Annual Review 2010 OUR BUSINESS 04 OUR INVESTORS 05 YEAR IN REVIEW 06 CHAIRMAN’S STATEMENT 07 CHIEF EXECUTIVE’S STATEMENT 08 GOVERNANCE 10 SUPERVISORY BOARD 12 MANAGING PARTNERS 13 PARTNERS 15 INVESTMENT APPROACH 16 FUND INVESTMENTS 18 SECONDARY INVESTMENTS 24 CO-INVESTMENTS 28 MEZZANINE INVESTMENTS 32 FINANCIAL PERFORMANCE 36 CORPORATE SOCIAL RESPONSIBILITY 38 HUMAN RESOURCES 40 REMUNERATION 42 RISK MANAGEMENT 43 PRIVATE EQUITY 45 ALPINVEST IRR CALCULATIONS 46

Throughout this document, “AlpInvest” or “AlpInvest Partners” refers to AlpInvest Partners N.V. In considering the performance information contained herein, prospective investors should bear in mind that the performance reflected herein is not necessarily indicative of future results, and there can be no assurance that any fund or investment will achieve comparable results. 3

INTRODUCTION AlpInvest Partners

AlpInvest Partners is one of the largest private equity managers in the world, with €42bn of assets under management. Over the past decade, we have achieved consistently strong performance, thanks Annual Review 2010 to our size, global platform and investment focus.

The strength of our business enables us to build partnerships with leading general partners around the world. The scope of our business gives us access to a broad sweep of private equity opportunities. And the dedication of our investment teams translates that access into value creation for our investors.

2010 was an exceptional year for AlpInvest. From an investment perspective, the year was marked by strong recovery. From a strategic perspective, the year sowed the seeds of transformational change. OUR BUSINESS

AlpInvest has delivered strong returns since it Since our inception, we have built a business based was founded in 1999. Investing across the private on three core tenets: expert execution, stability

Annual Review 2010 Annual Review equity spectrum, we offer our investors breadth and reliability. We strive to deliver superior returns of opportunity and depth of experience. Conferring across the cycle. We have a stable, dedicated distinct benefits to our investors, we invest in private management team and we have robust, reliable equity funds through our primary and secondary risk management tools. funds programs and directly in companies through

AlpInvest Partners AlpInvest our equity and mezzanine co-investment programs. Now we are entering a new stage in our

4 Our size and scale confer meaningful advantage, development, following the sale of AlpInvest by as evidenced by our performance across the its former shareholders. The firm will henceforth economic cycle. be jointly owned by The Carlyle Group and AlpInvest management, one of the largest and AlpInvest was founded by two of the largest most highly respected private equity managers investment institutions in Europe, predecessors in the world. AlpInvest’s investment activities and of the Dutch pension fund managers APG and business operations will continue to operate on an PGGM. For more than ten years, they have been independent basis from The Carlyle Group and we our shareholders and over the last few years believe the new structure will prove a successful we have invested exclusively on their behalf. combination for all our stakeholders.

Fund investments Secondary investments The team invests in private equity funds across The team acquires private equity investments and a broad spectrum of geographies, sectors and commitments from other investors. Investments investment stages. Further information on page 18. are made across the private equity spectrum. Further information on page 24. €33.4bn €927m €5.8bn €683m Total commitments New commitments to PE Total commitments 2010 new commitments received from investors funds with a 2010 vintage received from investors to secondary transactions

Co-investments Mezzanine investments The team invests alongside private equity firms in The team works together with leading mezzanine leveraged buyouts and growth capital transactions partners to provide debt financing for buyouts and across Asia, Europe and North America. growth capital transactions in Asia, Europe and Further information on page 28. North America. Further information on page 32. €6.4bn €377m €1.9bn €155m Total commitments 2010 new Total commitments 2010 new received from investors investments received from investors investments 5

OUR INVESTORS AlpInvest Partners

AlpInvest has been jointly owned by two leading They have committed to investing at least €10bn2 Dutch pension fund managers since it was founded with us between now and 2015. We see this as

11 years ago. Without their entrepreneurial spirit, a testament to their ongoing support to our Annual Review 2010 we would not be here today. investment approach and their backing for our new partnership with The Carlyle Group. APG and PGGM were both founder shareholders and investors1 in AlpInvest. The two managers APG and PGGM will henceforth be able to work awarded AlpInvest an exclusive private equity with other private equity managers, and AlpInvest mandate at the turn of the century, since when will be able to seek funds from other investors. AlpInvest has received commitments of more than Nonetheless, we expect to serve our founders €49bn from them. We have worked together for for many years to come. more than a decade, during which time we have developed a strong, mutually beneficial relationship. APG and PGGM have been part of the fabric The unswerving support of APG and PGGM has of AlpInvest since 2000 and they will remain given AlpInvest a fundamental stability, allowing an integral part of our investment platform. us to focus on the delivery of superior returns. We are grateful for the support they have shown us in the past and we look forward to continuing our unique relationship in the future.

Commitments received from investors by investmentPAGE 5type by investorPAGE type 6 – INVESTMENTS PAGE 6 – REALIZATIONS

5 4 99. 6% 0.2% 0.2% Pension funds Insurance Government 3 companies agencies

by geography 2 1 99. 8 % 0.2% Western Europe North America

1. Fund investments €33.4bn 2. Secondary investments €5.8bn 3. Co-investments €6.4bn 4. Mezzanine investments3 €1.9bn 5. Other €1.5bn PAGE 31 PAGE 35

APG is a financial services provider in the collective PGGM is an asset manager and pension fund pension market. APG provides pension fund administrator for collective pension schemes, administration, asset management, management principally in the care and welfare sector. It is support and communication services to pension also an income provider for people in the care funds. It manages pension assets of approximately and welfare sector. It manages pension assets of €277bn (as at December 31, 2010) for 4.5 million approximately €103bn (as at December 31, 2010) active and retired participants from the public and for over 2.3 million people. private sectors. www.pggm.nl www.apg.nl

1APG and PGGM represent more than 99% of the commitments received from investors. In addition, AlpInvest has a small number of other investors. 2Of the €10bn new commitment we received from our investors for the period 2011-2015, €1bn is designated for the 2009-2011 mandate period. 3This includes mezzanine direct investments only. YEAR IN REVIEW

2010 was an exceptional year for AlpInvest. From shareholders. We initiated a sale process at the an investment perspective, the year was marked by start of the year, and early in 2011 it was announced

Annual Review 2010 Annual Review strong recovery. From a strategic perspective, the that APG and PGGM would sell their shares to year sowed the seeds of transformational change. AlpInvest management and The Carlyle Group.

Private equity was already beginning to rebound In the new joint venture, The Carlyle Group will hold at the beginning of 2010, but we were unsure how 60% of the shares. AlpInvest management will own

AlpInvest Partners AlpInvest sustainable this would prove to be. As the year the balance and have an equal vote on the Board.

6 developed, it became clear that conditions were The business will remain independent from an far more favorable than they had been since the investment and operational perspective, and APG financial crisis. Our net life to date performance, and PGGM will continue to be among our most covering the whole of the past decade, rose to important investors. At the end of 2010, they had 10.5%1 in 2010, a significant increase from the €32bn of assets under management with AlpInvest previous year. and are committed to investing with us until 2015. We believe this commitment is an endorsement AlpInvest has developed a unique investment of our investment approach, the returns it delivers approach to private equity investment over the and the quality of the new ownership structure. past decade. This served us well during the tough, post-crisis period. And it also served us well last 2010 has been active, dynamic and rewarding. Our year. Our size, investment focus and management people have shown their dedication and put their commitment gave us access to a broad range of experience to good effect. Our relationships with opportunities and all business lines benefited general partners around the world have deepened from sharply improved investment conditions. and strengthened and we have been delighted with We made commitments of €3.6bn and received their response to improved market conditions. gross realizations of €2.8bn. An element of caution remains and the economic The year was also characterized by a change backdrop is still volatile, but AlpInvest is confident of ownership. Having been owned since our that its robust model, risk management tools and foundation by our two investors, APG and PGGM, new ownership structure position the business we all concluded a different model would give well for the future. each party a greater degree of independence, to the benefit of both our business and our founder

2010 total investments 2010 total realizations PAGEPAGE 5 5 PAGEacrossPAGE 6 – key INVESTMENTS6 – investments INVESTMENTS areas acrossPAGEPAGE key 6 – investmentsREALIZATIONS6 – REALIZATIONS areas

5 5

4 4 3 3

2 1 1 2

1. Fund investments €2,415m 1. Fund investments €1,765m 2. Secondary investments €640m 2. Secondary investments €603m 3. Co-investments €377m 3. Co-investments €236m 4. Mezzanine investments1 €155m 4. Mezzanine investments1 €238m 5. Other €3m 5. Other €8m PAGEPAGE 31 31 PAGEPAGE 35 35

1Net life-to-date internal rate of return on the capital invested on behalf of APG and PGGM (more details on page 46). 2This includes mezzanine direct investments only. 7 AlpInvest Partners Annual Review 2010 the largest private equity private the largest in the world,managers and pedigree with a strong excellence. for a reputation OTTO VAN DER WYCK VAN OTTO CHAIRMAN AlpInvest the years, Over one of into has developed I believe the new ownership model suits all parties model suits all ownership the new I believe investors, the founder owners, the new well: very the private and, of course, employees AlpInvest has whom the firm with partners equity general date. to so fruitfully worked partner for is an excellent Group The Carlyle in alternative of experience wealth with a AlpInvest, of relationships and a network management asset part, its partners AlpInvest’s For the globe. across deliver to motivated highly been always have of the business As joint owners superior returns. their ongoing commitment Group, with The Carlyle is further assured. be a one-tier will model, there Under the new Officer Chief Executive by AlpInvest chaired Board, the hand over to Doeksen. I am pleased Volkert the that I leave him, knowing chairmanship to hands. in capable business rewarding. and has been fulfilling Chairing AlpInvest has happy that this unique business I am extremely success home and I wish it every new a stable found in the future. from one another. one another. from landscape. Those developments have made it have developments Those landscape. and its that AlpInvest appropriate increasingly of independence should gain a measure founders of the largest private equity managers in the equity managers private of the largest for and a reputation pedigree with a strong world, by has been marked decade But the past excellence. management asset shifts in the Dutch wide-ranging some ways; but in others it is a natural evolution. it is a natural some ways; but in others one into has developed AlpInvest the years, Over The Carlyle Group and AlpInvest management. The and AlpInvest Group The Carlyle This be anchor investors. to will continue founders in is momentous change in ownership structural change to have affected AlpInvest over the past year. year. the past over AlpInvest affected have change to by its was owned of 2010, the business At the start APG and and investors, shareholders founder two it has been sold to 12 months later, PGGM. Now, investment approach. investment is not the only environment But the economic dedication and focus of its management. They will, I They of its management. and focus dedication thanks returns, superior deliver to continue believe, and unique scale experience, the depth of their to At the start of 2010, there were signs that the private signs that the private were there of 2010, At the start During improve. to was starting equity environment and up considerably picked conditions the year, by the helped, in no small part, prospered, AlpInvest eventful and interesting period in my time as period in my and interesting eventful of AlpInvest. Chairman The past year has been, without doubt, the most has been, without year The past CHAIRMAN’S STATEMENT CHAIRMAN’S CHIEF EXECUTIVE’S STATEMENT

AlpInvest is one of the largest private equity managers and global network of investor relationships. in the world today. We strive to deliver superior returns We will continue to operate as we have always

Annual Review 2010 Annual Review not just in good times but also when economic done. Investment decisions will be made conditions are more challenging. Last year was independently and we will focus resolutely on particularly successful for us but, over the past decade, the delivery of superior returns to our investors. we have consistently outperformed public markets APG and PGGM already have €32bn under worldwide. We believe our achievements to date can management with us and, in what we believe

AlpInvest Partners AlpInvest be attributed to several key factors. Our size and is a vote of confidence in our future, they have

8 geographic footprint give us access to top-performing committed a further €10bn over the next four private equity funds and opportunities. Our investment years. During that time, we intend to expand our approach enhances our relationships across the investor base and product scope. This expansion industry and provides us with superior insights will be done in a thoughtful and measured fashion. into funds and individual deals. The experience We will add new capital slowly but surely and we of our investment teams helps us to make the right will gradually move into adjacent product areas. investment choices. And the presence of our two We will ensure our investors’ needs are met by anchor investors, APG and PGGM, has provided our new business development and investor us with the solid foundation on which to grow relations team and by the professionals of AlpInvest. our business. The timing of this new venture is serendipitous. Now, after a decade of growth, development and Over the past four years, private equity has been strong performance, AlpInvest is moving into a new on the receiving end of allegations of overleveraging phase, a phase which is invigorating for the firm, and underinvesting in portfolio companies, poor exciting for the management and beneficial to our management and inadequate risk-adjusted returns. stakeholders, old and new. There was a widespread assumption during the financial crisis that private equity companies would The new structure, whereby the company will be be harder hit than others and that the entire asset jointly owned by The Carlyle Group and AlpInvest class would struggle to survive. management, has been designed with an eye to the future and the past. We will retain all that is This proved to be not only misguided but also good about our business and gradually introduce inaccurate. Private equity companies have changes to enhance our unique positioning. outperformed many of their public market peers, thanks to the hard work and diligence of general The Carlyle Group is not just one of the largest partners during the tough years of 2008 and and most successful alternative asset managers 2009. The strength of these companies today in the world. It also has a reputation for excellence is also testament to the industry’s governance and a genuine cultural affinity with AlpInvest. model, aligning the interests of shareholders and The partnership model we have constructed managers to encourage outperformance in good retains our operational independence but offers times and in bad. us the benefit of The Carlyle Group’s brand name Over the past year, the entire industry has bounced back with incredible speed and vigor. The negative views aired by many consultants did not turn into reality, there were no major bankruptcies of private

After a decade of growth, development and outperformance, AlpInvest is moving into a new phase, which is invigorating for the firm and beneficial to our stakeholders, old and new. 9 AlpInvest Partners Annual Review 2010

VOLKERT DOEKSEN VOLKERT CHIEF EXECUTIVE OFFICER has changed owners but the culture of excellence of excellence but the culture has changed owners unaltered. remains private equity industry and we are committed to committed are and we equity industry private and our business develop to using that knowledge AlpInvest our investors. to superior returns deliver positioned for the next phase of our development. phase of our development. the next positioned for modified will be slightly structure Our governance model. further emphasize this true partnership to the across and deep expertise a broad have We environment. Looking to the future, I am confident I am confident the future, Looking to environment. has team do so. Our partner to will continue we and is well many years for together worked years to come. Many uncertainties lie ahead but Many uncertainties come. to years deliver that it can in the past has proved AlpInvest the external whatever outperformance, consistent Operationally, we delivered superior returns. superior returns. delivered we Operationally, our ownership transformed we Structurally, on both of our achievements model. I am proud the about excited and I am genuinely levels are adopted both in spirit and more formally. formally. both in spirit and more adopted are AlpInvest. for year 2010 was an extraordinary the private equity world that corporate social that corporate equity world the private but ethically just sense not makes responsibility and these values endorse We also commercially. ESG principles ensure to our stakeholders urge governance (ESG) principles and encourage and encourage principles (ESG) governance to own they and the companies partners general across realization is a growing There do likewise. but will use our own expertise to guide our decisions.our guide to expertise own our use will but social and environmental, will also follow We a consistent and disciplined investment approach approach disciplined investment and a consistent We is difficult. as timing the right point in the cycle invest to trends of past use our knowledge to intend the herd will not follow We may be fearful. when others If nothing else, the past few years have shown have years few If nothing else, the past take We business. equity is a cyclical that private we are emerging from one of the toughest periods one of the toughest from emerging are we yield the best and such moments often on record in the future. rewards is best suited to experienced investors who investors experienced to suited is best On the oneworks. the market how understand volatile, remains climate hand, the economic is needed. On the other hand, caution suggesting We believe now is a good time to be in private be in private to is a good time now believe We environment the current also feel equity, but we structures reappear. Deals are being funded and being funded are Deals reappear. structures turning on their axis wheels are equity’s private again. and efficiently smoothly emerging markets, where attention was focused in was focused attention where markets, emerging as such markets, traditional 2009, but also in more back with a are and the US. Debt markets Europe seeing covenant-light even are and we vengeance, numbers of general partners going out of business. going out of business. partners of general numbers than faster recovered have markets Furthermore, in not just is buoyant, and activity expected anyone equity-owned companies, nor did we see large see large nor did we companies, equity-owned GOVERNANCE

Strong, effective governance lies at the heart of the AlpInvest business model. How we are governed

Annual Review 2010 Annual Review determines our culture, our processes and our returns. Over the years, we have developed well- defined governance structures and a disciplined approach to operational and investment decision- making. This is a fundamental part of who we are

AlpInvest Partners AlpInvest and how we operate.

