Private Equity 20134 Year End Review

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Please find attached our complimentary year end review from Bloomberg Brief Private Equity. This is just a sample of the incredible data available to our subscribers. Visit Bloombergbriefs.com for more information.

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Private Equity 20134 Year End Review

  1. 1. te iva Pr ar Ye 3 01 2 nd E w ie ev R y uit Eq
  2. 2. 01.21.14 www.bloombergbriefs.com From the Editor  Bloomberg Brief | Private Equity 2013 Global Review 2 Commentary by Jennifer Rossa 2013: Year of the Buyout Exit, the Soaring VC Valuation and the Separate Account “We’re selling everything that is not nailed down,” Apollo Global Management’s Leon Black said at a conference in April, neatly summarizing the story line of the year for the buyout industry. Every firm was selling or taking public its companies — not to mention dividend recaps — few were making new investments, and the deals that did get done were rich. While explanations varied, the on-again, off-again end of quantitative easing and a sense that interest rate risk is coming to dominate everything else clearly had something to do with it. As rates go up, companies being acquired at multiples of 12 to 14 times Ebitda today may well sell for around only 10 times in three to four years, Bela Szigethy, co-chief executive officer of Riverside Co., said at a press lunch in November, reiterating Black’s “everythingmust-go” sentiment. Meantime, fund-raising probably reached new heights in 2013, as the flood of exits meant lots of cash was returned to limited partners, who had to find places to redeploy it. It was a good example of “careful what you wish for,” since in a low-yield world, they struggled to put that money back out. Why the emphasis on the word “probably” above? It’s not like it was easy to collect data in private equity, and it’s getting harder, with more LP money going into secretive pockets of the industry — separate accounts, co-investments alongside individual deals. One telling example: In the two years to September 2013, California Public Employees’ Retirement System committed $2.1 billion to customized investment accounts — 44 percent of the $4.7 billion it allocated to funds. Another $600 million was set aside for co-investments. Combined, all these trends likely mean that a new capital overhang is building in private equity that, without great care, may turn into a new bubble. Perhaps these dynamics on the buyout side explain the view of one panel of tech investors we heard last year. On the panel were a venture, a growth, a buyout and a public tech investor. They all agreed, remarkably, that now is venture’s time. Unspoken here was that same prospect of rising interest rates, to which venture is less exposed. Even amid the fund-raising boom, fallout from the financial crisis continued. The industry, like global society, displays a widening wealth gap between the haves and have-nots. Many of the have-not firms continue to hang on with fund extensions, structured secondaries, or spinouts into new firms, and the industry has yet to shrink much. And finally, one story line that has yet to materialize: private equity firms figuring out how to tap defined contribution plans. We were convinced this would happen in 2013, but a number of barriers have proved too high to hurdle so far: daily liquidity and valuation requirements, too-high fees and pension plans’ herd mentality. Will private equity finally tap this market in 2014? Stay tuned. INVESTORS How LPs invested in 2013, plus what kinds of funds interest them in 2014, how much money they have for them, and a meeting calendar. Pages 11-14 Venture Deals & Exits Mapping New York’s venture boom. Also, just how many $100 million plus rounds were there in 2013? And, the biggest IPOs of the year, and how they’ve performed. Pages 20-22 Buyout Deals & Exits Southern Europe showed signs of life in 2013. Plus the biggest buyouts and exits via M&A and IPO. Pages 16-19 NEWS TRENDS The most talked about private equity executive in 2013 was... Page 24 Contents The BIG PICTURE Timeline, fundraising totals, the exit picture. Pages 3-4 VIEWPOINTS Industry participants pick their story of 2013 and make predictions for 2014. Pages 7, 12, 15, 18, 23 FUNDS Charting just how we got to such a big fundraising year, plus the biggest funds of the year and funds expected out in 2014. Pages 5-10 Bloomberg Brief Private Equity Bloomberg Brief Ted Merz Executive Editor tmerz@bloomberg.net +1-212-617-2309 Private Equity Jennifer Rossa Editors jrossa@bloomberg.net +1-212-617-8074 Scott Johnson sjohnson166@bloomberg.net +44-20-3525-8027 Private Equity Sabrina Willmer Reporter swillmer2@bloomberg.net +1-212-617-2515 Data Editors Jill Lewandosky jlewandosky@bloomberg.net +1-212-617-4414 Inessa Collier icollier1@bloomberg.net +1-212-617-1187 PE Terminal Sales Adam Kruithof akruithof1@bloomberg.net +1-609-279-5006 Reprints & Permissions Newsletter Nick Ferris Business nferris2@bloomberg.net Manager +1-212-617-6975 To subscribe via the Bloomberg Terminal type BRIEF <GO> or on the web at www.bloombergbriefs.com. To contact the editors: jrossa@bloomberg.net Charles DeLuca © 2014 Bloomberg LP. cdeluca1@bloomberg.net All rights reserved. +1-212-617-7667 This newsletter and its contents may not be forwarded or redistribLori Husted lori.husted@theygsgroup.com uted without the prior consent of Bloomberg. Please contact our re+1-717-505-9701 prints and permissions group listed above for more information. Advertising Jeff Maniatty jmaniatty@bloomberg.net +1-203-550-2446  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  3. 3. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 3 2013 TiMeline Jan. 17: SurveyMonkey.com raises the largest venture round of the year with early investors selling about $444 million in equity. The recap valued the company at $1.35 billion, an early example of a trend of soaring valuations for online companies in 2013. Jan. Quote of the year “In our business, the biggest driver of returns is the multiple of cash flow we can sell the business at five years from now. I think that has more risk today than it’s had at any moment since 2007 . ” April 18: Silver Lake Management garners $10.3 billion for its latest fund, the largest ever pool dedicated to technology buyouts. — Joe Baratta, Blackstone’s global head of private equity, speaking at the Bloomberg Link Dealmakers Summit in London. May July 24: A circuit court rules that two Sun Capital Partners funds that owned a bankrupt company with pension fund obligations could be responsible for that company’s withdrawal liability. Aug. Apr. Mar. Feb. Jan. 23: NewGlobe Capital launches, intending to buy interests in end-of-life funds. April 12: KPS Capital Partners closes on a $3.5 billion special situations fund. The fund drew more than $9 billion of interest, according to one LP, showing how easily GPs with strong performance are raising money. Feb. 14: Berkshire Hathaway and 3G Capital’s $27.4 billion purchase of HJ Heinz, the largest buyout of the year, is announced. Jun. May 23: Alaska Permanent Fund Corp. authorizes up to $450 million for private equity co-investments in fiscal 2014, joining others like University of California Regents and New Mexico Educational Retirement Board in expressing more interest in the low-fee strategy. SEP. Quote of the year “It’s like going into a haunted house, and every time you go around a corner some ghost pops up, and then a witch flies down on a broom, and then you go into another room and some devil tries to stab you with a pitchfork. ” OCt. September: Pantheon Ventures begins pitching a private equity fund to defined contribution sponsors. — Jimmy Lee, the chief of investment banking at JPMorgan, describing Michael Dell’s encounter with Wall Street in an interview with Bloomberg News. Dell’s sale to its founder and Silver Lake was completed on Oct. 29. July 22: CVC Capital Partners amassed 10.5 billion euros for a fund, the largest raised by a European firm since the financial crisis. June 19: Riverstone Holdings raises $7.7 billion for a new fund, more than its $6 billion target, as interest in energy deals rises. July Nov. 1: Energy Future pays off about $270 million in interest on its debt, delaying the restructuring and likely bankruptcy of the largest leveraged buyout of all time. July 10: The SEC votes to allow private equity firms to advertise they are raising money. NOV. Nov. 6: Twitter goes public at $26 a share, giving backers including Union Square Ventures and Spark Capital paper returns in excess of $1 billion. Bloomberg calculates that at least 10 U.S. VC firms generated more than $1 billion in returns from IPOs and acquisitions in 2013. Dec. 11: Blackstone’s Hilton IPO prices at $20, giving Blackstone a paper profit of $8.5 billion. That ranks with Apollo Global Management’s profit from LyondellBasell Industries as one of the two biggest of all time. Dec. Nov. 16: Former Treasury secretary Timothy Geithner says he’ll join Warburg Pincus as president. Other former Washingtonians joining private equity in 2013: former CIA director David Petraeus and former NATO Supreme Allied Commander in Europe Wesley Clark. Dec. 3: Oregon Investment Council’s Jay Fewel, a pioneer in investing in private equity, says he will step down after 24 years.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  4. 4. