The article discusses the advantages and challenges of private equity co-investment for limited partners. While co-investments promise lower fees and more control over portfolio construction, direct co-investments have actually underperformed private equity funds over the past decade. Sourcing good co-investment deals is difficult for most LPs, as the best opportunities are often restricted to large deals syndicated by top-tier GPs. Even for giant LPs, achieving co-investment targets can be a challenge given the resources required to put capital to work through smaller deals. Overall, while attractive in theory, co-investing does not guarantee better returns or control in practice for many investors.

1. The institutional investor
perspective on private equity,
venture capital, real estate
and infrastructure funds
www.LimitedPartnerMag.com Q4 2014
Co-investment conundrum:
why returns are lower
John Holloway: European
venture is finally delivering
Connecting LPs & GPs worldwidePublished by
FoF Akina Partners’macro
conviction strategy
Trillion dollar baby:
PE’s mighty war chest
Venture evangelist:
Bobby Franklin on why
US venture performs well
Small is beautiful:
why LPs should target niches
Plus: Expert insights on
funds, markets & regions
Diamonds in
the rough
How good ESG can really drive
private equity returns

3. 1
W
elcome to Limited Partner magazine. In this issue we have
the latest news on the private equity industry tailored for the
LP community – funds, people, secondaries, infrastructure,
real estate, buyouts, venture, cleantech, in Europe and the US, as well as
dedicated sections for Asia, the Middle East, Africa and Latin America –
and perspectives from LPs around the world.
On our cover is John Holloway, head of equity investments at
Europe’s largest venture capital investor, the EIF. He argues that
Europe’s venture industry needs state support, but also that the hangover
from the dot-com bubble – a 20-year nightmare – is finally receding and
the technology sector is delivering improved returns to LPs. We have opinion from the other side of
the pond, where Bobby Fisher, president and CEO of the NVCA, explains why US venture is such a
success.
For buyout investors we take an in-depth look at the hot topic of co-investment. It promises all the
benefits of private equity without the fees. It sounds too good to be true and – if recent experience is
any guide to the future – it is: direct co-investments have underperformed private equity funds over
the past decade.
Elsewhere, we report on the surprising finding that good environmental, social and governance
(ESG) practices drive alpha in private equity; show that despite having $1trn in dry powder, private
equity is facing a capital shortfall; and explain how GP-initiated secondaries can benefit all parties.
And don’t forget to check out www.AltAssets.net for daily breaking news and comment, as well as
our online research and IR tool, the AltAssets LP-GP Network, which is gaining critical mass and in
the last six months logged more than 50,000 LP-to-LP and LP-to-GP connections, as it continues to
establish itself as the world’s most effective and wide-reaching online private equity network.
Grant Murgatroyd
Editor
Introduction
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last 6 months

4. CONTENTS
2 Q4 2014
Venture
evangelist
Bobby Franklin,
National Venture
Capital Association
Features
Industry Profile
04 Co-investment conundrum:
returns are lower
Co-investments sound perfect. You back the
manager you like, choose the investments you like
and there’s no – or lower – fees. That’s the theory,
but does it work in practice?
How good ESG can really
drive private equity returns16
Far from being a cost to private equity, new
research from Pantheon Ventures shows that good
environmental, social and governance practices
are a driver of value
Trillion dollar baby:
Is private equity short of cash?26
The private equity industry has just two years of
investable capital at its disposal. Is this the start of a
golden era for limited partners?
Auction shows the way
forward for secondaries24
Private equity real estate secondaries are rare.
Does the general partner-led auction of positions
in China’s Trophy Property Development provide a
transparent route to liquidity for others to follow?
20
US venture capital is
the envy of the world,
and Bobby Franklin
has a steady stream
of politicians and
industrialists knocking
on his door, eager to
find out how it’s done.
He tells Limited Partner
magazine the secrets
of its success

5. Q4 2014
www.LimitedPartnerMag.com 3
10
It’s Europe’s largest venture capital investor,
but while the EIF’s policy is to support SMEs,
for John Holloway the bottom line is equally important
Diamonds in
the rough
JohnHolloway,
EuropeanInvestmentFund
34 Small is beautiful
Hans van Swaay,
Lyrique Private Equity
In 20 years Hans van Swaay has seen the
private equity industry as an LP, an adviser
and a direct investor. He admires the mega funds, but
believes niches are the way to generate outperformance
82
Taking a Silicon Valley-style approach to web
and mobile-based startups in South-East Asia
is what Golden Gate Ventures’ Vincent Lauria is all about
GP Perspective:
Golden GateVentures
Vincent Lauria
32
Investors in cleantech face strong headwinds.
Vikram Raju believes backing experienced managers in
unpopular niches is the key to generating sustainable returns
Climate
of change
Vikram Raju,
International Finance Corporation
LP Perspectives News & Views
Funds
42 Insider perspectives and exclusive coverage on
fundraising, new funds in the market and the latest
industry developments
People
56 Appointments, promotions and people moves from
both limited partners and general partners across
the globe
Sector Perspectives
60 Essential news, views and opinions on the most
relevant developments, trends and investor activity
across the private equity and venture capital industry
Regional insights into emerging markets and key
locations within the global investment space
Regional Perspectives
88
Asia
Middle East
Africa
Latin America
88
92
94
98
36
Successful investment is not about sectors
or sizes. Close relationships and a top-down
conviction strategy drive manager selection at the $2.2bn
Swiss fund-of-funds manager
Why investments go
under the macroscope
Thomas Frei, Akina Partners
60 Secondaries
64 Infrastructure
72 Real Estate
76 Buyout
82 Venture Capital
86 Cleantech & Sustainability

6. FEATURE
4 Q4 2014
P
rivate equity is an attractive asset class for many investors.
It has generated excellent returns, a long-term time horizon
and some degree of diversification away from mainstream
assets. But it’s an expensive game to play. A standard fund has a two
per cent management fee and pays 20 per cent in carried interest
once a certain hurdle has been achieved.
Add in fees for equity arrangement, investment monitoring, PR,
teleconferencing and just about anything you care to think of, and
you are talking about a lot of money going from the limited partner
to the general partner.
GPs justify the numbers – and counter the media criticism – by
saying that fees are transparent and agreed with LPs.
Agreed or not, fees are a major bone of contention for LPs, so it is
no surprise that co-investment has become a hot topic among them.
At AltAsset’s Limited Partner Summit in June, the room was packed
to capacity for the sessions on co-investment.
“Co-investment has become more prominent and more core to
how the industry decides to access private equity,” says Claudio
Siniscalco, recently appointed global co-head of co-investments at
Deutsche Bank, which has over $11bn of private equity assets under
management and is in the process of ramping up its co-investment
programme.
“One of the reasons – and it’s not necessarily our reason – is that
co-investment is typically undertaken on a reduced fee and carry
basis. So there is a cost-reduction component to the appetite. Due to
the financial crisis and the better negotiating leverage of the limited
partner community, co-investment has been used as a way to lower
their weighted average fees.”
Dennis McCrary, partner at global private equity investor
Pantheon in the US, agrees. “People recognise they can reduce the
Co-investments sound perfect.You can back the
manager you like, choose the investments you
like and there are no – or lower – fees.
That’s the theory, but does it work in practice?
Co-investment
conundrum

7. CO-INVESTMENT
www.LimitedPartnerMag.com 5
Partners, says lower fees are a good reason, but is less convinced
about the portfolio selection angle.
“The fees are lower and that can enhance the overall portfolio
return. But the other, less talked about reason, is that a lot of
institutional ventures now believe they have the capability,
knowledge and experience to co-invest alongside their general
partners. That’s truer for some than others.”
Conversations about the advantages of co-investment always
come back to fees, but there are other advantages over blind pool
investing. First, it gives LPs the ability to deploy capital more
quickly than via fund commitments. Instead of the three to five
years it takes a standard fund to be drawn down, co-investments are
called as soon as the investments are made.
“When we’re talking to investors that are interested in our
co-investment fund, they find the significantly reduced J-curve
fee load of private equity investing by allocating a portion of their
capital to co-invest. A big institutional investor might, for example,
commit to invest $100m in the fund and $20-30m in co-investment.
So instead of being two and 20, their blended overall fees might
instead be 1.7 per cent management fee and 17 per cent carry.”
It is no surprise that LPs are keen to reduce fee levels, but the
other principal attraction of co-investment is a belief that it gives
the investor greater control over portfolio construction, particularly
in terms of risk-reward and the level of exposure to certain sectors,
geographies or risks.
“They can have a bit more control from the perspective of having
the ability to select the deals they want,” says McCrary.
Jonny Maxwell, senior adviser at private equity firm GMT
Communications Partners, who has more than 30 years’ experience
as an LP at Standard Life Private Equity and Allianz Capital

8. FEATURE
6 Q4 2014
attractive,” says McCrary.
“Yes, it is often about people tackling the question of fees,”
says Graham McDonald, head of private equity at Aberdeen Asset
Management. “It’s also tackling the question of deployment of cash.
In a fund structure it’s about making a commitment, and typically
there’s a five-year investment period, whereas if you’re investing
directly alongside a general partner you are deploying that cash
within a particular timescale, and that cash is then very much in the
ground and working for you.”
Second, proponents argue that co-investment allows for more
flexibility in portfolio construction, whether by geography, fund
type, sector or any other factor. “You have the ability to stock-pick,
so it’s quite a different skillset from that of a fund investor where
your due diligence is all around the manager, the process, the sectors
and overall performance,” says McDonald. “As a co-investor you
can concentrate on a particular sector or region or, if you want,
increase your exposure to a particular asset. So, you’re far more in
control of how your capital is deployed.”
Third, co-investment gives the end-investor a feeling of greater
control. They can look at individual deals in more detail before
making the decision whether to commit. But this has a darker side
to it, and the real motives for pursuing direct investment may not be
so rational.
“Investing in funds is pretty dull,” says Hans van Swaay, founder
of Lyrique Private Equity. “Everyone in the financial industry thinks
they’re swashbuckling cowboys, but investors in funds are people
in suits behind behind desks with PCs and telephones. They are like
the purchasing department of an industrial business.
“If you make a co-investment you are a little more involved than
you are when you give money to a fund manager. It gives people a
warm feeling and it enables them to talk about this over cocktails,
especially if it’s a well-known name – ‘we have just invested in
Widget Ltd’. There’s a lot of psychology at work.”
Trickle-down effect
Sourcing deals is the most difficult aspect of co-investment (see
panel, left). Many LPs will find themselves restricted to the very
largest deals that are underwritten by a GP and then put into open
syndication.
“Certain deals sometimes do trickle through to the widely-
syndicated, widely-available market,” says Siniscalco. “Small
co-investors without the resources to really employ a proper
sourcing strategy will likely be limited in their choice to these
widely-marketed syndications. We focus a great deal of attention
on sourcing across the entire market, specifically on mid-market
opportunities which are much harder to come by and much harder
to source. It’s much less likely that a smaller investor is going to be
able to access those.”
Co-investments alongside some of the larger funds have been in
evidence for quite some time, but it is now becoming more common
to see opportunities in mid-market funds. They generally occur
where the deal size is large relative to the overall size of the fund.
Mid-market opportunities throw up their own set of difficulties
for LPs. “That’s where it becomes more challenging, because
you have to understand the dynamics of the individual region and
countries in a way you don’t necessarily have to with some of the
larger buyout funds,” says McDonald.
Even giant LPs can struggle to hit their co-investment targets.
Earlier this year, one of Asia’s largest sovereign wealth funds (SWF)
was forced to cut the minimum ticket size on its co-investment
programme from $100m to $20m, a move with massive resource
implications, since five times more man-hours are required to put
the same amount of capital to work.
There are two approaches to co-investment, both of which can
be equally valid. “Some LPs will almost formulaicly co-invest in
any opportunity they’re shown by their incumbent GPs, subject to
Dealsourcing:feastorfamine?
It is undoubtedly true that LPs want more co-investment,
but how can they go about getting a piece of the action?
Here an LP will usually find themselves at one end of a
spectrum – they either never see a deal or they can’t get out
of their office through the piles of investment memoranda
sitting on every available space.
“If one has a successful sourcing strategy and platform –
and we have the advantage of being Deutsche Bank, with
our banking relationships and billions of private equity
exposure as limited partner – the difficulty is that you
end up sometimes spoilt for choice, and it’s actually quite
challenging choosing the best opportunities from such a
large deal flow,”says Claudio Siniscalco.
“It’s more challenging than you would think, because
in many cases these are co-investment opportunities with
some of the most successful managers out there doing what
they do best. And typically you’re trying to take only a small
fraction of those deals and that’s actually very challenging.”
If you are a small or medium-sized investor or a family
office, sourcing is incredibly difficult.You are in competition
with institutions like Deutsche Bank, who have a trillion-
dollar asset management business, or funds of funds that
have billions of private equity exposure and, despite being
a charming individual or family office, you have little to offer
in exchange for getting your free co-investment.
“You need good relationships to generate deal flow,”
says McCrary.“Then you need to make sure you know the
manager well and have a level of confidence before you’re
comfortable doing a co-investment, because it is typically a
more passive role.
“Over 90% of the co-investments that we close are with
managers that are in our portfolio of fund investments,
and the remaining small percentage where they’re not are,
for one reason or another, managers that we have built a
relationship with, and know well enough to feel that level
of comfort.”

9. CO-INVESTMENT
www.LimitedPartnerMag.com 7
their concentration limits,” says Siniscalco. “Our philosophy has
always been to source as many opportunities as possible and then
apply very strict due diligence – you can call it a layer of additional
investment judgement – on that.”
Sometimes co-investors are brought in at the earliest stages
of a deal, while the asset in question is in an auction. LPs face
an obvious conundrum: “It can get very confusing when you’ve
got three of your underlying managers competing for the same
transaction,” says Maxwell.
Striking a balance
“You have to decide which manager’s got the best long-term
approach to the investment, which is a serious judgement call. But
it does allow you to understand your underlying managers much
better than if you just invest in their funds. So co-investment gives
you a much greater insight into the manager’s true ability and
strategic planning and value add.”
It is entirely rational to say that you should be conducting your
own due diligence, but is a desk-bound LP really qualified to
do that? “I’ve always argued, and I still argue, that you do good
due diligence on a fund manager, and if you trust him then you
should also trust him with a co-investment. It is, after all, a fund
investment,” says van Swaay.
“What makes you think you can do it better? How often does an
LP’s involvement lead to a better or even a different outcome? It’s
nice that you can listen into a management presentation. It brings
you a bit closer to it, you understand a bit better how they work, but
it is extremely rare for a co-investor to influence due diligence or a
negotiation.”
When making a commitment to a fund, an LP is making decisions
about the manager, understanding how they make their selections,
and conducting due diligence on the people, the strategy and the
track record. When making a co-investment where they are a fund
investor, the LP has the benefit of having done that diligence on the
manager and so, if it is a company in an industry that the manager
has been very successful in investing in, they already have a high
level of comfort.
Striking a balance is key. “We still do our diligence on that
business,” says McCrary. “We’re not going to hire consultants
ourselves, but we will typically have an opportunity to meet with
the management team and look at all the work the sponsor has done,
including their internal investment memorandum, the consultant
reports on the markets, the accounts, etc. We have ample time to talk
to the deal team at the private equity firm regarding the business.
“Then we add our own diligence, talking to other sponsors that
may be experts in the industry or sector to get their view. We do
a lot of diligence on each of the deals, but co-investors need to
balance the idea of doing their own due diligence with being a good
partner and being easy to work with for the manager.”
There are many differences between making a co-investment
and a direct investment, and these cannot be learnt overnight. The
temptation – and there is more than a grain of truth to it – is to think
“Youhavetoremember
thatyouarepiggybacking
onaGP’shardwork.
Insteadoftryingtocutthe
verybestdealforyourself,
youshouldfocusonbeing
asupportivedealpartner”
Claudio Siniscalco – Deutsche Bank

10. FEATURE
8 Q4 2014
that good direct deal-makers will make good co-investors. But there
are differences. “It takes years to learn those differences,” says
Siniscalco. “If you are in the direct-investment business you are
typically in the business of creating optionality for yourself. You
work on transactions for six months until the deal is absolutely right
and fully baked and you have walked away from the table and come
back and re-priced it and negotiated every fine line and dotted every
I and crossed every T in the contracts, and you walk away one more
time and you get a three per cent price reduction. That’s the direct-
deal business.
“Co-investing shares all the important characteristics of having
to understand the fundamentals, valuation and all the things that are
incredibly important across those disciplines, but the actual deal
process is completely different,” Siniscalco continues.
“It’s usually four to six weeks rather than four to six months.
And you have to remember you’re being offered a the privilege of
piggybacking on the lead GP’s hard work and getting access to their
deal. So instead of trying to cut the very best deal for yourself, you
should use the time you have to be as focused as possible with your
due diligence, while being as user-friendly and supportive a deal
partner as possible.”
Being easy to work with means that a separate team is needed
to do anything other than ‘blind’ co-investment. “It is resource
intensive over a shorter period of time, so you have to have a
dedicated team and you have to have a team that understands the
nuances of investing directly with the GP,” says McDonald.
The onus is on the LP to be as transparent and as quick and as
responsive as they possibly can be. GPs don’t mind a quick no, but
mess them around and you’re unlikely to be on the invite list when
the next opportunity comes around.
“If I see that I am not going to get there, I need to give a quick
‘no’, rather than engage in a prolonged kicking of the tyres,” says
Siniscalco. “The biggest flaw – and I’ve seen this in several market
participants who’ve joined the co-investment community from the
direct investment business – is that if you’ve spent a decade creating
optionality for yourself and trying to work a deal from all angles,
you will increase the risk of having a reputation as a ‘back-seat
driver’ as opposed to a supportive partner.”
Maxwell agrees. “There’s no point in saying, ‘We’re going to look
at this, and we need two months and we’ll come back and let you
know if we want to take it further’.
“You’ve got to be able to react very quickly – you need to be
tooled up in terms of personnel and experience and systems to be
able to approve the initial stages and the due diligence, and then
press the ‘go’ button if you’re going to do it. And if you screw the
GP around, you tend not to get the call next time round.”
There are two basic types of co-investment, and each has
markedly different characteristics. If it is a larger transaction with
one of the larger firms, the GP will commit the entire amount,
close the deal and then after the fact they may look to reduce their
exposure by bringing in their co-investors. The process is very
ordered, with a book drawn up and potential co-investors given the
opportunity to meet with management.
“It’s a defined and relatively quick syndication process, sometimes
just two or three weeks. You have to move quite quickly and I
think the more experienced your team, the better you can respond
to the situation,” says McCrary. “But there can also be deals where
you actually join the private equity firm when they’re meeting the
management for the first time. And you get more involved in the
earlier part of the process and it might be three months from that first
time until you actually commit or close.”
It is a timetable and process that many institutional investors are
not suited to. “You need to understand the drivers of the companies
concerned. You need to understand the capital structure. You
probably have to have the ability to move in a lot tighter time frame.
If you’re underwriting alongside a GP you need to be able to perform
in line with the timescales associated with the transaction. Even if
it’s a post-syndication exercise, there’s a fairly prescriptive period
of time, usually three to six weeks. You have to have a reactive
investment committee, you have to have the resources and team
available to act within these deadlines, and to be able to come to a
view very, very quickly as to whether or not you want to proceed or
not,” says McDonald.
Forget the idea of taking August off. One well-known European
private equity fund operated a ‘waterfall’, where co-investment
opportunities were offered first to its cornerstone investor, a large
French institution, then to a second tier of fund-of-funds. The
problems came when they tried to syndicate the equity on a deal
Dennis McCrary: “Co-invest reduces blended fees”

11. CO-INVESTMENT
www.LimitedPartnerMag.com 9
“Asaco-investoryoucan
concentrateinaparticular
sectororregionorincrease
yourexposuretoa
particularasset.Soyou’re
farmoreincontrolofhow
yourcapitalisdeployed”
Graham McDonald,
Aberdeen Asset Management
after it had closed. The French institution was on holiday and didn’t
respond until the team was back at work in September, politely
declining the offer. The funds of funds were wary, asking why they
should invest if the fund’s cornerstone backer wasn’t interested. The
GP was left holding a covenant-breaching amount of investment.
But co-investors do need to be available at unsociable hours. “I
got an email this morning asking me if I was interested in co-
investing with a US mid-market buyout group,” says one European
investor. “There’s a management conference call in a week, and it’s
pretty inconvenient because it starts at 9pm, because it’s US time.
Then I’ll have a fortnight to decide whether I want to invest. It’s all
a bit of a hurry.”
GPs have a variety of reasons for bringing in LPs. “The
fundamental reason is that the deal’s larger than what works for the
fund, but I think more and more you’re seeing GPs use this as a tool
to build LP relationships, because they recognise that many LPs
want co-investors,” says McCrary. “Sometimes you have groups that
are in the process of raising the fund and they’re trying to develop
relationships with LPs that will subsequently invest in their primary
fund. They may use a co-investment as an opportunity to have that
LP get to know them and vice versa, and that may be an enticement
then for someone to ultimately come into their primary fund.”
For LPs, a co-investment with a GP where they have no existing
relationship can give them insight into how the manager conducts
themselves, because the LP has access to the investment paper, the
Lower returns – how
co-investments perform
It’s pretty simple economics. Reduce the fees and you
increase the return.“Historically people have assumed that
co-investments were better than fund investments,”says Hans
van Swaay of Lyrique Private Equity.“Why? Simply because you
pay no fees, or at least far less fees. But most money went into
co-investments during peak years like 2006-07. Why? Because
everybody wanted to keep up with the Joneses, do the biggest
possible transaction and raise a bigger fund. Many of these
deals didn’t work out very well at all.”
In a September 2014 paper that will be published in the
Journal of Financial Economics, Lily Fang of INSEAD, with Josh
Lerner and Victoria Ivashina of Harvard University, looked
at the actual performance of private equity co-investment.
The dataset comprised detailed cashflows for 390 direct
investments made by seven institutions from 1991 to 2011.
“We examined the investing patterns, as well as the
performance of these direct investments. We compared them
against that of public market indices and private equity funds,
thus directly assessing whether the trend towards‘going direct’
is economically justified,”they said.
Their findings were“surprising”:
Direct investments perform better than tailored public
market indices. The best performance is concentrated in the
buyout fund investments and those made in the 1990s.
There is limited evidence of outperformance of direct
investments relative to the corresponding private equity
fund benchmarks. For venture capital (VC) deals, direct
investments underperformed the fund benchmark,
especially in the1990s.
Co-investments underperform the funds with which they co-
invest, with the performance gap widening in the latter half
of the sample. This under-performance of co-investments,
which are executed alongside private equity groups and are
the cornerstone of most direct investment programs,
is surprising.
Underperformance is driven by selection. Institutional
investors can only co-invest in deals that are available. In
particular, these transactions appear to be concentrated at
times when performance is relatively poor.
•
•
•
•
deal team, board packs and management team. “You get up-to-
date referencing on how the GP is behaving, how the GP conducts
themselves, how they influence the growth in the company and how
they influence the governance of the company,” says McDonald.
Whether or not you can improve your returns through co-
investment relative to typical fund investing is a function of whether
you think you can choose deals that are going to outperform.
History would seem to show that LPs cannot stock-pick (see panel
above). McCrary says: “But it makes sense to do it, even if you felt
you were going to basically perform the same way as the underlying
funds, because the overall fee level is lower.”

12. LIMITED PARTNER PERSPECTIVES
10 Q4 2014
Diamonds
in the
rough
John Holloway runs
Europe’s largest
venture capital
portfolio for the
European Investment
Fund.The policy remit
is to support SMEs,
but for Holloway the
bottom line is equally
important

13. JOHN HOLLOWAY – EUROPEAN INVESTMENT FUND
www.LimitedPartnerMag.com 11
W
hatever you do, don’t call John Holloway a
bureaucrat. Factually accurate it may be – as head
of equity investments at the European Investment
Fund (EIF), the small and medium sized business (SME) support
arm of the European Investment Bank (EIB), Holloway is directly
employed in Luxembourg – but the affable Yorkshireman is a
private equity guy through and through.
Holloway is on the front foot as we meet in London. His
conversation is peppered with phrases like “commercial return”
and “profit motive”, and his passion for the job is undiminished
after 14 years. In fact, you get the distinct impression that
he would still be doing it if he wasn’t paid, and despite just
celebrating his 60th birthday with the birth of a first grandchild,
Holloway is not likely to be retiring any time soon.
Funding for growth
The EIF exists to fund start-up, early-stage and mid-cap
businesses, which it does exclusively through intermediation,
investing in private equity funds such that 96 per cent of the
organisation’s €9bn of committed capital is in primary funds, with
a tiny – albeit growing – percentage allocated to secondaries and
co-investment.
“Our whole aim in life is to facilitate access to finance for small
and medium-sized and small mid-cap businesses,” he says. Typical
of the lower mid-market funds the EIF will support is UK player
Dunedin. The Edinburgh and London-based buyout house raised
£300m for its third fund in 2013. The fund, which will invest
in companies with an enterprise value of £25m-£75m, attracted
significant interest from international investors and hit its hard
cap. But Holloway is quick to point out that the EIF is not simply
following the crowd and that funds such as Dunedin sit firmly
within its policy objectives.
“Dunedin is one of many I could mention as a classic example
of what we would call lower mid-market,” he says. “They’re
investing in still small and medium-sized companies towards the
mid-cap definition. They’re growing companies. They buy them,
they build them, they sell them at a bigger exit valuation. It’s as
simple as that. We look at it from a policy point of view because
that creates confidence and economic growth.”
By value, lower mid-market investments account for an
increasing proportion of the EIF’s investment, today representing
less than one half of the total investment portfolio.
If it follows that the majority of the value of the EIF’s
investments are in early-stage companies, then it can be said that
the vast majority of its relationships are with smaller managers.
The institution supports technology transfer from universities,
“Youwanttosupport
newthingsandyouwant
yourmoneyback.The
conceptthatthisispublic
sectormoneybeing
poureddownadrainisan
absolutefallacy”
incubators, and early-stage and late-stage venture capital, as well
as smaller buyouts and growth investments.
“There is not an awful lot of money going into early stage from
the private sector,” says Holloway. “Europe wants an early-stage
VC industry and I think that’s absolutely right. But the sector
is still suffering the legacy of 2000 when the bubble burst and
returns have not been sufficiently attractive to bring in a large
number of private investors. There are some funds in the VC
space that will raise good fund sizes, but there are very few VCs –
genuine VC funds in Europe – that can raise money without public
sector support. That’s just a fact.”
The end of the beginning
When it comes to supporting European venture, the EIF pursues
return generation, but it is also mandated to make that return from
investing in smaller businesses and has the strength of being able
to absorb the losses of the past and continue investing in what
Holloway believes is now a more promising market.

14. LIMITED PARTNER PERSPECTIVES
12 Q4 2014
“Returns from venture in the first part of the millennium have
been, as you would expect, extremely poor,” says Holloway. “The
old VC portfolio is largely in run-off. More than half the managers
who were in that portfolio are no longer here.
“What I am really proud of is the performance of early-stage
funds from 2008 onwards. They have had some good realisations
and TVPIs are holding up, valuations are holding up. There are a
lot of companies in portfolios that could realistically be bought,
but one of our realisations for the period from 2008 onwards is that
GPs don’t sell companies, buyers acquire them.
“That might sound facetious, but it’s true. Our GPs have in
their portfolios a large number of super-looking companies that
will ultimately make a satisfactory return for investors. Even now
there is real evidence of exits being achieved, with 2014 looking to
come out as the best year yet for returns from VC, and with more
to come.
“I said that the ridiculous situation of 2000 would cost the
European venture and early-stage industry 20 years. Nobody else
has a portfolio that is as big and as clear a pointer to where this
industry is heading as us. The good news is that we’re in year 14.”
Holloway believes that around €100m is a normal minimum size
for a VC fund to be viable for the fund to be able to make its first
investments, follow the companies it has backed and provide the
necessary support throughout the growth phase.
“We support VC funds of less than that, particularly if it’s a
first-time team, because the industry will only be self-perpetuating
if new people come in. Anyone looking to raise a first-time fund
‘The only EU organisation with a profit motive’
This year the European Investment Fund
(EIF) is celebrating its 20th birthday.“The
EIF is a remarkable animal because it’s a
European Union organisation that was
born in Britain, or Scotland to be more
precise,”explains John Holloway, director
of private equity investments for the
Luxembourg-based organisation.
“The fund’s main job in life was to write
guarantees in favour of the lenders to the
TENs, the Trans-Europe Networks, which
were the big infrastructure projects of
the 1990s – roads, railways, ports, airports
and the likes.
“A short while later they started doing
equity investments as a fund-of-funds,
and built up a small portfolio and a small
team of people through to the year 2000.
By that time it also had a small business
guaranteeing portfolios of SME loans to
allow banks to offset risk so they could do
more SME loans.”
The year 2000 was a turning point for
the EIF, which underwent a significant
restructuring of its shareholder base.
When it was established in 1994 the
European Investment Bank (EIB) had a 40
per cent stake, the European Commission
30 per cent and a group of 80 public and
private financial institutions held 20 per
cent with the rest unallocated.
As the new millennium dawned,
the EIB decided that, as the principal
shareholder, it wanted to increase its
stake to a genuine controlling position,
which it duly did – buying out the other
shareholders and ending up with a stake
of approximately 60 per cent.
The EC retained a 30 per cent stake.
Many of the financial institutions sold
out, leaving a total of 28 organisations
holding around ten per cent.
“The EIF is the only European Union
organisation with outside shareholders,
and it’s the only European Union
organisation that has a profit motive. Not
only do we have to do policy, we have
also to return money to our shareholders,”
says Holloway.
As part of the restructuring process,
the EIB, whose raison d’être is to finance
large-scale infrastructure projects,
took control of the EIF’s project finance
guarantee business, while the equity
portfolio – then valued at about €100m
– was transferred to the EIF, along with
a team of ten executives, including
Holloway.
That equity business now has 55
employees, commitments of more than
€9bn in 450 investments in private equity
funds and 280 live GP relationships.
Compared with most LPs, the EIF has
an awful lot of GP relationships. It is,
Holloway explains, in the very nature of
the EIF.
CVJOHN HOLLOWAY
John Holloway is director of the European
Investment Fund, a position he has held for the past
14 years.
His role gives him responsibility for the
development of theVenture Capital and Portfolio
Guarantee transactions in support of European
small and medium-sized enterprises (SMEs).
He is currently responsible for all equity
transactions entered into by the EIF, with
approximately €12.5bn of assets under
management, invested in over 300 fund managers.
Holloway is a member of the EVCA LP Platform
Council, and a former vice-chairman of the board of
directors of the EVCA.
He joined the European Investment Bank (EIB)
in early 1980, and in more than 20 years with the
organisation has had different responsibilities in a
number of EIB lending departments in Luxembourg
and Rome.
Before joining the EIB, Holloway spent four years
at the London-based international division of
NationalWestminster Bank.

