Private Equity Fundraising Update

Private Equity Fundraising Update

AMEXCAP / Paul Capital Conference John Crocker



September 30, 2008



Citi Alternatives Distribution

john.crocker@citi.com



Citi Alternatives Distribution Group

Who we are…  Advisor to Alternative Investment Sponsors  One of the largest players with over 50 professionals  Global footprint – offices in ten geographies  Focus on the spectrum of alternative investments – better positioned to understand investor sentiments  Only group to have dedicated professionals to cover gatekeepers



 Only group with dedicated resources to respond to RFP’s  Only group to hold an invitation only Private Equity Conference – its ninth consecutive year



2



Citi’s Fundraising Global Coverage

Where we are…



Citi’s Distribution Team Coverage Mathias Giebken



LP Network By Investor Type By Number of Accounts

Joseph Nagae

Sovereign Wealth Funds Advisors 1% 8% Public Pensions 18% Bank/Insurance Companies 18%



James Haddon Maureen Curran Jonathan Freedman Elizabeth Hammond Brian Hickey Jim Katarincic Michael Lashendock Brian Leftwich Amy Lesch Amy Richards



Other 1% Family Offices 12%



Corporate Pensions 9% Fund of Funds 21% Endowment/ Foundation 12%



Serene Ang Rachel Farrell

Ari Barkan Mark Marxer Merope Pentogenis Jamal Al-Naif James Eldridge Francois Bornens Laurent de Rosière Nermina Hadziabdic Mark Johnson Andrew Wilbur Daniel Zinic John Crocker Filo Sedillo Toshihiro Koyanagi Kazumi Nakano Hiroko Ogiso Kazumoto Takeichi

North America 51%



LP Network By Geography By Number of Accounts

Asia 6% Australia 9%



Europe 27%



Middle East 7%



As of September, 2008



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Unparalleled Commitment to Alternatives

Citi’s industry-leading, invitation-only private equity conference, now in its ninth successful year, brings together over 400 private equity professionals.



General Partner Speakers from Past Conferences



2009 Private Equity Conference



 Robert Andreen Nordic Capital  David Bonderman Texas Pacific Group



 Nigel Doughty Doughty Hanson  Wesley R. Edens Fortress



 Thomas H. Lee T.H. Lee Co.  Chris O’Brien Investcorp  Daniel Och Och-Ziff  Steve Pagliuca Bain Capital  Richard Perry Perry Capital  David Roux Silver Lake Partners



 Gordon Bonnyman Charterhouse



 Don Gogel Clayton, Dubilier & Rice

 Guy Hands Terra Firma  Josh Harris Apollo  Henry Kravis KKR



March 30 – April 1, 2008 The Ritz-Carlton, Key Biscayne Key Biscayne, Florida



 John Canning Madison Dearborn  Dick Cashin One Equity Partners  Jon Coslet TPG Capital



 J.Taylor Crandall Oak Hill



 Lyndon Lea Lion Capital



 David Rubenstein The Carlyle Groupi



Speakers at the 2008 Conference

 Leon Black Apollo

 John Ehara Unison  Erik Hirsch Hamilton Lane  Glenn Hutchins Silver Lake Partners



 Michael Kim MBK

 Hugh Langmuir Cinven  Marc Lasry Avenue Capital  John Morris HarbourVest



 Jonathan Russell 3i

 Steve Schwarzman Blackstone  Wray Thorn Marathon  Erol Uzumeri Ontario Teachers



Limited Partner / Advisor Speakers from Past Conferences

 Michael Arpey Credit Suisse

 Andrea Auerbach Cambridge Associates  Adam Clemens New York Life



 Paul Crotty Portfolio Advisers

 Chuck Flynn Bregal  Thaddeus Gray Abbott Capital



 Clint Harris Grove Street

 Tim Kelly Adams Street  Carol Kennedy Pantheon Ventures



 James Kester Allianz Private Equity

 Jim Leech Ontario Teachers  Mark Wiseman CPP



4



The Fundraising Market: The Good …

Allocations continue to increase even in relatively mature programs



Private Equity Allocation Percentage

25%



47%

20%



15% 25% 10% 17% 13% 5% 11% 7% 10% 6% 10% 5% 10% 10%



18%



43%



67%



100%



150%



150%

5% 2% 0% 5%



4%



0% Washington State Pennsylvania Public Virginia Retirement California Public New Mexico Teacher Retirement Investment Board School Employees System Employees' Educational System of Texas Retirement System Retirement System Retirement Board

