BENCHMARKING + FUND PERFORMANCE 4Q 2015 REPORT VC IT INVESTMENT: PME CASE STUDY GLOBAL PE CASH FLOWS REMAIN MASSIVE

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1 BENCHMARKING + FUND PERFORMANCE 4Q 2015 REPORT SPONSORED BY 6 VC IT INVESTMENT: PME CASE STUDY 11 GLOBAL PE CASH FLOWS REMAIN MASSIVE 13 RECENT VC VINTAGES SEE CONTINUED POTENTIAL

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3 CONTENTS Introduction PE & VC KS PME Benchmarks KS PME Case Study: IT Global IRR by Fund Type Global Quartiles & Benchmarks Global PE IRRs Global PE Fund Return Multiples Global PE Fund Cash Flows Global VC IRRs Global VC Fund Return Multiples Global VC Fund Cash Flows CREDITS & CONTACT PitchBook Data, Inc. JOHN GABBERT Founder, CEO ADLEY BOWDEN Vice President, Market Development & Analysis Content, Design, Editing & Data GARRETT BLACK Editor ANDY WHITE Analysis Manager DANIEL COOK Senior Data Analyst NIZAR TARHUNI Analyst BRIAN LEE Data Analyst JENNIFER SAM Senior Graphic Designer JESS CHAIDEZ Graphic Designer Contact PitchBook RESEARCH reports@pitchbook.com EDITORIAL editorial@pitchbook.com SALES sales@pitchbook.com COPYRIGHT 2015 by PitchBook Data, 15 Select Top Funds by IRR Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment. 3

4 Introduction Assessing the performance of private equity and venture capital funds is crucial and challenging in equal measure. The timeline of performance reporting is just one of the key considerations; as fund performance data trails overall investment activity statistics by a matter of months, accurately analyzing those separate datasets to produce a comprehensive overview of how fund results have shaped and will continue to shape investors Strong cash flows for now signal continued LP investment, even as caution grows. actions can be difficult. But not overly difficult, and, furthermore, armed with not only broad dealmaking numbers but also fund performance figures, clearer and more comprehensive insights into the current private investment landscape are achievable. As an illustration, the primary storyline of the past few months has been a growing incidence of investor caution in both private and public markets, with PE fund managers dialing back activity somewhat in light of persistently high valuations and competition for quality targets. For venture investors, the existence of a true tech bubble remains uncertain, but at the very least, it s clear that quite a few vaunted valuations garnered by late-stage startups may have been overly exuberant. Yet, looking at the most recent influx of PE and VC fund performance data, it s clear that limited partners still have plenty of reasons to recommit to their investors. Last year saw venture fund managers worldwide return no less than $57 billion to their backers, while 1Q 2015 posted an immense $19.7 billion. Global PE cash flows were comparably mammoth, with a staggering $467.8 billion distributed back to LPs in 2014 and $168.2 billion through the end of March. The M&A boom and surging public markets that helped produce those massive sums may have shifted since, but in light of such success, PE and VC firms that have demonstrated success will likely continue to enjoy commitments on the part of their LPs, at least for some time. We hope the information contained in this report proves insightful and acts as a starting point in your efforts to benchmark the performance of PE, VC and other asset classes. If you have any questions, comments or suggestions, please contact us at reports@pitchbook.com. RR Donnelley is the world s largest integrated communications company. The company works collaboratively with more than 60,000 customers worldwide to develop custom communications solutions that reduce costs, drive top-line growth, enhance ROI and increase compliance. Drawing on a range of proprietary and commercially available digital and conventional technologies deployed across four continents, the company employs a suite of leading Internet based capabilities and other resources to provide pre-media, printing, logistics and business process outsourcing services to clients in virtually every private and public sector. Our Corporate Responsibility Report is available at Our Venue secure online workspace provides a powerful feature-set and an intuitive design that allows you to easily organize, manage, share and track all of your sensitive information. Venue data rooms provide complete control, allowing you to manage who has access to your data room, which documents they see, and how they can interact with those documents. Venue data rooms are backed by RR Donnelley, a $10.5 billion corporation with more than 500 locations and nearly 60,000 employees worldwide. RR Donnelley s total revenues are larger than all other virtual data room providers combined. Whether you re conducting due diligence for a merger, raising capital, or developing a document repository, a Venue virtual data room is the ideal virtual workspace for managing critical information. RR Donnelley is the sponsor of the PitchBook 4Q 2015 Global PE & VC Benchmarking & Fund Performance Report. All information contained in this publication is for informational purposes only and should not be construed as legal, accounting, tax, or other professional advice of any kind, on any subject matter. RR Donnelley expressly disclaims all liability in respect to actions taken or not taken based on any or all the content herein. 4

