PitchBook_PE_Trends_4Q2011_Presentation_Deck

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					                                                     : Fall 2011


           PitchBook’s 2011 4Q
           PE Presentation Deck
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          About the PitchBook Platform
PitchBook is an independent and impartial research firm dedicated to providing premium data, news
and analysis to the private equity industry. As a specialty-focused information resource, PitchBook's
core strength is its ability to meticulously collect, organize and analyze hard to find private equity and
venture capital deal and fund data.

PitchBook’s mission is to provide its clients with the highest quality private equity information, with an
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but to also provide the tools that help industry professionals effectively find, share and use information
to make better decisions.
Three Aspects of Private Equity
     Fundraising, Investment & Exits Trends




                   Fundraising




      Investment
                                 Exits
              U.S. PE on Pace for Similar Year to 2010
       Number of Deals Closed (red line) and Total Capital Invested by Year (blue bars)

$600                                                        3,025                                                3,500

                                                            $570
                                                                                                                 3,000
$500
                                               2,519
                                                                                                                 2,500
$400                                                                        2,216
                                    2,029
                                                                                              1,778              2,000
                            1,679
$300
                                                $305
                                                                                                                 1,500
                    1,221
$200                                                                                1,363
           840                                                           $195                         1,244      1,000
                                     $174
                                                                                              $158
$100                        $126
                                                                                                      $100      500
                    $83
                                                                                        $62
           $40
  $0                                                                                                            0
          2002      2003    2004     2005       2006        2007         2008       2009      2010    2011*

Source: PitchBook
                                    Capital Invested ($B)           # of Deals Closed                  *Through 3Q 2011
                    U.S. PE Activity Experiences Summer Lull
                    Number of Deals Closed and Total Capital Invested by Quarter

$250                                                                                                                                          900
                                       793
                                 752                735                                                                                       800
                                                   $204
$200                                         745            719                                                                               700
        646         650
                                                                      583
                                                                                                                        540                   600
            610           613
$150                                         $144
                          $130                                                                                                464 444         500
                                    $119                        520                                   433
                                                                                                395         405
                                $103                                                                                                          400
$100                                                                        394                                   400
                    $76                                   $71         $70         336 316                                               336   300
                                                                                          316                           $66
              $58
$50     $41                                                                                                 $43                               200
                                                                $39                                                           $36 $33 $31
                                                                                                $27               $30
                                                                            $15 $15                   $19                                     100
                                                                                      $8 $11
  $0                                                                                                                                          0
        1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
               2006                     2007                     2008                  2009                  2010                2011

Source: PitchBook
                                                    Capital Invested ($B)             # of Deals Closed                           *Through 3Q 2011
     Midwest Continues to Lead in 3Q with 65 Deals
                    Percentage of Deal Volume (count) by Region
                                                3Q 2011
                                                              Mid Atlantic
                    West Coast                      9%
                                   18%
                                               3Q 2010

                                         14%   9%
             Southwest            1%                                         Midwest
                          3%                                       19%
                                                          22%
                                   18%

             Southeast   15%
                                                         6%
                                                                   5%
                                                                             Mountain
                                         18%   12%


                                       15%                16%
                               South                            Northeast

Source: PitchBook
  B2B and B2C Account for Majority of PE Deal Activity
                    Percentage of Deal Volume (count) by Industry
                                Materials &
                                                      3Q 2011
                                 Resources
                      Information                2%
                       Technology     12%
                                                      3Q 2010
                                                                          Business Products
                                                 6%                       and Services (B2B)
                Healthcare                                          35%
                             12%         16%                31%



                                     14%
                             9%
      Financial Services                   10%          18%
                                                 5%
                                    8%
                           Energy                     22%         Consumer Products
Source: PitchBook                                                 and Services (B2C)
   PE Activity Shifts Back Towards B2B and B2C
                Percentage of Deal Volume (count) by Industry
100%
                                                                              Business Products
90%                                                                           and Services (B2B)

80%                                                                           Consumer Products
                                                                              and Services (B2C)
70%
                                                                              Energy
60%

50%                                                                           Financial Services


40%
                                                                              Healthcare
30%
                                                                              Information
20%
                                                                              Technology