Current AUM1: $85.4bn $64.0bn $55bn $239bn $9bn $112bn



Maryland State South Carolina Retirement and Retirement Systems Pension System

$40bn $28.5bn



Previous allocation

Source: Note: Private Equity Analyst, 2007 & 2008 and individual investor websites. (1) AUM stands for assets under management.



Latest allocation



5



The Fundraising Market: The Bad …

Following a five year period of unprecedented strength in the leveraged finance markets, the non -investment grade debt market entered a period of dislocation in the summer of 2007.



Rate Environment – Increasing Spreads

2006 - 2007

16.0% 15.73%



New Issue Volume – Plummet in New Issues

($ in Billions)

$574 $543



14.0%



165 181

11.96%

$251



$399



12.0%

Yield



$331



$293 $302 $250



121



10.0% 8.41%



98

$173



158



112 362 409



83 278

$71



142 173 190



43 130



8.0%



167



195



109

6.0% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Citi HY BB Index Citi HY B Index Citi HY CCC Index



2003



2004



2005



2006



2007



2008



1H 06



2H 06



1H 07



2H 07



Leveraged Loans



High Yield



Plus: There are over 500+ private equity placement memorandums in the market seeking to raise capital



Sources: Citi YieldBook, S&P/LSTA Leveraged Loan Index, S&P/LCD.



6



The Fundraising Market: And the Ugly …

Bear Stearns / Lehman Brothers

160%

140%



Bulge Bracket Banks



140% 120% 100% 80% 60%

60% 120% 100% 80%



(16.5%)



40% 20% 0% 01/07

40% 20% 01/07

(59.9%)



04/07



07/07



11/07



02/08



05/08



03/07



06/07



09/07



11/07



02/08



05/08



07/08



Bear Stearns



Lehman Brothers



C



BAC, BSC, C, CS, DB, GS, HBC, LEH, JPM, MER, WB



Indexed Price Performance Since IPO

180% 160 140 120 100 80 60 40 Feb-07 Apr-07 S&P 500 Index

Source: Factset, July 2008.



S&P 500 87%* OAKTR 65% APOLL 63% FIG 62% OZM 56% BX 56% Jul-07 Fortress Oct-07 Blackstone Jan-08 Oaktree Apr-08 Apollo Jul-08 Och-Ziff



7



*Percentage of IPO



Market Environment – What are the Key Questions

 Has there been a fundamental shift in the fundraising market? – Yes – while commitments to the alternatives space remains, cautious review has overtaken blanket euphoria

 Is the fundraising market headed for a significant downturn?



– No – but there will be a significant bifurcation between winners and losers and major allocation shifts within asset classes

 What is the likely complexion of the market players in the future?



– GPs: global brand platforms and specialty players will dominate

– LPs: the largest LPs will wield increasing power in the market



8



Market Dynamics – Reviewing Past Cycles …

The fundraising market has experienced periods of volatility over the past 20 years, but a look at historical trends indicates some differences in the current environment.



Global Fundraising1 from 1988 – 2008 YTD

($ in Billions)



CAGRs

$500 2,000



1988–2007

$450



17.2%

47.6%

$373



$452 1,750



2003–2007

$400 $350



1,500



$298 $300 $250 $200 $151 $150 $102 $100 $50 $0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 YTD $43 $22 $21 $19 $20 $20 $26 $52 $65 $91 $95 $182 $182 $139 $280 $283



1,250



S&P 500 Index



1,000



750



500



250



0



U.S. LBO



U.S. VC



Other U.S. PE



EU LBO



EU VC



Asian LBO



Asian VC



S&P500



9



Source: Note:



Venture Economics, September 2008 (as of June 30, 2008). (1) Includes Asia, Europe and the US



LBO Fundraising (Excluding Venture Capital Funds) …

The LBO fundraising market, while impacted by the stock market downturn in 2000, was much less volatile excluding venture capital funds.



