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AIFM Directive 2010 Conference
Tuesday 30 November 2010
Central London
www.aifmdirective.co.uk
Dear Spotlight Subscriber,
Preqin is delighted to have arranged a special invitation and 20% discount for Preqin Spotlight readers who would like to
attend Private Equity Forums AIFM Directive 2010 Conference in London, on Tuesday 30 November 2010. Please quote ref.
PreqinAIFM book your place for just 364.40 Member of trade body (RRP 455.50) / 396.00 Non-member (RRP 495.00).
The AIFMD is still not a done deal and a number of issues remain subject to negotiation and are critical to the alternative assets
industry, including but not limited to; the disproportionate burden the disclosure regime would place on SMEs, the third country
issue and the implication article 27a would have on management buy-outs. Everyone engaged in the sector will need to
become familiar with the details and likely impact of the new legislation.
Through company case studies, in-depth presentations and panel discussions, Private Equity Forum's AIFM Directive 2010
Conference will provide you with clarification on the next series of changes to ensure you are aware of the necessary key
actions and deadlines.
Confirmed speakers include:
Godfrey Bloom MEP - Coordinator for the Europe of Freedom and Democracy Group on the Economic and Monetary Affairs
Committee in the European Parliament UK Independence Party (UKIP)
Jarrod Cowley-Grimmond, Director, Finance Sector Development, Commerce & Employment Department States of
Guernsey
James Greig, Partner PricewaterhouseCoopers Legal (PwC Legal)
Sam Kay, Partner Head of Investment Funds Travers SmithJustin Partington, Commercial Director Ipes (UK) Limited
Joanna Perkins, Director, Financial Markets Law Committee (FMLC) established by the Bank of England
Ian Sayers, Director General Association of Investment Companies (AIC)
Jarkko Syyrila, Director International Relations Investment Management Association (IMA)
Conference chairs:
Martin Arnold, Private Equity Correspondent Financial Times (FT)
Paul Hodkinson, Editor Private Equity News (PEN)
I will also be participating in a panel discussion at the conference, and hope to have an opportunity to connect with you there.
Best Regards,
Tim FriedmanHead of Communications
Preqin
To register For sponsorship opportunities:
Tel: +44 (0)845 463 7621 Tel: +44 (0)845 269 7842
Email: [email protected] Email: [email protected]
8/8/2019 Preqin Private Equity Spotlight October 2010
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Private EquitySpotlightOctober 2010
Secondaries Spotlight:Fund type preferences of buyers and
sellers in the secondary market.
Page 11.
Conferences Spotlight:The months private equity events.
Page 12.
Investor News:
All the latest news on private equityinvestors.
Page 14.
Regulars
Fundraising Spotlight:In Q3 2010 private equity fundraisingincreased from the previous quarter,but by how much? And what is the
outlook in terms of funds on the road,going into the final quarter of the year?
Page 7.
Performance Spotlight:
Preqin has analyzed the returns
generated by private equity partnerships
as at 31 March 2010. The NAV of all
private equity funds has changed, but to
what?
Page 9.
Deals Spotlight:Q3 2010 was the strongest quarterfor deals since the collapse of
Lehman Brothers. We examine thecharacteristics of deals made in thequarter and in particular the shifttowards European-based deals.
Page 10.
Feature
Overview of Alternatives Investment Consultants
A growing number of institutions active in private equity and other alternatives areutilizing investment consultants to help them make decisions about allocations andspecific investments. We conducted a survey to see how satisfied these investors are
with their consultants. Page 3.
Q3 2010 Special
Preqin has moved!
Please note, that as of 18th October,2010 Preqins London address haschanged:
Preqin Ltd,
Equitable House,
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London,EC4R 9AF
Tel: +44 (0)20 7645 8888
You can download all the data in this months Spotlight in Excel.Wherever you see this symbol, the data is available for freedownload on Excel. Just click on the symbol and your downloadwill begin automatically. You are welcome to use the data in anypresentations you are preparing, please cite Preqin as the source.
Welcome to the latest edition
of Private Equity Spotlight, the
monthly newsletter from Preqin
providing insights into private
equity performance, investors and
undraising. Private Equity Spotlight
combines information from our onlineproducts Performance Analyst,
nvestor Intelligence, Fund Manager
Profiles, Funds in Market, Secondary
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The 2011 Preqin AlternativesInvestment Consultant Review
FEATURED PUBLICATION:
The 2011 Preqin Alternatives
Investment Consultant Review
More information available at:
www.preqin.com/aic
October 2010Volume 6 - Issue 10
alternative assets.intelligent data.
