BENCHMARKING + FUND PERFORMANCE PE B2C INVESTMENT: PME CASE STUDY PE HORIZON IRRS BY FUND SIZE MEDIAN VC FUND RETURN MULTIPLES.

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1 BENCHMARKING + FUND PERFORMANCE through 1H 2015 SPONSORED BY 6 PE B2C INVESTMENT: PME CASE STUDY 9 PE HORIZON IRRS BY FUND SIZE 13 MEDIAN VC FUND RETURN MULTIPLES

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3 Credits & Contact PitchBook Data, Inc. JOHN GABBERT Founder, CEO ADLEY BOWDEN Vice President, Market Development & Analysis Contents Content GARRETT BLACK Senior Analyst NIZAR TARHUNI Senior Analyst BRIAN LEE Data Analyst JENNIFER SAM Senior Graphic Designer JESS CHAIDEZ Graphic Designer Contact PitchBook pitchbook.com Introduction 4 PE & VC KS PME Benchmarks 5 KS PME Case Study: B2C 6 IRR by Fund Type 7 RESEARCH reports@pitchbook.com EDITORIAL editorial@pitchbook.com SALES sales@pitchbook.com Quartiles & Benchmarks 8 PE IRRs 9 PE Fund Return Multiples 10 PE Fund Cash Flows 11 VC IRRs 12 VC Fund Return Multiples 13 VC Fund Cash Flows 14 Select Top Funds by IRR 15 COPYRIGHT 2016 by PitchBook Data, 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 As more funds data from 2015 rolls in, a more comprehensive, holistic picture of the current investment landscape for private equity and venture capital investors emerges. Let s take the most recent installment of PE cash flows data. Limited partners are still raking in hefty distributions from general partners, as the seller s market that persisted throughout last year has produced rich rewards. However, heightened valuations cut both ways, leading to a competitive, expensive environment for PE dealmakers, which is a primary factor cutting into contributions currently. Those same heightened valuations have been, if anything, even more pronounced for the venture industry saw massive distributions back to LPs by venture fund managers, but 2015 is already setting an even more torrid pace in terms of both contributions and distributions, reflective of the hefty sums VCs were, and in some cases still are, paying out. As we have seen for both PE and VC, the dealmaking landscape has shifted considerably in recent months. Coupling our analysis of PE and VC investment trends with this most recent set of benchmarking data, accordingly, will help inform your analysis for an even richer picture of the forces shaping the dealmaking environment. As a final note, all the funds return data within this report is as of June 30, 2015; the lag is due to reporting cycles. MAKE WAY FOR SMARTER, ON-THE-FLY MEETING PREP Introducing PitchBook Mobile. The same excellent data, technology and service from the PitchBook Platform, now available on a mobile device. 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 www. rrdonnelley.com. 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. Available for Search: PitchBook RR Donnelley is the sponsor of the PitchBook 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. US UK +44 (0) demo@pitchbook.com pitchbook.com 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 When using a KS PME, a value less than 1.0 indicates underperformance of the public index (net of all fees). For example, the 0.81 value for 2006 vintage VC funds means investors in a typical vehicle from that year would be 81% the value of what it would be if it were instead invested in the public markets. 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: B2C This edition of the report series examines PE performance in the B2C sector. Using a KS PME benchmark formula, post-recession B2C-focused PE vehicles have rather significantly underperformed the public markets. Most notably, 2012 vintage vehicles have recorded a KS PME of 0.77, which reflects an underperformance of roughly 23% if investors were to place their capital in a comparable public index in What should be highlighted is that the KS PME tracks funds cash flows, so GPs would have had to exit and distribute capital back to LPs to adequately track their performance. Since many investments made in recent years have yet to be exited, successful B2C investments have likely contributed to increasing fund values for certain vintages due to those assets being marked up based on their performance and the consistent outperformance of their public comps, yet without funds exiting such companies, their PME values would lack until those gains are realized. We ve experienced a noticeable decline in median fund multiples from 2009 to 2010 vintages, with the median TVPI during that time period moving from 1.36x to 1.17x. Over time, increased exits will contribute to a spike in DPI multiples, yet with the median time to exit for PEbacked companies in 2015 declining significantly, the suppressed TVPI of 2010 vintages speaks to a few points. For instance, the drop in TVPI from 2009 to 2010 may be explained by the quality of B2C companies in PE funds leading to difficulty in garnering heightened exit multiples today, while also being affected by recent public volatility inducing revised valuations. Specifically for DPIs, fund managers may be forced to hold on to these companies for longer periods as they look to bolster and underpin Global B2C-focused PE fund KS PME benchmark by vintage Global B2C-focused PE fund return multiples by vintage 1.8x 0.1x 1.5x 0.2x 1.4x 0.2x 1.3x 0.4x 1.5x 1.5x 1.5x 1.5x 1.4x 0.4x 1.0x growth before agreeing to a potential depressed exit price, thus reducing the amount of distributions currently flowing to LPs Median of DPI Median of RVPI Median of TVPI 1.7x 0.6x 0.8x PME calculated using Russell 3000 Index 1.3x 1.4x 1.2x 1.2x 1.2x 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 www. russell.com. 0.7x 0.6x 0.8x 0.7x 1.1x 0.1x 1.0x 0.0x 1.1x 0.1x 6