5 KS PME Benchmarks PE KS PME BENCHMARK BY VINTAGE AN INTRODUCTION TO PME BENCHMARKS PME calculated using Russell 3000 Index IRR and cash multiples have been the gold standard of benchmarking for decades, but one of their main drawbacks is that they cannot be directly compared to indices that are used in mainstream asset classes. Public-market equivalent benchmarks (PMEs) effectively address this problem, making it possible to directly compare alternative asset fund performance to the performance of indexed asset classes by using fund-level cash flows. As there are multiple ways to calculate a PME, PitchBook has employed the Kaplan-Schoar PME method. Kaplan-Schoar (KS) Method: NAV T distributiont T + S t=0 I PME t KS TVPI, T = T contributiont S t=0 I T ( ) ( ) I t When using a KS PME, a value greater than 1.0 indicates outperformance of the public index (net of all fees). For example, the 1.12 value for 2005 vintage PE funds means investors in a typical vehicle from that year are 12% better off having invested in PE than if they had invested in public equities over the same period. VC KS PME BENCHMARK BY VINTAGE A white paper detailing the calculations and methodology behind the PME benchmarks can be found at pitchbook.com. PitchBook News & Analysis also contains several articles with PME benchmarks and analysis. These can be read here. To find out how the PME benchmarks can be utilized to gauge performance of a specific fund or your fund portfolio, please contact us at research@pitchbook.com PME calculated using Russell 2000 Growth Index 0.5 When using a KS PME, a value less than 1.0 indicates underperformance of the public index (net of all fees). For example, the 0.85 value for 2006 vintage VC funds means the value of an individual s investments in a typical vehicle from that year would be 85% the value of what it would be if it were instead invested in the public markets. Note: The axes on both charts above are scaled differently, with the area below 1.0 much larger on the VC chart than the PE chart. The KS PME charts on this page show the relative performance for a particular vintage of PE or VC funds against the specified index since the funds inception. Pre-2006 vintage PE funds outperformed the public markets consistently between 2002 and 2005, while VC funds across most vintages show overall underperformance. The stock market s surge over the last couple of years has definitely cut into PME values for more recent vintages on the PE side in particular; though, in the event of a market downturn, it s possible recent PE and VC fund vintages will begin to swing up if they generate returns better than stocks. 5