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 4 THE BIG PICTURE Fundraising Soars on Interest in Buyout, Real Assets, Debt, Real Estate Funds Fundraising rose by more than one-third from last year’s $315 billion. Real asset funds more than doubled their year-ago totals. Buyout, the largest category, rose by more than 50 percent, and debt, real estate and growth also gained. Venture fell by 10 percent, and funds of funds and secondary funds both saw big declines. Asia Pacific Asia Pacific Developed Emerging Any Buyout Debt Fund of Funds Growth Real Assets Real Estate Secondary Venture Grand Total 60,539 31,346 6,430 6,893 24,741 24,875 12,488 5,231 172,544 3,275 52 10,230 13 178 1,921 989 3,356 123 3,628 987 17,496 Eastern Europe 8,507 160 268 100 132 9,167 Latin America and Caribbean 1,396 673 780 497 Middle East and Africa North America Western Europe Grand Total 1,918 170 72,266 21,961 2,087 6,686 11,135 14,874 1,414 13,784 144,208 47,352 8,335 513 2,903 5,491 7,393 462 1,822 74,271 205,483 61,877 9,190 20,245 43,287 51,394 14,526 22,696 428,698 901 50 221 161 421 3,842 195 3,542 Source: Bloomberg. Amounts represent capital closed in 2013. Non-dollar amounts have been converted. Exits Dominated in 2013 as Federal Reserve Taper Talk Took Center Stage Many firms focused on returning capital to investors and paring down portfolios ahead of an eventual rise in interest rates. As the chart shows, the total value of M&A sales and IPOs of PE-backed companies topped PE dealmaking in five of the last seven months of 2013. 60000 Deal Volume IPO Offer Volume M&A Exit Volume 50000 40000 30000 20000 10000 0 $M May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Source: Bloomberg  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  5. 5. 01.21.14 www.bloombergbriefs.com 5 Bloomberg Brief | Private Equity 2013 Global Review Fundraising in Charts  Compiled by Jennifer Rossa, Inessa Collier and Adam KRuithof In 2013, 1,034 funds raised about $429 billion globally, up from around $315 billion in 2012. The average size of a buyout fund holding a final close in 2013 was about $1.5 billion, up from about $700 million in 2012, as more very large funds held final closes. The average size VC fund was $152 million, more or less flat with 2012’s $154 million. 2013 Fundraising By Type 24% # of Funds 12% 3% 10% 5% 12% 2% Source: Bloomberg 3% 5% 7% Debt 26% Volume 15% Buyout 11% Fund of Funds 3% 13% Real Assets Real Estate 11% 14% Secondary Venture 22% # of Funds Growth 48% 6% 2012 Fundraising by Type 8% 8% 6% 4% 4% Source: Bloomberg Debt 27% Fund of Funds Growth 43% Volume 6% Buyout 12% 9% 11% Other Real Assets 10% Real Estate Secondary Venture Buyout and real assets increased their shares of a bigger pie, driven by interest in energy funds and more large funds in the market. Funds of funds still face tough times as direct access to firms has gotten easier. As the popups show, large-cap funds increased their share of the buyout pool to 40 percent from 21 percent. In the venture category, early-stage funds took share from multi-stage ones in 2013 relative to 2012. 2013 Fundraising by Region 2012 Fundraising by Region 23% 1% 2% 4% 12% 17% 40% 3% Source: Bloomberg 2% 8% 1% 4% Volume Asia Pacific Developed 1% 1% 34% 47% Asia Pacific Emerging North America Latin America and Caribbean Middle East and Africa Multiple Eastern Europe Western Europe Western Europe captured more market share by volume in 2013, likely on the region’s better macroeconomy. We reclassed funds targeting both Asia Pacific Developed and Asia Pacific Emerging to “Multiple” this year. # of Funds 23% 2% 12% 46% 2% 3% 11% 1% 2% 6% 3% 3% 2% Volume 1% 1% Asia Pacific Emerging 2% 32% Source: Bloomberg Asia Pacific Developed 48% Asia Pacific Emerging & Developed North America Latin America and Caribbean Middle East and Africa Multiple Eastern Europe Western Europe While fund managers in Africa and some parts of Latin America say they saw more investor interest in 2013, that has yet to translate into those areas capturing a larger percentage of commitments. EXPLORE THE WORLD OF PRIVATE EQUITY PEM  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  <GO> # of Funds
  6. 6. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review FUNDRAISING IN CHARTS  6 Compiled by Jennifer Rossa and Scott Johnson Sweet Spot for Funds Is $100 Million-$500 Million; Lots of VC Fund Launches Buyout Venture Real Estate Growth Fund of Funds Real Assets Number of Funds With 2013 Closes (by Size) Debt Secondary Distribution of Funds by Size of Final Close $10B or more $5B to <$10B The $100 million to $500 million range was by far the most popular size for funds of all types holding final closes in 2013. The sub-$50 million category was also popular among venture funds, largely due to small seed funds holding closes. The sector breakdown of funds raising $1 billion or more is as follows: 35 buyout, three venture, 18 real estate, 14 debt, three growth, one fund of funds, 10 real asset funds, and four secondary funds. $2B < $5B $1B to <$2B $500M to <$1B $100M to <$500M $50M to <$100M Less than $50M Source: Bloomberg 0 30 60 90 120 150 180 210 Distribution of Fund Launches by Type Data compiled by Bloomberg shows that 31 percent of funds that launched in 2013 and have yet to hold a close were in the venture category. In contrast, among funds holding closes, only 24 percent were VC, as shown on page 5. Fund Launches 31% 3% 8% Source: Bloomberg Buyout 26% 9% 11% 4% Debt 8% Fund of Funds Growth Real Assets Real Estate Secondary Venture Number of Firms That Beat, Met, Missed Target Exceeded Target Buyout Venture 0 Met Target Number of Funds Closing in 2013 20 40 60 80 Missed Target 100 120 Secondary funds exceeded their targets 74 percent of the time in 2013, data compiled by Bloomberg shows. Buyout funds exceeded target 64 percent of the time. At the other end of the spectrum venture funds and funds of funds beat stated targets only 30 percent of the time. Real Estate Debt Growth Real Assets Secondary Fund of Funds Source: Bloomberg  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  7. 7. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 7 VIEWS: Asia/Emerging Markets COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER India’s Underdog Status; Election Concerns in Brazil; African Growth Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say: Steven Cowan, managing director at 57 Stars Story: Appetite for emerging markets equities experienced a cyclical decline in investor sentiment as a result of renewed confidence in the U.S. As a result of this shift, but also the return to market of many U.S. and European private equity firms, emerging markets private equity witnessed a drop in capital-raising activity. We expect this evolution could be quite positive with respect to the investment environment over the next few years. One thing I’d have done differently: In retrospect, I would have made fewer New Years’ resolutions. And, I’d have kept more of them. Worry: We continue to keep our eyes on the Federal Reserve and the impact it may have on global markets. Surprise: The potential for returning investor interest in India if there is strong equity market performance, election results which are perceived to be positive, and rupee appreciation. Veronica John, senior adviser at Diamond Dragon Advisers in Singapore Story: Investors have started giving more attention again to Southeast Asia, to more developed Asian markets like Japan and just having an overall re-think of what their portfolio allocation is going to look like in the next three years, given that they don’t want to concentrate so heavily on India and China. They want diversification. Worry: Investors continue to maintain a herd mentality. You don’t go into private-equity markets when they’re hot. You go into them when they’re not so hot. We still have significant challenges in convincing prospective LPs to commit to high-quality GPs in markets that are out of favor, such as India. Surprise: The situation in China is a little more troubling than people are predicting. There’s going to be an upswing in social unrest; growth may slow considerably more than predicted; Bank NPLs will be higher than expected and more difficult to work out. Also, India may make the necessary policy changes to come back. Haide Lui, principal at HarbourVest in Hong Kong Story: Unexpectedly large number of home run deals and liquidity events across Asia, particularly from VC. One thing I’d have done differently: I wish I had spent more time on solid ground rather than on planes. Worry: Negative impact on valuation and ultimately on performance if the larger firms choose to deploy dry powder quickly rather than be selective and deploy at a slower pace. Surprise: Despite slowing economic growth in China, a sustained stream of liquidity and strong exits. Davinder Sikand, Partner & Head of Sub-Saharan Africa Business, The Abraaj Group Biggest 2014 investment-related worry: There is nothing that is particularly worrying for us. Although there are more players entering our markets, we see this as healthy competition. Surprise of the year in 2014: If there isn’t an increase in transactions like Fan Milk, given the attractive opportunities that exist for deal-making and growth on the continent. Sub-Saharan Africa has the youngest population in the world, and will continue adding to its workforce, thereby growing its middle and consumer classes. Christopher Meyn, senior partner and head of private equity at Gavea Investimentos Story of 2013: 2013 was a markedly slower year for Brazilian PE. Despite solid long-term fundamentals in Brazil, a slowdown in the economy and concerns around a somewhat heavy-handed federal government appear to have reduced the appetite for PE investing and fundraising. Additionally, extremely selective local equity capital markets and more cautious strategic buyers limited realization opportunities in 2013. One thing I’d have done differently: We could have built a stronger cash war chest at portfolio companies during the first half when interest rates were lower and lenders had strong appetite for putting money to work. The significant tightening of local credit markets occurred earlier than expected. Worry: October elections and, to some extent a potentially “dead” June with Brazil hosting the World Cup, will likely create uncertainty and volatility. Caution is the key word for 2014. Surprise: I believe we could very well see a re-opening of local capital markets particularly in the beginning and at the end of the year. I also think we could see some positive surprises with presidential elections. The markets seem to be pricing in “more of the same” whereas Gávea thinks there is upside in either a regime change or simply with a better, more focused existing party re-election.