP Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin Private Equity Spotlight providing insights into private equity performance, investors and January 2011 fundraising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence, Fund Manager Proﬁ les, Funds in Market, Secondary Market Monitor and Deals Analyst.

Feature January 2011 Volume 7 - Issue 1 2011: A Year of Recovery?

Although fundraising hit its lowest point in six years, the value of deals made in the year FEATURED PUBLICATION: recovered to pre-crisis levels. As capital once again starts to ﬂ ow through the industry, we

examine the implications for the asset class in 2011, and highlight some of the key trends for The 2011 Preqin Global Private Equity Report the new year. Page 4.

2011 Preqin Global Private Equity Report Regulars

ISBN: 978-1-907012-17-4 $175 / £95 / €115 Fund Manager Spotlight: Investor Spotlight: www.preqin.com How has the number of private equity Using information from recent interviews

ﬁ rms in operation changed over recent with investors; we look at the investor More information available at: www.preqin.com/reports years? We investigate. outlook for private equity in 2011. Page 6. Page 13.

Performance Spotlight: Secondaries Spotlight: London: Public pension funds are among the most What is the likelihood of investors buying Equitable House, experienced types of investor in the asset and selling on the secondaries market in 47 King William Street, class; we look at the returns that they the next 24 months? London, EC4R 9AF have been achieving. Page 17. +44 (0)20 7645 8888 Page 8. Conferences Spotlight: New York: Deals Spotlight: The month’s private equity events. 230 Park Avenue, We examine deals and exits in 2010, Page 18. 10th Floor, New York, both of which have recovered to pre-crisis NY 10169 levels. Investor News: +1 212 808 3008 Page 9. All the latest news on private equity investors. Singapore: Page 22. Samsung Hub 3 Church Street Level 8 Singapore 049483 +65 6408 0122 You can download all the data in this month’s Spotlight in Excel. Wherever you see this symbol, the data is available for free download on Excel. Just click on the symbol and your download w: www.preqin.com will begin automatically. You are welcome to use the data in any e: [email protected] presentations you are preparing, please cite Preqin as the source.

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alternative assets. intelligent data. Fundraising to the next level

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Securities placed through CSP Securities, LP Member FINRA/SIPC Feature 2011: A Year of Recovery? Download Data

2011: A Year of Recovery?

The fi nal fundraising fi gures for 2010 were the lowest since 2004, but Tim Friedman takes a look at the potential for recovery in 2011.

2010 saw activity in the private equity-backed buyout market the number of funds out there remained relatively high, many of the recovering to reach the kind of levels not seen since the onset of the larger, more established fi rms were holding back, and the number of fi nancial crisis. Q4 in particular represented a very strong quarter, funds on road fell. with $64bn of new deals announced – the highest since Q2 2008 – and $72bn in exits – the highest quarter of all time. 2011 is already The success stories of fi rms such as Infl exion (raising £375mn within continuing on similar path, with high-profi le deals such as Thomas H. four months of launch), and Atlas Capital Holdings (closing nearly Lee’s buyout of Acosta and Advent’s buyout of The Priory Group in 50% above target on $365mn) show that for fi rms with strong past the pipeline, and a number of high profi le IPOs and other exits also performance and a well-informed, strong investor base, fundraising slated. was indeed possible, and in quick time at, or even above, targeted amounts. This is certainly encouraging news for a number of other The story in the fundraising market was less encouraging, with the fi rms planning to launch funds this year. $225bn raised over the course of the year being the lowest total since 2004. However, fundraising is to an extent a lagging indicator. The signifi cant pick-up in activity is leading to capital now being Funds, especially in the current environment, take some time to pulled through the private equity cash cycle once again, and as a raise, and the dearth of new vehicles achieving a fi nal close is more result, it will be necessary for investors to make new investments a refl ection of lacking institutional investor confi dence in 2009 than if they wish to maintain their allocations to the asset class. In anything else. Although the 2009 fundraising fi gures are higher, December 2010 we interviewed 100 leading LPs from around the a considerable amount of funds that held a fi nal close during that world, revealing that not only do the majority of investors intend to at period gathered the majority of their commitments before Lehman least maintain their exposure to private equity (96%), 37% actually Brothers went under in late 2008. expect to increase allocations in the longer term. In terms of their planned activity, 78% expect to match or exceed 2010 investment With institutional investors remaining reluctant to commit new capital, levels, with 45% expecting to commit more capital in 2011 compared the diffi culties seen in the fundraising market of 2009 led to many with 2010. prominent fund managers delaying fundraising efforts until investor sentiment and cash fl ow became more positive. As a result, although Of course, the other effect of the increase in investment activity is that many fund managers are now running low on dry powder, and will need to hit the road in order to gain the new commitments that will allow Keynote Speakers them to invest in new companies in the current cycle. We have already seen major fi rms such Glenn Hutchins Marc Lasry Co-Founder & Co-Chief Chairman, CEO, & as BC Partners, Vestar Capital Management Executive Officer Co-Founder and Berkshire Partners initiating new fundraising Silver Lake Avenue Capital Group activity, while other signifi cant fi rms including The world’s largest student conference on Randall Dillard Providence Equity Partners are also primed to Stephen Pagliuca Co-Founder & Chief launch. Managing Director Investment Officer Bain Capital Liongate Capital Hedge Funds & Management In recent months the total number and value of funds on the road has increased following two Private Equity Hardy McLain Tim Wong Managing Partner & Chief Executive years of slow decline, and this total is certain Co-Founder Officer 24-25 January 2011 CVC Capital Partners AHL to increase further in 2011. Although there are Marriott London Grosvenor Square more investor dollars out there, they are being Hugh Hendry CIO, CEO, Steven Drobny spent with more care and consideration than Founding Partner Co-Founder, Author ever before, and there are still nowhere near Eclectia Asset Drobny Global Management enough to satisfy the ambitions of the 1,600 fi rms seeking $600bn worldwide. Made Possible by Consolidation in the private equity industry is a long process, and it is only now that the total number of active private equity fi rms is starting to decline in certain sectors, as fi rms that last raised capital at the turn of the millennium reach the tail-end of their lifecycles and slowly close up shop, with not so many new fi rms being established to replace them. With the last major fundraising cycle being seen between 2005 and 2008, the majority of fi rms that are not able to raise new capital in the current market will still

continue to operate for a number of years yet – some coming back Those that are able to communicate strong past performance and to market in the future while others only continuing to operate as a compelling investment strategy for the current environment will long as they still hold an investment portfolio. fi nd fundraising to be possible, but those entering the market will fi nd an investor community which has changed signifi cantly since the bumper conditions of four years ago. Investors are looking to reduce the number of existing relationships they hold, and will be scrutinizing re-ups with great care. Nothing is guaranteed.