10%                                                                           Materials &
                                                                              Resources
 0%
                                                                                   *Through 3Q 2011
       2002   2003   2004   2005   2006   2007   2008   2009   2010   2011*        Source: PitchBook
         Information Technology Jumps to 20% of Capital
          Invested in 2011, Highest Percentage in Decade
               Percentage of Deal Volume (capital) by Industry
100%
                                                                              Business Products
90%                                                                           and Services (B2B)

80%                                                                           Consumer Products
                                                                              and Services (B2C)
70%
                                                                              Energy
60%

50%                                                                           Financial Services

40%
                                                                              Healthcare
30%

20%                                                                           Information
                                                                              Technology
10%
                                                                              Materials &
 0%                                                                           Resources
       2002   2003   2004   2005   2006   2007   2008   2009   2010   2011*        *Through 3Q 2011
                                                                                   Source: PitchBook
  Deals Under $250M Account for 73% of Deal Flow
         Percentage of Deal Volume (count) by Deal Size Range
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

 0%
       2004       2005         2006     2007        2008         2009       2010           2011*
                                                                                        *Through 3Q 2011
         Under $50M      $50M-$250M   $250M-$500M    $500M-$1B      $1B-$2.5B      $2.5B+
                                                                                       Source: PitchBook
  Deals Above $1B Increased to 53% of Capital Invested
        Percentage of Deal Volume (capital) by Deal Size Range
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

 0%
       2004       2005         2006     2007        2008         2009       2010           2011*
                                                                                        *Through 3Q 2011
         Under $50M      $50M-$250M   $250M-$500M    $500M-$1B      $1B-$2.5B      $2.5B+
                                                                                       Source: PitchBook
  Add-ons % Climbs for the 6th Straight Year
                 Add-on Deals as Percentage of Buyout Deals
2,500                                                                                         55%


                                                                                   50%
2,000                                                                                         50%
                                                                           47%
                                                    1352             46%
1,500                                                                                         45%
                                             1187
                                                            933
                                      981
1,000                                                                      692                40%
        38%                     855

                      626                                            516           459
 500                                                1056                                      35%
               414                           821            743
        322                           636                                  608
                                467                                  438           463
                      333
        198    208
   0                                                                                          30%
        2001   2002   2003     2004   2005   2006   2007    2008    2009   2010   2011*
                             Add-on   Non Add-on    Add-On % of Buyout            *Through 3Q 2011
                                                                                  Source: PitchBook
         Median Buyout Size at a Record Level
          Median Capital Invested in U.S. Buyout Transactions
$160

$140                                                                                   $135


$120

                                                $100                      $100
$100

$80                                   $76
                                                            $66
                            $62
$60                  $53
              $50
       $40                                                         $40
$40

$20

 $-
       2002   2003   2004   2005     2006       2007        2008   2009   2010        2011*
                             Median Buyout Deal Size ($M)                        *Through 3Q 2011
                                                                                 Source: PitchBook
      LBOs Over $1B Using the Most Debt
                       Percentage of Debt Used in Buyouts
75%

70%              71%
                                                67%
65%
      63%
                                                                           62%
60%                                                                                                59%
      58%
55%                                                                                                56%


50%                                   51%
      48%        48%
45%                                                                        45%

40%                                                                                                40%

35%
       2002   2003      2004       2005      2006     2007   2008       2009     2010        2011*
                               Under $250M     $250M - $1B   Over $1B                   *Through 3Q 2011
                                                                                        Source: PitchBook
   Links for PitchBook Deal Flow Charts
PitchBook users can click the links below to load the corresponding chart directly into
                  the PitchBook Platform for further customization
Slide 4 – PE deal flow by year
                                                       How to view in PitchBook:
Click to customize chart in PitchBook
                                                        1) Right click on the link
Slide 5 – PE deal flow by quarter                       2) click ‘open hyperlink’
Click to customize chart in PitchBook
                                                         3) Log-in to PitchBook
Slide 6 – PE deal flow (count) by region
Click to customize chart in PitchBook
Slide 7 – PE deal flow (count) by industry
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Slide 8 – PE deal flow (count) by industry by year
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Slide 9 – PE deal flow (capital) by industry by year
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Slide 10 – PE deal flow (count) by size bucket
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Slide 11 – PE deal flow (capital) by size bucket
Click to customize chart in PitchBook
      296 U.S. PE Exits for $81.6B in 2011to Date
      Quarterly PE Exits by Corporate Acquisition, IPO and Secondary Sale