Global Fundraising1 — (Excluding VC Fundraising) from 1988 – 2008 YTD

($ in Billions)



$500 $450 $400 $350 $300



CAGRs



1988–2007

2003–2007



18.2%

49.7%

$316 $391



$249 $250 $200 $150 $110 $106 $100 $50 $16 $0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 YTD U.S. LBO Other U.S. PE EU LBO Asian LBO $15 $14 $16 $15 $21 $31 $38 $48 $75 $143 $235



$124 $80 $78



$111



U.S. LBO



Other U.S. PE



EU LBO



Asian LBO



Source: Note:



Venture Economics, September 2008 (as of June 30, 2008). (1) Includes Asia, Europe and the US



10



What’s Changed – From Mid-market Buyouts to Mega Funds

103% of the $161 billion increase in the global fundraising market between 2000 and 2007 was committed to funds in excess of $3 billion. Global Buyout Fund Commitments Size Breakdown and Dollars Raised

2000

>$3bn 13%



2007

$3bn 45%



$250mm - $1bn 22%



$250mm - $1bn 38%



$1bn - $3bn 23%



$ 306 billion



$ 467 billion



While the ―Super-Mega‖ funds will be limited going forward, $3 billion+ funds will continue to dominate capital commitments.



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Source: Venture Economics, September 2008 (as of June 30, 2008). Note: Represents net amount raised for buyout funds globally.



Increasing Size of All Funds … For Now

Major US and European buyout funds have increased 2.0x on average from their previous fund size.

Size Increases From Previous Fund to Current Fund (1)

($, € in Billions)



6.0x



4.0x 4.0x

Size Increase



2.9x 2.6x 2.0x 2.0x 1.6x 1.3x 1.5x 1.2x 0.9x

€11.2 €7.0 $20.0 €5.0 $15.0 €6.0 €12.1 $17.6 €2.0 $10.0 €3.7 €5.4 €12.0 $9.3 $6.0 $10.1 $18.0



2.4x 1.9x 1.5x 2.0x 1.5x 1.9x 2.0x



2.6x 2.4x 1.7x 1.2x Average US: 2.0x Average Europe: 2.0x



$15.8



$10.0



€2.4



0.0x

Madison Dearborn CP Apax Europe Blackstone Charterhouse Barclays PE Lion Capital Nordic Capital Silver Lake Carlyle Permira Apollo CVC Capital Partners BC Partners Sun Capital Partners Bridgepoint Bain TH Lee KKR PAI TPG



This trend will slow markedly over the next few years.

Source: Private Equity Intelligence, August 2008. Notes: (1) Indicates size increase from penultimate fund raised to the last fund raised, except for funds that are currently marketing or pre-marketing where the target amount is used.



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Coming to Market Faster … Until Now

The average US buyout funds have come to market an average of 3.0 years after its predecessor fund closed against an average of 2.5 years for European buyout funds, with a number of well-known funds returning within two years.

Fundraising Time Gap(1)

($, € in Billions)

8.0x



6 6.0x

Time Period (Years)



5 4 4.0x 3 2 2.0x 2 2 3 2 3 3 2 3 2 2 2 3 2 Average US: 3.0 years Average Europe: 2.5 years 2 2



€11.2



$15.8



$10.0



€2.4



€7.0



$20.0



€5.0



$15.0



€6.0



€12.1



$17.6



€2.0



$10.0



€3.7



€5.4



€12.0



$9.3



$6.0



$10.1



$18.0



0.0x

Madison Dearborn CP Apax Europe Charterhouse Blackstone Barclays PE Lion Capital Nordic Capital Silver Lake Carlyle Permira CVC Capital Partners BC Partners Sun Capital Partners Bridgepoint Apollo TH Lee Bain KKR PAI TPG



This trend will clearly slow as the pace of deals has slowed.

13

Source: Private Equity Intelligence, August 2008. Notes: (1) Indicates time gap from vintage year of penultimate fund raised to the vintage year of last fund raised, except f or funds that are currently marketing or pre-marketing where 2008 is used.