Looking at geographies, Asia and other emerging markets such as Latin America will grow to represent a major part of the portfolio for a large number of institutions. European managers had a particularly challenging year in 2010, and with AIFM legislation serving to add additional burden to managers and investors alike, 2011 could again present difﬁ culties for the industry. US managers should see conditions steadily improving as certain institutions look to put capital to work for the ﬁ rst time since 2008.

In terms of strategy, mid-market funds, distressed vehicles, and growth and development capital funds will represent popular strategies, and we are also likely to see up an uptick in secondaries activity as fund prices stabilize and specialist players such as Coller and Lexington raise additional capital to add to the signiﬁ cant reserves gathered by other prominent ﬁ rms in recent years.

We have already seen an increase in the levels of capital being called up and distributed, and we expect such activity to remain at a relatively high level as ﬁ rms put remaining dry powder from older vintages to work and exit some of the Superior returns in an era of ample liquidity and stiff competition investments made during the previous cycle. The recovery in fund NAVs is Over 15 years There is no doubt that Russian and CIS Private Equity and Venture Capital is back on a smart investor’s radar of cutting edge screen. The region economy is through the worst of the downturn with the investors’ appetite and confidence conferences in expected to continue, and notwithstanding Russia, CEE & CIS returning to pre-crisis levels at a surprisingly fast pace... some casualties, we expect conﬁ dence in C5’s 7th International Forum private equity as an asset class to return CIS PRIVATE EQUITY AND VENTURE CAPITAL in 2011. 15 - 16 March 2011 | Moscow

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Number of Active Private Equity Firms

The economic downturn has not only aff ected private equity fundraising but, as Sam Meakin investigates, it has also resulted in the fi rst ever decrease in the number of private equity fi rms in existence.

As outlined earlier in this edition of Spotlight, Fig. 1: Number of Active Private Equity Firms over Time the economic downturn has continued to affect (by Vintage of First Fund Raised) private equity fundraising, with the 2010 ﬁ gures

down on the previous year. The effect of the 4,500 downturn can also be seen on the number of 4,000 new fi rms establishing private equity funds for the fi rst time. Fig. 1 shows the number of new fund 3,500 3,000 managers joining the private equity sector each New year (calculated using the vintage of their fi rst fund 2,500

to represent their year of establishment). Any ﬁ rms 2,000 that have not raised a fund in the past 10 years are 1,500 Existing

considered to have become inactive. The fi gures Number of Firms 1,000 only include fi rms managing commingled private equity funds, and do not include private equity fi rms 500 that do not raise distinct private equity funds (i.e. 0 those that manage corporate or personal capital and those that manage third-party capital without pooling 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 into commingled private investment vehicles). Source: Preqin

The graph shows that the total number of active Fig. 2: Number of Active Venture Firms over Time fund managers in the industry fell for the fi rst time (by Vintage of First Fund Raised) ever during 2010, to approximately 4,130, down from the 2009 fi gure of around 4,180. This is as a 2,000 result of both fewer new fi rms entering the industry 1,800 due to the recent downturn and a signifi cant number 1,600 of fi rms becoming inactive due to their most recent 1,400 fund being of a 2000 vintage, particularly venture 1,200 New capital fi rms established during the dot-com boom 1,000 that have not been successful in raising any further 800 600 venture funds since. Existing 400 Number of Firms 200 The number of new fund managers joining the 0 sector peaked in 2007, with over 400 new fi rms

managing funds with this vintage. Each year since 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 has witnessed a steady decline in the number of new fi rms, with just over 130 fund managers Jan - Oct 2010 entering the industry in 2010. The 2010 fi gure Source: Preqin only includes fi rms that have reached one or more interim closes on their debut funds in order to Number of Active Buyout and Venture Firms over Time begin making investments. There are a number of additional fi rms raising their fi rst funds that have yet to reach an initial close. Given Figs. 2 and 3 show the number of active venture and buyout the current state of the private equity fundraising market, it is likely fund managers over time respectively. Fig. 2 demonstrates that that some of these fi rms will be forced to abandon their fundraising the decrease in the total number of active venture fi rms in 2010 efforts. More than 180 fi rms became inactive as of 2010, exceeding accounts for most of the fall in the total number of active fi rms in the number of new fi rms joining the industry and resulting in the fi rst the private equity industry as a whole over the year, with more than fall in the total number of active private equity fund managers. 140 venture fi rms having become inactive as a result of having last raised a fund during the dot-com era. Just under 50 venture fi rms joined the sector in 2010, meaning that the total number of active venture fi rms has fallen by around 100 since last year.

In comparison, the total number of active buyout Fig. 3: Number of Active Buyout Firms over Time fund managers has only decreased slightly, more as (by Vintage of First Fund Raised) a result of the very small number of new fi rms rather than a particularly large number of fi rms dropping 900 out and becoming inactive, as Fig. 3 shows. The 800 number of new buyout fi rms joining the sector each 700 year peaked in 2007 at more than 70 and has fallen 600 steadily each year since, with less than 20 in 2010. 500 New 400 The other fi rm types follow similar patterns, with 300 the annual number of new fi rms having fallen in Number of Firms 200 recent years and the total number of active fi rms 100 Existing stabilizing. The one exception to this is private 0 equity infrastructure fi rms, where the number of

new fi rms in 2010 is higher than the 2009 fi gure, 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 and few fi rms have become inactive as the sector is relatively new.

Source: Preqin Jan - Oct 2010

Data Source:

2011 Preqin Private Equity Compensation and Employment Review

A source of reliable and accurate information on the latest trends in private equity compensation and employment is a vital tool enabling decision-makers and advisors to examine existing compensation practices against wider industry benchmarks.

For more information, or to view sample pages, please visit: www.preqin.com/compensation

Keynotes Panels

Leveraged Buyouts

Glenn Hutchins International Venture Capital Co-Founder and Co-Chief Executive Financial Regulatory Reform Silver Lake Distressed Investing Sponsors Private Equity in Emerging Markets Howard Marks Venture Capital Chairman Oaktree Capital Management Value Creation Middle Market

Tom Stemberg Private Equity in Europe Managing General Partner Highland Consumer Fund Limited Partner Perspectives

For information & registration: www.whartonpeconference.org

Performance: PE Returns for Public Pension Funds

Public pension funds are amongst the most established investors in private equity Bronwyn Williams examines one of their chief motivations for investing in the asset class.