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AWARDS 2009
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4
Investment consultants are an integral part of the investment process
in the alternatives space. They can be a necessary and useful
intermediary or advisor on an investors dealings across an array
of asset types, providing services such as manager search and
selection, asset allocation and investment policy development, and
performance monitoring. They are ever present in all regions of theworld and advise a diverse range of institutional investors, with client
types ranging from those with relatively small investment portfolios,
such as high-net-worth individuals and single family offices, to
those with more complex and larger portfolios, such as insurance
companies and pension funds.
Investment consultants perform an important role within the
alternative assets industry. Investors benefit from the advice and
guidance their consultants provide, as well as the access they can
gain through their consultants to specific managers or funds. Fund
managers can also benefit from establishing relationships with
consultants as this can be an important step towards garneringcommitments from their clients.
This article examines some of the vital attributes of the investment
consulting industry using data from the soon-to-be-released 2011
Preqin Alternatives Investment Consultant Review.
Overview of the Industry
The Preqin Investment Consultant database has information on
more than 300 investment consultants which are active in the
alternatives space. As Fig. 1 shows, 13% offer consulting services
on a discretionary-only basis and a further 39% offer their services
on a non-discretionary-only basis. Just under half offirms (48%) offer
both types of service.
The majority (65%) of investment consultants are headquartered in
North America. A further 29% are based in Europe and the remaining
6% in Asia and Rest of World. Though few investment consultants
active in the alternatives space are headquartered in Asia and Rest
Source: Preqin
Fig. 1: Breakdown of Alternatives Investment Consultants byNature of Services Provided
77%
72%
59%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Private Equity Hedge Funds Real Estate Infrastructure
Source: Preqin
Fig. 2: Proportion of Alternatives Investment Consultants Offering
Services by Asset Class
ProportionofFirms
Feature Overview of Alternatives Investment Consultants Download Data
Investment consultants are being utilized by a growing number of institutions active in alternatives, DamiSogunro looks at how satisfied these investors are and what this means for the investment consultantspace.
Overview of Alternatives Investment
Consultants
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5
of World, largerfirms which are headquartered in North America or
Europe often have satellite offices in other regions of the world, in
places such as Australia, Singapore and China.
Of all the consultants active in alternatives, 64% advise investors
on their activity in private equity, 59% on hedge funds, 49% on real
estate and 34% on infrastructure, as shown in Fig. 2. While somefirms specialize in investments in one asset class only, others advise
investors across the whole spectrum of alternative asset classes.
Review and Performance of Investment Consultants
Preqin undertook a survey of 120 leading institutional investors that
make use of the services of an investment consultant for some or all
of their investments in the alternatives space, the full results of which
can be seen in the 2011 Preqin Alternatives Investment Consultant
Review. The split of respondents is representative of the global make-
up of institutional investors in alternatives by type, size, and location.
Investors were asked questions on performance-related issues and
their investment consultant review procedure.
Survey respondents were asked to rank the level of importance they
place on several of the key attributes they consider when assessing
and reviewing investment consultants. Each attribute was ranked on
a scale of one to five, with one denoting a low level of importance
and five denoting a high level of importance. Fig. 3 shows how LP
opinions in this area have changed over the past couple of years. On
average, attributes of the most importance to clients when reviewing
investment consultants have continued to be both the consultants
ability to demonstrate a good track record in fund selection and its
ability to provide a good level of customer service. In 2010, survey
respondents gave these attributes an average importance rating of
4.7 and 4.5 respectively.
Surprisingly, the lowest average importance rating was given to the
need for consultants to have an international presence; this was given
an average rating of 3.9 in 2008, 3.5 in 2009, and 3.4 in 2010. It is
possible that investors are more cautious about making investments
outside of their domestic region. Alternatively, those looking to invest
internationally may be seeking local advisors.
Value for Money of Investment Consultants
Many investors have placed the costs incurred by their investment
portfolios under increasing scrutiny and consequently the ability
of investment consultants to provide top quality services at acompetitive price is also of increasing importance to investors. Survey
respondents gave the need for consultants to charge a competitive
level of fees an average rating of 4.1, rising significantly from the 3.2
average importance rating this attribute was given in our 2008 survey.
In order to assess how well consultants were measuring up to this
requirement, investors were asked whether or not they felt their
consultants provided good value for money. Fig. 4 shows that overall,
27% of respondents felt their consultants provide excellent value
for money and a further two-thirds rated them as above average or
average. Only a small percentage of survey respondents (1%) feel
the services their consultants supply represent poor value for money.