Alternative Allocations Will Increase Going Forward

Allocations to alternatives in North America and Europe amongst top institutional investors are expected to reach 23.2% and 23.6%, respectively. Alternative Allocation Among Select Leading Investors

North America

25.0% 23.2% 21.7% 20.0%

7.1 8.9 7.7 7.5 15.0% 3.6 4.5 10.0% 10.0% 2.5 5.3% 5.0% 7.5 7.1 6.7 6.7 5.0% 7.5 7.0 7.0 6.5 10.0% 4.6 4.0 5.5 15.9% 5.3 7.4



Europe

25.0% 23.6% 20.9% 20.0% 19.6%



21.4%



20.7%



8.4



15.0%



7.3



1.7 3.6



8.3



9.8



8.9



9.7



0.0% 2001 2003 2005 2007 2009E



0.0%

2001 2003 2005 2007 2009E



Real Estate



Private Equity



Hedge Funds



Real Estate



Private Equity



Hedge Funds



14



Source: 2007–2008 Russell Survey on Alternative Investing. Note: Respondents were selected from a broad-based, global list of institutions that manage tax-exempt assets, and those interviewed were qualified to represent the investment activities, decisions and views of their organization.



With Interest Rates Expected to Remain Low …

Interest rates remain below the 10-year historical average levels.



Government Bond Yields

7.0%



6.5%



6.0%



5.5% UK Gilt 10-yr Avg.: 4.815% Current: 4.994% US Treasury 10-yr Avg.: 4.740% Current: 4.097% German Bund 10-yr Avg.: 4.307% Current: 4.604%



5.0%



4.5%



4.0%



3.5%



3.0%



2.5% Jul-98



Jul-99



Jul-00



Jul-01



Jul-02



Jul-03



Jul-04



Jul-05



Jul-06



Jul-07



Jul-08



Source: Bloomberg, July 2008.



15



… And Equity Market Returns Expected to be Moderate and Volatile

The bullish investor sentiment seen early in 2007 dissipated as the fixed income markets collapsed, along with the then-robust M&A / LBO markets. 2007 to Date Equity Market Trading and Outlook

Democratic/Republican National Conventions Presidential Elections



120% 115%



32



28 110% 24

S&P 500 DJIA



% Change

2007YE 5.5% 8.8% 10.7% 94.6% 2008YTD (13.0)% (12.9)% (12.2)% (2.1)%



Market Indices



105%



VIX



100% 95%



20



NASDAQ VIX



16 90% 12 85% 80% 01/05/07 03/01/07 04/26/07 06/20/07 08/15/07 10/09/07 12/04/07 01/28/08 03/24/08 05/18/08 07/13/08 09/06/08 11/01/08 S&P 500 DJIA NASDAQ VIX 8



With low interest rates and tepid equity markets Investors are still seeking alpha returns to augment their portfolios.

Note: Market data as of July 29, 2008.



16



Private Equity Returns Have Been Consistently Superior …

Top Quartile private equity returns have shown consistent excess returns versus other indices.



Top Quartile U.S. Buyout Returns

23.3% Top Quartile U.S. Buyout 29.4% 38.3%



Top Quartile European Buyout Returns



Top Quartile European Buyout



34.4% 29.7% 34.2%



4.2% S&P 500 3.5% 10.8% FTSE



5.7% 14.7% 7.7%



3.7% DJIA 9.7% 6.4% CAC - 40 4.1%



8.9% 15.9%



0%



10%



20%



30%



40%



50%



0%



10%



20%



30%



40%



1 - year



5 - year



10 - year



1 - year



5 - year



10 - year



Source: Venture Economics, Bloomberg. Data annualized ending 12/31/07.



17



… But Much of the Leveraged Finance Market has Shut Down

Reduced fund flows and rising defaults continue to affect demand for leveraged finance paper resulting in reduced issuance volume, increased yields and widening spreads. Leveraged Loan

($ in Billions)



$50 $40 $30 $20 $10 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 17 20 35 36 26 19 7 14 13 4 1 8 5 6 6 6



500 400 3 300 200



Source: S&P LCD, July 2008. Note: Spreads over LIBOR are discounted to include upfront fees to market / OID amortized over a three year period. Indicated spreads include loans rated in the B+/B area.