Public pension funds are important and experienced investors in Fig. 1: Median Returns of Public Pension Plans by Asset Class as private equity and on average allocate 5.5% of their capital to the asset of 30 June 2010 class. Preqin data shows that the 20 largest public pension funds have allocated a total of $224 billion to private equity, and their high capital 20

reserves make fund managers keen to attract this type of investor. 15 Fixed Income Private equity investments provide diversity within the pension fund’s Hedge Funds investment portfolio, and have the potential to yield high returns. 10 Listed Equity 5 Preqin examined the fi nancial statements of over 150 public pension Private Equity funds from North America, Europe and the UK to ascertain how 0 1 Year 3 Years 5 Years 10 Years Real Estate well their investments in both listed and non-listed equities were Median Return (%) -5 performing. Median returns fi gures across one-, three-, fi ve- and ten- Total Investmen Portfolio year horizon periods were generated and show that the private equity -10 investments made by the pension funds considered were performing well, with positive returns across each time period. Private equity and -15 Time Period fi xed income were the only investment types to generate positive Source: Preqin returns across all horizons; other asset classes fell into the red at some point. Fig. 2: One-Year Median Returns to 30 June 2010: Private Equity Fig.1 shows the median returns across one-, three-, fi ve- and ten vs. Total Investment Portfolio and Listed Equity – year horizons earned by pension funds from private and listed 80 equities, fi xed income, hedge funds and real estate. As of Q2 2010, 60 fi xed income, hedge funds, listed equity and private equity are Listed showing positive one-year returns. Real estate returns, however, are in Equity the red over the same horizon period. All asset classes show positive 40

returns across fi ve and ten years, but across the three-year horizon 20 Private only fi xed income and private equity show positive returns, 7.6% and Equity 0.6% respectively. This phase does of course include the onset of 0 the fi nancial crisis, the impact of which was most severe on the fi xed Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 To t a l Median Return (%) -20 Investmen income and real estate markets. Portfolio -40 The overall portfolio performance of these public pension funds follows a similar trend showing positive returns across one-, fi ve- and ten-year -60 horizons with three-year horizons in the red at -4.1%. Real estate and Source: Preqin Quarter listed equity are showing more negative three-year returns of -11.3% and -9.5% respectively, illustrating the importance of portfolio diversity to ensure that risk is spread across the various asset classes. The one quarter delay in reporting schedules for private equity is evident between Q2 2009 and Q3 2009. While the one year returns Fig. 2 shows the one-year returns by quarter from December 2008 of other equity classes were recovering in Q2 2009, private equity one to June 2010. One year private equity returns increased during the year returns only start to show signs of recovery in Q3 2009. This is second quarter of 2010 from 10.6% to 15.4%. During the same period due to their returns being calculated using the net asset value reported however, listed equity one year returns fell from 55.2% to 14.8%, by the GP from the previous quarter. Despite the increased uncertainty refl ecting the turbulence in the public markets caused by recent in the public markets, both private and listed equity show positive European sovereign debt issues, while the total investment portfolio returns across one year in Q2 2010. also decreased from 31.9% to 13.3%.

Deals Spotlight: Deals and Exits in 2010

Q4 represents a record-breaking quarter for exits from private equity buyouts.

Fig. 1: Quarterly Number and Aggregate Value of PE-Backed Fig. 2: Annual Number and Aggregate Value of PE-Backed Buy- Buyouts Globally, Q1 2006 - Q4 2010 outs Globally, 2006 - 2010

900 300 3,500 700 Aggregate Deal Value $bn 800 250 3,000 600 Aggregate Deal Value $bn 700 600 200 2,500 500 500 150 2,000 400 400

No. of Deals 300 100 1,500 300

200 No. of Deals 50 1,000 200 100 0 0 500 100

0 0

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 2006 2007 2008 2009 2010

No. of Deals Aggregate Deal Value ($bn) Source: Preqin Source: Preqin No. of Deals Aggregate Deal Value ($bn) End of year results suggest the private equity deals sector has Kravis Roberts, Vestar Capital Partners and Centerview recovered following the ﬁ nancial crisis, with both the value and Partners, which was announced in November 2010. volume of deals and exits returning to, or exceeding, pre-crisis levels. Almost half of all deals announced globally in 2010 were leveraged buyouts, accounting for 53% of the aggregate deal Private Equity-Backed Exits in 2010 value worldwide during the quarter.

811 PE-backed exits occurred in 2010, with an aggregate exit Public-to-private deals contributed 26% of the aggregate value transaction size of $203bn. This is almost three times the of deals globally during 2010, but made up less than 5% of the aggregate exit value seen in 2009, ($73.6bn), with Q4 exit value number of deals. at $71.8bn – the highest quarterly ﬁ gure on record. In Q4 2010, 593 private equity buyout deals were announced, with an aggregate value of $64.2bn. This is a 6% increase in Private Equity-Backed Deals in 2010 aggregate value from Q3, when 593 deals worth $60.6bn were announced. The largest deal announced during 2010 was the $5.3bn public- to-private acquisition of Del Monte Foods Company by Kohlberg

Fig. 3: Quarterly Aggregate Value of PE-Backed Buyouts by Fig. 4: Breakdown of Number and Aggregate Value of PE- Region, Q1 2008 - Q4 2010 Backed Deals in 2010 by Type

45.0 100% 3% 4% 3% 40.0 90% 4% 26% 35.0 80% 20% 30.0 70% 3% 7% 60% 25.0 23% 7% 20.0 50% 15.0 40% 10.0 30% Proportion of Total Proportion of 53% 47% 20% Aggregate Deal Value ($bn) Aggregate Deal Value 5.0 10% 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 0% 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 No. of Deals Aggregate Value of Deals

North America Europe Asia and Rest of World LBO Add-on Growth Capital Recapitalization Public to Private PIPE Source: Preqin Source: Preqin

Fig. 5: Breakdown of Number and Aggregate Value of PE- Fig. 6: Breakdown of Number and Aggregate Value of PE- Backed Deals in 2010 by Value Band Backed Deals in 2010 by Industry

100% 30% 7% 26% 90% 9% 25% 80% 9% 46% 70% 20% 19% 18% 18% 20% 16% 16% 60% 15% 13% 50% 12% 10% 10% 10% 10% 40% 10% 8% 6% 5% 5% 5% 30% 55% 24% Total Proportion of 5% Proportion of Total Proportion of 3% 3% 20% 0% 10% 12% 0% 6% Other

No. of Deals Aggregate Deal Value Energy Media Services Food & Business Business Industrials Consumer Agriculture Healthcare Information Technology

Less than $100mn $100-249mn $500-999mn Telecoms & $250-499mn $1bn or More No. of Deals Aggregate Deal Value Source: Preqin Source: Preqin

