Prequin Private Equity Report September 202009

Private Equity, Venture Capital & Institutional Investor Summit

17-20 November 2009, Westin Hotel, Paris

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interaction and high value face-to-face opportunities and a programme dense with the most critical issues facing the LP and

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30% were LPs.

I’ll be giving a State Of The Union address in the morning during the Secondaries Summit, and hope to see you there.

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Mark O’Hare

Managing Director

Preqin

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Private Equity Spotlight

Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin, providing insights into private equity performance, investors and fundraising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence, Fund Manager Profi les & Funds in Market.

September 2009 / Volume 5 - Issue 9

PERFORMANCE • INVESTORS • FUNDRAISING • FUND MANAGERS

If you would like to receive Private Equity Spotlight each month

please email [email protected].

Subscribers to Performance Analyst and Investor Intelligence

receive additional information not available in the free version. If

you would like further details please email [email protected]

Publisher: Preqin Ltd.

Scotia House, 33 Finsbury Square, London. EC2A 1BB

Tel: +44 (0)20 7065 5100 w: www.preqin.comT

www.preqin.com

Employment in Private Equity

This month we examine how the the number of professionals

being employed by the industry has increased signifi cantly.

Feature Article page 3

Benchmarking Private Equity Performance

This month we look at the diffi culties faced by investors and fund

managers alike, when trying to benchmark private equity fund

performance.

Performance Spotlight page 9

This month’s Fundraising Spotlight takes an in-depth look at buyout,

venture and life science private equity fundraising.

Fundraising Spotlight page 15

All the latest news on private equity investors:

Including...

Banque Transatlantique•

AG2R•

Investor News page 25

Private Equity Employment Special

Buyout Dry Powder

This month’s Fund Manager Spotlight looks at the amount of dry

powder available to buyout fund managers.

Fund Manager Spotlight page 12

OUT NOW

The 2009 Preqin Fund Terms Advisor

More information available at: www.preqin.com/fta

Be the fi rst to know about all our exclusive research reports and projects, follow us on www.twitter.com/preqin

We look at the upcoming events in the private equity world.

Conferences Spotlight page 23

Insurance Companies

This month’s Investor Spotlight features results from a recent

survey of insurance companies, and looks at how they are dealing

with the crunch.

Investor Spotlightpage 19

This month’s Secondaries Spotlight takes a look at SMM and the

latest secondaries news.

Secondaries Spotlightpage 22

3 ◄


September 2009

The private equity industry has undergone tremendous growth in recent years, with fundraising levels increasing to record levels and fund sizes growing ever bigger. As the asset class has become a more integral part in the investment portfolios of institutional investors the world over, the number of professionals being employed by the industry has increased signifi cantly. In this month’s feature article we have used data taken from our online Fund Manager Profi les database in order to document both the current levels of employment within the industry, and also examine how employment has been increasing over time.

Number of Active Private Equity Fund Managers

The private equity industry has undergone enormous growth and the number of fi rms active within private equity has grown consistently each year since the industry began. This growth is demonstrated in Fig. 1, which shows the total number of existing active fund managers each year alongside the number of new managers,

a fi gure based on the vintage of the fi rms’ fi rst funds. It should be noted that there are additional private equity fi rms not included in these fi gures because they do not manage and invest out of distinct private equity funds. 1998 saw

the total number of fund managers pass 1,000 for the fi rst time and since then the number has increased nearly four-fold. As of September 2009, there are 4,270 fi rms currently active managing private equity funds, 412 of which are new to

Feature Article: Employment inPrivate Equity

Feature Article

Fig. 2:

57 81 89 106 119149

175207

241278

329385

426

490524

576628

673

738780

248

1714

3026

35

36

37

54

60

44

64

40

55

59

57

75

58

65

0

100

200

300

400

500

600

700

800

900

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

New

Existing

Total Number of Active Buyout Fund Managers per Year (by Vintage of First Fund Raised)

No.

of A

ctiv

e B

uyou

t Fun

d M

anag

ers

Fig. 3:

177 196 204 224 253 281 329 386479

557690

8901028

11601250

13541446

15431647 1697

20 10 21 31 3453

65100

95

141

204

150

143

100

117

105

124

135

106135

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

New

Existing

Total Number of Active Venture Fund Managers per Year (by Vintage of First Fund Raised)

No.

of A

ctiv

e Ve

ntur

e Fu

nd M

anag

ers

Fig. 1:

287 346 373 422 477 561 665 789 956 11271358

16911937

22072418

26802962

32673607

3858

60 29 50 58 90110

138176

192246

341

264

284

230

287

307

354

390

337

412

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

New

Existing

Total Number of Active Private Equity Fund Managers per Year (by Vintage of First Fund Raised)

* / Raising

4 ◄


September 2009

... there is a consistent growth taking place annually in the number of private equity fund managers based in North America, Europe and Asia and Rest of World ...

“

the industry this year. From these annual totals we have subtracted fi rms that have not raised a fund in the past 10 years and are not currently raising one. The number of fi rms considered to have become inactive so far in 2009 stands at 86.

Number of Active Buyout Fund Managers

The number of active managers that principally raise buyout funds has grown consistently year on year, and the fi gure now stands at 845 managers, as shown in Fig. 2. In 2009, there have been 65 new buyout fund managers joining the sector, while there have been 16 managers reaching the 10 year point without raising a new fund or being in the process of raising one. Over the past 10 years, on average, 58 new buyout fund managers have come into existence annually.

Number of Active Venture Fund Managers

The number of active managers that principally raise venture funds has increased each year, although the rate of growth has fl uctuated. Growth in

the number of venture fund managers accelerated rapidly at the end of the 1990s into this decade, with a record 204 fi rms with a fi rst fund of vintage 2000. Following this, the rate of growth has decreased somewhat. The total number of venture fund managers now stands at 1,832, with 135 new fi rms having joined the industry

this year, as shown in Fig. 3.