High Yield

($ in Billions)



$35 $30 $25 $20 $15 $10 $5 $0



30 23 14 17 16



32 11.5 19 11 4 7 2 Aug Sep Oct Nov 2 Dec 2 Jan 1 Feb 3 Mar 5 12 10 3 May Jun Jul 10.0 8.5 7.0



Jan



Feb



Mar



Apr



May



Jun



Jul



Apr



18



Source: Citi Proprietary Database, July 2008. Note: Average at-issue yield is the weighted average of tranche sizes and the corresponding coupons.



Avg. At-issue Yield (%)



Volume



Spread over LIBOR (bps)



Issuance Volume



$60



57



53



600



… So the Question Remains: Will the PE Revolution Continue?

Explosion of global growth and increasing understanding of the private equity opportunities will continue to provide tremendous demand for private equity investment and other alternatives investing.  Middle Market Transactions

─ Notwithstanding the current credit dislocation this trend will continue



 Asia and Emerging Economies

─ Asia is attracting an enormous flow of capital



 Distressed Investing and Credit Opportunities

─ Market disruption will cause shifts in allocation to distressed players and credit funds



 Growth Capital

─ Favorable market conditions for growth capital investing exist due to lack of available financing



 Infrastructure

─ An enormous volume of assets are now being targeted by private equity



 Public Market Stakes

─ Increasing opportunities to take active minority stakes in public companies



19



… And Will There Be Capital to Fund Demand for PE?

Significant sources of capital have increased their alternative investments and will alter the fundraising landscape.



 Sovereign Wealth Funds Globally  Middle East Investors



 Russian Oligarchs

 Increasing Allocations of Pension Funds



 Direct Investors  Hedge Funds



20



Sovereign Wealth Funds

At the end of 2006, estimates on the investments held by sovereign wealth funds varied between $1 and $7 trillion. The Largest Sovereign Wealth Funds

($ in Millions)



$1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $315,000 $300,000 $200,000 $200,000 $100,000 $100,000 $0 Stabilization Fund of the Russian Federation Qatar Investment Authority Alaska Permanent Fund Australian Central Hujjin Government Investment Future Fund Corp Temasek Holdings China Investment Company Ltd. Kuw ait Investment Authority The Government Government of Singapore Pension Fund Investment of Norw ay Corporation Abu Dhabi Investment Authority $32,000 $40,000 $40,100 $51,000 $100,000 $250,000 $875,000



$330,000



21



Continued Demand for Alternatives to Fund Pension Gap

Aging populations across the world and pension plan asset/liability mismatch are expected to fuel demand for alternative assets. Pension deficits in the US alone total almost $500 billion.

Pension Deficits

($ in Billions)



Private Defined Benefits, Contributions vs. Distributions

($ in Billions)



(1)



United States

US $0 ($100) ($200) ($300) ($400)



United Kingdom

UK



$200 $180 $160 $140 $119 $131 $164 $147 $150 $145 $137 $141 $136 $109 $98 $100 $80 $60 $40 $84 $87 $89 $161 $168 $176



$185



$155



($155)



$120



$92 $95



($500) ($600)



($489)



$37



$40 $30 $20 $0



2008E



2009E



Contributions



Distributions



22



Source: Department of Labor—Private Pension Plan. No.12, Federal Reserve, company reports, Morgan Stanley Research. Note: (1) 2000–2010 estimated by Morgan Stanley Research.



2010E



1999



2000



2001



2002



2003



2004



2005



2006



2007



Alternative Allocations Will Increase Going Forward

Allocations to alternatives in North America and Europe amongst top institutional investors are expected to reach 23.2% and 23.6%, respectively. Alternative Allocation Among Select Leading Investors

North America

25.0% 23.2% 21.7% 20.0%

7.1 8.9 7.7 7.5 15.0% 3.6 4.5 10.0% 10.0% 2.5 5.3% 5.0% 7.5 7.1 6.7 6.7 5.0% 7.5 7.0 7.0 6.5 10.0% 4.6 4.0 5.5 15.9% 5.3 7.4



Europe

25.0% 23.6% 20.9% 20.0% 19.6%



21.4%



20.7%



8.4



15.0%



7.3



1.7 3.6



8.3



9.8



8.9



9.7



0.0% 2001 2003 2005 2007 2009E



0.0%

2001 2003 2005 2007 2009E



Real Estate



Private Equity



Hedge Funds



Real Estate



Private Equity



Hedge Funds



23



Source: 2007–2008 Russell Survey on Alternative Investing. Note: Respondents were selected from a broad-based, global list of institutions that manage tax-exempt assets, and those interviewed were qualified to represent the investment activities, decisions and views of their organization.