��� Under the ownership of APG and PGGM, AlpInvest was managed by a Supervisory Board, an Executive Committee and five sub-committees.

That is now changing, following the sale of the business to The Carlyle Group and AlpInvest management. But the underlying philosophy that guides our approach to governance remains – a commitment to robust management and internal discipline that bolsters performance and enhances investment returns.

The joint venture between The Carlyle Group and AlpInvest is a true partnership, in which each party brings its own experience and expertise to the other. The Carlyle Group has a global network, a respected brand and a proven track record in building a diversified alternative asset management firm. We believe this will be very valuable to AlpInvest as we seek to gradually broaden our investor base and product scope. AlpInvest brings The Carlyle Group more than a decade of experience in fund-of-funds investing and is one of the largest independent private equity managers in the world.

Indeed, our partnership with The Carlyle Group is based on mutual respect and a clear understanding that AlpInvest will maintain operational and investment independence. A strict information firewall between AlpInvest and The Carlyle Group will safeguard all general partner, fund and/or deal- specific information. Both sides are determined to ensure AlpInvest delivers consistent, superior returns as it grows and develops. The AlpInvest partners’ personal investment in the new venture is testament to their commitment, and we believe that the decision by APG and PGGM to commit to a new mandate highlights their endorsement of the new deal. Strong, effective governance The Board In future, AlpInvest will have a one-tier Board, lies at the heart of the comprising four Directors and three Observers. Our Chief Executive Officer, Volkert Doeksen, will AlpInvest business model. take on the additional role of Chairman. Our Chief Financial and Operations Officer, Paul de Klerk, How we are governed will be a member of the Board and there will be two determines our culture, members from The Carlyle Group, Daniel D’Aniello and Glenn Youngkin. Daniel is a Managing Director our processes and our and Founding Partner of The Carlyle Group; Glenn is a Managing Director, serves on The Carlyle returns. Group Executive Committee and is Chairman of its ��� AlpInvest Partners Annual Review 2010

included lessons learnt from the financial crisis, from learnt included lessons and markets credit for the outlook regulation, debt crisis. sovereign the European AlpInvest. Topics discussed in 2010 included discussed Topics AlpInvest. compensation appraisals, Managing Partners’ the year. for and objectives CSR Committee and on the development focuses This committee topics Key CSR policy. of AlpInvest’s implementation with in 2010 included engagement discussed investors to on CSR, reporting partners general with industry and involvement on sustainability equity private such as the PRI groups, working committee. steering HR Committee ensuring for is responsible This committee managed and well are employees AlpInvest by the HR discussed topics Key motivated. well in 2010 included senior promotions Committee planning and career within AlpInvest and roles the organization. across Committee and Allocation Research took Committee and Allocation The Research and in the economy of trends overview a broad guided Its assessments financial markets. decision- in their investment partners AlpInvest in 2010 discussed Topics making processes. Committees sit beneath the used to committees Five Committee, Executive and Board Supervisory AlpInvest. within role a distinct each performing of the Audit and Remuneration the work In future, while Board, by the fulfilled will be Committees will Committees Resources the CSR and Human but will be managed form in their present continue and The Research Committee. by the Operating in its will not continue Committee Allocation function will the research In future, form. present the Committee, support the Investment directly and investor services investor teams, investment ensure to intends In this way, AlpInvest relations. across governance and robust functional continuity all activities within the firm. Audit Committee audit the AlpInvest oversees This committee in by the Audit Committee reviewed function. Items risk compliance, report, 2010 included the auditor’s of ISAE 3402 and the implementation assessment our SAS70 procedures). (which replaces Committee Remuneration at remuneration assesses This committee

decisions and managing operations at AlpInvest. at AlpInvest. decisions and managing operations and the by the Board be fulfilled will now Its role Committee. Operating Executive Committee Executive was previously Committee The Executive policy executing setting strategy, for responsible would like to thank them all for their contribution their contribution thank them all for to like would links with close to maintain we hope our firm and to them in the future. policies and the general course of business within of business course policies and the general these will hand over They the organization. We one-tier Board. the new to responsibilities GOVERNANCE IN 2010 GOVERNANCE Supervisory Board at role a key has played The Supervisory Board strategy, overseeing decade, the past over AlpInvest other members comprise Tjarko Hektor, Elliot Hektor, Tjarko comprise other members Vervoort. and Maarten Erik Thyssen Royce, including areas such as business planning, CSR, such as business including areas management development, human resources, will The committee and reporting. remuneration and our CFO/COO, de Klerk, Paul by be chaired Operating Committee Operating will be responsible Committee The Operating business, side of AlpInvest’s the operational for partners will feed into this committee and decisions this committee into will feed partners basis. be made on a collegial to will continue Borgdorff, Managing Partner of our Primary Funds of our Primary Funds Partner Managing Borgdorff, will also include Volkert the committee business, Maanen and Sander van Moerel, Doeksen, Wouter The opinions of all AlpInvest Westerkamp. George Investment Committee Investment for will be responsible Committee The Investment by Wim Chaired decisions. making final investment investment decisions and manage the daily daily decisions and manage the investment running of the firm. individual portfolio investments. individual portfolio Committee the Investment committees, Two final make will Committee, and the Operating The Carlyle Group will not in any shape or form will not in any shape or form Group The Carlyle nor will process, in any investment be involved regarding any information to access have they AlpInvest strategy and focusing on further and focusing strategy AlpInvest of As a matter of the business. development who represent members the Board principle, is a Managing Director at The Carlyle Group Group at The Carlyle is a Managing Director of the firm.and Cedric is a Principal setting the for will be responsible The Board Hektor, Michael Arpey and Cedric Bobo. Tjarko is Cedric Bobo. Tjarko and Michael Arpey Hektor, and co-leads Managing Partner an AlpInvest Michael team. investments our secondary Operating Committee. The Observers are Tjarko Tjarko are Observers The Committee. Operating GOVERNANCE SUPERVISORY BOARD

1. 2. 3. Annual Review 2010 Annual Review AlpInvest Partners AlpInvest

���

4.

1 Otto van der Wyck 3 André ten Damme Otto van der Wyck was Chairman of AlpInvest from André ten Damme is a member of the Board of 2004 to July 1, 2011 and played a major role in Directors of APG Group NV, a member of the the firm, shaping our strategy and direction over Executive Board and CFO of the Group’s subsidiary, the years. He worked tirelessly on our behalf and APG (All Pensions Group). Mr ten Damme was a we would like to thank him for his great support member of AlpInvest Partners’ Supervisory Board and contribution. Mr van der Wyck is Chairman from 2009 to July 1, 2011. We want to thank him for of investment company and family office Salland the valuable experience and expertise he shared Ltd. He founded BC Partners and Citicorp Venture with us during that time. Mr ten Damme has been Capital, two leading European private equity firms, CFO at ABP Pension Fund since 2007 and was CFO and previously worked at Shell and Rothschild at CapGemini Netherlands between 2004 and 2007. Intercontinental. He was a Partner at Ernst & Young Consulting, a member of the financial services management 2 Else Bos team of EY Netherlands from 1997 to 2004 and Else Bos is Chief Institutional Business and Deputy started his career as a consultant at Moret Advies. Chairman Executive Committee at PGGM and was a member of AlpInvest Partners’ Supervisory 4 Adriaan Nühn Board from 2004 to July 1, 2011. We benefited Adriaan Nühn is the former CEO of Sara Lee enormously from her advice and guidance and we International and Executive Vice President of Sara want to thank her for the time and effort she has Lee Corporation. He was a member of AlpInvest devoted to our firm. Ms Bos joined PGGM in 2003 as Partners’ Supervisory Board from 2004 to July 1, Director Third Parties, Operations & Staff. In March 2011. We benefited substantially from his corporate 2005, she was appointed Chief Executive Officer, experience and expertise and we want to thank him Investments and a member of the PGGM Board of for the time and effort he devoted to our firm. Governors. Ms Bos was previously with NIBC Asset Mr Nühn began his career with Xerox Corporation Management and ABN AMRO. Ms Bos is a member and later joined Richardson-Vicks/Procter & Gamble. of the Board of the UN Principles for Responsible He is Non-Executive Chairman of Sligro N.V. Investment and sits on the board of a number of and Macintosh Retail Group N.V. and holds Non- leading Dutch institutions, including Nederlandse Executive Board positions at LEAF B.V., Heiploeg Waterschapsbank N.V. and Isala Klinieken. B.V., Stern Groep N.V., Plukon and Anglovaal Industries Ltd (AVI).

Raymond G. Chambers Raymond Chambers was a member of AlpInvest Partners’ Supervisory Board from 2007 to June 1, 2010. His wide-ranging interests and charitable endeavors gave the firm an invaluable perspective and we want thank him for his contributions to our firm. ��� AlpInvest Partners Annual Review 2010

3. 6. experience. Previously, Iain was Managing Investment Previously, experience. Benson responsible Kleinwort at Dresdner Partner Iain also was transactions. buyout US direct for Banking at Kleinwort of Investment Director Brunel an MBA from Benson Ltd. He received of the Chartered (UK) and is a Fellow University in the UK. of Certified Accountants Association Member of Nielsen and DelMonte. Iain is a Board investment manager responsible for deal execution deal execution for manager responsible investment equity private on Benelux mid-market with a focus Erik was a financial analyst Previously, transactions. he was involved with NIBC Bank in London, where transactions. finance leveraged in numerous with economics an MSc in business He received the from strategy and a specialization in finance of Groningen. University Hektor 5 Tjarko investments secondary AlpInvest’s co-leads Tjarko in North America on transactions and focuses team and on the Board and Asia. He is an Observer Committee. Operating is a member of the new its predecessor, firm from joined the Tjarko buyout for he was responsible where Parnib, that at NIB Capital, and before transactions, acquisition and on corporate he focused where an MSc in received Tjarko finance. structured Erasmus and an LL.M. from economics business Rotterdam. University 6 Iain Leigh co-leads and office York Iain heads the New he focuses where team co-investment AlpInvest’s the firm in 2000 He co-founded on North America. of related 30 years than with him more and brought 4 Erik Bosman co-leads and Erik heads the London office he focuses where mezzanine activities AlpInvest’s Erik joined the firm in in Europe. on investments he was an where Parnib, its predecessor, 2000 from

5. 2. 4. 1. and an MBA from Erasmus University Rotterdam. Rotterdam. University Erasmus and an MBA from of Cório N.V., He sits on the Supervisory Board of Apax and Permira. and the Advisory Boards alternative investments unit. Previously, he was unit. Previously, investments alternative an MSc Management. Wim received at ING Asset of Technology Delft University cum laude from chairs the Investment Committee. Wim co-founded Wim co-founded Committee. the Investment chairs of 20 years with him over and brought AlpInvest when he joined experience investment alternative he set up the where ABP Investments, from 3 Wim Borgdorff 3 Wim Borgdorff team, fund investments AlpInvest’s Wim co-leads in Asia. He also on transactions he focuses where in civil law from the University of Utrecht and an of Utrecht the University in civil law from Columbia University. MBA from Before joining AlpInvest, Paul was responsible for for was responsible Paul joining AlpInvest, Before banking units at ABN corporate one of the largest an LL.M. received AMRO in the Netherlands. Paul an LL.M. of Amsterdam, the University law from in tax new Board. He co-founded AlpInvest, chairs the new chairs AlpInvest, He co-founded Board. new the for and is responsible Committee Operating process. and review valuation portfolio investment 2 Paul de Klerk, CFO/COO CFO/COO de Klerk, 2 Paul and Chief Operating is the Chief Financial Officer Paul and a member of the Partners of AlpInvest Officer Benson Ltd. Previously, Read at Dillon he worked in London. Stanley and Morgan Volkert received Law School. Leyden an LL.M. from of investment experience. Before joining AlpInvest, Before experience. of investment Kleinwort at Dresdner was a Partner Volkert at Kleinwort and a Director York Benson in New as overseeing the firm, he is responsible for responsible the firm, he is as overseeing relations and investor development business Committee. is a member of the Investment and 20 years and has over AlpInvest He co-founded 1 Volkert Doeksen, Chairman and CEO 1 Volkert Chief and Board is Chairman of the new Volkert well As Partners. of AlpInvest Officer Executive MANAGING PARTNERS MANAGING MANAGING PARTNERS

7. 8. 9. Annual Review 2010 Annual Review AlpInvest Partners AlpInvest

���

10. 11. 12.

7 Wouter Moerel 10 Sander van Maanen Wouter co-leads AlpInvest’s secondary investments Sander heads the Hong Kong office and co-leads team and focuses on transactions in Europe. AlpInvest’s co-investment team, where he focuses He is a member of the Investment Committee. on Asia and Australia. He also sits on the Investment Wouter joined the firm in 2005 from The Carlyle Committee. He joined the firm in 2001 from the Group, where he was a Principal responsible for Boston Consulting Group, where he was a project investments in the telecoms and media sector. leader on assignments for the Boards of multinational Previously, Wouter was an investment banker at firms. Previously, he worked at Procter & Gamble, JPMorgan and Lehman Brothers. He received an where he was responsible for new product MSc in business administration from the University development and the introduction of new consumer of Groningen and holds an advisory position on products in Europe. Sander received an MSc several Boards, including Nazca Capital, AAC in chemical engineering from Delft University Capital, Lyceum Capital and Paragon Partners. of Technology and an MBA from INSEAD.