15. JOHN HOLLOWAY – EUROPEAN INVESTMENT FUND
www.LimitedPartnerMag.com 13
money back. In other words, you are a market-orientated investor.
The concept that this is public sector money being poured down a
drain is an absolute fallacy.”
For the EIF, manager selection is the determinant of asset
allocation. “We don’t have a top-down system that says this year
we are going to invest 12 per cent in a particular country or early-
stage or whatever else,” says Holloway. “We don’t do it because
we can’t do it and it wouldn’t be wise to do it. Why?
“Imagine we had decided 12 per cent of the portfolio would be
invested in a particular country and by October we’re only at nine
per cent. Then three general partners from that particular country
walk in the door and, we say great, our target has been met even if
they are not up to the required standard. What do you do? Do you
meet your target by investing in something you don’t think is right,
or do you do it the other way round and say this year the particular
country is nine per cent?”
That is not to say the EIF doesn’t have a plan, and the EIF
is currently working on its 2015 investment plan. “I’ve got the
basic figures for next year. The plan is built bottom-up from
the investment managers, through their team leaders and into
me. There are three teams – tech transfer, VC and lower-mid
market – and they know who is going to be raising money in their
market next year. That feeds the plan, not just geographic or stage
allocations.”
in Europe will come to us and, if the team convinces us, we will
support them substantially. They still have to find support from
other sources, but the EIF’s strong support, frequently around
one third but sometimes more, does act as a bit of a reference.
Certainly, without the EIF many funds would not find a first
close.”
Reference or not, raising early-stage VC is still a struggle. The
traditional pension funds and insurance companies that support
the wider private equity industry tend not to look at early-stage,
but Holloway says there is increasing interest from family offices
and business angels. The EIF has initiated programmes to support
business angels that have been rolled out in Germany, Spain and
Austria, with the Netherlands and Ireland scheduled for roll-out
before the end of the year.
“The UK has a very, very active business angel function through
what used to be Capital for Enterprise and is now the British
Business Bank. Their model is not exactly the same as ours, but
we know each other and we work together,” he says.
Biggest partner
“Capital for Enterprise is the second biggest partner of the EIF.
We have worked together on many deals with them over the
years in the UK because we have the same investment scope and
mentality. You want to support new things and you want your
John Holloway: Focus on performance

16. LIMITED PARTNER PERSPECTIVES
14 Q4 2014
Last year the EIF committed €1.4bn to 72 fund vehicles, and
Holloway expects it to do more in 2014. But its selectivity policy
still leads it to say no. The EIF sees an average 300 deals a year, so
230 fund managers walk away disappointed.
“A few are black and white – ‘you’re not in the EU’ – but the
majority fall into the grey area in the middle, where it comes down
to the investment policy and the team. The real joy of this business
is when you take on a first-time team and they come back for a
second and third generation. An even bigger joy is when they
come back for the fourth generation and we can say ‘you don’t
need us any more’. That has happened quite a lot and is what
makes us proud because this is what ultimately builds a strong and
healthy equity system.”
The next steps
So where does Holloway see the EIF in five years? Not
surprisingly, he refuses to be drawn into specifics – which will be
determined by the market – but secondaries and co-investment are
expected to play a greater role.
That, in theory, should help IRRs and returns. He emphasises
that everything the EIF does has to be for policy reasons, but there
is no harm whatsoever in using instruments to bring the returns in
more quickly, because the return will be put back to work another
time around. He says: “So long as SMEs are critical to the future
of Europe, the EIF will continue to support them.”
“Iamreallyproudofthe
performanceofearly-stage
fundsfrom2008onwards.
Theyhavehadsomegood
realisationsandTVPIsare
holdingup,valuations
areholdingup”

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18. FEATURE
16 Q4 2014
R
ed tape – excessive or burdensome regulations – cost the
UK economy £27.4bn in 2013, according to an impact
assessment of 100 EU regulations by Open Europe. From
Australia to China, the US and everywhere in between, governments
are promising to cut billions of dollars in unnecessary cost to
business. Britain’s CBI, the employers organisation, has said that
red tape is the number one factor hindering economic growth.
Environmental, social and governance (ESG) issues are an area
where the hand of the so-called ‘nanny state’ can clearly be seen.
Take the UK’s Carbon Reduction Scheme (CRC), introduced
on April 1, 2010. Part of the Climate Change Act 2008, the CRC
was significant because it was one of the first tangible signs of
ESG having a quantifiable impact on a company’s bottom line,
as companies were fined for excessive use of carbon. The impact
was one that could be brought directly into financial models, with
measurable impact on cashflow, profits and enterprise value.
The private equity industry was particularly upset. Portfolio
companies were counted as groups and had to be included if their
aggregate energy spend was more than £500,000 per annum.
Simon Walker, then chief executive of the BVCA, wrote: “Clearly,
this disadvantages private equity-owned companies, many of
which will fall below the threshold individually but will be brought
in to the scheme in aggregate with other portfolio companies,
disadvantaging them simply because of their ownership model.”
Cost or benefit?
Dushy Sivanithy, principal at global private equity investor
Pantheon, says private equity has traditionally been wary of ESG:
“The perception is that ESG costs you something in terms of your
return. That kind of makes intuitive sense, but there is very little
evidence of it. We currently using our own data set to determine
if we can find a correlation between better performance and good
ESG management. What we are really asking is: are GPs aware of
the issues within their businesses on ownership? Are they managing
those issues appropriately?” Put like that, ESG takes on a different
Far from being a cost to private equity, new research from Pantheon shows that
good environmental, social and governance practices are a driver of value
How ESG can really
drive those returns
slant. Instead of being about cost, it is about risk management – a
relabelling that puts it firmly on the investment agenda.
So do ESG practices influence returns? “You need to rephrase
your question to ask if ESG influences risk-adjusted returns,” says
Ludo Bammens, head of EMEA corporate affairs at private equity
giant KKR.
“Return is always linked to a certain amount of risk, especially
if you go for above average returns as you do in private equity. A
lot of private equity is about whether you really had a full view to
ensure there were no blind-spots related to any potential financial
or other risks that might impact your investment thesis. I think
everyone would agree that the ES and G factors have become, over
the last number of years, potentially material risk factors. So, from
“Companiesthatmanage
ESGissueswellgrow
faster,particularlyona
revenueandEBITDAlevel”
Dushy Sivanithy, PantheonVentures

19. ESG AND ALPHA
www.LimitedPartnerMag.com 17
a risk management perspective, ESG is absolutely part of the value
creation toolkit.”
That’s the theory, but what about the practice? Over the summer
Pantheon published preliminary research that has showed a
correlation between good ESG practices and good returns in private
equity. “Early indications are that there is a correlation – and I stress
these are very preliminary results – between good ESG management
and growth. Companies that manage ESG issues well grow faster,
particularly on a revenue and EBITDA level. So, obviously, if you
multiply those out that leads to a better return,” says Sivanithy.
For the past 18 months Pantheon has been working with Dr
Andreas Hoepner, associate professor of finance at the ICMA Centre
at Henley Business School and senior academic fellow at the United
Nations-backed Principles for Responsible Investment (UNPRI).
The research collaboration employs Pantheon’s proprietary
private equity data set, which includes global data on approximately
9,500 portfolio companies built up over 17 years. The research
focuses on the period from 2007, and the initial analysis is based on
a controlled data sample of 400 firms. The negative news data was
sourced from RepRisk, a leading business intelligence provider on
ESG risks of both listed and non-listed companies worldwide.
“We have a sample of about 400 firms where Pantheon invested
KKR’S ESG TOOLKIT
SELECT PRIORITY KEPAs
Review current environmental practices
Assess environmental and business impact
through materiality assessment
ESTABLISH METRICS AND BASELINE
Establish key metrics to assess progress for
priority issues
Collect historical data and establish baseline for
selected metrics
DEVELOP GOALS AND ACTION PLAN
Identify improvement targets against selected
metrics
Develop and implement action plan
MEASURE AND REPORT RESULTS
Report on performance against baseline and
targets quarterly
Reassess and amend as necessary
•
•
•
•
•
•
•
•

20. FEATURE
18 Q4 2014
in them after 2007 and there has been an actual valuation event,”
explains Hoepner. “We looked at the investments that have very
high multiples – 2.5 times, two times and so forth – to see if these
investments have a different distribution of negative events to
investments with low multiples. The results are very clear.”
ESG offers an opportunity for private equity firms to add value.
“Historically people have said if a business is bad, don’t buy it. The
decision has been very binary,” says Sivanithy. “What we’re seeing
now from the more forward-looking GPs is a willingness to buy
businesses that clearly have issues, but identifying them up front.
“In the past we used to see GPs buying businesses that had issues
but not picking them up in due diligence and getting surprised later
on. The level of diligence has definitely increased over the past five
years. Those GPs that actually do identify issues in due diligence
and don’t walk away actually have risk mitigation as part of the
value-creation strategy. So in that sense the focus is quite positive.”
Core business model
For some businesses in private equity ownership, ESG is
fundamental to their business model. For example, KKR invested
in Van Gansewinkel Groep, the largest waste management and
processing group in the Benelux. “The whole sustainability agenda
is not disconnected from the business model, it is a core part of
what the company does,” says Bammens.
“Therefore by driving and pushing your sustainability agenda
you are at the same time driving the core business model of the
company.” Since KKR’s investment, the company has established
a whole new advisory business linked to the prevention and
recycling of waste within large companies.
The environmental issue is an easy sell, and the private equity
industry has long believed the governance model of concentrated
ownership with active management equity participation is superior
to other forms of corporate structure. But what about the ‘social’ in
ESG? Surely being socially responsible is just a nice-to-have and
not a driver of shareholder value?
Bammens pulls out another example. In July 2014 KKR invested
in Afriflora, an Ethiopian-based fresh vegetable and flower grower
that exports to continental European markets.
“A specific dimension of the investment is the community
development angle,” he says. “It is more than a nice thing to do,
making sure there is access to education and healthcare. It is linked
to the core business model because 80 per cent of the employees,
13,000 of them, are women. Making sure that they can say, “My
kids have access to education, I and my family have access to good
healthcare”, that is a differentiator towards both workforce and end
customer. So it’s an integrated part of their business model.”
Sivanithy says it is important to pay attention to ESG issues
from the point of investment, through ownership and on to exit.
“It is about identifying in diligence whether there are issues or no
issues, fixing them, maintaining standards or improving them over
your period of ownership, and so demonstrating the company has
very strong ESG credentials in the way it operates, because such
businesses will actually attract a premium on exit, particularly in
emerging markets. Trade buyers and public markets have a binary
decision about whether they are willing to buy something with an
issue, and the answer is no. That’s quite a powerful statement, and
a lot of GPs have taken that on board. They want to be sure the
business is clean and free of issues.”
KKR more than ten executives focused on managing ESG issues
and improving the performance of portfolio companies. KKR is also
working to integrate an awareness of ESG management throughout
all roles at the firm, as evidenced by its new global private equity
ESG policy. And it is rigorous in measuring the impact. Since
establishing its programme in 2008, 25 portfolio companies have
taken part, with 19 of them releasing results in 2013.
Collectively, through their efforts in key environmental
performance areas, these companies avoided roughly 1.8m metric
tons of GHG emissions, 4.7m tons of waste, and 19.5m cubic meters
of water use. Significantly, these savings have achieved an estimated
$917m in financial impact.
It all sounds like good news for anyone who thinks you can make
a profit without destroying the planet or the lives of the people that
live on it. But Sivanithy adds a word of caution: “LPs have got to be
very cognisant of the size and capacity of a GP. To expect the same
standards from a mega buyout house and a small mid-market house
of ten people just isn’t realistic, even though some of them are very
progressive with ESG fully baked into the investment process.
“What we don’t want to do is burden the GP with unnecessary
data requests and questions that either aren’t relevant or, quite
frankly, don’t add anything to informing yourself about whether the
business is well run or not.”
Dushy Sivanithy: Little evidence that ESG costs more

21. EUROPEAN PRIVATE EQUITY AND
VENTURE CAPITAL ASSOCIATION
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Exchange ideas with the movers and shakers in
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Dr. Sebastian Sieglerschmidt Managing Director,
Allianz Digital Accelerator
Cornelia Yzer Minister for Economics,
Technology and Research, Berlin
Benoist Grossman Managing Partner, Idinvest Partners
Book now at evca.eu/vcf14
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VP Investor Relations
Adveq
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PNickeas@AltAssets.net
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+44 (0)20 7749 1270 – Speak to Mr Paul Nickeas

22. INDUSTRY PROFILE
20 Q4 2014
J
ohn D Rockefeller had a simple formula: “The secret of
success is to get up early, work late and strike oil.” It works as
well today as it did 100 years ago, and the world’s five largest
companies by revenue – Exxon Mobil, Royal Dutch Shell, China
National Petroleum Corporation, Sinopec and BP – all make their
money from the black stuff.
Rankings of the world’s most valuable public corporations
(which necessarily exclude national oil companies and other private
enterprises such as Saudi Aramco or CNPC) give an alternative route
to untold wealth.
Exxon Mobil is still there as the second most valuable public
company, but it is sandwiched between Apple ($560bn at the end
of the second quarter of 2014), Microsoft and Google. Fifth place
goes to a unique animal, Berkshire Hathaway, which is effectively a
private equity firm.
Onwards and upwards
Apple, Microsoft and Google all owe at least part of their success
to venture capital. Microsoft may have eschewed the traditional
route of seed, start-up and multiple early-stage rounds, but Bill
Gates’ software business still took on a small VC investment in the
early 1980s not because it needed the money, but because it wanted
the expertise of Dave Marquardt of Technology Venture Investors
(TVI) ahead of its 1984 flotation.
So you might think that a year into the job, Bobby Franklin,
president and CEO of the National Venture Capital Association
(NVCA) can take it easy.
Franklin, a veteran of Capitol Hill and the telecoms industry (see
CV p23), is in relaxed mood, but even over the phone you can feel
his enthusiasm for the ‘ecosystem’ that has produced so many world-
beating companies (US VCs have invested in 17,000 IT companies,
4,800 in healthcare and 900 in cleantech).
“It’s about lobbying policymakers, having a good communications
effort, organising the grass roots, working with coalitions of other
US venture capital is the envy of the world, and Bobby Franklin has a steady stream
of politicians and industrialists knocking on his door eager to find out how it’s done.
The head of the NVCA tells Limited Partner magazine the secrets of its success
Venture evangelist
industries that are on the same page on important policy issues such
as immigration and tax reform,” he says. “I won’t say it’s an easy
mission, but it’s certainly made easier by having a good story to tell.
There aren’t policymakers that don’t want venture capital in their
state, district or country. On the contrary, they are all trying to figure
out how they can develop entrepreneurial ecosystems.”
Franklin is not always preaching to the converted. Some issues
– immigration is an obvious example – are much trickier. “We
“Iwon’tsayit’saneasy
mission,butwehavea
storytotell.Therearen’t
policymakersthatdon’t
wantventurecapitalin
theirstate,districtor
country”

23. BOBBY FRANKLIN – NATIONALVENTURE CAPITAL ASSOCIATION
www.LimitedPartnerMag.com 21

24. INDUSTRY PROFILE
22 Q4 2014
recognise the contribution that immigrants have made to the
entrepreneurial ecosystem because we continue to need highly
skilled workers and we recognise that a high percentage of new
companies in the US are formed by immigrant entrepreneurs and
founders,” he says.
For the ecosystem to work effectively, the right regulations need
to be in place. And venture capital, huge as it is in the US, is still a
niche industry that can get caught in nets designed to catch bigger
fish. “We’re really proud of our achievements to help secure passage
of the Jobs Act in 2012,” explains Franklin.
“Prior to that there had been a real slowdown in the ability of
companies to go public. A lot of the Jobs Act provisions made it
easier for portfolio companies to have an exit opportunity, which
means the returns can be sent back to limited partners who can then
re-invest that capital in the next set of funds so that the cycle can
start over again.”
The Jobs Act went a long way to redressing the balance for
smaller and mid-cap companies that had found the route to public
ownership much more onerous in the wake of post-Enron, post-
crisis legislation such as Sarbannes-Oxley and Dodd Frank.
“Young companies thinking about an IPO had to disclose a lot of
information that was available to their competitors, so for many the
provisions of confidential filing were very important.”
A big area of focus for the NVCA is the life-sciences industry,
where it has lobbied hard to get the Food & Drug Administration
(FDA) to recognise the fact that many of the newly-approved
drugs and devices come from small start-up companies, rather than
‘big pharma’.
“The regulators will now sit down with companies that are going
for approval and give them guidance on exactly what needs to
happen before the process starts,” says Franklin.
The NVCA was set up as a lobbying body by entreprenueurs,
investors and the earliest VCs. Its primary aim was to create a
favourable tax environment for start-ups and an early success was
promoting legislation in the 1980s which
allowed pension funds and endowments to
invest in private equity and venture capital.
“Over the past four decades we have
been involved in debates with policymakers
over the tax treatment for investors who
are very long-term, very high-risk capital,
and the importance of that capital for the
entrepreneurial ecosystem,” says Franklin.
“Policymakers need to be constantly
reminded how important that is.”
About the NationalVenture
Capital Association
The NationalVenture Capital Association (NVCA) has
been in existence for 40 years, lobbying on behalf of the
entrepreneurial ecosystem. Despite its age and undoubted
success in selling theVC industry’s story, the organisation
employs only a dozen people.
As the voice of the US venture capital community, the
NVCA empowers its members and the entrepreneurs they
fund by advocating policies that encourage innovation and
reward long-term investment.
Membership of the NVCA is open by invitation to all
professional venture capital firms and corporate venture
capital investors who are responsible for investing risk
capital in developing companies or industries.
Members benefit from representation, professional
development, networking, member peer groups, research
and publications, public relations, business and travel
discounts, and access to information regarding venture
philanthropy, impact investing and social entrepreneurship.
“TheJobsActmade
iteasierforportfolio
companiestohaveanexit
opportunity,soreturns
couldbesentbackto
limitedpartners”
CambridgeAssociatesUSVentureCapitalIndex 1Year 3years 5years 10years 15years 20years
USVenture Capital – Early-Stage Index1 30.9 16.0 14.5 9.3 82.1 47.8
USVenture Capital – Late & Expansion Stage Index1 33.4 14.7 18.5 12.7 9.4 11.7
USVenture Capital – Multi-Stage Index1 29.1 14.4 12.3 10.6 8.2 13.8
US Growth Equity1 24.8 15.8 18.1 13.6 NM NM
DJIA 15.7 13.0 19.9 7.5 6.0 10.3
NASDAQ Composite* 28.5 14.7 22.4 7.7 3.6 9.0
S&P 500 21.9 14.7 21.2 7.4 4.5 9.5
`
Source: Cambridge Associates
US Venture Capital returns

25. BOBBY FRANKLIN – NATIONALVENTURE CAPITAL ASSOCIATION
www.LimitedPartnerMag.com 23
Selling the story
Chief is the belief that long-term capital gains should be taxed at a
lower rate than ordinary income. “In general there is some recognition
that long-term capital needs to be treated favourably, but the debate
that has been teed up is looking at changes to the treatment of long-
term capital in the context of comprehensive tax reform,” he says.
“There have been a number of ideas floated that are not good for
this sector and we’ll keep watching those and providing a voice for
the entrepreneurial ecosystem.”
A big part of the NVCA’s remit is to provide research and data
on the activity and performance of the venture capital industry.
Franklin is content that the US VC industry is performing well and
communicating the right information to all stakeholders. The NVCA
– together with PricewaterhouseCoopers and Cambridge Associates –
publishes quarterly updates on investments, fundraising, exits and the
all-important returns data.
The performance of US venture as an asset class is nothing short
of remarkable (see table on facing page). The ten-year return for
all stages of venture capital fund to December 2013 is 9.7 per cent,
a performance that might not attract you to an asset class until you
consider the fact the period includes the dotcom bust. Take a shorter
view and the picture is much brighter, with a five-year return of 15.3
per cent or a one-year gain of 27.2 per cent. Take the long view, 20
CVBOBBY FRANKLIN
Bobby Franklin took over as president and CEO of
the National Venture Capital Association (NVCA)
in September 2013. He leads and oversees the
strategic direction of the 400-strong member
association on behalf of US venture capitalists and
the startup ecosystem.
Before the NVCA Franklin spent ten years
at CTIA, a large Washington-based trade
association representing the wireless industry.
He was responsible for helping to manage the
organisation’s $58m budget and 90 employees.
His achievements include successfully lobbying
for legislation that reclaimed highly valuable
radio spectrum, which was auctioned off to
wireless carriers to meet increased demand.
Before joining CTIA Franklin was a vice-president
of federal government affairs and head of Alltel’s
Washington office.
Franklin began his professional career with
nearly eight years’experience on Capitol Hill
working on various issues in the office of Senator
David Pryor.
Bobby Franklin, NVCA president and CEO
years, and venture capital has returned an annualised 30.8 per cent,
compared with 10.3 per cent for the Dow Jones Industrial Average,
9.0 per cent for Nasdaq or 9.5 per cent for the S&P 500.
“We believe the industry is very transparent,” says Franklin. “We
provide a lot of data on what is still a private financing event with
contracts between two parties. If any limited partner thinks there is
insufficient transparency, they are certainly in a strong position to
make changes and get it.”
Innovation is not just in disruptive companies, it can be seen in the
models that are used to finance them, such as with the recent rise of
crowd funding.
“On the investment side there are lots of things happening between
seed and exit,” says Franklin. “The US has the whole package.
You have universities that are accustomed and used to transferring
technology that has come out of their research and development to
commercial products or private companies.
“So you have universities, entrepreneurs, investors and other
service providers, from lawyers to employment agencies, that help
them get the human capital they need to scale up and grow. And you
need to have this whole ecosystem thriving to be able to experience
what the US has over the past several decades.
“It takes a whole ecosystem to make it work, and that doesn’t
happen overnight.”

26. FEATURE
24 Q4 2014
P
rivate equity real estate is notoriously illiquid, so the
secondary acquisition of 31 investors’ stakes in Trophy
Property Development, a China-focused property
development fund, marks a welcome extension of the secondaries
market into the real estate segment.
Trophy was formed in 2007 as a seven-year fund by Winnington
Capital and invested in five development projects in China. The fund
raised $1bn from 140 limited partners (LPs), a number of whom
were big institutional pension funds in the US, but a significant
proportion of which was made up of individual investors holding
$100,000-$250,000 positions.
After a restructuring in September 2013, Venator Real Estate
Capital Partners replaced Winnington as investment advisor to
Trophy’s general partner (GP).
‘Transparent team’
“We are a highly transparent management team and we wanted to do
the best we could for LPs who were in a difficult situation,” explains
Harriet Dedman, director of legal and investments at Venator.
“For those investors who wished to exit following the
restructuring of the fund, we wanted to do all we could to facilitate
that for them.”
As part of the restructuring, Venator had already initiated an asset
swap with Hong Kong-listed Shui On Land, a partner in the original
development projects, to exchange Trophy’s minority stakes in
the five original projects for a majority stake in Taipingqiao 116, a
968,000 square foot residential development in central Shanghai.
Tullet Prebon Alternative Investments was instructed by Venator
in December 2013 to set up an auction platform for the assets,
though informal discussions had been under way since August 2013.
“Tullet put in place the mechanics and then held the hands of
limited partners that were looking to sell their stakes through that
process,” says Dedman.
“As well as talking to existing limited partners to see if they
Private equity real estate secondaries are rare. Does the general partner-led auction
of positions in China’s Trophy Property Development provide a transparent route to
liquidity for others to follow?
Auction shows way
forward for secondaries
wanted to increase their interests in the fund, Tullet also approached
interested third parties, such as the ultimate purchaser – Partners
Group.”
The secondaries market has grown dramatically over the past two
decades, but it remains shrouded in mystery. “The secondary market
has been around for a very long time,” says Neil Campbell, head of
alternatives at Tullet Prebon.
“In my view it has been very, very inefficient and very opaque,
with LPs tending to push the sales process through and GPs being
very reactive. When you get a GP being proactive what you end up
“GPsareverycoyabout
releasingthiskindof
information,sotheLP
getsapricethatis
considerablylowerthan
iftheGPwereactive”
Neil Campbell,Tullet Prebon

27. SECONDARIES
www.LimitedPartnerMag.com 25
with is a process that is very, very efficient, which has got to be to
the benefit of the LPs.”
Of the original 140 LPs, 40 expressed an interest in selling,
representing around $200m of the original $1bn commitment.
There were expressions of interest in buying the LP stakes from
20 bidders, including some of the fund’s existing limited partners,
and there followed a series of auction rounds conducted through
sealed bids.
Campbell says where this transaction differs from most secondary
auctions is that the active participation of the GP made it easier to
market the deal to third-party investors.
“The first thing you do as an intermediary is approach the existing
investors in the fund, because they know all about the underlying
investment and have a good handle on what is in the fund and may
want to add to their position.
“Next you approach secondary buyers, but if they are not
already in the fund it can be difficult for them to get information
from the GP because GPs are very coy about releasing this kind
of information. So what happens is the LP gets a price that is
considerably lower than they would get if the GP were actually
active in the process.”
Switzerland-headquartered Partners Group won the auction,
offering the highest bid that was accepted by 31 of the selling LPs,
accounting for 12 per cent of the fund’s capital.
“Partners Group had been monitoring the assets within the overall
Trophy portfolio for several years, even before the involvement
of Venator,” says Marc Weiss, partner and head of real estate
secondaries at Partners. “With the programme successfully
restructured by Venator and a strong management team now in
place, Partners Group is pleased to have been able to structure a
secondary offer that benefits all parties involved,”
Watershed
Talking to the various parties, the deal is a clear win-win, but does
it represent a watershed in how secondaries transactions will be
completed in the private equity marketplace?
“Now the platform is established it is something we could revisit
if there is demand to do so from our limited partners,” says Dedman.
“The question is whether there will be a time again when there
is a third party interested in acquiring an interest in Trophy. The
restructuring transaction was signed in September 2013 and closed
in September 2014, so once it closed a degree of risk went away.
The auction process was a tempting proposition for secondaries
purchasers, who could secure the returns they were looking for.
“Now that the asset swap has closed, and some risks of the
transaction mitigated, it is not yet clear whether there will be further
appetite for secondary acquisitions. Of course, Venator will continue
to monitor all opportunities for its investors.”
Harriet Dedman, director of legal and investments at Venator
“The auction process
was tempting
for secondaries
purchasers, who
could secure the
returns they were
looking for ”

28. FEATURE
26 Q4 2014
Trillion dollar baby
The private equity industry has just two years of investable capital
at its disposal. Is this the start of a golden era for limited partners?

29. DRY POWDER
www.LimitedPartnerMag.com 27
O
ne trillion dollars. One thousand billion dollars. A
million million dollars. $1,000,000,000,000. Whichever
way you express it, $1tn is an awful lot of money.
That’s the amount of dry powder held by private equity firms
around the world – more than was available in the peak boom
years of 2006-07, according to management consultant Bain &
Company’s Global Private Equity Report 2014.
Despite this massive war-chest, pressure on general partners
to deploy capital has actually decreased. Bain says at the end
of 2013, roughly $100bn of the $399bn available for buyout
funds was of vintages 2010 or older, showing that the so-called
overhang dating back to the boom years has been worked
through. At the end of 2012, approximately $150bn of the $356bn
of buyout capital was past its sell-by date.
“People were wondering what was going to happen with the
capital raised during the boom and whether it would get out,
be released, or whether LPs would approve extensions,” says
T Bondurant French, chief executive officer of Adams Street
Partners.
Fresh capital
“The truth of the matter is that all of that happened in some
fashion. Very little was released, there were more investments
putting the dry powder to work, extensions were granted, and
so now the composition of the dry powder has changed rather
dramatically from two years ago. Now there’s very little dry
powder that’s under pressure. The vast majority of it is fresh
capital. It’s been raised in the last three years and is now ready to
be invested.”
Bain cites the example of Bridgepoint, a pan-European buyout
firm that had already called 76 per cent of its €4.8bn 2008-vintage
Europe IV fund that was due to expire in November, which
negotiated a one-year extension on the balance in August 2013.
In April 2014, Bloomberg reported that Bridgepoint was
ready to go back to the market for a €4bn fifth European fund,
though Securities & Exchange Commission filings in July did not
disclose a target size.
Market analysis by Capital Dynamics is revealing (see chart
overleaf). The percentage of capital in private equity described
as dry powder for buyouts fell from a high of 47 per cent in
December 2006 to 38 per cent in June 2014.
Across other sub-segments of the private equity industry dry-
powder ratios have remained surprisingly stable, with distressed
private equity and growth capital seeing the largest increases.
“We don’t believe we have too much money on the market
today, given the volume of deal flow we can find on the market,”
says Benoit Verbrugghe, managing partner and head of Ardian
in the US. “Competition is very high for good quality assets, but
we don’t see this type of high competition for poor assets. The
liquidity of the market is very strong today.
“Across most of our portfolio the amount distributed is higher
than the amount called. This is because the refinancing market is
very active, as is the IPO market. What is very interesting is that
we are now seeing more and more significant acquisitions made
by industrial companies.”
Significantly, the volume of exits globally was around 1,100,
higher than the 750 new investments recorded by Bain. “The
PE industry showed long-awaited signs of a return to health in
2013,” the consultancy concluded.
Another factor that needs to be taken into account when
considering whether there is an excess of capital available for
private equity is the price of assets.
“Over the past five years assets have become substantially
more expensive in public markets,” says Peter Cornelius,
“There’sverylittledry
powderthat’sunder
pressure.Thevast
majorityofitisfresh
capital.It’sbeenraisedin
thelastthreeyearsandis
nowreadytobeinvested”
T Bondurant French,
Adams Street Partners

30. FEATURE
28 Q4 2014
managing director at Alpinvest. “So the amount of dry powder
needs to be normalised by the price you pay for assets. So even if
the numbers you mentioned are technically correct, they cannot
be compared with a trillion dollars five years ago.”
In Europe, there is an estimated $150bn dry powder available
for buyouts and there has been approximately $70bn of private
equity transactions for each of the past two years.
“Intuitively there is two years of spare capacity in the market,
which is not overly excessive given that the majority of funds are
raised on a four- to five-year cycle,” says Graeme Gunn, partner
at SL Capital Partners.
“If we’d been having this discussion in the early to mid-2000s,
there would be three to four years’ dry powder. We don’t feel the
European market today is out of kilter.”
Cautious investors
The US market has been hot in terms of fundraising, and groups
have quickly raised their target on the back of a longer recovery
and bright prospects. The European economy is not accelerating
as fast as the US and investors are cautious about the prospects.
There are certain pockets – the UK, Germany, Scandinavia
– that are performing well, but France, the Benelux, Southern
Europe and parts of Eastern Europe are still facing economic
headwinds, which is acting as a dampener on fundraising but
throwing up interesting investment opportunities.
“We obviously can’t determine how the end investor looks
at that market, but there’s appetite there for all segments of the
private equity market at the moment,” says Gunn.
“People are looking to put more money in, to increase exposure,
if they have available capital. So I expect the available capital to
increase over the next couple of years. When investors get money
back they typically recycle it into private equity.”
Particularly in Europe, there has not been the post-crisis
acceleration of deals that some people had expected.
Private equity is a subset of M&A, and while M&A has been
strong in the large deal market, it has not filtered down to the
core middle market M&A that is the bread and butter of the
private equity funds.
“There is healthy competition for a relatively small pool of
high-quality assets which intuitively drives the price up. Pricing
is very volatile at the moment, quarter-on-quarter. It’s down to
the fact that if there’s strong deal-flow in a quarter then prices
tend to be stable, but if it’s a bit tight and there’s an attractive
company or two these can skew the stats,” says Gunn.
The private equity industry has been successful in attracting
new funds in recent years, which means that some GPs are trying
to raise significantly larger vehicles.
Discipline
“We were talking to an individual manager at the end of last
week and they wanted to increase the fund size to three times
what it had previously been. When we asked why, he said ‘you
have to’,” says one LP.
“That’s what you need to be very careful about – that discipline
about the fund size and being able to stick to your strategy and get
that capital deployed in a three- to five-year period.”
As always, the key to successful investment will be manager
selection. This means that the best performing groups will not
struggle to raise capital. “You have to select as limited a number
of the best managers as possible in order to avoid too much
diversification, otherwise your return will follow the index,”
says Verbrugghe. “It is increasingly the case that capital flows to
the best managers, which is why the good GPs are able to raise
money quickly. That’s why today those who are not so successful
Graeme Gunn, partner at SL Capital Partners
Date Dec06 Dec07 Dec13 Jun14
Buyout 47% 44% 37% 38%
Mezzanine 4% 3% 4% 4%
Distressed Private Equity 5% 6% 7% 6%
Growth 3% 4% 7% 7%
Venture Capital 13% 12% 11% 11%
Real Estate 17% 17% 17% 18%
Other 11% 14% 17% 16%
`
Source: Capital Dynamics
Drypowderaspercentageoftotal

31. DRY POWDER
www.LimitedPartnerMag.com 29
have difficulty raising money, because LPs have become more
and more selective.”
For seasoned LPs, investment discipline is one of the most
prized characteristics of a GP. “You really need to look at the
underlying manager and determine their discipline in making
investments,” says John Gripton, managing director at Capital
Dynamics. “We’re looking for managers that are capable of
increasing and decreasing the pace of investment so they’re not
putting out money on a third, a third, and a third over a three-
year period, but they really are taking a view on pricing in the
market and whether they think the good opportunities are there.
We expect them to wait for the right opportunities and not to just
invest to get money to work.”
Private equity has generated outperformance for a considerable
time, and not surprisingly, those in the industry feel it is well
placed to beat other asset classes over the medium to long term.
“In Europe fixed interest is delivering very poor returns in
the main,” says Gripton. “The quoted equity market is clearly
volatile and has also not really delivered the returns that some
investors have been looking for.
“You’ve got big deficits in pension funds that they’ve got to
make up, and many clients, many pension funds, are looking to
increase their exposure to alternatives, including private equity,
which has been the best-performing asset class in their portfolios
for more than 20 years.”
Asset allocation bands
– your flexible friends
Maintaining or achieving particular asset allocation levels is
always a challenge for LPs.
“We’ve had four years in a row where distributions have
exceeded capital calls, and the excess of distribution over
capital calls has increased to the point where it’s almost 2:1
now,”says Adams Street’sT Bondurant French.“People are
obviously very pleased with that liquidity and they are very
pleased with the realisation of unrealised gains.”
French says that investors should avoid simple percentage
allocations to alternatives, which display lower volatility
than public markets.“You want the flexibility to be able to
continue to invest in a down market,”he says.
“But that’s going to be precisely the time when you’re
going to be over-allocated, because public equities will have
been down, which will pull down the size of the total plan.
This is precisely what happened during the financial crisis.”
Graeme Gunn at SL Capital Partners says he continues to
see a high level of interest in private equity, but that many
are not able to satisfy their appetite.“People think it’s a good
time to invest in private equity in Europe but there’s a lot of
pension funds who are capped out on their allocations.
Local authority investment
“We recently surveyed a cross section of UK local authorities
and they want to invest more in private equity because
they can see the returns over the long term – given it’s been
difficult, obviously, in the equity markets to get the returns
that they’re looking for. But at present they are in part
stymied by asset allocation.”
Limited partners have been busy re-balancing their
portfolios, as their exposure to private equity has been
declining relative to what they have targeted given the
dynamic in the equity market.The financial crisis left many
institutional investors over-committed to private equity
as the value of other assets plummeted. But private equity
advisers argue that over-commitment strategies are still the
best way for LPs to achieve their target allocation.
“From an LP’s point of view, if you take the average buyout
fund it will only be exposed to a maximum of two-thirds of
its commitment, because as it draws down it’s also returning
capital,”explains John Gripton of Capital Dynamics.
“Our research shows that on average, if you commit 100
you will only ever be exposed to two-thirds of that, 67 of
the 100.That’s why you get the over-commitment strategies
from the LPs, which in the main works very well.
“But when you get a crisis period as we had in 2008 and
all of a sudden the exits dry up and you’re left with these big
commitments, then you’re probably going to be exposed to
more than the two-thirds of your capital, and that’s where
investors get uncomfortable.”
“Thereistwoyearsof
sparecapacityinthe
market,whichisactually
notoverlyexcessivegiven
thatthemajorityoffunds
areraisedonafour-to
five-yearcycle”

32. Investor Forum
REAL ESTATE
www.lpgp.com/real-estate
Join the most influential
investors, managers & developers
in private equity real estate
2 DECEMBER 2014 – LONDON
Leveraging off our unique
LP-GP Network, connecting
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meeting to get the latest
information and news on
this exciting and maturing
asset class. Alongside a
topical agenda, developed
with LPs, interactive
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networking breaks allow
delegates the opportunity
to grow their networks.