When the asset classes are considered separately, the proportion
of respondents that felt their advisor offered good value for money
varied greatly. 72% felt that their private equity consultants provide
excellent or above average value for money, while a much smaller
11%
19%
46%
24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Very Likely Possibly Unlikely Definitely Not
Source: Preqin
Fig. 5: Likelihood of Investors Seeking New or Additional Adviceon Alternative Investments in the Next 12 Months
ProportionofInvestors
Likelihood of Investor Seeking New or Additional Advice in theNext 12 Months
4.54.3 4.3
3.2
3.94.2 4.2 4.3
3.9
3.5
4.74.5
4.1 4.1
3.4
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
ProvenStrong
TrackRecordin
FundSelection
Client
Communication/
GoodCustomer
Service
Good
Relationships
withTop
Managers
CompetitivePrice
International
Presence
2008
2009
2010
Source: Preqin
Fig. 3: Attributes Clients Consider When Reviewing AlternativesInvestment Consultants
AverageRatingof
Importance
27% 21% 15%
35%27%
34% 46%
8%
37%
30%
33%30%
69%
20%40%
5% 3% 8% 6%3%1% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Overall
HedgeFund
Consultants
Infrastructure
Consultants
PrivateEquity
Consultants
RealEstate
Consultants
Poor
Below Average
Average
Above Average
Excellent
Source: Preqin
Fig. 4: Alternatives Investment Consultants Success in ProvidingGood Value for Money
ProportionofAssetClass
Respondents
Feature Overview of Alternatives Investment Consultants Download Data
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23% believed that their infrastructure advisors service was of this
standard. 27% and 30% of real estate advisors were felt to offer
excellent or above average value for money respectively, while
hedge fund consultants were rated as providing either excellent or
above average value for money by 67% of respondents.
Seeking New Advice?Investors were also asked about the likelihood that they would seek
new or additional advice on alternative investments in the next 12
months. As shown in Fig. 5, just under a third of respondents may
seek new or additional advice at some point over the next 12 months.
Investors could be motivated to seek a new consultant by a number
of factors, such as an increase in the rate of investments, a change
in strategy, dissatisfaction with their current consultant, or as a result
of a statutory requirement to issue RFPs for consultants at certain
points in time. Fig. 5 also shows that 46% stated that it was unlikely
that they would be seeking new investment consultants in the coming
year and 24% stated that they would definitely not be seeking a new
consultant or additional advice.
Future Outlook
Overall, our survey found that the majority of investors rated their
consultant(s) as having above average performance in most key
areas, such as value for money and customer service, showing
that alternatives investment consultants are generally meeting the
needs of their clients. Little movement in terms of the relationships
investors maintain with consultants is also to be expected: 70% of
investors are unlikely to seek new or additional advice and just 11%
indicated that that it was very likely for them to do so. In terms of
client satisfaction, only 6% of respondents expressed dissatisfaction
with their consultant(s) by rating the value for money they provide as
below average or poor.
Considering these statistics, investors currently appear to be largely
content with their investment consultants. It is also clear that the key
attributes that investors look for in their investment consultants are
the provision of a good level of customer service and communication,
and evidence of their ability to identify and select the top performing
managers for their clients while remaining competitive in the fees
they charge for their services.
The 2011 Alternatives Investment Consultant Review
The 2011 Preqin Alternatives Investment ConsultantReview is a necessary guide for all fund marketers andfund managers looking for information on the alternativeinvestment consultant industry. The Review containsprofiles for over 300 consulting firms, with informationon the asset classes they cover, services on offer, keyfinancial information, and direct contact information forthe relevant contacts, alongside details showing whichconsultants are being retained by over 1,700 investors.
Feature Overview of Alternatives Investment Consultants
The intelligence behind theworld's leading business events
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Brian Morgan, Chief Investment Officer(Would benefit from attending this marcus evans summit)
29 November 1 December 2010Majestic Barrire, Cannes, France
[email protected]/Preqin
The Alternative Investments Europe Summit 2010 gathers theregion's forefront institutional investors to explore nextgeneration alternative investment strategies in private equity,infrastructure, hedge funds and emerging asset classes.
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ICG Fitch Ratings Latham & Watkins Capital Dynamics Golding Capital
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Deutcsche Bank Indigo Capital Conseil M Cap Finance Ares Europe Lloyds Banking Group Hutton Collins DEG Barclays Nomura Mezzanine AXA Private Equity -
Mezzanine DB Private Equity
Syntaxis Vantage Risk Capital Cinven EQT Partners Mezzanove Bain Capital Proskauer Goldman Sachs Muzinich & Co RBS Neovara Permira Investcorp
New Speakers! LPs Banks
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More Networking! More networking time
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The big debateAre we replicating mistakes?