8 Elliot Royce 11 Maarten Vervoort Elliot co-leads AlpInvest’s fund investments team Maarten co-leads AlpInvest’s fund investments and focuses on the US and Latin American markets. team and focuses on the European market. He is He is a member of the new Operating Committee. also a member of the new Operating Committee. Elliot joined the firm in 2007 from Allianz Private Maarten has been with AlpInvest Partners from the Equity Partners, where he led US investment activities outset, joining the firm from PricewaterhouseCoopers and was a member of the global investment and Management Consultants (PwC), where he was management committees. Previously, he worked a senior management consultant in the corporate at GE Equity, McKinsey, Dillon Read, CSFB and strategy area. He received an MSc in business Aberdeen, Inc. He represents AlpInvest on various economics from Erasmus University Rotterdam. Advisory Boards. Elliot received an AB in government Maarten sits on the Advisory Board of many magna cum laude from Harvard College and an organizations, including Accel, Alpha, Bain Capital, MBA with distinction from INSEAD. CVC, Index, Nazca Terra Firma and Waterland.

9 Erik Thyssen 12 George Westerkamp Erik co-leads AlpInvest’s co-investment activities George shares responsibility for business and focuses on transactions in Europe. He is also development and investor relations at AlpInvest a member of the new Operating Committee. and is a member of the Investment Committee. Erik co-founded AlpInvest Partners and has From 2000 to 2010 he co-led the AlpInvest co- 25 years’ experience in financial services. He joined investments team and focused on transactions AlpInvest from Fortis Bank Nederland, where he in Europe. George joined AlpInvest from its was an Executive Board Member responsible predecessor, Parnib, where he was responsible for commercial banking. Previously, he was at for buyout transactions. Previously, George was Generale Bank Nederland. Erik received an LL.M. based in Singapore, where he was responsible for from Antwerp University and has completed the the asset finance activities of NIB Capital in Asia. CEDEP-INSEAD General Management Program. George received an MSc in business economics He represents AlpInvest on the Board of Maxeda. from Erasmus University Rotterdam. ��� AlpInvest Partners Annual Review 2010

3. for financing leveraged buyouts. Before that, Before buyouts. leveraged financing for Thom received Brothers. he was with Salomon magna cum laude and finance a BS in economics and was awarded of Scranton the University from the National University to Scholarship a Fulbright Committee He sits on the Executive of Singapore. the Council for Business of the President’s of Scranton. University 4 Thom Spoto and mezzanine team AlpInvest’s Thom co-leads He joined in North America. on transactions focuses Goldmanat worked previously and 2005 in AlpInvest responsible President he was a Vice Sachs, where

2. 4. 1. cum laude from the University of Pittsburgh and an of Pittsburgh the University cum laude from Technology. of Institute Georgia from MBA in finance Invesco Private Capital responsible for evaluating evaluating for responsible Capital Private Invesco as as well and LBO fund investments both venture in economics a BA Chris received investments. direct market. He joined AlpInvest Partners in 2007 Partners AlpInvest He joined market. he was where Investments, Capital Paul from and secondary a on fund investing focused Principal he was a Principal at Previously, investments. 3 Chris Perriello investments Chris is a partner in the secondary in the US on transactions and focuses team Consultants. Rob received an MSc in business MSc in business an Rob received Consultants. Rotterdam. University Erasmus from economics responsible for advising and assisting multinationals advising and assisting for responsible on developing organizations and governmental PwC, Prior to strategies. and business corporate Management & Young Ernst for he worked He joined AlpInvest Partners in 2001 from in 2001 from Partners He joined AlpInvest he was a senior where PricewaterhouseCoopers, Strategy, & Operations Corporate for consultant 2 Rob de Jong co-investment Rob is a partner in AlpInvest’s in Europe. on transactions and focuses team Advisory Board seats, including 3i, KKR Europe, seats, including 3i, KKR Europe, Advisory Board Segulah, Phoenix, Gresham, Baring Vostok, and Vitruvian.Palamon at Credit Suisse First Boston. Tatiana received a BS, received Tatiana Boston. First Suisse at Credit of Bristol the University from honors, with first-class INSEAD. She holds numerous and an MBA from AlpInvest Partners in 2003 from McKinsey & Co., McKinsey in 2003 from Partners AlpInvest in Moscow based a consultant, she was where on companies advising multinational and Brussels, worked she Previously, and financial issues. strategic 1 Tatiana Chopova Chopova 1 Tatiana fund investments is a partner in AlpInvest’s Tatiana She joined market. on the European and focuses team PARTNERS UNIQUE INVESTMENT APPROACH

AlpInvest is committed to investing across the private equity spectrum – funds, secondary investments, co-investments and mezzanine. Our approach to private Annual Review 2010 Annual Review equity investment is structured to deliver strong returns across the economic cycle.

Tangible benefits Dedicated teams - integrated approach AlpInvest’s unique scale and investment approach AlpInvest Partners AlpInvest

deliver tangible benefits: superior access to

��� investment opportunities globally, informed insights based on superior information, strong selection skills and highly engaged portfolio management. We develop close relationships with general partners and capture and use knowledge at the best possible time. In this FUND way, we create an environment where the most INVESTMENTS informed choices can be made and risks appropriately identified and mitigated. Above all, our approach aims to provide superior returns, consistently.

Superior access First and foremost, our investment approach provides SECONDARY KNOWLEDGE CO-INVESTMENTS SHARING us with superior access to investment opportunities. INVESTMENTS As one of the largest primary fund programs globally, we develop close relationships with our general partners. These relationships are cemented because we engage with many of them on a number of other MEZZANINE levels too, through secondary commitments and/or INVESTMENTS as equity co-investors or mezzanine finance providers for their portfolio companies.

Superior insights The breadth of our involvement provides us with unique information about funds, portfolios and their underlying assets in a more detailed and timely manner than many of our peers. We hold Advisory Board positions on more than 75% of the active funds we are invested in on a primary basis. In addition, our co-investment and mezzanine teams frequently become aware of portfolio company developments at an early stage and can relay this information across the firm.

Keeping abreast of economic, financial and regulatory developments is a crucial part of AlpInvest’s decision- making process. We analyze and interpret macro- developments in the world at large and assess a wide variety of issues that may influence the types of investment we make. We then make choices about the emphasis we place on sectors, geographies and asset classes.

We believe our superior insights and breadth of vision also allow us to better assess the risk/reward profiles of many of the investment opportunities we consider. This, in turn, helps us make more informed decisions about whether to participate in an investment. ��� AlpInvest Partners Annual Review 2010

APPROVAL TO PROCEED TO APPROVAL PROCEED TO APPROVAL Investment Committee Investment Highly engaged portfolio management engaged portfolio Highly as a portfolio our responsibilities take we At AlpInvest, and mezzanine Co-investments manager seriously. all fund and basis while on a quarterly reviewed are semi-annually. reviewed are investments secondary by the investment undertaken are These reviews and qualitative both quantitative monitoring teams, information As part of the process, performance. our de Klerk, with Paul and discussed is analyzed necessary. where and actions proposed CFO/COO, that developments for our portfolio also monitor We investment a responsible from be sensitive could situation arises, a sensitive Whenever perspective. the GP to respond the right way to consider we and the company partner) in question, (general our investors. investing to and our unique approach Our scale our investors. to returns attractive help us deliver benefits of our in the distinct believe strongly We model. business

      

INVESTMENT FINALIZED/EXECUTED REVIEW QUARTERLY/SEMI-ANNUAL FURTHER DUE DILIGENCE FINAL INVESTMENT PROPOSAL PRELIMINARY INVESTMENT PROPOSAL QUICK SCAN DUE DILIGENCE DEAL PROPOSITION Investment process Investment point a final investment decision is made. point a final investment investment proposal is drafted to address outstanding address to is drafted proposal investment additional findings. This is and present issues at which Committee, the Investment to presented If the Committee indicates its support for a proposal, a proposal, its support for indicates If the Committee by the investment is undertaken further due diligence a final favorable, looks still If the investment team. Investment Committee meeting. Questions are are meeting. Questions Committee Investment in a constructive discussed are and issues raised manner. and consultative and non-financial issues. The teams’ findings are findings andteams’ The non-financial issues. proposal investment in a preliminary included at a weekly assessed are and these proposals investment teams decide to pursue an investment an investment pursue decide to teams investment in-depth due diligence undertake opportunity, they both financial considering analysis, and market rigorous examination of each potential investment investment of each potential examination rigorous checks Multiple and their colleagues. by our partners embedded in the decision-making are and balances When our approach. our integrated through process retain talent with the required skill-set for each skill-set for with the required talent retain are processes Our decision-making strategy. encourage We thorough. and analytical structured, Strong selection skills selection Strong each investment for teams has dedicated AlpInvest and attract us to This allows it pursues. strategy FUND INVESTMENTS

AlpInvest’s fund investments business is focused on delivering consistently superior returns. Over the past 11 years, the team has committed close to €29bn to 250 Annual Review 2010 Annual Review general partners globally. Our business saw a swift and sharp recovery in 2010.

Our business interests were protected by offering financial AlpInvest’s fund investments business works support and working through a number of complex AlpInvest Partners AlpInvest

with private equity funds across a broad spectrum fund restructurings. ��� of geographies and sectors. We aim to create a balanced portfolio over time, investing in funds that This concerted effort paid off in 2010. Private equity allocate resources to large buyouts, mid-market firms cut costs significantly during the downturn companies, emerging markets, venture capital, so, when activity picked up, there was a swift and mezzanine and distressed businesses. dramatic impact on earnings. Financial restructuring by our GPs boosted fund performance still further, The fund investments team is highly experienced raising valuations across our portfolio. and forms close, long-term relationships with general partners (GPs). We gain access to firms During the year, we began to look to the future, that deliver top-quality performance, choosing our positioning our business for the coming years so partners only after a rigorous selection process. as to take full advantage of economic recovery as it occurs. Even as we were benefiting from the increase We actively seek out opportunities, engaging with in returns from existing investments, we were hundreds of firms before committing capital to a seeking out new opportunities on a global basis. select handful. Our size allows us to invest significant amounts in given funds and our stature within the This was somewhat challenging, particularly industry gives us exposure to opportunities often during the first half of 2010. Our reputation in the inaccessible to others. From offices in Amsterdam, market and our proactive approach enabled us to New York and Hong Kong, we scour the global make a number of interesting investments but we marketplace, analyzing and assessing the supplemented these with purchased primaries, performance of existing and potential investments. buying substantially unfunded commitments from investors who wanted or needed to exit the market. Through the AlpInvest business model, we gain a broader and deeper view of investment funds than These investments increased our exposure to segments many of our peers, as our involvement in mezzanine of the market that we find attractive and they are and co-investment provides us with insight not just reducing the negative returns during the early years into funds but into the portfolio companies in which of our vintage funds (J-curve, see also page 36). they invest. The secondary investments team also helps us with its broad market knowledge and ability Making commitments to source purchased primary investments, where During 2010, we made 17 new commitments, we acquire fund allocations from other limited excluding purchased primaries. These were global in partners (LPs). Unlike secondary investments, reach and diverse in nature. Fund allocations ranged these are substantially unfunded. from a mid-market fund in India to a mezzanine fund in the UK and from a buyout firm in Latin America to a We aim to make annual commitments of around venture capital group in Silicon Valley. €2bn each year and, since our foundation, we have committed €28.9bn to 250 GPs. Our individual Sourcing such a broad range of funds requires allocations to funds range from €5m to €400m. substantial resources. We have 20 professionals, tracking the private equity landscape and continuously In every case, we employ a rigorous selection process, evaluating and assessing opportunities as they arise. adopting a top-down, bottom-up approach to our As a large and active participant in the market, investment choices. we engage in constant dialogue with GPs and are always open to new initiatives. For every 100 Developments in 2010 opportunities we see, we look more closely at Fund investments staged a marked recovery in fewer than ten and ultimately invest in one or two. 2010. The number of investment opportunities Those one or two are often hidden gems: exciting increased substantially and valuations rose sharply. funds, run by experienced managers and offering excellent potential. But access to these gems can The financial crisis imposed a number of challenges only be gained by ongoing market awareness and on the private equity industry but, by the end of 2009, the experience to sort the great from the good. The there were already signs of change. During that private equity universe is large but many funds offer year, GPs devoted most of their time and resources uncertain rewards. AlpInvest is determined to select to portfolio companies, helping them adapt to the only top-quality funds run by top-quality managers. changing environment and survive the downturn. This takes time, knowledge and robust due diligence – We worked with GPs in this regard, ensuring our an approach validated by our long-term track record. ��� AlpInvest Partners Annual Review 2010

CX Partners is an India-focused private equity private is an India-focused Partners CX in the minority investments fund, which takes in 2008, Established space. mid-market a private CVCI, is a spin-out from Partners CX by Citigroup owned wholly equity operation core Partners’ CX until the financial crisis. for together worked have members team four and the firm has years than ten more economy, themes: the knowledge investment and resource- energy consumption, domestic work aims to Partners rich oligopolies. CX and is interested leaders with market transactions in relationship-driven primarily at be made can investments where valuations. reasonable is one of the strongest record track The team’s market It has an enviable in its peer group. deals proprietary and sources reputation of long-term network an extensive through of contacts range This broad relationships. the competitive given important, is particularly equity market. of the Indian private nature its since Partners CX has followed AlpInvest I in Partners CX to spin-out and committed in the fund. investors 2010 as one of the largest CX PARTNERS CX INVESTMENT CASE INVESTMENT 28.9bn 5 GP relationships New Total committed to committed Total equity funds private 485 number of fund Total investments €

21.5bn is investedis 21.5bn

€

927m 33.4bn

New commitments to PE to commitments New funds with 2010 vintage by private equity funds equity by private Of this, Of received from investors from received Total commitments commitments Total €

76% € Commitments in 2010 Overview FUND INVESTMENTS

CSR opportunities. To date, we have focused on funds Our team was actively involved in furthering targeting Europe and North America but we now

Annual Review 2010 Annual Review private equity’s commitment to corporate social hope to broaden our exposure in Asia. responsibility (CSR) as well. In line with AlpInvest’s CSR policy, CSR due diligence is an integral part of The outlook our investment analysis. In 2010, we went further There is no doubt that prospects for private equity than this, however, surveying a core group of GPs are brighter than they were at the beginning of 2010

AlpInvest Partners AlpInvest with whom we have existing relationships to assess but much uncertainty remains. Many European

��� their commitment to CSR. The results indicated that countries face continued economic challenges, progress is being made on this front (see page 38). the US has yet to demonstrate sustained recovery and the geopolitical situation is highly volatile, In the related area of fund governance, substantial particularly following recent upheaval in the progress was also made last year on the overarching Middle East and North Africa. We are also relationship between GPs and LPs, through the concerned that equity markets may not be fully Institutional Limited Partners Association (ILPA). discounting the risks that lie ahead. Nonetheless, During the downturn, it became more apparent that given the discipline and expertise we see in our the interests of GPs and LPs were not always in full fund managers, we believe our portfolio will alignment. As this is a crucial component of private deliver positive performance in 2011 and beyond. equity’s success, ILPA, backed by many of the largest LPs, took meaningful steps to address the There is substantial unused operational and situation. AlpInvest was an active participant in this financial leverage in the funds to which we have effort, helping to draft the first version of the ILPA committed capital. This means the companies Principles and culminating in the publication of the within those funds should deliver strong growth ILPA Principles 2.0 at the beginning of 2011. These as economic conditions recover, creating overall Principles focus on ensuring the right governance, outperformance. transparency and alignment, and have been well received by the vast majority of GPs. We are proud We are hopeful the next few years will see a sustained to have been part of that process. improvement in economic conditions but the recent downturn has demonstrated that, even when times Cleantech are hard, our portfolio is relatively resilient. Over the past few years, we have amassed considerable investment experience in cleantech, We are particularly optimistic about opportunities having secured our first mandate in this sector in for growth in key emerging markets, such as 2007, for €500m. That initial allocation of capital China and Brazil. We have had a presence in Asia was specifically designed to gain exposure to both and Latin America for many years now, during early-stage venture funds, targeting technology which time we have built up a network of strong development opportunities, and late-stage funds, relationships, which help us to discover and investing in technology implementation in the participate in high-quality funds in both regions. cleantech sector. The mandate was fully invested by the end of 2010, but during the year we received In more mature markets, we believe there are additional allocations allowing us to commit some interesting restructuring opportunities, €100m-€150m annually to this sector. so we are keen to allocate capital to funds that specialize in this sector. We already have exposure We expect to continue to invest in cleantech to distressed situations but we believe there is funds during 2011 and intend to build a balanced potential for expansion in this field as the portfolio of early-stage venture and late-stage fund aftermath of the Great Recession unfolds.