33. Jersey for Funds
Jersey has developed a leading funds sector that offers a broad range of fund regimes from
regulated options through to the more sophisticated and institutional end of the market. With over
1,500 funds established in Jersey and a net asset value of Jersey funds under administration close to
US$400bn.
Jersey has in more recent years evolved into a specialist centre for the alternative asset classes,
including hedge, real estate and private equity funds, which account for around 70% of Jersey’s
overall funds business. This offering has been built upon the key factors that make Jersey a leading
international finance centre, including the experience and expertise of its practitioners, its political,
economic and fiscal stability, and its appropriate level of regulation and security.
Jersey retains easy access to the European market under AIFMD through private placement regimes
and was the first ‘third country’ to offer a fully compliant opt-in AIFMD solution. At the same time,
Jersey remains an attractive location to service and domicile funds globally under its existing regime.
For further information, please visit www.jerseyfinance.je
www.linkedin.com/company/jersey-finance @jerseyfinance www.youtube.com/jerseyfinance

34. LIMITED PARTNER PERSPECTIVES
32 Q4 2014
Cleantech investors face strong headwinds. Vikram Raju says backing experienced
managers in unpopular niches is the key to generating sustainable returns
Climate of change
T
he cleantech sector has undergone a dramatic transformation
over the past few years and has been labelled a ‘busted trick’
by many. But Vikram Raju, outgoing principal investment
officer of World Bank’s investment arm the International Finance
Corporation (IFC), is confident the organisation knows how to
generate a good return from the sector. The strategy is to go for
experienced teams and choose market segments that have not
received much funding.
Since 2000 IFC has invested $3bn in around 200 funds,
achieving net returns of 19-20 per cent. Direct commitments to
private equity funds account for five per cent of IFC’s investment
programme. The fund commits around $500m to emerging
markets vehicles annually, a fifth of which is focused on
strategies related to climate change (see panel on p33).
The limited partner defines climate change through initiatives
such as renewable energy, cleantech and resource efficiency,
including waste and water treatment.
Across its general and climate strategies, IFC invests in
five regions, committing to four or five funds per region every
year. The LP usually backs between 20 and 25 funds annually,
investing an average of roughly $20m for stakes that don’t
normally exceed 20 per cent. IFC’s investments under the climate
change strategy include China Environment Fund, SinoGreen
GRC, Armstrong Asia, Asia Environmental Partners, TPG ART,
Lereko Metier Sustainable Capital, Evolution One, and Infuse.
In Raju’s words the cleantech sector has suffered from “initial
overenthusiasm” of people that came into the market and
“jumped on the green bandwagon”. But he says that by shunning
the sector, investors are missing opportunities that can be
capitalised on by picking the right manager and being patient.
“There has been more than a little bit of disappointment.
People keep saying that the time horizon is too long and returns
aren’t so great – the truth is somewhere in between,” he says.
“There is an opportunity and it needs to be addressed. Given
our contrarian nature, we are willing to work in an unfashionable
sector. Energy and environment in emerging markets and smart
solutions can make a very healthy return. And they need to make
a healthy return for this sector to be sustainable.”

35. VIKRAM RAJU – INTERNATIONAL FINANCE CORPORATION
www.LimitedPartnerMag.com 33
Addressing problems
While sectors such as waste and water are well established
in the developed world, they have a lot of potential for growth
in the developing markets. IFC is looking for funds that can
generate returns in the high teens, and strategies have to be
financially viable as well as possessing the potential to have a
positive impact on the environment.
Most of the funds that IFC invests in tend to be at the smaller
end of the market, or around $100m in size, as such funds can
be more disruptive by investing in markets that haven’t received
much attention from more experienced managers.
IFC considers helping to launch new funds to be its mission,
and this means that it invests in a lot of first-time funds, the
type of investments that many in the industry perceive as being
risky. “We find that some first-time funds can generate attractive
returns. In fact I think that generally speaking there is a delta of
around 300 to 400 basis points in how first-time funds have done
relative to regular funds,” he says. The main thing is to analyse
not just a fund’s strategy, but also the execution capabilities of its
team.
Out of fashion
“That’s the nature of our mandate, and it shouldn’t surprise
you that it has generated some very good returns when you
are providing capital at a time when there is a great need for
expansion and working capital, but not a lot of investor interest –
and vice versa.”
“What we have found is that the best opportunities globally
tend to arrive when a market is out of fashion, enabling funds to
transact at much more reasonable valuations. Even in the more
favoured markets – where flights from New York and London are
always full – there are overlooked sectors and regions that we
tend to find more interesting, like climate change.”
There are many challenges faced by LPs investing in the
cleantech sector in emerging markets, primarily the local
regulatory landscape. Investors are advised to pick experienced
teams that have been focused on a specific sector in a specific
region for a long time.
“So rather than looking top-down at specific markets, our core
focus is on the skillset. For example, we are currently working
with a GP in South America, SCL Emergia, with a strong
operational background from many years of being in the energy
business as developers and operators.
“So while plain vanilla clean energy projects can have the
double whammy of being complex to execute, with utility
returns, in the hands of an operationally skilled team you find
turnaround opportunities or consolidation opportunities that can
generate very compelling returns.
“You can have GPs operating in the exact same market and
exact same conditions and have things turn out very differently.
So it is all about a GP’s operational approach and local
knowledge. If you are working with a group of people that have
been doing this for a couple of decades, then they can problem-
solve amidst the uncertainty inherent in this sector and come out
on top in most of the deals they do. And they will be able to do
deals where others are struggling and at a good price and wait
for the perfect market conditions,” he added.
IFC’s portfolio funds have generated net returns of around
19-20 per cent and its cleantech team evaluates every vehicle
against that overall portfolio benchmark of 20 per cent. Raju
concludes, “That is a necessary but not sufficient condition.
In addition to strong performance, funds have to demonstrate
development impact – ideally in terms of job creation and,
naturally, climate impact.”
IFC–createdbyWorldBank
toboostprosperityinEMs
The International Finance Corporation is a unit of the World
Bank and can trace its roots back to 1947, when NewYork
financier Robert L Garner joined the World Bank as one of its
first senior executives.
Garner helped to highlight the role private business can
play in international development, a topic few others had
considered at the time.
The IFC was formally created with $100m of share capital in
1956, but it was only authorised to guarantee loans. It was not
until 1961, the year of Garner’s retirement, that it was allowed
to make equity investments. In 1965 the IFC pioneered the
template of syndicating equity investments, raising $600,000
for Brazilian paper firm Champion Cellulose.
The transaction provided early support for Champion, a
rising player that was sold in 2001 for $9.1bn to International
Paper of the US.
In 1981, IFC investment officer Antoine van Agtmael first
coined the term‘emerging markets’, defining a new asset class.
Today, the IFC holds $49.6bn portfolio, reaching millions
of people in more than 100 countries, creating jobs, raising
living standards, and working towards the World Bank’s two
stated goals – ending extreme poverty and boosting shared
prosperity.

36. ADVISER PROFILE
34 Q4 2014
“Smallfundsarehavinga
toughtime.Thismeans
thereislesscompetition
andentrymultiplesare
lower.Welikethat”
In 20 years Hans van Swaay has seen the private equity industry as an LP, an adviser
and a direct investor. He admires the mega funds, but believes niche strategies are
the best way to generate outperformance
Small is beautiful
H
ans van Swaay is not shy about his admiration for the
founders of today’s very large private equity firms. From
tiny beginnings three decades ago, they have taken their
companies to Wall Street and created investment institutions that
sit at the top table of private equity.
“When they started they were pure buyout firms and very good
ones at that,” says van Swaay. “I’m not saying they are bad now,
but they have got into a different business.
“That’s logical for them, and as a business concept it makes
sense. Their business is very diversified, they have grown it
substantially and they have plenty of candidates to replace a
founder when he retires, which has got to be good for their
investors.”
For van Swaay, the problem is that what is in the interest of the
GP may not be in the best interest of investors.
Growing the business
Managers have to grow businesses to attract and retain the talent
that generates the return, but that growth may take them out of the
markets where they made their name. Funds that have managed
to strike a balance between growing the business and ‘sticking to
their knitting’ are few and far between.
Van Swaay is particularly impressed by smaller groups that have
had the discipline to stick to the same-sized investments. They
may have, for example, grown not by moving out of the core US
small- to mid-market buyouts, but by geographical expansion into
Europe, and product expansion into debt and restructuring.
He is keen to stress that he is not criticising the mega funds,
merely arguing that market dynamics mean they do not have access
to the best investment opportunities – which typically come in
niche strategies.
It comes down to basic supply and demand. Private equity
fundraising has boomed, and in 2013 the average fund size was
higher than ever – even larger than in the boom years of 2006-07.
“Most of the money that is being raised is going into big
funds,” says van Swaay. “There is a flight to safety, rather than a
flight to quality. Small funds are having a very tough time raising
money. This also means that in the smaller segment there is less
competition, multiples are lower, etc. We like that.”
Lyrique Private Equity was founded by van Swaay, who now
heads a team of six professionals based on the shores of Lake
Geneva. They are seeking opportunities primarily for private
wealth managers and family offices with total assets of between
$100m and $500m, and a typical allocation to private equity of
10 per cent. These investors are not well served by private equity,
in that they are too large for retail products, which are also very
expensive, but too small to have a dedicated private equity team.

37. HANSVAN SWAAY – LYRIQUE PRIVATE EQUITY
www.LimitedPartnerMag.com 35
It is not a question of access, however. “There is a myth that you
have to be very big to get into a fund directly, but it’s simply not
true,” says van Swaay. “If you have money, GPs will want to know
you.”
The problem is that smaller investors have a real struggle
assessing the best opportunities. They need to understand the
dynamics of sectors, geographies and individual management
teams. It’s a riskier business than putting your money into a bigger
fund, but it potentially more rewarding.
“We do quite a few of what I call emerging managers,” explains
van Swaay. “I’m not talking about a bunch of consultants who
think it would be cool to do private equity, but people who have
operated in a segment they want to invest in.
“They have probably made investments individually, deal-by-
deal, and then raised a ‘friends and family’ fund. Then they are
ready to do a more substantial, institutional fund and that’s when
we tend to get involved.”
As an investment adviser, Lyrique is necessarily driven by client
demands. “We have clients that want exposure to venture capital
and we’ve done investments in the US, where the large funds are
again the safe option – but the smaller funds more interesting,”
says van Swaay.
“European venture may become interesting again and, at the
request of a client, we invested in a European venture group that
has turned out quite well. But, on the whole, we prefer venture
debt at the moment. It’s a safer way to get into venture capital, it’s
more diversified, you rank ahead of the equity, and we believe the
whole sector has been underinvested over the past few years.”
If private equity investing is about management, management,
management, then for van Swaay experience and a willingness to
not go with the flow is the key to being a good LP.
“I’ve had experience of cycles,” he says. “It is important to be
somewhat independently minded to be a good investor.”
Experiencecounts
Lyrique is a private equity firm created by a team that has been
active in the private equity industry since 1987.
The team has been involved in all stages of private equity,
ranging from early-stage venture capital to late-stage buyouts
and restructuring.
Lyrique is a direct investor primarily in European deals and an
investor in funds in the US, Europe and Asia. Lyrique will invest in
primary funds, co-investments and direct investments.
Lyrique manages money on behalf of private individuals,
family offices and smaller institutions, typically with $100m to
$500m of assets and a ten per cent allocation to private equity.
Its sweet spot is funds with a niche strategy and assets of
$100m-$300m.
CVHANS VAN SWAAY
Born in the Netherlands, Hans van Swaay has a 20-year
track record in private equity as partner of Lyrique, head
of private equity at Pictet & Cie, managing director of
UBS Capital, managing director of Merifin and as partner
of Lowe Finance.
He has made direct investments in Switzerland,
Germany, France, the United Kingdom and in the
Netherlands. As an investor in funds he has been
active in the United States, Europe and Asia. As a direct
investor he has, on occasion, assumed operational
responsibilities in industrial situations as CEO in
Germany and in Switzerland.
He holds an MBA with honours from IMD in
Switzerland, an MSc in engineering geology from Leeds
University in the UK, and a BSc in geology from Leiden
University in the Netherlands.
Hans van Swaay – Looking for bargains in smaller funds

38. FUND-OF-FUNDS PROFILE
36 Q4 2014
S
wiss fund-of-funds manager Akina Partners does not care
what sector it is investing in when it considers committing to
a private equity fund. The firm’s macro top-down ‘conviction’
strategy means the highest importance is placed on the investment
suiting the Akina’s outlook for the region – and, of course, that they
have previously seen good things from the fund’s manager.
There are a number of dimensions that Akina looks at when
considering investing in a fund, according to Thomas Frei, senior
partner and a member of the investment committee.
“We look at the market, the size and the attractiveness of the
investment opportunity for private equity. Then, most importantly,
we look at the macro outlook and try to draw the appropriate
conclusions about where one should invest, considering the
environment for the next few years.”
For example, Europe-focused Akina does not differentiate
between technology and pharmaceutical funds, unless the firm has
decided it suits the economic view.
Cautious optimism
This macro approach determines whether Akina believes the
environment is right for investing over a private equity fund cycle.
In the UK, for example, the firm view is that the country’s recovery
is driven by financial services and asset-price inflation because of the
availability of cheap money.
Frei says: “We would therefore look at the UK in general with
cautious optimism and seek strategies which are clear value-add
strategies. We would not bank on the macro growth continuing over
the next few years.”
To this end, Akina’s focus on the UK is on companies offering
business-to-business services, particularly to the financial services
industry. These might include companies that enable customers to
optimise cost flow and rationalise their purchasing.
Akina’s outlook– and therefore investment strategy – for core
Europe also differs from its views for some of the peripheral
Successful investment is not about sectors or sizes for Thomas Frei at Akina Partners.
Close relationships and a top-down conviction strategy are the drivers of manager
selection at the $2.2bn Swiss fund-of-funds manager
Why investments always
go under the macroscope
countries, such as Spain, Italy and central and Eastern Europe.
“In these countries we are looking for underlying businesses that
have more of an export angle rather than domestic, because that
is what will give growth. In central and Eastern Europe, as well
as export companies, we look at businesses providing consumer
basics,” says Frei.
Frei says that within a fund-of-funds portfolio, Akina might
invest in ten funds but is unlikely to go much higher. “If you have
high conviction in the investments you are making, why would you
choose 50? It doesn’t make sense.”
“Ifyouhavehigh
convictioninthe
investmentsyouare
making,whywouldyou
choose50?Itdoesn’t
makesense”

39. THOMAS FREI – AKINA PARTNERS
www.LimitedPartnerMag.com 37
It is also a matter of diversification or, more accurately, not
worrying too much about it. “The private equity allocation of
our clients tends to be still quite small and the tickets they sign
off within their private equity allocation are even smaller, so
diversification is never an issue for them,” says Frei.
Akina’s strategy is proving popular with some investors, but it is
not an easy sell. The firm’s fifth Euro Choice fund-of-funds held a
final close on €270m in March this year, having had an interim close
on €173.5m in June 2012.
Akina is relatively conservative in its fund-of-fund investments,
tending to stick with risks that it is comfortable with rather than
chasing huge multiples, says Frei, who believes it is a strategy that
his clients appreciate.
He says: “We’re focused on a strategy that will bring in two times
the money, rather than highly volatile three-timers. I think that’s
rather unique compared to other strategies currently on offer for
European deals.”
Frei reckons the institutional managers that invest with the firm
are increasingly looking for just this kind of strategy, which can
provide an alternative to something like fixed income, which has
given dismal returns in recent years. “What’s important to our
investors are resilient strategies that offer very stable returns at
lower risk parameters.”
Given its downbeat view of the European economic environment,
Akina is not particularly keen on a strategy that relies on leverage to
make money. Frei says: “Our forward-looking perspective indicates
that the European macro outlook is not that shiny after all, but
rather gloomy. Our general conclusion is that the only managers
who survive in private equity are the ones who pursue some kind of
value-add investment strategy.

40. FUND-OF-FUNDS PROFILE
38 Q4 2014
“In this environment, you cannot buy a business, leverage it and
then expect the market to do what you don’t want to do. For every
country, for every deal segment, you need certain specific strategies,
such as consolidation, value, technology perspectives and, in some
cases, internationalisation.”
A clear and focused strategy
Recent examples of Akina’s fund-of-fund investments include
committing to UK lower mid-market buyout house August Equity,
which held a £200m final close for its third fund in January this year.
August’s strategy involves investing between £10m and £30m of
equity in deals in the healthcare, education, technology services and
business services sectors. It was one of the first UK buyout shops to
actively promote a sector-focused strategy in the late 1990s.
Frei explains: “We’re looking for resilient strategies, typically
value-add, such as supporting growth, consolidation, buy-and-build
and expansion into new markets. The old axiom of doing leveraged
buyouts, that’s not going to take you anywhere.”
Akina is also wary of private equity funds using a cyclical
strategy to make their money. “What we have noticed is the
shortening of economic cycles. It is no longer the case that we have
a seven-year up-swing and then a two or three year downturn,” says
Frei. “It is much more volatile, so it might be two years up, one
year down and as a consequence, we have been quite reluctant and
cautious on cyclical investing.
“Private equity in and out cannot be done within two weeks.
It takes much more time and therefore the cyclical place in an
environment where the cycles are shortening becomes much more of
a challenge. On a portfolio basis it is extremely difficult to achieve.”
Money talks
The firm takes on board the manager’s experience when choosing
a firm to invest in. “We are very careful to invest in managers who
have a proven capacity to exit,” says Frei.
“You can have portfolios of 50 years but it is much nicer to have
cash from realised investments. That’s a very important dimension.
Sometimes a bad experience can be destined from the start and we
want to avoid them.”
When investing in a fund, Frei says it is important that the general
partners have a significant amount of skin in the game. “If it’s a
spinout group from an organisation where staff did not get carry
before, then the amount they invest in their own funds will be
smaller. If it’s a fund where we know that all the senior partners are
worth €10m, or even more, we would expect the weighting to reflect
that. That’s how we hold it on our level and what we expect from the
funds that we invest in.”
Akina’s Thomas Frei believes a macro approach is critical to good investing

41. THOMAS FREI – AKINA PARTNERS
www.LimitedPartnerMag.com 39
The second main part of Akina’s activities as a fund manager and
direct investor is in the secondaries space, with the firm looking to
close its most recent Euro Choice Secondary fund in December
this year.
The target for the vehicle is $200m, and to date around half
that total has been committed. Frei says: “The advantage of this
secondary product is that it has started to invest, and has done so
when the markets were still a little less competitive.”
Akina has two broad targets for secondary investment: “Either
we look at businesses that are still reasonably valued and wherewe
see there is an inflection point and where there will be additional
growth. Otherwise we look for businesses that will benefit from
consolidation and where there is significant value upside to be
captured.”
However, once again the macro strategy comes into play in
different regions, with the periphery having a different strategy.
“In the periphery it is more about export-oriented companies, or
consumer-related businesses, once again, but which are available
at a deep discount on the fund level.”
The third part of Akina’s business is its Euro Choice Direct
co-investment funds, which allow its investors to have access to
the most attractive mid-to-lower end of the European mid-market
with one single investment rather than a selection of many different
country funds.
Akina blossoming after
spin-out from Lombard
Akina Partners began life in 1998 as part of Swiss investment
adviser Lombard Odier Group. It was founded by Christopher
Bödtker, who was joined by Thomas Frei andYvonne Stillhart in
1999. Mark Zünd joined a couple of years later.
Their vision was to build a dedicated, multinational
team of experts, whose aim would be to provide a truly
personal service to clients, as well as to achieve high levels
of performance. The firm grew strongly and now has 28
employees, who between them speak at least 14 European
languages between them because, as Frei says,“It’s always best
to do a deal in the investor’s mother tongue.”
The unit was spun-off from the group in a management-led
buyout in 2010 and was re-named Akina Partners. Akina was
chosen as the name because it means‘a group of people who
have similar likes’, and Frei says it underscores the importance
of the firm’s network of stakeholders and of building close
relationships with clients, fund managers, entrepreneurs,
managers and service providers. A second meaning of Akina
is‘a blossoming flower’, reflecting the belief in helping private
businesses to grow and develop.
Institutional investors include pension funds, financial
institutions, endowments, trusts and family offices, as well
as private ultra-high net worth individuals. Roughly 45% of
Akina’s clients are in Europe and 45% in the US. The firm has
$2.2bn under management.
“We’relookingfor
resilientstrategiessuch
asexpansionintonew
markets.Leveraged
buyoutsarenotgoingto
takeyouanywhere”
CV
THOMAS FREI
Frei is a senior partner, a member of the investment
committee and country partner for the UK, France, Italy
and Benelux at Akina Partners. He also sits on the board
of many private equity funds.
In 1999 he joined Lombard Odier Private Equity as
managing director, and was responsible for setting
up and managing the finance and administration unit
as chief financial officer, a role he held for five years.
In 2007, Frei established the marketing and investor
relations unit, which he still leads.
Before joining the company, Frei worked in
investment banking for 11 years at UBS in Europe and
the Americas. He headed the European structured
finance transaction team, where he managed a portfolio
of leveraged, mezzanine and minority equity deals
worth €1.6bn across continental Europe.
Frei has a masters’degree in economics and finance
from Zurich University and is fluent in German, English
and French. He also speaks Italian.

42. D
ata collected by the Women’s Private Equity Network
(which is supported by AltAssets) shows women are losing
out to men across the private investment spectrum.
Research has long shown that women are badly represented in
terms of GPs, with a 2011 report by the NVCA and Dow Jones
suggesting women make up just 11 per cent of US venture capital
investors.
Data released this year by Preqin shows an identical figure for
senior women within private equity. But the problem is not limited
to the industry’s buyout and VC firms.
A study from the University of New Hampshire’s Center for
Venture Research revealed that just 19 per cent of entrepreneurs
backed by angel investors are women, despite increasing efforts
being made within business to bring gender representation onto a
more even keel.
An earlier research report by Dow Jones, “Women at the Wheel”,
suggested just 1.3 per cent of venture capital-backed companies had
a female founder, while only 6.5 per cent had a woman as CEO.
The same study revealed that 80 per cent of venture-backed
companies failed to field a single woman on their board of directors.
Related services within the industry are not exempt from the bias,
with women making up just 12 per cent of senior lawyers working
with private equity according to Chambers Global.
Female employees in investment banking and securities totalled
just 35 per cent of all employees according to research conducted in
2011 by Catalyst.org and the US Equal Opportunity Commission,
with just 15.6 per cent at the management and senior executive level.
LPs concerned about environmental, social and governance
issues are already putting pressure on PE and VC firms to think
about the ethical impact of their day-to-day dealmaking, and
gender representation within the industry is sure to come under the
spotlight.
The gross under-representation of women in private equity is nothing new, but
newly-collated data suggests the problem extends far further throughout the
private investment industry than previously thought.
Under-representation
of women spans entire
private investment spectrum
The wider business community has taken steps to change this
discrepancy, and private equity needs to move fast to make sure it
does not get left behind.
Research released by YouGov earlier this year revealed that just
one in three full-time female students aged 16 to 20 would consider
a career in finance, with the male dominated culture and sexist
culture cited as two of the top three reasons to avoid the industry.
The study suggested that a lack of awareness of role models could
be an issue compared with other sectors.
When shown images and names of iconic women across a range
of industries, over half of the students surveyed were aware of all the
fashion designers shown, whereas less than one per cent were aware
of all of the influential women in finance.
That kind of awareness can only be built by giving talented,
successful businesswomen the same opportunities to show their
skills as their male counterparts.
WPEN hopes to boost this process by bringing professional
women together to make valuable connections cutting across
regions, organisations and entrenched ‘old guard’ networks.
“80percentofventure-
backedcompaniesfailedto
fieldasinglewomanontheir
boardofdirectors”

44. 42 Q4 2014
FUNDS
European private equity firm Bridgepoint is
back in the fundraising market for its fifth
flagship vehicle.
No target is given for Bridgepoint
Europe V in a series of filings with the US
Securities and Exchange Commission, but
documents previously released by Portfolio
Advisors claim the firm is targeting €3.5bn
with a €4bn hard cap. That document,
which was presented to the Pennsylvania
Public School Employees’ Retirement
System in May, claimed Bridgepoint was
eyeing a first close this month and a final
close towards the end of the year.
It added that the firm would commit
€100m to the fund, which will target mid-
market European companies with enterprise
values of between €150m and €600m.
Bridgepoint brought in €4.8bn of com-
mitments for its previous flagship vehicle
in 2008.
Bridgepoint on trail to raise up to €4bn
Buyout house Mid Europa Partners has
closed its fourth fund on €800m thanks to
heavy re-investment from its existing LPs.
The firm also picked up €650m through
a co-investment programme, with the total
representing the largest vehicle dedicated to
central and Eastern Europe in the last five
years.
Managing partner Thierry Baudon said,
“A very large proportion of our investors…
expressed strong interest in co-investing
alongside the fund, which led us to structure
a pre-allocated co-investment programme of
€650m. This structured approach, building
upon our extensive co-investment history in
Fund II and Fund III, will provide optimal
alignment of interest and allow us to react
quickly and flexibly to changes in our target
deal-flow throughout the investment cycle.”
Nearly 70 per cent of investment in the
fund was via existing LP investors from
previous vehicles, Mid Europa said.
The firm’s investment strategy is to target
growth sectors that benefit from consumer
trends, buy and build, consolidation and
regional expansion themes.
Fund IV will be used for equity invest-
ments of between €75m and €250m in
control buyouts of companies with enterprise
values of up to €500m.
Equistone’s new
€1.7bn vehicle
Barclays Bank private equity spinout
Equistone Partners Europe is reportedly eye-
ing €1.7bn for a new fund 18 months after
pulling in €1.5bn for its debut raise as an
independent firm.
Equistone has hired Lazard to help place
the fund according to Bloomberg.
The firm spun out of Barclays in late
2011, and hit the final close for its Fund IV
just over a year later.
It said 70 per cent of the fund’s backers
were investors in its previous vehicles, with
about half the capital coming from Europe,
16 per cent from North America and about a
third from the rest of the world.
Mid Europa raises €1.4bn to invest
in central and Eastern Europe
Bridgepoint: looking to raise first flagship vehicle since €4.8bn fourth fund from 2008

45. FUNDS
www.LimitedPartnerMag.com 43
US private equity major TPG Capital is
reportedly ready to kick off fundraising
for a new $10bn flagship vehicle six
years after closing its titanic $19.8bn
buyout fund.
TPG has already collected $2bn
for a bridge
vehicle
which will
be rolled into
the Fund VII
pool when
it begins
raising later
this month
according to
Bloomberg,
which cited
two inves-
tors. The firm has been forced to deal
with the high-profile disaster of its
Energy Future Holdings investment,
which saw the business loaded with
about $35bn of debt through a 2007
take-private deal.
TPG, which backed the business
alongside KKR and Goldman Sachs’
private equity arm, stands to lose about
$1.5bn through the company, which
filed for bankruptcy protection in April.
AltAssets reported earlier this year
that the Oregon Investment Council
had agreed to invest $700m in TPG’s
bridge vehi-
cle, with state
treasurer Ted
Wheeler com-
menting that
Fund VIII
was “make or
break” for the
firm.
The firm
has been a
strongly-
performing
business since it was founded in 1992,
although returns from its last two
vehicles have not matched its previous
success.
TPG gathered $15.4bn for Fund V
in 2006, but some deal-making has
suffered following the impact of the
global financial crash.
TPG fundraising launch for
$10bn-targeting FundVII Private equity investor Oak Hill Capital
Partners is reportedly considering its next
flagship buyout fund five years after the close
of its predecessor.
The new fund will be smaller than the
$3.8bn Oak Hill Capital Partners III vehicle
according to Reuters. The firm has informed
potential LPs that it is looking to raise
between $2bn and $3bn, with fundraising
tipped to start by the end of the year.
The firm closed Capital Partners III in
2009 with a $350m GP commitment.
Oak Hill considers
next flagship buyout
CVC eyes new
$750m tech fund
Stripes smashes
$400m target
US-based buyout firm Stripes Group has
pulled in $500m for its Growth Partners III
fund, putting it $100m over its previous target.
It is believed the fund closed on its hard
cap after pulling in investments from 44
investors. LPs investors include the Arkansas
Teachers’ Retirement System, which com-
mitted $30m in June.
The vehicle has so far been used for
recapitalisation and to buy cloud services
company INetU.
CVC Capital Partners is back in the fundraising
market for a $750m growth vehicle to follow
up the €10.5bn mega fund it closed last year.
The new vehicle will target smaller, tech-fo-
cused investments according to the Wall Street
Journal, which cited a person with knowledge
of the fundraise.
They added that the vehicle would be used
to target “the unsexy part of the industry”,
focusing on tech-enabled businesses such as
human resources software companies rather
than hot consumer startups. WSJ said recent
hire John Clark, who joined from Welsh Carson
Anderson Stowe earlier this year, would be
leading the fund.
Investment house JMI Equity has hit a
$1bn hard cap final close for its eighth
growth equity vehicle.
AltAssets revealed earlier this month
that the firm had registered almost
$950m for Fund VIII, pushing it past its
$900m target.
General partner and co-founder Harry
Gruner said, “With JMI VIII we will
continue to pursue our strategy of invest-
ing in rapidly growing, high-quality
software businesses.”
He added: “Our experience across
many market and economic cycles helps
us to identify and understand develop-
ing market opportunities and work with
management teams to add value post
investment.”
JMI’s seventh fund held a final close
on $875m in 2010, up 45 per cent from
its 2007-vintage previous fund. The
latest vehicle brings the total raised by
the firm to $3.1bn since it was launched
in 1992.
JMI focuses on investing $10m to
$100m in North American businesses, and
has backed more than 100 companies.
The firm’s portfolio companies include
cloud-based workforce management
software provider Kronos and ac-
counting, tax, budgeting and analytics
software developer PowerPlan.
JMI Equity holds $1bn hard cap close
TPG has already collected $2bn for a bridge vehicle

