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Lehman Brothers Private Equity Partners

LBPE Investor Presentation

23 January 2009

Table of Contents

I. Investment Manager Update

II. Q4 2008 Preliminary Performance Update

III. Market Performance

IV. LBPE Action Plan & Value Proposition

A. Appendices

Investment Manager Update

LBPE Investment Manager Update

A new, independent investment management company to be called Neuberger Berman will be created comprising businesses that managed approximately $160 billion of assets as of 30 November 2008

LBPE’s Investment Manager, NB Alternatives (formerly called the Private Fund Investments Group), is a part of this transaction, and the investment team is completely intact

The Board of Directors expects this transaction to significantly benefit LBPE by providing the Investment Manager with a strong platform from which to continue managing the Company’s high quality private equity portfolio

– LBPE will continue to be managed by the same experienced management team

– LBPE’s Investment Manager remains committed to the goal of creating long term value for our shareholders

Management will control Neuberger Berman with a 51% interest while Lehman Brothers Holdings Inc. will retain a 49% stake

Final Bankruptcy Court approval occurred on 22 December 2008 and closing is expected in Q1 2009

The Management bid was selected as the winner in a Bankruptcy Court auction held on 3 December 2008, topping a previous bid from the private equity firms of Bain Capital and Hellman & Friedman that was announced in September and was used to start the auction process

On 3 December 2008, a group consisting of portfolio managers, the management team and senior professionals (“Management”) agreed to a management buyout of Neuberger Berman and the fixed income and alternative asset management businesses of Lehman Brothers’ Investment Management Division

1

LBPE Name Change

The name change and re-branding of LBPE is expected to occur during Q1 2009

We believe that the name Lehman Brothers has caused some of the selling pressure on LBPE shares due to name recognition in connection with the Lehman Brothers bankruptcy filings

We believe the name change will help symbolize a transition away from the Lehman Brothers affiliation, and we hope it will serve to alleviate any ongoing confusion regarding any connection to Lehman Brothers

In conjunction with the Management acquisition, LBPE intends to change its name and ticker symbol to reflect the new name of the Investment Manager

2

Private Equity Fund of Funds

Co-Investments

Secondaries

Hedge Fund of Funds

Alternative Investment Solutions

Capital Analytics

NB Alternatives

Overview of Neuberger Berman

Neuberger Berman Overview *

Equity

U.S. Equity

International/Global Equity

Quantitative

Fixed Income

Cash & Short Duration

Tax-exempt

Investment Grade

Non-Investment Grade

Specialty

Traditional Non-TraditionalHedge Funds

Equity

Fixed Income

Quantitative

Commodities

Premier global investment management firm dedicated to providing investment products, advice and research

$160 billion in total assets under management

Over 2,000 employees globally (U.S., Europe and Asia)

Research-driven and quantitative approach to portfolio management and alpha generation

Industry leading, sophisticated risk management

___________________________* As of December 15, 2008. Information shown reflects the individuals, account, assets and/or product lines of select registered investment advisers, including Neuberger Berman, LLC, Neuberger Berman

Management LLC, Lehman Brothers Asset Management LLC, Lehman Brothers Asset Management Inc., Lehman Brothers Alternative Investment Management Inc., Lehman Brothers Alternative Investment Management LLC, Lehman Brothers Private Equity Advisers L.L.C., Lehman Brothers Private Fund Advisers, LP and select other affiliated investment advisers, that will be part of the pending management acquisition of a majority interest in Neuberger Berman and select fixed income and alternative asset management businesses of Lehman Brothers Inc.’s Investment Management Division. Please see the disclosures at the end of the material for important information regarding the pending acquisition transaction and associated marketing names.

