For more information, visit www.tresvista.com PE MINORITY INVESTMENTS - LESS IS MORE NOW! Growth in Minority Investments Why the Surge in PE Minority Investments? I ncreased % of Minority Deals by Le ading* Global PE Firms Hi gher Minority Sha reholdings in Businesses 13% 2004-07 27% 2008-14 19% 2010 31% 2015 Surge in Dry Powder since the Previous High of PE New Deal Opportunities in 2016 to be from Acquisition of Minority Shareholdings 34% 2008 $1,066B Global $612B in US 2015 $1,216B Global $681B in US Constrained Access to Debt Finance Alternative to Paying Exorbitant Valuation to Purchase a Company Outright 6.6x 2009 8.2x 2012 9.2x 2015 What Makes a Minority Deal Work How to Protect Your Minority Investment What Makes Certain Deals Not Work Little to no say in Corporate Decisions Settle for a Minority Stake as a Consolation Prize Treating Control/Non- Control as Zero-Sum Game Not Preparing for an Exit Before Getting in Foresee and Plan Contingencies Influence Decisions via a Veto Investment Thesis Fits the Ownership Relationship with CEO and Senior Management Board Representation Put Option Right of First Offer Tag-Along Rights Drag-Along Rights Dividend Preference US PE Trends in Minority Investments 390 508 595 565 546 634 672 803 871 776 2007 2015 2014 2013 2012 2011 2010 2009 2008 2006 2005 449 Minority Deals Count per Year Minority Deals as a % of Overall PE Deals Pre Crisis Period Deals/Year 498 2005-07 Post Crisis Period Deals/Year 665 2008-15 *Includes Apax, Blackstone, BC Partners, Cinven, TPG, KKR and Warburg Pincus 38% 44% 35%
Transcript
For more information, visit www.tresvista.com
PE MINORITY INVESTMENTS - LESS IS MORE NOW!
Growth in Minority Investments Why the Surge in PE Minority Investments?
Increased % of Minority Deals by Leading* Global PE Firms
Higher Minority Shareholdings in Businesses
13% 2004-07
27%2008-14
19% 2010
31%2015
Surge in Dry Powder since the Previous High
of PE New Deal Opportunities in 2016 to be from Acquisition of Minority Shareholdings
34%
2008
$1,066B Global
$612B in US
2015
$1,216B Global
$681B in US
Constrained Access to Debt Finance
Alternative to Paying Exorbitant Valuation to Purchase a Company Outright
6.6x
2009
8.2x
2012
9.2x
2015
What Makes a Minority Deal WorkHow to Protect Your Minority Investment
What Makes Certain Deals Not Work
Little to no say in Corporate Decisions
Settle for a Minority Stake as a Consolation
Prize
Treating Control/Non-Control as Zero-Sum Game
Not Preparing for an Exit Before Getting in
Foresee and Plan Contingencies
Influence Decisions via a Veto
Investment Thesis Fits the Ownership
Relationship with CEO and Senior Management
Board Representation Put Option
Right of First Offer Tag-Along Rights
Drag-Along Rights Dividend Preference
US PE Trends in Minority Investments
390
508
595565 546
634672
803
871
776
2007 2015201420132012201120102009200820062005
449
Minority Deals Count per Year
Minority Deals as a % of Overall PE DealsPre Crisis Period
Deals/Year
4982005-07
Post Crisis Period
Deals/Year
6652008-15
*Includes Apax, Blackstone, BC Partners, Cinven, TPG, KKR and Warburg Pincus
38%
44%
35%
For more information, visit www.tresvista.com
PE MINORITY INVESTMENTS - LESS IS MORE NOW!
TresVista Financial Services is the leading provider of high-end outsourced support for asset managers, investment banks, research firms, and corporates. TresVista delivers operational efficiencies and cost savings to its clients while providing them with dedicated teams to support them across various functional activities. Services
include investor relations, fund raising, deal sourcing, deal execution, valuation, research, financial modeling, portfolio m anagement, marketing and legal support.
ABOUT TRESVISTA
Larger Minority Investment Market Outside US Driven by Minority Investment Exits
Fewer Family Controlled $1B+ Revenue Businesses
Deeper Private Debt Market
Higher Average Private Equity Deal Size
85%40%15%
$234B $99B
$500M $300M
Industry Buyer PE Buyer Public-
Market Exit
Buyback by Original
BuyerOther Total
28
9
4
41
14
14
22
8
1
59
Sale of Entire Company
Sale of Minority Stake
USA Europe Asia
$58B
$131M
Source: BCG Analysis, PWC, FactSet, Preqin, PitchBook, Capital IQ
Motivation for Minority Stake Seller Motivation for Minority Stake Buyer
Recent Returns on Minority Deals Mirror Majority Deals for Leading PE Firms
to30% 50%
Median Differential in CoC Returns
2002-07
No Significant Differencein CoC Returns
2008-13
Less Competition Avoids Winner's Curse of Overpaying
Control Retention by Majority Shareholder Indicates Confidence in
BusinessIndustry Expertise
Credibility of Being Associated with an Established PE
Liquidity Event for Multi-Generational Family Business
Minimize Future Tax Burden
PAYINGOVER
$800MTransaction Value
DYAL CAPITAL PARTNERS
$440MTransaction Value
Largest Minority Investments Focused PE Funds Closed (2015-YTD 2016)