FUND COMMITMENTS OVERVIEW1

Segment % of capital committed GPs2 Funds Global large buyout 37% 21 55 European mid-market 13% 30 48 U.S. mid-market 14% 40 59 Non-traditional markets3 10% 39 77 Venture capital 11% 57 98 Distressed debt 4% 11 17 Cleantech 2% 9 9 Mezzanine 4% 13 19 Fund-of-funds4 5% 6 7 Total 100% 226 389

1Vintage years 2000-2010. 2As a GP can have funds in more than one category, the total is larger than mentioned in the text above. 3Non-traditional markets include markets outside of Western Europe and the US to the extent not covered by global large buyout. 4These comprise largely secondary fund-of-funds. ��� AlpInvest Partners Annual Review 2010

Avalon Ventures is a well-established early- well-established is a Ventures Avalon firm with a 28-year capital venture stage record. track seed and early-stage pursues Avalon media digital sciences, in life investments Avalon companies. technology and wireless and challenging most be the this to views creation, period of company rewarding ideas in ever- disruptive pursuing through The firm environments. changing market traditional a execute successfully to continues early at the very model: investing venture intensive and low-capital lean forming stages, injecting additional and only companies funds as and when short- and medium-term met. are milestones Avalon to capital committed first AlpInvest in 2003 as part of its US venture Ventures its exposure has grown AlpInvest allocation. Funds VIII in investments the firm through to in investor is the largest and IX. AlpInvest participation IX, and through Fund Avalon to secure it was able closing, first in the fund’s its ongoing continue to a full allocation with the firm. relationship AVALON PARTNERS AVALON INVESTMENT CASE INVESTMENT

28.9bn to private equity funds through equity funds through private 28.9bn to € 21.5bn, or 76%, had been invested by the funds. 21.5bn, or 76%, had been invested members serve on the Advisory Boards of more more of on the Advisory Boards serve members funds in our portfolio. than 75% of all the active we made were with GPs with whom we have an have with whom we with GPs made were we exert to able are we As a result, relationship. existing team Our on fund governance. influence considerable whom we have chosen to invest. invest. chosen to have whom we 70% of the fund commitments example, In 2010, for As proponents of active portfolio management, portfolio of active As proponents on its own each fund investment consider we relationships, GP new to open always are and terms with those to in principle loyal remain but we stated long-term commitment to private equity private to commitment long-term stated by This is further evidenced class. as an asset relationships. of our investment the continuity capital over three to five years, our commitment to commitment our a years, five to three over capital launch. after 14 years 12 to for active remain fund can AlpInvest’s mirrors commitments of such The length Private equity is inherently a long-term asset class. class. asset a long-term equity is inherently Private an individual buyout holding period for The average a fund’s invest and, as GPs is 5.5 years investment Between 2000 and 2010, AlpInvest made 389 fund 2000 and 2010, AlpInvest Between GPs. managed by 216 different investments debt. Our commitments to individual funds consist individual funds consist to debt. Our commitments only. of equity contributions GP relationships Furthermore, the portfolio companies themselves themselves companies the portfolio Furthermore, industries. of different in a wide range involved are no employs AlpInvest level, At the fund portfolio are broadly diversified across market segments, market across diversified broadly are years. deal sizes and vintage geographies, Our portfolio is constructed in such a way as is constructed Our portfolio times and during difficult resilience offer to benign. are when conditions outperformance 500 funds and these to in close invested are We be invested in a range of attractive opportunities of attractive in a range be invested years. few the next over its fund investments strategy. Of this figure, Of this figure, strategy. its fund investments € it to expect but we 24% is uncalled The remaining Funds update Funds had committed 2010, AlpInvest 31, As of December of a total returns to our investors. We believe we are well are we believe We our investors. to returns the next to forward look do this and we to placed 12 months. We will continue to develop relationships with the relationships develop to will continue We with managers cultivating GPs, successful most to capital commit can so we potential the highest superior deliver to likely it is most where the places we are confident of our ability to source superior to source of our ability confident are we arise. opportunities as they equity investing in developed markets, but even but even markets, in developed equity investing the companies is robust portfolio our existing here, and stable are invested funds are in which our We are more cautious about traditional private private traditional about cautious more are We FUND INVESTMENTS

New fund commitments in 2010 Portfolio activity in 2010 The fund investments team made new commitments In 2010, a total of €2.4bn of capital was called to

Annual Review 2010 Annual Review to 17 funds with a 2010 vintage year for AlpInvest. fund investments in private equity funds. The most Of these, 12 were to funds where a prior commitment recent mandate that is fully committed to third had been made with the GP. The remaining five parties is the 2006-2008 mandate, which supplied represent a new relationship. €1.7bn, or 72% of the total.

AlpInvest Partners AlpInvest During or before 2010, six commitments were During the year, AlpInvest received €1.8bn of

��� made to funds that are expected to have a 2011 proceeds from investments. Within this figure, vintage. Those six funds are therefore not included 36% came from the 2000-2002 mandate, 33% came in this year’s annual review overview. Of these from the 2003-2005 mandate and 25% came from commitments, four were to funds where we have the 2006-2008 mandate. an existing relationship with the GP.

FUND INVESTMENTS PORTFOLIO OVERVIEW as per December 31, 2010 Mandate Capital Capital Invested as amount committed2 invested2 as % of Vintage years Investment focus (€m) (€m) (€m) committed3 2000 – 20021 Buyout and venture capital 10,853 9,998 9,307 100% 2003 – 2005 Buyout and venture capital 4,545 4,524 4,171 96% 2006 – 2008 Buyout and venture capital 11,500 11,308 6,847 62% 2009 – 2011 Buyout and venture capital 4,660 1,618 191 12% 2007 – 2011 Clean technology 644 411 218 51% 2000 – 2011 Mezzanine funds 1,130 972 715 74% Buyout and venture capital - other mandates 84 76 66 90% Total 33,416 28,908 21,515 76%

1The Fund Investment Mandate 2000 - 2002 includes pre-vintage year 2000 commitments made by our investors and AlpInvest predecessors. 2At historical foreign exchange rates. 3Based on foreign exchange rate as per December 31, 2010. 2010 NEW FUND COMMITMENTS1 Fund name Segment Relationship Description Advent Latin American NTM2 Existing Buyouts and growth financing across Latin America with Private Equity Fund V a focus on Brazil, Mexico and Argentina Avalon Ventures IX Venture capital Existing Focus on seed and early-stage companies, including life science and IT sectors in the US OrbiMed Private Venture capital Existing Multi-stage venture capital investments in life sciences Investments IV companies primarily in the US CDH Fund IV NTM2 Existing Focus on growth capital investments in China, to a lesser extent also SOE restructurings Champ Buyout III NTM2 Existing Control and buyout investments in Australia, New Zealand CX Partners Fund I NTM2 New Primarily mid-market minority and growth capital investment in India Fondo Nazca III Europe New Control and minority investments in buyouts and growth mid-market financings in Spain India Value Fund IV NTM2 Existing Mid-market control investing and buy and build strategy in small- to medium-size companies in India Littlejohn Fund IV Distressed Existing Mid-market control equity and distressed investments primarily in North America Merit Mezzanine Fund V Mezzanine Existing Non-sponsored mezzanine investments in lower mid-market companies in the US Park Square Capital Partners II Mezzanine New Focus on (co)-leading sponsored mezzanine investments in Europe Phoenix Equity Partners 2010 Europe mid-market Existing Buyouts and buy-ins in the lower end of the UK mid-market Southern Cross Latin America NTM2 New Focus on control equity investments in companies based Private Equity Fund IV in Latin America TA Associates XI US Existing Growth investments in North America, Europe and India, mid-market including buyouts, leveraged recaps and unleveraged equity Trident Capital Fund VII Venture capital Existing Multi-stage venture capital investments primarily in IT and Cleantech in the US

1Additionally, AlpInvest committed to two other funds with a 2010 vintage which are not listed by name for confidentiality reasons. 2 Non-traditional markets. ��� AlpInvest Partners Annual Review 2010

. We are attracted attracted are . We 1 The commitment to Litorina was made in 2010 but the fund will have Litorina to The commitment on page 22. not included in the table and is hence a 2011 vintage Litorina is a growth-oriented private equity firm private is a growth-oriented Litorina middle- of lower buyouts on control focused in Sweden. primarily businesses, market companies Nordic in profitable, The firm invests position and identifiable market with a strong or buys family It frequently potential. growth benefit that can businesses founder-owned and focused professional, a more from Litorina approach. strategic sophisticated management or new with existing partners sectors. industry multiple across years for several the firm has followed AlpInvest access meaningful secure to able were and we fund IV an oversubscribed to sourcing to approach structured by Litorina’s support portfolio as its ability to deals, as well network. industrial a large through companies prior investments The quality of the company’s and stable The strong attractive. is also very 1998 and since grown has gradually team different through of investing has experience cycles. economic LITORINA INVESTMENT CASE INVESTMENT 1 SECONDARY INVESTMENTS

AlpInvest’s secondary investments team acquires private equity assets from other investors. To date, we have committed €4.5bn to 57 transactions. In 2010, secondary Annual Review 2010 Annual Review activity increased dramatically and we played a leading role in the market.

Our business The volume of deals more than doubled, as the AlpInvest’s secondary investments business economic outlook improved and purchase prices AlpInvest Partners AlpInvest

buys private equity portfolios wholly or in part became more attractive for vendors and acquirers. ��� from investors, who seek to generate liquidity or restructure their portfolios. Vendors are typically In the global secondary market, deals with a banks, insurance companies, pension funds, value of around €14bn were completed in 2010, endowments and family offices and investments compared to just €5.5bn in 2009. Vendors were range from €10m to €2bn. Some transactions are primarily financial institutions. In Europe, banks relatively simple, such as the purchase of a single looked to reduce private equity commitments as limited partnership interest, and some are more they restructured their balance sheets. In North complex, involving multiple interests or combining America, pension funds decided to sell existing fund investing and secondary investing. commitments so they could participate in new private equity opportunities. In every case, we aim to be the preferred buyer of the highest-quality assets at the best price. Over the Most market participants were more active in the past decade, we have consistently achieved best-in- second half than the first, such that around 35% class returns for our investors and we will strive of global transactions were undertaken from to maintain that performance in the years ahead. January to June and around 65% in the remaining six months of the year. Our confidence stems from a fundamental belief in the effectiveness of our business model. AlpInvest took a very different approach. We committed Our fund investments team has a wide network €641m to secondary purchases in the first half of relationships with general partners (GPs), and just €42m in the second half of the year. Our which gives the secondary investments team conscious decision to be ahead of the market was deep understanding of funds or assets offered for based on sound logic and market experience. sale. AlpInvest’s involvement in co-investments and mezzanine finance also means that we are At the end of 2009 and beginning of 2010, we often directly invested in one or more underlying decided to bid aggressively for assets. We believed companies in a secondary transaction. These prices were low, economic conditions were improving insights differentiate us from other operators in and competition was scarce. We therefore approached the secondary market and ultimately position us certain institutions proactively and offered to buy to make a better assessment of the upside and all or some of their private equity commitments. risks in secondary transactions. We also seek to We were able to act in this way for two reasons: we mitigate risk by creating a diversified portfolio had developed relationships with these institutions over companies, sectors, geographies and GPs. already and our primary team knew many of the GPs behind the funds we were bidding on. This We employ extensive due diligence and we are not allowed us to perform due diligence faster and afraid to reject transactions we consider overpriced. more thoroughly than many of our peers and Our investment team analyzes potential portfolios submit competitive prices. As a result, we made in a rigorous and detailed fashion. The majority of significant investments in the first half of 2010. our time is spent evaluating companies within any given portfolio, assessing the quality of the assets, In the second half of the year, conditions became the risks associated with those assets and the GPs more competitive. The number of potential responsible for those assets. transactions increased but demand outstripped supply, prices rose more rapidly than we expected Operating from Amsterdam and New York, we source and we were simply not prepared to overpay. deals locally but execute globally. Our Amsterdam team is responsible for sourcing from European Overall 2010 was rewarding. We deployed a large investors while our New York team sources from amount of capital on three transactions in the first North American investors. Through our office in few months of the year and watched developments Hong Kong, we are kept abreast of activity in Asia too. with interest in the latter part of the year, ultimately committing to two transactions, albeit relatively Developments in 2010 small ones. The early positive returns on all AlpInvest’s secondary investments business these investments indicate that this was the delivered a strong performance in 2010. All right approach. our funds achieved robust returns. In the wider market, secondary activity picked up dramatically. ��� AlpInvest Partners Annual Review 2010

700m, managed by high-quality GPs. This deal opened up the secondary market for for market This deal opened up the secondary by the start in 2010 and, transactions portfolio apparent. already were of 2011, the returns A high-profile European bank was keen tokeen bank was European A high-profile equity so as to private to its exposure reduce with new sheet and comply its balance reduce approached AlpInvest requirements. regulatory purchase to offering the bank pre-emptively, equity portfolio. private European its entire 45 funds and almost comprised The assets The assets companies. 300 underlying over to of close commitments original comprised € approach AlpInvest’s The bank acknowledged was that any trade ensure to but wanted Consequently, tension. competitive subject to and place took auction process an accelerated a a winning bid, offering delivered AlpInvest and earn-out arrangement. price competitive underwrote fully funds team The secondary quick conduct to able and were the transaction thanks to due diligence, but comprehensive with GPs relationships existing AlpInvest’s with co-operation managing the funds. Full allowed in the process early from these GPs and efficiently. swiftly of assets the transfer initial approach – from process The whole months. three just – took completion to EUROPEAN BANK EUROPEAN INVESTMENT CASE INVESTMENT 4.5bn 5 Transactions Commitments made to Commitments made transactions secondary 57 Number of secondary transactions €

4.0bn is invested

€

683m 5.8bn

New commitments made commitments New transactions secondary to by private equity funds equity by private Of this, from investors from Commitments received Commitments received €

88% € Investments in 2010 Investments Overview SECONDARY INVESTMENTS

During the downturn, secondary transactions were General partner relationships scarce and there was an increase in structured Since inception, AlpInvest secondary investments

Annual Review 2010 Annual Review transactions and spin-outs. In 2010, traditional has acquired more than 325 interests managed by purchases – portfolios of assets acquired from more than 150 GPs. Looking at our commitments financial institutions – became the norm once from a sector perspective, approximately 49% of our more. Deal conditions normalized too, as 2010 drew capital is allocated to small and mid-buyout; 47% to to a close and the difference between prices offered large buyout; and 4% to venture capital. Geographically,

AlpInvest Partners AlpInvest and underlying valuations became more realistic. approximately 55% of our commitments are allocated

��� to Europe and 42% to North America with the Outlook for 2011 balance to the rest of the world. We believe volumes in the secondary market will continue to increase this year, driven by regulatory AlpInvest sits on the Advisory Board of approximately and strategic developments. 40% of the underlying fund interests. More than 50% of those GPs we have investments in through Banks, insurance groups and pension funds are our secondary portfolio have relationships with our expected to dominate the sellers’ market, because primary funds team as well. they are keen either to reduce private equity exposure or to restructure their existing portfolios 2010 transactions to free up capital for other opportunities. AlpInvest secondary investments committed €683m across five transactions in 2010, compared to A number of new participants have entered the €106m across three transactions in 2009. market so we expect prices to remain competitive. We will maintain a disciplined approach to 2010 portfolio activity investment opportunities, focusing on transactions For the 12 months ending December 31, 2010, where we know and understand the underlying AlpInvest secondary investments received proceeds assets so we can compete effectively on price. from 48 transactions out of 57, totaling €603m We are well prepared to invest in high-quality compared to €92m received in 2009. assets and we will continue to seek these out on a global basis. Our execution capabilities also give us confidence: vendors trust us to complete transactions swiftly and well and this can be a decisive factor in a competitive bid situation. Interesting opportunities should be plentiful this year and we hope to allocate more capital to secondary transactions in 2011 than we did in 2010.