3

Over $11 billion of commitments managedOver 200 professionalsOver 20 years as a private equity investorGlobal presence with offices in U.S., Europe and AsiaServing over 150 institutional investors

Overview of NB Alternatives – Private Equity

NB Alternatives – Private EquityPrimary Investments Secondary Investments Co-Investments

Fully integrated approach to private equity fund of funds investing

Our Competitive Advantages

Strong Track RecordExperienced Team Proven Access and SourcingTactical Portfolio Construction

Client Customized PortfoliosSecondaries and Co-investmentsIndustry Leading ReportingIntegrated Alternative Strategies

4


– Led by 10 member Fund of Funds Investment Committee, with over 190 years of collective private equity experience

– Experienced team of senior professionals with diverse backgrounds• Investment management• Direct private equity investing• Corporate finance• Venture-backed companies• Legal, tax and structuring

Investment Team – 53 Professionals Investor Services – 148 Professionals

– CPAs, accountants, analysts, computer programmers and other professionals

– Extensive proprietary private equity systems and database

– Sophisticated investor servicing capabilities• Fund accounting and reporting• Consolidated performance analysis• Risk management services• Transaction management

Fund of Funds Secondary Investments Co-Investments

Focused on three disciplines…

NB Alternatives investment team

5


$2.0$2.6 $2.6

$5.1$6.2$0.8 $0.8

$0.8

$2.6

$1.6

$1.6

$1.6

$0.5

$0.5

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

2004 2005 2006 2007 2008

($ in billions)

Fund of Funds Secondaries Co-investments LBPE

Five-Year Growth in Commitments

NB Alternatives’ commitments under management grew to $11 billion by the end of 2008

6

Q4 2008 Preliminary Performance Update

LBPE Financial Performance UpdateOn a preliminary basis, LBPE’s NAV per share was $9.41 at 31 December 2008

Private equity investment level increased to 103%Funded capital calls and co-investments of approximately $187 millionReceived distributions of approximately $46 million$151 million drawn down under the 7-year $250 million credit facility40% over-commitment level– Over 100% of our unfunded commitments are backstopped by cash and the available credit facility

2008 Portfolio Highlights

___________________________Note: As of 31 December 2008.

($ in millions, except per share values) 31 December 2008(Unaudited Monthly)

30 November 2008(Unaudited Monthly)

31 October 2008(Unaudited Monthly)

Fund Investments $409.1 $402.8 $409.2

Direct Co-investments $100.7 $100.1 $109.5

Total Private Equity Investments $509.9 $502.8 $518.7

Private Equity Investment Level 103% 102% 100%

Cash and Cash Equivalents $139.2 $147.4 $155.5

Net Other Assets (Liabilities) ($155.1) ($155.4) ($155.5)

Net Asset Value $493.9 $494.9 $518.7

Net Asset Value per Share $9.41 $9.27 $9.68

7

LBPE 2008 PerformanceNAV per share development based on preliminary estimates as reported in the December 2008 monthly report:

$9.41$0.01$0.09($0.23)

($0.92) ($0.25)

$0.19

$0.15$10.37

$7.00

$7.50

$8.00

$8.50

$9.00

$9.50

$10.00

$10.50

$11.00

$11.50

$12.00

Net AssetValue PerShare 31

December2007

PrivateEquity NetRealized

Gains(Losses)

NetUnrealizedChange inPrivatelyHeld PE

Investments

NetUnrealizedChange in

CreditRelated &Public PE

Investments

Interest andDividends,including

Mezzanine

ForeignExchange

Adjustments

OperatingExpenses &

Other

AccretiveShare

Repurchases

Net AssetValue PerShare 31

December2008


8

Investment Activity Since IPO

Approximately 69% of LBPE’s private equity NAV can be attributed to capital contributions made since our IPO in July 2007

$257.1

$166.1

($30.8)

$186.9 $509.9

($69.4)

$0

$100

$200

$300

$400

$500

$600

Initial PortfolioPrivate Equity NAV

Less: DistributionsSince IPO (Primarilyfrom Initial Portfolio)

Less: ValuationAdjustments

July to December2007 Contributions

2008 Contributions 31 December 2008Private Equity NAV

($ in millions)

$353 million deployed since IPO in July 2007

9

$10.4

$4.1

$10.2$8.3

$1.7 $2.7

$2.7

$5.1

$18.8

$14.8

$5.9 $4.3

$0.9

$1.3

$0.3

$1.5

$0.2 $0.7

$0

$5

$10

$15

$20

$25

$30

Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

($ in millions)