Number of Active Private Equity Fund Managers by Region

Figs. 4, 5 and 6 show the number of active private equity fund managers each year in North America, Europe and Asia and Rest

“Fig. 4:

Feature Article

229 267 282 313 350 406 480 557 662 749874

10441171

13151427

15731700

18151957

2067

39 16 32 39 6080

90113

102137

177

136155

126166

146150

176154

200

0

500

1000

1500

2000

2500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NewExisting

Num

ber o

f Nor

th A

mer

ica-

base

d Fu

nd M

anag

ers

Total Number of North America-based Fund Managers per Year (by Vintage of First Fund Raised)

Fig. 5:

40 55 63 73 84 101 117 148 187241

315425

509588

652709

787879

10021068

15 9 10 11 19 16 3239

59

77

110

89

80

6662

80

103

127

92

99

0

200

400

600

800

1000

1200

1400

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NewExisting

Total Number of Europe-based Fund Managers per Year (by Vintage of First Fund Raised)

Num

ber o

f Eur

ope-

base

d Fu

nd M

anag

ers

Fig. 6:

18 24 28 36 43 54 68 84 107 137169

222257

304339

398475

573648

723

6 4 8 8 11 14 16 2431

32

54

39

49

38

59

81

101

87

91

113

0

100

200

300

400

500

600

700

800

900

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NewExisting

Total Number of Asia and Rest of World-based Fund Managers per Year (by Vintage of First Fund Raised)

Num

ber o

f Asi

a an

d R

est o

f Wor

ld-b

ased

Fun

d M

anag

ers

5 ◄


September 2009

of World respectively. All three graphs show the consistent growth taking place annually in the number of private equity fund managers based in North America, Europe and Asia and Rest of World.

North America-based fund managers represent the largest percentage (53%) of fi rms overall, with 2,267 of the 4,270 fi rms currently active based in this region. In second place are European-based fi rms, with a total of 1,167 fund managers, accounting for 27% of the global total. Asia and Rest of World-based fund managers make up the remaining 20% of the worldwide total, with 836 fi rms currently active.

Total Number of Employees in the Private Equity Industry

The growth in the number of active private equity fi rms has naturally meant that the overall number of employees within the industry has grown. Including fi rms that do not raise, manage and invest out of distinct private equity funds, there are currently almost 6,000 fi rms active in the private equity industry worldwide, and these fi rms directly employ an estimated 69,000 people. The industry remains fragmented in terms of the share of funds raised by the smallest and largest fi rms: the largest 10 fi rms account for 15.9% of the total assets under management in the industry, while the top 100 account for 45.8%. It is important to note that our estimate here constitutes the “core” of the industry, taking into consideration fi rms managing funds that institutional and other large investors invest in. Beneath this lies a further tranche of smaller fi rms that invest lesser sums of capital, raising capital from private sources such as friends and family.

Number of Employees in Private Equity by Country

When analysing employment in the private equity industry by country, the US is the clear leader in terms of the number of employees, with approximately 38,500, as displayed in Fig. 7, or 56% of the global total. The UK is second with 7,700 – 11% of the global total. France comes in

third with 2,300, while Germany, Australia, Canada, Japan and India all have more than 1,000 employees within the industry.

Number of Employees in Private Equity by City

Fig. 8 shows that New York is the leading city in terms of the number of people employed in the private equity industry,

with an estimated 11,000 employees. London comes in second, with 7,000 private equity employees, while San Francisco is third, with 3,900. Boston and Paris make up the top fi ve. Cities in the US occupy seven of the places in the top 15, while there are three European and three Asian cities on the list. Toronto and Sydney complete the list.

Feature Article

Fig. 7:

38,500

7,700

2,300 1,500 1,400 1,400 1,100 1,000 900 900 800 800 800 600 600

8800

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

US UK France Germany Australia Canada Japan India Hong Kong Switzerland China (exc. Hong Kong)

Italy Sweden Israel Netherlands Other

Estimated Private Equity Employment by Country*E

stim

ated

Tot

al E

mpl

oym

ent

Fig. 8:

11,000

7,000

3,900

2,7002,200

1,7001,300 1,200 1,000 1,000 900 800 750 700 600

0

2,000

4,000

6,000

8,000

10,000

12,000

New York London San Francisco**

Boston Paris Chicago Washington Los Angeles Sydney Tokyo Hong Kong Dallas Stockholm Toronto Singapore

Estimated Private Equity Employment by City*

Est

imat

ed T

otal

Em

ploy

men

t

*Based upon location of head offi ce for each fi rm ** Includes Menlo Park, Palo Alto and San Mateo

6 ◄


September 2009

Number of Employees in Private Equity by Firm Type

Fig. 9 shows the estimated employment by fi rm type. This refers to the type of fund that the private equity fi rm is most synonymous with raising and managing. In spite of their generally small sizes relative to other types of fi rm, venture fi rms employ the highest number of people in the industry worldwide – 21,100 – due to the fact that such fi rms are so numerous. Buyout fi rms are close behind, with a total of 20,600 employees – despite the fact that buyout fi rms manage well over twice the amount of assets that venture fi rms manage. Real estate fi rms are the third-largest employer in the industry, with an estimated 11,100 employees in total.

Number of Employees in Private Equity by Firm Size

The number of staff employed by a private equity fi rm varies signifi cantly with the size of the fi rm, as shown in Fig. 10. A fi rm with less than $250 million in assets under management employs 10 staff on average, while a fi rm with $10 billion or more in total assets employs an average of 245 people. Naturally, there are signifi cant economies of scale to be enjoyed by the larger private equity fi rms, and such fi rms typically have fewer staff per $1 billion in assets under management than their smaller counterparts. Fig. 10 shows that fi rms with less than $250 million in assets under management employ, on average, the equivalent of 130 members of staff per $1 billion in assets, or $7.7 million managed per employee. For fi rms with $10 billion or more in total assets the fi gure drops to just 10, or one employee for every $100 million managed.

Since the management fees that private equity fi rms collect are almost universally calculated as a percentage of total investor commitments to a fi rm’s funds, one would expect that the percentage rates charged by fi rms managing the largest funds would be lower than those charged by fi rms managing less. As is detailed in the 2009 Preqin Fund Terms Advisor, this is indeed the case: buyout

funds of $5 billion or more in size have average management fees of around 1.5%, for example, while the fi gure for buyout funds under $500 million is over 2%, rising to 2.1% for the smallest buyout funds (those below $100 million). However, the slightly lower fees charged by the largest funds only partially refl ect the economies of scale that the larger

fi rms benefi t from. As a result, the operating economics of the largest funds are very favourable and the management fees earned by these vehicles have become the primary source of income for their managers.

Consequently, and particularly in light of the current economic climate and its

Feature Article

Fig. 10:

10.3 14.5 18.3 22.229.5

59.8

113.3

244.8

130.4

40.830.9 25.6 19.8 18.7 14.3 10

0

50

100

150

200

250

300

Less than $0.25 bn

$0.25-0.49 bn

$0.5-0.74 bn

$0.75-0.99 bn

$1-2.4 bn $2.5-4.9 bn $5-9.9 bn $10 bn and above

Average No. of Staff

Average No. of Staff per $1 bn AUM

Average Number of Staff per Firm by Value of Funds Managed by Firm

Fig. 9:

21,100 20,600

11,100

6,000

2,900 2,400 2,000 1,300 900 8000

5,000

10,000

15,000

20,000

25,000

Venture Buyout Real Estate Fund of Funds

Distressed Private Equity

Infrastructure Mezzanine Balanced Natural Resources

Other

Estimated Private Equity Employment by Firm Type*E

stim

ated

Tot

al E

mpl

oyed

*Based upon fund type most associated with fi rm

Assets Under Management

7 ◄


September 2009

effects on the GP/LP relationship, there is pressure from LPs on GPs of the larger funds to reduce the management fee rates for new vehicles looking to raise capital. Investors are seeking to bring management fee levels more in line with the actual costs associated with running funds of different size and type.

