Archer Capital is an Australian private equity firm that has $2 billion under management from super funds and international investors. It focuses on buyouts and has completed 25 investments totaling $4 billion since 1998, generating over 50% gross IRR on realized deals. Private equity activity in Australia over the past 5 years totaled $8.7 billion invested into 570 companies, though the amount invested declined in fiscal year 2009. Private equity uses leverage to boost returns, though available debt has declined as transaction multiples have fallen. Despite the challenges, private equity will continue to be a factor in Australia given the $18.5 billion that has already been raised for future investments.

1. CFO Network Event: Private
Equity Update
8 June 2010

2. Introduction to Archer Capital
 Established in 1997 and is an independent Private Equity firm
 Currently has A$2 billion of funds under management or advisement, provided primarily by
large Australian super funds as well as several international private equity investment funds
 Substantial in-house operating experience and a strong operational focus
 Since 1998 Archer Capital has completed 25 investments with a total deal value of $4 billion
and on 15 realised deals has generated a gross IRR of over 50%
Current Investments
Archer is one of the largest & most successful Private Equity managers in Australia

3. Archer Capital Fund Mandate
Preferred Business
Attributes:
 Strong sustainable cash flow
 Demonstrable competitive advantages
 Organic and strategic growth/margin options
 High quality and ambitious management
 Majority ownership preferred
Industry Sectors:  All industries considered
3
Private Equity Spectrum
Seed / Venture
Capital
Expansion
Capital
Buyouts (LBOs,
MBOs, MBIs, etc.)
Archer
Focus
Archer is focused on buyouts

4. 4
Investment Approach
 In embryonic markets, less competition leads to low pricing pressure and a “buy low,
sell high” approach can generate superior returns
 As the market matures, deep capital markets price risk more efficiently reducing the
returns available from financial structuring alone
 Superior returns in mature markets arise from an ability to increase value during the
period of ownership, which requires:
• Identification of value creation opportunities during deal assessment
• An ability to drive operational performance, and hence value creation, during the period of
ownership
Increasing
Market
Maturity
Archer believes that in order to generate superior returns, Private Equity managers must be
owner-operators and not simply geared passive institutional investors

5. Private Equity Activity: The last five years
Source: Australian Private Equity & Venture Capital Association Limited, Fiscal Year Ended June 30, 2009
1,5601,540
2,1162,118
1,392
584
891191331329788
FY09FY08FY07FY06FY05FY04
No of Companies
Funds Invested (AUDm)
Over past five years there was a total Private Equity investment of $8.7b into 570 Australian
companies. FY09 activity was 27% down on FY07 in terms of amount

6. 6
Private Equity Activity: the impact of debt and leverage
Acquisition Multiples Paid by Private Equity Use of Leverage in Private Equity Acquisitions
7.1x
9.9x
8.9x
7.4x
5.6x5.6x
5.0x
5.9x
5.6x
2000 2001 2002 2008200720062004 20052003
Purchase Price / EBITDA
2.9x
5.5x
5.1x
4.2x
3.4x
3.9x3.8x
2.9x
2.0x
200820072006200520042003200220012000
Debt / EBITDA
There is a strong correlation between transaction multiples and the availability and term of
acquisition debt.

7. However... reports of Private Equity’s demise have been exaggerated
1,277
5,612
4,584
3,614
3,453
863
1,5601,540
2,1162,118
1,392
584
FY09FY08FY07FY06FY05FY04
Funds Raised
Funds Invested (AUDm)
Source: Australian Private Equity & Venture Capital Association Limited, Fiscal Year Ended June 30, 2009
Private Equity investment in Australia will continue to be a factor based on the amount of
capital that has already been raised. In the past five years the amount of Private Equity
monies raised amounted to $18.5b compared to $8.7b invested.

8. Private Equity is a different form of company ownership
At the core of Private Equity is a fundamentally aggressive focus on equity returns and some
different operating principles...
Attributes / management
tools
Private
Company /
Family owners
Public
ownership
Private
Equity
Access to Capital ?  
Fast decision-making   
Management equity   
Strategic clarity and a
medium term finish line
?  
Heavy investment where
necessary
  
Privacy   
Use of leverage  with p / g’s  
At the core of Private Equity is a fundamentally aggressive focus on equity returns and some
different operating principles...

9. 9
Questions