46. FUNDS
44 Q4 2014
Mid-market investor Wasserstein & Co has easily beaten its
$300m target by pulling in $403m for the final close of its
third buyout fund.
The heavily-oversubscribed fund had already reached a
$311m second close in July this year, and powered to a final
close on August 29 according to a source with knowledge of
the process.
A total of 35 LPs committed capital to Wasserstein Part-
ners III, which has already been used to make four deals.
These include the acquisition of speciality valve manufac-
turer High Pressure Equipment Company, communications
solutions provider Globecomm Systems, and audiobooks
business Recorded Books.
Wasserstein announced it had partnered with a string of
investors, including the Ontario Pension Board and private
equity firm Pantheon, to buy ALM Media from Apax Part-
ners and RBS in June this year.
The firm will pay sales commission of $1.8m to Diamond
Dragon Capital for the fund, according to a filing with the
US securities regulator.
Predecessor vehicles from Wasserstein include US Equity
Partners I, which closed in 1997, and a follow-up which
closed in 2002. Those two vehicles pulled in a total of $750m.
Wasserstein was created in 2001 when it spun out from
banking group Wasserstein Perella & Co.
In the last 20 years it has executed more than 50 deals
worth $3bn enterprise value. The firm focuses on leveraged
buyouts with investments of between $30m and $150m.
Wassersteinscorestarget-busting$400mclose
PatriotFinancialpasseshalfway
markfor$300msecondfund
Raine raises nearly
$600m for Fund II
Financial services-focused private equity
firm Patriot Financial Partners has hit the
halfway mark for its $300m-targeting
second fund.
Patriot Financial Partners II has received
about $124m of commitments from 19 LPs
according to a document filed with the US
Securities and Exchange Commission.
The firm has also raised about $26.5m
from 37 LPs via a parallel vehicle, giving it
total commitments of just over $150m.
A year ago AltAssets reported the fund
had raised $75m from 41 investors.
Patriot, which registered the first com-
mitment for the fund in August last year,
has left the $50,000 minimum investment
requirement unchanged.
The Philadelphia-headquartered firm
currently has more than more than $325m
of assets under management, and plans to
make deals ranging from $15m to $35m
through the new fund.
Patriot invests in community banks,
which it says are composed of more than
1,000 public and privately-held depository
institutions with between $500m and $5bn
of assets.
The firm said these institutions account
for an aggregate of $1.5tn of assets, or 10.1
per cent of the industry total.
Entertainment, media and sports-targeting
merchant bank the Raine Group has secured
nearly $600m for its second fund.
Raine Partners II has raised just over
$592m from a total of 69 LPs according
to a document filed with the US securities
regulator. The target was not revealed in the
filing.
The firm’s first buyout fund held a final
close on $475m in October 2011 after
securing investments from high-profile LPs
including William Morris Endeavor, the
talent agency headed by outspoken founder
Ari Emanuel.
Raine was launched in 2009 by former
UBS and Goldman Sachs investment bank-
ers Jeff Sine and Joe Ravitch.
Rocket-fuelled: Wasserstein shot through the $300m target for its new fund

47. FUNDS
www.LimitedPartnerMag.com 45
European private equity firm Idinvest
Partners has revealed it expects to
outstrip the €300m target for its third
private debt fund with a close towards
the end of the year.
The firm said Idinvest Private Debt
III would target mid-sized European
companies to support them in further
growth or a leveraged buyout.
Idinvest aims to tap the fund for in-
vestments of between €5m and €20m of
mezzanine debt financing and secondary
purchases of existing mezzanine debt.
The firm said Private Debt III had
already carried out three investments for
Park & Suites, J&S Automotive Tech-
nology and Maxeda, and said a fourth
project was currently being finalised.
Christophe Bavière, chairman of
the Board of Idinvest Partners, said,
“Idinvest Private Debt III has already
attracted prestigious French and interna-
tional institutional investors, including
banks, insurance companies, pension
funds, mutual insurance companies and
family offices, and we are proud of the
confidence they continue to have in our
team’s capabilities.”
Earlier this year Idinvest beat the
target for its second SME senior debt
fund by holding a €400m final close for
the vehicle.
ACG Capital holds €150m first close
Idinvestaimstooutdo€300m
goalfordebtfundbyyear-end
France-based ACG Capital is three-
quarters of the way to its Acto
Mezzanine II fund’s €200m target.
The firm has announced it has held a
first close of €150m thanks to existing
investors including French institutions
Bpifrance, AG2R La Mondiale and OFI
AM, which re-upped its investment
with the firm.
ACG said the mezzanine vehicle had
also attracted new commitments from
financial institutions such as the Euro-
pean Investment Fund.
The firm’s debut Acto Mezzanine ve-
hicle closed on €187m in 2008, beating
its €150m target.
ACG CEO Wladimir Mollof said,
“We are grateful to our historical inves-
tors, and to those who have joined us.
This fundraising rewards the hard work
of the ActoMezz team.”
The ActoMezz fund will be used
to invest in French SMEs looking to
extend their equity and management
teams and invest alongside them as a
mezzanine arranger.
Listed US alternative assets major the
Blackstone Group is reportedly eyeing up
to $8bn for its second-generation Tactical
Opportunities fund.
About $2bn to $3bn will be contained
within a commingled fund according to
peHub, which said the balance would be held
in large accounts.
Blackstone closed its debut Tactical Op-
portunities fund on $5.6bn following a 2012
launch.
Blackstone eyes $8bn
for second vehicle
Rothschild closes
new fund on
€300m hard cap
Performance in
$400m fund launch
Investment firm Performance Equity
Management has launched a new direct
investment fund with a $400m target and a
$550m hard cap.
The Connecticut-based firm is raising the
fund without a placement agent and expects
to receive a management fee of $40m, a
regulatory filing showed.
PEM currently has more than $20bn of
committed capital.
Edmond de Rothschild Group has closed its
latest development capital fund, Winch 3, on
its €300m hard cap, making it the largest ever
fund raised by the French investment firm.
The firm said that 23 international LPs
which had invested in its previous fund
backed the new vehicle, committing 40 per
cent more on average.
New LPs in the fund, which was initially
targeting €250m, include the European
Investment Fund and Sogecap.
Rothschild noted that the fund received
strong interest from high net worth individu-
als and family offices, whose commitments
accounted for ten per cent of the total.
Coining it in: Idinvest aims to tap the fund for investments of between €5m and €20m

48. FUNDS
46 Q4 2014
Private equity firm Quantum Energy Part-
ners has reportedly held a first close for its
sixth fund.
The fund has secured $1.17bn towards its
$2.5bn target, peHub said, citing a person
with knowledge of the fundraise.
The source said Quantum Energy Partners
VI has a hard cap of $3.5bn.
QEP IV follows the firm’s $2.5bn fund
raised in 2009. That vehicle was generating
an IRR of 19.75 per cent and a 1.35 cash
multiple as at the end of last year, accord-
ing to data from Texas County & District
Retirement System.
Quantum has received more than $6.5bn
of equity commitments since its launch in
1998.
Last September AltAssets reported that
an affiliate of Quantum had launched a fund
with a $1bn target. At that time, Quantum
Resources Fund II did not have any com-
mitments.
Quantum Resources is focused on buying
and developing producing and divesting
long-lived, mature, onshore oil and gas
properties in North America.
The firm was launched in 2006 by the
founders of Quantum Energy Partners, who
teamed up with chairman Don Wolf and
Alex Cranberg.
Veritas hits
$1.87bn hard cap
MenthaCapitalcollects€70mforinterimclose
Amsterdam-based private equity firm Men-
tha Capital has held a €70m interim close
for its fourth fund as it bears down on up to
€100m.
The firm, which has been fundraising for
about nine months, held a €51m first close
in February and said at the time it expected
to close on €100m by the end of June.
That timescale has now been extended
according to a source with knowledge of
the fundraise, who spoke on condition of
anonymity. They said Mentha Capital Fund
IV could still go as high as €100m, but added
that the firm was already pleased with the
amount of capital it has to deploy.
Mentha focuses on lower mid-market
companies based in Benelux with an-
nual sales of between €25 and €75m, and
EBITDA between €2m and €10m.
The firm had already made two deals
using the fund at the time of its first close
by backing customer services company
Customs Support and self-adhesive label
maker Etiket Nederland.
Mentha’s other portfolio companies
include recruitment agency KP&T Project­
advies, which received a majority invest-
ment from the firm in summer 2012.
Optimism about the private equity, ven-
ture capital and leveraged finance sector in
the Benelux in 2014 increased “significant-
ly” compared with last year according to a
report released in April by NautaDutilh.
Respondents were more optimistic about
the Benelux market, with an expected in-
crease in private equity deal volume despite
worries about the market conditions in the
Netherlands compared to other Western
European countries and the Nordics.
In Belgium, there is a clear trend towards
the lower mid-market, while in the Neth-
erlands there is an increase in transactions
towards the upper mid-market.
Veritas Capital Fund Management has hit
the $1.87bn hard cap for its fifth fund, com-
fortably exceeding its $1.5bn target.
Veritas Capital Fund V was significantly
oversubscribed and reached its hard cap in
one close after about four months on the
road.
The fund will target mid-market compa-
nies which provide products and services
to government customers in sectors such as
aerospace and defence, healthcare, technol-
ogy, national security, communications,
energy and education.
Veritas’ previous vehicle was closed with
$1.2bn of commitments in July 2010.
Quantum Energy nears halfway
for $2.5bn-targeting Fund VI
Mentha Capital Fund IV could still go as high as €100m

49. FUNDS
www.LimitedPartnerMag.com 47
UK buy-and-build specialist Sovereign
Capital has hit a £395m hard cap final
close for its fourth fund just six months
after launch.
SCLP IV hit its £350m target in July
and was significantly oversubscribed,
the firm said, with commitments coming
from new and existing LPs across the US,
Europe and Asia. Earlier this year Sover-
eign fully realised its 2001 debut fund to
deliver a 3.5-times money multiple.
The firm said it planned to tap its latest
vehicle to invest up to £50m of equity at a
time in service-based companies.
Managing partner Andrew Hayden
said, “It was quickly clear when we
launched that the appetite for SCLP IV
was strong. The pace of the fundrais-
ing and the level of interest it attracted
is an endorsement of the success of our
investment strategy – which has been
strictly applied across all our funds – the
energy and dedication of our team, and
the quality of the management teams and
businesses we have partnered.”
Sovereign’s last vehicle, Limited Part-
nership Fund III, had a target of £350m.
It is not known whether that amount was
reached, but it had pulled in about 40 per
cent of the total at its first close in 2009.
The firm’s second fund closed on its
£275m hard cap in May 2005.
SovereignCapitalcaps
fourthfundraiseat£395m
Bain Capital hits €2bn mark
Private equity giant Bain Capital has hit
the €2bn mark for its latest European
fund.
Bain Capital Europe Fund IV has
raised €2.03bn from 103 LPs, the firm
disclosed in a document filed with US
securities regulators.
Two other filings showed that the
fund has secured nearly €64m via two
parallel vehicles. The fund does not
have a placement agent.
Bain is seeking €2.5bn for the fund,
which would make it the same size as
its third European vehicle which was
raised in 2008.
Bain Capital Europe Fund III was
generating an IRR of 2.3 per cent at
the end of June last year according to a
Bloomberg report.
The firm’s first and second European
funds were producing net IRRs of 31
per cent and 9.3 per cent, respectively.
UK-based Primary Europe has reached the
£225m target for its fourth fund.
The firm raised more than $181.8m for
Primary IV through 12 investors according to a
filing with the US securities regulator. A sepa-
rate filing shows that a ‘B’vehicle had pulled in
nearly $203m from nine LPs, bringing the total
at current conversion rates to just over £225m.
Primary closed its third fund in March 2006
after reaching its hard cap target of £200m. It
used the fund for a buy-in of Güralp Systems
for £20m.
Primary Europe focuses on the consumer
products and services, leisure, business and
support services, IT and media and industrial
products and services sectors.
Primary Europe
reaches £225m target
Carlyle nears halfway
mark for fund
Altor raises €2bn
US private equity major Carlyle is report-
edly nearing the halfway mark for its fourth
European fund.
The firm has raised nearly half of Europe
Partners IV’s €3bn target, Dow Jones report-
ed. Earlier in the summer AltAssets revealed
the firm had held a third close on just over
€900m for the fund.
TCG Securities, Morgan Stanley Smith
Barney and Merrill Lynch are acting as
placement agents for the vehicle.
Carlyle’s other recent funds in the market
include Asia Partners IV, which it closed on
$3.9bn in September.
Nordic buyout house Altor has closed its fourth
fund on €2bn after less than three months on
the road.
Most of the capital was raised from Altor’s
existing LPs and only “a select few” new inves-
tors were invited, the firm said. Nordic inves-
tors provided 20 per cent of total commitments,
with the rest coming from the US, Europe, the
Middle East and Asia.
Crowningachievement:SCLPIVhitits£350mtargetinJuly

50. FUNDS
48 Q4 2014
Turnaround and restructuring-focused pri-
vate equity firm Z Capital Partners has held
a final close for its latest vehicle 50 per cent
above it $500m target.
The firm pulled in $750m for Z Capital
Special Situations Fund II thanks to 30 new
LPs, including sovereign wealth funds,
pension funds, family offices and insurance
companies from across the globe.
Z Capital president and CEO James Zenni
Jr said, “We received interest of approxi-
mately $1bn from limited partners which we
believe, together with the global footprint of
our investor base, is testament to our leading
track record, proven investment strategy and
experienced leadership team.
“As we have done for over a decade, we
will continue to capitalise on opportunities
to maximise value for our investors through
our opportunistic, value-oriented approach.”
AltAssets revealed in August 2012 that
the firm had hired Jefferies to place the
fund, which followed the final close of its
debut vehicle on $250m in the previous
year.
The vehicle will continue its predeces-
sor’s strategy of investing in distressed
debt, operational turnarounds and special
situation opportunities in the mid-market
across industries, which in the past have
included consumer, steel, agricultural, gam-
ing, leisure and automotive.
Z Capital was founded in 2006 after
Zenni left Black Diamond with six of its
associates.
The firm has made a number of high-
profile investments to date, including casino
operator Affinity Gaming and former Sun
Capital portfolio business Real Mex
Restaurants.
ZCapitalsmashesthroughtargettohit$750m
Destroying its target: Z Capital easily beat its $500m aim after attracting expressions of interest of $1bn
GenNx360fallsshortin$535mcloseKelso & Co to commit
$500m to own fund Industrial turnaround-focused private
equity firm GenNx360 Capital Partners has
reportedly held a $535m final close for
its second fund, falling short of its $600m
target.
Investor relations manager Carmen Rojas
told peHub the fund had already invested
more than $100m in three portfolio compa-
nies, including backing tool-maker Tooling
Technology earlier this month.
GenNx360 spent about two years fund-
raising for Capital Partners II, which had a
hard cap of $750m.
AltAssets revealed in January the fund
had pulled in at least $437m.
The final total included a $25m commit-
ment from the $27bn Connecticut Retire-
ment Plans & Trust Funds.
Mercury Capital Advisors acted as
a placement agent for the fund, which
registered its first commitment in February
2012, according to filings made with the US
securities regulator.
GenNx360’s first vehicle took two years
to raise $500m and was closed in 2008.
The firm targets underperforming indus-
trial business-to-business companies with
$250m to $1bn of revenues.
It was founded by ex-GE vice-chairman
Lloyd Trotter, former GE Equipment Ser-
vices CEO Arthur Harper and investment
bank founder Ronald Blaylock.
US private equity house Kelso & Co is
believed to be ready to commit a massive
20 per cent of the $2.5bn target for its ninth
flagship fundraise as a GP commitment.
The commitment of up to $500m was
revealed by the Maine Public Employees
Retirement System, which approved a
$60m investment in the fund earlier this
month.
Most firms commit just one or two per
cent of fund totals.
Kelso was in the market to raise between
$2.5bn and $3bn, well below the $5.1bn it
gathered for its eighth flagship vehicle in
2008.

51. FUNDS
www.LimitedPartnerMag.com 49
Consonance Capital Partners, the
healthcare investor set up by a trio of
former JP Morgan execs, has closed its
debut vehicle on its $500m hard cap.
The firm was initially targeting $350m
for the fund but easily passed that figure
amid heavy oversubscription.
Consonance
targets lower
mid-market
companies in
the US health-
care industry,
with an em-
phasis on busi-
nesses driving
efficiency, cost
containment
and high-
quality clinical
care.
AltAssets re-
cently revealed
the firm was past the $320m-mark for
the fund thanks to commitments from
76 LPs.
CCP co-founder Nancy-Ann DeParle,
former deputy chief of staff for Barack
Obama, said, “This is a period of dy-
namic change in the healthcare industry,
with significant opportunities to invest in
companies that can improve the quality
of service, transform the care experience
and create a more efficient and effective
healthcare sector.
“We believe that our fund is ideally
suited and sized to help lead this change
through our investments, insights, exper-
tise and support.
“We will continue our strategy of
sourcing
partnerships
and invest-
ments with
companies
that are
capitalis-
ing on new
healthcare
niches.”
Fellow
co-founders
Mitchell
Blutt, Benja-
min Edwards
and Stephen
McKenna spent more than a decade
together at JP Morgan and its entities,
investing in private equity, primarily in
the healthcare sector.
DeParle, who joined as a founding
partner last year, also worked with all
three men at JPMP. Other team members
include former JPMP employees Sean
Breen and Javier Starkand, and ex-Besse-
mer VP investor Sapna Tejwani Jethwa.
DemanddrivesConsonance
debutfundraiseto$500m
Roark seeks $1.5bn for Fund IV
Roark Capital Group is reportedly look-
ing to raise at least $1.5bn for its fourth
private equity fund.
The Atlanta-based firm is currently in
talks with investors about Roark Capital
Partners IV, which is expected to be at
least as large as its $1.5bn third fund,
Dow Jones said.
Roark invests between $15m and
$600m in companies with an EBITDA
of $10m to $250m and revenues of
between $20m and $2bn.
The firm is focused on the restaurant,
retail, services, consumer products,
business services, direct marketing and
environmental services sectors.
Portfolio company CKE operates and
franchises restaurant brands including
Green Burrito, Red Burrito, Hardee’s
and Carl’s Jr. It has 3,400 franchised
or company-operated restaurants in 30
countries.
Injected capital: Consonance was heavily oversubscribed in
surging to its $500m hard cap
Alternative asset manager Ares Manage-
ment is looking to raise $1bn for its fourth
special situations fund.
The target is in line with the amount Ares
was rumoured to be chasing earlier this year,
although a source said he expected the vehi-
cle to reach its $1.5bn hard cap.
Ares closed the vehicle’s predecessor Spe-
cial Situations Fund III in 2010 on $650m.
Ares confirms $1bn
target for Fund IV
Wynnchurch eyes
$1bn for Fund IV
ABRY Partners
targets $1.9bn
for FundVIII
Chicago-based private equity firm
Wynnchurch Capital is reportedly ready to
head back into the fundraising market target-
ing up to $1bn.
Wynnchurch closed its third mid-market
focused buyout fund on $603m in 2011, eas-
ily beating its $500m target.
Wynnchurch previously gathered $350m
for its second fund in 2005 and $163m for its
2000-vintage debut.
The firm targets equity investments of up
to $150m in companies working in niche
manufacturing and business services.
Private equity firm ABRY Partners is
reportedly seeking $1.9bn for its eighth fund,
which was launched in spring.
The Boston-based firm expects the fun-
draise to be “quick and quiet”, which is its
usual way of operating said peHub, citing LP
sources.
ABRY is disciplined about increasing fund
sizes, which investors appreciate said one
LP, adding that limiting fund size leaves little
room for new investors.
The new fund follows ABRY’s seventh
flagship vehicle, which held a final close on
$1.6bn in 2011.

52. FUNDS
50 Q4 2014
New Mountain Capital’s latest fundraise
is reportedly going so smoothly the buyout
house has bumped up its target to its
former hard cap of $4bn.
The new hard cap for Fund IV is $5bn
according to peHub, which cited two
sources with knowledge of the fundraise.
It added that the firm had almost
finished marketing for the vehicle it began
tracking down capital for last year.
AltAssets revealed in July that the firm
had passed its original $3bn target after
commitments snowballed in the preceding
few months.
The firm was sitting on just over $3.4bn
at that point.
New Mountain’s third fund also targeted
$3bn, and was closed on $5.1bn in 2008
after securing commitments from LPs
including CalPERS.
The Californian pension fund invested
$400m in the vehicle, two years after put-
ting $150m into New Mountain’s second
fund.
Fresh $5bn hard cap for New Mountain Fund IV
Fundraising peak: New Mountain now has eyes on a $5bn hard cap for its fourth flagship fund
Charlesbank Capital seals swift eighth
fundraise by hitting $1.75bn hard cap
Boathouse beats
$180m target
Charlesbank Capital Partners has struck
the $1.75bn hard cap for its eighth fund
through a final close after just three months
in the market.
The firm hoped to gather $1.5bn for
Charlesbank Equity Fund VIII, but made
quick work of that target thanks to most
investors returning from its previous funds,
it said.
Charlesbank, which was founded in
1998, targets mid-market and growth capi-
tal financings by deploying between $50m
and $150m per deal.
Fund VIII is set to make between 12 and
15 investments across a range of industries.
Charlesbank has previously invested in
areas including energy, consumer products
and healthcare.
Co-chairman and CEO Michael Eisenson
said, “We are deeply grateful for the contin-
ued trust and support of our long-standing
limited partners.”
Lower mid-market buyout firm Boathouse
Capital has beaten the target for its second
fund.
The Philadelphia-based firm said it had
held a first close above the fund’s $180m
target.
Boathouse added that it had secured its
second Small Business Investment Com-
pany licence.
The fund follows Boathouse’s debut ve-
hicle, which was closed with commitments
of $120m in July 2011.

53. FUNDS
www.LimitedPartnerMag.com 51
European private equity firm Keensight
Capital plans to complete a €250m
fundraise for its fourth fund by the end
of the year after a hefty first close.
The firm, previously called R Capital
Management, has already pulled in
€200m thanks to investors including the
Rothschild Group and unnamed Euro-
pean pension funds, insurance compa-
nies and banks.
Keensight said it planned to continue
its strategy of backing profitable com-
panies across Europe with high growth
potential and revenues between €10m
and €150m.
Managing partner Jean-Michel
Beghin said, “We are very pleased to
announce the first closing of our new
fund, which has been achieved in a very
short time-frame.
“This fundraising is a testimony to the
confidence that both existing and new
investors place in us.
“This success also acknowledges
the good work of our investment team,
which has a proven track record thanks
to its differentiated position within a
market segment that has very few com-
petitors in Europe.
“We now aim to conclude the final
closing of this fund at €250m by the end
of the year.”
Keensight collects €200m
for first close of Fund IV
Clairvest Group has closed its fifth fund
on its C$600m hard cap.
The Canadian private equity firm had
already passed its C$500m target at
the first close of the fund at the start of
May, raising a total of C$518m.
At that point Clairvest had invested
C$180m of its own cash alongside
C$420m pulled in via third-party inves-
tors. The firm reserved the right to up its
GP commitment to C$200m.
The minimum commitment to the
fund per LP was C$2m according to
a filing with the US Securities and
Exchange Commission. Atlantic-Pacific
Capital acted as a placement agent.
The Clairvest Equity Partners IV
vehicle closed on C$467m in Janu-
ary 2011, of which C$264m is so far
invested in 10 projects.
Previous investments include
sponsoring an MBO of mental health
platform Shepell FGI, through which
the firm made a 6.6-times return.
Canada’s Clairvest closes at C$600m
Consumer and healthcare-focused private
equity firm Webster Capital has outstripped
the $205m of capital for its second buyout
vehicle by pulling in $255m for Fund III.
The firm has gathered the commitments
from 37 LPs to date, according to a US
regulatory filing, which does not reveal if
the fund has hit a final close.Webster closed
Fund II on $205m in early 2008.
The firm was launched in 2002 by Don
Steiner, Andrew McKee and Charlie Larkin,
and made its first investment two years later
by buying Robert Redford-founded catalogue
and internet company Sundance Holdings.
Steiner previously spent a decade as a gen-
eral partner and co-founder of Boston Capital
Ventures. McKee was formerly an invest-
ment banker at Goldman Sachs and Larkin
worked in commercial lending for JP Morgan
Chase and consulting for PwC.
Webster targets businesses already mak-
ing above-average profits, aiming for those
companies with revenues of between $20m
and $100m.
Webster Capital
pulls in $255m
for biggest fund
Guardian closes Fund II
on $153.5m hard cap
Guardian Capital Partners has closed its
second fund on a $153.5m hard cap, with
90 per cent of LPs from the debut vehicle
reinvesting.
The Pennsylvania-based firm’s Fund II
initially had a target of $150m, and reached
its limit in less than a year.
The oversubscribed vehicle is three times
larger than the firm’s first fund, which closed
on just over $50m in 2010.
As well as repeat investment from existing
LPs, Guardian’s second fund attracted more
than 12 new institutional, family office and
high net worth investors.
Managing partner Peter Haabestad said,
“We are extremely pleased with how the
fundraising process played out.”
Eyes on the prize: Keensight aims to complete a €250m fundraise by the end of the year

54. FUNDS
52 Q4 2014
Asian private equity firm Headland Capital
Partners has gone to market with its $1bn-tar-
geting seventh fund, and is keeping the vehicle
around this size to keep investors happy, ac-
cording to an LP close to the firm.
Headland is unlikely to go beyond a $1.25bn
hard cap, the Hong Kong-based investor said.
“It’s important in Asia not to go too big,”
said the LP. “This fund keeps Headland firmly
in the middle market.
“In Asia, and in other places, sometimes
private equity funds start doing bigger and
bigger funds and LPs don’t like that because
they feel the firms are just trying to collect
more margin.”
The firm’s previous vehicle closed on $1.3bn
in 2008.
Headland’s LPs include the normal institu-
tional investors such as pensions and insur-
ance funds, and the firm expects the majority
of investment to come from American inves-
tors, the source said.
He said, “It’s simply because the biggest
investor population is from North America.
“In Asia investors will tend to come and go,
but big US pensions and insurance companies
are the steady investors.”
HeadlandtolimitFundVIIto$1.25bnhardcap
Keeping perspective: Headland aims to limit Fund VII to a hard cap of roughly $1bn
LATEST FUND NEWS
For daily breaking news on all the latest fund
activity visit: www.AltAssets.net
New MainStream raises $191m for Fund IIMidwest Mezz seals
SBA-backed final close Goldman Sachs spin-out New MainStream
Capital has registered just under $151m of
LP commitments for its $250m-targeting
second fund.
The US private equity firm has raised the
capital thanks to commitments from 18 in-
vestors, according to the NMS Fund II filing
with the US securities regulator.
The document also reveals, however, that
with “affiliate” investment the fund’s total
currently stands at $191m.
Investors committed to the fund include
the Maryland State Retirement and Pension
System, which has allocated $40m to the
vehicle.
The capital raised so far already makes
Fund II bigger than NMS’ predeces-
sor, which pulled in $160m in 2010 with
investors including fund of funds Pantheon
Ventures,.
NMS focuses on equity investments rang-
ing from $10m to $50m and typically seeks
companies with values less than $300m.
The firm targets US service-oriented busi-
nesses in healthcare, consumer products and
specialised business services.
Midwest Mezzanine Funds has held the
final close of its fourth vehicle on $270m
after more than two years on the fundraising
trail.
The firm’s Mezzanine Fund IV was
raised during an especially challenging
period, senior managing director Dave
Gezon said.
Midwest lost more than 70 per cent of its
Fund IV commitments when Dodd Frank
regulation reduced take-up in alternatives
in 2012.
The firm applied for a Small Business
Investment Company license in December
2012 which enabled it to pull in $140m
via the US Small Business Administration
program.