Keynote Presentations! Global economic outlook
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Janusz HeathManagingDirector,HeadofAssetManagementCAPITALDYNAMICS
Michelle deAngelisSeniorDirectorFITCH RATINGS
JamesChestermanPartnerLATHAM&WATKINS
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Pre-conference Workshop:
Mezzanine DocumentationSuccessful Structuring in a Pan-European Context
23rd November 2010,London
24th & 25th November 2010, May Fair Hotel, London
For more information or to purchase the publication with apre-publication discount, please visit:www.preqin.com/aic
Data Source:
Download Data
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The 2011 Preqin Alternatives Investment Consultant Review is a necessary guide for all fund marketers and fund managers
looking for information on the alternative investment consultant industry.
Key content includes:
Vital analysis on all aspects of the alternatives investment consultant universe.Includes key trends plus information on the markets make-up.
Specific intelligence on activity in private equity, real estate, hedge funds andinfrastructure included in all analysis and profiles.
Comprehensive profiles for over 300 investment consultants. Profiles include key individual contact information, areas of speciality, plans for
2011 and beyond, financial information, service coverage etc. Details for over 1,500 sample clients. See who is advising whom for each area of
alternatives. See which firms operate a buy-list, which firms considerfirst-time managers, and
what they look for when considering new opportunities. Results of our in-depth survey showing investor satisfaction with their consultants
and other key information. League tables.
The 2011 Preqin AlternativesInvestment Consultant Review
www.preqin.com/aic
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alternative assets.intelligent data.
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Turn opportunities into a win-win scenario for your partners and investors
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The Private Equity World
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Be recognized as setting the
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Fundraising Q3 2010 Fundraising Overview Download Data
In Q3 2010, 83 private equity funds worldwide reached
a final close, raising an aggregate $59bn (Fig. 1). This
represents a 20% increase on the amount raised in the
previous quarter, during which quarterly fundraising fell to a
six-year low. Although improved from the previous quarter,
Q3 private equity fundraising fell short of the $66bn raised
in Q1 of this year. The figures suggest that the fundraising
market remains challenging for managers currently on theroad.
The length of time that funds which closed in Q3 2010
spent on the road is indicative of the difficult market
conditions faced by fund managers. Over a quarter of the
funds that reached a final close in Q3 2010 were in market
for 19-24 months, as shown in Fig. 2. A further 36% had
been on the road for between 25 and 36 months, while 3%
had been fundraising for over three years, as illustrated in
Fig. 2. Fundraising generally took longer for funds closed
in Q3 2010 than in the previous quarter: the proportion of
funds that reached a final close in 12 months or less fell
from 24% to 15%.
Buyout funds raised the most capital in Q3 2010, with 13
such funds raising an aggregate $21bn (Fig. 3). Although
one fewer buyout fund closed than in the previous quarter,
the aggregate capital raised by buyout funds increased
significantly from Q2, when 14 such funds raised an aggregate
$13.9bn. The second-largest amount of capital raised in Q3 2010
was accounted for by real estate funds, with 18 such funds raising
a combined $8.7bn. Venture funds were the most abundant and
$3.7 bn was raised by the 20 funds of this type that closed during
the quarter. Infrastructure fund closes were the least numerous, but
6%
9%
19%
27%
21%
15%
3%
0%
5%
10%
15%
20%
25%
30%
1-6 Mon th s 7-12Months
13-18Months
19-24Months
25-30Months
31-36Months
37Months +
Fig. 2: Time Spent on the Road for Funds Closed in Q3 2010
AggregateCapitalRaised($bn)
Time Spent on the Road
ProportionofFundsClosed
222119
38
5652485163
9581
108121
139149
126124
207
123
196
170
198
123
162
76
94
595666
4959
0
50
100
150
200
250
Q12003
Q22003
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
Q12006
Q22006
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Fig. 1: All Private Equity Fundraising by Quarter,
Q1 2003 - Q3 2010
Private equity fundraising in Q3 2010 was up from Q2 but by how much? Claire Wilson investigates.
Fundraising Spotlight: Q3 2010 Overview
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the three funds that did close during the quarter raised the third-largest
amount of aggregate capital, $8.4bn.