Buyout Special Situations Growth / Venture

Capital Deployment Since 30 June 2008

Capital Deployment Since 30 June 2008

Over half of the capital invested in the second half of 2008 was directed to special situations / distressed funds

TotalDrawdowns

Buyout Funds $37.4Special Situations Funds 51.6Growth / Venture 4.9Total $94.0

10

Europe20%

Asia / Rest of World

5%

North America75%

LBPE Portfolio Diversification

Geography

Private Equity Asset Class

Industry

Diversification based on the fair value of private equity investments at 31 Dec. 2008: 1

Vintage Year

Buyout Funds 52%

Buyout Co-invest 19%

Secondary Purchases 2%

Growth / Venture 4%

Special Sit Co-invest 2%

Special Sit Funds 21%

2000 & Earlier

1%

200733%

200633%

20014%

20089%

20023%

20042%

200512%

20033%

Energy / Utilities

24%

Financial Services

10%

Technology / IT

9%

Business Services

5%

Industrials10%

Consumer / Retail8%

Comm. / Media6%Healthcare

7%

Transport.2%

Diversified / Undisclosed /

Other19%

11

LBPE Vintage Year Diversification

31% of LBPE’s vintage year 2007 portfolio, and over 90% of the 2008 portfolio, is dedicated to special situations / distressed investments

($ in millions) Vintage Year<=2004 2005 2006 2007 2008

Buyout Funds $59.0 $48.8 $116.8 $41.9 $0.1 Buyout Co-investments - 0.8 29.3 65.4 3.2 Special Situations Funds 0.3 2.5 16.4 51.1 33.8 Special Situations Co-investments - - - 0.3 8.2 Growth / Venture 3.4 4.6 5.8 8.2 1.2 Secondary Purchases 1.7 6.7 0.5 0.0 - Total $64.4 $63.3 $168.8 $166.9 $46.4

Vintage Year<=2004 2005 2006 2007 2008

Buyout Funds 92% 77% 69% 25% 0%Buyout Co-investments 0% 1% 17% 39% 7%Special Situations Funds 0% 4% 10% 31% 73%Special Situations Co-investments 0% 0% 0% 0% 18%Growth / Venture 5% 7% 3% 5% 3%Secondary Purchases 3% 11% 0% 0% 0%Total 100% 100% 100% 100% 100%

___________________________Note: As of 31 December 2008. Certain figures may not total due to rounding.

12

Active Special Situations Portfolio

$3 mm$17 mmDiversified distressed investments and mezzanine investments

Diversified / Other Special Situations

$38 mm$113 mmTotal

$21 mm

$5 mm

$9 mm

$8 mm

$28 mm

$59 mm

“Turning around”underperforming businesses

Operational Turnarounds

Restructuring “bad”balance sheets of “good”companies or assets

Financial Restructurings

Trading stressed and distressed securities

Undervalued Securities

Our special situations / distressed portfolio is comprised of funds with a variety of investment strategies

Description Est. 31-Dec NAV 31-Dec UnfundedStrategy

___________________________Note: As of 31 December 2008. Certain figures may not total due to rounding.

Fund Managers

Lehman Crossroads Fund XVII & XVIII

13

Distressed Debt Transaction: Illustrative Case Study

Scenario:– Company X is a company that has exhibited steady growth through all economic cycles– In early 2007, Company X was acquired for over $1 billion by Acquisition Sponsor A– The buyout financing included $450 million of senior debt and $300 million of mezzanine debt– However, due to the current credit crisis, Company X’s senior debt now trades at less than 60 cents on the dollar– The current market value of the debt implies senior leverage of less than 2.2x LTM EBITDA– Company X continues to have a strong liquidity position with steady growth and over 75% market share in its

industry

Investment Opportunity:– Distressed Debt Sponsor Z has an opportunity to purchase Company X’s senior debt from a distressed financial

seller at an attractive valuation (57% of face value)– Risk levels are much lower than traditional LBO equity because the debt is senior to equity and provides a strong

current yield– Potential unlevered returns of 20%+ IRR and 2.2x multiple of invested capital at five years to par