55. FUNDS
www.LimitedPartnerMag.com 53
US private equity firm CCMP Capital has
held a $3.6bn final close for its latest mid-
market buyout and growth equity fund,
$100m above its initial target.
CCMP Capital Investors III is likely
to make about a dozen deals, if the 13
made by its predecessor vehicle are a
benchmark.
The firm, launched by former mem-
bers of JP Morgan Chase, raised $3.4bn
for Fund II in 2006.
President and CEO Stephen Murray
said, “The success of this fundraise is
a testament to our team’s 30-year track
record of strong and consistent returns,
and the confidence and trust of our exist-
ing and new limited partners.”
He added: “We are pleased with the
construction and performance of the
fund’s current portfolio and look forward
to delivering outstanding returns for our
investors.”
CCMP said it planned to target North
American and European mid-market
companies in the consumer and retail,
industrial, energy and healthcare sectors.
The firm has already invested in vita-
min firm Jamieson, keymaker Hillman,
and US business-to-business food opera-
tor Jetro Cash & Carry.
Darwin continues FoF strategy
CCMPbeatstargetin$3.6bn
closeforthirdmid-marketfund
Fund-of-fund investor Darwin
Ventures is targeting $100m for its third
fundraise six years after closing its
predecessor vehicle.
Darwin pulled in $93.9m for Fund
II in 2008, following a $40m debut
vehicle raised in 2004.
The firm has already collected
$21.4m for Darwin Venture Capital
Fund of Funds III according to a US
regulatory filing, which shows 15 LPs
have committed to date.
Darwin’s strategy is to invest primar-
ily in top-tier US-based, early-stage
venture capital funds diversified across
industry sectors focused on technology,
information technology, and healthcare.
Fund investments to date span more
than 30 firms, including Accel Partners,
First Round Capital, New Enterprise
Associates, US Venture Partners and
Kleiner Perkins Caufield & Byers.
Darwin was founded by managing
partner Frank Caufield in 2004, and
lists Charlie Jadallah as a partner on its
website.
Hellman & Friedman Capital Partners
is reportedly several billion dollars
oversubscribed for its $8.9bn-targeting eighth
fund despite only sending out marketing
materials a few months ago.
The firm is now set to close on its
$10.25bn hard cap despite turning some LPs
away and requiring others to cut the size
of their commitments according to peHub,
which cited three limited partners.
Hellman & Friedman
wraps up $10bn raise
Bessemer seeks
$350m for latest
fund of funds
Column Group strolls
past Fund II target
Biotechnology-focused firm the Column
Group has beaten the target for its second
venture capital fund by holding what is
believed to be a $306m final close.
AltAssets revealed in April that the firm
had passed the halfway mark in the $250m-
targeting fundraise, but it has now easily
beaten that figure according to an updated
filing with the US securities regulator. The
firm has tapped 50 LPs to hit the total.
Asset management firm Bessemer Trust has
launched a fund of funds with a $350m
target.
Old Westbury Private Equity Fund XIII
has yet to register its first commitment, ac-
cording to a document filed with regulators
in the US.
Bessemer Investor Services is acting as
a placement agent for the fund, which has
a minimum commitment requirement of
$350,000.
Bessemer Trust’s previous vehicle in the
series was launched with a $250m target in
December 2012. The Old Westbury Private
Equity vehicles target buyout, venture capital
and later-stage private equity funds.
Capital close: CCMP is likely to make about a dozen deals with the new fund

56. FUNDS
54 Q4 2014
Sovereign wealth investors are due to up their exposure to
global private equity by an estimated 39 per cent this year,
according to new research.
The increased PE allocation is part of a wider atmosphere
of sovereigns moving away from equities and bonds and
looking for more exposure to alternatives such as infrastruc-
ture, hedge funds, real estate and commodities.
The biggest recipient for increased allocation will be
domestic private equity funds, with exposure estimated to
increase by 64 per cent relative to 2013.
Exposure to global real estate is tipped to increase by 60
per cent and global infrastructure by 50 per cent according
to the Invesco Global Sovereign Asset Management Study
2014.
Invesco states the heightened interest in alternatives is
because “sovereigns were seeking diversification, noting the
volatility of equities, [the] yield compression in treasuries
and greater correlation between equities and corporate bonds
due to quantitative easing”.
Sovereign wealth investors will partly make up for the
extra allocation by reducing exposure to global bonds by an
estimated seven per cent, domestic bonds by 38 per cent and
dropping their cash holdings by 25 per cent.
Researchers for the report expect that the increasing
exposure to alternatives will run for three years, from 2014,
and will be driven by strategic asset allocation, rather than
a tactical short term shift. The research also revealed that
Latin America is likely to be the region with the biggest rise
in investment, estimated at 40 per cent.
PEfundraisersprepareforsovereignwealthboost
AmericanSecuritieslaunches
$4bn-targetingFundVII
Paine & Partners pulls
past halfway point
Mid-market focused American Securities
Partners has confirmed the launch of its
seventh private equity fund.
The vehicle has a target of $4bn, just
slightly bigger than the previous vehicle
which beat its $3bn target and closed on
$3.64bn in June 2012.
American Securities focuses on a range
of companies within the industrial, health-
care, power and energy, consumer and
service sectors.
The New York-based buyout house tar-
gets companies pulling in between $500m
and $2bn revenues.
The firm’s strategy is to invest in market-
leading companies with sustainable posi-
tions. They should operate in stable demand
industries and employ a conservative capital
structure with no subordinated debt.
Current investments include Advanced
Drainage Systems, GT Technologies and
Liberty Tire Recycling. Exited investments
include former Burger King franchise
holder Caribbean Restaurants.
Last year AltAssets reported that American
Securities was targeting a total of $750m for
its second distressed investment fund in two
years.
Food and agriculture-focused private equity
firm Paine & Partners is more than halfway
to its $850m target for its first flagship fund
since the financial crash.
AltAssets revealed in June that the firm
was targeting a more conservative figure for
Fund IV compared to the $1.2bn it gathered
for Fund III in 2007.
A total of 20 LPs have committed $476m
to the fund to date according to an updated
filing with the SEC, the US securities
regulator.
Paine & Partners was founded in 2006
by Dexter Paine, who had previously co-
founded private investment firm Fox Paine
& Company.
Revving up: Sovereigns are shifting towards alternatives and away from equities and bonds

57. FUNDS
www.LimitedPartnerMag.com 55
US private equity major Adams Street
Partners is eyeing up to $1bn for its
latest global fund of funds and has
already closed on almost half that
amount.
The firm held a $410m first close
for Adams Street 2014 Global Fund in
December according to the investment
minutes of the State Universities
Retirement System of Illinois (SURS),
which is considering a $100m
investment in the vehicle.
Adams Street is hoping to raise
between $800m and $1bn, according to
key terms outlined in the minutes of the
LP’s investment committee.
About 50 per cent of the vehicle is
slated to be invested in US funds, 25 per
cent in developed markets funds, 15 per
cent in emerging markets funds and 10
per cent in direct funds.
SURS senior investment officer
Kimberly Pollitt said the LP had $250m
left for its private equity funding plan
ahead of the proposed investment,
having already committed $400m since
the $650m plan was agreed in 2012.
Since 1990 SURS has committed
more than $1.5bn to private equity
investments with Adams Street Partners
and its predecessor organisations.
About $1.2bn in capital has been
called and $1.5bn distributed back to
SURS as of September 30, 2013.
Paragon raises €412m for second fund
Littlejohn hits
$2bn hard cap
Connecticut-based mid-market firm Littlejohn
& Co has closed its latest fund on its $2bn
hard cap, beating its initial target by $500m.
Littlejohn Fund V is significantly larger
than the firm’s fourth vehicle, which was
closed on $1.34bn in 2010, and more than
double the size of its $800m third fund.
LPs backing the vehicle include
endowments and foundations, public and
corporate pension plans, insurance companies,
sovereign wealth funds and family offices.
Littlejohn targets mid-market companies
with annual revenues of between $100m
and $800m, investing $50m to $150m per
company.
Flying the flag: German private equity firm Paragon’s initial €350m target was easily beaten
German private equity firm Paragon Part-
ners has closed its second fund on €412m,
beating its initial target.
The fund was launched with a €350m
target in early 2014, nearly six years after
Paragon closed its debut vehicle on €220m.
Munich-based Paragon invests between
€30m and €150m in private mid-market
companies and non-core subsidiaries of
large companies in German-speaking
Europe.
Paragon co-founder and managing part-
ner Edin Hadzic said, “Investors responded
well to our long-term track record of strong
returns and the strength of the team, as well
as our differentiated approach.
“We are seeing a unique range of oppor-
tunities as a result of the changing market
conditions in the DACH region, where our
ability to navigate complexity positions us
well to execute.”
Paragon’s recent deals include the
acquisition of Vion Food Group’s German
convenience retail unit.
Adams Street eyes $1bn fund

58. 56 Q4 2014
PEOPLE
Z Capital hires former
Tile Shop CFO as MD
Orlandi is made MD at CPPIB
Menlo adds Dawson as venture partner
Insight names White
as new head of IR The Canada Pension Plan Investment
Board has appointed Andrea Orlandi as
MD and head of real estate investments
for Europe.
Orlandi, pictured, was previously a
director in the CPPIB’s London office.
His responsibilities covered real estate
investments on a pan-European basis
and in India.
He has more than 15 years’ experi-
ence in real estate investment, having
previously held senior positions at real
estate private equity and investment
firms.
These include European chief invest-
ment officer and director of Apollo
Real Estate Advisors Property Partners,
where he was responsible for the sourc-
ing and oversight of investments.
Alpha addition: Tim Clayton has been hired by Z Capital Partners
Insight Equity Partners has hired a new head of
investor relations two months after former
incumbent Felicia Hardwick left the firm.
Chris White will now lead the firm’s global fund-
raising, IR and consultant relations efforts.
The firm has also made five new hires and
promoted two people as the firm continues work on
fundraising for its third vehicle.
Insight had raised almost $400m towards the
fund’s $750m target according to an AltAssets
report from April this year.
The Texas-based firm makes control investments
in mid-market businesses, and has backed compa-
nies with aggregate revenues of more than $4bn.
Illinois and New York-based private equity firm Z Capital Partners has
hired former Tile Shop CFO Timothy Clayton as a managing director
and operating partner.
Clayton was also previously vice-president and CFO of language
translation business Sajan and was founder and principal of consulting
firm Emerging Capital.
Z Capital president and CEO James Zenni said, “Tim is a great ad-
dition to the Z Capital family. With nearly 40 years’ business experi-
ence in financial, operating and strategic planning with a variety of
large, multinational corporations and smaller enterprises, his extensive
expertise will support the execution of our strategy to identify strategic
opportunities and enhance operational efficiencies.”
Earlier this month turnaround and restructuring-focused Z Capital
Partners held a final close for its latest vehicle 50 per cent above its
$500m target.
The firm pulled in $750m for Z Capital Special Situations Fund II
thanks to 30 new LPs, including sovereign wealth funds, pension funds,
family offices and insurance companies from across the globe.
Menlo Ventures has hired former
chief sales officer and executive vice-
president Jim Dawson of Fusion-io as a
venture partner.
Dawson will focus on storage and
infrastructure investments.
During his tenure at vice-president of
3PAR, which was a portfolio company
of Menlo, Dawson helped to grow an-
nual revenues from $6m to $200m.
Dawson has also served as vice-
president of worldwide sales at
Scale 8, and a vice-president at Data
General Corporation.
Oaktree vet steps down
Oaktree Capital Management veteran Kevin
Clayton has stepped down after nearly 20 years.
Clayton is off to take the reins at Lehigh Univer-
sity in Pennsylvania as interim president according
to the education provider’s website. The former
Lehigh graduate founded Oaktree’s marketing and
client relations department in 1995.

59. PEOPLE
www.LimitedPartnerMag.com 57
Evercore has poached UBS’ head of
European secondaries Rodney Reid,
who will now serve as the firm’s
managing director.
The Swiss banking group promoted
Reid to head of Europe last year to
replace Nicolas Lanel, who also left for
Evercore, which was launched by UBS’
former head of secondaries Nigel Dawn.
While at UBS Reid led a number of
secondary deals in North America and
Europe for clients including public pen-
sions, university endowments, banks,
insurance companies, hedge funds and
private equity firms.
Evercore’s CEO and president Ralph
Schlosstein said, “Rodney has substan-
tial experience advising institutions in
Europe, the Middle East, Africa and the
US on secondary transactions.”
Earlier this year Evercore secured a
mandate from GE Capital to sell $1bn
of private equity interests.
Evercore poaches Reid from
UBS as managing director
Rodney Reid: poached by Evercore
Healthcare-focused early-stage investment
firm Flagship Ventures has hired former
Merck & Co senior vice-president Roger
Pomerantz as a senior partner.
Flagship said Pomerantz, pictured,
would provide counsel and support to
Flagship’s team and portfolio companies.
Pomerantz was most recently senior
VP and worldwide head of licensing and
acquisitions at Merck.
Flagship CEO and managing partner
Noubar Afeyan said, “Roger brings with
him a wealth of management experience in
developing and commercialising therapeu-
tics, as well as expertise in the pharmaceu-
tical industry.”
Boston-based investment firm Polaris
Partners has hired ex-Pfizer executive
Amy Schulman as a venture partner.
Schulman most recently served as
general counsel, executive vice-pres-
ident, and business unit lead of Pfizer
Consumer Healthcare.
She has also worked at the company’s
nutrition business, which was sold to
Nestlé for $11.85bn, and its consumer
arm, which includes the Advil, Chap-
Stick and Emergen-C brands.
Schulman will also serve as CEO of
Polaris’ portfolio company Arsia Thera-
peutics.
Polaris was launched in 1996 and
has more than $3.5bn of capital under
management.
European venture capital firm Active Venture
Partners has hired a former T-Venture exec
and an ex-Rocket Internet LatAm managing
director to extend its investment power.
Sebastian Blum, who was a managing
director in T-Venture’s San Francisco office,
has joined as a partner, while Georg Stock-
inger becomes a venture advisor.
Stockinger will bring large-scale digital
business experience to Active, the firm said,
following his experience working with com-
panies including Groupon and eDarling.
Blum said, “This is such an exciting op-
portunity – to work with a passionate team
of entrepreneurially-minded professionals
helping other entrepreneurs succeed.”
Active hires Blum
and Stockinger to
extend its reach
Flagship hires Roger Pomerantz
Polaris adds Amy Schulman as partner
BVP nabs James
from Google
SV Life Sciences appoints
Balmuth as partner
Bessemer Venture Partners has appointed two
new vice-presidents, nabbing Sunil James
from Google and promoting Amit Karp from
senior associate.
Karp will focus on investments in the
software, mobile and digital media sectors,
identifying the next leaders and working
closely with existing portfolio companies.
They include Thinking Phone Networks,
Cloudlock and Syncsort.
SV Life Sciences has hired experienced
venture capital investor Michael Balmuth as
a partner in its healthcare services team, not
long after adding three new venture partners
to its biotech investment division.
Prior to joining SVLS, Balmuth worked
as a general partner at Edison Ventures,
where he was head of the firm’s healthcare IT
practice, and as a general partner at Summit
Partners at the East Coast office.

60. PEOPLE
58 Q4 2014
Ex-Heinz CEO Johnson
joins Advent as partner
Landmark adds Mullen as principal
Highbridge hires Fortress’s Jon Ashley
Carlyle nabs Goldman
and Warburg execs Real estate secondaries firm Landmark
Partners has hired former Morgan
Stanley managing director Geoffrey
Mullen as principal.
Mullen’s role will include expanding
the firm’s business development and
investor relations team.
At Morgan Stanley Mullen was
managing director in the investment
bank’s Alternative Investment Partners
division, where he led institutional
business development, marketing, and
distribution.
Landmark managing partner Tim
Haviland said, “Geoff has extensive
industry knowledge and experience
working with institutional investors. He
has built and led capital-raising, investor
relations, and marketing functions for
several high-quality organisations.”
New operator: William Johnson has joined Advent
The Carlyle Group has added to its Ireland team with
executives from Goldman Sachs and Warburg Pincus.
The private equity major has taken on Peter
Garvey and Jonathan Cosgrave as directors of its
Ireland Fund. Garvey was previously an execu-
tive director for private equity at Goldman Sachs
Asset Management. At Warburg Pincus, Cosgrave
focused on growth capital and buyout investment
opportunities across Europe.
JP Morgan’s $29bn hedge fund
Highbridge Capital Management
has taken on experienced private
equity executive Jonathan Ashley as
a portfolio manager in its principal
strategies platform.
Ashley, who will work in the firm’s
London office, previously served as
managing director of Fortress’s Euro-
pean private equity arm.
His new job will focus on publicly-
traded debt and other negotiated debt
investments, said the FT.
In July last year Highbridge hired
Scott Kapnick as CEO to replace Glenn
Dubin, who remained as chairman.
Bain appoints Salem as MD
Bain Capital’s VC arm has brought in Enrique
Salem, former CEO and president of Symantec, as
a managing director in its Palo Alto office.
In addition to his 27 years’ executive experience,
Salem has also been an active personal investor in
software companies and currently sits on the boards
of Atlassian, Clari, Cloudgenix, DocuSign, FireEye
and ForeScout.
Global private equity major Advent International has hired former
Heinz chairman, CEO and president William Johnson as an operating
partner.
Johnson spent a 31-year career with Heinz and was CEO for almost
half of that, helping to grow the company’s top and bottom-line results
and transform it into a global food industry leader.
The move came soon after Advent lost experienced retail and con-
sumer investment executive Andrew Crawford to US growth equity firm
General Atlantic.
Crawford spent more than a decade at Advent working on deals
including Bojangles, Charlotte Russe and Five Below.
Advent managing director Jeff Case said, “Bill is one of the premier
executives in the consumer packaged-goods industry, and we are ex-
cited that he has agreed to support the Advent team.
“Bill’s expertise in consumer products and food will complement our
extensive experience in the retail space and further strengthen our abil-
ity to source new investments and drive value creation in our portfolio.”
Advent has been investing in the retail, consumer and leisure industry
for 25 years and has completed more than 50 investments in the sector
worldwide.
Global investments over the past five years include Dudalina, The
Coffee Bean & Tea Leaf, Party City, Five Below and DFS Furniture.

61. PEOPLE
www.LimitedPartnerMag.com 59
CCMP names Doug Cahill as new MD
KKR has hired Leafgreen Capital
Partners founder Jaka Prasetya as its
new credit and special situations head in
South-East Asia.
Prasetya will also become a managing
director leading KKR’s Indonesian deal-
making, while former Leafgreen partners
Rahul Bhargava and Allan So are joining
the firm’s Singapore office.
KKR said the trio would bring exten-
sive investment experience to the region
through their work at Leafgreen – a pro-
vider of mezzanine and structured growth
funding in South-East Asia, with a focus
on Indonesian opportunities.
Ming Lu, co-head of Asia private
equity at KKR, said, “Indonesia continues
to be a dynamic market for investment,
with great growth potential and positive
demographics driving opportunities.
“With our first deal in the market in
2013, we look forward to exploring new
opportunities to provide both equity and
credit solutions to companies to suit their
long-term needs.
“The addition of Jaka, Rahul and
Allan – who have a deep understanding of
Indonesia’s local culture and business en-
vironment – greatly enhances our ability
to partner with Indonesian companies.”
Mid-market private equity firm CCMP
Capital has named executive advisor
Doug Cahill as its newest managing
director.
Cahill, who will be based in New York,
has been with the firm since May 2013,
but his involvement dates back to 1997
when he was president and CEO of for-
mer portfolio company Doane Pet Care.
As executive advisor he helped CCMP
source deals and create value in portfolio
companies, including the firm’s recent
investments in Jamieson Laboratories and
the Hillman Companies.
CCMP said that as managing director
Cahill would be responsible for sourcing
new investment opportunities in the retail
and industrial sectors.
Emerging markets-focused private
equity firm Actis has hired former PwC
sustainability and climate-change team
member Shami Nissan (above) as a director
in its responsible investment team.
Nissan will help portfolio companies with
their social and environmental impact from
the firm’s London office.
She previously led the London business
of Innovest Strategic Value Advisors and
has also worked with the UN development
programme in Central America.
Actis executive chairman Paul Fletcher
said, “We are delighted to have Shami on
board. Her experience will be highly valued.”
Actis hires ex PwC
exec Shami Nissan
for SRI team
Phoenix promotes two
as Muirhead steps down
UK mid-market buyout house Phoenix
Equity Partners has promoted long-standing
management committee members David
Burns and Richard Daw to managing partners.
The two men join existing managing part-
ner James Thomas, with the trio taking on
day-to-day responsibility for management of
the firm and investor relations activity.
Existing managing partner Sandy Muir-
head is stepping down after 13 years in the
role, but will continue as chairman of
Phoenix’s investment committee.
The transition follows Hugh Lenon step-
ping down as a managing partner and being
named chairman of the firm last year.
Private equity firm Paladin Capital
Group has added Beacon Global
Strategies founder and former chief of
staff at the Department of Defense and
the CIA, Jeremy Bash, to its strategic
advisory group.
In both his roles Bash served as a
senior adviser to Leon Panetta.
Between August 2010 and March 2011
Bash was a member of the CIA’s senior
management team overseeing the opera-
tion that resulted in the death of Osama
Bin Laden.
He has also worked as chief counsel to
the House Permanent Select Committee
on Intelligence and as a senior national
security advisor to Congresswoman Jane
Harman.
The hiring came a fortnight after
Paladin appointed former deputy director
of the National Security Agency Chris
Inglis as a venture partner.
Paladin founder and managing partner
Michael Steed said, “Jeremy and the
Beacon Global Strategies team will add a
new and dynamic domestic and inter-
national viewpoint to Paladin and our
portfolio companies.
“We are delighted to have Jeremy join
our Strategic Advisory Group, especially
as we further expand our cyber-investing
activity.”
Paladinaddsex-CIAchief
tostrategicadvisorygroup
KKRbringsinLeafgreentriotoboost

62. 60 Q4 2014
SECTOR PERSPECTIVES
BUYOUT 76REAL ESTATE 72 CLEANTECH 86INFRASTRUCTURE 64SECONDARIES 60 VENTURE 82
The smaller end of the buyout market offers
some of the most attractive opportunities for
secondary deals according to Adveq’s manag-
ing director Tim Creed.
Creed estimates that portfolios of buyout
funds are bought at discounts of five to 15 per
cent, while venture portfolios are bought at
discounts of up to 20 per cent.
He said that on the buyout side, large brand
names are often bought at premiums, at par or
at only small discounts.
“Such high prices are paid because some
investors who acquire those large funds set up
special purpose vehicles and put a bit of debt
on it,” said Creed.
“At the small end of the buyout market
there are fewer debt providers who would
provide debt for a secondary to a small group.
This is why we see bigger discounts in that
segment.
“The smaller part of the market is also
the area that has the lowest capital market
dependency.
“With small companies, the entry prices
aren’t dependent on debt, as the companies
themselves are not dependent on debt.
“So if you have debt that goes up or down,
you generally won’t see much of a difference
in deal volume or deal prices.”
Creed said that while discounts are impor-
tant, Adveq is more focused on the quality of
the assets in fund portfolios.
“If you look at the European landscape,
there are 700 managers – about 25 have
a fund of above €2bn, 75 have funds of
between €500m and €2bn and 600 funds are
below €500m.
“That’s a large number. In order to choose
from these 600 managers we look for those
GPs that are most specialised in what they do.”
SmallEuropeanbuyoutfunds‘offerbestchances’
Small is beautiful: Large brand names are often bought at premiums according to Adveq’s Tim Creed
Lexington, Alpinvest
take on JPM portfolio
Lexington Partners has teamed up
with the Carlyle Group’s secondar-
ies offshoot AlpInvest Partners to
buy about 50 per cent of the private
equity portfolio held by JP Morgan
Chase PE arm One Equity Partners.
Staff at One Equity will become
independent from JP Morgan and
form new investment advisory firm
OEP Capital Advisors (OEPCA) as
part of the deal.
OEPCA will manage the portfolio
being sold by JP Morgan, as well as
investments set to be retained by the
US banking giant.

63. SECTOR PERSPECTIVES: SECONDARIES
www.LimitedPartnerMag.com 61
Hutton Collins to sell Fund III stakes
The global private equity secondaries market
hit $22bn in the first half of 2014 amid the
busiest period in the asset class’s history, new
research by Setter Capital suggests.
Deal volume was up 47 per cent from
the same period last year thanks to new and
incumbent buyers being optimistic and ag-
gressive, according to the report.
It said that in addition to higher dollar vol-
umes in almost all areas, the first six months
of 2014 saw an even greater increase in the
number of transactions.
That reflected the same trends and broader
adoption of the secondary market strategies
being employed by active LPs, the report
added, with many more investors becoming
permanent fixtures on the secondary market.
Setter said it arrived at its $22bn figure by
taking the $14.3bn of volume reported by the
81 survey respondents and grossing it up in
proportion to the number of small, medium
and large active buyers that did and did not
participate.
Global secondaries
volume hits $22bn
in just six months
Hollyportcollects60xreturn
UK-based private equity firm Hutton
Collins Partners is reportedly looking
to sell stakes in its €600m 2009-vintage
Fund III.
The firm has hired Campbell Lutyens
& Co to help find buyers for the stakes
according to Bloomberg, which cited
two sources.
A Hutton Collins spokesman said,
“The effort has been initiated by the
manager as a number of existing limited
partners no longer participate in the
asset class and might therefore seek to
achieve early liquidity.”
Earlier this year the firm agreed to
invest €50m in Italian healthcare IT
systems business Dedalus Group.
Hutton’s co-investors have also
agreed to invest €15m in the business,
which has revenues of about €70m and
EBITDA of €17m.
Hutton’s portfolio companies also
include restaurant chains Pizza Express
and Wagamama.
Private equity secondaries specialist
Hollyport Capital has made more than
60-times its initial investment by selling
its minority stake in Sauflon Pharmaceu-
ticals in a deal worth about $1.2bn.
The firm bought into the contact-lens
maker in 2007 by picking up a stake
from Quester Capital, which had gone
beyond the life of its LP agreements.
Hollyport forming a dedicated vehicle
to buy Quester’s interest in Sauflon and
offered the Quester fund investors the
option of either taking cash or rolling
over into the new vehicle.
The firm raised capital from its clients
to buy out investors and arranged a £5m
mezzanine loan for the company from
Bond Capital Partners to finance new
production facilities.
Hollyport chief executive John Carter
said, “We were able to use our experi-
ence as a specialist secondary investor
to customise an approach which offered
both liquidity for original investors
whilst also allowing the option of ongo-
ing equity participation.
“Addressing and resolving these
shareholder issues facilitated the
continued rapid growth of the business,
maximising value for all stakeholders.” Akina-managed Euro Choice Secondary has
held a €73.5m first close to help it target mid-
market secondary investments in Europe.
The fund-of-funds adviser said it aims to
use the vehicle to pick up value and high-
discount investments focused on smaller
deals of between €5m and €30m.
Euro Choice will target mostly-drawn
funds investing in healthcare, energy, food,
infrastructure, and distribution and real-
estate companies.
The firm’s head of secondary funds Chris-
tian Böhler said, “Akina is currently in the
advanced stages of executing further invest-
ments in excess of €100m.
“Most of these opportunities are with
country funds in the core of Europe, comple-
mented by pan-European mid-market funds.”
Euro Choice closes
first round on €73m
Sharp dealmaking: Hollyport bought into contact-lens maker Sauflon in 2007

64. SECTOR PERSPECTIVES: SECONDARIES
62 Q4 2014
Lexington Partners buys $1.2bn
of Citi’s stake in Metalmark fund
Investment firm Arcis is seeking €350m for
its new European secondaries fund.
European Secondary Development Fund V
has yet to register its first commitment
according to a document filed with the US
Securities and Exchange Commission.
The firm is raising the fund via a main US-
based vehicle and a parallel fund registered
in the Cayman Islands.
Threadmark and PTP Securities are acting
as placement agents for both vehicles, which
have not set minimum commitment require-
ments for outside investors, the documents
showed.
The firm invests in funds which are still
in their investment period and have not been
fully called down.
It also looks at the positions of all the
limited partners in a fund or portfolios of
positions in private companies.
Arcis targets growth capital, LBO and
early-stage investment funds that have a
lifespan of ten years.
Arcis launches
fifth European
secondaries fund
PartnersGroupbuysLPinterests
Private equity secondaries major Lexington
Partners has agreed to buy 80 per cent of
Citigroup’s $1.5bn interest in Metalmark
Capital Partners II.
The remaining 20 per cent will be offered
to New York-based Metalmark’s existing
LP investors.
Lexington managing partner Brent
Nicklas said, “We are excited to expand our
longstanding relationship with the princi-
pals at Metalmark, a leading middle-market
sponsor with whom Lexington has been an
investor for nearly 20 years.”
Metalmark was spun out of Citi’s New
York-based private equity unit in December
2013. At the time Citi said it would retain its
LP interest in Metalmark Capital Partners II.
Metalmark recently exited its invest-
ment in Canadian company PTW Energy
Services.
European private equity firm Partners
Group has bought secondary interests
from 31 LPs invested in Venator Real
Estate Capital Partners’ Trophy Fund.
The transaction makes Partners Group
the second-biggest investor in the $1bn
China-focused Trophy Fund vehicle, with
a 12 per cent stake.
The deal coincides with a fund restruc-
turing, with the management changing
from original manager Winnington Capital
to Venator, after Winnington hit capital
and timing hurdles when it invested in
projects that were unlikely to be complet-
ed within the vehicle’s 10-year lifespan.
Venator has upped the lifespan of the
fund by two years, with investments to be
realised by 2017.
The sale is a rare example of a private
equity real-estate secondary deal in Asia,
Partners said.
Head of private real-estate secondaries
Marc Weiss said, “The secondary market
for private equity real estate is still in its
infancy. Before the global financial crisis,
there was no reason to sell real estate
interests, as most institutions were behind
in their allocations.”The State of Wisconsin Investment Board is
selling part of its portfolio of private equity
investments which was worth $203m at
the end of last year, public documents have
revealed.
The portfolio comprises 48 investments
managed by Brinson Partners, with the state
set to retain 14 of them.
Winsconsin’s pension system currently has
assets of around $100bn and plans to invest
$1.2bn in private equity this year.
It will make further investments in its ex-
isting GPs and back new managers on a very
selective basis, according to the documents.
Back in 2012 Wisconsin sold $1bn worth
of private equity funds in one of the largest
ever secondary deals involving an institu-
tional investor.
Wisconsin to sell
part of PE portfolio
Dealmaking: Partners Group has become the second-biggest investor in China’s Trophy Fund

66. SECTOR PERSPECTIVES: INFRASTRUCTURE
64 Q4 2014
Fortress lines up rail deals in strong infra climate
Bank spending restrictions and governments
seeking private investment partners has
made it a heyday for transport and infrastruc-
ture deals, according to Fortress Investment
Group which made a rare move to reopen its
fund to take on more deals.
The New York-based private equity
firm held a final close for its Transport and
Infrastructure fund on $395m in January
2013, but decided to seek more fundraising
because of new opportunities, particularly in
rail and rail infrastructure, that the team felt
it could not miss.
The strategy paid off, with the fund’s
capitalisation shooting up by $600m, closing
just shy of the $1bn mark.
Fortress CIO for the fund Joe Adams said,
“Earlier this year we had the good fortune of
having more investment opportunities than
we had capital.
“We went to our investors to discuss
options and ideas and they all supported us
creating a bigger portfolio, so we chose to
re-open the fund, making it more diversified
and enabling us to take advantage of these
attractive opportunities.”
The firm is coy about its recent deals, but
investments within Fortress’ other funds
include RailAmerica and Florida East Coast
Railway, both acquired in 2007.
On track: Fortress has seen the capitalisation of its Transport and Infrastructure Fund shoot up by $600m
Hermeshits£700mwithcashinjectionfromSantander
Private equity firm Hermes has hit the
£700m mark for its GPE Infrastructure fund
thanks to £210m of new commitments from
LPs including Santander UK’s Common
Investment Fund.
The vehicle and its related accounts have
also attracted capital from UK local govern-
ment pension schemes, the firm said.
Hermes Infrastructure currently manages
a portfolio of 11 assets valued at around
£1.2bn. These are predominantly direct
investments in its UK core and value added
strategies.
Santander director of pensions Antony
Barker said, “Partnering with Hermes Infra-
structure is our first dedicated infrastructure
commitment for the Santander CIF, with
Hermes selected because its strategies of-
fered us the opportunity to tailor a direct
and indirect portfolio that satisfied our risk-
and-return requirements.”
Hermes Infrastructure’s total AUM now
stands at £2.7bn, £2bn of which is a direct-
investment, managed-account programme
for the BT pension scheme.
Hermes’ Infrastructure head Peter Hof-
bauer said, “We remain focused and com-
mitted to delivering enhanced risk-adjusted
returns for investors.”
Hermes tapped its Infrastructure fund to
buy a 50 per cent stake in the 72MW Braes
of Doune wind farm in Stirlingshire, Scot-
land, for £59m in cash in May 2013.

67. SECTOR PERSPECTIVES: INFRASTRUCTURE
www.LimitedPartnerMag.com 65
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68. SECTOR PERSPECTIVES: INFRASTRUCTURE
66 Q4 2014
Large insurers poised to fill infra funding gap
Insurance companies are in the best posi-
tion to fill an infrastructure funding gap of
$500bn a year, with private equity firms set
to benefit the most according to a new study.
Global infrastructure programmes will
require a total investment of $3.4tn a year
until 2030, according to researchers from
Standard and Poor’s Ratings Services. De-
spite government and bank investment, there
will still be an annual shortfall of $500bn.
S&P said insurance investors could be the
perfect fit as these companies are often look-
ing for long-term, high-yielding assets. But
risks such as technical and design failures
and a lack of industry data could make it un-
viable for insurers to back projects directly,
meaning private equity is the best way for
them to gain exposure.
The report said, “Diversifying into in-
frastructure investments requires specialist
knowledge, of which insurers have relatively
little experience, in our opinion.
“We therefore believe larger insurers with
specialist teams of investment professionals
may be more inclined to invest in infrastruc-
ture directly through private equity and loan
structures, compared with smaller insurers
which are more likely to participate through
bonds and shares in investment funds.”
Nevertheless, the S&P researchers rank
infrastructure investment via private equity
as ‘high risk’, equating it with investing in
the asset class through bonds.
Bridging the gap: Global infrastructure programmes will require $3.4tn a year until 2030
Aberdeenlaunchesfifthinfrafund
UK private equity firm Aberdeen Asset
Management has launched its fifth infra
vehicle, Global Infrastructure II.
The new vehicle will be used to invest in
social and economic infrastructure projects
including sectors such as health, education,
social housing and waste management.
Aberdeen said its target investment would
include those underpinned by long-term
government contracts, characterised by
stable and inflation-linked cash flows.
Aberdeen’s global head of alternatives
Andrew McCaffery said, “The interest in
this fund is an insight into the increasing
demand from institutional investors who are
attracted by the potential for a stable income
over a sustained period.”
Aberdeen has a bias towards greenfield
infrastructure and is focused on geographic
areas with high political stability such as
Europe, Australia and North America.
Aberdeen team leader Gershon Cohen
said, “Our focus is on undertaking rigorous
due diligence before investing, leveraging
off the numerous deep relationships we have
built with industry partners.”
Swiss-based Partners
opens Texas office
Swiss-headquartered private equity firm
Partners Group has opened a new office in
Houston, Texas to build on its private mar-
kets coverage in the US and Latin America.
Managing director and head of infra-
structure for the Americas Todd Bright will
head up the new office and continue to build
the firm’s investments in the US and Latin
America.
Bright said, “Houston is the undisputed
energy centre of the US and therefore this
office opening is a natural next step for
Partners Group.”