Register Today: Call: +44 (0) 20 7017 7790 Fax: +44 (0) 20 7017 7824 Email: [email protected] the latest programme and to register, please visit: www.informaglobalevents.com/KM2550PES1
New updates for 2010-11,including:
Regional Outlook Economic Outlook for the CEE
Region CEE Private Equity: A Research
Based Overview
General Partner Outlook for CEE Limited Partner View of
Opportunities in CEE
Financing Deals How are deals being financed? The role of Mezzanine
Fundraising Raising a CEE Fund LPs Commitments to Funds
Country Focuses Russia Poland SEE/Turkey Baltics
Plus Exit Strategies Distressed Opportunities Restructurings Regulation The Mid-Market Legal Update
Hear from over 30 leading industry expertsincluding:
Date: 2nd & 3rd November 2010, London
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unt
forPreqinSpotlightReaders.
QuoteVIPCode:KM2550PES1
Post-Conference Workshop:
StructuringFinance
inCEE LeveragedBuy Outs
4th November 2010, London
Organised by
4th Annual
Martin Prohazka
GAIN CAPITAL
Indrek Kaldoja
SWEDFUND
Hannes Ambacher
BANK GUTTMAN AG
Alessandra Pasian
EBRD
Radim Stach
RIVERSIDE EUROPE
Piotr Nocen
RESOURCE PARTNERS
Jacek Korpala
ARX EQUITY PARTNERS
Peter Piho
SWEDFUND
Scott R. PenwellPARISH CAPITAL
Bill WatsonAMUNDI
Martin PaevSORTIS
Mark OHarePREQIN
Barbara Nowakowska
POLISH PRIVATE
EQUITY ASSOSCIATION
Tolga IsmenISMEN
Tod KerstenDC ADVISORY
Sean GlodekDARBY OVERSEASINVESTMENTS
Private EquityCEE 2010 Fundraising & Deal Structuresin the New Fund Cycle
13
4
18
3
20
5
11
54
21.1
8.9 8.7 8.4
3.7 3.72.9
1.0 0.6
0
5
10
15
20
25
Buyout
Distressed
Debt
RealEstate
Infrastructure
Venture
Secondaries
Fundof
Funds
Mezzanine
Other
No. FundsRaised
AggregateCapitalRaised($bn)
Fig. 3: Private Equity Fundraising by Type, Q3 2010
Fund Type
Data Source:
Preqins Funds in Market database contains details of over
1,500 private equity funds on the road seeking capital, plus
information on every vehicle that has closed since 2003. For
more information about this product and how it can assist you,
please visit:
www.preqin.com/fim
Fundraising Q3 2010 Fundraising Overview Download Data
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Funds on the Road in Q4 2010Fundraising
Helen Wilson examines the number and type of funds on the road at the start of Q4 2010.
Fundraising Spotlight: Funds on the Road
Download Data
Q4 2010 sees the first quarter-on-quarter increase in the
aggregate capital targeted by funds on the road for over a year
and a half. Throughout 2010 the number and aggregate target of
private equity vehicles on the road had been in decline, but going
into the final quarter of the year there are 1,547 funds targeting
an aggregate $571bn, marking a 2% increase from the previous
quarter in the capital targeted.
Despite this increase there are still fewer vehicles on the road
and less capital being targeted than at the beginning of the year,
as can be seen in Fig. 1. At the start of the year 1,582 funds
were seeking to raise an aggregate $691bn, 17% more capital
than is being targeted by funds on the road as of Q4 2010. The
average target size of funds in market has also decreased over
this period. In Q1 2010 the average target of a fund in market
stood at $440mn; as of Q4 2010 it stands at $370mn. These
figures show that the difficult fundraising conditions in the wake
of the financial crisis are yet to ease and a significant number of
fund managers with vehicles on the road are having to reduce
their fundraising targets as a result.
A large proportion of the funds in market are primarily focused
on North America, with 696 such vehicles targeting an aggregate
$275bn, as shown in Fig. 2. Primarily North America-focused
funds account for 45% of the number of funds in market and
nearly half of the aggregate target capital. Such funds also have
the largest average target size out of all funds in market, with the
average fund target of a North America-focused fund standing
at $400mn, compared to $360mn for Europe-focused funds and
$340mn for Asia and Rest of World-focused funds.
Asia and Rest of World-focused funds are targeting the second-
largest amount of capital. 485 such vehicles are seeking $165bnin aggregate commitments, accounting for 31% of the number of
funds and 29% of the aggregate targeted capital of all funds in
market.
There are currently 366 primarily Europe-focused funds on the
road targeting an aggregate $131bn in investor capital. Europe-
focused funds account for 23% of the global targeted capital and
24% of the number of funds on the road.