• 40%+ IRR and 1.9x multiple of invested capital at two years to par– In addition, Distressed Debt Sponsor Z has opportunities for additional returns by trading the debt for equity or by

gaining control of Company X

The following provides an example of investment opportunities that are currently being pursued by distressed debt firms

14

Market Performance

LBPE Share Price and NAV per ShareOn a preliminary basis, LBPE’s NAV per share was $9.41 at 31 December 2008

LTM Share Price Performance and Net Asset Value Per Share

___________________________Source: NYSE Euronext.Past performance is not indicative of future results.

$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00

$10.00$11.00$12.00

Price

0

200

400Volume (000's)

Daily Trading Volume Net Asset Value per Share Price per Share

$9.41

$2.55 (72.9% Discount)

31-Dec-07 31-March-08 30-June-08 23-Jan-0930-Sept-08

15

Private Equity Discount to NAV per ShareWe believe that LBPE shares are significantly undervalued. After subtracting the balance of our net cash, public equity securities and credit related fund investments at fair value, our shares are currently trading at an implied discount of 88% to the fair value of our other privately-held investments

___________________________Note: Net cash balance = cash and cash equivalents minus total liabilities.

Investors have the opportunity to benefit from both NAV appreciation and reduction / elimination of the NAV discount

Net Asset Value per Share $9.41 Minus: Net Cash, Public Equity Securities andCredit Related Fund Investments Per Share ($1.62)

Private Investments per Share $7.79

Closing Share Price (23-January-09) $2.55 Minus: Net Cash, Public Equity Securities andCredit Related Fund Investments Per Share ($1.62)

Market Value of Private Investments per Share $0.93

Private Investments Premium (Discount) to Private Equity NAV (88.1%)

Summary of Net Asset Value Per Share 31 December 2008

16

LBPE Action Plan & Value Proposition

LBPE’s Solid Financial PositionLBPE has a healthy balance sheet and a conservative capital structure with over 100% of unfunded commitments backstopped by cash and the undrawn credit facility

As of 31 December 2008, our private equity exposure and capital position consisted of the following:– Total private equity exposure of $691.5 million, including unfunded private equity commitments of $181.7 million– Total capital resources of $237.8 million, including cash and cash equivalents plus the undrawn credit facility– Over-commitment level of 40%– Excess capital resources over unfunded commitments of $56.1 million


($ in millions) 31 December 2008

Net Asset Value $493.9

Total Private Equity Investments $509.9

Private Equity Investment Level 103%

Unfunded Private Equity Commitments $181.7

Total Private Equity Exposure $691.5

Over-commitment Level 40%

Cash and Cash Equivalents $139.2

Undrawn Credit Facility $98.6

Total Capital Resources $237.8

Excess Capital Resources Over Unfunded Commitments $56.1

17

LBPE’s Solid Financial PositionLBPE continues to have access to its favorable credit facility

LBPE has a revolving credit facility with The Bank of Scotland for up to $250 million with a term expiring in August 2014

– Borrowings under the credit facility bear interest at LIBOR plus 1.35% per annum

– The key financial covenant is a maximum debt to value ratio of 50%

As of 31 December 2008, LBPE has drawn down $151 million under the credit facility, with the proceeds held at JPMorgan or in U.S. Treasury bills

In October 2008, LBPE and The Bank of Scotland agreed to amend certain terms of the credit facility

– The amendment removed a covenant stating that the Investment Manager be majority owned by Lehman Brothers and replaced it with a covenant that provides for a key man provision on certain investment professionals


18

LBPE’s Actions Taken to Date

We continued to deliver on our market leading and timely investor reporting

We continued to pursue a positive outreach program with investors and research analysts

We initiated a liquidity enhancement program in July 2008

– Since the inception of the program, LBPE has repurchased over 1.7 million shares, or 3.2% of the total issued Class A ordinary shares

– During the month of December, LBPE repurchased 881,264 shares, or 1.6% of the total Class A ordinary shares in issue, at a weighted average repurchase price of $1.51 per share

– Share repurchases through 31 December 2008 have been accretive to NAV per share by $0.19