69. SECTOR PERSPECTIVES: INFRASTRUCTURE
www.LimitedPartnerMag.com 67
White House unveils $10bn
rural economic infra fund
Canadian fund manager Northleaf Capi-
tal Partners has held a $520m final close
for its Infrastructure Co-Investment
Partners fund, easily beating the $300m
target.
The fundraise brings Northleaf’s total
infrastructure capital under management
to more than $900m.
Northleaf managing partner and
managing director Stuart Waugh said,
“We sincerely appreciate the support we
have received for NICP from both exist-
ing and new investors.
“They have entrusted us with a signif-
icant pool of capital and we are focused
on investing this capital in a disciplined,
thoughtful and productive manner.
“NICP is designed to provide direct
access to mature infrastructure assets in
OECD countries through an innovative
cost structure with enhanced portfolio
construction and liquidity features – an
investment strategy and approach that
has resonated with investors.”
NICP hopes to build an attractive
portfolio of mature assets in OECD
countries and has already invested about
15 per cent of the fund’s capital. Earlier
this year Northleaf held a $255m final
close for its debut secondaries fund.
The White House Rural Council has
launched a $10bn infrastructure fund to
promote potential investment opportu-
nities throughout rural America.
US national cooperative CoBank, a
member of the Farm Credit System, is
the fund’s anchor investor, having laid
down the initial $10bn.
Capitol Peak Asset Management will
manage the new fund and try to recruit
more investors to add to CoBank’s
initial commitment.
The investment fund will aim to
grow the rural economy by increasing
access to capital for rural infrastructure
projects and speeding up the process of
rural infrastructure improvements, said
the rural council.
Northleaf holds $520m final close
Infracapital
nears £900m
fund target
Antin buys Roadchef
European private equity firm Infracapital has
registered more than £770m of commitments
for its second infrastructure fund.
The capital for the £900m-targeting vehi-
cle has been raised via 22 LPs, which invest-
ed a minimum of $17.1m each, according to
a filing with the US securities regulator.
Infracapital held the third close of the fund
on £530m in September last year, saying
it had attracted funds from LPs in the UK,
Europe, North America and Asia.
The investments from the fund include UK
utility company Affinity Water, which the
firm bought in 2012.
The second fund is fast approaching the
same size as Infracapital’s 2005-vintage
debut vehicle, which closed on £908m and
is fully invested in seven core infrastructure
assets. It has an expected term of 12 years.
Other companies in the firm’s portfolio
include gas and electricity meter business
Calvin Capital, and Swedish heating and
electricity distributor Falbygdens Energi.
In May last year AltAssets reported that
Infracapital and venture capital firm Citi
Infrastructure Investors was looking to sell
their stake in Kelda Group, which owns the
UK’s fifth largest UK water and sewerage
company Yorkshire Water, for £1.5bn.
Europe was the dominant region for infra-
structure deal activity during the first decade
of this century. While deal activity steadily
declined from the levels reached prior to the
global financial crisis, signs of recovery were
noted from 2011.
Europe-focused Antin Infrastructure Partners
has agreed to buy UK motorway services
operator Roadchef from Israeli energy
company Delek Group.
It is believed that Antin is tapping its sec-
ond vehicle, which closed on €2bn in June
this year, for the deal. That vehicle is one
of the largest ever infrastructure fundraises
dedicated to Europe.
State of the nation: the fund will grow the rural economy by increasing access to infra capital

70. SECTOR PERSPECTIVES: INFRASTRUCTURE
68 Q4 2014
Mumbai-based L&T Infra Finance has held
the first close of its $1bn-targeting private
equity fund after pulling in INR5bn ($83m)
from investors.
The capital has been raised purely from
domestic investors including pension funds
according to a spokesman for the firm, and
L&T is now considering raising capital from
outside India.
The spokesperson said, “We are cur-
rently assessing the interest of international
investors given the change in their outlook
towards India, and will begin the formal
process after completing the first level as-
sessment.”
Although the firm is said to be targeting
$1bn, a source close to the firm said it was
unlikely to reach that size.
L&T Infra Finance is a subsidiary of
engineering and construction conglomerate
Larsen & Toubro.
Its private equity arm focuses on invest-
ing in companies experiencing a funding
gap during periods of sectoral or regulatory
instability, loan constrains, volatile equity
markets or weak investor sentiment.
L&T holds £83m
first close for
$1bn-targeting
infra fund
CalSTRS commits
$150m to First Reserve
The California State Teachers’ Retirement
System reportedly committed $150m to
private equity firm First Reserve in the
second quarter of this year.
The mammoth $186bn pension fund
allocated the capital to the firm’s Energy
Infrastructure Fund II, which closed on $2bn
in June this year, according to Pensions and
Investments. CalSTRS partnered with Indus-
try Funds Management on a two-part, $500m
global funds commitment and invested
$150m in the debut First Reserve Energy
Infrastructure Fund in April 2011.
Calpers,UBSin$500mpartnership
Powering up: CalPERS has signed a $500m infra deal with UBS Global Asset Management
The California Public Employees’
Retirement System has signed a $500m
global infrastructure partnership with UBS
Global Asset Management.
CalPERS will contribute $485m to the
newly-formed company, with the Swiss
bank contributing the remaining $15m and
acting as managing member.
The Golden State Matterhorn venture
will target infrastructure investment op-
portunities in the US as well as globally.
CalPERS interim chief investment
officer Ted Eliopoulos said, “UBS brings
extensive experience and a proven track
record in global infrastructure investing
that makes them a great fit for this partner-
ship.
“We’re excited to work with them as we
identify and acquire core assets that will
provide the best risk-adjusted returns for
our portfolio.”
CalPERS looks for investments in
public and private infrastructure, primarily
in the transport, power, energy, and water
sectors.
The pension fund said that infrastructure
investments returned 22.8 per cent during
the 2013-14 fiscal year and 23.3 per cent
over the past five years, outperforming the
benchmark by more than 17.2 percent-
age points and 16.6 percentage points
respectively.
CalPERS currently holds approximately
$1.8bn in infrastructure assets.
Morgan Stanley’s second infrastructure
fund raised more than $1.5bn in the first
six months of the year.
The figure was achieved through two
parallel vehicles, with Morgan Stanley
Infrastructure Partners II raising more
than $881m via commitments from seven
investors.
The capital raised is still less than half
that of the investment bank’s first infra-
structure vehicle, which closed on $4bn
in 2008. Morgan Stanley has not revealed
the target for its second fund.
Investments in the portfolio include
gas transmission and storage facility
provider Southern Star, electricity, steam
and chilled water company MATEP, and
Chicago Parking Meters.
MorganStanleyin$1.5bnfundraise

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experts.
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of or be relied upon in connection with any contract or commitment whatsoever or be taken as investment advice
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72. SECTOR PERSPECTIVES: INFRASTRUCTURE
70 Q4 2014
Actis invests $250m in Mexican energy platform
Emerging markets investor Actis has
invested $250m in Mexican energy platform
Zuma Energía.
The new vehicle which will be used to
target projects providing at least 500MW of
installed electricity generation capacity.
Zuma said it would build on Actis’s exper-
tise, especially in project finance, construc-
tion and operations, in a bid to become a
leading independent power producer.
The deal represents Actis’s fourth invest-
ment in a power generation platform in Latin
America, following recent investments in
Brazil, Chile and Central America.
The platform has already been tapped for
the acquisition of PE Ingenio, a 50MW wind
farm located in the state of Oaxaca.
PE Ingenio will be built by Acciona
Energía, which will also supply its 33 wind
turbines. The company will receive debt
finance from Bancomext and will have hydro
projects company Comexhidro as a local
partner, with a five per cent stake. Once
in operation the wind farm is expected to
produce enough clean energy to power more
than 125,000 Mexican households, reducing
CO2 emissions from conventional genera-
tion by more than 200,000 tons.
Actis co-head of energy Michael Till said,
“Mexico has compelling fundamentals for
investing in power generation, including
superior natural resources and a deep project
finance capacity.”
Hot deal: Zuma Energia will target projects providing at least 500MW of electricity generation capacity
Zoukquadruplessizeofdebutfund
Private equity firm Zouk Capital has raised
more than four times the amount of its
debut Renewable Energy & Environmental
Infrastructure Fund by closing the follow-up
vehicle on €220m.
The oversubscribed Fund II will be used
to finance construction and operational im-
provement in areas such as waste-to-energy,
geothermal, biomass, storage and energy
efficiency.
Zouk’s first renewable-energy vehicle
closed on €52m in 2008, with the firm
saying the plan was to start small and aim
higher for the follow-up. LPs committed to
the second vehicle include institutions from
around the globe, including public pension
funds, sovereign wealth funds, funds of
funds, corporates and large family offices.
CEO Samer Salty said, “Zouk’s infra-
structure partners, Colin Campbell and Er-
ich Becker, offer a genuinely differentiated
approach to investing in Europe’s renewable
energy market, one which the success of our
first fund demonstrates by combining high
returns, specialist sector expertise and rigor-
ous risk management.”
AlpInvest hires
Justine Gordon as MD
Carlyle’s private equity fund-of-funds
arm AlpInvest has hired Justine Gordon
as managing director in its secondaries
investment team.
Gordon was previously head of acquisi-
tions for Guggenheim Infrastructure, a unit
of asset management firm Guggenheim
Partners.
She will be tasked with leading the build-
out of AlpInvest’s energy and infrastructure
investment practice according to the firm’s
website.

73. INVESTMENT IN
REAL ASSETS
Oxford Capital is an international multi-strategy investment manager specialising in
infrastructure and growth capital. With over 15 years experience and a network of
international offices, assets are primarily managed out of our investment offices in the
UK with a staff of over 40 professionals. Our clients include a mix of UK and international
institutions, family offices and sophisticated private investors.
TO FIND OUT MORE ABOUT HOW WE CAN HELP YOU AND YOUR
CLIENTS, PLEASE CONTACT ONE OF THE TEAM:
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Call us on 01865 860760 or visit oxcp.com New Energy Investor of the Year 2012 & 2013
TARGETTING A
REAL RETURN
This document does not constitute an offer to sell, or a solicitation or an offer to buy participations in the fund. Such offer or solicitation will not be made prior to requests to receive
a Private Placement Memorandum. Before making an investment decision, we advise potential investors to read these materials carefully and to consult with their financial and legal
advisors. Only accredited investors (as defined by the relevant legal jurisdiction and/or nationality) are eligible. We have compiled this information from sources we believe to be reliable,
but we cannot guarantee its accuracy. We present our opinions without warranty. This document is directed to “Eligible Recipients” as defined by the Financial Services and Markets Act
2000 (“FSMA”), which include the following: a) Persons with professional experience in matters relating to investments of the type described as described in article 19 of the Financial
Promotion Order; or (b) Persons of the kind described in article 48, 49 (2), 50 and 50A of the Financial Promotion Order; or (c) Any other persons to whom this document may be lawfully
communicated. Other persons may not reply on the contents of this document. Past performance is no guarantee of future results. Oxford Capital Partners is authorised & regulated by the
Financial Conduct Authority No. 585981

74. SECTOR PERSPECTIVES: REAL ESTATE
72 Q4 2014
Heitmanplans$400mJanuarycloseTristan exits for €523m
Global real-estate investor Heitman has held the second close of its Value Partners III fund on
just under $179m worth of commitments.
Heitman said it was planning to hold the final close of the $400m-targeting fund in January
2015. The latest vehicle in the series was launched last year and has attracted investment
from nine LPs according to the firm’s filing with the US securities regulator.
Heitman has also laid down a GP commitment of $15m, equivalent to two per cent of the
total equity.
A spokesman for the Chicago-based firm said investments so far included a “diversified
portfolio that currently includes apartment, office and speciality assets”.
The fund looks set to be smaller than its pre-crisis predecessor Value Partners II, which
closed in June 2007 after receiving $800m from 20 existing and new clients.
Heitman closed its debut fund on $400m.
Tristan Capital Partners has sold a
627,000 sq m Czech logistics portfolio to
PointPark Properties in a €523m deal.
The transaction includes logistics ware-
houses and associated development land in
the Czech Republic, which were bought by
two funds advised by UK-based Tristan and
VGP.
The deal marks the fourth-largest logistics
portfolio transaction in Europe since the be-
ginning of 2012 according to research from
Real Capital Analytics.
PE doubles share of real estate debt market
The proportion of private equity
funds active in the European real
estate lending market has nearly
doubled in the last two years ac-
cording to a new report.
Private equity debt funds mak-
ing European real estate loans ac-
counted for 27 per cent of the total
number of debt providers in the
first half of this year, compared
with around 15 per cent two years
ago according to the European
Real Estate Lending Update,
which tracks ‘active’ lenders to
real estate.
While the largest proportion of
real estate debt providers in the
first half of 2014 were from the
commercial bank sector, at 37 per
cent, ‘alternative lenders’ now
make up nearly 40 per cent, the
report shows.
The research, compiled by
financial services firm Cushman
& Wakefield Corporate Finance
(CWCF) stated, “The breadth of
lenders has continued to grow over the past
12 months, creating a diverse and increas-
ingly liquid lending market.
“Over the past six months European
property debt funds have continued to play
a key role, having stepped into a lend-
ing market vacated by traditional lenders
during the recent downturn.” CWCF also
revealed that investment banks made up 18
per cent of active debt providers, followed
by insurance and pension funds, which ac-
count for 10 per cent of the total number of
real estate lenders.
The top target countries within Europe
for real estate lending are the UK, with 79
per cent of the lenders being active there,
followed by Germany with 43 per cent and
France at 42 per cent.
Interest in Spain, Portugal and Italy has
grown “considerably” since the first quarter
of 2012, the report added.
Home run: PE debt funds making Euro loans accounted for 27 per cent of the total number of debt providers in H1

75. SECTOR PERSPECTIVES: REAL ESTATE
www.LimitedPartnerMag.com 73
Investment management firm Mesirow
Financial has registered more than
$270m of capital for its Real Estate
Value Fund II.
The institutional real estate arm of the
firm pulled in the investment from 16
LPs according to its filing with the US
securities commission.
Mesirow said the target for the fund
was $500m, but that it could be raised to
a $700m hard cap.
The minimum investment for the fund
is listed as $5m, although the GP said
it may accept smaller investments at its
own discretion.
Mesirow’s previous RE Value Fund
was significantly smaller, closing in June
2012 with a capitalisation of $379.3m.
According to a report from the board,
the strategy for the vehicle included
targeting renovations, repositionings and
management enhancements.
Mesirow halfway to $500m target
Lone Star shoots to $7.4bn
at final close of Fund IX
Real estate private equity firm GTIS Partners
has launched its second US Residential Strat-
egies Fund targeting $750m just 10 months
after it easily beat the target for its previous
vehicle.
GTIS’ debut fund in the series had a target
of $400m, but the firm left that figure in the
dust by closing on $716m in October last
year.
At that point president and CEO Tom Sha-
piro said the fund was 60 per cent invested,
with a primary focus on markets including
New York, Georgia and states in the south-
west of the country.
The follow-up vehicle has so far raised
$30.3m according to a filing with the US
securities regulator.
GTIS says it targets opportunistic real-
estate investments through direct equity
investment in addition to non-traditional
lending.
GTIS launches
second fund
targeting $750m
SC Capital Partners
raises $365m for
4th real estate fund
Singapore private equity firm SC Capital
Partners has registered about $365m worth of
commitments for its Real Estate Capital Asia
Partners IV fund.
The SC Capital vehicle has so far attracted
investments from 10 LPs, according to a
source with knowledge of the fundraise
No target was given for the real estate ve-
hicle, but it is well on its way to being at least
as big as Real Estate Capital Asia Partners III,
which closed on $530m exactly two years ago.
The third vehicle from SC Capital was
formed to acquire real estate and real estate-
related assets across Asia.
Investments in the portfolio include proper-
ties in Shanghai, Sydney and Tokyo.
Real Estate Capital Asia Partners II fund
closed on $190.3m in 2008.
Texas private equity firm Lone Star
Funds has held a $7.2bn final close of its
ninth distressed real estate fund.
A further internal commitment from
the firm brings the total capital in the
fund to $7.4bn, said a source with
knowledge of the fundraise.
Capital was raised from more than 94
investors, with the minimum invest-
ment set at about $120,000, according to
regulatory documents filed in the United
States.
Lone Star founder John Grayken
reportedly committed $350m of his own
cash to the pool.
The filing revealed that $10.6m would
be used to reimburse Lone Star Global
Acquisitions and Lone Star Partners IX
for expenses incurred on behalf of the
fund, as well as for potential manage-
ment fees.
Dallas-based Lone Star invests in real
estate, equity, credit and other assets
across the globe. Investors include pen-
sion funds, sovereign wealth funds, funds
of funds and high net worth individuals.
Star fundraise: The firm has tapped more than 90 LPs for the $7.4bn vehicle

76. SECTOR PERSPECTIVES: REAL ESTATE
74 Q4 2014
Bayside benefits as banks sell loan books
Building its business: Bayside is now seeing an overwhelming number of opportunities
HIG affiliate Bayside Capital’s is benefit-
ing from banks being more relaxed about
selling off distressed real estate loans and
has struck a string of deals.
The move is happening to such an extent
that there is now an overwhelming num-
ber of opportunities that Bayside could be
considering, according to managing direc-
tor Ahmed Hamdani.
He said, “It used to be the case that if we
weren’t invited to sales pitches, you’d get
annoyed and want to know why not. Now
we don’t have enough bandwidth to view
all of them.”
The London-based team invests in both
assets and real estate loans in distressed
situations, and focuses purely on Europe.
Hamdani is especially looking at places
where there is dislocation in the pricing of
the investments, such as Ireland, Italy, the
Netherlands and the UK.
He said, “It is an area that some Euro-
pean banks are only starting to get more
involved in. It’s been six years since the
banking crisis, but only now is the delever-
aging starting. The banks didn’t feel it was
the right time to sell these assets for a host
of reasons, such as regulation.”
Carmel’s FundV reaches $1bn
hard cap in just nine months
Carlyle picks up
$1.5bn for new fund
Private equity firm Carmel Partners has
held a final close for its Investment Fund
V having reached a $1.02bn hard cap, well
ahead of its initial $850m target.
Carmel’s fifth US multi-family value-
creation fund, launched in October 2013,
attracted more than 50 LP commitments
from existing and new investors.
The vehicle had already reached its target
by its second close in March of this year
and included a $25m GP commitment,
Carmel said.
The latest vehicle brings the multi-family
value-creation fund series to more than
$3bn since it was launched in 2003.
Carmel’s fourth fund closed on a hard cap
of $820m in October 2012, and three-quar-
ters of the LPs from that fund reinvested in
the latest vehicle.
The fifth fund attracted new investment
from corporate defined-benefit pension plan
investors, as well as the usual endowment,
foundation and family offices, Carmel
added.
The firm said it would use capital from
the fund to invest in multi-family properties
in supply-constrained US markets with high
barriers to entry. The firm also invests in
new development and high-yielding multi-
family debt opportunities.
Listed alternative investments firm Carlyle
has raised another $200m for its seventh
real estate vehicle, bringing the total to
$1.5bn.
Carlyle has pulled in capital for Realty
Partners VII from 61 LPs, according to its
filing with the US Securities and Exchange
Commission.
The fund had raised $1.35bn in May this
year, with Carlyle reportedly targeting $4bn.
The firm has yet to reach the figure it
raised for its sixth realty fund, which closed
on $2.3bn in 2012.
LPs investing in that fund included Texas
County & District Retirement System and
San Diego City Employees.

77. Fluent in real estate
There is no substitute for local expertise
and insight when searching for the
best real estate investments. It is this
knowledge and experience that has built
AEW Europe’s reputation as one of the
leading real estate investment managers
in Europe. AEW Europe continues to
expand its European platform with more
than 280 people managing €18.1billion of
real estate across Europe.
www.aeweurope.com

78. SECTOR PERSPECTIVES: BUYOUT
76 Q4 2014
Private equity-backed exits via IPO are on
pace to set a new record this year thanks
to strong global equities markets and
rising investor confidence, according to a
recent report.
Companies backed by private equity
have raised $55.9bn across 134 deals so far
this year, compared with 187 deals total-
ling $58.5bn in the whole of 2013, which
marked an all-time high.
The pace of IPO issuance has some
fearing a summer slowdown, but such con-
cerns are overblown according to EY.
The report noted that the second quar-
ter saw record amounts raised by private
equity-backed companies and the pipeline
remains strong. There were 87 such IPOs
totalling $38.1bn during the period, setting
a new quarterly record.
The EMEA region was particularly
strong, seeing a fourfold increase in pri-
vate equity-backed IPOs to $16.5bn.
Firms took 51 companies public in the
region in the first six months of the year,
raising $24bn, up 200 per cent from the
first half of 2013.
“After years of stop-and-start activity,
investors are clearly favouring a risk-on
stance, allocating significant portions of
their portfolios to new issues. Barring any
systemic disruptions, year-end volumes
might even double last year’s record activ-
ity,” said EY. Meanwhile, secondary offer-
ings have also seen a substantial increase
on the back of strong equities markets,
said EY. Private equity firms have raised
$58.9bn across 178 separate follow-on
deals this year, keeping it on track to ex-
ceed the $109.2bn raised last year.
PE-backedIPOsontracktosetnewrecord
Knocking down records: PE-backed companies look set to easily outstrip the amount raised in 2013
PEsealssolidex-USreturnsfor2013Audax wins 3x return
inTriMark USA exit Developed market private equity outside the
US returned 16.3 per cent in 2013 according
to the latest benchmark figures from
Cambridge Associates.
The firm’s Global ex US Developed Mar-
kets PE/VC index returned 6.5 per cent in
the fourth quarter of the year to hit the 16.3
per cent annual mark, an improvement of
200 basis points over its 2012 performance.
Cambridge said returns across the four
largest vintage years in the index, 2005 to
2008, ranged from 5.6 per cent to 7.8 per
cent during the fourth quarter.
For the year they were all in double
digits, ranging from 11 per cent to 21.4 per
cent. These years represented about three-
quarters of the benchmark’s value.
More than half the index’s value resided
in the two largest vintages, 2006 and 2007,
while the only vintage year of the four
largest to underperform the index in the
fourth quarter and year was 2005. The 2008
vintage year was the best-performing in
both the quarter and the year.
For 2008, write-ups in financial services
and information technology (IT) companies
were the key drivers of fourth-quarter per-
formance, while manufacturing and media
businesses were the strongest performers in
fourth quarter for 2005.
The Audax Group has reportedly tripled
its initial investment in TriMark USA by
selling the company to fellow private
equity firm Warburg Pincus after an eight-
year holding period.
Financial terms were not disclosed by
Audax, but peHub reported the exit multi-
ple citing an unnamed source.
Audax bought the business in 2006
through its $700m second fund, which it
closed a year earlier. The company, which
provides restaurant equipment and design
services, has grown its revenues from
$260m to more than $1bn.

79. SECTOR PERSPECTIVES: BUYOUT
www.LimitedPartnerMag.com 77
Aurelius seals 25x return
in Connectis, Softix sale
US private equity major Oak Hill Capital
Partners has agreed to buy rigid packaging
maker Berlin Packaging from Investcorp in a
deal worth more than $1.4bn.
The company, founded in 1898, provides
services including structural and brand de-
sign, worldwide sourcing, warehousing and
logistics and capital financing.
Oak Hill invested alongside the company’s
current management team, led by chairman
and CEO Andrew Berlin, in the $1.43bn
transaction.
Firm managing partner Tyler Wolfram,
said, “Berlin Packaging is a high-calibre
business experiencing double-digit growth
and targeting a large addressable market
opportunity.”
Oak Hill agrees
$1.4bn MBO
from Investcorp
Carlyle hires banks
for Axalta IPO
Private equity giant the Carlyle Group has
reportedly hired Citigroup and Goldman
Sachs to oversee the IPO of coating
maker Axalta Coating Systems, which it
bought less than 18 months ago.
The flotation of the company could raise
as much as $1bn according to Reuters, citing
people familiar with the matter.
Carlyle bought the coatings company from
DuPont Capital Management in February
2013 for a reported $4.9bn. It tapped its
Europe Partners III and Partners V vehicles
for the deal.
Exitrevenueshitanall-timehigh
Revenues from exited deals have
increased significantly from last year,
to reach the highest level on record
according to a recent report.
Exit revenues amounted to $3.6bn in
the first eight months of the year, up 50
per cent from a year earlier, Dealogic
said.
It also marked a 23 per cent increase
from the previous record of $2.9bn set
in 2011. The report showed that pending
M&A revenues from exits for the past
24 months amounted to $571m.
Revenues generated by M&A and
equity capital markets (ECM) exit deals
reached $2.2bn and $1.4bn respectively.
ECM currently accounts for 61 per
cent of total exit revenues, which is the
highest share since 2004, when it was
70 per cent.
Meanwhile revenues from IPO exits
more than doubled from the previous
year, surging to $1.3bn from $498m.
Consumer and retail was the most ac-
tive sector, with exit revenues of $656m,
up from $428m in the same period of
last year. This is also above the previous
record high of $503m set in 2007.
German-headquartered private equity
firm Aurelius has sealed a stunning
25.7-times return by selling Swiss ICT
provider Connectis and its sister
company Softix to France’s SPIE Group.
The Munich-based firm bought Con-
nectis for just €1.7m in the summer of
2008, and has driven its EBITDA in
that time from CHF500,000 to more
than CHF9m, AltAssets can reveal.
The firm forged the huge return
through a buy-and-build strategy, which
saw it take on employees and clients of
Telindus in 2009, take over Grouptec
in 2011 and buy Getronics Switzerland
in 2012. It also bought the distribution
business of NEC Unified Communi-
cations last year, which it has since
rebranded to Softix.
SPIE has agreed to pay CHF48m for
Connectis, which is now the second-
biggest ICT provider in Switzerland.
Splashingthecash:Munich-basedAureliusboughtConnectisforjust€1.7m
Private equity firm Madison Dearborn
Partners has sold tyre pressure-monitoring
sensors maker Schrader to Sensata Technolo-
gies in a $1bn deal.
The firm is believed to have made a return
of around three times, but a spokesperson for
Madison Dearborn declined to comment on
the financial terms of the deal.
Madison exits Schrader

80. GP PROFILE: NIGEL BINGHAM – PENCARROW PRIVATE EQUITY
78 Q4 2014
OpportunityknocksforPEinNewZealand
W
ith a GDP around $180bn, or
roughly one eighth of Australia’s
economy, New Zealand is a small
market, but according to Pencarrow executive
director Nigel Bingham it offers enough
investment opportunities – and the size can
actually give private investors an advantage.
Pencarrow is focused exclusively on New
Zealand, which is also where all its LPs are
based. It invests in companies with enterprise
values of between NZ$20m and NZ$100m. It
started out with a close (semi-captive) relation-
ship with Australasia’s largest insurance group
AMP and had a couple of other LPs, but later
separated its fund management arrangements
to become a fully independent firm.
Bingham, who is one of the firm’s two own-
ers, notes that New Zealand currently has one
of the Western world’s strongest economies,
and investing in established local GPs with
solid domestic experience gives LPs good ac-
cess to the country’s private markets.
“We are a reasonably small private equity
firm with five investment professionals, but
it’s not an unusual size for a country the size of
New Zealand. Here we have teams that know
the country extremely well and give investors
good access to deal flow,” says Bingham.
He points out that New Zealand was among
the first country to start tightening its monetary
policy and is expecting GDP growth of around
four per cent in the next 12 months.
Australian managers do invest in New
Zealand, normally targeting companies with
enterprise values of NZ$100m to NZ$150m
or more. According to Bingham, the presence
of Australian investors in the market makes
it easier to realise investments, giving an ad-
ditional exit route.
“We’re in the lower mid-market – if you
move up the spectrum you get more and more
interest from Australian GPs, but we don’t see
them entering our segment,” says Bingham.
Australian GPs are not the only investors
taking a look at New Zealand, which also
draws attention from pan-Asian and even glob-
al funds. One example of that is Blackstone’s
acquisition of Antares Restaurant Group, which
operates the local Burger King franchise, from
Anchorage Capital Partners.
When looking at potential investees, one
type of investment Pencarrow seeks is what
Bingham calls “emerging global champions”,
or companies that have developed a niche
product or service with global potential.
One such company is Aranz Geo, which has
developed 3D geological modelling software
for the mining industry. Its clients include min-
ing majors such as BHP Billiton, Rio Tinto and
Anglo American, and virtually all its revenues
are generated from exports.
“We like those companies in New Zealand
that have that ability to create those global op-
portunities. I think that because New Zealand
is such a small economy you reach the limit of
the domestic market’s size pretty quickly and
this means that if you want to grow, you need
to go offshore,” says Bingham.
Another strategy used by Pencarrow is
acquiring an established market leader in New
Zealand and expanding it into Australia.
“New Zealand is a small market and has
very concentrated industries,” says Bingham.
“You can often buy into the number one or
number two players in the country and have
quite a solid position in the market that gives
you higher returns on equity. Then you can
often use that base to expand into Australia.”
When it comes to exiting companies,
Pencarrow’s preferred route is a trade sale as,
in Bingham’s words, “we never like to rely
on the IPO market because it can open and
shut depending on the health of markets and
economies”.
Bingham says the firm currently sees the
best investment opportunities in the healthcare
sector, as well as in food and beverage. An-
other interesting sector is IT and software.
“We’ve had a very large number of technol-
ogy companies listed on the market in the past
six months. It’s quite an extraordinary number.
This sector has grown under the radar, but
we’ve got quite a few companies with good
globally scalable software capabilities in New
Zealand.”
New Zealand story: Nigel Bingham of Pencarrow Private Equity

81. SECTOR PERSPECTIVES: BUYOUT
www.LimitedPartnerMag.com 79
Global private equity firm HIG Capital
has sold Capstone Logistics to New
York PE firm the Jordan Company to
seal a 10-times multiple of its initial
investment.
Atlanta-based Capstone provides
outsourced supply chain solutions at
230 sites across the US in the grocery,
foodservice, retail and auto sectors.
The company was formed in 2011
through the merger of two industry-
leading players, HIG-backed Progressive
Logistics Services and MSouth Equity
Partners-backed LMS Intellibound.
HIG principal Camilo Horvilleur
said, “We created an industry-leading
brand in Capstone, and management
flawlessly executed on its strategic ini-
tiatives to deliver a highly differentiated
client value proposition.
“A transaction providing more than
10-times cash-on-cash returns to HIG
and its investors speaks volumes for the
quality of the Capstone business.”
Clairvest makes impressive
13.5x return exiting KUBRA
HIGmakes10xreturnonCapstone
Private equity firm Clairvest Group has
sold its remaining stake in digital
bill delivery and payment services
company KUBRA, making a hefty
13.5-times multiple on its investment.
Toronto-based Clairvest sold its stake
to media and information company
Hearst, which now owns 80 per cent of
KUBRA.
The firm first invested in the online
payments company by tapping its Clair-
vest Equity Partners III fund in 2006.
Since then KUBRA has multiplied its
EBITDA by more than six-times, which
the company said was achieved through
continued investment in technology and
enhanced service offering.
Clairvest has posted an IRR of more
than 40 per cent on the investment.
Managing director Michael Wagman
said, “We are very proud of KUBRA’s
growth during our investment period.
“KUBRA’s continued focus on
innovation, investment in talent and
relentless emphasis on service improve-
ment allowed them to win some of the
industry’s most coveted and sizable
clients.”
New York private equity firm the Jordan Company has bought Capstone Logistics
US private equity major Thoma Bravo has
agreed a $2.5bn take-private deal for Nasdaq-
listed IT support business Compuware.
The deal, which requires shareholder ap-
proval, works out at about $10.92 per share,
a premium of 17 per cent to the company’s
closing stock price on August 29.
Thoma Bravo managing partner Seth Boro
said, “We have been incredibly impressed
with the business that the Compuware man-
agement team has built, and look forward
to working with them on this next stage of
growth for the company.”
Thoma Bravo in $2.5bn
Compuware deal
Oaktree’s Store Capital
files for $500m IPO
Swander Pace exits
Insight Pharma
in $750m sale
Private equity-backed real estate company
Store Capital Corp has filed to raise $500m
via an IPO on the New York Stock Exchange.
Goldman Sachs, Credit Suisse and Morgan
Stanley are acting as underwriters for the
IPO, although it is not known how many
shares will be sold or at what price. Oaktree
invested $400m in the company at the time
of its launch in 2011.
Private equity firm Swander Pace Capital
has agreed to sell over-the-counter products
company Insight Pharmaceuticals to strategic
investor Prestige Brands Holdings for
$750m.
Consumer-focused Swander Pace first
invested in Insight in 2009. Since then the
company’s sales have more than doubled,
from approximately $80m to more than
$200m.
The sale of Insight to fellow pharma
products company Prestige represents the
Swander’s second successful exit in the OTC
industry, the firm said.