Fig. 7: Largest Buyouts Globally 2010

Deal Size Name Date Type Currency Buyers Sellers Industry Location (mn) Del Monte Foods Nov-10 Public To Private 5,300 USD Centerview Partners, Kohlberg Food US Company Kravis Roberts, Vestar Capital Partners Tomkins plc Jul-10 Public To Private 3,150 GBP CPP Investment Board, Onex Engineering UK Corporation NBTY Jul-10 Public To Private 4,048 USD Carlyle Group Food US Extended Stay May-10 Buyout 3,925 USD Blackstone Group, Leisure US Centerbridge Capital Partners, Paulson & Co. CommScope Oct-10 Public To Private 3,900 USD Carlyle Group Communications US Interactive Data May-10 Public To Private 3,700 USD Silver Lake, Warburg Pincus Financial US Corporation Services Sunrise Sep-10 Buyout 3,300 CHF CVC Capital Partners TDC A/S Telecoms Communications MultiPlan, Inc. Jul-10 Buyout 3,100 USD BC Partners, Silver Lake Carlyle Healthcare IT US Group, Welsh, Carson, Anderson & Stowe J Crew Group, Inc Nov-10 Public To Private 3,000 USD Leonard Green & Partners, Retail US TPG

Source: Preqin

Fig. 8: Notable PE-Backed Exits Globally 2010

Date Transaction Exit Exit Sold Exit Transaction Name Firms Investing Currency Acquired Size (mn) Date Type to Size (mn)

Chrysler Financial May-07 Cerberus Capital Management $7,400 Dec-10 Trade Sale USD Toronto- $6,300* Corp* Dominion Bank HCR Manor Care Jul-07 Carlyle Group $6,300 Dec-10 Asset Sale USD HCP Inc $6,100* Inc.* Cognis Nov-01 Permira, GS Capital Partners € 2,975 Jun-10 Trade Sale EUR BASF plc € 3,100 Talecris Mar-05 Cerberus Capital Management, $590 Jun-10 Trade Sale USD Grifols $3,400 Biotherapeutics, Inc. Ampersand Ventures

MultiPlan, Inc. Feb-06 Carlyle Group, Welsh Carson $1,000 Jul-10 Sale to GP USD BC Partners, $3100 Anderson & Stowe Silver Lake *denotes partial exit Source: Preqin

Fundraising Spotlight: Fundraising in 2010

Private equity fundraising reached a new low in 2010, we uncover the full results in more detail.

Fig. 1: Quarterly Global PE Fundraising, Q1 2004 - Q4 2010 Buyout funds accounted for the largest proportion of the aggregate capital raised; $68.5bn was collected by 88 such funds that 450 closed in 2010. 400 European fundraising was particularly poor; 122 350 European-focused funds closed in 2010 raising No. Funds an aggregate $50.2bn. The 118 Asia and Rest 300 Raised of World-focused funds that closed accounted 250 for $41.1bn, with $134.6bn being raised by 242 North America-focused funds. 200 Aggregate 150 Commitments The largest fund to close in 2010 was ($bn) Blackstone Capital Partners VI, a buyout fund 100 that raised a total of $13.5bn. (Although no 50 longer in market, the fund is reportedly still allowing existing investors to increase their 0 commitments and so the ﬁ nal fund size may increase.)

Q1 2004 Q2 2004 Q3 2004 2004 Q4 2005 Q1 2005 Q2 2005 Q3 2005 Q4 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 Other signifi cant vehicles to close in 2010 include Real Estate Turnaround Consortium, a Source: Preqin real estate fund which closed on $5.6bn, and Stone Point Capital’s Trident Fund V, which raised $3.5bn at fi nal close in December. Key Stats: 2010 in Focus Oaktree Capital Management’s OCM Opportunities Fund VIII Q1 saw the highest amount of capital raised; $73bn was raised was the largest distressed debt fund to close in 2010, raising during the period. $4.4bn. Q2 saw the highest number of funds close; 147 fi nished the Results for infrastructure were positive in 2010; 25 such fundraising cycle between April and June. funds closed globally raising an aggregate $27.3bn in capital commitments, suggesting the sector is enjoying something of a Venture funds were the most prolifi c, with 102 reaching a fi nal recovery following a poor year in 2009. close in 2010 raising an aggregate $20.4bn. Funds that reached a fi nal close in 2010 spent an average of 20.4 months on the road – up from 9.6 months in 2004.

Fig. 3: Funds on the Road over Time, Fig. 2: Geographic Split of Funds Closed in Q4 2010 January 2008 - January 2011

60 1,800 1,624 1,592 1,561 1,562 1,547 49 1,600 1,522 50 No. of 1,400 1,304 Funds 40 1,200 No. Funds Raising 1,000 30 918 888.4 Aggregate 21 21 Capital 800 705 698.5 19.4 636 20 Raised 560.3 571.5 594.9 ($bn) 600 Aggregate Target ($bn) 360 10 400 6.5 5.7 200 0 North America Europe Asia and Rest of World 0 Jan-07 Jan-08 Jan-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11

Source: Preqin Source: Preqin

Fig. 4: Average Time Taken for Funds to Achieve a Final Close by Year of Fund Data Source: Close

Preqin’s Funds in Market database 25 contains details of over 1,500 private equity funds on the road seeking capital, 20.4 20 plus information on every vehicle that has 15.5 closed since 2003. For more information 14.9 about this product and how it can assist 15 11.4 you, please visit: 10.6 11.1 10 www.preqin.com/ﬁ m Average Time (Months) Time Average 5

0 2005 2006 2007 2008 2009 2010 Source: Preqin

Fig. 5: Top 10 Largest Funds to Hold a Final Close in Q4 2010

Amount Manager Fund Fund Firm Type Closed (mn) Country Focus Trident Fund V Stone Point Capital Buyout 3,500 USD US US Sheridan Production Partners II Sheridan Production Partners Natural Resources 1,800 USD US US CHAMP Buyout III CHAMP Private Equity Buyout 1,480 AUD Australia ROW Littlejohn Fund IV Littlejohn & Co. Buyout 1,340 USD US US ATP Private Equity Partners IV ATP Private Equity Partners Fund of Funds 1,000 EUR Denmark Europe Wellspring Capital Partners V Wellspring Capital Management Buyout 1,200 USD US US Partners Group Real Estate Real Estate Partners Group 750 EUR Switzerland Europe Secondary 2009 Secondaries Newbury Equity Partners II Newbury Partners Secondaries 1,024 USD US US Rushmore Value Fund Rushmore Properties Real Estate 965 USD US US JMI Equity Fund VII JMI Equity Growth 875 USD US US