6 KS PME Case Study: IT Given the current heightened valuations of many VC-backed technology companies, we decided to focus on the IT space for this report s KS PME case study. Our KS PME benchmark formula allows us to directly compare alternative asset fund performance to the broader public market using fundlevel cash flows. Older vintage ITfocused vehicles have consistently underperformed the Russell 2000 Growth Index before shifting gears in We witnessed the most significant underperformance in 2004 vintage pools, which have underperformed by nearly 60% relative to public equivalents. Prior to the financial crisis, public equities had moved considerably higher in the years following With this steady rise in values, VC investors may have acquired many stakes in companies unable to weather the recession, and thus the fund returns at that vintage have severely underperformed their benchmark. While 2007 saw flat performance between IT-focused VC returns and their public equivalents, 2008 vintages have experienced success, outperforming their benchmark by 22%, only second to the near-25% outperformance 2010 vintages displayed. As 2008 came directly in the midst of the last global recession, assets were acquired during distressed states, allowing for significant upside gains as the economy and markets subsequently recovered. Further, in 2010, many VCs were able to fund companies such as Palantir Technologies or Twitter (NYSE: TWTR) that were able to achieve considerable growth amid that recovery following financings at more reasonable valuations, as opposed to today s environment. GLOBAL IT-FOCUSED VC FUND KS PME BENCHMARK BY VINTAGE PME calculated using Russell 2000 Growth Index GLOBAL AVERAGE IT-FOCUSED VC FUND RETURN MULTIPLES BY VINTAGE 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x x 1.13x 1.11x 0.11x 0.97x 0.32x 0.81x 0.68x 0.43x 1.45x 1.36x 1.71x 1.67x 1.47x 0.91x 0.54x 0.85x 0.51x 1.05x 0.66x Russell Investments is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. Russell Investments is not responsible for the formatting or configuration of this material or for any inaccuracy in PitchBook Data, Inc. s presentation thereof. For more information on Russell Investments and Russell Indexes, visit x 0.41x 1.23x 0.24x 2.03x 1.57x 0.45x 1.30x 1.37x x Average of DPI Average of RVPI Average of TVPI 1.31x 6

7 IRR by Fund Type GLOBAL MEDIAN IRR BY FUND TYPE AND VINTAGE YEAR 25% PE Funds VC Funds Debt Funds Funds-of-Funds 20% 15% 10% 5% 0% Vintage Year PE 21.5% 14.8% 14.1% 11.6% 7.9% 7.3% 9.3% 10.8% 13.0% 9.1% 11.7% 9.8% VC 3.1% 3.8% 3.2% 0.3% 4.8% 5.3% 7.5% 10.9% 12.1% 21.1% 9.5% 10.1% Debt 10.4% 17.9% 6.8% 10.6% 5.7% 5.0% 8.2% 12.2% 12.4% 10.2% 11.7% 12.0% FoF 9.6% 9.0% 10.1% 7.9% 7.6% 7.4% 8.1% 10.4% 11.0% 9.5% 10.6% 8.3% GLOBAL HORIZON IRR BY FUND TYPE 20% 15% 10% 5% 0% 1-Year 3-Year 5-Year 10-Year PE Funds VC Funds Debt Funds Funds-of-Funds Looking back to 2001, PE and debt funds have continued to display the most consistent performance in terms of median IRRs, with older vintages in both outperforming noticeably. Across relatively recent vintages, VC funds have displayed improvement, peaking at the 21.1% median IRR seen thus far by 2010 vintages. That outperformance was likely driven by early stakes acquired prior to the subsequent, rapid rise in valuations. With regard to other asset classes, one-year horizon IRRs for funds-offunds have been driven by the discrimination managers have been able to exercise in placing capital, especially with the recent volatility in public markets, and modest trepidation in dealmaking. 7