The largest fund currently in market is BC European Cap IX, a
European-focused buyout fund targeting capital commitmentsof 6bn. The fund, which is managed by London-based firm
BC Partners, plans to invest in a diverse range of industries
throughout Europe.
1,304
1,6241,673
1,6221,574 1,582 1,562 1,522 1,547
705
889 887807 754
691636
560 571
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
No. Fundson Road
AggregateTarget($bn)
696
366
485
275
131165
0
100
200
300
400
500
600
700
800
North America Europe Asia and Rest of World
No. Fundson Road
AggregateTarget($bn)
Fig. 1: Funds in Market by Quarter, Q4 2008 - Q4 2010
Primary Geographic Focus
Fig. 2: Composition of Funds in Market by Primary
Geographic Focus
Data Source:
Preqins Funds in Market database contains details of over
1,500 private equity funds on the road seeking capital, plus
information on every vehicle that has closed since 2003. For
more information about this product and how it can assist you,
please visit:
www.preqin.com/fim
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Performance Performance of Private Equity Funds Download Data
Sam Meakin looks at the performance of private equity firms as at 31 March, 2010.
Performance Spotlight
Using data from Performance Analyst, Preqin has analyzed the
returns generated by private equity partnerships as at 31 March 2010
in order to provide an independent and unbiased assessment of the
industrys performance. Preqin currently holds transparent net-to-LP
performance data for over 5,200 private equity funds of all types and
geographic focus. In terms of aggregate value, this represents around
70% of all capital ever raised by the industry.
Fig. 1 shows the change in net asset value (NAV) between successive
quarters from Q2 2009 to Q1 2010. The industrys fund valuations
have consistently increased quarter on quarter throughout the period.
The largest change occurred over Q3 2009, when the non-weighted
average change in net asset value for all private equity funds was
4.1%, and the weighted change was 6.7%. This weighted change
takes into account fund sizes, suggesting that larger funds have
outperformed smaller funds in each of the four quarters shown. Q1
2010 data shows an increase of 2.2% in the weighted metric and 1.7%
in the non-weighted. However, it is important to note that larger funds
had previously been more adversely affected by the financial crisis
than smaller funds.
Fig. 2 shows the horizon IRR of all private equity funds over the one-,
three- and five-year periods compared to the returns achieved by
three public indices benchmarks. The overall private equity horizon
IRR for the one-year period to 31 March 2010 stands at 21.8%, an
improvement on the 13.8% posted as of 31 December 2009 and
significantly better than the -9.2% as of Q3 2009 and the -27.6% as of
Q4 2008.
The one-year returns to Q1 2010 for the Standard & Poors 500,
MSCI Europe and MSCI Emerging Markets were 49.8%, 56.1%
and 81.1% respectively, higher than the one-year private equity
returns to Q1 2010. As with private equity, the public indices were allposting negative returns as of the first quarter of 2009 but have been
improving since.
Over the three-year period, the returns achieved by all four indices
are more closely bunched, and the private equity horizon IRR to 31
March 2010 is -0.3%, while the figure for the five-year period stands at
16.8%.The three- and five-year returns for the Standard & Poors 500
were -4.2% and 1.9% respectively.
2.7%
4.1%
3.4%
1.7%
5.0%
6.7%
5.4%
2.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Q2 2009 Q3 2009 Q4 2009 Q1 2010
Non-Weighted
Weighted
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1 year to Mar 2010 3 years to Mar2010
5 years to Mar2010
All PrivateEquity
S&P 500
MSCI Europe
MSCIEmergingMarkets
Fig. 1: All Private Equity Change in NAV by Quarter
AverageChangeinNAVfro
mP
reviousQuarter
AnnualizedReturns
Fig. 2: Private Equity Horizon IRR vs. Public Indices,
as of 31 March 2009
Data Source:
Preqins Performance Analyst database contains full metrics
for over 5,200 named vehicles. For more information about this
product and how it can assist you, please visit:
www.preqin.com/pa
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A total of 515 private equity-backed buyout deals were
announced in Q3 2010 with an aggregate value of $66.7bn.
This represents a 29% increase in the aggregate value from Q2
2010, when 498 deals were announced with an aggregate value
of $51.9bn, and a notable 147% increase on the value reported
in Q1 2010, which saw 396 deals valued at $27bn. Deal flow
globally in Q3 2010 represents the strongest quarter for buyoutdeals in the post-credit crunch landscape, with the aggregate
value of deals announced in Q3 2010 more than treble the value
of deals seen during the same period in 2009.