Fig. 6: Top 10 Largest Funds to Hold a Final Close in 2010

Amount Manager Fund Fund Firm Type Closed (mn) Country Focus Blackstone Capital Partners VI Blackstone Group Buyout 13,500 USD US US Real Estate Turnaround Brookﬁ eld Asset Management Real Estate 5,565 USD Canada US Consortium Morgan Stanley Real Estate Morgan Stanley Real Estate Real Estate 4,700 USD US ROW Fund VII Global OCM Opportunities Fund VIII Oaktree Capital Management Distressed Debt 4,400 USD US US Energy Capital Partners II Energy Capital Partners Infrastructure 4,335 USD US US Madison Dearborn Capital Madison Dearborn Partners Buyout 4,100 USD US US Partners VI Alinda Infrastructure Fund II Alinda Capital Partners Infrastructure 4,097 USD US US Trident Fund V Stone Point Capital Buyout 3,500 USD US US OCM Principal Opportunities Oaktree Capital Management Distressed Debt 3,331 USD US US Fund V Blackstone GSO Capital Solutions Fund Distressed Debt 3,250 USD US US Group

Investor Outlook for 2011: LPs’ Plans for New PE Investments

Following in-depth interviews with investors around the world, Helen Kenyon looks at where these institutions plan to place their capital in 2011.

Fundraising conditions for private equity funds in 2010 were So where are investors set to place their capital in the year extremely challenging for GPs. 489 funds reached a fi nal close ahead and what are they looking for? during the year, raising a total of $228bn, less than was raised by funds that closed the year before. At present, there are 1,616 Key Strategies in 2011 funds on the road, seeking a combined $626bn, and many more are expected to launch in the coming months, meaning that Fig. 2 shows the areas of the private equity market that LPs are fundraising in 2011 is set to remain just as competitive. intending to invest in over the course of 2011. Respondents were invited to name any fund types that they felt fi t these categories Fortunately for GPs seeking to raise capital, 2011 looks set to and were not prompted to give their opinions on each fund type witness some improvement in private equity fundraising levels individually. Therefore the results represent the types of fund that and investor appetite for new investments is relatively strong. are at the forefront of LPs’ minds. Preqin interviewed more than 100 institutional investors in private equity funds located around the world in December 2010 in order Small to mid-market buyout funds are continuing to attract a to fi nd out their plans for future investments and their attitudes signifi cant degree of investor interest, with 52% of respondents to the market at present. 58% of LPs told us they had made new naming them as a fund type they plan to make commitments to commitments to private equity funds in 2010. In 2011, however, in 2011. 62% of respondents are intending to make new commitments to private equity funds. An additional 30% had yet to fi nalize the Interest in venture funds is also relatively high, with 28% of timing of their next investments and so the proportion of LPs investors spoken to in December 2010 stating an intention to looking to actively make new commitments in 2011 may end up invest in these funds over the course of 2011. much higher. Other fund types to attract particular investor interest at present The capital made available by LPs for new commitments in 2011 include large to mega buyout funds (named by 13% of investors is also, in many cases, greater than was set aside in 2010. As as a fund type they intend to make commitments to during 2011), shown in Fig. 1. 36% of respondents intend to commit more to mezzanine funds (named by 12%) and funds of funds (named by funds in 2011 than in 2010 and a further 32% plan to commit the 13%). same amount. An important 18% of respondents did not make new commitments to private equity funds in 2010 but expect Interest in Emerging Markets to do so in 2011, evidence that many LPs that had suspended their private equity investments during 2009-2010 are intending Emerging markets have continued to attract a considerable to return to the asset class in 2011. Just 14% of those surveyed degree of interest from investors. 70% of respondents to our intend to commit less capital to funds. December 2010 survey either currently invest or will consider Fig. 1: Amount of Capital Investors Plan to Commit to Private Fig. 2: Areas of the Market Investors Are Seeking to Invest in Equity Funds in 2011 Compared to 2010 over 2011

Small to Mid-Market Buyout 52% Venture 28% Large to Mega Buyout 13% Funds of Funds 13% Mezzanine 12% Distressed Private Equity 9% Growth 9% Cleantech 4% Secondaries Funds 3% None 9% Other 3%

0% 10% 20% 30% 40% 50% 60% Proportion of Respondents Source: Preqin Source: Preqin

investing in emerging markets, in comparison to Fig. 3: Regions and Countries within Emerging Markets That Are Viewed as 67% of respondents to our survey the year before. Presenting the Best Opportunities in the Current Financial Climate

We are still seeing investors consider gaining exposure to emerging markets for the ﬁ rst time. Asia 52% One such LP, a Nordic insurance company, China 50% told us, “We haven’t invested in Asia or other emerging markets yet apart from a ‘trial’ India 35%

private equity investment in Russia but we are Brazil 28% considering it. We like Russia and Latin America.” South America 26%

Fig. 3 shows the regions or countries within CEE 20% emerging markets that investors told us were Africa 13% presenting the best opportunities for investment at present. As with Fig. 2, investors were invited to Russia 11% name regions or countries they ﬁ nd attractive. Middle East 9%

Half of respondents told us China was particularly 0% 10% 20% 30% 40% 50% 60% attractive and 52% named Asia. A North American Source: Preqin Proportion of Respondents asset manager, for example, told us that it is looking to invest in “Asian growth equity for the high returns.” structure” and a European LP said, “GPs will need to be more open and forthcoming with information.” Other regions and countries to attract signiﬁ cant attention from investors include India (named by 35% of respondents), Brazil Investors to Watch in 2011 (28% of respondents) and South America (26% of respondents). Preqin contacts LPs on a daily basis to ﬁ nd out about their How Can GPs Stand Out from the Crowd? investments in private equity funds. A sample of LPs we have spoken to recently that are set to actively invest in private equity What can GPs do to improve their chances of securing funds in 2011 is included in Fig. 4. commitments to their funds? During our December 2010 LP survey, we asked investors how they feel GPs can stand out from the crowd in 2011.