8 Quartiles & Benchmarks GLOBAL PE IRR QUARTILES BY VINTAGE YEAR 40% 35% 30% 25% 20% 15% 10% 5% 0% th Percentile Median 75th Percentile With LPs chasing high returns in alternative assets more and more over the past decade, PE funds have been able to raise considerable amounts of capital. Yet as this has happened across the board, outperforming returns have become more difficult to achieve as competition for quality assets has ramped up. Moving into more recent years, this competition has contributed to rather noticeable tightening in the spread between top quartile, bottom quartile and median fund IRRs vintages witnessed a spread of over 14.5% between top-quartile and median IRRs, along with a spread of just under 25% between topquartile and bottom-quartile pools. Looking at the most recent data for 2012 vintages, we ve seen these respective spreads narrow to just 9.5% and 14.2%. Vintage Year Top Quartile IRR Hurdle 27.7% 26.5% 18.5% 12.0% 11.1% 15.4% 15.2% 20.4% 16.3% 18.0% 19.2% Median IRR 14.8% 14.1% 11.6% 7.9% 7.3% 9.3% 10.8% 13.0% 9.1% 11.7% 9.8% Bottom Quartile IRR Hurdle 8.9% 8.0% 5.8% 2.8% 3.2% 5.4% 6.6% 8.7% 5.7% 3.2% 5.0% GLOBAL VC IRR QUARTILES BY VINTAGE YEAR IRRs for VC funds with vintages between 2009 and 2012 have been strong, peaking in 2010 with a median IRR of 21.1% and a top-quartile IRR hurdle of 36.8%. However, the landscape appears to be changing and VCs will face considerable headwinds in attempting to maintain these returns. Valuations have reached frothy levels across most asset classes, and as recent volatility in public comparables has increased the uncertainty regarding the values of many VC-backed companies, we may see a lack of liquidity that can increase hold periods and suppress future returns. Exits are down noticeably thus far in 2015, and secondary transactions are also becoming increasingly difficult to complete. Taking the above into account, recent vintages may well see their numbers slide by an appreciable amount sooner rather than later. 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% th Percentile Median 75th Percentile Vintage Year Top Quartile IRR Hurdle 8.3% 7.2% 4.8% 10.0% 10.6% 16.5% 17.3% 22.5% 36.8% 19.0% 21.0% Median IRR 3.8% 3.2% 0.3% 4.8% 5.3% 7.5% 10.9% 12.1% 21.1% 9.5% 10.1% Bottom Quartile IRR Hurdle (3.5%) (4.8%) (8.0%) (0.8%) (4.4%) 2.5% 2.3% 4.8% 11.7% (0.3%) 5.2% 8

9 Private Equity IRRs PE horizon IRRs recorded through the first quarter of this year have remained consistent with recently seen trends. Funds sized over $1 billion have outperformed across three-year to 10-year horizons, while vehicles sized between $250 million and $1 billion have fared better across one-year to three-year horizons. Scanning these fund size buckets and their respective horizons, the only 10-year horizon IRR uptick we saw relative to its last recording occurred in $1 billion+ pools, which generated an 18.2% return as of 1Q 2015, compared to 17.4% in 4Q Such outperformance only further reinforces what seems to be an ever-more significant trend for the PE industry: larger PE vehicles performing better and consequently attracting a disproportionate share of LP interest. Comparing all traditional PE funds relative to other private fund types including secondaries, VC and fund-of-funds, PE IRRs fare better than all other fund types across three-year to 10-year timeframes, yet funds-of-funds and secondaries lead the way in the short run. As expensive valuations are forcing GPs to potentially overpay to win deals, LPs have been able to utilize funds-of-funds and secondaries to generate returns while downplaying risk to some extent. Those invested in the former are able to take advantage of managers handpicking GPs that they deem most suitable for the client s needs. Those investing in secondaries are able to achieve heightened visibility into the portfolio companies in a fund, thus providing additional transparency for the buyer to gauge the investment s risk profile, helping prop short-term horizon IRRs. GLOBAL PE HORIZON IRR BY SIZE BUCKET 20% 15% 10% 5% 0% Outperformance at the long term among larger vehicles indicates LPs may continue favoring them disproportionately. PE HORIZON IRR BY REGION 30% 25% 20% 15% 10% 5% 0% -5% 1-Year 3-Year 5-Year 10-Year Under $250M $250M-$1B $1B+ U.S. PE Funds European PE Funds 1-Year 3-Year 5-Year 10-Year 9

10 PE Fund Return Multiples GLOBAL AVERAGE PE FUND RETURN MULTIPLES BY VINTAGE 2.0x 1.8x 1.6x 1.4x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x 1.76x 1.70x 1.72x 0.18x 0.21x 0.26x 1.50x 1.48x 1.42x 1.34x 1.39x 0.40x 0.49x 0.64x 0.69x 0.78x 1.51x 1.54x 1.46x 1.10x 0.85x 0.78x 0.70x 0.69x 1.26x 1.25x 1.17x 0.88x 1.03x 1.00x 0.38x 0.22x 0.18x Average of DPI Average of RVPI Average of TVPI Fund return multiples have noticeably improved since the last edition of this report, driven by a continued push to exit portfolio companies before a potential softening in the market. Distributions have remained healthy, even in newer vintages, with figures from 2012 including an average DPI of 0.18x, among a TVPI figure that jumped higher to 1.17x from the 1.12x recorded in the prior edition of this report. Looking at slightly older vehicles, the average DPI of 2005 vintages jumped significantly to 1.10x, compared to just 0.72x recorded in 4Q As firms continuously look to exit assets ready to get to market, distributions may remain strong. That being said, GPs continue to hold high levels of dry powder, and thus, newer vintages could see multiples stagnate over the next 12 to 24 months, as fund managers begin calling down capital to deploy into distressed energy plays or distressed debt and lending opportunities, among other areas. Distributions look set to remain healthy, although multiples could plateau in the next 12 to 24 months. GLOBAL AVERAGE PE DPI MULTIPLES OVER TIME BY VINTAGE 1.6x 1.4x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x Years since inception

