: fall 2010

: Fall 2010

PitchBook 4Q 2010 Private Equity Reporting Deck

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ExitsInvestment

Fundraising

Three Aspects of Private EquityFundraising, Investment & Exits Trends

Private Equity Investment

Capital Invested Through 3Q 2010 Surpasses 2009

Number of Deals Closed and Total Capital Invested by Year

Source: PitchBook

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*$0

$100

$200

$300

$400

$500

$600

$700

0

500

1000

1500

2000

2500

3000

3500

$50 $33 $39$83

$126

$173

$300

$605

$213

$57$76

904

670826

1228

1661

2041

25242987

2170

1300

1027

Capital Invested ($B) Number of Deals* Through 3Q 2010

2010 Capital Invested Continues Upward Trend

Number of Deals Closed and Total Capital Invested by Quarter

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q2005 2006 2007 2008 2009 2010

$0

$50

$100

$150

$200

$250

0

100

200

300

400

500

600

700

800

900

$27$42 $41

$63

$42$58

$69

$131$125$127

$145

$208

$68

$39

$85

$21 $16$8 $11

$22 $18$31 $28

546

468

498529

647

607

646624

744785

745713 696

504

583

387

335305 308

352 376

335316

Capital Invested ($B) Number of Deals Source: PitchBook

Middle-Market Deal Activity Increases

Percentage of Deal Volume (count) by Deal Size Range

2003 2004 2005 2006 2007 2008 2009 2010*0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Under $50M $50M-$250M $250M-$500M $500M-$1B $1B-$2.5B $2.5B+Source: PitchBook* Through 3Q 2010

Middle-Market Grabs Over 50% of Capital

Percentage of Deal Volume (capital) by Deal Size Range

2003 2004 2005 2006 2007 2008 2009 2010*0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Under $50M $50M-$250M $250M-$500M $500M-$1B $1B-$2.5B $2.5B+Source: PitchBook* Through 3Q 2010

Midwest the Top Region for PE Investment Percentage of Deal Volume (count) by Region

Mid Atlantic9%

Midwest24%

Mountain6%

Northeast12%

South17%

Southeast16%

Southwest1%

West Coast14%

Source: PitchBook* Through 3Q 2010

B2B Holds Onto Highest Volume of Deals

Percentage of Deal Volume (count) by Industry

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q2007 2008 2009 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Business Products and Services (B2B)

Consumer Products and Services (B2C)

Financial Services

Energy

Healthcare

Information Technology

Materials & Resources

Source: PitchBook

Capital Shifts Away from B2CPercentage of Deal Volume (capital) by Industry

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q2007 2008 2009 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Business Products and Services (B2B)

Consumer Products and Services (B2C)

Financial Services

Energy

Healthcare

Information Technology

Materials & Resources

Source: PitchBook

Private Equity Exits

Exits Up 64% from 3Q 2009 Quarterly PE Exits by Corporate Acquisition, IPO and Secondary

Sale

Percentage of capital invested by industry

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q2006 2007 2008 2009 2010

0

20

40

60

80

100

120

140

160

180

134

158

116

39

59

85

116

97

Corporate Acquisition IPO Secondary Transaction Source: PitchBook

Median Exit Value Climbs in 2010 Median Exit Size ($M)


2004 2005 2006 2007 2008 2009 2010*$0

$50

$100

$150

$200

$250

$300

$109 $115 $126

$135 $138

$85

$200

$176

$155

$180

$250

$165

$200

$246

Corporate Acquisition Secondary Transaction*As of 9/30/2010Source: PitchBook

PE Firms Holding onto Companies Longer

Average Time from Buyout to Exit


2004 2005 2006 2007 2008 2009 20103

4

5

3.9 Yrs 3.8 Yrs 3.8 Yrs

4.1 Yrs4.2 Yrs

4.7 Yrs

4.9 Yrs

Average Holding Period of Exits

Year Sold

Ave

rage

Yea

rs H

eld


Private Equity Fundraising

PE Fund Closings on Pace with 2009Number of Funds Closed and Total Capital Raised by Year

* Through 3Q 2010

2004 2005 2006 2007 2008 2009 2010*$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