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  8. 8. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 8 Largest funds Firms Find Bigger Is Better in 2013 In 2013, 81 funds held final closes on more than $1 billion, up from 49 in 2012. Funds of $2 billion or more are shown here. The year’s largest fund, Apollo Investment Fund VIII, raised $17.5 billion. The largest 2012 fund: Blackstone’s $13.3 billion Real Estate Partners VII. Return of the Generalist Mega Funds Fund Name 1 2 3 4 5 6 7 8 9 10 11 12 12 14 15 15 15 15 19 20 21 22 23 24 25 26 27 27 27 30 31 32 33 34 34 36 37 38 39 40 41 42 42 Strategy Region Apollo Investment Fund VIII LP CVC Capital Partners VI LP Carlyle Partners VI LP Warburg Pincus Private Equity XI LP Silver Lake Partners IV LP KKR North America Fund XI LP Riverstone Global Energy & Power Fund V LP Apax Europe VIII LP Fifth Cinven Fund LP Brookfield Infrastructure Fund II LP Lone Star Real Estate Fund III LP EIG Energy Fund XVI LP KKR Asia Fund II LP Lone Star Fund VIII LP Highbridge Principal Strat - Mezz Partners II LP Blackstone/GSO Capital Solutions Fund II Providence Equity Partners VII LP EnCap Energy Capital Fund IX LP Nordic Capital Fund VIII LP Brookfield Strategic RE Partners LP Triton Fund IV LP Starwood Distressed Opp Fund IX Global AXA LBO Fund V LP Platinum Equity Capital Partners III LP Macquarie European Infrastructure Fund 4 Dover Street VIII LP KPS Special Situations Fund IV LP Blackstone RE Debt Strategies II LP TowerBrook Investors IV LP Crescent Mezzanine Partners VI LP ICG Europe Fund V HgCapital 7 LP Highbridge Principal Strat - Spec Loan Fund III LP Wayzata Opportunities Fund III LP MBK Partners III Inc Cerberus Institutional Partners V LP InSight Venture Partners VIII LP Oaktree Real Estate Opportunities Fund VI LP Trilantic Capital Partners V LP Blackstone Real Estate Partners Europe IV LP Equistone Partners Europe Fund IV LP Crown Global Secondaries III PLC NB Secondary Opportunities Fund III LP Buyout Buyout Buyout Buyout Buyout Buyout Buyout Buyout Buyout Real Assets Real Estate Real Assets Buyout Debt Debt Debt Buyout Real Assets Buyout Real Estate Buyout Real Estate Buyout Buyout Real Assets Secondary Debt Debt Buyout Debt Debt Buyout Debt Debt Buyout Buyout Growth Real Estate Buyout Real Estate Buyout Secondary Secondary North America Western Europe North America Any Any North America Any Western Europe Western Europe Any Any Any Asia Pac Developed North America Any Any Any North America Western Europe Any Western Europe Any Western Europe Any Western Europe Any Any Any Any Any Western Europe Western Europe North America North America Asia Pac Emerging Any North America Any North America Western Europe Western Europe Any Any Sector Generalist Generalist Generalist Generalist Technology Generalist Energy Generalist Generalist Infrastructure Real Estate Energy Generalist Real Estate Generalist Generalist Communications Energy Generalist Real Estate Generalist Real Estate Generalist Generalist Infrastructure Generalist Generalist Real Estate Generalist Generalist Generalist Generalist Generalist Generalist Generalist Generalist Technology Real Estate Generalist Financials Generalist Any Any Total ($M) Notes 17,500 13,831 13,000 11,200 10,300 8,300 7,700 7,586 7,083 7,000 6,600 6,000 6,000 5,085 5,000 5,000 5,000 5,000 4,790 4,400 4,245 4,200 3,787 3,750 3,607 3,600 3,500 3,500 3,500 3,400 3,362 3,048 3,000 2,700 2,700 2,610 2,570 2,300 2,187 2,076 2,017 2,000 2,000 Largest fund since financial crisis Took seven months to raise Includes $1B from the firm and employees Cut fees for big clients Its first fund raised without partner Carlyle Offered dollar option on concerns over euro Offered fee discounts for early LPs The second largest infrastructure fund Biggest fund for global property deals Offered fee discount for first close Less than half the size of predecessor Cut fund target by 25% Took eight months to raise Saw more than $9B of interest Raised in four months Carry rises to 25% on net IRR of 25%+ Formerly Lehman Brothers’ merchant bank First solo fund from Barclays’ spinout Source: Bloomberg. Non-dollar figures have been converted.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  9. 9. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 9 Future Funds: likely in market in 2014 Compiled by Sabrina Willmer North America Buyout/Energy/Distressed Firm Name ABRY Partners American Industrial Partners American Securities ArcLight Capital Holdings Bertram Capital Bison Capital Blackstreet Capital Blackstone Energy Partners Castanea Partners Centerbridge Partners Charlesbank Capital Partners CI Capital Partners Cressey & Company EnCap Flatrock Energy Investors Funds Energy Spectrum Capital Francisco Partners Freeman Spogli & Co. The Gores Group J.F. Lehman & Company JLL Partners JMI Equity Kayne Anderson Capital Advisors (growth equity) Kelso & Company Kinderhook Industries Lightyear Capital Lincolnshire Management Linden LLC Littlejohn Madison Dearborn Partners Mason Wells Merit Energy Company Monomoy Capital Partners Natural Gas Partners Pfingsten Partners Prairie Capital Prophet Equity Quantum Energy Partners Resilience Capital Partners Seidler Equity Partners Sheridan Production Partners Silver Lake Sumeru Spectrum Equity Fund # Fund VIII Previous Fund Size $1.6 billion Fund VI $700 million Fund VII Fund VI Fund III Fund V Fund III $3.6 billion $3.3 billion $500 million $218 million $91 million Fund II $2.5 billion Fund IV Fund III $575 million $4.4 billion Fund VIII $1.5 billion Fund III Fund V Fund III Fund V Fund VII Fund IV Fund VII Fund IV Fund IV Fund VII Fund VIII $620 million $385 million $1.75 billion $1.71 billion $999 million $2 billion $735 million $2 billion $575.5 million More than $800 million $875 million Fund III $100 million Fund IX Fund IV Fund IV Fund V Fund III Fund V $5.1 billion $300 million $954 million $835 million $375 million $1.34 billion Fund VII $4.1 billion Fund IV Fund IX Fund III Fund X Fund V Fund VI Fund II Fund VI $525 million $912 million $400 million $3.6 billion $525 million $300 million $275 million $2.5 billion Fund IV $225 million Fund V $260 million Fund III $1.8 billion Fund II Fund VII $1.1 billion $680 million Firm Name Sycamore Partners Symmetric Capital TA Associates Thoma Bravo Thomas H. Lee Partners TPG Capital Vista Equity Partners Waud Capital Partners Welsh, Carson, Anderson & Stowe Wynnchurch Capital Fund # Fund II Fund II Fund XII Fund XI Fund VII Fund VII Fund V Fund IV Previous Fund Size More than $1 billion $202 million $4 billion $1.275 billion $8 billion $19.8 billion $3.5 billion $463 million Fund XII $3.7 billion Fund IV $603 million Fund # Fund XII Fund V Fund V Fund V Previous Fund Size $475 million $625 million $270 million $625 million Fund X $675 million Fund XIII $2.56 billion Fund # Fund I Fund IV Previous Fund Size N/A EUR2 billion Fund III EUR575 millions Fund V Fund V EUR4.8 billion EUR350 million Fund X EUR4 billion Fund X Fund III Fund III Fund VIII Fund IV Fund V Fund II 2014 Fund Fund II Fund V Fund II Fund IV GBP437 million GBP800 million EUR200 million $1.5 billion GBP375 million $5.9 billion $100 million EUR220 million GBP450 million EUR250 million SEK 5 billion EUR670 million GBP250 millio Fund III EUR375 million Fund VI Fund VI EUR1.1 billion EUR150 million U.S. Venture Firm Name Accel Partners Founders Fund Flagship Ventures GGV Capital Lightspeed Venture Partners Oak Investment Partners European Funds Firm Name Adamant Ventures Altor Equity Partners AnaCap Financial Partners Bridgepoint Capiton Charterhouse Capital Partners ECI Partners Exponent Private Equity Gilde Equity Management HitecVision Inflexion Private Equity KKR Europe Life Sciences Partners Paragon Partners Phoenix Equity Partners ProA Capital Segulah Silverfleet Capital Sovereign Capital Stirling Square Capital Partners Waterland Xenon Private Equity continued on next page  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  10. 10. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 10 Future Funds Continued... continued from previous page Secondaries Firm Name Coller Capital Ltd. Pantheon Fund of Funds Fund # Fund VII Fund V Previous Fund Size $5.5 billion $3 billion Mezzanine Funds Firm Name Accel-KKR Structured Capital Audax Private Equity Caltius Capital Management Kayne Anderson Senior Credit Summit Partners Firm Name Private Advisors Siguler Guff Fund # Fund VI Distressed Fund V Previous Fund Size $340 million $1.3 billion Asian Funds Fund # Previous Fund Size Fund II $180 million Fund IV Fund V $1 billion $500 million Fund II $350 million Fund V (subordinated debt $840 million fund) Firm Name Capital Today CITIC Private Equity Hahn & Company Hao Capital Legend Capital Lunar Capital Northstar Group SAIF Partners Unitas Capital Fund # Fund III Fund II Fund II Fund III Fund VI Fund IV Fund IV Fund V Fund IV Previous Fund Size $400 million $990 million $750 million $400 million $500 million $200 million $820 million $1.25 billion $1.2 billion private equity take your Free 30 day Fundraising trends, expert commentary and people news trial today! Single and group subscriptions available. Visit our website or call +1-212-617-0544 www.bloombergbrieFs.com  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  11. 11. 