11 Global PE Fund Cash Flows GLOBAL PE FUNDS ANNUALIZED CASH FLOW BY YEAR $600 $500 Total Contributions ($B) Total Distributions ($B) Net Cash Flow ($B) $400 $300 $200 $100 $0 -$ * -$200 -$300 -$400 *As of 3/31/2015 LPs continued to experience positive net cash flows out of global PE funds through the first quarter of Total distributions during the period have amounted to approximately $168.2 billion, offset by $114.3 billion in total contributions. The quality of assets currently coming to market isn t up to par with what we saw in 2014, and thus, what attractive deals remaining are being bid up to levels many PE shops are simply unwilling to pay. Although fundraising has remained strong and there is plentiful capital to close deals, funds are weary of overpaying at a period where we may be nearing the end of a fairly robust buyout cycle, leaving them with expensive portfolio companies and the risk of not being able to generate a substantial return. As additional data comes in, we expect similar results. Pockets of quality exist, yet with so much competition for those assets, some GPs may have to simply return capital to LPs, if they cannot adequately put it to work at reasonable values. Year Distributions ($B) Contributions ($B) Net Cash Flow ($B) 2001 $26.0 ($53.7) ($27.7) 2002 $32.8 ($77.9) ($45.0) 2003 $57.0 ($79.5) ($22.4) 2004 $142.7 ($106.7) $ $152.5 ($134.9) $ $177.2 ($228.2) ($50.9) 2007 $208.6 ($304.4) ($95.7) 2008 $122.1 ($317.9) ($195.9) 2009 $62.0 ($168.5) ($106.5) 2010 $169.6 ($254.1) ($84.5) 2011 $261.5 ($258.7) $ $326.8 ($269.9) $ $394.8 ($227.6) $ $467.8 ($300.8) $ * $168.2 ($114.3) $53.9 *As of 3/31/

12 Venture Capital IRRs The dip in overall performance as measured by median IRR among venture funds on the larger side at the 10- year horizon is likely partially due to funds of that size experiencing a greater statistical disparity given the number of investments they make. That said, the fact the median trends that low in the long term underlines the risk inherent in the venture industry, which, in light of recent fears surrounding overpriced valuations, is likely to be overemphasized if anything. Investor sentiment in both public and private markets tends to overcorrect somewhat accordingly, even the decent numbers seen in short-term IRRs may become overshadowed by a few high-profile disappointments. What s a bit more interesting is the surge in long-term median IRRs in funds sized between $100 million and $250 million. Perhaps funds in that range achieve better returns on an overall basis given the typical size and subsequent number of the checks they cut. As must be said of all IRRs, however, their heavily time-dependent nature means that as an overall metric they must be taken with a grain of salt. That much is clear when assessing venture horizon IRRs by region, which decline in both the U.S. and the rest of the world as time goes on. That bump in the mid-term horizon IRRs for the rest of the world may be attributable to relatively shorter holding periods for startups based abroad that achieve sufficient growth to attract acquirers interest and, consequently, liquidity. GLOBAL VC HORIZON IRR BY SIZE BUCKET 15% 10% 5% 0% -5% The long-term outperformance of midsized venture funds may be more due to their size economics than anything else. VC HORIZON IRR BY REGION 15% 10% 5% 0% 1-Year 3-Year 5-Year 10-Year Under $100M $100M-$250M $250M-$500M $500M+ 1-Year 3-Year 5-Year 10-Year U.S. VC Funds Rest of World VC Funds 12