In January 2009, we announced an amendment to the liquidity enhancement agreement that increased the maximum number of shares which may be repurchased to 7.5% of the total Class A ordinary shares in issue

– The amended agreement will be in force until 15 April 2009 subject to extension at the election of LBPE

We have taken steps to enhance and strengthen the liquidity of LBPE shares


Liquidity Enhancement Program Activity

Month # of Shares RepurchasedWeighted Average

Repurchase Price per ShareJuly 2008 56,349 $7.93 August 2008 164,617 $7.82 September 2008 174,458 $6.74 October 2008 216,493 $4.72 November 2008 218,956 $2.41 December 2008 881,264 $1.51 Total 1,712,137 $3.38

19

LBPE’s Action Plan

As long as current market conditions prevail, we intend to maintain a conservative capital structure with a combination of cash and the undrawn credit facility exceeding the amount of unfunded private equity commitments

While a number of attractive private equity investments exist in the market, few are more compelling in our view than purchasing LBPE shares at current price levels

– LBPE does not presently intend to make new private equity commitments while these market circumstances persist

We plan on changing the name and ticker symbol of LBPE during Q1 2009 to reflect the new name of the Investment Manager and the fact that we will no longer be affiliated with Lehman Brothers

In addition, we continue to evaluate other courses of action to counteract what we believe is an unwarranted discount to NAV per share

We are considering options to address current market events and stand ready to take appropriate actions

20

Public Investments (31-Dec-08)

6%

Private Fund Investments (31-Dec-08)

3%

Credit Related (31-Dec-08)

15%

Private Co-investments

(Rolling Basis)21%Private Fund

Investments (30-Sep-08)

55%

LBPE’s reported valuations account for all available information, providing a timely viewof the private equity portfolio

LBPE’s Timely Valuation Process


NAV by Valuation Type

Public Valuation

6%

Private - Held At Cost17%

Private - Held Below Cost

24%

Private - Held Above Cost

38%

Mark-to-Market Credit

15%

NAV by Date of Most Recent Available Information

LBPE’s Investment Manager proactively evaluates the investment portfolio to re-value the Company’s investments using all available information

In the December 2008 monthly report, LBPE’s private equity investments were re-valued as of 31 December 2008 or 30 September 2008

– 21% of net asset value was held in credit related fund investments and publicly traded securities that were re-valued as of 31 December 2008

– 3% of net asset value was held in private equity funds valued using information through 31 December 2008

– 55% of net asset value was held in private equity funds valued using information through 30 September 2008

– 21% of net asset value was held in private co-investments that are evaluated on a rolling monthly basis or as necessary

21

LBPE’s Timely Valuation Process

LBPE’s Investment Manager is currently employing its high quality valuation procedures to account for year end 2008 valuation adjustments

We believe the Investment Manager’s proactive approach to valuations is particularly appropriate given the recent market volatility and sharp decline in public asset valuations in the latter half of 2008

LBPE’s Investment Manager is reaching out to fund sponsors and collecting all available information to re-value the Company’s private equity investments at year end

While this valuation process will extend LBPE’s reporting timeline into late February, LBPE will continue to be one of the first listed private equity companies to issue its 2008 annual report

We believe this approach is the prudent course of action in order to maintain our industry leading valuation processes

LBPE’s Investment Manager is re-doubling its efforts to provide a fair value of the private equity investment portfolio for the 2008 annual report

22

LBPE Value Proposition

Experienced Investment Manager with a strong long-term track record

High quality private equity portfolio– Top-tier managers with proven success– Robust allocation to special situations / distressed– High quality co-investment program with proprietary access

Timely and transparent valuations and reporting

Conservative capital structure– Over 100% of our unfunded private equity commitments are backstopped by cash and cash

equivalents and the undrawn credit facility– Over-commitment level of 40%– $139 million of cash and cash equivalents and $99 million undrawn on our credit facility

We continue to believe that LBPE offers a compelling investment opportunity


23

Appendices

Who We Are

LBPE is a closed-end investment company which invests in an actively managed portfolio of private equity fund investments managed by leading sponsors and direct co-investments alongside leading sponsors