Situation Analysis: Private Equity Investor Market

The global private equity investor market continues to evolve.



Commitments to Private Equity Hi

Aus / N. Z.



Asia (ex. Japan)



Middle East



Canada



Future Growth

Europe Japan



US



Low



Low



Current Share



Hi



24



Source: Citi estimates 7/07. Note: Bubbles reflect estimate of total commitments to private equity



Evolving Global Sources of Capital

U.S.

   Large share of private equity market but growing slowly Many well established programs reducing number of relationships Strategy – become a ―core‖ portfolio holding



Europe



 



Large market with new entrants Expand relationship with larger players across countries



Middle East



  



Oil revenues drive increase in commitments for foreseeable future Number of new entrants by investor type and geography Important to establish ―proper‖ base from which to expand relationships



Canada



 



Growth in defined benefit programs spur increase in commitments Large established programs with newer programs coming on line



Asia (ex. Japan)



  



Growing interest in alternatives with wide spectrum of sophistication and appetite Need a targeted marketing strategy in general; mostly too early for India and China Inroads today may prove beneficial in the long run



Japan



  



Established players returning to market but focus on well known names Privatization of pension system could create significant potential Leverage marquee name to expand base



Aus / N.Z.

25



 



Superannuation growth drive markets and will expand Investors transition from Fund-of-Funds to direct fund investing



The Limited Partners Dilemma and Opportunities

While the market continues to grow post the credit problems, there are many issues confronting the market that will lead to further changes.



 Managing a multi-alternative asset platform is critical for performance



– The PE, hedge funds, real estate and infrastructure sectors are increasingly inter-related – Most sophisticated institutional investors are evaluating sectors concurrently

 Mega funds now dominate most investor private equity portfolios – Risk to diversification requirement among many of the large investors



– However, investors cannot adequately review the over 500 funds in the market yearly  Market will increasingly bifurcate as investors continue to target fewer relationships – Fewer relationships relieves operational impediments to growth in asset allocation

– It will be increasingly difficult for funds to penetrate new institutional relationships



 Investors are increasingly targeting more strategic relationships – GPs going public may impact historical relationships – Direct investments in GPs and direct sponsorship of transactions are major focuses



26



Appendix: Funds in the Market / Coming to Market



Select Global Funds

Select Global Buyout Funds Raised since 2005 ≥ $2 billion Fund Blackstone Capital Partners V Goldman Sachs Capital Partners VI KKR 2006 Fund Warburg Pincus Private Equity X Texas Pacific Group Partners V Providence Equity Partners VI Apollo Investment Fund VI Bain Capital Fund X Silver Lake Partners III GS Capital Partners V Hellman & Friedman VI Carlyle Partners IV First Reserve Fund XI JC Flowers II Madison Dearborn Capital Partners V Sun Capital Partners V Green Equity Investors V New Mountain Partners III Clayton Dubilier & Rice VII Carlyle/Riverstone Global E&P Fund III TA X Welsh Carson Anderson & Stowe X Court Square Capital Partners II Summit Partners Private Equity Fund VII LS Power Equity Partners II Platinum Equity Capital Partners II Bear Stearns Merchant Banking III New Enterprise Associates XII Hopu USD Master Fund I Francisco Partners II Energy Capital Partners I Stone Point Capital (Trident Fund IV) Bain Capital Co-Investment Fund IX Select Global Buyout Funds In/Coming to Market Fund Blackstone Capital Partners VI TPG Partners VI Apollo Investment Fund VII Carlyle Partners V First Reserve Fund XII Madison Dearborn Capital Partners VI Clayton Dubilier & Rice VIII JC Flowers III TPG Financial Partners Advent International Global Private Equity VI Oak Hill Capital Partners III Onex Partners III Lindsay Goldberg & Bessemer III Welsh Carson Anderson & Stowe XI DLJ Merchant Banking Partners V Avista Capital Partners II Metalmark Capital Partners II GI Partners III JLL Partners Fund VI Lee Equity Partners Ripplewood Partners Fund III TowerBrook Investors III Blum Strategic Partners IV Code Hennessy & Simmons VI JW Childs Equity Partners IV Target Size (in millions) $ 20,000* $ 18,000* $ 15,800* $ 15,000* $ 12,000* $ 10,000* $ 7,500* $ 7,000* $ 7,000* $ 5,000* $ 4,500* $ 4,500* $ 4,000* $ 4,000* $ 3,500* $ 3,000* $ 3,000* $ 2,500* $ 2,500* $ 2,500* $ 2,500* $ 2,500* $ 2,000* $ 2,000* $ 2,000*