13 VC Fund Return Multiples GLOBAL AVERAGE VC FUND RETURN MULTIPLES BY VINTAGE 1.8x 1.6x 1.4x 1.2x 1.10x 1.12x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x 1.04x 1.62x 1.44x 1.42x 1.33x 1.33x 1.29x 1.25x 1.26x 0.27x 0.29x 0.61x 0.62x 0.85x 0.85x 1.03x 1.11x 1.28x 1.20x 1.21x 0.83x 0.83x 0.43x 0.63x 0.48x 0.48x 0.40x 0.33x 0.34x 0.09x 0.04x Average of DPI Average of RVPI Average of TVPI TVPI multiples across recent venture vintages have continued to climb quarter on quarter vintage funds, for instance, saw their average TVPI multiple jump from 1.36x in 4Q 2014 to 1.62x in 1Q However, nearly 80% of that value has yet to be realized by investors. As venture capitalists invest in latestage deals with lofty valuations, the risk of a correction threatens to erase some of that unrealized value when a liquidity event rolls around. It is worth noting, for example, that investors in Square s Series E round invested at a 28% premium to where the shares are currently priced in the public market. Those investors will break even thanks to the protections they negotiated in that financing, but the temporary drop has caused some concern. Fears may not be well founded, however, as short-term performance in public markets does not dictate overall VC fund results, as investors will likely sell off their stock at a more opportune time. When and if that time will occur is unknown, but both points should be noted. TVPI multiples for recent VC funds hint at future potential, but realizing significant value remains an uncertain prospect. GLOBAL AVERAGE VC DPI MULTIPLES OVER TIME BY VINTAGE 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x Years since inception

14 Global VC Fund Cash Flows GLOBAL VC FUNDS ANNUALIZED CASH FLOW BY YEAR $80 $60 Total Contributions ($B) Total Distributions ($B) Net Cash Flow ($B) $40 $20 $0 -$ * -$40 -$60 *As of 3/31/2015 After 2014 saw a whopping $57.0 billion distributed back to LPs worldwide, leading to a huge positive spike in net cash flow, 2015 has started off in a much less dramatic if still positive fashion, at $1.0 billion globally in net VC cash flow. More noteworthy, however, is the sheer volume of cash that has been called by fund managers already this year. Through the end of March, VC investors have called close to $19 billion from their backers more than half of the 2014 total. With exits dipping in the second and third quarters of 2015, net cash flows could turn negative as 2015 data continues to roll in. Depending on how long and how much the seller s market may continue to slide, future realization of the recent, heavy spate in venture financings could be postponed for some time. LPs will likely remain content for a while with such recent strong numbers, but they will need more capital as well as justification to recommit at some point. Year Distributions ($B) Contributions ($B) Net Cash Flow ($B) 2001 $13.1 ($30.7) ($17.6) 2002 $12.3 ($26.8) ($14.5) 2003 $33.3 ($26.0) $ $8.3 ($29.2) ($20.9) 2005 $13.9 ($31.1) ($17.2) 2006 $26.9 ($41.0) ($14.1) 2007 $32.5 ($44.3) ($11.8) 2008 $13.7 ($43.9) ($30.2) 2009 $14.4 ($32.8) ($18.4) 2010 $27.3 ($38.6) ($11.3) 2011 $33.3 ($46.6) ($13.2) 2012 $38.1 ($43.2) ($5.1) 2013 $41.0 ($42.3) ($1.4) 2014 $57.0 ($33.1) $ * $19.7 ($18.7) $1.0 *As of 3/31/