For most LPs, a strong, consistent track record will unsurprisingly remain essential. As a European private sector pension “Efficient and enjoyable way of keeping up to date on the latest developments”, fund told us, GPs need to show “a decent Garret Byrne, Partner, Deloitte track record, recent realized performance, a stable portfolio and good returns in the last two to three years, a value-added Business Information In A Global Context European Secondary aspect and a stable team even during the downturn.” Many investors are also looking Private Equity for managers to bring something more to the table than a strong track record; a European family ofﬁ ce stated managers need to Win-win strategies for secondary buyers, sellers and GPs in a market poised for rapid growth “offer something off the beaten track... a differentiated strategy.” 8-9 February, 2011 | Le Méridien Piccadilly Hotel, London

LPs are increasingly looking for GPs to Expert insights from: offer interesting opportunities to co-invest AXA Private Equity GED Capital Adveq Cogent Partners in certain portfolio companies. One LP, a LGT Capital Partners UBS Investment Bank Alpha Russia & CIS 17 Capital family ofﬁ ce in Western Europe, stated, “We Pomona Capital Campbell Lutyens Secondary L.P. Ibersuizas Capital Advisers SL Capital Partners like good terms on co-investment deals and Parish Capital AXON Partners Pinebridge Investments Capital Dynamics Elm Capital Associates Hermes GPE ARCIS Capital Limited more sweetheart deals.” Allianz Capital Partners Nova Capital Management HarbourVest Alpinvest

Fund terms and conditions have remained Media Partners: important to investors. A Canadian LP told us GPs will need to offer “LP-friendly terms, close to ILPA [Institutional Limited Partners Association] standards, a good track record To register your place(s) please call +44 207 878 6888, or visit our website www.C5-Online.com/TurkishPE and a good team.” Greater transparency is quoting ref: 572F11.PES in all your correspondence. also important: a Swedish corporate investor For more information contact us, phone: +44 (0) 20 7878 6917 or email: [email protected] said it required “more transparency on fund

Fig. 4: Investors to Watch in 2011

Alliance Trust Equity Partners Investment Trust Location: UK Total Assets: £3bn Target PE Allocation: 10% of Total Assets Current PE Allocation: 3.3% of Total Assets Alliance Trust Equity Partners plans to invest up to £100mn in private equity funds in 2011. New investments will primarily be made with existing managers in its portfolio but it will also consider establishing new relationships with GPs during this time. It seeks to invest in Western Europe-focused small and mid-cap buyout funds, to which it expects to commit £10-20mn each. The investment trust has been progressively more active in the private equity market over the last few years and expects to commit more capital in 2011 than it did in 2010 in anticipation of a greater availability of attractive investment opportunities. Cathay Life Insurance Insurance Company Location: Taiwan Total Assets: $75bn Target PE Allocation: 2% of Total Assets Current PE Allocation: 0.3% of Total Assets Having signifi cantly reduced the pace of its commitments to private equity funds in the wake of the fi nancial downturn, Cathay Life Insurance is now intending to ramp up its activity in the asset class in 2011 to match 2009 levels. It anticipates signifi cantly increasing the number of GP relationships it possesses, from 20-30 at present to 40-50 in the future. It looks to invest in small to mid-market buyout funds and funds of funds and is also considering adding some exposure to emerging markets to its portfolio. CDC Group Government Agency Current PE Allocation: 55.7% of Total Location: UK Total Assets: £2.5bn Assets In 2011, CDC Group plans to commit around $300mn to approximately 10 new funds and it will also look to form some new GP relationships in the coming year. The government agency will continue to focus on investing in vehicles targeting Africa and South Asia, including the Mekong region. It primarily invests in growth and infrastructure funds, and also has some exposure to venture funds. CDC Group will also seek co-investment opportunities over the next 12 months. Kansas Public Employees’ Retirement System Public Pension Fund Location: US Total Assets: $12bn Target PE Allocation: 6% of Total Assets Current PE Allocation: 2.9% of Total Assets Kansas Public Employees’ Retirement System (KPERS) is seeking to forge two or three new fund manager relationships over the course of 2011 in addition to re-upping with existing GPs in its portfolio. Its focus in 2011 is likely to be on growth equity as well as small and mid-cap buyout funds as it feels these fund types are offering the best opportunities at present. It is also interested in investing in Asia in the future and expects to gain this exposure via funds of funds. As of Q4 2010, KPERS was halfway to its target allocation to private equity and plans to continue to build up its portfolio over the next few years. Sumitomo Trust and Banking Company Bank Location: Japan Total Assets: $221bn Current PE Allocation: 0.8% of Total Assets Sumitomo Trust and Banking Company (STBC) is optimistic about the private equity markets in Japan and Greater China and is looking to commit to up to nine funds in 2011. STBC makes commitments of $5-25mn per fund and seeks vehicles managed by GPs with proven track records, although it will consider spin-offs. It is interested in establishing new relationships with fund managers. The bank is looking to invest in mid-cap buyout funds and venture funds in the coming year. UJA Federation of New York Foundation Location: US Total Assets: $1.1bn Target PE Allocation: 10% of Total Assets Current PE Allocation: 10% of Total Assets UJA Federation of New York is planning to commit $30mn across three new private equity funds in 2011. It is looking to forge some new relationships with managers and also considers investing with spin-off teams. It views mid-market buyout funds as particularly attractive at present. It also has an interest in emerging markets, in particular Brazil, India and China, and is considering gaining exposure to these markets. In the longer term, the foundation expects its allocation to private equity to increase. Source: Preqin FEATURED PUBLICATION:

Data Source: The 2011 Preqin Global Private Equity Report 2011 Preqin Global Private Equity Report

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Secondaries Spotlight

Antonia Lee examines the latest activity on the secondaries market.

Fig. 1: Breakdown of Secondary Fund of Funds Managers by Total Fig. 2: Investors’ Likelihood of Buying and Selling Private Equity Number of Secondaries Funds Managed Fund Stakes on the Secondary Market in the Next 24 Months

Source: Preqin Source: Preqin 100% 3% 10% 90% 12% 2% 80% 17% Highly Likely 70% 11% 60% Possible 50% 83% 40% Opportunistically 30% 62% 20% Unlikely 10% 0% Proportion of Investors Surveyed Buying Selling

Fig. 1 shows that 44% of active managers are managing or Fig. 2 represents investors’ likelihood of buying and selling raising their fi rst dedicated secondaries fund. A signifi cant private equity fund stakes on the secondary market within 11% of secondary fund of funds managers have raised six the next 24 months. A substantial 38% of investors have or more such vehicles, demonstrating that a number of fi rms expressed some level of interest for purchasing fund have a large amount of experience in this specialist sector. stakes on the secondary market and a considerable 17% Managers with numerous secondaries funds have generally of investors are potentially interested in selling fund stakes raised the largest funds and have raised signifi cant amounts on the secondary market within the next 24 months, of capital over the years, and therefore continue to dominate demonstrating a slight increase in investors’ appetite for the market in spite of the increasing number of new, smaller taking part in secondary market transactions over the past managers. year.

According to Preqin’s unique pricing model, a $10,000,000 commitment to the median 2008 buyout fund - which would have called $3,190,000 and has a reported net asset value (NAV) of $2,807,200 - would today fetch $2,286,127 on the secondary market, or approximately 81% of its NAV.