-

50

100

150

200

250

300

$99,122 $156,297 $211,393 $311,942 $332,563 $146,296 $81,648

129

227 209

251

214

105

73

Capital Raised ($B) # of Funds Raised Source: PitchBook

PE Fundraising Levels Off in 3Q 2010Number of Funds Closed and Total Capital Raised by Quarter

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q2008 2009 2010

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

-

10

20

30

40

50

60

70

80

$113,685$107,132 $75,199 $36,547 $64,189 $40,389 $16,759 $24,959 $22,509 $34,553 $24,587

78

55

47

34

45

28

12

20

28 27

18

Capital Raised ($B) # of Funds Raised Source: PitchBook

Growing Fund Size Trend Continues

Percentage of US PE Funds (Count) by Size

2004 2005 2006 2007 2008 2009 2010*0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B $5B+


$1B - $5B Funds Dominate Capital Raised

Percentage of Capital Raised by Size – US Funds

2004 2005 2006 2007 2008 2009 2010*0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B $5B+

* Through 3Q 2010

74%

Source: PitchBook

Fund Returns Overview

J-Curve

PE Leads in Average IRR Since 2000Average Fund IRR by Vintage Year

Vintage Year

1998 1999 2000 2001 2002 2003 2004 2005 2006

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%22%

13%

4%

12%

-11%

-3%

-9%-12%

PE VC FoF Mezz All

Net

IRR

(%) S

ince

Ince

ption

As of 3/31/2010 Source: PitchBook

Private Equity Outperforming in the Long Run

Horizon IRR – Private Equity, Venture Capital and Public Index

1 Yr 3 Yrs 5 Yrs

-10%

0%

10%

20%

30%

40%

50%

12%

2%

14%

-3% 1%

PE VC Russell 3000

Hor

izon

IRR

(%)

As of 3/31/2010 Source: PitchBook

Returns Bounce Back from 2009 LowsMedian 1-Year Rolling Horizon IRR by Fund Type

Source: PitchBookOne Year IRR as of Year Ending March 31st

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

-40%

-30%

-20%

-10%

0%

10%

20%

30%

17%

21%

-18%

12%

17%

-38%

-14%

-7%

3%6%

-16%

-3%

20%

-1%8%

PE VC FoF Mezz ALL

Rolli

ng 1

Yea

r Hor

izon

IRR

(%)

PE Fund’s had an aver-age 1-year IRR of 12% for 2010

Private Equity Fund Returns

Outsized Returns for Funds Big and Small

Private Equity Horizon IRR by Fund Size

1 Yr 3 Yrs 5 Yrs

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%20%

-14%

12%

0%

21%

4%

12%

Under $100M $100M-$250M $250M-$500M$500M-$1B $1B-$5B $5B+

Hor

izon

IRR

(%)

Source: PitchBookAs of 3/31/2010

Total Value of PE Funds Rose by 31% Last Year

Weighted 1-Year Change in Total PE Portfolio Value

3/31/2009Under $100M

$100M - $250M

$250M - $500M

$500M - $1B$1B - $5B

$5B+ 3/31/2010

95%

100%

105%

110%

115%

120%

125%

130%

135%

100%

0% 1% 0%1%

7%

21%

131%

Decrease In Remaining Value

Chan

ge (%

) in

Tota

l Por

tfol

io V

alue

Increase in Remaining ValueSource: PitchBook

Mature Private Equity Funds Well into the Positive

Average Private Equity Return Multiples by Vintage Year

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.8x

2.0x

1.38

1.55

1.79 1.81

1.60

1.25 1.28

1.00

0.86 0.82 0.840.78 0.80

Average of DPI Average of RVPI Average of TVPI

J-Curve

Source: PitchBook*Through 1H 2010

50% of All PE Funds Have a 7.6% IRR or HigherIRR Quartiles by Fund Size for Mature Private Equity

Funds

All

Under $100M

$100M-$250M

$250M-$500M

$500M-$1B

$1B-$5B

$5B+

-10% -5% 0% 5% 10% 15% 20% 25%

Internal Rate of Return (IRR)

Fund

Siz

e Ra

nges

As of 3/31/2010

75th Percentile

Median

25th Per-centile

Source: PitchBook

$485B of Private Equity Dry PowderCapital Overhang for Private Equity Funds Raised by US