Our experience, expertise and disciplined approach give us confidence for the year ahead.

SECONDARY INVESTMENTS PORTFOLIO OVERVIEW as per December 31, 2010 Mandate Capital Capital Invested as amount committed2 invested2 as % of Vintage years Investment focus ( €m) (€m) (€m) committed3 2000 – 2002 Buyout and venture capital 519 519 511 100% 2003 – 2005 Buyout and venture capital 998 994 935 94% 2006 – 2008 Buyout and venture capital 2,250 2,147 1,834 86% 2009 – 2011 Buyout and venture capital 1,775 666 492 74% 2002 – 2011 Mezzanine funds1 207 108 118 109% Buyout and venture capital - other mandates 87 80 68 83% Total 5,836 4,515 3,958 88%

1Capital invested exceeds capital committed mainly due to realized investments that have been reinvested. 2At historical foreign exchange rates. 3Based on foreign exchange rate as per December 31, 2010. ��� AlpInvest Partners Annual Review 2010

as the preferred buyer for the two funds. the two for buyer as the preferred pricing, with competitive the seller provided We expeditious and and an flexibility transaction process. discreet cross- a successful represents The transaction knowledge leveraged we where effort platform and geographies across and relationships and execute source to teams investment transaction. secondary an attractive Through the joint sourcing efforts of the primary efforts sourcing the joint Through learned we teams, investments and secondary fund was superannuation that an Australian equity portfolio. in its private constraints facing The fund had identified a pool of non-core liquidity generate to sell it was willing to assets equity portfolio. private support its core and with the dialogue a direct into entered AlpInvest process. the sale facilitate fund to superannuation identified two months, AlpInvest several Over both portfolio, funds in the non-core attractive with whom we partners managed by general a middle-market relationship: had an existing fund. and a pan-Asian buyout fund in Australia of the underlying knowledge had extensive We positions held the sizeable through assets in each of them in our primary program; tracking had been closely we furthermore, team some time. The secondary these funds for due diligence and thorough timely completed team while deal a cross-office by creating and relationships the knowledge leveraging in teams of the primary and co-investment Hong Kong. position ourselves to able were we In the process, AUSTRALIAN FUND SUPERANNUATION INVESTMENT CASE INVESTMENT CO-INVESTMENTS

AlpInvest’s co-investments team invests directly in private equity companies. Working with general partners (GPs) throughout Europe, North America Annual Review 2010 Annual Review and Asia, AlpInvest has invested more than €4bn in 108 transactions. In 2010, market activity picked up sharply and the existing portfolio performed well.

Our business participating once more in auctions for deals. AlpInvest Partners AlpInvest

��� AlpInvest co-investments team is dedicated, In this environment, it is easy to overpay and we experienced and well established within the had to be selective. private equity community. For more than a decade, we have committed capital to private We believe our business model is instrumental equity portfolio companies, during which time we in this selection process. We have a dedicated have delivered consistently strong performance. and experienced team, who have built close relationships with leading GPs. We have a robust Our investments range from €10m to €150m per due diligence process and we benefit from the transaction. We aim to create a diversified portfolio, insights of the broader AlpInvest organization. including companies from different industries and All these factors help us reach the right investment geographies. We prefer transactions where the decisions, whatever the economic environment. lead sponsor takes a majority stake in a portfolio company but we also consider other situations, In 2010, we worked actively on more than 40 deals. such as investments where the lead GP, together After thorough analysis by our team and our GPs, with its co-investors, has a minority position. we ultimately decided to participate in six transactions, and as the year ended, there were another five in We do not take a lead role in deals but, in some the pipeline. cases, we are involved from the very beginning, helping to construct and finance bids. In other Of the six completed transactions, three are in transactions, we participate in the syndication the healthcare sector. Two are market-leading of a share in a company after it has been global companies: Marken, an international acquired by the lead GP. operator in specialist logistics for the clinical trials industry, and IMS, a provider of market We consider each transaction on its own merits, data and consultancy services to healthcare following a rigorous selection process. The AlpInvest and pharmaceutical companies. The third, integrated approach provides further benefits, Liberty Dialysis, is a large US dialysis company. and we can leverage market knowledge from the secondary and primary fund teams. We also invested in Callcredit Information Group, a UK information provider to finance companies; Once we have made an investment, we engage in Spotless Group, a European consumer products regular meetings with the GP and/or the portfolio company; and Abertis, a Spanish infrastructure group. company. In those deals where we are a more active partner, we may hold a seat on the Board as well. In each case, we worked alongside GPs we know We prepare quarterly reviews for each investment well and which have demonstrated their ability and these are assessed by partners across the firm to create value in comparable companies. to discuss progress and areas of concern and valuation. The existing portfolio showed a good return in Developments in 2010 2010 and there was a number of highly rewarding The co-investments market staged a strong recovery liquidity events. Some were full exits, such as the in 2010, particularly in the second half of the year. sale of North American coffee specialist Van Houtte Debt is the fuel that powers private equity investments to trade buyer Green Mountain Coffee Roasters. and credit markets picked up significantly in the third We had also many partial exits, after companies quarter, prompting a surge in the number and volume completed IPOs and we retained a shareholding. of private equity transactions. The flotation of cut-price US retailer Dollar General, in which we retain a small stake, was an Healthy debt capital markets encouraged competitive example of this type of exit. In some cases, cash pricing and other factors also contributed to the was realized after companies divested one or more competitive environment. Many transactions in businesses. Benelux retailer Maxeda is a case in 2010 were secondary buyouts sold by sophisticated point. AlpInvest has been a co-investment partner vendors; a number of GPs were eager to deploy in this business since 2004, during which time the capital from funds raised three or four years ago company has been completely transformed. Last and cash-rich trade buyers returned to the market, year, following a strategic review, the department store and fashion formats were sold, and the group will now focus on its DIY activities. ��� AlpInvest Partners Annual Review 2010

Spotless Group specializes in insecticides, specializes Group Spotless products. laundry and household care of portfolio a diversified has The company niche on profitable and focuses brands leading markets. European segments within select specialty is the company’s protection Color color protect to designed products and it makes runs. One of its best-selling color and prevent is the ‘laundry sheet’, a small piece items the wash be added during to fabric of white machine. in the directly in France active is predominantly Spotless in expand to is keen The company and Italy. to but also intends markets core its existing range protection its color and develop introduce in further innovation and drive Europe across is an important growth base. External its product on with a focus as well, part of the strategy a From in household care. brands leading from benefits Spotless financial perspective, driven, and marketing being asset-light generation. cash of strong record with a track in Spotless co-invested In 2010, AlpInvest funds advised by BC Partners. alongside SPOTLESS GROUP SPOTLESS INVESTMENT CASE INVESTMENT

4.4bn 6 Companies Total invested Total 79 currently companies Total in portfolio € 400m to cleantech funds. We have funds. We cleantech 400m to

€

377m 6.4bn

New investments New Total buyout transactions buyout Total from investors from Commitments received Commitments received €

108 € Investments in 2010 Investments Overview to launch co-investment activity in this space. launch co-investment to developed strong relationships with specialized relationships strong developed a number of transactions. and analyzed GPs positioned well are we believe Based on this, we in 2007 and we have subsequently acquired acquired subsequently have in 2007 and we committing in the sector, experience considerable than more structure. structure. in cleantech investing start to also intend In 2011, we began mandate cleantech AlpInvest’s companies. that the business cases we underwrite are based are underwrite we cases that the business not are companies targets, growth realistic on financial a flexible have and they overleveraged spending power and government budget constraints constraints budget and government spending power and employment. growth impact economic by ensuring this environment to respond to intend We are increasingly expensive, imposing pressure on a imposing pressure expensive, increasingly are companies Consumer-facing of industries. wide range individuals’ as inflation affects too, under pressure are imbalances persist, particularly in Europe and North in Europe particularly persist, imbalances social and markets, emerging And in some America. Raw materials growth. affect turmoil could political started well, with a healthy pipeline of deals, with well, started seem resilient. markets and the capital vigilant. Many economic remain we Nonetheless, Outlook about 2011. The year positive relatively are We CO-INVESTMENTS

CO-INVESTMENTS PORTFOLIO OVERVIEW as per December 31, 2010 Mandate Capital 2

Annual Review 2010 Annual Review amount committed Vintage years Investment focus (€m) (€m) 2000 – 20021 Buyout and venture capital co-investments 800 759 2003 – 2005 Buyout co-investments 1,090 926 2006 – 2008 Buyout co-investments 2,760 2,241

AlpInvest Partners AlpInvest 2009 – 2011 Buyout co-investments 1,575 303

��� 2010 – 2011 Clean technology 36 0 Buyout co-investments - other mandates 151 130 Total 6,412 4,360

1The Co-Investment Mandate 2000 - 2002 includes the investments made by the former AlpInvest N.V. (mainly pre-vintage year 2000). The Co-Investment Mandate 2000 - 2002 includes Buyout, Life Sciences and Technology investments. Life Sciences and Technology were discontinued late 2003. 2 At historic foreign exchange rates.

2010 CO-INVESTMENTS TRANSACTIONS Company Sector Location Date of Description completion Callcredit Financials UK Feb-10 Callcredit Information Group is a major player in the UK Information Group consumer credit referencing industry and assists its client base to acquire and retain customers. Vitruvian Partners is the lead investor on this transaction. www.callcredit.co.uk IMS Health Healthcare US Feb-10 IMS Health is the global market leader in providing healthcare market data and consulting services to healthcare and pharmaceutical companies. AlpInvest invested alongside TPG. www.imshealth.com Marken Healthcare UK Feb-10 Marken is the second-largest global specialist logistics provider to the clinical trials industry. The lead investor in this transaction is Apax Partners. www.marken.com Spotless Group Consumer France Apr-10 Spotless Group is a European company specializing in laundry discretionary and household care products, with a portfolio of leading brands. Color protection is its key product category. The lead investor in this transaction was BC Partners. www.spotlessgroup.eu Liberty Dialysis Healthcare US May-10 Liberty Dialysis is the third-largest owner and operator of for- Holding profit dialysis clinics in the US. The company (and its affiliates) operates 260 clinics consisting of 19,000 patients in 32 states. AlpInvest invested alongside KRG. www.libertydialysis.com Abertis Basic Spain Dec-10 Abertis is a listed Spanish infrastructure group managing industries transport and communications infrastructure. The company’s main activities are the operation of toll roads and a network of broadcasting towers. AlpInvest invested alongside CVC. www.abertis.com

2010 CO-INVESTMENTS REALIZATIONS Company Location Avago Investment Partners Partial sale of our position in a listed company Dollar General Partial sale of our position in a listed company Gemalto Sold remaining position in a listed company IASIS Healthcare Dividend payment Jostens Dividends and repayment of preferred stock following refinancing Jupiter Asset Management Partial sale of our position in a listed company Ontex Full exit Rec-Les N.V. Sold remaining position in a listed company Retail Decisions Repayment of preference shares as a result of the divestment of a division Roundy’s Dividend payment TDC Group Partial sale of our position in a listed company Van Houtte Full exit Warner Chilcott Sold remaining position in a listed company ��� AlpInvest Partners Annual Review 2010

PAGE 6 – REALIZATIONS PAGE

free cash-flow generation and debt pay-down; generation cash-flow free opportunities exit attractive and fourth, following or IPO, particularly a sale through acquisition. the Renal Advantage Liberty Dialysis is the third-largest owner is the third-largest Liberty Dialysis clinics in dialysis of for-profit and operator and hospitals the US, partnering with local disease specialists) (kidney nephrologists The company communities. in underserved patients 260 clinics serving 19,000 operates in 32 states. with KRG Capital partnered In 2010, AlpInvest This is the fifth the business. acquire to KRG, a GP with alongside co-investment industry. in the healthcare experience tangible on the thesis is predicated The investment clinics, of existing development continued expansion market through growth selective entry opportunities and a number ofand new year, acquisitions. At the end of last selective bought Renal Liberty Dialysis example, for operating provider, dialysis a large Advantage, the group. to markets in complementary in Liberty the investment believes AlpInvest investment an attractive represents Dialysis the First, reasons. several opportunity for industry; dynamics of the dialysis growth stable grow ability to proven management’s second, strong third, and by acquisition; organically LIBERTY DIALYSIS INVESTMENT CASE INVESTMENT PAGE 35 PAGE PAGE 6 – INVESTMENTS PAGE 8% 5% 4% 4% 4% 22% 10% 12% 20% 11% 2 3 377m in co-investments. co-investments. in 377m 10m from other sources, sources, other 10m from € € 1 6.4bn of commitments for for 6.4bn of commitments 4 1 € 5 344m in six new investments and investments 344m in six new 10 € 9 8 4.4bn has already been invested, including invested, been already 4.4bn has PAGE 31 PAGE PAGE 5 PAGE € 7 6 technology 7. Information 8. Materials services 9. Telecommunication 3. Energy 4. Financials 5. Healthcare 6. Industrials 1. Consumer discretionary 2. Consumer staple Sector distribution Sector perspective, 54% of our investments are in are 54% of our investments perspective, and 2% in the North America 43% in Europe, of the world. rest diversification in our portfolio. The sector in our portfolio. diversification 2000 since of our co-investments breakdown a geographical From below. be found can Portfolio diversification diversification Portfolio of sectors range in a broad invests AlpInvest significant creating and geographies, Includes the 2000 – 2002 (excluding life science and technology investments), investments), and technology science life Includes the 2000 – 2002 (excluding mandates. co-investment 2003 – 2005, 2006 – 2008 and 2009 – 2011 buyout 1 4.1bn in 108 buyout transactions. 4.1bn in 108 buyout 226m. We also received also received 226m. We 33m in follow-on investments for existing portfolio portfolio existing for investments 33m in follow-on 10. Utilities

11 partial realizations in 2010 for a total amount of a total in 2010 for 11 partial realizations € of earn-out payments and the release mainly exits. former from accounts escrow 2010 realizations full and had two team co-investments AlpInvest In 2010, AlpInvest invested invested AlpInvest 2010, In This included € companies. € 2010 investments AlpInvest has received has received AlpInvest 11 years. the past over program its co-investment Almost Investment status Investment MEZZANINE INVESTMENTS

AlpInvest’s mezzanine team provides financing solutions for private equity portfolio companies. In 2010, returns from this business improved significantly Annual Review 2010 Annual Review and the team was involved in a number of notable new transactions. Over the past decade, AlpInvest has invested more than €1bn in 53 mezzanine deals.