Feature Article

Preqin: Employment and Research Solutions

Preqin currently employs over 50 staff directly involved with collecting comprehensive data, compiling accurate contact information, producing reports and developing the functionality of our online products. In addition we also have a signifi cant number of Client Services Consultants located in our London and New York offi ces in order to ensure that our clients are always able to receive a high level of support.

As a result Preqin is the trusted source of data and intelligence with 80% of the largest fi rms worldwide using our online services, in addition a large number of smaller fi rms of all different types are included amongst our clients. In total, over 2,000 users worldwide use Preqin’s online services in order to leverage their resources and increase effi ciency. Additionally over 30,000 people have access to our research by subscribing to our monthly Spotlight newsletters.

If you are not already using Preqin’s services, please visit our website in order to learn more and register for trial access: www.preqin.com

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The Preqin Performance Benchmarks module offers comprehensive benchmarking tools for the private equity industry. The benchmarks are calculated using performance returns for over 4,500 funds from our Performance Analyst database, the world's most extensive and transparent database of private equity and venture capital fund performance. In terms of aggregate value, this represents around 70% of all capital ever raised.

Preqin’s high level of coverage enables us to produce the most meaningful benchmarking and comparative tools available in the industry. Key features of the Preqin Performance Benchmarks module include:

Median, pool, weighted and average benchmarks by fund type and region focus.• View Benchmarks ratios for called-up, distribution, value and top, median and bottom quartile IRRs and multiples.• View benchmarks calculated using the most up-to-date data available in the industry and at specifi c quarter-ends.• Assess the performance of your own funds or your portfolio of funds and see in what quartile they ranked.• View what funds are included in the benchmarks (Performance Analyst users are able to see the individual fund • performance of each fund).Download the benchmarks to spreadsheet for further analysis.•

To fi nd out more about this industry-leading new service, or to start using Preqin’s Private Equity Benchmarks, please visit:

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Private Equity Benchmarks

...the lack of reliable tools often makes it diffi cult to meaure private equity performance...

““Problem:

Solution:

...Preqin is now offering free access to its powerful benchmarks which provide solid performance data...“ “

9 ◄


September 2009

Performance Spotlight:

Benchmarking Private Equity

Comparing investment performance is essential for private equity investors and fund managers alike, but the lack of reliable tools often make it diffi cult to establish consistent and comprehensive benchmarks. Many fi nancial data providers are competing to offer in-depth comparison tools for other investment classes but data is very limited for private equity. Moreover the few institutions which are monitoring the performance of the private equity industry are providing very different tools that vary in both coverage and quality. Therefore, to fulfi l the needs of private equity professionals and institutional investors, Preqin is now offering free access to its powerful benchmarks which provide solid performance data.

Preqin calculates complete and transparent performance benchmarks using data from its online product Performance Analyst. We currently hold net-to-LP data for a total of 4,808 funds of all types on a global scale, with performance data for around 44% of all funds of vintages 1990 to 2006. However, even this fi gure understates the true coverage of our performance data: generally we have performance data for a

greater proportion of the larger funds so, in terms of value, the database accounts for 70% of all private equity funds ever raised.

Preqin sources its data using a variety of means, including Freedom of Information Act requests, previously published information and voluntary data sharing. Limited partners are our primary source of performance data and to-date we have gathered data from almost 300 public pension funds and endowments. GPs have also become an increasingly important source of data and the number of contributors of this type now totals 800. With thousands of prospective investors viewing the performance data on a fund level, GPs now recognise the importance of providing the most accurate and up-to-date data. As our research program grows more extensive, it allows us to cross-check the data for individual funds with information from different sources, thereby increasing its reliability. As a result the benchmarks we produce are accurate and representative, and have become relied upon by thousands of private equity professionals on a daily basis.

Preqin calculates benchmarks for buyout,

fund of funds, mezzanine, real estate private equity, early stage and venture funds across North America, Europe and Asia and Rest of World. Performance ratios for called-up, distribution, unrealised value, multiples and IRRs are calculated for median, average, money-weighted and pooled benchmarks.

Preqin’s median benchmark simply ranks the fund performance from the best to the worst and is particularly helpful to compare specifi c funds against a typical median return. This type of benchmark is also used to identify the top, median and bottom quartile IRRs and multiples, and therefore can be used to identify which funds are ranked top quartile or bottom quartile.

Money-weighted and pooled benchmarks are both aimed at assessing the performance of a portfolio of funds. The performance ratios are weighted according to the size of each fund therefore refl ecting the total returns that LPs can expect to earn on their private equity investments as a whole.

Pooled benchmark IRRs are the most accurate measurement as it also takes into account the timing of each contribution and distribution. Pooled cash fl ow IRRs are calculated by aggregating cash fl ows for a portfolio of funds; and calculating the resulting IRR. Money-weighted is a benchmark that takes the performance ratios of each individual fund and calculates a weighted average using the size of each fund. Figures calculated using the money-weighted methodology are very close to pooled cash fl ow IRRs but the universe of funds is much larger and the results are therefore more robust.

Preqin’s benchmarks are fully transparent and users are able to view the names of the constituent funds. Subscribers to our Performance Analyst product are even able to see the individual fund return

Performance Spotlight

10 ◄


September 2009

for each partnership included in the benchmark. By downloading fund level data, these users are able to conduct further analysis and to construct their own tailor-made benchmarks.

With net returns data for more than 4,800 private equity funds worldwide, Preqin’s fund performance returns and benchmarking tools are not comparable to any other service. Aiming to bring increased transparency and understanding to the private equity industry, we are now offering everyone in the industry the opportunity to gain free access to our powerful benchmarks.

Performance Spotlight

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India Private Equity: New Opportunities

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2009 Preqin Infrastructure Review:Order Form

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(contains all underlying data for charts and graphs contained in the publication. Only available alongside purchase of the publication).