Investors

2003 2004 2005 2006 2007 2008 2009 2010$0

$20

$40

$60

$80

$100

$120

$140

$160

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500 $485

$2.56 $7.97

$20.33 $29.17

$111.67

$159.12

$114.57

$39.94

Cumulative Overhang Under $100M $100M-$250M $250M-$500M$500M-$1B $1B-$5B $5B+

$ in Billion As of 3/31/2010

Source: PitchBook

Venture Capital Fund Returns

Average Venture Capital Fund 5-year Return Around 1%

Venture Capital Horizon IRR by Fund Size


1 Yr 3 Yrs 5 Yrs

-20%

-15%

-10%

-5%

0%

5%

10%

-2%

-4%

-18%

1%

6%

-10%

3%

Under $80M $80M-$150M $150M-$250M$250M-$500M $500M-$1B $1B+

Hor

izon

IRR

(%)

As of 3/31/2010

Total Value of VC Funds Rose by 14% Last Year

Weighted 1-Year Change in Total VC Portfolio Value

Source: PitchBook

3/31/2009Under $80M

$80M-$150M$150M-$250M

$250M-$500M

$500M-$1B$1B+ 3/31/2010

95%

97%

99%

101%

103%

105%

107%

109%

111%

113%

115%

100.0%

- 1.3%

0.1%

5.9%

4.3%1.1%

3.8%

113.8%

Decrease in Remaining Value

Chan

ge (%

) in

Tota

l Por

tfol

io V

alue

Increase in Remaining Value

Venture Capital Funds Still Waiting for Liquidity Average Venture Capital Return Multiples by Vintage

Year

Source: PitchBook

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.18

0.760.86

0.94 0.93

0.790.89

0.94

0.87 0.77 0.82 0.840.92

Average of DPI Average of RVPI Average of TVPI*As of 3/31/2010

J-Curve

Over Half of All Venture Capital Funds have Positive IRR

IRR Quartiles by Fund Size for Mature Venture Capital Funds

Source: PitchBook

All

Under $80M

$80M-$150M

$150M-$250M

$250M-$500M

$500M-$1B

Over $1B

-15% -10% -5% 0% 5% 10% 15% 20% 25%

Internal Rate of Return (IRR)

Fund

Siz

e Ra

nges

As of 3/31/2010

75th Percentile25th Percentile

Median

$82B of Venture Capital Dry PowderCapital Overhang for Venture Capital Funds Raised by

US Investors

Source: PitchBook

2003 2004 2005 2006 2007 2008 2009 2010$0

$5

$10

$15

$20

$25

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90 $81.66

$1.39

$3.39

$10.65 $10.96

$20.30

$14.33

$9.63 $10.99

Cumulative Overhang Under $80M $80M-$150M $150M-$250M$250M-$500M $500M-$1B $1B+

Fund of Funds Returns

Funds from $500M to $1B Lead 5-Year IRRFund of Funds Horizon IRR by Fund Size


1 Yr 3 Yrs 5 Yrs

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%18%

-5%

7%

9%

-16%

4%

14%

1%

Under $250M $250M-$500M $500M-$1B$1B-$5B $5B+

Hor

izon

IRR

(%)

Mature Fund of Funds Posting Strong Multiples Average Fund of Funds Return Multiples by Vintage Year

Source: PitchBook

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.32

1.14

1.421.38 1.34

1.26

1.060.93

0.87 0.84

0.92 0.95 1.02


J-Curve

Global Fund Returns

Mature Global PE Funds Average DPI of 1.2x

Average Global Private Equity Return Multiples by Vintage Year

Source: PitchBook

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

1.54 1.49

1.78

2.41

1.751.63

1.17 1.14

0.79 0.73 0.72 0.72 0.82


J-Curve

Mature Global VC Funds Average TVPI of 1.25x

Average Global Venture Capital Return Multiples by Vintage Year

Source: PitchBook

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.8x

1.12

1.63

1.30

0.99

1.63

1.37

1.13

0.83

0.78 0.77 0.77

0.91 0.92


J-Curve

: fall 2010

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