Our business Nonetheless, the market remained challenging, AlpInvest Partners AlpInvest Mezzanine capital is a form of financing that sits thanks largely to trends in the wider financial ��� below senior bank debt but above equity. Tailor-made marketplace. In many private equity transactions, to suit the individual requirements of general capital was made available by a combination of partners (GPs) and their portfolio companies, senior bank debt and high-yield bonds. The high- mezzanine is highly flexible, making it a particularly yield market has become increasingly competitive valuable financing tool. over the past two years and current pricing is often aggressive, making high yield often meaningfully AlpInvest has been involved in the provision of cheaper than mezzanine debt. mezzanine capital for almost a decade, operating out of London and New York, the two global centers Despite this rather difficult environment, we still for this type of financing. Our team works with believe mezzanine is a rewarding asset class and, a range of leading mezzanine and equity GPs and during the year, we participated in five new deals we aim to create a well-diversified portfolio across with a combined value of €141m. a broad range of industries and geographies. Typically, we invest between €30m and €40m in Of the five transactions, three were in the US. each deal but we are able to commit substantially These included American Tire Distributors, more or significantly less, depending on individual a leading replacement tire distributor; Protection circumstances. One, a home and commercial security group; and PAS Technologies, a coating solutions firm. We also We perform extensive due diligence on the invested in Pets at Home, the leading UK pet store investment propositions put to us. Based on our chain, and Benelux retail group Maxeda, a company due diligence, we prepare investment proposals we have been closely involved with since our equity which are subsequently reviewed at a global co-investment back in 2004. meeting with the co-investments team and final decisions are taken by the AlpInvest Investment All but one of these transactions were completed Committee. We monitor investments based on in the first half of 2010, when investment conditions monthly management reports and through close were more compelling. Pets at Home started the contact with GPs. We also review investments once year and we then invested in Maxeda, American Tire every quarter in detail and discuss the and Protection One. results with our partners across the firm. In the second half of 2010, we only invested in PAS Mezzanine finance is a natural extension of our Technologies. The period was less active for us, role as a leading limited partner in the private largely because credit markets rebounded so much equity industry. On the one hand, the mezzanine that pricing became unattractive in many instances team gains access to potential deals on the back and we only participate in deals that satisfy our of relationships developed with GPs by our rigorous investment criteria. So we chose not to colleagues in the funds, secondary and co- take part in some of the largest transactions of the investment teams. On the other hand, offering last six months of the year, due to our risk/return mezzanine capital to GPs strengthens the firm’s assessment of those opportunities. Several other relationships with them and provides important deals we considered were ultimately completed insights into how GPs work and the performance without mezzanine. of their portfolio companies. Nonetheless, 2010 was meaningfully better than Developments in 2010 2009 and we are proud of our diligent approach The environment for mezzanine was distinctly to deals and our focus on transactions that yield better in 2010 than the year before, in terms returns commensurate with the risks involved of both deal activity and returns generated. in this complex financing area. As the wider private equity market opened up, mezzanine opportunities increased and there was Outlook far less focus on crisis-driven restructuring and Mezzanine brings additional financing capacity to refinancing, which were a dominant feature in leveraged transactions. As such, it has an important 2008 and 2009. The underlying performance of role to play in the private equity market. The number our portfolio companies improved significantly of participants in this area has reduced since the and our returns increased substantially. financial crisis but, of those that remain, AlpInvest ��� AlpInvest Partners Annual Review 2010

In March 2010, AlpInvest provided part of provided AlpInvest 2010, In March Pets at Home for the mezzanine financing Highbridge Capital with in a consortium at Home is the Management and KKR. Pets of pets, retailer specialist leading UK’s The company and accessories. pet food throughout than 250 stores more operates online presence. the UK and has a strong high-quality at Home as a very see Pets We mezzanine making it an attractive business, strong has shown The company investment. has a leading in the recession, resilience replicate to which is difficult position market flow cash strong generates competitors, for well-proven competent, and is run by a highly management team. PETS AT HOME PETS AT INVESTMENT CASE INVESTMENT

1.1bn 5 Companies Total invested Total 36 currently companies Total in portfolio €

155m 1.9bn

New investments New Total transactions Total received from investors from received Total commitments commitments Total €

53 € Investments in 2010 Investments Overview volume of debt required but mezzanine will be there but mezzanine will be there of debt required volume necessary. financing where of extra a layer provide to Looking further ahead, the outlook is very positive. is very Looking further ahead, the outlook in many deals completed years, few the next Over Bank and be refinanced. 2006 and 2007 will need to sheer with the cope to be unable may bond markets returns will almost certainly continue to improve, improve, to continue certainly will almost returns coming months. the over benefiting our investors with mezzanine, and competition will remain fairly will remain with mezzanine, and competition environment tough a for make to likely is This intense. that, we believeon the origination side. Against capacity. We are firmly committed to playing an active committed firmly are We capacity. the believe trends We in the mezzanine world. role in 2011. Senior 2010 will persist that characterized compete to debt and high-yield bonds will continue is uniquely positioned to offer both expertise and both expertise debt offer positioned to is uniquely MEZZANINE INVESTMENTS

MEZZANINE PORTFOLIO OVERVIEW1 as per December 31, 2010 Mandate Capital 2

Annual Review 2010 Annual Review amount committed Vintage years Investment focus (€m) (€m) 2000 – 2002 Mezzanine direct investments 33 33 2002 – 2004 Mezzanine direct investments 148 81 2005 – 2006 Mezzanine direct investments 285 287

AlpInvest Partners AlpInvest 2007 – 2011 Mezzanine direct investments 1,400 729

��� Total 1,866 1,131

1Direct investments only. 2At historic foreign exchange rates.

2010 MEZZANINE TRANSACTIONS Company Sector Location Date of Description completion Pets at Home Retail UK Mar-10 Pets At Home is the UK’s leading specialist retailer of pets, pet food and accessories. The company operates over 250 stores and has a strong online presence. www.petsathome.com Maxeda Retail The May-10 Maxeda operates four do-it-yourself (DIY) retail formats. Netherlands The company’s formats have 340 shops throughout The Netherlands, Belgium and Luxembourg. www.maxeda.com American Tire Industrials US May-10 American Tire Distributors is the leading replacement Distributors tire distributor in the US. The company has a network of 83 distribution centers. www.atd-us.com Protection One Services US Jun-10 Protection One is a US provider of electronic security alarm monitoring services to both residential and commercial customers. www.protectionone.com PAS Technologies Industrials US Nov-10 PAS Technologies provides innovative repair and advanced coating solutions serving the aerospace, industrial gas turbine, and oil & gas markets. www.pas-technologies.com

2010 MEZZANINE REALIZATIONS Company Location Ampac Packaging Repayment of principal ATI Holdings Full exit Brickman Group Repayment of principal Broadlane Full exit Goodman Global Repayment of principal OSI Group Dividend and interest payments Radiation Therapy Services Repayment of principal Scitor Corporation Repayment of principal Terremark Worldwide Sale of shares The Sports Authority Repayment of principal Visma Full exit ��� AlpInvest Partners Annual Review 2010

In November 2010, AlpInvest acted as lead as lead acted 2010, AlpInvest In November in support of KRG’s mezzanine investor Technologies. of PAS buyout in Kansas City, Missouri, Headquartered repair of innovative provider is a leading PAS serving the solutions coating and advanced industrial aerospace, and military commercial gas turbine, and oil & gas markets. investment as an attractive saw PAS We It has reasons. distinct several opportunity for EBITDA strong with financial profile a robust blue-chip customer a well-diversified margins, proposition. value customer base and a strong solutions provide and coating repair PAS’ theextending by to customers value significant and replace to costly that are of components life cost overall the customer’s reducing thereby has a The management team of ownership. is well and the business of success record track already has PAS market. positioned in a growing and share increase an ability to demonstrated believe and we market its addressable expand on this path. it will continue PAS TECHNOLOGIES PAS INVESTMENT CASE INVESTMENT PAGE 6 – REALIZATIONS PAGE

155m. 14m € € 5% 2% 7% 5% 9% 3% 37% 19% 13% 3 1 2 1 9 4

5 238m of cash inflows in 2010 inflows 238m of cash € 8 PAGE 35 PAGE PAGE 6 – INVESTMENTS PAGE 60m was due to interest income income interest 60m was due to 141m. In addition, we invested invested 141m. In addition, we € € 6 7 178m from realizations. realizations. 178m from € Sector distribution Sector technology 7. Information 8. Materials 9. Services 3. Energy 4. Financials 5. Healthcare 6. Industrials 1. Consumer discretionary 2. Consumer staple exposure to Europe and the rest of the world. of the rest and Europe to exposure the world. Historically, there has been a there Historically, the world. is a but there North America, bias towards over and elsewhere invest to effort continued our increased have we years four the last geographical perspective, 35% of our perspective, geographical 55% Europe, in Western are investments of and 10% in the rest in North America and geographies, creating significant significant creating and geographies, The sector in our portfolio. diversification of our mezzanine investments breakdown a From below. be found 2002 can since Portfolio diversification diversification Portfolio of sectors range in a broad invests AlpInvest Includes the 2002 – 2004, 2005 – 2006, and 2007 – 2011 mezzanine mandates. 1 1.9bn of commitments since 2000. since 1.9bn of commitments and AlpInvest had AlpInvest portfolio, mezzanine our outstanding from of which in follow-on investments in existing portfolio portfolio in existing investments in follow-on of total a combined creating companies, 2010 realizations 2010 investments 2010 investments investments mezzanine five made AlpInvest 2010, In totaling AlpInvest’s direct mezzanine program has received received has mezzanine program direct AlpInvest’s € Investment status Investment PAGE 31 PAGE PAGE 5 PAGE FINANCIAL PERFORMANCE

In 2010, there was a meaningful uplift in AlpInvest’s financial performance. Annual Review 2010 Annual Review AlpInvest was pleased with the returns generated is even more marked, with the gross IRR up from by all its businesses in 2010. The economic situation 0.5% to 7.3%. However, private equity is a long-term stabilized and we were able to take full advantage business so it can take time for funds to generate of improving conditions. rewarding returns for investors (see explanation of J-curve below). In this regard, we believe that AlpInvest Partners AlpInvest

��� Over the past decade, we have consistently delivered results shown for the periods after 2006 do not yet strong returns to our investors. The overall net provide a meaningful indication of the long-term IRR (internal rate of return) has been 10.5%1 since performance of these mandates. inception. During that time, we have received €49bn of commitments from our investors, across Looking to the future, we believe our businesses and a number of mandates. Our funds, secondaries the mandates they invest from are well positioned and co-investment lines of business are currently to deliver further improvements in performance. investing their fourth mandate for the period 2009- In 2009, we worked hard with GPs to ensure our 2011 and our mezzanine business is investing from interests were being well served, in terms of both the its 2007-2011 mandate. An overview of the gross and funds in which we were invested and the portfolio net returns (or IRRs) AlpInvest has achieved to date companies within those funds. That work paid off can be found in the tables on the right. in 2010, cementing our relationships with many GPs, in a way that should be beneficial in the years ahead. These show that all our mandates performed well in 2010, supported by more robust financial markets. Even as we worked on existing commitments, Whilst the returns of the older vintage years in our we were extremely disciplined in our approach to portfolio remained relatively stable compared to 2009, new investments so we still had substantial funds our 2003-2005 mandate, in particular, highlights the to invest by the end of 2009. At that time, we were attractive long-term returns that can be generated hopeful that new opportunities would emerge with from private equity investments. By the end of 2010, economic recovery – and so it has proved. By the the capital invested in that mandate showed an end of 2010, commitments from the 2006-2008 overall gross IRR of more than 20%. private equity mandate were 70% invested while commitments from the 2000-2002 and 2003-2005 Our 2006-2008 private equity mandate showed mandates were almost fully invested. The pace of a significant improvement in performance too, investment in our 2007-2011 mezzanine mandate producing an overall gross IRR of 0.8%, compared to rose substantially too, so commitments made a negative gross IRR of -13.7% in 2009. Our 2007-09 from this mandate are now 80% invested. cleantech mandate has also done well, achieving a net IRR of 10.8% to date. The past few years have highlighted the cyclical nature of private equity. But AlpInvest has continuously tried to Our mezzanine funds have performed well in absolute achieve strong returns for its investors by investing terms and by comparison with 2009. The gross IRR in leading funds, developing close relationships with from the 2005-2006 mandate surged from 2.6 % GPs and pursuing a focused, disciplined and diligent to 7.1 %, while the recovery in the 2007-2011 mandate investment approach.

Investing over the long term The J-curve in private equity is used to illustrate IRR should provide a meaningful guide to the the historical tendency of private equity funds ultimate returns to be expected from a specific to deliver negative returns in early years fund, although the period is generally longer for and investment gains in later years. Initially, early-stage funds. For the AlpInvest mandates, investment returns are negative because the IRR becomes meaningful approximately five management fees are drawn from committed years after the start of the mandate. capital and underperforming investments are identified and written down at an early stage. In J -curve later years, as companies are sold, ideally for Smooth versus actual returns more than the purchase price, cash starts to flow Smooth Actual to the limited partners.