LBPE is managed by NB Alternatives (formerly the Private Fund Investments Group)

– Broad scale, experience and access

– Strong long-term track record

– Deep team of experienced professionals dedicated to fund of funds, secondary investments, co-investments and investor services

– Global presence with offices in New York, Dallas, London and Hong Kong

Investor friendly terms

Our investment objective is to produce attractive returns on our capital from private equity investments while managing investment risk through portfolio diversification across asset class, vintage year, geography, industry and sponsor

24

3rd Quartile11%

4th Quartile1%

2nd Quartile24%

1st Quartile64%

High Quality Private Equity PortfolioThe private equity funds in our portfolio are managed by leading private equity firms

We believe that the private equity sponsors who have been successful investors in the past frequently continue to outperform their peers

The chart on the right includes the performance of all prior funds managed by managers currently in the LBPE portfolio

Of the prior funds managed by these sponsors, 88% were above median, including 64% that were 1st quartile

Quartile Analysis of Prior Funds Managed 2


25

Europe24%

Asia / Rest of World

5%

North America71%

LBPE Portfolio Diversification

Geography

Private Equity Asset Class

Industry

Diversification based on total private equity exposure at 31 December 2008: 1

Vintage Year

Energy / Utilities

21%

Financial Services

11%

Technology / IT

9%

Business Services

6%

Industrials12%

Consumer / Retail9%

Comm. / Media8%Healthcare

7%

Transport.3%

Diversified / Undisclosed /

Other14%

Buyout Funds 54%

Buyout Co-invest 15%

Secondary Purchases 1% Growth /

Venture 8%

Special Sit Co-invest 1%

Special Sit Funds 21%

2000 & Earlier

1%

200735%

200633%

20014%

200810%

20022%

20042%

200511%

20032%

26

Private Equity Investment PortfolioThe following is a list of our private equity investments as of 31 December 2008

Fund Investments Asset Class Fund Investments Asset ClassAIG Highstar Capital II Buyout Sankaty Credit Opportunities III Special SituationsAmerican Capital Equity II Buyout Summit Partners Europe Private Equity Fund Growth EquityApollo Investment Fund V Buyout Sun Capital Partners V Special SituationsAquiline Financial Services Fund Buyout Terra Firma Capital Partners III BuyoutArcLight Energy Partners Fund IV Buyout Thomas H. Lee Equity Fund VI BuyoutAvista Capital Partners Buyout Trident IV BuyoutBertram Growth Capital I Growth Equity Warburg Pincus Private Equity VIII BuyoutCarlyle Europe Partners II Buyout Wayzata Opportunities Fund II Special SituationsCenterbridge Credit Partners Special Situations Welsh, Carson, Anderson & Stowe X BuyoutClayton, Dubilier & Rice Fund VII BuyoutClessidra Capital Partners BuyoutCorsair III Financial Services Capital Partners Buyout Direct Co-investments Asset ClassCVI Global Value Fund Special Situations Avaya, Inc. BuyoutDoughty Hanson & Co IV Buyout Dresser Holdings, Inc. BuyoutFirst Reserve Fund XI Buyout Edgen Murray Corporation BuyoutInvestitori Associati III Buyout Energy Future Holdings Corp. (f/k/a TXU Corp.) BuyoutJ.C. Flowers II Buyout First Data Corporation BuyoutKKR 2006 Fund Buyout Firth Rixson, plc (Equity) BuyoutKKR Millennium Fund Buyout Firth Rixson, plc (Mezzanine) Special SituationsLehman Crossroads Fund XVII Diversified Freescale Semiconductor, Inc. BuyoutLehman Crossroads Fund XVIII Large-cap Buyout Buyout GazTransport & Technigaz S.A.S. BuyoutLehman Crossroads Fund XVIII Mid-cap Buyout Buyout Group Ark Insurance Holdings Limited BuyoutLehman Crossroads Fund XVIII Special Situations Special Situations Kyobo Life Insurance Co., Ltd. BuyoutLehman Crossroads Fund XVIII Venture Capital Venture / Growth Linn Energy, LLC BuyoutLightyear Fund II Buyout MaRI Holdings Limited BuyoutMadison Dearborn Capital Partners V Buyout Press Ganey Associates, Inc. BuyoutOCM Opportunities Fund VIIb Special Situations Sabre Holdings Corporation BuyoutOCM Principal Opportunities Fund IV Buyout Seventh Generation, Inc. Growth EquityPlatinum Equity Capital Partners II Special Situations TPF Genco Holdings, LLC BuyoutProspect Harbor Credit Partners Special Situations Unión Radio Buyout