Secondaries News

Lexington Partners has agreed to purchase a private equity two months on approximately USD 70-80 million. Cuyahoga Capital portfolio from Lloyds Banking Group. Partners IV will look to purchase stakes in a variety of fund types It was recently announced that US-based secondary fund of funds including venture, buyout and mezzanine and will generally target manager, Lexington Partners, has agreed to acquire a GBP 470 deals less than USD 25 million in value. million private equity portfolio from subsidiaries of Lloyds Banking Group. The portfolio consists of 33 European mid-market private equity funds. The portfolio is reported to include stakes in funds managed by Doughty Hanson & Co and Bridgepoint Capital. The secondary market transaction is expected to complete in Q1 2011. Data Source: Cuyahoga Capital Partners recently began fundraising for its latest secondaries fund. Secondary Market Monitor (SMM) is a service available Cuyahoga Capital Partners was established in January 2011 after free of charge to accredited LPs. The service enables LPs Key Capital Corporation (KCC), the private equity fund of funds to obtain indicative pricing indications on all or part of their team of KeyCorp (the parent company of KeyBank), spun out to form an independent organization. Cuyahoga Capital Partners private equity and private equity real estate portfolios. recently started fundraising for its latest dedicated secondaries www.preqin.com/smm vehicle, Cuyahoga Capital Partners IV. The vehicle has a USD 125 million target and is expected to hold its ﬁ rst close within the next

Conferences Spotlight: Forthcoming Events

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Foundations, Endowment & Not for Proﬁ t Investment Summit 18 - 19 January 2011 Toronto Strategy Institute

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Public-Private Partnership in Emerging Markets Conference 24 - 26 January 2011 Kuala Lumpur KW Group 4th Annual Investment Performance Analysis and Risk 24 - 25 January 2011 Hong Kong IQPC Management 2011 Private Placements Industry Investment Forum 24 - 26 January 2011 Miami IIR USA Financial Research Innovative Fundraising Options and Opportunities 26 - 27 January 2011 Silicon Valley Associates The Activist Investor Conference 27 - 28 January 2011 New York DealFlow Media

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Private Equity World Australia 2 - 4 February 2011 Melbourne Terrapinn

LSE Alternative Investments Conference The Activist Investor Conference 2011

Date: 24-25 January, 2011 Date: 27 - 28 January, 2011 Location: Marriot Hotel, Grosvenor Square, London Location: The Westin Times Square, New York Organiser: London School of Economics Organiser: DealFlow Media

The LSE Alternative Investments Conference is the world’s The Activist Investor Conference provides a forum for largest student conference on private equity and hedge the examination of the issues raised by investors and funds. The conference takes place in the Marriot Hotel the responses of corporations. Whether you are an in Grosvenor Square, London. Last year students from investor or corporate manager, you will learn about the over 70 universities attended, and delegates participated latest strategies and tactics, regulatory changes, and in a mixture of keynote speeches, panel discussions and hear real case studies of effective proxy campaigns and seminars. successful corporate defenses.

Information: www.dealﬂ ow.com/activist Information: www.lseaic.com

Wharton’s Private Equity and Venture Capital European Secondary Private Equity

Date: 4 February, 2011 Date: 8-9 February, 2011 Location: Hyatt at the Bellevue at Philadelphia, PA Location: Le Méridien Piccadilly Hotel, London Organiser: Wharton, University of Pennsylvania Organiser: C5

Welcome to Wharton’s Private Equity and Venture Building on C5’s market-leading private equity series - Capital Conference. The theme, “Moving Forward we are pleased to introduce a new, exciting European in Uncertain Times: Navigating a New Economic, Secondary Private Equity Forum. Right now, you have a Regulatory, and Financial Reality”, provides an unique opportunity to shape the future of this increasing opportunity to discuss key issues that impact private important capital management tool; network with the equity and venture capital ﬁ rms, investors, and the way buyers and sellers of fund interests on the secondary forward for the various industry stakeholders. market thus making the most out of the existing opportunities Information: www.whartonpeconference.org/ Information: http://www.c5-online.com/SEC.htm

Sponsors London Business School 7th Annual Private Equity Conference 11 February 2011 Keynote Speakers Panels

► Value Creation: Driving LP Returns through Operational Excellence John Moulton, Founder Better Capital ► Fundraising: Attracting Capital in an Uncertain Environment ► Emerging Markets: Funding Opportunities Beyond the BRIC’s Johannes Huth, Head of Europe ► Venture Capital: KKR Funding Novel Opportunities and Seeking Out Hidden Gems

Featuring speakers from: Vincenzo Morelli, Partner TPG Capital 3i Lloyd’s Development Capital Actis Capital Morgan Stanley Altius Associates Motorola Ventures Campbell Lutyens Pantheon Ventures Carlyle Phoenix Equity Partners

TicketsTickets and Information Available at: http://www.londonpeconference.org/hhttp://www.londonpeconference.org/

London Business School Private Equity Conference SuperReturn Latin America 2011

Date: 11 February, 2011 Date: 15 - 17 February, 2011 Location: London Business School Location: Sao Paolo, Brazil Organiser: London Business School Organiser: ICBI

Register by 14/1/2011 to SAVE up to $700 “TURNING THE CORNER” – Delivering Value over the Plus receive a 10% Discount - quote VIP Code: Next Decade” looks to the shift that several major industry FKR3A3LPRWEB when registering players are making from creating value through leverage, to value from operational excellence and core growth at a In response to the phenomenal interest in Latin time when limited partners are diversifying commitments AAmerican private equity by international & regional LPs, across investment platforms, older vintages are fi nally SuperReturn Latin America shall take place on February being realized, and new investment themes are beginning 15-17 2011 in Sao Paulo, Brazil. to be uncovered. The event promises to continue SuperReturn’s unique ability to attract international pension funds, sovereign Information: wealth funds, family offi ces and wealth managers who http://londonpeconference.org are already investing or looking to invest in the region. In addition, local pension funds and wealth managers have already started to confi rm their attendance, meaning that fund managers will be able to network and mingle with a huge variety of LPs investing in the region.

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Hear From 50+ Local & International LPs Including: Plus! LP Summit Partilhe Experiências com + de 50 LPs Locais e Internacionais, Incluindo: Tuesday 15th February 2011 One day summit dedicated to the opinions of local & international LPs. Expert LP speakers include: SAFDIÉ GESTÃO DE PATRIMÔNIO, FACHESF, BLACKROCK, PRIVATE EQUITY PARTNERS, AT&T, IFC, SVB CAPITAL, QUANTUM WEALTH MANAGEMENT, BROOKFIELD ASSET MANAGEMENT plus many more....