82. SECTOR PERSPECTIVES: BUYOUT
80 Q4 2014
Canadian private equity firm Onex
Corporation has made a whopping
8.5-times return exiting its stake in
aeronautical engineering company
Spirit AeroSystems.
Onex has sold its remaining 8.4
million shares of common stock in
Spirit, which produces structures
for commercial and military jets
worldwide.
The Toronto-headquartered firm
bought Spirit for $950m when it was
carved out of the Boeing Company
in June 2005, investing around
$375m of equity.
In the following nine years Onex
has received proceeds of approxi-
mately $3.2bn, equating to a return
of 201 per cent a year.
Onex Senior managing director
Seth Mersky said, “Spirit’s leader-
ship, employees, and board of direc-
tors have been wonderful partners
and friends. Without their efforts
and support, Spirit would not have
become the thriving business it is
today.”
Earlier this year the firm exited
its investment in Cypress Insurance
Group after 16 years of ownership
for an IRR of 17 per cent.
Onexmakes8.5xreturnonSpiritAeroSystems
Toronto-based Onex has received roughly $3.2bn from its exit of Spirit AeroSystems
HgCapitalsellsVoyageCarefor£375mUS LBO loan volume
hits six-year high HgCapital’s six-year investment in UK
supported living service Voyage Care has
come full-circle after a consortium includ-
ing former owner Duke Street bought the
business for £375m.
Duke Street sold Voyage Care to HgCapi-
tal in a £322m deal in 2006, when it was
still named Paragon Healthcare Group.
Duke Street made a 3.5-times return
through that exit and an IRR of about 50
per cent.
Voyage Care provides residential services
and supported living for people with learn-
ing disabilities, associated physical disabili-
ties, autistic spectrum disorders, acquired
brain injuries or other complex needs which
require high levels of support. HgCapital
has grown the business to 290 care homes
supporting more than 2,000 people.
Duke Street partner Charlie Troup said,
“This is a company and sector we know
very well, having owned the business and
worked with management closely over a
very successful period of its development
through to its sale to HgCapital.
“We have also worked closely with
Partners Group and are delighted to be com-
bining our deep knowledge of this sector to
support the business through its next phase
of growth.”
Marketed loans for leveraged buyouts in the
US have hit the highest level since 2008,
new data shows.
US-marketed syndicated loans for LBOs
have reached $64.4bn so far this year, up
15 per cent from a year earlier according to
Dealogic.
This marked the highest loan volume
since 2008, but it is down 70 per cent from
the peak in 2007.
Professional services companies were
in the lead with $9.4bn of loans attracted
so far this year, an increase of 165 per cent
from the previous year.

83. SECTOR PERSPECTIVES: BUYOUT
www.LimitedPartnerMag.com 81
Private equity giant The Carlyle Group
has agreed to sell a stake in roadside
breakdown company RAC to Singapore
sovereign wealth fund GIC.
Following the transaction Carlyle and
GIC will jointly own a majority stake
in the business, with RAC management
holding the remaining shares.
Plans to float RAC on the London
Stock Exchange have been shelved as
a result of the deal. The investment is
expected to be completed by the end of
the year.
Carlyle bought RAC in 2011 and
has invested more than £40m into the
business to strengthen the operational
capabilities and reinvigorate the brand.
Since then RAC has increased its net
revenue from £433m to £485m.
The firm’s group partner Andrew
Burgess said, “Both Carlyle and GIC
believe that RAC has a clear strategy
with significant growth potential, which
its talented and experienced manage-
ment team will continue to deliver. GIC
will provide a solid partnership for the
business.”
RAC is the second largest roadside
assistance provider in the UK after AA,
and had approximately eight million
roadside members at the end of June
this year.
RAC’s IPO cancelled as GIC
buys stake from Carlyle
OmnesexitsLegoupilIndustrie
French buyout house Omnes Capital
has agreed to sell its stake in industrial
building business Legoupil Industrie
to a consortium led by Bpifrance and
Capitem.
Omnes bought into the business in
2007 and has seen Legoupil’s revenue
grow 56 per cent in that time.
Last year Legoupil had revenues
of €25m and an installed base of
170,000sq.m, up 80 per cent on 2007.
Omnes partner Bertrand Tissot said,
“We are proud to have helped Legoupil
grow despite the adverse economic en-
vironment. Today, the company has all
the attributes, in terms its staff and the
depth of its product ranges, that it needs
to conquer new markets.”
The transaction is the 11th disposal
by the CACI 2 fund, which now has
four companies in its portfolio. Earlier
this year Omnes sold its stake in mining
and underground works equipment-
maker Melkonian Group.
Off the road: RAC’s planned IPO has been cancelled
Blackstone-backed travel booking busi-
ness Travelport Worldwide has picked up
$480m through its listing on the New York
Stock Exchange.
The buyout house, which did not sell
shares in the offering, bought Travelport
back in 2006 and had to pilot the company
through the aftermath of the financial crisis.
Travelport previously planned a London
IPO that would have valued the company at
£1.2bn.
Blackstone made back most of its initial
$775m investment through a dividend in
2007, but saw almost all its stake wiped out
when the company ceded control to junior
creditors in 2011.
Travelport raises
$480m through IPO
Vista eyes Misys exit
CVC bid to revive
sale of phone firm
Sunrise for €4bn
Vista Equity Partners is already looking to
exit UK banking software business Misys
just two years after picking it up in a £1.27bn
deal. The private equity firm clinched a deal
for Misys after shareholder ValueAct pulled
out of a potential rival bid.
London-headquartered private equity
firm CVC Capital Partners is reportedly
ready to revive the sale of Swiss mobile
phone company Sunrise for more than €4bn.
The firm could hire a bank to advise on
the deal by the end of the year according to
Reuters, which cited several sources familiar
with the matter.
CVC paid €2.4bn for the business in
2010 and was originally thought to be plan-
ning to float the company, though this did not
happen.
Reports surfaced in December last year
that the firm was eyeing an exit of the busi-
ness, although at that point the company only
had a valuation of about €2.6bn.

84. GP PROFILE: VINCENT LAURIA – GOLDEN GATEVENTURES
82 Q4 2014
‘Ilikeinvestingearlyindisruptivecompanies’
T
aking a Silicon Valley-style approach
to web and mobile-based startups in
South-East Asia is what Golden Gate
Ventures’Vincent Lauria is all about.
The firm’s partner moved to Singapore
more than three years ago, after taking time
off work to travel in Asia. Having experience
in internet startups, Lauria was attracted to the
area because it had budding entrepreneurs and
fledgling companies which he felt could ben-
efit from US-style venture capital investing.
He said, “By ‘Silicon Valley-style’, I mean
the idea of investing early for a minority stake
in high-growth companies that can disrupt
an industry. When I would meet investors in
South-East Asia they would want a majority
stake in a business, and the founders would
become like employees rather than owning
their own company. That’s not a Silicon Val-
ley approach.”
In the past three years GGV has invested in
20 companies, and typically takes on a maxi-
mum stake of about 25 per cent, being keen to
let the owners stay in charge of the operations.
The VC firm is also able to invest in startups
at a very early stage.
Lauria said, “We’re investing in most of
those companies pre-revenue. It was often the
case that if they weren’t making any money,
there were no investors they could talk to who
would be a fit.
“But we look a lot of stats, such as Google
analytics, mobile stats and user behaviour,
and we make the decisions based on that.”
Since moving to Singapore, Lauria reckons
he has seen significant in the tech startup
market. “The number of startups being cre-
ated each year, and the number that are raising
money each year, has hit an inflection point
– within the past two years it has really turned
around,” he said.
“When I first moved out here I thought
finding a company to invest in would be like
finding a needle in a haystack, but since then
we’ve actually been able to pass on compa-
nies that are doing well. It’s a good sign that
we have enough good deals that we can really
pick the ones that we’re 110 per cent behind.”
GGV is in the middle of fundraising for its
second fund, which has a target of $50m, hav-
ing held a first close of $35m.
LPs include sovereign wealth funds in Sin-
gapore, big family offices and corporates from
Japan and Korea. Lauria said, “We’re now
raising money outside of South-East Asia, so
globally the investor network sees that the bar
has been raised.”
GGV invests in web and mobile-focused
companies based in Singapore, Malaysia,
Vietnam, the Philippines, Thailand and
Indonesia, with online grocery store Redmart
being one of its success stories.
The firm was one of the first investors in
the company in 2011. Redmart is now valued
at $80m and has raised a total of $25m in
equity-backing to date.
“When we first invested it was a very small
shop, and the team was just a handful of peo-
ple. Now they have 150 employees.
“There were a few different ways we
helped them to raise follow-on rounds – we
helped with their expansion strategy, intro-
duced them to other CEOs in our portfolio,
took them out to have a look at their ware-
houses; also we helped early on with hiring.”
There are particular areas with internet and
tech companies that GGV is fond of, includ-
ing online payments providers, e-commerce
companies and online marketplaces. One
example of such as company is Carousell, a
secondhand marketplace that is only available
via a mobile device.
GGV avoids certain areas of the market
which are particularly competitive, namely
companies that deal in flash sales, loyalty
apps, fashion e-commerce and services which
are just geared on the luxury goods sector.
Of the latter Lauria said, “It’s a very big
market and start-ups doing well there, but it’s
a different play than a straight consumer app.
It’s more difficult to get into, it’s harder to
pick the right horse.”
“We do try to find companies where there’s
some competition, that’s a good thing, but we
don’t want to invest when it’s over-saturated.”
Vincent Lauria: taking a Silicon Valley-style approach to South-East Asian investment

85. SECTOR PERSPECTIVES: VENTURE
www.LimitedPartnerMag.com 83
The highest number of IPOs in Europe
since 2006 has seen venture capital exit
opportunities nearly double across the
first half of 2014.
Venture capital firms were able to
benefit from 19 VC-backed IPOs in the
second quarter – up from 11 in the first
three months of this year, according to a
Dow Jones Venture Source report.
While the number of deals was up,
however, the capital raised actually fell,
with the firms pulling in €407m via
their companies’ listings compared with
€449m in the first quarter of this year.
The Europe-focused report reveals
that consumer services continue to be
the favourite sector, attracting 37 per
cent of total investment – a total of
€788m via 109 deals.
Second in the popularity contest was
business and financial services, which
pulled in 25 per cent of the total capital.
IPOs soar asVC exits double
Raine wins $80m for first fund
Multiplier closes popular
debut fund at $227m
JP Morgan’s asset management unit is within
a whisker of equalling the $1.2bn it gathered
for its debut digital growth vehicle through a
follow-up fundraise.
The firm has collected about $1.05bn of
commitments for Digital Growth Fund II
according to an updated filing with the US
securities regulator.
AltAssets revealed in the summer that the
firm was nearing $1bn after drawing commit-
ments from 438 LPs, and has since received
pledges from about 50 more investors, ac-
cording to the filing.
A second filing for an ‘offshore’ vehicle
shows it has now collected $488m, although
it is believed that is included in the figure for
the main fund.
The firm intends to tap the funds to target
internet and digital media businesses.
JP Morgan passes
$1bn mark for
Digital Growth II
Media-focused
Providence set for
new growth vehicle
Media-focused private equity major Provi-
dence Equity Partners has launched a new
growth equity fundraise a year after closing
its most recent flagship fund on $5bn.
No target is given for the Providence Stra-
tegic Growth Capital fund in a pair of linked
filings made with the US securities regulator.
Managing director Mark Hastings is lead-
ing the growth strategy according to Provi-
dence’s website – which shows he joined
the firm in 2013 from Garvin Hill Capital
Partners.
Providence Equity Partners targets
investments in the media, communications,
education and information sectors, and cur-
rently has more than $40bn of assets under
management.
The firm has invested in more than 140
companies globally since its inception in
1989.
Venture debt-focused investment firm
Multiplier Capital has closed off its
debut vehicle after collecting $227m in
an oversubscribed fundraise.
Liberty Peak Capital acted as an anchor
investor in the fund, which also received
commitments from a college endowment,
a publicly-traded bank, a family office
and high net worth individuals in the US
and Canada, Multiplier said.
Multiplier was founded by partners
Ray Boone, Ezra Friedberg, Henry
O’Connor and Kevin Sheehan, bringing
with them almost 80 years and $1bn of
debt transactions experience.
Sheehan said, “Our strong capital base
and nimble decision-making process
consistently provide a solid financing al-
ternative to shrewd company managers,
and our venture debt experience offers
very attractive risk-adjusted returns.
“We are gratified by the strong inves-
tor support in establishing Multiplier
Capital.”
Multiplier said it planned to provide
loans ranging from $3m to $15m to rap-
idly growing, expansion-stage, profes-
sionally backed companies.
Multiplier’s debut vehicle was oversubscribed
Merchant bank the Raine Group has raised nearly $80m for its first venture capital
fund.
Raine Venture Partners I has secured commitments of just over $77m from 40 LPs,
a document filed with the US Securities and Exchange Commission shows.
In February this year AltAssets revealed the fund had secured $62m from 24
investors. The latest filing also revealed that Raine has added London-based firm EFP
Capital and Tokyo-based GI Capital Management as placement agents.

86. SECTOR PERSPECTIVES: VENTURE
84 Q4 2014
MeritechVclosesontargetVista eyes $5.7bn hard cap
Late-stage venture capital investor Meritech Capital Partners has
closed its latest fund with $500m of registered commitments.
Meritech has raised the amount via 53 investors, according to its
filing with the US securities commission.
A separate ‘sidecar’ filing for Capital Partners V registered $65m
and pulled in via 23 LPs. A sidecar vehicle is generally dedicated to
a small number of specific deals.
Meritech focuses on investing in late-stage tech companies. Its
portfolio has included Facebook, Wonga.com, ZipCar and Counter-
pane Internet Security.
The fifth vehicle is slightly bigger than the firm’s fourth fund,
which targeted $400m and raised $425m in 2010.
US venture capital giant Vista Equity Partners has picked up a
commitment from Taiwan’s Cathay Life Insurance towards its latest
multibillion-dollar fund.
The company has pledged $20m to Vista’s Fund V according to a
filing with the Taiwan stock exchange.
Vista has already passed its $3.5bn target by holding a $3.8bn first
close in April, and is now eyeing its $5.75bn hard cap for the fund.
Other backers include the New Jersey Division of Investment,
which committed $200m, and the Texas County and District Retire-
ment System, which agreed to part with up to $75m.
Vista closed its previous fund on $3.5bn in 2012, four years after
it raised $1.8bn for its third fund.
SiliconValleyVC valuations hit 12-year high
The valuations of Silicon Valley-
based companies picking up
venture capital financing hit the
strongest quarter in 12 years
recently according to research by
law firm Fenwick & West.
Up rounds exceeded down
rounds by 80 per cent to just 6 per
cent in Q2, with 14 per cent of
investments remaining flat.
Fenwick said that was the big-
gest difference between up and
down rounds since it began calcu-
lating figures in the first quarter of
2002.
The firm’s Capital Barometer
revealed an average price increase
of 113 per cent, the highest amount
since it began recording that statis-
tic at the start of 2004.
Fenwick corporate partner
Barry Kramer described the survey
results as demonstrative of the con-
fidence that game-changing com-
panies are inspiring in the Silicon
Valley venture capital community.
However, he doesn’t view the record
increases as an indicator of a tech investment
bubble, because a bubble would require a
much higher volume of individual venture fi-
nancings, initial public offerings, and merger
and acquisition deals.
The Fenwick research showed that the
internet and digital media, software and
hardware industries all had very strong
results, with internet/digital media having an
increase of 169 per cent, while software con-
tinued not only to have strong valuations but
also increased its percentage of post-Series A
financings to 48 per cent.
The hardware industry registered a very
strong second best barometer result of 132
per cent, Fenwick added. It said the life sci-
ence industry also posted solid results, while
cleantech lagged other industries but still
had reasonable results.
Fenwick analysed the terms of 174 ven-
ture financings closed in the second quarter
of 2014 by companies headquartered in
Silicon Valley for its research.
Global leader: Valuations of Silicon Valley tech companies taking VC capital have reached a 12-year high

87. SECTOR PERSPECTIVES: VENTURE
www.LimitedPartnerMag.com 85
Venrock bags $450m for new fund
Former Rockefeller family venture-cap-
ital arm Venrock has closed its seventh
fund with commitments of $450m.
The new fund is $100m larger than
the Palo Alto-based firm’s sixth vehicle.
Venrock partner Bryan Roberts said,
“The establishment of a new fund feels
like one part cause for a proud an-
nouncement, and 99 parts assumption
of a decade or more of responsibility
to relentlessly strive for excellence for
our two crucial constituencies – the
teams in whom we invest and the limit-
ed partners who have invested in us.
“We are really excited about what’s
happening at the intersection of health-
care and technology, as the opportunity
to dramatically remake our healthcare
system attracts a quality of entrepre-
neurial talent that is truly staggering.”
Interest in European venture invest-
ments is on the rise as more exit routes
are now available and the general
macroeconomic backdrop is improving,
according to DFJ Esprit partner Richard
Marsh.
He said that there were plenty of
companies and funding opportunities
to support a greater level of venture
investment in Europe.
“If you go back three, four years ago,
it was all M&A. Absolutely all M&A.
We had $2.5bn of M&A exits from our
portfolio in three years,” Marsh told
AltAssets.
“Right now public markets are open,
we have had a listing on Nasdaq at the
end of last year and listings in London
and Euronext this year.
“There is no question that it is a much
more receptive environment in Euro-
pean venture thanks to the high-profile
successes in the last 12 months.”
Marsh said the main challenge faced
by LPs that come into the European
venture space is picking the right man-
ager. He noted that a lot of capital was
invested during the dotcom bubble era
in 1999-2000 in funds that failed to per-
form by investors that have since stayed
away from the asset class.
“What has happened is there is a
relatively small number of managers
who are demonstrating that they are
consistently successful, so these manag-
ers are raising funds, they are making
money for LPs and they are getting
repeat investments from LPs and slowly
and steadily more people are looking at
the asset class,” said Marsh.
EuropeanVCs win more
cash as confidence grows
Biotech-focused Sofinnova Ventures has held
a final close of its ninth fund on its $500m
hard cap, confirming an AltAssets story from
mid-July.
The firm plans to tap SVP IX to back
companies with promising later-stage clinical
programmes, as well as select investments in
earlier-stage businesses.
AltAssets revealed earlier this year that
Sofinnova was eyeing up to $500m and could
outstrip the $440m it gathered for its eighth
fund.
The new vehicle will target both US and
European drug-development businesses.
SVP VII was generating a cash multiple
of 1.65 times and an IRR of 16.9 per cent at
the end of March this year, according to the
Oregon Public Employees Retirement Fund.
Sofinnova is focused on life sciences
and technology and leads 90 per cent of its
investments.
Its life-sciences team targets components,
systems, and software companies, and in-
vests between $15m and $30m per company,
with an initial commitment of $5m to $15m.
It also makes seed-stage investments from
$100,000 to $1m.
Sofinnova tops
out FundVIII
at $500m
Weinberg sets
sights on hard cap
Perella Weinberg Partners is well on the way
to the hard cap for its debut growth equity
fund after picking up about $444m for the
vehicle.
The firm has won commitments from 106
LPs to date according to a filing with the US
Securities and Exchange Commission, which
shows Barclays Capital is acting as a place-
ment agent.
Fortune revealed in March last year that
Perella Weinberg was targeting $400m for
the growth equity fund, to be led by former
Weston Presidio partners Chip Baird and
David Ferguson.
MORE SECTOR PERSPECTIVES
For daily updates on the latest industry
developments, visit: www.AltAssets.net
Marsh: confidence is returning

88. SECTOR PERSPECTIVES: CLEANTECH
86 Q4 2014
Mexicangreenenergyfundhalfwaytotarget
Powering on: A Mexican cleantech fund managed by Rohatyn and BK Partners is halfway to its $200m target
A Mexico-focused fund jointly managed by
private equity firms the Rohatyn Group and
BK Partners has registered $93.3m of com-
mitments.
Balam Fund I has pulled in the capital via
four LPs according to a filing with the US se-
curities regulator, bringing it almost halfway
to its $200m target. The minimum investment
is set at $5m.
Rohatyn and Spain-based BK formed
a partnership in 2013, and set up Balam I
the same year to invest in renewable power
generation and energy-efficiency industries in
Mexico.
The firms held a $70m first close of the
vehicle in August last year after securing a
$40m commitment from the Japan Bank for
International Cooperation.
An announcement from the bank’s board
stated that “JBIC’s participation in the fund
will contribute to reduction of GHG emis-
sions in Mexico and thus enhance such efforts
of the government”.
The Japanese bank also said that it is
expected the fund managers would provide
information on its portfolio investments to
Japanese companies with interests in the
renewable-power generation and energy-
efficiency businesses in Mexico.
TRG specialises exclusively on investing in
emerging markets. The firm recently sold its
minority stake in Colombian energy-holding
company Transportadora de Gas Internacional
to majority shareholder Empresa de Energia
de Bogota.
BK Partners was created following the
launch of the RLD fund, which was estab-
lished in 2007 to pursue tourism-focused land
development opportunities in Mexico. The
firm opened its first office in Madrid in 2010.
KKR, Acciona near
$2bn IPO for AEI
Global private equity giant KKR
has reportedly hired banks to work
on the IPO of Acciona Energia
International (AEI).
The firm is said to have recruited
JP Morgan and Goldman Sachs,
together with fellow shareholder
Acciona, according to the Wall Street
Journal.
The US flotation could value AEI,
which comprises Acciona’s interna-
tional renewable energy assets, at
around $2bn.
KKR agreed to buy a one-third
stake in AEI for €417m in June
using capital from its first Global
Infrastructure Fund.

89. SECTOR PERSPECTIVES: CLEANTECH
www.LimitedPartnerMag.com 87
Robeco Institutional Asset Manage-
ment, Japanese financial services com-
pany ORIX Corporation and the Asian
Development Bank (ADB) have formed
Asia Climate Partners to invest in low-
carbon companies across the continent.
The ACP fund currently has $400m in
its coffers which has been invested by
the founding partners.
Target investments from the vehicle
will include companies in the renew-
able energy, clean technology, natural
resource efficiency, water and forestry
sectors.
ADB director general Todd Freeland
said, “ACP will benefit from the com-
bined strengths of Robeco as a global
asset manager and ORIX and ADB,
which are two of the most active and
successful investors in the low-carbon
sector in Asia.
“The substantial resources that the
founding partners are committing to
ACP will help position it as the pre-
eminent investor in this asset class in
Asia from day one, and represents a
clear signal of the depth of our collec-
tive belief in the investment strategy
and its return potential.”
The Who’s Winning the Clean Energy
Race report published last year found
that investment in renewable energy
declined overall in 2012, but that China
managed to attract 20 per cent more
that year than in 2011, with $65.1bn
invested in its clean-energy companies.
Three years ago the Asian Develop-
ment Bank committed $60m to three
clean tech-focused venture capital funds
– Aloe Environment Fund III, Keytone
Ventures II, and VenturEast Life Fund
III.
TPGleads$110mroundforVitAg
Target, Shortcut up investment inTado
TPG Alternative and Renewable Technologies (ART) has led a $110m investment
in VitAg Corporation to become the Florida-based company’s largest shareholder.
The round included an equity investment led by TPG, tax-exempt bonds worth
$64m from the Orange County Industrial Finance Authority, and a credit facility
from Tennenbaum Capital Partners.
Fertiliser firm VitAg’s other backers include iron micronutrients producer
Agro-Iron and industrial supplier Shrieve Chemical.
The company will use the funds to build a biosolids-to-fertiliser facility in Zell-
wood, Florida, which will produce organically-enhanced fertiliser.
Target Partners and Shortcut Ventures
have renewed their commitment to Ger-
man smart thermostat company Tado by
backing a €10m financing round.
The business makes products which
automatically adjust heating or air-
conditioning systems to users’ needs,
with the app recognising when users
are leaving or approaching home and
setting the temperature accordingly.
Tado says its control strategy, which
takes into account weather forecasts
and house characteristics using smart al-
gorithms, can reduce household energy
costs by more than 30 per cent.
In January Google bought private
equity-backed smart home automation
company Nest Labs for $3.2bn.
Robecoin$400minjoint
low-carbonAsianventure
UK growth investor BGF has backed one of
the country’s leading home-focused sustain-
able energy system suppliers with £3.6m.
Ecovision provides heat pumps, solar
panels, biomass and gas boilers in homes,
businesses and community buildings across
the UK, and has installed more than 5,000
systems since 2005.
The company said it expects to gener-
ate revenues of more than £20m in the next
financial year.
BGF investment director Ned Dorbin said,
“This is an opportunity to back a fantastic
management team with considerable experi-
ence and success already in this sector.
“There are a number of opportunities in
the household sustainable energy market for
Ecovision to capitalise on and the team has
worked hard to establish themselves in this
market and build up their excellent reputation.
“Our capital, together with the debt facil-
ity from Shawbrook, will immediately be
invested in the increased marketing of Ecovi-
sion’s Hassle Free Boiler offering so that it
gains increased momentum and traction in
the market.”
BGF backing
for home energy
firm Ecovision
Otter leads $17m
round in NewLeaf
Otter Capital has led a $17m Series B round
of financing in agricultural bio company
NewLeaf Symbiotics.
Otter was joined by existing investors
Rockport Capital, Open Prairie Ventures and
Pangaea Ventures, who had all previously
backed the company’s $7m Series A invest-
ment round.
NewLeaf said the investment would be
used to further accelerate its R&D pro-
gramme and ramp up production from pilot
to commercial scale.
Otter Founder John Pasquesi said, “I am
a big believer in the future of biologicals as
an alternative or supplement to conventional
agriculture inputs and GMO.”

90. 88 Q4 2014
REGIONAL PERSPECTIVES
AFRICA 94MIDDLE EAST 92ASIA 88 LATIN AMERICA 98
Orchid Asia beats $750m target for FundVI
TPG affiliate Northstar
eyes $1bn fund close
Navis hits $1.4bn for FundVII
and eyes a December closeTPG Capital’s Indonesian private equity affiliate
Northstar expects to hit the $1bn hard cap for its
fourth fund no later than December.
The firm was said to be nearing a $500m first
close for the fund in July according to AVCJ, which
cited sources familiar with the situation.
The firm raised $820m for Fund III in 2011, but is
hoping to eclipse that figure after strong exits such
as last year’s 7.7-times return from BTPN bank.
TPG owns about 20 per cent of Northstar, which
in turn has a five per cent holding in TPG.
The firm manages more than $1.2bn dedicated
to investments in South-East Asia, with a primary
focus on Indonesia.
Since its foundation Northstar has backed more
than 20 companies in areas including banking and
insurance, mining, telecoms and agribusiness.
Kuala Lumpur-based private equity firm
Navis Capital is eyeing a December
close for its seventh Asia fund on its
$1.5bn hard cap.
The firm has already pulled in $1.4bn
and is just waiting to tie up commit-
ments from a few final investors accord-
ing to a source.
Navis easily reached its $1.3bn target
for Fund VII in February, just four
months after launching the vehicle.
It has since been working on raising
a Sharia-compliant parallel fund, and
appears certain to close before the end
of the year.
The firm held an $860m first close
for the fund in December last year.
Navis’s latest vehicle follows the firm’s
sixth fund, which it closed on $1.2bn in
September 2010.
The firm focuses on buyouts, recapi-
talisations and financial restructurings
in Asia, and has invested in the food
processing, dining, industrial products,
consumer goods, advertising, auto rent-
als and professional services sectors.
Previous deals include last year’s
purchase of more than 50 per cent of
Malaysia’s HG Power Transmissions.
Fund VII is expected to maintain the
focus on South-East Asia, while shying
away from Indian deals.
Flowering opportunities: Orchid Asia has beaten all expectations with Fund VI, which received $1.3bn of interest
Orchid Asia has held a $920m
hard cap final close for its sixth
China growth capital vehicle.
The fund was significantly
oversubscribed according to
Orchid, which said it had received
about $1.3bn of interest.
Orchid easily beat the $750m
initial target thanks to invest-
ment from LPs including the
Pennsylvania School Employees’
Retirement System, which agreed
to commit up to $75m.
PSERS previously commit-
ted $40m to the firm’s fifth fund,
which it closed on $650m in 2011.
Orchid Asia VI will make
investments of between $5m and
$50m in mid-market businesses
based in China according to docu-
ments published by PSERS.
It will focus on the consumer,
healthcare, high-tech and
outsourced manufacturers and
services sectors in Greater China,
with up to 25 per cent expected to
be invested in other markets.

91. REGIONAL PERSPECTIVES: ASIA
www.LimitedPartnerMag.com 89
South-East Asia-focused private equity firm
Creador has stormed past its fund target to hit
a $300m final close for its second vehicle.
Firm founder Brahmal Vasudevan, a for-
mer GP at ChrysCapital, said LPs including
Siguler Guff and Hermes GPE had helped
push the fund close to its $325m hard cap.
That figure could still be reached accord-
ing to Vasudevan, who said a “couple of guys
were still looking” at a potential late capital
injection.
He said many investors were tempted after
the progress made by the firm’s debut fund,
but a number left it until the last couple of
months before committing.
Other LPs backing Fund II include a large
Boston-based university, a large Malay-
sian pension fund and “a bunch of funds of
funds”.
Creador has already spent half the fund’s
capital through six deals, including the acqui-
sition of an interest in Indian sanitaryware-
maker Somany Ceramics for $10m.
Another Indian business, two from Indone-
sia and two from Malaysia make up the rest
of the investments to date, with the firm aim-
ing to invest about 80 per cent of the vehicle
in South-East Asia.
Avendus Fund II
generates 1.4x return
Indian private equity firm Avendus Capital
has seen its Special Situations Strategy-II
Fund generate a net annualised return of 13
per cent in 3.5 years.
The fund has returned 1.4 times its capital
on a net basis and 1.5 times on a gross basis,
compared with returns of 4.6 per cent and
10.8 per cent generated by BSE mid-cap
index and BSE Sensex.
SSS-II has now been fully exited and
capital returned to LPs. The firm’s Fund III is
currently generating annualised gross returns
of around 52 per cent.
Creador cruises
past target to seal
$300m final closeInternational private equity
giant Bain Capital has agreed
to sell a 49.9 per cent stake in
its investment in telemarket-
ing company Bellsystem24
Holdings to Japanese trading
company Itochu Corporation.
The deal will leave Bain
with 50.1 per cent of the
shareholding and takes place
as part of a new joint venture
company established along-
side Itochu.
Bain first bought Bell­
system for JPY93.5bn ($1bn)
in 2009 from private equity
fund Citigroup Capital Part-
ners Japan, beating off com-
petition from rivals Permira,
Blackstone and KKR.
Bain took on a 93.5 per cent
stake in Bellsystem24 through
the transaction, and went on
to complete a $1.1bn recapi-
talisation of the telemarketing
giant in 2011.
Bain MD David Gross-Loh said,
“Since Bain Capital acquired Bell sys-
tem in 2009, our investment in the com-
pany’s advanced IT infrastructure, and
implementation of significant operating
improvements, have transformed the
business into a world-class operation.
“The continued improvements in
service quality and productivity have
enabled Bellsystem to strengthen its
leading industry position.”
Bellsystem24 is Japan’s largest call
centre operations service provider, with
approximately 20,000 operators in 22
locations.
IDGleads$100mroundforWomai
China-focused venture capital firm
IDG Capital has led a $100m round
for Chinese online grocery company
Womai.com.
Existing investor SAIF Partners,
which led the Series A round in 2012,
re-upped in the latest financing round.
Womai said it would use the cash to
build storage facilities, logistic centres
and IT systems, as well as improving
the online experience of its customers.
The company has 1.5 million users
and executed RMB1bn (US$160 mil-
lion) worth of transactions in 2013.
Womai was founded in 2009 by
Chinese state-owned food conglomer-
ate COFCO, which remains the largest
shareholder in the business.
Previous deals by IDG include
buying all the shares of micro electro-
mechanical systems business MEMSIC
in an $88.5m deal in April last year.
Bain sells 49% stake in
telesales giant Bellsystem
Capital call: Bain is selling a 49 per cent stake in Bellsystem

92. REGIONAL PERSPECTIVES: ASIA
90 Q4 2014
It was a case of second time lucky
for private equity-backed pork
giant WH Group after it raised
$2.05bn at its Hong Kong IPO.
The flotation saw 2.57 billion
new shares offered at a fixed price
of HKD6.20 ($0.80) each.
Private equity backers of WH
Group include CDH Investments,
which before IPO had a 33.7 per
cent stake, New Horizons, which
held 4.2 per cent, and Goldman
Sachs’ private equity arm, which
owned 5.2 per cent.
The listing on the Hong Kong
Stock Exchange valued the
company at about $11.7bn, or
11.5-times its 2014 earnings.
WH Group previously sched-
uled to start pre-marketing its
initial IPO on March 31 last year
and hoped to raise $6bn through
the share sale.
It was forced to pull that pro-
cess in April, however.
In addition to high valuations
sought, investors were said to be turned off
by mismanaged marketing after a record
29 banks were hired for the offering, as
well as sky-high executive compensa-
tion which raised corporate governance
concerns.
WH Group bought US firm Smithfield
Foods for $4.9bn in 2013 and planned to
raise up to $5.3bn to pay down debt. BOC
International and Morgan Stanley were
hired as joint sponsors and global coordi-
nators of the IPO.
Second time lucky as pork giant’s IPO raises $2bn
Messy: WH Group’s IPO had to be rescheduled after the first attempt went awry
Olympus passes the halfway
mark for environmental fund
Flipkart secures $1bn
in GIC-backed round
Private equity firm Olympus Capital
Asia has passed the halfway mark for its
$300m-targeting second fund focused on
the environmental and cleantech indus-
tries.
Asia Environmental Partners II has
received commitments of $152.85m from
18 LPs, a document filed with the US
securities regulator showed.
LPs backing the fund include World
Bank’s investment arm IFC, which ap-
proved a $25m commitment in February
this year.
The fund follows Olympus’ second
Asian environmental fund, which raised
$250m in 2009.
The first vehicle also received a $25m
commitment from IFC.
Olympus makes investments of $30m to
more than $200m in mid-market com-
panies with annual revenues of between
$100m and $2bn.
Besides environmental and clean-energy
companies, the firm also invests in the
agribusiness and resources and financial
and business services sectors.
Olympus has investment teams in China,
India, Japan and South Korea.
Indian e-commerce business Flipkart has
raised a $1bn funding round not long after
securing $210m of financing.
Singapore’s sovereign wealth fund GIC
took part in the latest round, alongside
Flipkart’s existing investors, including Tiger
Global and Naspers. The round, which will
help Flipkart compete with e-commerce giant
Amazon, valued the business at about $7bn.
The $210m round was raised in October
last year and was backed by Morgan Stanley
Investment Management, Vulcan Capital and
Tiger Global. Tiger and VC firm Accel Part-
ners joined South African technology group
Naspers to provide $200m in July 2013.