27

Largest Underlying InvestmentsAt 31 December 2008, the estimated fair value of our twenty largest portfolio company investments was approximately $155 million, representing 31% of total net asset value. No single company accounted for more than 5% of total net asset value. Listed below are the twenty largest portfolio company investments in alphabetical order

Approximately $32 million of our private equity portfolio was comprised of companies with publicly-traded securities as of 31 December 2008, representing 6% of total net asset value

___________________________Note: As of 31 December 2008, our ten largest portfolio company investments totaled approximately $112 million in fair value, representing 23% of total net asset value.

Company Name Company Status Company Name Company Status

Affinion Group Holdings Inc Privately-Held HD Supply Privately-Held

Avaya, Inc. Privately-Held Linn Energy, LLC Publicly-Traded

Dresser Holdings, Inc. Privately-Held Nielson Company Privately-Held

Edgen Murray Corporation Privately-Held Nycomed Holdings Privately-Held

EMI Privately-Held Power Holdings Privately-Held

Energy Future Holdings (f/k/a TXU Corp.) Privately-Held Sabre Holdings Corporation Privately-Held

First Data Corporation Privately-Held ServiceMaster Company Privately-Held

Firth Rixson, plc Privately-Held TPF Genco Holdings, LLC Privately-Held

Freescale Semiconductor, Inc. Privately-Held U.S. Foodservice Inc Privately-Held

Group Ark Insurance Holdings Limited Privately-Held Unity Media Privately-Held

28

Endnotes

1. The diversification analysis by asset class and investment type is based on the net asset value of underlying fund investments and co-investments (including unfunded commitments on a total private equity exposure basis). The diversification analysis by vintage year, geography and industry is based on the diversification of underlying portfolio company investments at fair value as estimated by the Investment Manager. The vintage year diversification also includes an allocation of net cash flows and valuation adjustments made since financial statements were last received from the investment sponsor. Determinations regarding asset class, geography and industry, as well as the allocation of unfunded commitments on a total private equity exposure basis, also represent the Investment Manager’s estimates. Accordingly, the actual diversification of our investment portfolio and the diversification of our investment portfolio on an ongoing basis may vary from the foregoing information.

2. Past performance is not indicative of future results. The performance quartile information was prepared by the Investment Manager based on publicly available information and on information received from the general partners of the underlying private equity funds, which the Investment Manager has compared to information compiled by Thomson Venture Economics. The percentages are based on the net internal rate of return of the prior private equity funds with investment strategies similar to those of the sponsors of the direct fund investments in the investment portfolio. The prior funds of one sponsor were not included in the information presented because prior fund performance information was not available. In addition, two prior private equity funds managed by two sponsors were not included in the information presented because sufficient benchmark data was unavailable.Thomson Venture Economics reports on a sample of private equity funds investing in various asset classes (such as buyouts and mezzanine debt, special situations and others) that commenced operations in a given year to serve as the investment benchmark sample for that vintage year. Thomson Venture Economics ranks vintage year funds by four quartiles or tiers. The Investment Manager derived the percentages shown in the chart by comparing the most recent available net realized and unrealized internal rates of return of the prior private equity funds managed by the sponsors of the direct fund investments contained in the investment portfolio against what the Investment Manager believed were the most applicable cumulative vintage year performance benchmarks provided by Thomson Venture Economics. In the Investment Manager’s analysis, special situation funds were compared against all private equity funds. The Investment Manager invested in some, but not all, of such prior funds. The performance of such prior funds has not been independently verified.