180
                                                                                                               165
160
                                        136
140
                        125                   121
                              117 117                         117
120    111        112                                                                               108                   104 101
                                                    98
100          87                                                                                                      91
                                                                                          81   81         85
                                                         80
 80
                                                                    60
 60                                                                             54
                                                                                     45
 40                                                                       32

 20

 -
       1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
             2006                  2007                  2008                    2009                2010                 2011
                                   Corporate Acquisition            IPO        Secondary Buyout                      Source: PitchBook
Exit Strategies Stay Consistent with Long Term Averages
              Percentage of P.E. Exit Volume (count) by Exit Type
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

 0%
       2002     2003   2004      2005       2006         2007    2008         2009   2010         2011
                        Corporate Acquisition      IPO     Secondary Buyout                 *Through 3Q 2011
                                                                                            Source: PitchBook
      Median Secondary Transaction Value Stays Elevated
                                           Median Exit Size ($M)
$400

                                                                                                     $351
$350

$300                                                                                                                $280
                                                                      $250
$250                                                                                       $230
                                                                                                  $220
                                                            $196                 $200                          $199
$200                                $190          $188                       $182

                          $145                           $150      $143
$150         $130
                                 $118      $123
                                                                                        $105
                    $95
$100

$50    $42


 $-
        2002         2003         2004        2005        2006      2007      2008       2009       2010        2011*
                                         Corporate Acquisition      Secondary Buyout                       *Through 3Q 2011
                                                                                                           Source: PitchBook
             PE Firms Holding onto Companies Longer
                               Median Time from Buyout to Exit
             6


             5                                                                        4.71         4.83

                 4.27          4.23
                        3.85          3.97                              3.85   3.92
             4                                     3.68       3.60
Years Held




             3


             2


             1


             0
                 2002   2003   2004   2005         2006       2007      2008   2009   2010        2011*
                                                                                             *Through 3Q 2011
                                             Median Time to Exit - Yr                        Source: PitchBook
                                        Portfolio Company Inventory Keeps Building
                                       with 4,300 PE Investments Now 3-Years or Older
                                   Number of U.S. Private Equity Company Inventory by Deal Year
                                7000
                                       US Private Equity Company Inventory
                                       by Deal Year

                                6000                                                                                     5,862         Year of
                                                                                                                 5,699
                                                                                                         5,399                       Investment
                                                                                                 5,123
                                5000
Number of PE Backed Companies




                                                                             4,520                                                     2009-2011*


                                4000                                3,665
                                                               Percentage of capital invested by industry                              2005 - 2008

                                                     2,890
                                3000
                                                                                                                                       2000 - 2004
                                       2,219

                                2000



                                1000



                                  0
                                       2004          2005           2006     2007                2008    2009    2010    2011*
                                                                                    As of Year                              *As of 9/30/2011
                                                                                                                                   Source: PitchBook
    Links for PitchBook Exit Flow Charts
 PitchBook users can use the links below to load the corresponding chart directly into
                  the PitchBook Platform for further customization

Slide 17 – PE Exits (count)                     How to view in PitchBook:
Click to customize chart in PitchBook           1) Right click on the link
                                                2) click ‘open hyperlink’
Slide 18 – PE Exits % (count)
Click to customize chart in PitchBook
                                                3) Log-in to PitchBook

Slide 19 – PE Median Exit Size
Click to customize chart in PitchBook
              PE Fundraising on Track to Top 2010
             Number of Funds Closed and Total Capital Raised by Year
$350                                                                                         350
                               314
                                               268
$300                                                                                         300
                      260
              250
$250                                                                                         250


$200                                                                                         200

                                                             132         133
$150                                                                                         150

                                                                                102
$100                                                                                         100


$50                                                                                          50

             $138    $217      $313           $307          $139         $87    $79
  $0                                                                                         0
             2005    2006      2007           2008          2009         2010   2011*

Source: PitchBook
                             Capital Raised ($B)     # of Funds Closed           *Through 3Q 2011
            U.S. PE Fundraising Experiences Summer Lull
          Number of Funds Closed and Total Capital Raised by Quarter
$120                                                                                                                           140
         121
                                                                                                                               120
$100