The 2009 Preqin Infrastructure Review is the most comprehensive examination of the unlisted infrastructure fund market ever produced. With exclusive information on over 250 fi rms, 400 funds and over 230 investors in the sector, plus detailed analysis reviewing every aspect of the industry, the Preqin Infrastructure Review is a vital purchase for fund managers, fundraising professionals, advisors, consultants, legal fi rms and investors in this rapidly growing market. Features of this year’s publication include:

Detailed analysis examining the history and development of the infrastructure market; recent funds closed; current fundraising market; fund terms and conditions; investors; performance; the listed fund market; plus separate sections showing key facts and fi gures for the most important regions. Fund terms and conditions listings for 27 vehicles, plus transparent performance data for 62 infrastructure funds (all performance data is net to investors). Profi les for over 250 infrastructure fi rms and 400 funds, including detailed investment strategies and key information. Profi les for over 230 investors in the sector, including investment plans and key contact details.

•

• • •

12 ◄


September 2009

Fund Manager Spotlight:Dry Powder in Buyout

Fund Manager Spotlight

In December 2008 Preqin estimated that there was just over $1 trillion in private equity dry powder, and buyout fund managers were sitting on half of this total, ($500.9 billion). This research report takes an in-depth look at the types and locations of the fi rms sitting on this un-called capital.

Fig. 1 shows the dry powder available to buyout funds from December 2003 to September 2009. The data reveals that the amount of buyout dry powder available has increased year on year since December 2004. The only decrease was a marginal 5% decline between 2003 and 2004. Between December 2004 and December 2008, the amount of dry powder available to buyout funds increased from $178 billion to $501 billion, although the rate of this increase has tapered each year since 2006. The fi gure from September 2009 indicates that the December 2009 total will also be in line with this trend.

Fund Size

Fig. 2 illustrates the amount of buyout dry powder available to buyout funds of

various fund sizes. The graph reveals that mega buyout funds (those with capital commitments of more than $3.5 billion) have seen the levels of dry powder increase drastically between December 2004 and December 2008, swelling from

$39 billion to $267 billion. Smaller buyout funds have not seen the same increase in dry powder over this time period. Between December 2004, the date at which the level of dry powder was roughly equal for all fund sizes, and December 2008, large

Fig. 1:

186.43 177.99

258.78

378.84

461.61500.93 508.54

0

100

200

300

400

500

600

Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Sep 2009

Dry Powder Available to Buyout Funds - December 2003 - September 2009

$bn

Fig. 2:

0

50

100

150

200

250

300


Mega Buyout (> $3.5bn) Large Buyout ($1.0bn - $3.5bn) Mid Market ($300mn-$1.0bn) Small Buyout (< $300mn)

Dry Powder Available to Buyout Funds by Fund Size

$bn

Fig. 3:

0

50

100

150

200

250

300


US Europe Asia and Rest of World

Dry Powder Available to Buyout Funds byRegion Focus

$bn

13 ◄


September 2009

buyout funds have seen an increase in dry powder of 110%. Mid-market buyout funds experienced an increase of 68%, while small buyout funds saw an increase of 17%. These fi gures confi rm that over the past half-decade the larger the buyout fund, the more dry powder that has become available to invest.

Fund Focus

Fig. 3 depicts the amount of dry powder available to buyout funds by regional focus. The graph reveals that, since December 2003, buyout funds investing in the US have persistently had the most dry powder available, followed by funds investing in Europe, and lastly funds investing in Asia and Rest of World. All

regions have seen a continuous increase in the amount of dry powder available since December 2003, the only exception being a small decrease between December 2003 and December 2004 for US focused funds. In absolute terms, buyout funds focused on the US have seen the largest increase in dry powder from December 2003 to December 2008, followed by those focused on Europe, then those focused on Asia and Rest of World. However, in terms of percentage increase from over the same period, the ranking is reversed with Asia and Rest of World experiencing a 517% increase in dry powder, Europe a 248% increase, and US focused buyout funds a 114% increase.

Fund Manager Location

Fig. 4 shows the top 10 buyout fi rms by estimated dry powder. Looking at the location of these fi rms it is clear that the majority of the fi rms (90%) are based in the US. The only other location which features in this top 10 is the UK, which is home to the fourth largest buyout fi rm by dry powder available - CVC Capital Partners.

Top 10 Buyout Firms by Estimated Buyout Dry Powder

Firm Location Estimated Buyout Dry Powder ($ Bn)

Advent International US 22.2

TPG US 21.7

Carlyle Group US 17.1

CVC Capital Partners UK 16.8

Kohlberg Kravis Roberts US 13.6

Blackstone Group US 13.0

Bain Capital US 12.2

Goldman Sachs Private Equity Group US 12.1

Apollo Management US 11.1

Apax Partners UK 9.2

Fig. 4:

Benjamin Formela-Osborne

New to Fund Manager Profi les - Dry

Powder. View historical dry powder

across the private equity industry

for all private equity fund types and

geographic regions. This feature

includes in-depth analysis and a

comprehensive breakdown of dry

powder available historically across

buyout, venture, mezzanine, distressed

private equity and other fund types.

Please visit www.preqin.com for more

information and to register for a free

trial of our products.

Fund Manager Spotlight

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2009 Preqin Sovereign Wealth Fund Review

2009 Sovereign Wealth Fund Review - Chapters

1.................................................................................................. EXECUTIVE SUMMARY

2................................................................... SOVEREIGN WEALTH FUNDS OVERVIEW

3.................... PLANNED & RECENTLY ESTABLISHED SOVEREIGN WEALTH FUNDS

4............................................ SOVEREIGN WEALTH FUNDS INVESTING IN EQUITIES

5................................... SOVEREIGN WEALTH FUNDS INVESTING IN FIXED INCOME

6................................ SOVEREIGN WEALTH FUNDS INVESTING IN PRIVATE EQUITY

7........................................ SOVEREIGN WEALTH FUNDS INVESTING IN REAL ESTATE

8.............................. SOVEREIGN WEALTH FUNDS INVESTING IN INFRASTRUCTURE

9..................................... SOVEREIGN WEALTH FUNDS INVESTING IN HEDGE FUNDS

10............................................................................................................... LEAGUE TABLE

11....................................................................... SOVEREIGN WEALTH FUND PROFILES

12............................................................................................................................... INDEX

The 2009 Preqin Sovereign Wealth Fund Review

Despite the global turmoil that has seen the assets of other institutional investors drop over the course of 2008/2009, the formation of a number of signifi cant new sovereign wealth funds has seen the aggregate capital controlled by these giant investment vehicles grow by 6% from 2008 fi gures.

Sovereign wealth funds currently control an aggregate $3.22 trillion in assets under management, up from $3.05 trillion in 2008. They remain a vitally important source of capital, and have been making important investments across all the different asset classes over the past year. In response to a call for more information, we have expanded this year’s edition of the Preqin Sovereign Wealth Fund Review to include comprehensive information on all aspects and areas of sovereign wealth fund investments. This year’s review contains information on equities, fi xed income, private equity, hedge funds, real estate and infrastructure.