Private equity measures returns using a mechanism

called the internal rate of return, or IRR. This Returns % calculates underlying returns, taking into account 0 money invested, money returned and unrealised investments. After three to five years, the interim 1 Year 10 ��� AlpInvest Partners Annual Review 2010 3 3 3 3 3 3 3 3

80% 70% 1.8% 2.3% 7.3% 5.7% 8.6% 8.9% 0.3% 0.8% 49.0 2011 -8.4% -7.7%

2006 – 2008 2006 – 2008 2007 – 2011 2006 – 2008 2006 – 2008 2006 – 2008 Includes fund 2007 – 2011 2007 – 2011 4 48.0

2010 The difference between The difference 2 97% 96% 2005 2005 7.8% 8.2% 7.1% 6.5% 42.7% 44.7% 28.7% 29.6% 19.3% 20.2% 44.5 2009 2003 – 2005 2003 – 2005 2005 – 2006 2003 – 2005 2005 – 2006 2005 – 2006

40.0 2008 97% 2004 2004 9.6% 9.9% 100% 21.4% 23.4% 15.0% 18.6% 52.9% 56.1% 14.3% 15.2% 2000 – 2002 2000 – 2002 2002 – 2004 2000 – 2002 2002 – 2004 2002 – 2004 32.7 2007

2003 2003

5 13.8% 14.2% 26.0 2006

21.4 2005 2002 2002 16.7% 17.4% 18.2 2004

Based on fixed foreign exchange rates as per December 31, 2010. as per December rates exchange foreign Based on fixed 5

2001 2001 15.8 20.2% 20.9% 2003 Due to the J-curve effect (as explained on the left), the results only begin to become meaningful after five years ofyears five meaningful after become begin to only the results on the left), (as explained effect the J-curve Due to 3

13.6

2002 1, 2

2000 2000 7.5% 8.0% 1, 2

11.4 2001 4 4

4

9.5 2000

5.5 1999 the start of the mandate. However, please note the J-curve is deeper for the 2006-2008 and 2007-2011 mandates due to market circumstances. circumstances. market due to mandates the 2006-2008 and 2007-2011 is deeper for the J-curve note please However, of the mandate. the start and co-investments. investments secondary investments, If performance for the remainder of the capital invested were included, there would be no material difference in the IRR shown here. More detailed information information detailed More here. in the IRR shown difference be no material would included, there were invested of the capital the remainder for If performance results. of future upon as an indication should not be relied performance on page 46. Past be found can methodology on the calculation to, relation little and may bear for, be applicable will no longer historically charged fees The fees. and net IRRs includes management and performance gross management agreements. going forward Mandate NET LIFE TO DATE IRRS DATE NET LIFE TO 31, 2010 as per December as per December 31, 2010 as per December Mandate GROSS LIFE TO DATE IRRS DATE TO LIFE GROSS Mandate Mezzanine Co-investments equity private Total Mandate investments Secondary Fund investments Fund Mezzanine Mandate Secondary investments Secondary Co-investments equity private Total Fund investments Fund Mandate TOTAL CAPITAL COMMITTED TO ALPINVEST COMMITTED TO CAPITAL TOTAL €bn Mandate Mezzanine Mandate equity private Total PERCENTAGE OF COMMITTED CAPITAL THAT HAS BEEN INVESTED THAT OF COMMITTED CAPITAL PERCENTAGE 31, 2010 as per December Internal rate of return (IRR) achieved for our anchor clients APG and PGGM, who at all times have represented more than 95% of the capital invested. invested. of the capital than 95% more represented our anchor clients APG and PGGM, who at all times have for (IRR) achieved of return rate Internal 1 CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR) is an integral part of good governance. Effective CSR promotes stronger management, encourages innovation, Annual Review 2010 Annual Review enhances stakeholder relationships and creates better-performing companies over the long term.

AlpInvest has one overriding aim: the delivery of and communicated actively on governance issues. AlpInvest Partners AlpInvest optimal returns to investors and their beneficiaries. Our website and the annual review are part of that ��� We believe the promotion of corporate social communication effort. responsibility goes hand in hand with this objective. We therefore focus on CSR within our firm and We also engaged with GPs on CSR both at a high encourage a commitment to it among general level and more directly. In this respect, we closely partners (GPs) and the companies in which we monitored any ESG issues that we identified in and they are invested. our portfolio and pursued them with GPs where necessary. We can report that GPs were uniformly Our interest in CSR has been enhanced by our responsive to our enquiries and took appropriate relationship with APG and PGGM. As worldwide steps to address issues, where needed. leaders in the field of responsible investment, they take a proactive approach to sustainability We are also pleased to notice increased interest and corporate governance and ensure both issues in CSR from many other limited partners (LPs), play an integral role in their investment processes. as well as national and international private We have learnt from their experience and we hope equity associations. to share that knowledge with current and potential stakeholders in our business. Developments in 2010 To ensure we remain focused on the implementation CSR matters of CSR internally and externally, we set annual Environmental, social and governance (ESG) issues targets and benchmark ourselves against those at play an increasing role in the community – for good the year-end. In our 2009 annual review, we set out reason. Good governance delivers better results. five priorities for 2010. For private equity firms, effective management of ESG issues can protect or significantly enhance The first was to evaluate the implementation of profitability, value and overall investment appeal. CSR in our investment processes. To that end, Applying ESG principles may avoid embarrassing we performed an evaluation exercise across all situations that can harm a company’s reputation our investment divisions, involving partners and and brand value, adversely affecting the reputation managers throughout the firm. We were pleased of general and limited partners too. Companies to note there has been good progress in this that manage their ESG issues well may avoid endeavor, especially at the due diligence stage. future costs or generate significant savings, and Certain improvements were suggested, particularly an improved focus on CSR can also create business regarding portfolio management, but we regard this opportunities. So we actively engage with companies as positive evidence that our teams are engaged in and GPs to improve their CSR performance. effective delivery of CSR.

Although we have always taken CSR seriously, Our second objective was to improve the we formalized our approach in 2008 with the implementation of CSR in our investment processes. creation of the AlpInvest CSR framework. Here too, we can report steady progress. CSR has During 2009, we focused on the implementation become an integral part of our investment analysis of our policy across investment and management and decision-making. All our investment divisions processes. We communicated our views to include CSR as part of the due diligence process stakeholders, engaged in a number of initiatives and the findings are outlined in every investment and became a signatory to the UN-backed proposal. We also stepped up interaction with Principles for Responsible Investment (PRI). GPs to underline the importance of CSR to our investment decisions. In 2010, we built on the steps taken during the previous year. CSR is now firmly embedded within Our third objective was to maintain an active role in our investment analysis and decision-making a number of industry initiatives. We worked diligently processes. We have developed a structured in this area. We remained active participants in the approach to CSR and we use this internally PRI Private Equity Steering Committee and ILPA and with our stakeholders. (the Institutional Limited Partners Association) and we joined the ESG working group of EVCA As part of our ongoing commitment to CSR, (the European Venture Capital Association). we participated in industry initiatives, engaged Our fourth objective was to pursue engagement in dialogue with the wider investment community initiatives, analyze the implementation of CSR ��� AlpInvest Partners Annual Review 2010

equity commitment to equity commitment our expect CSR and we be reinforced to efforts under the partnership Group. with The Carlyle We are proud to be in the to proud are We of the private vanguard to CSR and we expect our efforts to be reinforced be reinforced to our efforts expect CSR and we to Group. with The Carlyle partnership under the new including with a number of parties Working the development led Group The Carlyle AlpInvest, Responsible first equity industry’s of the private been Guidelines in 2009 and has Investment those implement then to since working actively the Foreign received Group The Carlyle principles. Social Corporate for 2010 Award Council’s Policy with the UK “Walker” Responsibility and complies for Guidelines and the German “BVK” Guidelines and Transparency. Disclosure A brightening outlook outlook A brightening of the importance been aware equity has Private and the wider but GPs years many of CSR for committed more noticeably become have industry in GP The increase times. in recent this area to the PRI underlines this to and LP signatories of see evidence to keen are behavior shift. LPs formalizing are and GPs equity CSR in private and communicating in response their approach investors. to their efforts CSR will play believe we the future, Looking to across selection in investment role an increasing create help to CSR can equity industry. the private and/ costs reduce revenues, generate It can value. Failing value. and brand reputations or enhance – and occasionally be highly it can address to be in to proud are – damaging. We terminally equity commitment of the private the vanguard

GPs and portfolio companies. and portfolio GPs Third, we will promote knowledge-sharing within knowledge-sharing will promote we Third, by undertaken actions our firm on best-in-class Second, we will monitor GPs to ensure they ensure to GPs will monitor we Second, CSR policies, and implementing developing are as promised. become a recurring topic for discussion with discussion for topic a recurring become our initial after companies and portfolio GPs made. are or investments commitments First, we intend to step up our efforts to integrate integrate to up our efforts step to intend we First, has to management. CSR portfolio CSR into natural resources. resources. natural 2011 for objectives Key in 2011. initiatives three pursuing are We sectors include renewable energy, waste water waste energy, include renewable sectors technology management, clean waste treatment, the efficient use of that promote and other areas that actively promote sustainability by helping to sustainability promote that actively such as or social challenges, environmental solve Relevant scarcity. change, pollution or water climate made concrete progress on this objective too. on this objective progress made concrete our investors to report to started In 2010, we a ‘high have in our portfolio which investments or funds companies These are factor’. sustainability Our fifth objective was to develop a system to identify a system to develop was Our fifth objective have We in our portfolio. investments sustainable initiatives, we engaged with GPs whenever we became we whenever GPs with engaged we initiatives, spoke CSR and we around issues of particular aware on the topic. at a number of conferences a CSR policy or were planning to develop one in develop planning to a CSR policy or were the near future. engagement pursue to intention As part of our broad approach towards this area. Encouragingly, however, however, Encouragingly, this area. towards approach half the be changing. Almost attitudes appear to had already said they our survey to respondents The results confirmed our expectations: most GPs most expectations: our confirmed The results potential when evaluating account CSR into take or formal a structured take fewer investments; of the normal due diligence cycle but it helped cycle of the normal due diligence our GPs of where understanding us gain a better CSR. to with regard stand with LPs and other interested parties. To find out parties. To interested and other with LPs 30 surveyed we CSR, about GP attitudes to more part was not This request GPs. of our relationship among a group of core GPs and continue to engage to and continue GPs of core among a group HUMAN RESOURCES

AlpInvest is defined by its people. They make the firm what it is and without them, we would not have been able to source top-quality investments, develop Annual Review 2010 Annual Review strong GP relationships and deliver superior returns to our investors.

Over the years, we have developed a culture based All new professionals receive an introduction program on mutual respect, professionalism and pride in the to the firm and employees are encouraged to develop AlpInvest Partners AlpInvest

work we do. We take a conscientious, committed and broaden their skills. Further training is given ��� and collegial approach and most of us have worked to employees and employees may follow further together for many years. Trust is an implicit part external training courses, based on individual of our culture and we aim to deliver consistency, development needs. We appraise employee reliability and strong execution. performance continuously with formal reviews at least semi-annually, to encourage our people Our staff play a crucial role in our strategy, and the to execute on their responsibilities and enhance ability to attract, develop and retain people with the their skills. requisite investment experience is integral to our success. In this regard, we believe the partnership AlpInvest is an equal opportunities employer. We with The Carlyle Group is highly significant as it are committed to promoting diversity and believe will help us to expand the opportunity set for our in the great value diverse teams and experiences employees through the gradual development of bring to our firm. Currently, there are 68 men and new product areas and the addition of new clients. 48 women working at the firm, from 19 different nationalities. We have always been a highly motivated firm but the growth opportunities arising from the new The strength of our culture and the success of our ownership structure will focus our staff still further, approach to personnel are evidenced by extremely and we believe it will reinforce our position as an low turnover at the senior investment level. attractive employer in the years ahead. The average senior professional has been with the firm for more than eight years and departures are Our long-term aim is to create an environment few and far between. In 2010, we lost two senior where people are motivated, well supported and people, one partner in New York and an investment fulfilled in their work. manager in the Amsterdam office. We promoted three investment managers to principal level, one in Hong Kong and two in the New York office.

New York London Amsterdam Hong Kong 35 29 04 03 69 28 08 06 employees investment employees investment employees investment employees investment professionals professionals professionals professionals ���

AlpInvest Partners Annual Review 2010

Following the new partnership with The Carlyle Group, our governance structure will be slightly modified (see page 10). As of July 1, 2011, seven Partners will become Managing Partners and four Principals will be promoted to Partner level.

We take our responsibilities as an employer extremely seriously and constantly endeavor to maintain a positive working environment, where people feel encouraged to express opinions, pursue new ideas and communicate with colleagues. Business ethics and integrity are central to our culture and we have a detailed compliance manual and a dedicated compliance officer.

HR highlights as per December 31, 2010 116 8.3 Total number of Average years employees at AlpInvest1

Diversity Gender 59% 41% Male Female

Nationality

4

3 1

2

1. Dutch 54 2. Other European2 17 3. American/Canadian 31 4. Asian/Australian3 14

1Senior investment professionals (managing partners, partners and principals) 2UK, Belgium, France, Germany, Austria, Russia, Slovakia, Ireland 3China, Hong Kong, Korea, Taiwan, Thailand, India, Malaysia REMUNERATION

Aligning the interests of managers and investors is a key element of the private equity model and an integral factor in the industry’s success. Remuneration at Annual Review 2010 Annual Review AlpInvest is explicitly structured to reflect that model.

Our remuneration is long term, multilayered and Our remuneration also includes carried interest. performance oriented. Designed to incentivize This is calculated according to mainstream private AlpInvest Partners AlpInvest

employees to deliver to the best of their ability, our equity practice and is designed to be the largest ��� policies are also structured to encourage our staff potential component of compensation for most to feel a commitment to the firm. This is important, of our investment professionals. Carried interest given the long-term nature of private equity investment. is paid only after our investors have received all capital back plus a preferred return on their One of the most distinctive ways in which private original investments. All costs and management equity differs from other asset classes is the explicit fees, including salaries and bonuses, have to be alignment of interest among general partners, repaid, too. When all expenses have been covered limited partners and management teams. At AlpInvest, and investment returns have exceeded a certain we have chosen to emulate this approach to level – the hurdle rate – additional returns are remuneration because we believe it is the most shared between AlpInvest and our investors. effective way to retain and motivate key staff, ensuring they stay focused on delivering value The way in which this capital is distributed is to our investors. pre-defined and pre-agreed with our investors on each mandate. Frequently, carried interest We are keen to remunerate professional and does not become payable until seven to nine years support staff fairly, appropriately and objectively. after a mandate in order to promote long-term We use independent, external guidance to help us alignment between AlpInvest and our investors. structure bonuses for employees, with whom we Our remuneration structure also encourages senior set specific targets at the beginning of the year. members of staff to remain with the firm. Indeed, In 2011 it was agreed to discontinue the existing most of our senior managers have been with deferred compensation schemes. Instead, AlpInvest AlpInvest for many years, encouraging continuity senior management has agreed to commit, on and promoting a collegial culture. a going-forward basis, an aggregate amount for investment alongside APG and PGGM which as a In line with our stated strategy of aligning pay to minimum requirement will amount to 50% of the performance, remuneration increased in 2010 in annual discretionary bonus awards (net of taxes) comparison to 2009, driven by the strong returns made to each member of AlpInvest management we delivered to our investors during the year. during the preceding calendar year. However, many of the elements of last year’s remuneration packages will not pay out for several years.