28



Amount Raised (in millions) $ 21,700 $ 20,335 $ 17,600 $ 15,000 $ 15,000 $ 12,100 $ 10,100 $ 10,000 $ 9,300 $ 8,500 $ 8,400 $ 7,850 $ 7,800 $ 7,000 $ 6,500 $ 6,000 $ 5,300 $ 5,100 $ 4,000 $ 3,800 $ 3,500 $ 3,440 $ 3,130 $ 3,100 $ 3,085 $ 2,750 $ 2,700 $ 2,500 $ 2,500 $ 2,300 $ 2,250 $ 2,250 $ 2,000



Notes: *Denotes fund currently in the market. Source: Private Equity Intelligence, Citi, market publications.



Select European Funds

Select European Buyout Funds Raised since 2005 ≥ €1 billion Amount Raised (in millions) Fund Apax Europe VII € 11,204 Permira IV € 11,100 Advent Global Private Equity VI € 6,600 Cinven IV € 6,500 CVC European Equity Partners IV € 6,000 BC European Capital VIII € 5,800 Terra Firma Capital Partners III € 5,400 Carlyle Europe Partners III € 5,400 PAI Europe V € 5,400 3i Europe Partners V € 5,000 KKR European Fund II € 4,500 EQT V € 4,250 CVC European Equity Partners IV Tandem Fund € 4,123 Charterhouse Capital Partners VIII € 4,000 Bain Capital Europe III € 3,500 Candover 2005 Fund € 3,500 Doughty Hanson & Co. V € 3,150 PAI Europe IV € 2,700 Bridgepoint Euro Private Equity III € 2,500 Barclays Private Equity European Fund III € 2,400 Montagu III € 2,260 Lion Capital Fund II € 2,026 Nordic Capital Fund VI € 1,900 Industri Kapital 2007 Fund € 1,675 Doughty Hanson & Co. IV € 1,590 Electra European Fund II € 1,250 Altor Fund II € 1,150 Englefield Capital Fund II € 1,060 Sagard Private Equity Partners II € 1,000 Summit Partners European Fund € 1,000

Notes: *Denotes fund currently in the market. Source: Private Equity Intelligence, Citi, market publications.



Select European Buyout Funds In/Coming to Market Fund CVC European Equity Partners V Permira V BC Partners European Capital IX KKR European Fund III Bridgepoint Euro Private Equity IV Candover 2008 Charterhouse Capital Partners IX Nordic Capital Fund VII Montagu IV Altor Fund III Cognetas Hg Capital VI Avenue Europe Special Situations Clessidra Capital Partners II Pamplona Capital Partners II Eurazeo Gilde Buyout Fund IV Silverfleet Capital (fka PPM Capital) Apax France VIII Italian Private Equity Fund V Stirling Square Capital Partners II Oakley Capital Investment 2007 Carlyle Europe Technology Fund II GMT Communications Partners IV Target Size (in millions) € 12,100* € 12,000* € 7,000* € 6,000* € 5,000* € 5,000* € 6,000* € 3,700* € 3,000* € 2,000* € 2,000* € 2,000* € 1,500* € 1,500* € 1,500* € 1,000* € 1,000* € 1,000* € 700* € 600* € 600* € 550* € 500* € 500*



29