Key features of this years publication include:

Full profi les for all sovereign wealth funds, including: •

Fund background Contact details Key fi nancial information Overall investment plan Asset class specifi c investment plans and preferences Fund investments and public/private holdings Advisors and consultants used

Key contact information for each of these sovereign • wealth funds, including direct email addresses and phone numbers.

Overview of the sovereign wealth fund market, its history • and our predictions for the future of the market.

Details and information on planned and recently • established sovereign wealth funds.

Separate analysis sections identifying all key trends and • patterns for sovereign wealth fund activity in:

Equities Fixed income Private equity Real estate Hedge funds Infrastructure

League table showing the top sovereign wealth funds, • by assets under management.

To see sample pages, an executive summary, and further information on ordering your copy online, please visit: www.preqin.com/swf

15 ◄


September 2009

Fundraising Spotlight:Buyout

KKR E2 Investors - Annex Fund

Manager: Kohlberg Kravis RobertsTarget Size (mn): 400 USDClosings (mn): Final Close: 400 USDGeographic Focus: EuropeIndustry Focus: AnySample Investors: Etera Mutual Pension Insurance Company, Finnish Industry Investment, Ilmarinen Mutual Pension Insurance Company, KKR Private Equity Investors, Oregon State Treasury, Washington State Investment Board

Unison Capital Partners III

Manager: Unison CapitalTarget Size (mn): 150000 JPYClosings (mn): First Close: 90200 JPY (Aug-2008), Second Close: 116345 JPY (Oct-2008), Final Close: 140000 JPY (Aug-2009)Geographic Focus: JapanIndustry Focus: Pharmaceuticals, Consumer Products, Industrial, Manufacturing, Media, Information Services, Food, Restaurants, Publishing, IT Infrastructure, Telecom Media

Sample Investors: Princess Private Equity Holding

Sentica Buyout III

Manager: Sentica PartnersTarget Size (mn): 100 EURClosings (mn): First Close: 50 EUR (Nov-2008), Second Close: 74 EUR (Jan-2009), Final Close: 113 EUR (Aug-2009)Geographic Focus: FinlandIndustry Focus: Healthcare, Industrial, Engineering, Information Services, Business Services, OutsourcingSample Investors: Etera Mutual Pension Insurance Company, Finnish Industry Investment, Ilmarinen Mutual Pension Insurance Company

Final Close Barometer

131

53

144

68

020406080

100120140160

Jan-Sept 2008 Jan- Sept 2009

No. of Funds Aggregate Capital ($bn)

Funds on the Road US Europe ROW Total

No. of Funds 129 65 63 259

Aggregate Target Size ($bn) 124 36 37 197

Average Size ($mn) 959 549 587 760

Buyout Funds on the Road

Recently Closed Buyout Funds

Fund Manager Target Size (mn) GP LocationBlackstone Capital Partners VI Blackstone Group 15,000 USD US

KKR Fund 2009 Kohlberg Kravis Roberts 8,000 USD US

Candover 2008 Candover Partners 5,000 EUR UK

Madison Dearborn Capital Partners VI Madison Dearborn Partners 7,500 USD US

Hellman & Friedman VII Hellman & Friedman 7,000 USD US

Morgan Stanley Capital Partners V Morgan Stanley Private Equity 6,000 USD US

Clayton Dubilier & Rice VIII Clayton Dubilier & Rice 5,000 USD US

Abraaj Buyout Fund IV Abraaj Capital 4,000 USD United Arab Emirates

Onex Partners III Onex Corporation 4,000 USD Canada

JC Flowers III JC Flowers & Co 3,500 USD US

Buyout Funds on the Road

Fundraising Spotlight

Anna Strumillo

16 ◄


September 2009

Fundraising Spotlight:Venture


289

9556.8

17.40

50100150200250300350

Jan-Sept 2008 Jan- Sept 2009



No. of Funds 221 104 147 472

Aggregate Target Size ($bn) 43 21 27 91

Average Size ($mn) 196 198 181 192

Venture Funds on the Road

Keytone Ventures China Fund

Manager: Keytone Ventures Target Size (mn): 200 USDClosings (mn): First Close: 104 USD (Oct-2008); Final Close: 200 USD (Jul-2009)Geographic Focus: ChinaIndustry Focus: Technology, Consumer Products, Media, Clean TechnologyLawyer: Gunderson DettmerSample Investors: Jade Invest

Aureos Latin America Fund

Manager: Aureos CapitalTarget Size (mn): 300 USDClosings (mn): First Close: 140 USD (Sept-2009); Final Close: 184 USD (Jul-2009)Geographic Focus: Colombia, Mexico, PeruIndustry Focus: Transportation, Manufacturing, Financial Services,

Agriculture, Any, Education / Training, LogisticsLawyer: SJ BerwinSample Investors: CDC Group, International Finance Corporation (IFC), Swiss Investment Fund for Emerging Markets (SIFEM)

Domain Partners VIII

Manager: Domain AssociatesTarget Size (mn): 700 USDClosings (mn): Final Close: 500 USD (Aug-2009)Geographic Focus: USIndustry Focus: Life SciencesSample Investors: San Francisco City & County Employees’ Retirement System

Lola Aboderin

Fund Manager Target Size (mn) GP LocationCyrte Investments TMT Fund Cyrte Investments 3,000 EUR Netherlands

New Enterprise Associates XIII New Enterprise Associates 2,500 USD US

Invention Investment Fund II Intellectual Ventures 2,500 USD US

China-Singapore Hi-tech Industrial Investment Fund

China-Singapore Suzhou Industrial Park 1,330 USD China

Riverwood Capital I Riverwood Capital 1,250 USD US

Shanghai Financial Development Investment Fund

Jinpu Industrial Investment Fund Management 8,000 CNY China

ECP Africa Fund III Emerging Capital Partners 1,000 USD US

Hudson Clean Energy Partners Hudson Clean Energy Partners 1,000 USD US

Millennium Private Equity Media & Telecommunication

Millennium Private Equity 1,000 USD United Arab Emirates

Venture Funds on the Road

Recently Closed Venture Funds


17 ◄


September 2009

Fundraising Spotlight:Life Science


16

9

3.772.61

02468

1012141618

Jan-Sept 2008 Jan-Sept 2009



No. of Funds 18 10 3 31

Aggregate Target Size ($bn) 3.134 1.613 0.284 5.031

Average Size ($mn) 174.1 161.3 94.7 162.3

Life Science Funds on the Road

Essex Woodlands Health Ventures VIII

Manager: Essex Woodlands Health VenturesFund Type: VentureTarget Size (mn): 1000 USD Closings (mn): First Close: 800 USD (Mar-2008), Final Close: 900 USD (Mar-2009) Geographic Focus: Asia, Europe, North America Lawyer: Choate, Hall & StewartPlacement Agent: Denning & CompanySample Investors: Adams Street Partners, Aetna, California Public Employees’ Retirement System (CalPERS), Conversus Asset Management, Kentucky Retirement Systems, State Teachers’ Retirement System of Ohio, Texas Children’s Hospital, Wellcome Trust