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Conference organised by ICBI LP Summit: 15th February 2011/15 Fevereiro Main Conference:/Conferência Principal David Roux Jeremy Coller Antonio Bonchristiano Alexander Navab Jonathon Bond Co-Founder & CIO Co-Chairman & Member and Co-Head Partner, Head of Investor 16-17th February 2011 ICBI Chairman COLLER CAPITAL Co-CEO of North American Development Group 16-17 de Fevereiro SILVER LAKE GP INVESTIMENTOS KKR ACTIS Private Equity, Renaissance Hotel, Sao Paulo, Brazil

Co-sponsors Media partners Supporting organisation

Africa Investment Summit 2011 CIS PRIVATE EQUITY AND VENTURE CAPITAL

Date: 28 February - 2 March, 2011 Date: 15 - 16 March, 2011 Location: Royal Garden Hotel, London Location: Swissôtel Krasnye Holmy, Moscow, Russia Organiser: Terrapinn Organiser: C5

The African Investment Summit 2011 is the only C5’s Annual CIS Private Equity and Venture Capital conference that brings together European Investors, Forum is, no doubt, one of the most anticipated events AAsset Managers and African businesses to help in the private equity calendar. This prestigious and highly promote this exciting frontier market. With over 3 days acclaimed event has been running for the past 7 years of expert case studies from top speakers and over 14 and established itself as the key meeting place for leading hours of dedicated networking time. LPs, GPs, venture capitalists, investment banks and lawyers active in this region. Information: www.terrapinn.com/2011/african-investment-summit/ Information: www.c5-online.com/CISPE

Book before 21st Jan and save up to £390 LPs attend for free!

Hear from

Proﬁtable Richard Laing Luc Rigouzzo Alternatives CEO CEO CDC Proparco

Connecting European institutional investors with the African opportunity

Learn from the key European LPs already investing in Africa Discover what African exposure has worked for top European pension funds, including, Royal County of Berkshire Pension Fund, British Steel Pension Fund, Commonwealth Education Trust, Hermes Pension Management and Hewitt. Nagi Adel Liliang Teng Hamiyeh Chief Navigate the challenges surrounding the deployment of European private equity to Managing Representative secure signiﬁcant returns Director of China-Africa Gain the insights of the organizations that know what’s happening ‘on the ground’: hear from the CEOs of the CDC, Investments Development Aureos, Proparco and the African Development Corporation as well as the Commonwealth Secretariat, China-Africa Temasek Fund Development Fund, African Development Bank and Emergent Asset Management. Holdings Investigate how to overcome the illiquidity concerns that face investors in Africa Explore the challenges of investment in Africa with over 20 investors with the experience on the ground to succeed. Gain the insights into investment in Africa that you need when planning your portfolio strategy for the next decade.

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www.terrapinn.com/2011/africainvest

Judy Curry Sev Vettivetpillai Finance Director CEO and Secretary Aureos Organised by: Commonwealth Education Trust

Investor News

Emma Dineen takes a look at the latest private equity investor news.

Alberta Investment Management City of London Corporation Pension forging relationships with GPs that it has Corporation (AIMCo) expects to commit Fund is looking to commit to funds of not previously worked with and is likely to to three to four new funds in 2011. funds in 2011. make its next commitment in the fi rst half AIMCo has a target allocation to private The GBP 567 million pension fund of 2011. Ball State University Endowment equity of CAD 2.5 billion, equating to 3.7% of for employees of the City of London maintains a 15% target allocation to private total assets, and currently has approximately Corporation is considering forming some equity funds and is currently over its target CAD 1.9 billion allocated to the asset class. new fund of funds manager relationships allocation to the asset class. It expects that The CAD 68.2 billion asset manager made during 2011 in addition to making re- its allocation will fall in line with this target a number of new commitments in 2010 up investments. It did not make any over the course of the next 12 months as and expects to commit a further CAD 300 commitments in 2010 and expects its the rest of its investment portfolio recovers million to private equity funds in 2011. Since next commitment to be in early 2011. The from the fi nancial crisis. reviewing its investment strategy in 2009, pension fund currently invests with SL AIMCo has looked to reduce the number Capital Partners, and has a private equity San Mateo County Employees of GPs in its portfolio as it is looking to target allocation of 5% of total assets. It Retirement Association (SamCERA) commit more capital to fewer managers, is considerably below this at present and has made its maiden private equity as well as seeking more direct and co- expects the number of GPs in its roster to investment. investment opportunities. It prefers to invest increase over the next two years. City of The USD 2 billion San Mateo County in growth equity funds in Asia, as well as London Corporation Pension Fund does not Employees Retirement Association has seeking investments in North American invest in fi rst-time funds. committed USD 20 million to Sheridan mid-market buyout funds where it can Production Partners’ natural resources act as the lead investor and make large Healthcare of Ontario Pension Plan is vehicle, Sheridan Production Partners enough commitments to have signifi cant looking to invest in a number of new II. The fund focuses on oil and gas co-investment opportunities. In 2011, AIMCo private equity vehicles over the next 12 investments in the US. SamCERA set aside is unlikely to form any new relationships with months. a 20% allocation to alternative assets at its GPs as a number of its existing managers The CAD 35 billion Canada-based pension board meeting in August 2010 following an are returning to market; however, in 2012, it fund anticipates committing between CAD asset-liability study. It has since confi rmed is likely to have room in its portfolio to forge 200 million and CAD 400 million to several an 8% target allocation to private equity to some new GP relationships. new private equity vehicles over the next 12 be split 60:20:20 between buyout, venture months and expects to invest with a mixture capital and debt-related/special situations California Institute of Technology of existing managers in its portfolio and vehicles respectively. SamCERA has Endowment (Caltech) is looking to hire a managers it has not previously worked with. delegated the management of this private new private equity director. The pension fund also considers investing in equity allocation to its investment consultant, Katie Hardy has left her position as fi rst-time funds and co-investing alongside Strategic Investment Solutions. Director of Investments, Private Equity GPs directly into portfolio companies. at the USD 1.5 billion endowment. It is The pension fund typically looks to gain actively seeking a replacement. Separately, exposure to North America and Western Caltech recently hired a new CIO, Scott Europe. Richland, in September 2010. Mr Richland More news and updates are available was president of private investment fi rm Ball State University Endowment expects online for Investor Intelligence and Lunada Bay Investors. He is expected to its next private equity commitment in H1 Secondary Market Monitor subscribers. review Caltech’s private equity investments 2011. in the coming months, as well as examine The USD 150 million endowment fund In the last month, Preqin analysts internal staffi ng. Caltech tends to focus expects to commit a maximum of USD have added 41 new investors on private equity and venture investments 6 million to up to two new vehicles over and updated 438 existing investor in the technology sector. The endowment the next 12 months. It will most likely profi les. manages its private equity investments commit to fund of funds vehicles with a in-house. focus on distressed private equity and For more information, or to register for venture capital as it feels that these a demo, please visit: areas are currently presenting attractive www.preqin.com/II opportunities for investment. It will consider