01.21.14 www.bloombergbriefs.com 11 Bloomberg Brief | Private Equity 2013 Global Review Investors LP Commitment Plans in 2014 LP Name 2014 PE/Alts Plan Allocation strategy for 2014 2013 Commitments AUM* Primary/secondary and co-invests in U.S./Europe turnaround, small/ mid-sized buyouts; U.S./Asia VC and growth; global real assets Funds focused on buyouts, debt, distressed debt, turnaround, growth, venture capital and international strategies 70% to U.S./30% to Europe. Mostly small/mid-market buyout funds 60% to buyouts, 15% to credit-related strategies, 15% to growth equity and 10% to opportunistic Lower mid-market buyouts in Europe and the U.S. Mostly U.S. small and mid-market buyout funds. Also, looking at secondaries and mezzanine finance strategies More than $500M to about 40 managers $5B $200M $13.7B EUR350M EUR5.5B $260.9B as of Aug. 31 EUR3B $12.3B as of June 30 $30Mto $50M Looking for a broad range of funds, mostly in developed markets About $45M About $2B HarbourVest Partners Similar to 2013 U.S., Europe, Asia, EM across primary, secondary, and direct coinvestments, private equity (venture, growth, buyout), private debt. About $3B More than $35B Illinois State Board of Investment Kansas Public Employees Retirement System Kentucky Retirement Systems L.A. County Employees Retirement Association About $125M to 5 PE funds Mostly mid-market buyout funds of $500 million to $1 billion in size Expect to commit $96M $13.5B $350M Targeting investments across multiple sectors $275M $15.3B as of Oct. 31 Adveq Management Arkansas Teacher Retirement System ATP Private Equity Partners California Public Employees' Retirement System Danske Private Equity Employees' Retirement System, State of Hawaii Fort Worth Employees' Retirement Fund Expects to keep the same pace as 2013 $230M EUR350M As much as $6B during FY13-14 EUR300M $200M About $3B for the fiscal year so far EUR200M Targeting $200M Build out international program, invest in smaller mid-market buyout funds in the U.S. and structured equity-focused managers "Emphasis will be on small buyouts, international investments, venture capital and special situations." About $350M by year-end $15B $952M to 11 funds, $100M emerging managers, $300M coinvestments $300M-$350M 50% to buyouts, 30% to special situations and 20% to VC $280M $42.3B as of June 30 $17.3B as of Nov. 19 $250M Balanced approach focusing on Europe, North America, Asia and secondaries. Final allocation of funding is client led $280M Mostly small to mid-market buyout funds in North America $135M No specific strategies $240M PE focus is on buyout funds of $500 million to $2 billion in North America, Europe and Latin America 50% to buyouts, 30% to special situations and 20% to VC. More private credit for clients, opportunistic co-investments and secondaries North American small buyout funds About $320M to PE and $330M to infra/energy EUR25B $3B $32B $250M NA NA $3B $8B as of Nov. 30 Continuation of previous strategies in the U.S., Europe and Asia, including distress and intellectual property $250M plus into private assets $9.5B plus Alternative strategy deferred until new consultants for the program are able to participate and the strategic review has been completed. NA ~$18B Mostly buyout. Will explore non-U.S./special situations funds (energy, secondary, distressed, co-invests, emerging markets) $50M each to 2 PE funds during FY13 $11.4B as of Aug. 31 State Universities $250M to PE funds Retirement System, Illinois NA About $300M in FY13 $16B Teachers Retirement System of Louisiana For FY14,up to $1.25B $350M-$450M to buyout funds, up to $50M to VC, $125M-$175M to real About $860M in private markets estate, $275M-$350M to mezz/distressed debt funds, up to $50M to infra in FY13 funds, $125M-$175M to commodities. Mostly U.S.-focused funds. $300M-$500M Mostly looking at U.S. buyout funds Los Angeles Fire & Police Munich Private Equity Partners Nebraska Investment Council New Hampshire Retirement System PKA Alternative Investment Partners About $300M $1.8B About $150M to 5 managers $200M-250M to 5 to 7 PE/debt funds $600M to PE funds, $200M to energy/infra Portfolio Advisors $3B RCP Advisors Rhode Island State Investment Commission SD County Employees Retirement Association SF City and County Employees' Retirement System $250M-$300M $100M-$120M to 5-8 PE partnerships School Employees Retirement System of Ohio Tennessee Consolidated Retirement System Texas Employees Retirement System West Virginia Investment Management Board Similar to 2013 Commit up to $400M for 9 months from Dec. $150M-$250M to PE funds during fiscal 2014 $1.25B to 6 to 10 funds Mostly buyout funds globally and coinvestments $25M to a VC FoF, $25M to an int’l FoF, $40M each to 5-6 managers; 60$250M-$275M 80% in N. America, up to 20% W. Europe, up to 10% other regions. expect to commit $874M Roughly $600M in FY2013 Estimated $250 million by year-end Source: Compiled by Sabrina Willmer with assistance from Susannah Birkwood *AUM represent most recent available.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  $2.3B $18.8B as of June $6.6B as of Sept. 30 $15.3B as of Sept. 30 $37.5B as of June 30 $24.5B as of October $15B
  12. 12. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 12 VIEWS: NORTH AMERICAN INVESTORS COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER Liquidity; Hot Housing Markets; Learning Japanese Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say: Steven Costabile, a managing director and global head of private funds group at PineBridge Investments Story: The continued story starting in 2012 of very good liquidity coming off legacy portfolios. One thing I’d have done differently: I would have done more of the things that we had been doing. Worry: Some aspects of developed market private equity valuations and leverage have reached pre-2008 levels. Surprise: That we actually make it through 2014 without getting any surprises! Vijoy Chattergy, chief investment officer of the Employees’ Retirement System of the State of Hawaii Story: The move by PE firms into the U.S. housing market. The buying of defaulted residential properties, led by firms like Blackstone, seemed to move to a new level as they began to IPO some restructured properties. The impact is well beyond just private real estate investing. One thing I’d have done differently in 2013: Held a smaller allocation to TIPS, and been less fearful of inflation in general. Worry: Continued bickering in DC and focus on curbing deficits instead of stimulating growth and employment. Surprise: U.S. growth prospects are less tied to the Federal Reserve balance sheet than is widely perceived; Europe’s growth prospects are much worse than widely perceived. Jim Herrington, private and public equity investment officer, West Virginia Investment Management Board One thing I’d have done differently: Worked more proactively and creatively to find allocation in over-subscribed funds. Worry: A rise in interest rates that is too fast. Surprise: Resurgence of venture capital, and tanking in some emerging markets. Yegin Chen, investment officer, acting as head of private equity, at San Diego County Employees Retirement Association Story: Greater awareness of economic and political risks in several previously-hot developing markets. One thing I’d have done differently: Learned more Japanese. Worry: Increasing political & economic stresses in some developing markets. Surprise: Developments (of a positive sort) involving China. Make an IMpact wIth BlooMBerg BrIef content Bloomberg Briefs provide dedicated licenses to reuse our content to help your business. We offer a full suite of products and services ranging from hardcopy and electronic reprints to plaques, permissions/licensing and photocopies. to find the solution that is right for you, contact us today at: 800 290 5460 x 100, email: bloombergbriefreprints@theygsgroup.com  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  13. 13. 01.21.14 www.bloombergbriefs.com INVESTORS IN CHARTS  Bloomberg Brief | Private Equity 2013 Global Review 13 Compiled by Jennifer Rossa and Scott Johnson Pensions Desire Smaller Funds; Development Banks Play Big Role in Emerging Markets For the first time, we took the limited partner commitment data we compile throughout the year and analyzed it to find out where investors are putting money to work. The data is compiled primarily from public pension meeting minutes and development bank disclosures, and is by no means comprehensive, but does show trends such as development banks’ support of Middle Eastern and African funds and public pensions’ interest in diversifying their commitments beyond the mega buyout funds. Public Pensions Like Buyout, Real Estate Buyout Venture Coinvestment Separate account 1% 4% 3% 1% 4% 4% Real Estate Real Assets Fund of Funds Distressed, Special Opp. Debt Secondary Growth Development Banks Support MENA Funds Any Number of Commitments by Fund Strategy 6% 7% 11% 42% 17% Corporates, Endowments, FoF, Insurance, Pension, SWFs Source: Bloomberg 45% 5% 3% 10% 2%1% 17% 17% Development Banks Value of Commitments MENA = <1% LatAm = 0% Asia Europe Latin America 35% 37% 48% #of 43% Commitments 10% MENA North America Commitments by Region of Focus 9% 12% 11% 5% Corporates, Endowments, FoF, Insurance, Pension, SWFs Source: Bloomberg 16% 2% 20% 6% 13% 31% 11% 25% 18% 26% 21% Development Banks Public pensions, which dominate the pie chart on the left, are most interested in buyout funds, where they can put the largest amounts of money to work. Development banks’ key role in promoting growth is apparent. Public pensions continue to struggle to figure out how to access emerging markets. By number of commitments, development banks were most involved in the Middle East and Africa in 2013. Public Pensions Diversify Beyond Mega Funds Largest Funds of 2013 Leave No Stones Unturned $100 Million to $500 Million $1 Billion to $5 Billion More Than $10 Billion 13% #of Commitments 45% 49% 22% Corporates, Endowments, FoF, Insurance, Pension, SWFs Source: Bloomberg 38% 3% 1% 12% 14% 26% 57% 49% Development Banks Development banks play a bigger role in promoting emerging managers and smaller funds. Still, the data backs up pension plan claims of being more interested in committing to mid-market funds than they used to be. Apollo Investment Fund VIII CVC Capital Partners VI KPS Special Situations Fund IV Vista Foundation Fund II Levine Leichtman Capital Partners V Top Funds by Commitments Riverside Capital Appreciation Fund VI Triton Fund IV LP Olympus Growth Fund VI EnCap Energy Capital Fund IX DCPF VI Oil and Gas Coinvestment Fund 0 Source: Bloomberg 5 10 15 20 Fittingly, the two largest funds raised last year, Apollo VIII and CVC VI, collected the largest number of publicly disclosed commitments. KPS and Vista Foundation Fund also appear to have diverse investor bases. EXPLORE THE WORLD OF PRIVATE EQUITY PEM  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  <GO> As Much as $100 Million $500 Million to $1 Billion $5 Billion to $10 Billion 2% Value of 6% Commitments 16% 8% 8% 16% 14% 1% Commitments by Fund Target