GBS BioVentures IV

Manager: GBS Venture Partners Limited Fund Type: Early StageTarget Size (mn): 200 AUD Closings (mn): Second Close: 100 AUD (Nov-2008), Final Close: 122.5

AUD (Mar-2009) Geographic Focus: Australia Sample Investors: Australian Reward Investment Alliance, Industry Funds Management, Macquarie Group, Meat Industry Employees’ Superannuation Fund, Quay Partners, Victorian Funds Management Corporation

SHS Fonds III

Manager: SHS Gesellschaft für Beteiligungsmanagement Fund Type: Late StageTarget Size (mn): 70 EUR Closings (mn): First Close: 40 EUR (Feb-2008), Final Close: 51 EUR (Mar-2009) Geographic Focus: Austria, Germany, Switzerland Lawyer: P+P Pollath + PartnersSample Investors: Baden-Württembergische Versorgungsanstalt für Ärzte, Zahnärzte und Tierärzte, CFH - Sachsen LB Corporate Finance Holding, Contrium Capital, European Investment Fund, KfW – Bankengruppe

Fund Manager Type Target Size (mn) LocationSV Life Sciences Fund V SV Life Sciences Venture 400.0 USD US

Symphony Capital Partners II Symphony Capital Venture 400.0 USD US

New River Management VI Third Security Expansion 400.0 USD US

Linden Capital Partners II Linden Buyout 300.0 USD US

Forbion Venture Fund II Forbion Capital Partners Venture 200.0 EUR Netherlands

Lumira Capital II Lumira Capital Corp. Venture 250.0 USD Canada

Spur Ventures III Spur Capital Partners Fund of Funds 250.0 USD US

Life Sciences Partners IV Life Sciences Partners Venture 150.0 EUR Netherlands

NeoMed V NeoMed Venture 150.0 EUR Norway

Global Life Science Venture Fund III Global Life Science Ventures Venture 150.0 EUR Germany

Life Science Funds on the Road

Recently Closed Life Science Funds


Benjamin Formela-Osborne

Calling all LPs Keen to discover the true value of your private equity portfolio?

+44 (0)20 7065 5100

+1 212 808 3008

[email protected]

www.preqin.com

London:

New York:

Email:

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For a free and confi dential indicative valuation

of all or part of your private equity holdings visit:

www.preqin.com/secondarymonitor

Preqin’s

Secondary Market

Monitor

19 ◄


September 2009

Investor Spotlight:Insurance Companies’ ActivityFollowing the Financial Crisis

Investor Spotlight

This month’s Investor Spotlight examines some of the results of a recent survey of insurance companies. We look at how the fi nancial crisis has affected their private equity plans, how they expect their allocation to change in the future, and what returns they expect from their investments in the asset class.

Within the private equity universe,insurance companies, with an average target allocation of 3.7%, invest a relatively small proportion of their assets in private equity compared to other types of institutional investor, such as pension funds, endowment plans, asset managers, foundations and family offi ces. This is often due to the practical and regulatory need for insurance companies to maintain a low level of risk.

Although private equity typically makes up only a small percentage of an insurance company’s investment portfolio, the large size of their assets under management means that this small percentage accounts for a considerable proportion of the aggregate capital committed to private equity. Preqin’s 2009 Global Private Equity Review shows that, without taking account of fund of funds and asset managers, the capital invested by insurance companies represents 13% of the aggregate capital invested in the asset class, a fi gure which is only exceeded by pension funds.

Effects of the Financial Crisis

Following on from our recent research report concerning private equity investors’ views of the asset class in the current climate, Preqin’s analysts have been talking to insurance companies to see how the fi nancial crisis and economic downturn of the past 12 months have affected their plans for, and expectations of, the private equity asset class.

Fig. 1 shows the changes which insurance companies are making to their private equity plans in the wake of the economic downturn. While nearly a quarter of the insurance companies that we spoke to said that their plans for private equity had been unaffected by the fi nancial crisis, a similar percentage told us that it had caused them to conduct a more stringent due diligence process, with some specifying that they sought a higher degree of transparency and information from fund managers regarding prospective deal fl ow and existing underlying investments.

Approximately 40% of these respondents informed us that, as well as employing a stricter due diligence process, they were also making fewer investments than in previous years. Such a process is not only time consuming, but it also reduces the number of investment opportunities available for consideration by a company. This is not necessarily a bad thing, given

the current fi nancial climate and the fact that insurance companies must maintain a reasonable level of liquidity.

13% of insurance companies stated that, as a result of the fi nancial crisis in the past year, they had decided not to make any new commitments to private equity for at least 12 months. In contrast to this, approximately 16% of the fi rms we spoke to said that they were focusing more on a particular area of the market as a direct result of the crisis, with popular strategies including small-mid market buyout, distressed debt and turnaround, as well as both secondaries funds and purchases of fund stakes on the secondary market. A number of respondents explained that their private equity plans had changed in other ways including: putting a temporary hold (of less than 12 months) on commitments, increasing a private equity target allocation, and re-entering the asset class due to attractive opportunities becoming available following the crisis.

Fig. 1:

What Changes Have Been Made to Your Private Equity Plans In The Wake of the Financial Crisis?

Pro

porti

on o

f Ins

uran

ce C

ompa

nies

26%

32%

13%16% 16%

24%

0%

5%

10%

15%

20%

25%

30%

35%

More stringent due diligence

Reduced rate of commitments

No investments More focus on particular area

Other Plans remain the same

20 ◄


September 2009

Outlook

To get an idea of insurance companies’ outlook in terms of their private equity investments, we asked the participants in our survey if they intended to change their allocation to the asset class over the coming 12 months, as well as if they anticipated their long-term private equity target allocation to alter over the next 3-5 years.

As Fig. 2 shows, the majority of respondents expected to maintain their allocation to the asset class during the next year, with just over a quarter intending to increase their exposure. While this can be seen as encouraging for fund managers raising new vehicles, some insurance companies said that they expected capital calls and a lack of distributions, rather than new commitments, to be the main reason for their allocation staying the same or increasing over the next 12 months.