Distribution of returns € Carried interest Return above hurdle rate

Preferred Return

Cost & Fees

Intial Investment

Total investments, Total returns Distributed to Distributed to costs and after sale of investors AlpInvest Partners management fees all investments ��� AlpInvest Partners Annual Review 2010

our relationships with fund managers and portfolio and portfolio with fund managers our relationships companies. concentration Investment of economic a range across invests AlpInvest policy and jurisdictions. Our investment sectors across portfolio a diversified create is designed to deal industries, geographies, segments, market investment have We years. sizes and vintage risk, concentration address to guidelines in place Our ability to source and execute quality investments and execute source Our ability to attract, need to We factors. depends on several with the requisite professionals and retain develop optimize need to We experience. investment benefits across and synergy information-sharing undertake need to And we teams. our investment opportunity, investment each of assessments thorough and experience. knowledge using collective assesses carefully Bearing this in mind, AlpInvest before record track skills and each fund manager’s the From commitment. making an investment the finalization to assessment initial investment a methodical employs AlpInvest of the transaction, teams. and investment partners involving process, performance Investment depends on a of our portfolio The performance including the quality of the initial of factors, range decision and the ability of the fund investment performance drive to company portfolio or manager strategy. its business and achieve we management program, As part of our portfolio and regular detailed on a our investments review manage to process a rigorous basis and employ Business continuity risk continuity Business our two from largely funding comes AlpInvest’s APG and PGGM, which could anchor investors, to allocation regarding change their strategies use or decide to class asset equity the private mitigate To their assets. to manage other firms structured are with our investors this, contracts the management to continuity offer so that they update period. We a prolonged for company basis with detailed on a regular our investors ensure to strive and on their portfolios information is also a risk aligned. There remain our strategies may be lost. that senior management expertise is based on long-term remuneration However, a create designed to arrangements, incentive In addition, alignment with AlpInvest. long-term of be shareholders will henceforth the partners the management company. risks Investment decisions Investment

interaction with portfolio companies. Investing Investing companies. with portfolio interaction in all our mandates, stipulated guidelines are manages the contracts. department and our legal the likelihood of such events, we rigorously assess assess rigorously we such events, of the likelihood Any indication invest. in which we the companies is identified either during practices of unethical on, through or, later process the due diligence affected or disrupted by several factors, such factors, by several or disrupted affected lawsuits, adverse contracts, as unenforceable reduce To publicity. or negative judgments, fraud and tracking the performance of our investments. the performance and tracking risks Reputational Our firm and our funds may be negatively performance or financial position. To address this To address or financial position. performance and forecasts, trends external monitor risk, we our assumptions reviewing consistently while developments, as well as internal and external and external as internal as well developments, may be But our initial assumptions risk factors. the firm’s affect which could by events, overtaken The Board is responsible for setting the firm’s firm’s setting the for is responsible The Board with the Operations consultation in close strategy of partners. group and the broader Committee and sector market account into takes Our strategy on a regular basis. basis. on a regular risks Strategic geographies, industries and investment stages. stages. and investment industries geographies, before research extensive also conduct We our portfolio and monitor markets new entering macroeconomic and geopolitical developments developments and geopolitical macroeconomic policies and as changes in government as well such circumstances, mitigate To regulations. across portfolio our investment diversify aim to we External risks External and emerging in developed invests AlpInvest by affected are so our investments markets provides further reassurance by performing audits by performing further reassurance provides on an ad hoc basis. and enable standardization across the firm. across standardization and enable are strategies and mitigation Risk assessment auditor and our external with our Board, discussed all aspects of the business under management all aspects of the business and procedures policies detailed supervision, while consistency encourage manage risks, to in place are a hands-on approach to operational control and control operational to a hands-on approach risk, quality performance, discipline, monitoring responsibilities. part of their daily as and operations bring procedures and review Management reports applying the highest standards of risk management standards the highest applying conduct code of values, the firm in our throughout adopt All our partners management. and personnel AlpInvest is committed to the delivery of superiordelivery the to is committed AlpInvest by achieved best are these believe We returns. standards of integrity across the firm and employ a rigorous control framework framework control a rigorous and employ the firm across of integrity standards functions. and professional lines, geographies all business across RISK MANAGEMENT RISK on the highest insist We business. part of our integral is an Risk management RISK MANAGEMENT

including limits on the percentage interest held in Legal, tax and regulatory risks any one fund or portfolio company. Asset allocation AlpInvest complies with legal, regulatory and other

Annual Review 2010 Annual Review is discussed regularly and compliance reports are external requirements, as well as contractual reviewed on a quarterly basis to ensure allocations agreements. Our in-house team of senior legal fall within these guidelines. and tax professionals provides advice, reviews and negotiates documentation and helps us meet Treasury and funding risks our regulatory obligations. An external law firm

AlpInvest Partners AlpInvest Market risk monitors and updates AlpInvest on relevant legal

��� As an advisory firm, AlpInvest has limited exposure and regulatory developments. to financial assets. Cash is typically held in short- term deposits with reputable banks, while our Policies management company has limited exposure to Conflicts of interest adverse movements in interest rates and foreign Conflicts of interest can arise but internal conflict exchange rates. We typically hedge foreign currency management policies and guidelines are in place to exposure when providing funds to our main reduce these instances and address such conflicts operating subsidiaries. as do arise in a way that protects and deals fairly with the interests of all those involved. Credit risk AlpInvest is dependent on funding from its investors. Valuation standards Mandates are in place between the parties that For our direct and co-investments (equity and define the minimum amounts our investors commit mezzanine), we determine fair value based on to AlpInvest for investment purposes. These are the International Private Equity and Venture subject to certain limitations, which are monitored Capital Guidelines (September 2009, endorsed through compliance procedures. by the European Venture Capital Association). Determination of fair value involves a significant Liquidity degree of management judgment and takes AlpInvest informs investors on a timely basis of into consideration the specific nature, facts and forthcoming liquidity requirements. Under our circumstances of each investment, including, but mandate terms, we have access at all times not limited to, the price at which the investment to sufficient liquidity to fund our investments. was acquired, current and projected operating Cash management procedures include cash- performance, trading values on public exchanges flow forecasting and liquidity monitoring. for comparable securities, and financing terms currently available. Operational risks AlpInvest is exposed to a range of operational risks For investments in private equity funds, we use that can arise from inadequate or failed systems, the valuations provided to us by the general processes and people, or from external factors partners, in conjunction with our own mechanisms, affecting any of these. They include risks around including initial due diligence and ongoing human resources, legal and regulatory issues, tax, portfolio management. Owing to the time lag in information technology system failures, business the statements provided by the general partners disruption and internal control weaknesses. All versus the timing of AlpInvest’s financial reporting, staff are required to undergo probity checks and fair market value is extracted from the most recent sign the company compliance manual, including information available from the general partners the code of conduct. before the end of the calendar year. This is typically September 30, so it is adjusted for actual cash Across the entire organization, operational risk flows from the date of the reported valuations management is underpinned by clearly defined to the financial statement date. As valuations roles, segregation of duties, delegated authorities depend to some extent on stock market conditions, and monitoring at all levels. AlpInvest relies on a AlpInvest closely monitors public equity market number of third-party service providers to support developments during the last quarter of the year our operations, including information technology, and assesses whether, in the event of tangible insurance and pensions. We work with reputable movements, any valuation adjustment is required. firms and have relevant service level contracts with a number of these parties. The AlpInvest commitment AlpInvest endeavors to uphold the highest standards Our investment management process is subject to and mitigate risk in a timely and consistent fashion. an annual ISAE 3402 audit to attest to the design We are committed to strong and robust governance and operating effectiveness of our internal controls. across the firm and our experience and expertise AlpInvest also holds a license from the Netherlands help us to deliver on this aim. Authority for the Financial Markets pursuant to clause 2:96 Act on Financial Supervision (‘Wet op het financieel toezicht’). ���

PRIVATE EQUITY AlpInvest Partners

Private equity is a unique asset class with a governance model specifically designed to align the interests of owners, managers and investors. Over more than five decades, this approach has attracted the interest of discerning financial Annual Review 2010 institutions and companies around the world.

Private equity focuses on the provision of equity teams invariably invest in the company, too, and capital to private companies – that is, companies have clear performance-linked incentives. So that are not listed on a stock exchange. Private management is encouraged to deliver above- equity managers seek out businesses with average growth, GPs are focused on making that significant potential for growth over the long happen and LPs are rewarded for providing the term. These may need managerial guidance, necessary capital. financial assistance or even greater independence from a large parent company. In each case, The three most common types of private equity private equity aims to unlock the potential within investment are buyouts, growth capital and venture a business, helping it to expand, develop and capital. In buyouts, private equity investors acquire improve profitability. In the process, jobs are a controlling stake in an existing company from its created, management becomes more effective and incumbent owners. In growth capital investments, businesses grow. funding is provided to help a business expand or restructure. In venture capital investments, Private equity takes a long-term approach to new capital flows into start-up or early-stage investment, typically owning a company for three businesses. to seven years before selling it, usually at a premium to the initial purchase price. Investments The three most common types of sale are an are made in many different businesses and IPO (initial public offering), trade or secondary these are called portfolio or investee companies. buyout. In the first, a company is listed on a stock With their experience, focus and capital, private exchange; in the second, a company is sold to equity managers work with portfolio company a private or public corporation; in the third, management teams to create an environment that a company is sold to another private equity investor. can generate above-average growth. Over the past five decades, private equity has Money for investments comes from funds, typically become a global asset class, managing billions structured as limited partnerships. The capital for of dollars. Before and during the financial crisis, these funds is raised primarily from institutional the industry was criticised on a number of levels, investors, such as pension funds and insurance ranging from lack of disclosure to overly aggressive companies, which are known as limited partners, use of leverage. However, private equity firms fared or LPs. They are not actively involved in managing better than expected and, in many cases, default the funds, but they regularly assess the quality of rates were lower than in the public markets. investments and have an important consultative or A global survey published by the World Economic supervisory role. Each fund is managed by a group Forum concluded that private equity tends to have company within the private equity firm, known as a positive impact on employment, management the general partner, or GP. The GP monitors the and productivity compared with other ownership overall performance of the fund and is closely structures1. In essence, private equity works, involved with its portfolio companies. delivering growth, encouraging focus and fostering business excellence on a worldwide basis. One of private equity’s distinguishing characteristics is the alignment of interest that flows through the entire value chain, from LP to GP to portfolio company management. GPs are remunerated via a periodic management fee and a share in the profits earned by the fund. This is called carried interest and typically involves up to 20% of the profits of the fund. In most cases, carried interest becomes payable only after the limited partners have achieved repayment of their original investment plus a defined return. This is known as the hurdle rate and it is normally set at a high level so remuneration is linked to exceeding performance targets. Company management

1 Globalization of Alternative Investments, Working Papers Volume 1: The Global Economic Impact of Private Equity Report 2008 and Volume 2: The Global Economic Impact of Private Equity Report 2009. ALPINVEST IRR CALCULATIONS

The AlpInvest gross annualized internal rate of returns The performance shown is provided solely to (IRRs) are calculated based on actual AlpInvest illustrate AlpInvest’s performance in managing

Annual Review 2010 Annual Review fund cash flows up to and including December 31, prior AlpInvest funds, is not the performance of any 2010 and the audited December 31, 2010 net asset fund being offered, and is not indicative of future values (NAVs) of the AlpInvest funds, gross of any performance. Past performance should not be management fees and/or performance fees charged relied upon as an indication of future results. by AlpInvest. The NAVs for AlpInvest primary fund

AlpInvest Partners AlpInvest investment funds and secondary investment funds With respect to the performance information

��� are based on the latest available valuations of the shown, the investment performance data relates underlying limited partnership interests (in most solely to investments originated by the AlpInvest cases as of September 30, 2010), as provided by team. No individual or entity other than the their general partners, plus the net cash flow since AlpInvest team was responsible for the investment the latest valuation, up to and including December performance data included for the performance 31, 2010. In addition, adjustments for fluctuations information shown. Investments that were not in public market prices have been incorporated originated by AlpInvest have been excluded from to reflect the estimated impact on the underlying the performance information shown. Similarly, limited partnership interests as of December performance information for Direct Investments, 31, 2010. The NAVs, including adjustments for which was spun off from AlpInvest in 2005, is not fluctuations in public market prices, for AlpInvest included here. The AlpInvest team believes that primary fund investment funds and secondary inclusion of such information in the performance investment funds have been audited under Dutch information shown would result in a presentation GAAP, are considered to be carried at fair value and of performance that may be misleading because it were reported as such to AlpInvest fund investors. would include performance data for investments The NAVs for AlpInvest co-investment funds and not currently associated with the AlpInvest team. mezzanine equity investment funds are based on AlpInvest internal valuations. These internal To AlpInvest’s knowledge, there are no established valuations have been audited under Dutch GAAP, standards for the calculation of IRRs for private are considered to be carried at fair value and were equity portfolios. The use of another methodology reported as such to the AlpInvest fund investors. would be expected to result in a different, and possibly lower, IRR. Net IRR is based upon actual AlpInvest fund cash flows up to and including December 31, Investors should be aware of the significant 2010 and the audited December 31, 2010 NAVs differences between private equity and public of the AlpInvest funds, calculated after deducting markets regarding their portfolio/index constituents management fees and/or performance fees and specific risk/return characteristics. Investors charged to investors by AlpInvest. should also be aware of the prevailing market conditions in public and private markets, including To eliminate the effect of currency rate changes volatility, during the periods shown. over time on the gross and net AlpInvest IRRs, all cash flows and NAVs have been converted from local currency to euros using the December 31, 2005 foreign exchange rates. No cash flow projections have been used to calculate any of the performance numbers.

Statement of disclosure This is AlpInvest’s third Annual Review and its purpose is to increase the understanding of AlpInvest Partners N.V. and to improve communication with our stakeholders. The Walker Guidelines, as published by the British Private Equity and Venture Capital Association (BVCA), are one of the prominent initiatives on increased disclosure and it is our intention to follow these guidelines as a basis for our report. We are advocates of transparency and believe the private equity industry will benefit from more open communication with all stakeholders. We have tried to be as open as possible in this Annual Review. However, some areas remain subject to legal confidentiality clauses between AlpInvest Partners, our investors, or the parties we invest in and invest with. Some types of information could also be commercially sensitive. As a result, we are not able to disclose publicly all of the information we provide to our client investors.

Disclaimer AlpInvest Partners N.V. is a member of the EVCA and the NVP. This document is issued and distributed in The Netherlands by AlpInvest Partners N.V., which is authorized and regulated by the Netherlands Authority for the Financial Markets. While this information has been prepared in good faith, AlpInvest Partners N.V. makes no representation or warranty as to its accuracy, truth or completeness. Certain information contained in this document has been obtained from third-party sources. Although AlpInvest Partners N.V. believes that such third-party sources are reliable and is not aware of any misstatement as of the date of this document, it has not independently verified such information. The information contained herein is for information purposes only and does not constitute an offer to sell, or a solicitation of an offer to purchase, an interest in any private equity or technology ventures fund. This document contains information concerning the past performance of various investments, but this should not be taken as an indication of the likely future performance of any investments. ��� AlpInvest Partners Annual Review 2010 AMSTERDAM NEW YORK AlpInvest Partners N.V. AlpInvest Partners Inc. Jachthavenweg 118 630 Fifth Avenue, 28th Floor 1081 KJ Amsterdam New York, N.Y. 10111 The Netherlands U.S.A. Phone: +31 20 540 7575 Phone: +1 212 332 6240 Fax: +31 20 540 7500 Fax: +1 212 332 6241

HONG KONG LONDON AlpInvest Partners Ltd. AlpInvest Partners UK Ltd. 701 Citibank Tower 13 Charles II Street 3 Garden Road London, SW1Y 4QU Hong Kong England China Phone: +44 20 7747 5100 Phone: +852 2878 7099 Fax: +44 20 7747 5101 Fax: +852 2878 7009