  14. 14. 01.21.14 www.bloombergbriefs.com 2014 LP Meeting Calendar Bloomberg Brief | Private Equity 2013 Global Review 14 Compiled by jingya Gao click on calendar entries for expanded lists JANUARY FEBRUARY PENSION FUND PENSION FUND 21 Massachusetts PRIM - Investment Committee 4 22 New Jersey State Investment Council 5 22 Pennsylvania State Employees' Retirement System 6 23 New York City Teachers' Retirement System -Board Meetings 23 Pennsylvania Public School Employees' Retirement System 12 29 New York State Teachers' Retirement System -Board Meetings 17 29 Oregon Investment Council 30 New Mexico Public Employees Retirement Association -Board Meetings MAY 6 12 18 19 19 Massachusetts PRIM - Board Meeting California State Teachers' Retirement System Alaska Retirement Management Board Washington State Investment Board -Private Market Committee Los Angeles County Employees' Retirement Association Investment Board MERS of Michigan Florida SBA Investment Advisory Committee California Public Employees' Retirement System Illinois Teachers Retirement System North Carolina Investment Advisory Committee JUNE MARCH 5 6 6 12 12 13 13 17 17 18 APRIL PENSION FUND PENSION FUND Oregon Investment Council California State Teachers' Retirement System Washington State Investment Board -Private Market Committee Los Angeles County Employees' Retirement Association Investment Board Pennsylvania State Employees' Retirement System MERS of Michigan Pennsylvania Public School Employees' Retirement System California Public Employees' Retirement System Florida SBA Investment Advisory Committee Massachusetts PRIM - Investment Committee Massachusetts PRIM - Board Meeting California State Teachers' Retirement System Washington State Investment Board -Private Market Committee Los Angeles County Employees' Retirement Association Investment Board MERS of Michigan California Public Employees' Retirement System Illinois Teachers Retirement System Pennsylvania State Employees' Retirement System Alaska Retirement Management Board JULY 1 2 3 9 9 14 14 23 24 30 Oregon Investment Council AUGUST PENSION FUND 1 1 1 8 14 19 20 21 22 28 PENSION FUND PENSION FUND PENSION FUND California State Teachers' Retirement System Pennsylvania Public School Employees' Retirement System Washington State Investment Board -Private Market Committee MERS of Michigan Los Angeles County Employees' Retirement Association Investment Board California Public Employees' Retirement System Massachusetts PRIM - Investment Committee Alaska Permanent Fund Corp. North Carolina Investment Advisory Committee Oregon Investment Council California State Teachers' Retirement System Los Angeles County Employees' Retirement Association Investment Board MERS of Michigan Pennsylvania State Employees' Retirement System Pennsylvania Public School Employees' Retirement System Washington State Investment Board -Private Market Committee California Public Employees' Retirement System Massachusetts PRIM - Board Meeting Illinois Teachers Retirement System Alaska Retirement Management Board Los Angeles County Employees' Retirement Association Investment Board California State Teachers' Retirement System Washington State Investment Board -Private Market Committee California Public Employees' Retirement System Nebraska Investment Council Pennsylvania Public School Employees' Retirement System Massachusetts PRIM - Board Meeting Los Angeles County Employees' Retirement Association Investment Board MERS of Michigan SEPTEMBER 4 11 11 11 12 12 16 17 24 26 OCTOBER PENSION FUND 4 10 11 15 17 18 22 23 24 24 Washington State Investment Board -Private Market Committee Los Angeles County Employees' Retirement Association Investment Board Texas County & District Retirement System California Public Employees' Retirement System Pennsylvania State Employees' Retirement System Alaska Retirement Management Board Florida SBA Investment Advisory Committee Massachusetts PRIM - Investment Committee North Carolina Investment Advisory Committee Oregon Investment Council PENSION FUND 2 2 7 8 8 13 17 22 29 29 Pennsylvania Public School Employees' Retirement System Washington State Investment Board -Private Market Committee Massachusetts PRIM - Board Meeting Los Angeles County Employees' Retirement Association Investment Board MERS of Michigan California Public Employees' Retirement System Texas Teacher Retirement System Board Meeting Rhode Island State Investment Commission New York State Teachers' Retirement System -Board Meetings Pennsylvania State Employees' Retirement System 9 10 10 14 15 16 22 23 23 30 MERS of Michigan Massachusetts PRIM - Investment Committee New York State Teachers' Retirement System -Board Meetings Pennsylvania State Employees' Retirement System Oregon Investment Council NOVEMBER 5 6 12 13 14 17 17 19 20 20 6 12 13 13 13 18 19 22 26 27 Arizona State Retirement System Nebraska Investment Council Rhode Island State Investment Commission DECEMBER PENSION FUND Oregon Investment Council Washington State Investment Board -Private Market Committee Los Angeles County Employees' Retirement Association Investment Board MERS of Michigan Massachusetts PRIM - Investment Committee California Public Employees' Retirement System Nebraska Investment Council North Carolina Investment Advisory Committee Texas Teacher Retirement System Board Meeting University of Michigan Regents Board Wisconsin Investment Board California Public Employees' Retirement System Texas Employees' Retirement System PENSION FUND 2 3 4 4 5 8 8 10 10 10 Massachusetts PRIM - Board Meeting Oregon Investment Council Alaska Retirement Management Board Washington State Investment Board -Private Market Committee Illinois State Board of Investment Investment Committee Florida SBA Investment Advisory Committee Pennsylvania Public School Employees' Retirement System Alaska Permanent Fund Corp. Los Angeles County Employees' Retirement Association Investment Board Pennsylvania State Employees' Retirement System  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  15. 15. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 15 VIEWS: EUROPE COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER Bifurcation in Fundraising; Large European GPs’ Success Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say: Klaus Ruhne, partner at ATP Private Equity Partners Story: That we are back before Lehman in terms of pricing of deals and debt. One thing I’d have done differently: Run a marathon. Worry: No growth. Surprise: Fed and ECB increase key interest rates. John Morrison, a managing director at Munich Private Equity Partners Story: Bifurcation in the fundraising market – an increased spread between funds in demand and those that struggle to raise capital. One thing I’d have done differently: More active management of legacy portfolio stakes. Worry: Short termism amongst investors – private equity is a long term asset class and has to be recognized as such. Jim Strang, a managing director at Hamilton Lane Story: The notable success of some of the larger European GPs in fundraising. There were more one-time closes amongst this group that I think anyone would have figured at the start of the year. One thing I’d have done differently: Pushing GPs harder in investment period extension conversations, of which there were quite a few. Worry: The big worry is the economy in mainland Europe. Clearly there’s been somewhat of a recovery over the last few months but it’s hard to see a sustained recovery with the challenges remaining in the banking system and indeed the labor markets. Surprise: Scotland votes for independence, signaling a breakup of the U.K. BLOOMBERG BRIEF GROUP BRIEF SUBSCRIPTIONS Bloomberg newsletters are now available for group purchase at very affordable rates. Share with your team, firm or clients. Contact us for more information: +1-212-617-9030 bbrief@bloomberg.net  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  16. 16. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 16 Buyout Deals & Exits Private Equity Firms Do $223 Billion of Deals Globally There were about $223 billion of buyouts globally in 2013, up from $181 billion in 2012. A $3 billion offer for Commonwealth Property Office Fund boosted Australia’s total. The biggest buyout in China was the $913 million purchase of Giant Interactive Group by Baring Private Equity, much smaller than 2012’s biggest deal in the country, the $3.5 billion takeover of Focus Media. Southern Europe showed some signs of recovery, with the $873 million buyout of Club Mediterranee in France and CVC Capital’s $1.5 billion secondary deal for Cerved Group in Italy. German volume topped $10 billion thanks to two $4 billion deals, for Springer Science and ista International. —Jennifer Rossa Firms Exit Companies Worth About $134 Billion via M&A Globally, private equity firms sold companies worth about $134 billion in 2013, up from about $125 billion in 2012, according to data compiled by Bloomberg. Southern Europe showed some strength on the exit front as well, with the $1.6 billion sale of Mivisa Envases in Spain by Blackstone Group and others, the $850 million sale by L Capital and others of Groupe SMCP to KKR in France, and Finmeccanica and First Reserve’s $1 billion exit of Ansaldo Energia in Italy in addition to the Cerved secondary. FIND ETFs THAT TRADE AT A 52 WEEK HIGH EQS  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  <GO> —Jennifer Rossa