Insurance companies’ expectations for their long-term target allocation, therefore, is perhaps a better indication of their attitudes towards the asset class and the level at which they anticipate being active within it in the future. With just 8% of those that we

spoke to expecting a drop in their long-term target allocation, it seems clear that insurance companies remain dedicated to investing in private equity.

Moreover, a considerable proportion of insurance companies (42%) believe that they will increase their target allocation in the long-term. Should such expectations be fulfi lled, the average target allocation of

insurance companies is likely to move towards those of other institutional investor types, which typically exceed 5%. This suggests that, with signifi cant assets under management, insurance companies would play a more prominent role as investors in private equity in the future.

Performance Expectations

A barrier to insurance companies increasing their involvement in the private equity asset class could come in the form of tighter regulations, with authorities around the world reacting to the turmoil in fi nancial markets of the last year. The investments of insurance companies in particular have been affected, with further restrictions on the exposure to risk planned in various jurisdictions. One Japanese life insurance company told us that new regulations introduced by fi nancial

authorities in the wake of the fi nancial crisis mean that it will have to increase its capital or decrease its exposure to risk assets, including alternative assets - with the latter being more likely due to the diffi culty of increasing capital.

Fig. 3 illustrates the returns which the participants in our survey expect from their private equity portfolio.

Investor Spotlight

Fig. 3:

What Returns Do You Expect From Your Private Equity Portfolio?

Fig. 2:

Insurance Companies’ Intentions For Their Private Equity Allocations

Pro

porti

on

27%

42%

66%

50%

7% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Private equity allocation in the coming year

Long-term private equity target allocation over the next 3-5 years

Decrease

Maintain

Increase

21 ◄


September 2009

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With the level of risk held by insurance companies being a key issue for this investor type, it is understandable that these fi rms expect signifi cant returns from their private equity investments. 85% of the insurance companies we spoke to said that they expected their private equity portfolio to outperform the public market by more than 2%, with more than half of respondents stating that they look for returns in excess of 4% over the public market.

A few insurance companies stated that they do not seek a specifi c level of performance from their private equity portfolio however, with some investing for purely strategic reasons. These included maintaining relationships with particular fi rms or contributing to the development of certain sectors, such as healthcare and technology.

Although insurance companies may be considered to be conservative investors, our survey indicates an appetite for increased exposure to private equity. It also suggests that the fi nancial crisis and economic downturn has caused this type of institutional investor to raise its expectations of the asset class, with many implementing more stringent due diligence processes and most expecting signifi cant levels of performance from their private equity investments.

Joe Childs

Investor Spotlight

22 ◄


September 2009

The SMM LP service user base is diversifi ed geographically, with the majority of users (54%) based in North America. The service is also being used by a number of LPs based throughout ROW, forming 16% of the current user base.

User Base Geography

Secondaries Spotlight

Preqin’s Secondary Market Monitor (SMM) has attracted a great deal of interest since its launch in May. Attracted by the opportunity to obtain free, indicative portfolio pricing indications from both Preqin and third-party buyers, 118 LPs and potential sellers of fund interests are currently using the LP service. The SMM LP service user base is comprised of a variety of institutional types and includes a number of signifi cant investors in the private equity asset class.

A variety of institutions are currently using the SMM LP service. Pension funds (26%), family offi ces and foundations (13%) and asset managers (14%) feature prominently, while endowment plans comprise 12% of the user base, and banks form 9%.

User Base Firm Type

According to Preqin's unique pricing model, a $10,000,000 commitment to the median 2007 buyout fund - which would have called $3,110,000 - would today fetch $1,142,840 on the secondary market, or 46.1% of its net asset value.

Secondaries News

Teachers’ Retirement System of the State of Illinois plans to purchase fund interests on the secondary market.The USD 29 billion retirement system plans to develop a programme for the purchase of private equity fund interests on the secondary market in 2010. Buying fund stakes on the secondary market will contribute to it reaching its long-term private equity target of 10% of assets under management, which was increased from its former level of 8% in May 2009. The decision to establish a secondaries programme coincides with the recent approval of the pension fund’s plan to invest USD 1.2 billion in private equity next year.

JP Morgan Private Equity (JPEL) has raised over USD 75 million to exceed its fundraising target by over 50%.The London-listed secondaries fund, managed by Bear Stearns Asset Management (JPMorgan Asset Management), raised the capital at a premium to the stock price through a series of closings in July and August. JPEL will now be looking for cheap secondary market deals of USD 5 million and below. The fund feels that this strategy will enable it to avoid competing against bigger players on the secondary market, who will be looking

for larger acquisitions. JPEL feels there are good opportunities available on the secondary market, and it will be targeting sellers who are eager for liquidity.

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Secondaries Spotlight

23 ◄


September 2009

Date: 21 October, 2009 Location: The RoyalLancaster Hotel, LondonOrganiser: SIFMA

Keep abreast of developments in the leveraged fi nance market as the industry continues to de-leverage! This continues to be THE event, attracting hundreds of high yield and leveraged loan investors, bankers and legal, accounting and rating agency professionals and private equity sponsors from across the industry each year.

Information: www.sifma.org/leveragedfi nance2009

EHYA 4th Annual European Leveraged Finance Conference

Conferences Spotlight: ForthcomingEvents

Featured Conferences:

Date: 26-29 October, 2009 Location: Sandton Convention Centre, JohannesburgOrganiser: Terrapinn The time has never been better for industry leaders acrossthe continent to get together and discuss the changesand challenges facing this asset class. Private EquityWorld Africa 2009 brings you this insight at the SandtonConvention Centre, Johannesburg from 26 - 29 October2009. Don’t miss the greatest opportunity to learn andimplement industry best practice.

Information: http://w ww.terrapinn.com/2009/peza

Private Equity World Africa 2009

Conferences Spotlight

Date: 28 October, 2009 Location: Taj Mahal Palace and Tower Hotel, Mumbai, IndiaOrganiser: IBF Media The IBF Media India Private Equity Conference is the largest private equity conference in India, delivering unrivaled insight and analysis about the most-timely issues affecting the industry. This year’s conference will address the dramatic challenges - and opportunities - created by the new market environment, and where are the new opportunities.

Information: http:// www.ibfmedia.com

IBF Media India Private Equity Conference 2009

Date: September 22-23, 2009 Location: New YorkOrganiser: iGlobal Forum Global economic crisis hasn’t spared anyone. Available funding is drying up and companies in virtually all sectors are struggling to remain afl oat. List of businesses in distress is growing longer by the minute. Even the most successful companies fi nd themselves facing distressed situations, opening another window of opportunities for investing in distressed debt across the globe.The event will unite Distressed Fund Managers, Private Equity Fund Managers, Hedge Fund Managers, M&A and Turnaround Advisors, Investment Bankers, Bankruptcy Advisors, Loan Originators, Debt Providers, and Rating Agencies.