Q3 2010 has seen aggregate deal value remain strong globally
in comparison to the previous year, with deal values in North
America and Europe significantly higher than during 2009. In
Q3 2010, North American aggregate deal value increased 6.5%
from the previous quarter, with 249 deals valued at $34.2 bn
announced in Q3 2010, up from the 233 buyouts valued at $32bn
in Q2 2010. Furthermore, Q3 2010 deal flow in North America
represents a significant 165% increase on the aggregate deal
value seen in the region in Q1 2010, and remains notably
higher than deal flow witnessed in the region during 2009.
However, North American deal flow remains significantly lower
in comparison to the buyout boom era of 2007, which saw
$124.3bn and $173.1bn in aggregate deal value during its first
and second quarter, respectively.
European aggregate deal value in Q3 2010 increased
significantly from the previous quarter, with 186 buyouts valued
at $26.3bn announced during the quarter, a notable 120%
increase from the $12bn in deal value witnessed during Q2 2010,
and close to treble the European aggregate deal value seen in
Q1 2010. Deal flow in Asia and Rest of World has continued tohover above the levels seen in 2009, with 80 deals valued at
$6.2bn announced in the region, a 62% increase from the $3.8bn
in value reported a year earlier in Q3 2009. However, the value
of deals in Asia and Rest of World has dipped slightly from the
$7.8bn in value witnessed during Q2 2010.
Q3 2010 PE-Backed DealsDeals
Manuel Carvalho looks at the strongest quarter for buyout deals in the post-credit crunch landscape.
Deals Spotlight: Q3 2010 PE-Backed Deals
Download Data
0.0
50.0
100.0
150.0
200.0
250.0
0
100
200
300
400
500
600
700
800
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Number of Deals Aggregate Deal Value ($bn)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
NorthAmerica
Europe
Asia andRest ofWorld
Fig. 1: Quarterly Number and Value of Deals,
Q1 2007 - Q3 2010
Numbero
fDeals
AggregateDealValue($bn)
Fig. 2: Quarterly Aggregate Deal Value by Regional Focus,
Q1 2008 - Q3 2010
Aggregate
DealValue
($bn)
Preqins Deals Analyst database contains in-depth data
for over 15,000 buyout deals across the globe. For more
information about this product and how it can assist you,
please visit: www.preqin.com/deals
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Source: Preqin
Fig. 1: Breakdown of Secondary Fund of Funds Managers byPrimary Regional Location
13%
39%
22%
13% 13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Less Than$100mn
$100-249mn $250-499mn $500-999mn $1bn or More
Source: Preqin
Fig. 2: Breakdown of Secondaries Funds Currently Fundraising byTarget Size
Prop
ortionofFunds
Secondaries News
Secondaries Spotlight
Secondaries Secondaries Spotlight
According to Preqins unique pricing model, a $10,000,000 commitment to the median 2008 venture fund - which would have called
$2,690,000 and has a reported net asset value (NAV) of $2,359,130 - would today fetch $1,941,304 on the secondary market, or
approximately 82% of its NAV.
CDP Capital Private Equity Group is bringing a private equity
portfolio to the secondary market.The asset manager, which is responsible for the private equityportfolio of the Caisse de dpt et placement du Qubec, is lookingto sell a $800 million portfolio of private equity fund stakes onthe secondary market. Although it is unknown exactly which fundstakes the asset manager is looking to sell, the portfolio reportedlyconsists of buyout and venture funds. CDP Capital Private EquityGroup has previously looked into selling a private equity portfoliothat comprised C$1-2 billion of commitments, with approximatelyhalf of them drawn down, but cancelled the sale at the beginning ofthe year.
Indiana Public Employees Retirement Fund has made acommitment to Lexington Capital Partners VII.The $14.2 billion pension fund committed $100 million to thesecondaries fund, which is targeting $5 billion from investors. Thevehicle seeks to purchase LP stakes in established global buyout,venture capital and mezzanine funds. As well as gaining exposure
to the secondary market through secondaries vehicles, the
retirement fund also actively purchases fund stakes directly on thesecondary market. It makes secondary investments for a numberof reasons, including favourable pricing, gaining access to funds ithas previously not had exposure to, and increasing its exposure tofunds it has already committed to.
Fig.1 shows a breakdown of the regional location ofsecondary fund of funds managers and private equity fund offunds managers raising dedicated secondaries funds. NorthAmerica-based managers dominate the market, comprising51% of all secondary fund of funds managers. Managersbased in Europe account for 45% of the total, whilemanagers based elsewhere make up the remaining 4%. Asthe private equity market in Asia continues to expand andmature, the number offirms managing secondaries vehicleslocated in Asia is expected to increase.