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Forward-Looking Statements

This report contains certain forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made and relate to expectations, beliefs, projections (including anticipated economic performance and financial condition), future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and are subject to risks and uncertainties including, but not limited to, statements as to: our future operating results; our business prospects and the prospects of our investments; the impact of investments that we expect to make; the dependence of our future success on the general economy and its impact on the industries in which we invest; the ability of our investments to achieve their objectives; differences between our investment objective and the investment objectives of the private equity funds in which we invest; the rate at which we deploy our capital in private equity investments, co-investments and opportunistic investments; our expected financings and investments; the continuation of the Investment Manager as our service provider and the continued affiliation with the Investment Manager of its key investment professionals; the adequacy of our cash resources and working capital; and the timing of cash flows, if any, from the operations of our underlying private equity funds and our underlying portfolio companies.In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "should," "will," and "would," or the negative of those terms or other comparable terminology. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Factors and events that could cause our business, financial condition, liquidity and results of operations to vary materially include, among other things, general economic conditions, securities market conditions, private equity market conditions, the level and volatility of interest rates and equity prices, competitive conditions, liquidity of global markets, international and regional political conditions, regulatory and legislative developments, monetary and fiscal policy, investor sentiment, availability and cost of capital, technological changes and events, outcome of legal proceedings, changes in currency values, inflation, credit ratings and the size, volume and timing of transactions, as well as other risks described elsewhere in this report.The foregoing is not a comprehensive list of the risks and uncertainties to which we are subject. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements to reflect any change in our expectations, or any changes in events, conditions or circumstances on which the forward-looking statement is based. In light of these risks, uncertainties and assumptions, the events described by our forward-looking statements might not occur. We qualify any and all of our forward-looking statements by these cautionary factors.

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Legal Disclaimer

This material is for informational purposes only and should not be regarded as an offer to sell or as a solicitation of an offer to buy any security or other financial product or service mentioned in it. Lehman Brothers Private Fund Advisers, LP and its affiliated companies (collectively, “LBPFA") is not soliciting any action based upon this material. This material is based upon information or sources that we believe to be reliable, but we do not represent or guarantee that it is accurate or complete, and it should not be relied upon as such. Opinions expressed herein are made as of the date of this material and are subject to change without notice. Past performance is not indicative of future results, and no representation or warranty, express or implied is made regarding future performance. The products mentioned in this document may not be eligible for sale in some states or countries. LBPFA is not providing investment advice through this material. Securities, financial instruments, products or strategies mentioned in this material may not be suitable for all investors. Their value and the income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors. This material does not take into account individual client circumstances, objectives, or needs and are not intended as recommendations to particular clients. In reaching a determination as to the appropriateness of any proposed transaction or strategy, clients should undertake a thorough independent review of the legal, regulatory, credit, tax, accounting and economic consequences of such transaction in relation to their particular circumstances and make their own independent decisions. Debt securities may be subject to call features or other redemption features, such as sinking funds, and may be redeemed in whole or in part before maturity. These occurrences may affect yield. Investing in foreign securities and foreign currency denominated securities presents certain risks, such as currency fluctuations and political and economic change, that could have an adverse effect on the value or price of or income derived from, the investment.LBPFA and/or its affiliated companies may make a market or deal as principal in the securities mentioned in this document or in options or other derivatives based thereon. LBPFA and/or its affiliated companies may from time to time provide investment banking, credit, and other financial services to any company or issuer mentioned in this material or solicit such business from such company or issuer. In addition, LBPFA, its affiliated companies, shareholders, directors, officers and/or employees (including persons involved in the preparation or issuance of this material), may from time to time have long or short positions in such securities or in options, futures, or other derivative instruments based thereon. One or more directors, officers, and/or employees of LBPFA or its affiliated companies may be a director of the issuer of the securities mentioned in this document. LBPFA or its affiliated companies may have managed or comanaged a public offering of securities for any issuer mentioned in this document within the last three years. © 2009 Lehman Brothers Private Fund Advisers L.L.C. All rights reserved.LBPE is registered with the Dutch Authority for the Financial Markets as a collective investment scheme which may offer participations in The Netherlands pursuant to article 2:66 of the Financial Markets Supervision Act (Wet op het financieel toezicht). All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results.

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