  17. 17. 01.21.14 www.bloombergbriefs.com Deals & Exits Bloomberg Brief | Private Equity 2013 Global Review Four of the top 10 buyout deals — and 14 of the 33 deals worth $1 billion or more — were also exits, showing the continued importance of secondary deals. Largest PE Firm Acquisitions * Target Name Acquirer Largest PE Firm Sales Seller Value ($M) 2/14 HJ Heinz Co Berkshire Hathaway, 3G Capital 27,403.30 2/5 Dell Inc MSD Capital, Silver Lake Management 16,435.60 DE Master 4/12 Blenders 1753 NV Joh A Benckiser SE Credit Suisse Group, Lone Royal Park Star Funds Investments GIC, Insight Venture Partner, BMC Software Inc Bain Capital Partners, Golden Gate Capital Warburg Pincus, Neiman Marcus CPPIB, Ares Management TPG Springer GIC Special InvestBC Partners Holdings Science+Business ments, EQT Partners HUB International Hellman & Friedman Apax Partners Charterhouse ista International CVC Capital Partners Capital Partners Gardner Denver KKR Apache Gulf of Riverstone Holdings (FieldApache Corp. Mexico wells wood Energy) Cerberus Capital ManageNew Albertsons ment, Kimco Realty, Klaff Supervalu Realty, Lubert-Adler Partners Commonwealth CPPIB, Dexus Property Property Office Group Portfolio of Newcastle Investment, AGF HSBC Holdings consumer loans Holding, Blackstone Group Banco Santander General Atlantic, (half of asset Warburg Pincus mgmt division) Davis Advisors, Leonard Activision Blizzard Green & Partners, Tencent Vivendi Holdings Scout24 Hellman & Friedman Deutsche Telekom CeramTec Cinven Ltd Rockwood Holdings Terminal Global Infrastructure Mediterranean Investment Partners Shipping Co SA JMI Equity Fund, Hellman Applied Systems Bain Capital Partners & Friedman Unit4 Advent International Panasonic KKR & Co LP Panasonic Corp Healthcare 7 shopping Starwood Capital Group Westfield Group centers/U.S ING Life Insurance MBK Partners ING Groep NV Korea Leonard Green & Brickman Group KKR Partners Clessidra, Bain Cerved Group CVC Capital Partners Capital Partners Alberta Investment Vue Entertainment Doughty Hanson Management, OMERS PE Public Sector Pension AirPort GmbH Hochtief Investment Coinmach Service, Pamplona Capital Babcock & Brown AIR-Serv Group Management LLP CSM's Bakery Rhone Capital Corbion NV Supplies business 9,614.90 4/27 RPI portfolio asset 8,730.10 5/6 6,735.72 9/9 6/19 8/5 4/18 3/8 7/18 1/10 10/11 3/5 5/31 7/26 11/21 6/16 4/1 11/26 11/18 9/27 9/16 7/9 11/11 1/2 6/10 5/7 5/15 3/25 Source: Bloomberg * Date announced 17 6,000.00 4,422.66 4,400.00 4,054.80 3,850.19 3,750.00 3,300.00 3,203.78 3,200.00 2,612.20 2,340.00 2,018.85 1,984.68 1,929.00 1,800.00 1,698.23 1,677.34 1,640.00 1,610.64 1,600.00 1,488.10 1,455.05 1,439.24 1,400.00 1,352.19 * Target Name Acquirer Seller Value ($M) 5/27 Bausch & Lomb Warburg Pincus, Valeant Pharmaceuticals Welsh Carson Anderson & Stowe 8,700.00 9/9 Neiman Marcus CPPIB, Ares Management 6,000.00 Warburg Pincus, TPG MIP Tower American Tower Holdings Springer Sci6/19 BC Partners Holdings ence +Business 8/5 HUB International Hellman & Friedman Macquarie Infrastructure Partners, PGGM NV GIC Special Investments, EQT Partners Apax Partners Charterhouse Capital 4/18 ista International CVC Capital Partners Partners LIXIL Group Corp, Devel- Credit Suisse Asset 9/26 Grohe Group opment Bank of Japan Management LLC, TPG Madison Dearborn 9/3 Yankee Candle Jarden Corp Partners 7/1 19 TV Stations Tribune Co. Oak Hill Capital Partners Apollo Global ManageCharter Com3/19 Liberty Media Corp ment, Crestview Partmunications ners, Oaktree Capital Softlayer Tech- International Business 6/4 GI Partners nologies Machine Goldman Sachs Capital AssuraMed 2/14 Cardinal Health Partners, Clayton Holding Dubilier & Rice JMI Equity Fund, 11/26 Applied Systems Bain Capital Partners Hellman & Friedman 12/2 Digital Insight NCR Corp Thoma Bravo Mivisa Envases Blackstone Group, N+1 10/31 Crown Holdings SAU Private Equity Leonard Green & 11/11 Brickman Group KKR Partners Clessidra, Bain Capital 1/2 Cerved Group CVC Capital Partners Partners Vue Alberta Investment Man6/10 Doughty Hanson Entertainment agement, OMERS PE Coinmach SerPamplona Capital 5/15 vice, AIR-Serv Babcock & Brown Management Group 8/11 ARINC Rockwell Collins Inc The Carlyle Group Intermediate Capital 5/3 Allflex Holdings BC Partners Holdings Group, Electra Partners Chemlogics 10/7 Solvay One Equity Partners Group 6/24 PRA International KKR Genstar Capital 650 Madison Highgate Holdings, 6/1 The Carlyle Group Avenue Crown Acquisitions Private Investor, Oak4/29 R&R Ice Cream PAI Partners tree Capital CCMP Capital Advisors 8/19 Edwards Group Atlas Copco LLC, Unitas Mitchell Norwest Equity Partners, 9/5 KKR International Aurora Capital Group 2/5 NuCO2 Praxair Aurora Capital Group Carmel Capital Royal Bank of Scotland Terra Firma Capital 8/2 II Sarl Pension Fund Partners 30 shopping 5/15 DDR Corp Blackstone Group centers 9/6 4,800.00 4,422.66 4,400.00 4,054.80 3,954.33 2,740.02 2,725.00 2,637.88 2,000.00 1,940.00 1,800.00 1,650.00 1,631.88 1,600.00 1,488.10 1,455.05 1,400.00 1,390.00 1,350.00 1,345.00 1,300.00 1,300.00 1,211.67 1,200.00 1,100.00 1,100.00 1,069.67 1,062.00 Click the table headlineS for further details  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  18. 18. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 18 VIEWS: NORTH AMERICAN BUYOUT/GROWTH COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER Return to Normalcy; Falling Purchase Price Multiples; Bitcoin’s Lure Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say: Jeff Drazen, managing partner at Bertram Capital One thing I’d have done differently: Moved more aggressively to make mobile a more integrated component of our go-to-market strategy even where it is not obvious. Worry: We have been overly conservative in our new platform selection and have focused on existing platform development through acquisitions. This may result in a more concentrated portfolio than we originally planned for, which could have its own attendant strengths and weaknesses. Surprise: Valuation inflation beyond our wildest expectations, fueled by aggressive lending practices. Ned Fleming, founder and managing partner of SunTx Capital Partners Story: The strength of the high-yield market has turned it into a tremendous resource for smaller companies that are looking to reinvest capital, without sacrificing financial and operational flexibility. To illustrate this point, one of our portfolio companies, Carolina Beverage Group, a supplier of numerous domestic and international beverage brands, recently closed on a $130 million bond offering that was quite in demand. It created liquidity for LPs coupled with growth capital. One thing I’d have done differently: Researched and better understood the possibilities of the Bitcoin. Worry: An increase in unnecessary regulation rooted in ideology, which often does not improve the business environment, but rather stunts growth particularly for small businesses. Surprise: There will be increased fundraising. Republicans and Democrats will show they can work together. The price of oil will go down 25 percent. Stewart Kohl and Béla Szigethy, co-CEOs, Riverside Company Story: The beginnings of a return to normalcy in the PE world. The tremendous disruptions of 2008 and 2009 are now firmly in the rear view mirror. Soon sellers won’t even need to show the plummet in sales and earnings on their five-year performance charts. 2012 was impacted by the tax law changes bringing forward M&A volume from 2013 as sellers took advantage of the lower rates. As a result, the first half of 2013 was deathly quiet. We bought almost all of the 17 companies in our class of 2013 in the second half of the year and enter 2014 with a much stronger pipeline than 12 months ago. Fundraising also began its return to normalcy as LPs everywhere recognized their need to maintain exposure to PE. One thing I’d have done differently: Sell even more companies in North America and Northern Europe – we sold a lot (11) but it is the best time to sell in the 25-year history of Riverside. Our investors – including our own folks in the GP – simply love the distributions. Worry: Falling purchase price multiples. We plan to sell another 15 companies next year and should have that many or more ready to exit in 2015. So my greatest fear is the end of the Great Seller’s Market that began in 2010 – likely due to a contraction in the record setting expansionist monetary policies by central banks leading to higher interest rates followed by lower purchase price multiples. Of course, as an eager buyer of quality companies this would also be a delight leading to a busier year on the buy side. Blair Thomas, chairman and chief executive officer of EIG Global Energy Partners Story: The unraveling of Eike Batista’s energy and resources empire in Brazil, particularly because the Brazilian government stood aside and is letting the market and the court system sort out the situation. Chaos like this sometimes creates opportunity. We were able to step in and purchase control of LLX, Batista’s energy-focused “super-port” at what we believe is a very attractive valuation. One thing I’d have done differently: We should have accelerated our plans to establish a captive MLP to dropdown several mature assets from our existing energy portfolios. The MLP market, like most every yield-oriented investment product, has been very receptive to new issues in 2013. Worry: Our industry is cyclical and vintage year returns are usually inversely related to the amount of capital flowing into new funds. We’re not yet back to 2008 levels overall but the amount of capital being committed to funds targeting North American upstream and midstream energy specifically is certainly at an all-time high. The challenge will be sourcing and exercising pricing discipline in a crowded market. Surprise: In the domestic energy space, natural gas prices will recover more quickly than people expect as the era of drilling uneconomic wells comes to an end.