The breakdown of secondaries funds currently fundraisingby target size is shown in Fig. 2. 39% of secondaries fundscurrently in market are seeking $100-249 million frominvestors. 13% are targeting $1 billion or more in commitments.Another 13% are at the smaller end of the spectrum, seekingless than $100 million in capital commitments.
Data Source:
Secondary Market Monitor (SMM) is a service available
free of charge to accredited LPs. The service enables LPs
to obtain indicative pricing indications on all or part of their
private equity and private equity real estate portfolios.
www.preqin.com/smm
Download Data
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Conferences
Conferences Spotlight: Forthcoming Events
Conference Dates Location Organizer
SuperReturn Middle East 17 - 20 October 2010 Abu Dhabi ICBI
Asset Allocation Forum in Alternatives 2010 18 October 2010 New York Catalyst Forum
Private Equity World Africa 2010 18 - 21 October 2010 Johannesburg Terrapinn
Alternative Investment Forum: Russia & CIS 18 - 20 October 2010 London Adam Smith Conferences
UK Pensions & Investments 18 - 20 October 2010 London Marcus Evans
Fund Forum Latin America 2010 19 - 21 October 2010 Sao Paulo ICBI
Southeast Asia Private Equity Investing Conference 19 - 22 October 2010 Ho Chi Minh City Thunderbird
NASBIC Annual Meeting & Private Equity Conference 24 - 26 October 2010 Palm Beach NASBIC
European Alternative & Institutional Investing Summit 25 - 27 October 2010 Monte Carlo Opal Financial Group
II Russian Private Equity Congress 28 October 2010 Moscow Cbonds-Congress
Endowment & Foundation Forum 1 - 3 November 2010 Boston Opal Financial Group
CEE Private Equity 2 - 3 November 2010 London IIR
AIS 2010 Abu Dhabi Showcase of Alternative
Investment Funds 3 - 4 November 2010 Abu Dhabi Leoron Events
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Date: 24-25 November, 2010
Location: May Fair Hotel, London
Organiser: IIR
IIRs Mezzanine Finance Conference is the leadingevent in the industrys calendar. Each year, key industryplayers gather in London for this annual forum, toaddress the business critical issues impacting themezzanine market.
Information: www.informaglobalevents.com/mezz
Mezzanine Finance Conference 2010
Date: 21-24 November, 2010
Location: Shangri-La Hotel, Dubai, UAE
Organiser: Terrapinn
The 6th annual Private Equity World MENA conferenceis the regions leading event designed to bring togetherinvestors, SWFs, private equity and venture capitalfunds for 4 days of high level networking and discussion.Learn first-hand from leading regional and internationalprivate equity firms on their strategies for creating value,managing portfolios, delivering returns and buildinginvestment partnerships to tap into new industries andnew markets.
Information: www.terrapinn.com/2010/pemena/
Private Equity World MENA 2010
Date: 30 November, 2010
Location: Central London
Organiser: Private Equity Forum
Through company case studies, in-depth presentations
and panel discussions, Private Equity Forums AIFMDirective 2010 Conference will provide you withclarification on the next series of changes to ensure youare aware of the necessary key actions and deadlines.
Information: www.aifmdirective.co.uk
AIFM Directive 2010 Conference
Date: 29 November 1 December, 2010
Location: Majestic Barrire, Cannes, France
Organiser: Marcus Evans
The Alternative Investments Europe Summit 2010
gathers the regions forefront institutional investors toexplore next generation alternative investment strategiesin private equity, infrastructure, hedge funds andemerging asset classes.
Information: www.aie-summit.com/Preqinel
Alternative Investments Europe Summit 2010
Date: 2-3 November, 2010
Location: London
Organiser: IIR Events
IIRs 4th Annual Private Equity CEE Conferencebrings together an exceptional panel of Private EquityProfessionals, with contributions from some of theleading Limited Partners investing in the region.
Information: www.informaglobalevents.com/KM2550PES
CEE Private Equity
Date: 28 October, 2010
Location: Moscow, MICEX Stock Exchange
Organiser: Cbonds Congress
The conference targets representatives of assetmanagement companies running private equityinvestment funds, law and consulting firms, andcompanies interested in raising financing by means ofPrivate Equity, and people interested in the current statein the Russian stock market, its tendencies and outlook.
Information: www.cbonds-congress.com/events/66/
II Russian Private Equity Congress
Conferences
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