                                                                                                                               100
$80

                                             58                                                                                80
$60
                          58                                                                                                   60
                                                                             49
                                     46 43
$40                                                   31                                               41
                                                                        31         31                        34                40
                                                                                          26     27                    27
$20
                                                             12                                                                20

         $99        $94        $73     $41   $62     $35     $12    $30      $28   $22    $26    $10   $37   $25      $17
  $0                                                                                                                           0
          1Q        2Q         3Q      4Q    1Q       2Q     3Q         4Q   1Q    2Q     3Q     4Q    1Q    2Q       3Q
                      2008                              2009                          2010                   2011

Source: PitchBook
                                                  Capital Raised ($B)        # of Funds Closed                     *Through 3Q 2011
       Middle-Market Raising Majority of Funds
           Percentage of U.S. P.E. Funds (count) by Fund Size
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

 0%
        2005           2006           2007        2008        2009        2010         2011*
                                                                                    *Through 3Q 2011
         Under $100M          $100M-$250M    $250M-$500M   $500M-$1B   $1B-$5B   $5B+
                                                                                    Source: PitchBook
  Funds Under $1B Account for 34% of U.S. PE Fundraising
          Percentage of U.S. P.E. Funds (capital) by Fund Size
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

 0%
       2005           2006           2007        2008        2009        2010         2011*
                                                                                   *Through 3Q 2011
        Under $100M          $100M-$250M    $250M-$500M   $500M-$1B   $1B-$5B   $5B+
                                                                                   Source: PitchBook
   Buyout Funds Account for 72% of 2011 PE Fundraising
         Percentage of U.S. Funds Closed (capital) by Fund Type
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

 0%
        2005       2006          2007            2008           2009        2010          2011*
                                                                                        *Through 3Q 2011
       Buyout   Mezzanine and Debt      Fund of Funds and LP Secondary   PE Growth-Expansion PitchBook
                                                                                       Source:
                    First Time Funds Flattens in 2011
                                     Number of Funds Closed by Year
350                                                                                                                     40%
          36%

300                                                                                                                     35%
                               31%                                     76
                     29%                29%          28%                                                                30%
250                                                                                     27%
                                                                                58
                                                             60
                                                     71                                                                 25%
200
           84                                                                                                 18%       20%
                                                                                                     17%
150
                                         46                                                                             15%
                      40                                              239                            23
           53                                                                            35
100                            36                            198                212
                                                     181                                                       19
                                                                                                                        10%

 50                  100                113                                                         114
           93                                                                            97                    87       5%
                               82

  0                                                                                                                     0%
         2001        2002     2003      2004     2005       2006      2007     2008     2009        2010     2011*
                # of Funds Closed (Experienced GP)
Source: PitchBook
                                                           # of Funds Closed (New GP)         % of First Time Funds
                                                                                                             *Through 3Q 2011
         PE Investors Sitting on $436B of Dry Powder
                  Capital Overhang of US PE Investors by Vintage Year
$140

                                                                                                                          $600
                                                       $119.38
$120

                                                                                                      $436 Billion        $500
$100
                                  $84.53
                                                                        $79.84                                            $400
 $80
                                                                                        $64.79
                                                                                                           $59.96         $300
 $60


                                                                                                                          $200
 $40
               $27.08

 $20                                                                                                                      $100



  $0                                                                                                                      $0
               2006                   2007              2008            2009             2010              2011*
$ in Billion                                                                                                  *Through 3Q 2011
                Cumulative Overhang      Under $100M     $100M-$250M   $250M-$500M   $500M-$1B   $1B-$5B     $5B+
                                                                                                              Source: PitchBook

                                                                                                                     29
Links for PitchBook Fundraising Charts
PitchBook users can click the links below to load the corresponding chart directly into
                  the PitchBook Platform for further customization
Slide 23 – PE fundraising by year                      How to view in PitchBook:
Click to customize chart in PitchBook                   1) Right click on the link
                                                        2) click ‘open hyperlink’
Slide 24 – PE fundraising by quarter
                                                         3) Log-in to PitchBook
Click to customize chart in PitchBook

Slide 25 – PE fundraising (count) by size bucket
Click to customize chart in PitchBook

Slide 26 – PE fundraising (capital) by size bucket
Click to customize chart in PitchBook
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