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  19. 19. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review PE-Backed IPOs {IPO <GO>}  Compiled by Scott johnson and jennifer rossa Two of Top Three PE-Backed IPOs Are Energy Companies Price Date 10/15 Company Name Plains GP Holdings LP Select Backers Occidental Petroleum Corp, Energy & Minerals Group, Kayne Anderson $2,912 22 Consumer, Cyclical United States Blackstone sold no shares at the IPO. It owns 752.5 million shares, valued at $16.7 billion at the Dec. 31 price of $22.25. It invested around $6.5 billion, giving it a paper profit of more than $10 billion. It's subject to lockups that begin to expire 6 months after the IPO and fully expire 18 months after. Energy United States An entity controled by the PE backers sold 3.4 million shares at the IPO for proceeds of about $150 million. Consumer, Cyclical Britain Blackstone and CVC were granted an overallotment option of 30.4 million shares. Germany United States The PE firm owners sold all 57.1 million shares in the offering, making $965 million. Industrial Belgium CVC invested around EUR523 million and got back around EUR2.1 billion. Consumer, Non-cyclical United States CD&R and others contributed equity of $915 million to the 2011 buyout. The firm sold no shares at IPO. Its stake was valued at almost $5B billion as of Dec. 31. Consumer, Cyclical United States Shares priced below range. Investors in the buyout paid an average of $19.99 a share for their stake. Consumer, Non-cyclical United States TPG, Bain, 3i Group and Temasek sold 10.6 million of the shares in the IPO for about $400 million in proceeds. The company previously paid dividends to its shareholders of at least $920 million. Consumer, Cyclical Italy PE owners raised about EUR784 million in the IPO. Eurazeo invested EUR305 million to buy some of Carlyle's stake in 2011. Financial Sep 15-month lockup. Consumer, Non-cyclical May United States Financial Jan Hilton Worldwide Blackstone Group Holdings Inc $2,706 20 Britain Communications France Jan 10% HLT US Equity 5% 0% 50% 10/9 11/8 1/31 Antero Resources Corp Yorktown Partners, Warburg Pincus, Trilantic Capital Partners Kirkbi A/S, Blackstone Merlin EntertainGroup, CVC Capital ments PLC Partners LEG Immobilien AG Perry Capital, Whitehall Funds Jan 44 30% Jan 10% 0% $1,700 315 Jan 10% 8% 6% 4% 2% 0% -2% Jan 5% May Sep Jan MERL LN Equity May Sep Jan 0% $1,527 44 -5% -10% 5% Berkshire Partners, Rhone Capital Sep AR US Equity 20% LEG GR Equity -15% 6/12 Coty Inc May 40% $1,802 Notes Energy PAGP US Equity 15% 12/11 Hover mouse over chart for a larger image IPO Value Performance Shr Industry Country ($M) Since IPO Price 25% 20% 15% 10% 5% 0% -5% 19 Jan $1,140 17.5 May Sep Jan COTY US Equity 0% -5% -10% -15% -20% 15% Jan 6/19 bpost SA CVC Capital Partners $1,120 14.5 May Sep Jan BPOST BB Equity 10% 5% 0% -5% -10% Jan 60% 8/13 Envision Healthcare Holdings May Sep Jan 40% Clayton Dubilier & Rice $1,111 23 EVHC US Equity 20% 0% 40% 6/26 HD Supply Holdings Inc Carlyle Group, Bain Capital Partners, Clayton Dubilier & Rice $1,101 18 Quintiles Transnational Holdin TPG Capital, Bain Capital Partners, 3i Group, Aisling Capital LLC Eurazeo, Ruffini Partecipazioni, Carlyle Group Sep Jan 10% 0% Jan $1,089 40 May Sep Jan Q US Equity 20% 15% 10% 5% 0% 60% 12/11 Moncler SpA May HDS US Equity 20% 25% 5/8 Jan 30% Jan May Sep Jan 40% $1,064 10.2 MONC IM Equity 20% 0% Jan 10% 3/22 esure Group PLC Tosca Penta Investments LP $1,052 290 Carlyle Group, Altice Finco, Cinven Jan -20% -30% 30% Numericable Group Sep -10% ESUR LN Equity -40% 11/8 May 0% Jan May Sep Jan 20% $1,012 24.8 NUM FP Equity 10% Cinven said in November its third fund generated gains of EUR1.4 billion or 4 times capital from Numericable, including its remaining shares. 0% Jan May Sep Jan Source: Bloomberg  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  20. 20. 01.21.14 www.bloombergbriefs.com 20 Bloomberg Brief | Private Equity 2013 Global Review VC By State  Compiled by Jennifer Rossa and Shikha Verma New York’s Up-and-Coming Venture Scene Is Big 2013 Story Tumblr’s sale to Yahoo! generated a windfall for East Coast investors Union Square Ventures and Spark Capital and boosted the New York City venture scene. New York and California are the two states where VC funding took the biggest jump in 2013, as the map shows. New York’s increased by about $850 million, or 47 percent, while California’s rose by more than $1 billion, or 8 percent. HAVE OUR DATA MAKE YOUR POINT ECWB  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  <GO> ECONOMIC WORKBENCH
  21. 21. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review VC-Backed IPOs {IPO <GO>}  Compiled by Scott johnson and jennifer rossa Twitter Tops List of Biggest VC-Backed IPOs of 2013 Price Date Company Name Select Backers 21 Hover mouse over chart for a larger image IPO Value Performance Shr Industry Country ($M) Since IPO Price Notes 200% 11/6 Twitter Inc 9/19 FireEye Inc Rizvi Traverse Management LLC, JPMorgan Chase & Co, Spark Capital, Benchmark Capital, DST Global Solutions Ltd, Union Square Ventures Sequoia Capital Operations LLC, Norwest Venture Partners, DAG Ventures LLC, Jafco Co Ltd, SVB Capital Partners 150% $2,093 26 20 300% 250% 200% 150% 100% 50% 0% Veeva Systems Inc Emergence Capital Partners United States Twitter's IPO gave several of its backers paper profits of more than $1 billion. Communications United States Pre-IPO backers invested $125.5 million at an average price of $1.23 a share. Sequoia and Norwest's stakes were both valued at more than $900 million at the Dec. 31 share price. Technology United States At IPO, Emergence Capital's $4 million investment was valued at $1.2 billion. Technology United States NEA invested $29.2 million and has so far sold shares worth about $480 million. Communications United States Maveron sold about $54 million of shares at IPO and holds a stake valued at more than $1 billion at Dec. 31. Communications France Fred Destin of Atlas Venture tweeted that the IPO looks like a "fund returner" for Elaia. Communications United States Shareholders including Austin Ventures and Norwest sold $106 million of shares in December and $88 million at IPO. The company raised $313 million at an average of $6.86 a share pre-IPO. Communications China DCM held 16.4% voting power at IPO and was planning to buy more shares. Technology United States Accel and Sequoia each own stakes valued at more than $500 million as of Dec. 31. Investors put in $108.9 million pre-IPO at an average of $1.75 a share. Consumer, Non-cyclical United States SV Life's 6 million shares were worth about $194 million at year-end. Consumer, Cyclical China Communications United States Communications 50% India 0% $349 150% 10/15 Communications TWTR US Equity 100% $300 20 Jan May Sep Jan FEYE US Equity Jan May Sep Jan 100% VEEV US Equity 50% 0% Jan 150% 5/16 Tableau Software New Enterprise Associates Inc,Meritech Capital Inc Partners $292 31 May Sep Jan DATA US Equity 100% 50% 0% 11/14 zulily Inc 10/30 Criteo SA 7/18 RetailMeNot Inc August Capital,Maveron LLC, Andreessen Horowitz Index Ventures, Idinvest Partners, Elaia Partners, Bessemer Venture Partners, Softbank Capital Austin Ventures LLC, Norwest Venture Partners, Institutional Venture Partners, King Holdings Pty Ltd ACN, Adams Street Partners LLC, Google Ventures, JPMorgan Chase & Co $291 $288 22 120% 100% 80% 60% 40% 20% 0% 31 25% 20% 15% 10% 5% 0% -5% 100% 21 SAIF Partners Ltd, DCM Sep Jan May Sep Jan CRTO US Equity Jan May Sep Jan SALE US Equity 80% $220 May ZU US Equity Jan 60% 40% 20% 0% 150% 10/30 58.com Inc Jan $215 17 Jan May Sep Jan 100% WUBA US Equity 50% 0% 150% 12/12 Nimble Storage Inc Accel Partners,Sequoia Capital Operations LLC, LightSpeed Venture Partners $193 21 Jan May Sep Jan 100% NMBL US Equity 50% 0% 60% Jan May Sep Jan 40% 9/24 Ophthotech Corp SV Life Sciences Advisers Inc $192 22 OPHT US Equity 20% 0% Jan 150% 11/1 Qunar Cayman Islands Ltd May Sep Jan 100% GSR Ventures, Baidu, GGV Capital $192 15 QUNR US Equity 50% 0% 0% 11/12 Chegg Inc Insight Venture Partners LP,Gabriel Ventures LLC, KPCB Jan May Sep Jan -10% $188 12.5 -20% CHGG US Equity -30% -40% -50% 250% Jan May Sep Jan 200% 5/27 Just Dial Ltd Sequoia Capital India Investments III, Tiger Global $167 530 150% JUST IN Equity 100% 50% Chegg's shares have dived since the IPO. IVP, the biggest VC backer, holds shares valued at $73.8 million as of Dec. 31. The company has raised $195 million in VC. 0% Jan May Sep Jan Source: Bloomberg  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  22. 22. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 22 Biggest Venture Rounds  Compiled by Jennifer Rossa and Shikha Verma A Year of Big Rounds and Bigger Valuations in 2013 Start-ups raised $39.8 billion globally in 2013, up from $35 billion in 2012, according to data compiled by Bloomberg. There were 42 rounds of $100 million or more, up from 28 in 2012. Half of the 10 Biggest VC Rounds Are for Non-U.S. Companies Annc* 1/17 7/7 2/16 8/23 11/22 12/9 10/23 10/11 7/10 2/24 2/20 9/29 12/24 6/8 8/2 6/19 10/9 8/1 10/14 10/4 8/29 5/2 1/15 5/12 4/18 6/11 6/25 12/13 5/2 12/4 2/1 12/6 12/4 11/20 2/20 10/28 1/16 12/12 9/30 9/4 6/20 5/22 Target Name Investors SurveyMonkey.com LLC Mobileye NV 360buy Jingdong Inc Uber Technologies Inc Spotify Ltd Lazada Value ($M) Google, Laurel Crown Capital, Social+Capital Partnership, Tiger Global Management, ICONIQ Capital Blackrock, Fidelity Management, Wellington Management, Sailing Capital, Enterprise Rent-a-Car Ontario Teachers' Pension Plan Board, Kingdom Holding Co TPG Capital, Benchmark Capital, Google Ventures Technology Crossover Ventures Tesco PLC, Access Industries, Investment AB Kinnevik, Verlinvest Fidelity National Financial, Valiant Capital Management, Deer Management, Andreessen Horowitz, Pinterest Inc FirstMark Capital ShopRunner Inc American Express, Alibaba Group, Kynetic Flipkart Online Services Pvt Ltd Naspers, Tiger Global Management, Accel Partners, ICONIQ Capital Airwatch LLC Insight Venture Partners Pinterest Inc Valiant Capital Management, Deer Management, Andreessen Horowitz, FirstMark Capital Palantir Technologies Inc Founders Fund Management Palantir Technologies Inc NA Fanatics Inc Temasek Holdings, Alibaba Group ConforMIS Inc NA Tencent Holdings, DoCoMo Capital, Itochu Technology Ventures, Andreessen Horowitz, Menlo Fab.com Inc Ventures, RTP Ventures, Pinnacle Ventures LLC, Atomico Sofina, Morgan Stanley Investment Management, Vulcan Capital, Tiger Global Management, Flipkart Online Services Pvt L Dragoneer Investment Group Hootsuite Media Inc OMERS Ventures, Accel Partners, Insight Venture Partners Xero Ltd Matrix Capital Management, Valar Ventures Management T Rowe Price, Red Hat, NEA, Salesforce.com, Intel Capital, Sequoia Capital, Altimeter Capital MongoDB Inc Management T Rowe Price, Fidelity Investments, Samsung Ventures America, Greylock Partners, Tiger Global Pure Storage Inc Management, Index Ventures, Redpoint Ventures, Sutter Hill Ventures Intrexon Corp Third Security LLC SevOne Inc Bain Capital Venture Partners Bloom Energy Corp Credit Suisse Group AG, E.ON SE Supercell Oy Index Ventures, Institutional Venture Partners, Atomico Lamoda/Russia Access Industries, Tengelmann Ventures, Summit Partners BP, ConocoPhillips, PVS Chemicals, Berg & Berg Enterprises, Cenovus Energy, Toyo-Thai, Zachry Skyonic Corp Corp, Energy Technology Ventures, Northwater Capital Management Freedom Financial Network LLC Vulcan Capital LendingClub Corp Google, Foundation Capital Juno Therapeutics Inc Arch Venture Partners, Alaska Permanent Fund Truphone Ltd Roman Abramovich Macnica, Mail.ru Group, Mitsui & Co Global Investment, Itochu Technology Ventures, Box Inc Telefonica Ventures Zalora Access Industries LLC, Scopia Capital Management LLC Moderna Therapeutics Inc Flagship Ventures LivingSocial Inc NA eRecycling Group Inc Silver Lake Management LLC, Kleiner Perkins Caufield & Byers Lynda.Com Inc Spectrum Equity Investors, Accel Partners OMERS Administration, Deer Management, Insight Venture Partners, Georgian Partners, Felicis Shopify Inc Ventures, FirstMark Capital Evolent Health Inc UPMC Health Plan Inc, The Advisory Board Co, TPG Capital CommonBond Inc Tribeca Venture Partners, Social+Capital Partnership Investment AB Kinnevik, Tengelmann Warenhandelsgesellschaft KG, Holtzbrinck Ventures GmbH, Lazada Verlinvest SA, Summit Partners LP Zalora Investment AB Kinnevik, Tengelmann Warenhandelsgesellschaft KG, Verlinvest SA, Summit Partners LP Source: Bloomberg, NVCA * Date announced Post-Money Valuation ($M) 444.00 400.00 399.97 361.20 250.00 250.00 1,350 1,500 225.00 3,800 206.00 200.00 200.00 200.00 196.50 177.51 170.00 167.70 600 2,500 6,000 165.00 1,000 3,500 4,000 3,100 160.00 159.50 150.57 150.00 1,200 150.00 150.00 150.00 130.00 130.00 130.00 770 128.00 125.00 125.00 120.00 117.97 1,550 112.00 2,000 112.00 110.00 110.00 105.00 103.00 1,500 100.00 1,000 100.00 100.00 200 100.00 100.00 Click the interactive button for further details  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  23. 23. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review 23 VIEWS: NORTH AMERICAN Venture COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER The Bitcoin Economy; Cloud Computing’s Rise; U.S. Cleantech Wake-up Call Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say: Mike Volpi, partner at Index Ventures Story: The return of the enterprise. In 2013 the enterprise technology sector found its stride again with next-generation companies like Workday, ServiceNow, FireEye, Splunk and many others being welcomed into the public markets. One thing I’d have done differently: We’ve all been buying some Bitcoin personally for a couple years, but missed an opportunity as a firm in the Bitcoin economy We’re very excited about the prospects for Bitcoin — especially outside the U.S. — and we hope to invest in this economy in 2014. Worry: Silicon Valley has experienced a lot of success in the last couple years and deservedly so. However, there is a growing concern around the onset of hubris in our culture — both toward the rest of the world and even amongst ourselves. There is a fine line between confidence and overconfidence. Surprise: Bill Gates will return to the helm of Microsoft. Byron Deeter, partner at Bessemer Venture Partners Story: Despite the high profile IPO of Twitter and the rebound of Facebook’s stock price, the real story of the year was the coming of age of the cloud computing sector. Boring is the new sexy! Ten new pure play cloud computing companies went public this year and 21 total since the start of 2012, bringing the total to 38 publicly traded pure play cloud computing companies. One thing I’d have done differently: I certainly wish I had conviction earlier on Veeva Systems, we pushed harder to get into Twitter, I’d anticipated the decline of the rupee and the explosive appreciation of Bitcoin. Worry: From a short term investment perspective, I worry most that the technology markets may pull back or get hit by exogenous factors. We also continue to witness high amounts of domestic and international volatility, which at some point could adversely impact even the very best businesses. Surprise: It’s quite possible that LinkedIn may pass Salesforce.com in 2014 to become the world’s most valuable cloud computing company. Most people think of LinkedIn for its powerful consumer internet brand, but at the core of the LinkedIn business model is one of the most powerful SaaS businesses in the industry. Andrew Chung, Partner, Khosla Ventures One thing I’d have done differently: If I had more bandwidth outside of assisting existing portfolio companies, I would have placed even more bets in the sustainability and “future tech” areas than we did. On the cleantech side, I see the quieting of the field as an opportunity to cherry-pick technologies outside our portfolio and take significant stakes at attractive valuations across stages. On the “future tech” side, we continue to look at dislocations that can topple industries or create new ones, in particular, around how advances in computing, big data, sensors, and robotics can impact/transform commerce, education, health care and agriculture. Worry: With cleantech under pressure, my two top worries are that fewer entrepreneurs are innovating and that U.S. investment in the sector is not sufficient to commercialize the technology on the home front. Entrepreneurs and investors from other countries — particularly China — are willing to take a progressive, long-term view of cultivating these technologies, and the U.S. risks falling behind. Surprise: Two surprises: Chinese companies make some big announcements to help fund early commercialization of clean technologies for their country’s survival; U.S. financial investors and policy-makers reawaken to the need to support and protect clean technologies domestically. For China, it’s no secret that the demand for cleantech is survival-driven. China recently surpassed the U.S. as the leader in deployment of renewables, and the country is pledging some $80 billion a year of investment into the sector. Companies outside of our portfolio have seen the other edge of the sword, as many Chinese companies have also eyed distressed cleantech companies and bought up their IP and assets. If U.S. investors and policy-makers don’t surprise us in 2014 with a move, then we risk more valuable cleantech IP leaving the U.S. Mike Maples Jr., managing partner of Floodgate Story: Twitter IPO One thing I’d have done differently: Invested in airbnb when I had the chance in 2008. Worry: Missing out on the next Thunderlizard. Surprise: A mobile-first app in a whole new category takes off as fast as Uber and Lyft.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 
  24. 24. 01.21.14 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2013 Global Review NEWS TRENDS {NT <GO>}  24 Jennifer Rossa, Bloomberg Brief Leon Black is Most Mentioned Private Equity Executive of 2013 Apollo Global Management’s Leon Black edged out other big private equity firm head honchos for the most mentions on the Bloomberg terminal NT <GO> search this year, at 329 to 325 for runner-up Henry Kravis of KKR & Co. Black’s quote about the exit environment (see page 2) got lots of play, as did his interest in fine art and his firm’s bidding for Hostess early in the year. Blackstone Group’s Stephen Schwarzman came in last among the four, with 239 mentions. Carlyle Group’s David Rubenstein made a strong push at the end of the year, with his name appearing in stories about the Kennedy Center, which he chairs, and about an exhibit of the Magna Carta. He bought one of the four surviving copies and loaned it to the National Archives. Buyout Kingpin Mentions in Stories Appearing on the Bloomberg 60 "Leon Black" Story Count "David Rubenstein" Story Count "Stephen Schwarzman" Story Count "Henry Kravis" Story Count 50 40 30 20 10 0 1/1 2/1 Source: Bloomberg 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  12/1

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