Information: http:// www.iglobalforum.com

iGlobal Forum Global Distressed Debt Investing

24 ◄


September 2009

Date: 5-6 November, 2009 Location: Renaissance Chancery Court, LondonOrganiser: C5 The time has come again for leading private equity professionals to get together for C5’s CEE Private Equity Forum which continues to attract hundreds of participants since its inception in 1996. This key industry event covers an area of strong interest to institutional and private investors targeting positive returns in adverse conditions.

Information: http://www.ceeprivateequityforum.com/MR09

CEE Private Equity Forum

Date: 17-20 November, 2009 Location: ParisOrganiser: ICBI

Hear from 180 of the most infl uential thinkers in a one-stop learning and networking shop, packed with interaction and high value face-to-face opportunities and a programme dense with the most critical issues facing the LP and GP community. Last year 700+ attended this private equity & institutional investment event, of which more than 30% were LPs!

Information: http://www.icbi-events.com/superinvestor-preqwb

SuperInvestor 2009

Other Conferences:

CONFERENCE/EVENT DATES LOCATION ORGANISER2009 Investment Forum for Endowments, Foundations and Pension Funds

September 2009 (tbc) New York Argyle Executive Forum

Capital Creation 2009 15 - 17 September 2009

Monte Carlo Worldwide Business Research

FundForum Latin America 15 - 17 September 2009

Sao Paulo ICBI

Annual Institutional Investor Summit 15 September 2009 New York iGlobalSucceeding at Fundraising 16 September 2009 New York Capital RoundtableSuperReturn Asia 21 - 24 September

2009Hong Kong ICBI

9th MedTech Investing Europe Conference 28 - 29 September 2009

London Campden Conferences

SuperReturn Middle East 11 - 14 October 2009 Dubai ICBIEVCA Venture Capital Forum 14 - 16 October 2009 Berlin EVCAEmerging Managers Summit South 15 - 16 October 2009 San Antonio Opal Financial GroupEuropean Alternative & Institutional Investing Summit 19 - 21 October 2009 Monte Carlo Opal Financial GroupFundForum Middle East 19 - 22 October 2009 Bahrain ICBIEuropean Leveraged Finance Conference 21 October 2009 London SIFMAPrivate Equity World Africa 2009 26 - 29 October 2009 Johannesburg TerrapinnThe Emerging Markets Private Equity Forum 2009 3 - 4 November 2009 London PEI Media14th CEE Private Equity Forum 5 - 6 November 2009 London C59th Annual Super Investor 17 - 20 November

2009Paris ICBI

Conferences Spotlight: ForthcomingEvents

Conferences Spotlight

25 ◄


September 2009

Wichita State University Endowment is seeking its fi rst investments in Europe and ROW.

The endowment, which is a relatively new investor in the private equity market, has invested solely in US focused funds since making its maiden investment to the asset class in 2008. After fi nding its feet in the US private equity market Wichita State University Endowment feels that the time is right for it to seek investment opportunities further afi eld. It is holding an opportunistic view as to the specifi c location of any European or Asia and Rest of World focussed investments over the next 12 months.

Teachers’ Retirement System of the State of Illinois plans on investing between USD 700 million and USD 1.2 billion in private equity over the course of the fi scal year.

In May 2009 Teachers’ Retirement System of the State of Illinois (TRS) increased its allocation to private equity from 8% to 10% of its total assets under management. As of June 2009, the public pension fund had just 7.8% of its assets under management invested in private equity and is now planning on making new investments in the asset class in a bid to reach its new target. Following this increased allocation to the asset class TRS hired an alternative investments offi cer, Zachary Doehla, who will focus on overseeing the public pension plan’s investments in private equity. Following a new state ethics law, TRS also reappointed RV Kuhns & Associates as its general investment consultant.

Clemens Haindl Verwaltungs is seeking its maiden investment in emerging markets.

The German family offi ce has typically invested in private equity opportunistically, a strategy which has led to investments in a variety of fund types and geographies, but has, until now, not included investments in emerging markets. Clemens Haindl Verwaltungs is now seeking its maiden investment in an emerging market focused fund and expects to make its fi rst commitment in Q4 2009 or 2010.

AG2R plans to make four new commitments to private equity funds over the next 12 months.

The insurance company, which currently allocates 2.5% of assets to private equity, is seeking to commit approximately EUR 15 million to the asset class during the next year. While legal restraints mean AG2R’s investments primarily focus on France, the company is

fl exible in terms of the fund types it invests in and views turnaround and distressed debt opportunities as particularly appealing in the current market.

Tennessee Consolidated Retirement System (TCRS) has made its maiden investments in private equity.

Since July 2009, when Tennessee state law changed allowing public funds to invest in private equity, Tennessee Consolidated Retirement System has committed a total of USD 150 million to three private equity vehicles. TCRS committed USD 75 million to Hellman & Friedman VII, USD 25million to Khosla Ventures Expansion Fund and USD 50 million to TA XI. In Q1 2009, the public pension fund appointed Lamar Villere as its director of private equity. TCRS may invest two or three more private equity funds in 2009, with the aim of increasing its private equity commitments to to USD 300 million by the end of the year.

Banque Transatlantique is reviewing its private equity investments with a view to implementing a new strategy.

The Paris-based bank is currently monitoring the private equity market and expects that it will make commitments to funds of funds in the future. While it is yet to establish a specifi c strategy, Banque Transatlantique anticipates that it could commit EUR 20 million to four or fi ve vehicles, annually. The bank includes private equity within the wealth management and advisory services offered to clients but its general investment activity has traditionally focused on listed equity.

Finnish Industry Investment has promoted Anne Riekki to investment director.

Ms. Riekki, who joined the company in 2007, was previously an investment manager. The government-owned investment company, which focuses on stimulating the growth and internationalisation of Finnish businesses, is known to have made a commitment of EUR 9.7 million to the Verdane Capital VII fund in June 2009. This was the fi rst commitment made by the investment company to a direct secondaries fund. Finnish Industry Investment tends to make investments within venture and mezzanine funds but is also known to have invested in buyout funds as well as directly in companies.

Each month Spotlight provides a selection of the recent news on institutional investors in private equity.

More news and updates are available online for Investor Intelligence and Secondary Market Monitor subscribers.

Contact us for more information - [email protected]

Investor News

Hanna Ohlsson

Investor News

Prequin Private Equity Report September 202009

Documents

Transcript of Prequin Private Equity Report September 202009