15 Select Top Funds by IRR VINTAGE BUYOUT $1B VINTAGE DEBT Fund Name Vintage IRR % DPI Odyssey Investment Partners Fund IV % 1.69x Vista Equity Partners Fund III % 2.04x Charlesbank Equity Fund VII % 0.54x Apollo Investment Fund VII % 1.68x Clayton Dubilier & Rice Fund VIII % 1.10x Great Hill Equity Partners IV % 0.71x Fund Name Vintage IRR % DPI Carlyle Strategic Partners % 2.54x PIMCO Distressed Mortgage Fund II % 2.94x Carlyle High Yield Partners Partners % 2.05x American Securities Opportunities Fund I % 1.36x Fortress Credit Opportunities Fund % 1.14x VINTAGE U.S. BUYOUT $250M-$500M Fund Name Vintage IRR % DPI Vista Foundation Fund I % 1.67x Marlin Equity Partners II % 0.83x CIVC Partners Fund IV % 1.11x Excellere Capital Fund % 1.86x Industrial Growth Partners III % 2.21x MSouth Equity Partners % 1.89x VINTAGE U.S. VC Fund Name Vintage IRR % DPI Maveron Equity Partners IV % 0.85x Union Square Ventures % 12.7x True Ventures II % 0.66x Avalon Ventures VIII % 2.05x Spark Capital II % 3.61x Emergence Capital Partners Fund II % 1.97x VINTAGE ENERGY Fund Name Vintage IRR % DPI OCM/GFI Power Opportunities Fund II % 3.05x KPS Special Situations Fund II % 3.99x Carlyle/Riverstone Global Energy & Power Fund II % 1.72x EnCap Energy Capital Fund V % 1.74x Energy Trust Partners % 2.11x VINTAGE EUROPE BUYOUT Fund Name Vintage IRR % DPI Sponsor Fund II % 3.00x Inflexion 2003 Buyout Fund % 2.68x Clessidra Capital Partners Fund % 0.94x Bowmark Capital Partners III % 2.33x 3i Eurofund IV % 1.92x Permira Europe III % 1.49x All returns data is net of fees through March 31, IRR medians are calculated based on the median value of all IRR values for each fund as reported to PitchBook by LPs. 15

16 Methodology PitchBook currently tracks more than 31,500 funds around the world and has returns data on over 10,500 vehicles. In the quarterly Benchmarking Reports, PitchBook examines data from close to 6,600 funds and 24,000 distinct LP commitments. We are constantly adding historical performance data as it becomes available; this explains many apparent discrepancies that may appear between reports. All returns data in this report is net of fees through 1Q 2015, as reported by LPs. DEFINITIONS PE Fund: Unless otherwise noted, PE fund data includes buyout, growth, co-investment, mezzanine, restructuring and energy funds. Debt Fund: For this report, the debt fund classification includes general debt, mezzanine and distressed debt. Vintage Year: The vintage year as reported by the fund GP and LPs, or the year in which a fund holds its final close. Horizon IRR: Horizon IRR shows the IRR from a certain point in time. For example, the one-year horizon IRR figures in this report show the IRR performance for the one-year period from 1Q 2014 to 1Q 2015, while the three-year horizon IRR is for the period from 1Q 2012 to 1Q DPI (Distributions to Paid-In): A measurement of the capital that has been distributed back to LPs as a proportion of the total paid-in, or contributed, capital. DPI is also known as the cash-on-cash multiple or the realization multiple. RVPI (Remaining Value to Paid-In): A measurement of the unrealized return of a fund as a proportion of the total paid-in, or contributed, capital. TVPI (Total Value to Paid-In): A measurement of both the realized and unrealized value of a fund as a proportion of the total paid-in, or contributed, capital. Also known as the investment multiple, TVPI can be found by adding together the DPI and RVPI of a fund. Internal Rate of Return (IRR): IRR represents the rate at which a series of positive and negative cash flows are discounted so that the net present value of cash flows equals zero. 16

17 WANT TO KNOW HOW YOUR FUNDS STACK UP? Let us calculate your PME PME= Contact us for a complimentary analysis of your funds using the new industry standard: PitchBook s PME Indices & Benchmarks available in the 4Q 2015 PE & VC Benchmarking Report research@pitchbook.com pitchbook.com