93. REGIONAL PERSPECTIVES: ASIA
www.LimitedPartnerMag.com 91
Telecoms and media-focused private
equity firm China Broadband Capital
has launched a $500m fundraise for its
third vehicle.
The firm expects to complete the
capital raise within a year according
to a filing with the US Securities &
Exchange Commission. No capital has
been registered for China Broadband
Capital Partners III, the filing shows.
CBC currently manages two US
dollar funds with more than $500m
under management, as well as a paral-
lel renminbi vehicle with more than
RMB1.4bn ($225m).
The firm has targeted China’s TMT
sector since 2006, looking to back
entrepreneurs from start-up through to
expansion-stage growth companies.
Last year CBC led a Series C round
for Pluribus Networks, which brought
the company’s total financing to more
than $44m.
It also led a $20m financing round for
digital advertising exchange platform
iPinYou.
BAML spin-out NewQuest
hits $316m close for first fund
ChinaBroadbandbackforcash
Asian direct secondaries firm NewQuest
Capital Partners has beaten the target
for its second fund by holding a $316m
final close.
Firm managing partner Darren Mas-
sara said the vehicle would focus on
greater China and India to take advan-
tage of GPs in need of liquidity from
their portfolio investments.
AltAssets revealed NewQuest had
hit a $215m first close for the vehicle in
December 2013, with a source confirm-
ing the fund was targeting $300m.
That source said the new fund was
already more than 50 per cent invested,
although Massara said he could not give
any more details about fundraising.
NewQuest’s first fund, which was
raised before the firm spun out of Bank
of America Merrill Lynch’s Asian
private equity arm in 2011, is now fully
invested and has already returned all its
capital, the source added.
Paul Capital, HarbourVest Partners,
LGT Capital Partners and Axiom Asia
were limited partners in that fund,
with HarbourVest and LGT reportedly
returning to invest in the latest vehicle.
NewQuest has already tapped its de-
but vehicle for a string of deals in Asia.
Tapping connections: China Broadband has come back to the market with a third vehicle
US banking group Morgan Stanley’s Asian
unit has closed its latest vehicle on $1.7bn,
beating its $1.5bn target.
Morgan Stanley Private Equity Asia
(MSPEA) IV has invested in two companies
in South Korea and India.
The bank committed $50m to the fund,
with the rest of the capital provided by out-
side investors.
MSPEA IV follows Morgan Stanley’s third
Asian fund, which raised $1.5bn in 2007.
The firm has seen the most attractive entry
prices in China for ten years since 2012,
MSPEA CEO Chin Chou told Reuters.
LPs committing capital to the fund include
the Pennsylvania Public School Employees’
Retirement System and the University of
Michigan.
The fund will be focused on buyout deals
across India, China, South Korea, Singapore,
Japan, Taiwan and Australia.
CMC leads $100m
round for China’s
Secoo.com
CMC Capital Partners has led a $100m
Series D financing round for Chinese online
luxury goods retailer Secoo.com.
Existing backers including IDG Capi-
tal Partners, Vangoo Capital Partners and
Ventech Capital also took part in the round,
which company CEO Rixue Li said would go
towards global expansion.
Secoo, which was launched in 2008, sells
about 100 global brands through its site and
has bricks-and-mortar stores in several large
Chinese cities and Tokyo.
Vangoo previously led a Series C financ-
ing round for Secoo in 2012, with IDG,
Ventech and Crehol Capital taking part in a
$30m round last August. Silicon Valley Bank
agreed to provide a double-digit dollar credit
line for the business.
Morgan Stanley
beats $1.5bn
fund target

94. REGIONAL PERSPECTIVES: MIDDLE EAST
92 Q4 2014
Early-stage tech investor Magma
Venture Partners has held the final
close of its fourth fund after pulling
in $150m.
Magma said the fund received
strong interest and was oversub-
scribed within weeks of announce-
ment.
The vehicle is believed to be slightly
bigger than the firm’s previous fund,
which closed on more than $100m in
February 2013.
Magma did not specify how much
larger the latest fund was.
Fund IV was only registered with
the US securities regulator in August
this year. At that point no LP commit-
ments were registered.
The vehicle will continue Magma’s
strategy of investing across areas of
information, communication technol-
ogy including mobile, cloud and
e-commerce within Israel, according
to the firm.
Magma expects to use the fund
to invest in approximately 25-30
seed and series A financing rounds,
with typical investments of between
$500,000 and $6m.The firm expects
to begin investing in early 2015 after
Magma III reaches investment capac-
ity.
Israel’s MagmaVenture launches fourth fund
ADIA set to expand private equityStanChart seals
first MENA deal Mammoth sovereign wealth fund the Abu
Dhabi Investment Authority plans to up its
investments in infrastructure and other alter-
native assets in 2014 after hitting its return
target for the asset classes last year.
The UAE-based authority is looking to
allocate between five and 10 per cent of its
capital to real estate, between two and eight
per cent to private equity and up to five per
cent to infrastructure according to its 2013
review.
ADIA managing director Hamed bin
Zayed Al Nahyan said, “We have built out
our investment teams in the illiquid space,
such as real estate, infrastructure and, more
recently, private equity, adding consider-
able expertise across geographies and asset
specialisation.”
Overall ADIA has achieved annualised
returns of 7.2 per cent over the past 20
years. The report said its private equity de-
partment had a busy year in 2013, review-
ing investment opportunities across primary,
secondary and co-investments.
Despite the positive comments on alterna-
tives, ADIA still plans to invest between 32
and 42 per cent of its capital in development
equities.
Standard Chartered Private Equity has
bought a minority stake in offshore vessel
operator Topaz Energy and Marine for $75m.
StanChart’s head of global private equity
portfolio management Taimoor Labib will
take a seat on the company’s board of direc-
tors as part of the deal, which is its first in
the Middle East and North Africa energy
sector.
Topaz is headquartered in the UAE and
operates a fleet of 99 offshore support
vessels throughout the Middle East and the
Caspian Sea.
Magma has launched a new fund just a year after closing its previous vehicle

95. REGIONAL PERSPECTIVES: MIDDLE EAST
www.LimitedPartnerMag.com 93
Dubai’s financial regulator has amended
the region’s financial rules to attract
more fund managers, including private
equity funds.
The Dubai Financial Services
Authority (DFSA) has announced it
has amended the Collective Investment
Law 2010 to allow the creation of a
new category of fund, called a Qualified
Investor Fund (QIF).
The QIF would be available to pro-
fessional investors willing to make an
investment of at least $500,000 with a
maximum of 50 investors per fund. This
is lowered from a previous minimum
investment of $1m. The new QIF rules
also stipulate lower regulation of funds,
designed for higher net worth investors.
The new rules are designed to attract
more investment into Dubai from richer
and more risk-tolerant investors.
To accommodate fund managers the
DFSA is also consulting on lowering
both the authorisation and annual fees
from $10,000 to $5,000.
The body said, “The DFSA has
concluded that regulatory costs of set-
ting up and carrying on certain types of
fund management business in the DIFC
appear to be relatively high.”
StandardCharteredinJordandeal
Dubai regulator eases rules
Standard Chartered Private Equity has
bought a significant minority stake in
Jordanian poultry producer Al Jazeera
Agricultural Company in a $35m deal.
The operation’s main products include
fresh and frozen chicken, parent and
broiler hatching eggs and chicks, and
chicken feed.
SCPE’s investment is its first in
Jordan and fifth in the MENA region,
although it is the first time it has backed
a food and agriculture business on the
subcontinent.
Taimoor Labib, regional head of
MENA private equity at SCPE, said,
“We are thrilled to become strategic
partners with one of the leading poultry
companies in Jordan.
“Al Jazeera’s high quality manage-
ment team, strong growth prospects and
successful backward integration has
been impressive.”
New dawn: Dubai’s regulators have changed the rules to attract more fund managers
Israeli algorithmic pricing and business
intelligence platform for online traders
Feedvisor has secured $6m in a Series A
round led by Square Peg Capital.
The round follows the Tel Aviv-based
company’s $1.2m seed round raised in Octo-
ber 2013 from JAL Ventures, Oryzn Capital
and Micro Angel Fund, which also backed its
Series A.
Feedvisor’s platform is currently used by
online retailers worldwide and manages more
than $1bn.
Its algorithms analyse the competitive
environment, product demand and price-
elasticity function of every retailer’s products
and calculate its optimum price according to
the retailer’s specific business objectives.
Square Peg partner Dan Krasnostein said,
“Over the last few years, marketplaces have
become the most rapidly growing sector of
e-commerce, and we’ve realised there is a
need for e-commerce retailers to have highly
sophisticated technology they can rely on to
achieve a competitive edge.”
Square Peg Capital was created last year
via the merger of Square Peg Ventures and
Victoria Capital.
Square Peg
leads $6m round
for Feedvisor
HSBC’s MENA eyes
$500m for Fund II
Dubai-based private equity investor MENA
Infrastructure is looking to raise $500m for
its second fund after “successfully” investing
its first $300m vehicle.
The fund will be tapped to fund energy,
transport, environmental services and social
infrastructure projects in the Middle East and
North Africa regions, as well as targeting
Turkey for the first time.
MENA Infra, sponsored by HSBC, Waha
Capital and Fajr Capital, said its strategy is to
be a primary sponsor or co-sponsor of infra-
structure and energy projects, together with
early-stage and growth companies.

96. REGIONAL PERSPECTIVES: AFRICA
94 Q4 2014
Blackstone-backed
African investment
company Black Rhino has
entered a joint agreement
to lay down up to $5bn
for energy infrastructure
projects across Sub-
Saharan Africa.
Black Rhino has part-
nered with West African
industrial conglomerate
Dangote Industries for the
venture.
The partnership will
focus on power, transmis-
sion and pipeline projects
with an expected invest-
ment term of five years,
Blackstone said.
Black Rhino was
formed in 2012 to
develop and invest in
transformational projects
in the power generation and fuel-transporta-
tion sectors.
Blackstone senior managing director
Sean Klimczak said, “We look forward to
bringing our collective resources and expe-
rience together to develop energy solutions
for Sub-Saharan Africa.”
Dangote and Black Rhino plan to pursue
projects that represent their commitment to
sustainable development and social respon-
sibility, including the involvement of local
communities and adherence to environmen-
tal and safety standards.
Blackstone’s investments in Sub-Saharan
Africa include oil and gas exploration
company Kosmos, which sold a 50 per cent
stake in two of its exploration blocks off the
coast of Suriname to Chevron in 2012.
Blackstone-backed Black
Rhino invests $5bn in infra
Black Rhino has entered into a $5bn energy infra deal
Competition
fierce for
sub-Saharan
buyout deals
Private equity investments in Africa at the
larger end of the deal-size spectrum are set
to become more competitive according to
EY.
A report by the professional services firm
said the lack of large deals available was
driving a contest for assets among private
equity buyers.
It predicted there would be opportuni-
ties in the power production sector as
privatisation takes place in Nigeria, and in
the banking and financial services space
as the Nigerian government sells its stakes
in financial institutions that were obtained
under the AMCON programme.
The report said, “While private equity
will continue to focus on consumer-backed
sectors such as financial services, FMCG,
agribusiness, retail, education and health
care, sectors such as power, logistics and
infrastructure will also attract investment
as increasingly wealthier populations will
require the development of the continent’s
infrastructure.”
Last year private equity investments in
banking and financial services in Sub-
Saharan Africa totalled $156m, 13 per cent
of the region’s total investments.
Private equity firms closed 40 deals
between 2010 and 2013 with an aggregate
value of $772m, or about 19 per cent of the
total, the report showed.
Investments in media and telecoms
infrastructure reached $1.2bn last year. The
relatively high transaction value was driven
primarily by the $1bn follow-on investment
in IHS Mauritius Ltd, which was led and
managed by Emerging Capital Partners.
The sector saw nine deals during the
three-year period, however, while the deal
count was small, total investments reached
$1.4bn, or nine per cent of the total.
Energy companies also attracted substan-
tial investment volumes, with private equity
firms having poured $747m into the sector.
Ascent closes growth fund at $50m
Africa-focused private equity firm Ascent
Capital has held a $50m final close for a
new growth capital vehicle targeting East
Africa.
The firm picked up most of its commit-
ments from pension funds according to
Kenya’s Capital FM, which said about 10
per cent came from Kenyan-based funds.
Ascent plans to tap Rift Valley Fund for
between eight and 12 investments across
the region, it added.
Firm partner David Owino told the news
outlet, “We are honoured to be the first
private equity fund to have won the trust
of local pension funds.
“In addition to the local institutional in-
vestors, the fund has also attracted signifi-
cant capital from international investors.”
He added that private equity as an alter-
native asset class presented local pension
funds with exciting investment options in
untapped markets and sectors.

97. REGIONAL PERSPECTIVES: AFRICA
www.LimitedPartnerMag.com 95
The second Africa-focused fund from
Development Partners International is
close to its $500m target, with $412m LP
commitments registered so far.
The total raised for African Develop-
ment Partners (ADP) II could go beyond
the initial target, however, to reach what
appears to be a $750m hard cap listed on
the vehicle’s filing with the US securities
regulator.
The cash has been pulled in via nine
investors according to the filing.
Investors in the fund
include UK-based develop-
ment finance investor CDC,
whose $75m investment last
September helped the vehicle
achieve its first close.
ADP has said it will use the
cash to provide risk capital to
businesses and take minority
stakes in companies across a
range of sectors.
The institution focuses on
high-growth companies that
are seeking to expand into
liberalising countries, such as
Angola, Ethiopia, Mozam-
bique and Rwanda, with deal
sizes of between $20m and
$75m.
Earlier this year the vehicle was tapped
for a $20m equity investment in Mo-
rocco’s Université Privée de Marrakech to
help the institution grow across Morocco
and sub-Saharan Africa.
Development Partners International
has paid $9.4m in sales commissions
and $275,000 in finders’fees, with New
York-based Park Hill Group named as
placement agent.
ADP’s first fund raised €271m in 2008,
with CDC also investing in that vehicle.
CDC development cash
helps ADP II near target
With a $400m war chest LeapFrog will
now be able to do the type of deals its much
smaller first vehicle had to pass on according
to the emerging markets-focused firm’s co-
founder Jim Roth.
LeapFrog recently announced it had closed
its second fund on $400m, making it roughly
three times the size of its $135m debut vehi-
cle closed in 2010.
In an interview with AltAssets Roth said
he did not expect it to be difficult to deploy
the cash as there have been deals that the first
fund has had to pass up.
Fusion picks up
40% stake in
Kenyan newspaper
LeapFrog targets
bigger deals
African private equity investor Fusion Capi-
tal has bought a 40 per cent stake in Kenyan
newspaper X-News through an investment in
its parent Xtra Publishing Group.
The newspaper was launched in Nairobi in
March with a hybrid print and digital model,
and targets the young professionals demo-
graphic.
Fusion said its investment would be used
to advance Xtra’s IT and editorial systems
and for working capital.
Xtra CEO Paul Marshall said, “The future
for print media is free news, and the future
for media as a whole is digital web and SMS
services.
“Companies are looking for an efficient
and targeted way to promote their products,
and this is what Xtra will offer.
“The partnership with Fusion will go a
long way in ensuring we realise our vision.”
Last summer Fusion Capital bought a
46.5 per cent stake in Rwanda-based stone-
extraction specialist Rusororo Aggregate to
take advantage of growth in the country’s
construction sector.
Rusororo, which is the country’s only
large-scale operation specialising in stone
crushing for commercial purposes, owns sites
worth a total RWF27bn ($41.5m).
Successful Angolan exit for Abraaj
Middle East-headquartered Abraaj
Group has exited its investment in
Angola by selling plastic pipe manufac-
turer Fibrex.
Fibrex was the first company in
Angola devoted to the manufacture of
plastic pipes and fittings.
Since investing in 2007 the private
equity firm has provided operational
support which resulted in Fibrex up-
grading in energy supply infrastructure
and improving governance, accounting
and reporting standards.
During Abraaj’s investment Fibrex’s
production volume increased by more
than 70 per cent. The company also
secured an internationally recognised
award for quality management in 2010.
Abraaj managing director Sandeep
Khanna said, “Fibrex remains in a
strong position today to capture the
continued growth of the construction
industry.
“This successful experience in An-
gola has strengthened our confidence in
the country’s investment opportunities.”
ADPII will focus on providing risk capital to firms in Africa

98. REGIONAL PERSPECTIVES: AFRICA
96 Q4 2014
Providence Equity Partners and Albright
Capital Management have re-upped in
telecoms provider Helios Towers Africa
through a $630m financing round.
Africa-focused private investment firm
Helios Investment Partners also commit-
ted capital again, while World Bank Group
member IFC invested for the first time,
bringing total funds raised to $1.8bn.
Providence managing director Dany
Rammal said, “As long-term investors in
the global wireless industry we are excited
about the tremendous growth potential
across Africa, and HTA’s unique position
as the leading, independent telecoms tower
company on the continent.”
More financing is also likely to be on its
way according to Helios Towers, with the
company expecting to complete negotia-
tions on new and extended debt facilities of
at least $350m.
Providence, Allbright in $630m telecoms deal
Financing boost: Helios Towers Africa has picked up $630m in a financing round including re-ups from Providence and Albright
Amethisraises$530mforAfricafundActis sells 9% stake
in Alexander Forbes African investment firm Amethis has raised
$530m for the final close of its African
Entrepreneurs fund, making it one of the
biggest vehicles of its kind.
Amethis said the fund’s 55 investors in-
clude banks, insurance companies and fund of
funds, as well as successful private entrepre-
neurs from the manufacturing and services
sectors.
CBR CEO Johnny El Hachem said, “We
were convinced that Amethis was the right
team for this partnership, with whom we share
the same vision of long-term responsible
investment in Africa.”
Amethis held a first close for African Entre-
preneurs a year and a half ago and has already
used it to make five investments. They include
companies in Kenya, Ghana, Côte d’Ivoire
and Mauritius in the banking, oil and gas retail
distribution sectors.
Amethis’s focus is on supporting urbanisa-
tion and consumer growth in Africa’s bottle-
neck areas by taking minority stakes in deals.
The investment firm previously raised
€134m for Amethis Finance Luxembourg
and its subsidiary Amethis Africa Finance in
December 2012.
Its shareholding structure is mostly private,
split between shareholders of banks and
financial institutions, corporates and family
offices globally.
The firm was launched in partnership with
Compagnie Benjamin de Rothschild Conseil
(CBR), the Africa and private equity project
finance arm of Edmond de Rothschild Group,
in 2011.
Emerging-market private equity firm Actis
has exited most of its stake in South African
financial services company Alexander
Forbes.
Actis has sold its nine per cent stake,
leaving it with four per cent, following an
oversubscribed offer of Alexander Forbes
through the Johannesburg Stock Exchange
(JSE), which raised $353m.
Professional services firm March &
McLennan Companies subsidiary Mercer
Africa bought a 14.9 per cent stake through
the listing and plans to buy a further 19.1
per cent.
That will see Actis and other backers
such as private equity firm Ethos, who col-
lectively hold 54 per cent, make a full exit.

99. REGIONAL PERSPECTIVES: AFRICA
www.LimitedPartnerMag.com 97
Caurismakes2.5xreturn
onS.Africantelecomsexit
West African private equity firm Cauris
Management has exited its investment
in South African telecoms company
MTN-CI.
The firm originally invested in the
business in 2009, tapping funds from its
second fund, and has more than doubled
its investment, reporting a 2.5-times exit
multiple on the sale.
MTN-CI is a subsidiary of Johannes-
burg-headquartered MTN and provides
mobile, fixed-line and internet services
to more than 6.5 million subscribers.
Cauris CEO Noël Eklo said: “We
remain confident about the future and
potential of MTN-CI and believe that
it will continue to sustain growth to the
benefit of all stakeholders.
“MTN-CI will continue to invest to
maintain a high-quality, reliable net-
work for the clients.”
Cauris has been investing in West
African SMEs for 18 years.
The firm has backed 46 companies
and completed 36 exits during that
period, including in the agribusiness,
financial services, hospitality and down-
stream oil and gas sectors.
Earlier this year Cauris tapped its
second fund to invest in Côte d’Ivoire
pharmaceutical company CIPHARM.
The investment will go towards
a new production line for injectable
pharmaceutical products according to
the firm, which said there was increas-
ing demand and a severe lack of local
production.
CIPHARM has been operating for
more than 25 years and manufactures a
broad range of generic pharmaceuticals
in dry forms, syrups and powders under
its own brand and licensed names.
Cauris has exited its investment in Johannesburg-based MTN-CI
African investment firm Injaro Investments
has closed its inaugural fund on $49m.
Injaro Agricultural Capital Holdings
received commitments of $15m, $10m and
$7m from European development finance
institutions CDC, FMO and Proparco,
respectively.
The firm sees agriculture as a key sector
for the development of West Africa as it
represents 30 per cent of the region’s GDP,
65 per cent of its jobs, and 70 per cent of
internal trade.
Injaro said, “Nevertheless the sector suf-
fers from a lack of financing, low yields, an
insufficient access to land and a weak busi-
ness regulatory framework. Injaro is one of
a very small number of private equity funds
focusing on the sector.
“This investment in Injaro represents a
much needed commitment to West Africa’s
agricultural sector.”
Injaro closes
inaugural fund
on $49m
Africa-focused private equity firm 8 Miles,
which boasts Sir Bob Geldof as its chairman,
has bought a 25 per cent stake in Egypt’s
Eagle Chemicals Group.
The company, which was established
almost 60 years ago, manufactures products
including acrylics, epoxy resins and saturated
polyesters and is one of the market lead-
ers in Africa. It employs about 600 people,
produces about 100,000 of chemical products
each year and had annual revenues of $120m
in 2013.
8 Miles partner Emad Barsoum said,
“Egypt remains an attractive investment
destination and Eagle Chemicals offers solid
fundamentals that are attractively priced.”
Sir Bob Geldof advises the team on politi-
cal and strategic issues.
Geldof-backed
8 Miles buys stake
in Egypt’s Eagle

100. REGIONAL PERSPECTIVES: LATIN AMERICA
98 Q4 2014
LatAmLPsmorewillingtoinvestinPEopportunities
Soaring ambitions: Latin American LPs are becoming more confident when it comes to investing in their own region
Latin American LPs are becoming more
confident of investing in private equity oppor-
tunities in the region according to Deutsche
Bank’s David Koh.
He said the US and Canada continue to at-
tract the bulk of private equity investments in
the Americas, but there is a “greater willing-
ness” among Latin American LPs to invest in
local private equity funds.
Mr Koh, Deutsche Bank’s head of primary
and direct investments for the Americas, told
AltAssets that “broadly speaking, you are
seeing a greater presence of Latin American
LPs within the makeup of different GP funds,
whether that’s on a co-investment, primary or
secondary basis”.
“There is a greater willingness among in-
stitutional investors in Latin America to have
alternative investments in private equity and
credit and represent a bigger portion of their
aggregate portfolios,” said Koh.
“There is an increasingly large number of
family offices and high net worth investors
coming out of Latin America that are deploy-
ing capital to private equity, real estate and
other forms of private markets investments.”
Koh also said that energy remained among
the most attractive sectors and there would be
more opportunities outside the US in future.
He said, “We are still big believers that
there are fundamental energy-growth drivers,
including the evolution of fracking technolo-
gies, consumer consumption – especially in
developing markets, as well as a growing
level of interest in renewable energy sources
such as water, wind and solar.
“Although we are bullish in terms of energy
as a sector, we will continue to proceed in a
very deliberate manner.
“I think that we are in the early chapters of
the North American energy story. But the fact
of the matter is there are compelling reasons
as to why you would want to pursue non-
OECD or emerging markets opportunities.”
LPsconfirmAdvent
in$2bnfundraise
Limited partners have reportedly
confirmed that Advent Interna-
tional is fundraising for a $2bn Latin
America-focused fund.
The vehicle will be the sixth in the
series and one of the biggest to focus
purely on the LatAm region, accord-
ing to a source cited by peHub.
Advent held the final close for
the previous vehicle in the series
on $1.65bn in 2010, while its fourth
fund closed on $1.3bn in 2007.
Advent says its Latin American
funds focus mainly on companies in
Brazil, Mexico and Colombia, and
target high-growth sectors such as
financial services, airport services,
business services and education.

101. REGIONAL PERSPECTIVES: LATIN AMERICA
www.LimitedPartnerMag.com 99
Mexico City-based investment firm Corporación Actinver has secured $62.3m for
its new private equity fund.
The fund will acquire minority stakes in Mexican companies with a holding
period of between three and five years, Actinver managing director Guillermo
Rodriguez said.
Mexico’s Actinver raises $62m Acon closes
fourth LatAm
fund on $515m
Nexxus-backed hotel
group raises $56m
Nexxus Capital and Walton Street Capital-
backed Mexican hotel investment platform
Grupo Hotelero Santa Fe has raised
MX$750m ($56.7m) floating on the Mexican
Stock Exchange.
Nexxus invested in the platform in 2010
via Capital Private Equity Fund III, which
closed on $146m. The firm partnered with
Walton Street and Mexican hotel developer
Grupo Chartwell to form Grupo Hotelero.
Mid-market firm Acon Investments has
closed its latest Latin American fund on
$515m.
The firm also said it had issued $150m-
worth of Mexican publicly-traded trust
certificates, giving the fund total capital
potential of more than $600m.
Acon Latin America Opportunities Fund
IV was oversubscribed and received com-
mitments from sovereign wealth and pension
funds, insurance companies, development
banks and family offices.
The fund will target Latin American pri-
vate or “thinly-traded” companies, acquiring
both controlling and minority interests.
Acon has invested in 30 companies in nine
countries in Latin America.
Founding and managing partner of Acon
Ken Brotman said, “We believe the current
environment in Latin America provides a
highly attractive opportunity to generate
favourable returns.
“Furthermore, we believe our team’s long
track record and expertise in these markets
uniquely positions us to capitalise on this
opportunity.”
Acon is focused on mid-market businesses
based in the US and Latin America and cur-
rently has around $2.75bn under manage-
ment across its funds. It invests between
$20m and $150m per deal.
MORE REGIONAL NEWS
For breaking news across the global private
equity market, visit: www.AltAssets.net
Patria pulls in $1.75bn for Brazil fund
Blackstone-backed Brazilian private
equity firm Patria Investimentos has
reportedly held a $1.75bn hard cap final
close for its fifth buyout fund.
AltAssets revealed earlier this year
that the firm was within a whisker of its
$1.5bn target for the fund, which Patria
has now closed, according to a source
who spoke to Reuters.
Patria pulled in $1.25bn for its fourth
Brazil fund in 2011, almost double the
$630m of commitments it banked for
Fund III in 2008. Blackstone acquired a
40 per cent stake in Patria in 2010.

102. REGIONAL PERSPECTIVES: LATIN AMERICA
100 Q4 2014
European investors crave Alta’s Mexico exposure
NEO well on way
to $300m target
Brazilian private equity firm NEO
Investimentos is seeking $300m for its
third fund, which has already raised
more than a third of its target.
The firm is looking to raise $150m
from Brazilian investors and an equal
amount from international LPs for
NEO Capital III, US regulatory filings
showed.
The fund has already secured a
$50m commitment from the US Over-
seas Private Investment Corporation
(OPIC). Data from OPIC also showed
that the fund has already secured
$120m.
NEO plans to raise most of the
funds from wealthy Brazilian families
and domestic institutional investors
including pension funds, sources told
peHub.
Mexico-focused Alta Growth Capital nearly
doubled the size of its first fund with its
second fundraise, partly thanks to new
investors from Europe committing capital.
The private equity firm recently an-
nounced the $142m final close of Alta
Growth Capital Mexico Fund II, easily top-
ping its debut $75m vintage-2009 vehicle.
All previous existing investors from the
US and Mexico re-upped their commitments
to the firm, while this time Alta managed to
get investors from further afield.
Co-founder and managing partner Scott
McDonough said, “We didn’t have any in-
vestors from Europe in our first fund, so we
were very excited to make some inroads.
“It was just a case of hard work – we made
more of an effort in the second fund to spend
time in Europe and work with groups that
have connections there. Mainly it’s just put-
ting in the time and the effort to go and meet
with people.”
The buzz around Mexico has already
been noted in a new report, which found that
the outlook for the venture capital space in
Mexico is bright, in large part due to strength
in the energy sector.
While venture capital in the country is at
an earlier stage of development than markets
such as Brazil and Chile, it has seen an up-
tick in activity over the past few years, with
the number of funds climbing to 15 from just
four between 2009 and 2013, EY said.
McDonough believes Mexico is also
becoming increasingly attractive to private
equity investors. “It has a very solid macro-
economic profile,” he said.
“On top of that, the current government
has engaged in a reform process and has
been able to implement some reforms that
have potential for some very interesting
structural changes for the economy and for
the investors.”
Deals are not always easy to make, how-
ever, because private equity is such a small
part of the financial sector, said McDonough.
Spiking interest: Mexico-focused Alta Growth Capital has attracted strong European backing for its second fund

103. At the Aztec Group we are delighted to have added
another prestigious fund services award to our collection.
We have been awarded ‘Fund Administrator of the Year’
at the 2014 Real Deals Private Equity Awards, which
recognises the best of European private equity.
Aztec Group has pioneered a unique offering which provides
our clients with a comprehensive understanding of their
underlying company portfolio data. This service tracks the key
metrics and is tailored to each client’s needs. We can report
on key portfolio data such as the industry sectors in which
they operate, the size of their workforces and their location
as well as EBITDA, revenue and valuation development. This
service is delivered through our leading private equity platform,
where live data can be accessed remotely 24/7 by our clients.
Wondering what we can do to help you
understand your underlying company
portfolio data? We are always happy
to share our experiences.
Call James Duffield, Head of Business
Development on +44 (0)845 505 5620
for an informal conversation, or email him:
James.Duffield@aztecgroup.co.uk
WINNER
2011•2012•2013
BRITISH PRIVATE
EQUITY AWARDS
FUND
ADMINISTRATOR
OF THE YEAR
The Real Deal in Advanced
Portfolio Services
FUND ADMINISTRATION
FUND ACCOUNTANCY
CORPORATE AND DOMICILIATION
DEPOSITARY SERVICES
ADVANCED PORTFOLIO SERVICES
The Bright Alternative
aztecgroup.co.uk | aztecgroup.eu | aztecgroup.se
Aztec Group is a regulated financial services group.

104. 50,000
CONNECTIONS
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LAST6MONTHS
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In the last 6 months over 50,000 LP-to-LP
and LP-to-GP connections were made.
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private equity network by far.