7 IRR by Fund Type With PE funds outperforming by a fairly wide margin in older vintages, heightened competition and increased sophistication among GPs have led to a considerable tightening in investment returns across various fund types. Older PE vehicles have also lived through the majority of their life cycles, thus completing a higher level of profitable liquidations, seen in the asset class s 10-year horizon IRR. Over the last few years, however, PE returns have experienced a bit of a plateau as we ve yet to see a significant number of exits from these vehicles, especially given the fact that newer funds are still working through their investment periods. In contrast, newer VC funds have fared much better vintages are enjoying a fairly impressive 20% IRR to date and 2012 vintages also are experiencing a significant uptick over 2011 vintages, driven by a continued rise in strategic M&A allowing fund managers to cash in on younger investments at record multiples. Vintage Year 20% 15% 10% 5% 0% PE 16.7% 10.3% 7.9% 7.3% 9.8% 10.5% 13.1% 10.0% 11.0% 10.8% VC 3.7% 1.3% 4.7% 6.2% 9.1% 11.1% 13.6% 19.9% 10.8% 14.9% Debt 6.9% 10.7% 5.0% 5.9% 8.9% 12.1% 11.3% 11.2% 10.5% 11.6% FoF 10.0% 7.9% 7.9% 8.5% 8.6% 10.8% 11.2% 10.1% 11.3% 7.5% Global horizon IRR by fund type 1-year 3-year 5-year 10-year PE funds VC funds Debt funds Funds-of-funds Global median IRR by fund type and vintage year 25% PE funds VC funds Debt funds Funds-of-funds 20% 15% 10% 5% 0%

8 Quartiles & Benchmarks Global PE IRR quartiles by vintage year 40% 35% 30% 25% 20% 15% 10% 5% 0% Vintage Year Top Quartile IRR th percentile Median 75th percentile % 10.3% 15.4% 15.1% 19.4% 15.7% 19.3% 20.1% Median 7.9% 7.3% 9.8% 10.5% 13.1% 10.0% 11.0% 10.8% Bottom 3.3% 3.5% 5.7% 6.3% 8.6% 6.0% 5.6% 4.9% The spread between the most recent venture vintages is one of the most striking features of the chart to the right. The 75th percentile of 2010 vintages and the 25th differ by around 28%, while the 2012 counterpart stands at 30%. This is indicative of nothing so much as the recent venture boom s surfeit of exuberant valuations and round sizes, primarily at the late stage, resulting in not only higher overall IRRs but also a greater spread. Even over a short timeline, the disparity should shrink somewhat, with the loftiest IRRs coming back down to earth as public market corrections exert downward pressure on unrealized private venture valuations. Although public technology stocks could rally somewhat, providing more of a positive backdrop for private valuations in the short term, in the long term, even top-tier venture returns trend downward. As that is due to venture fund holdings, once past a certain age, being much less likely to produce substantial returns than their PE counterparts, the window of liquidity for VC investors appears to be quite short. 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Competitive fundraising and deal environments over the last 15 years have contributed to a tightening of return spreads between top-quartile and bottom-quartile funds. As of late, however, they have begun to widen, notwithstanding vehicles with vintages during or near the recession. Looking at 2010 vintages and beyond, we ve witnessed a consistent uptick in top-quartile fund benchmarks, while simultaneously seeing a consistent move lower in bottom-quartile fund returns. This increased divergence has led to a top quartile-to-bottom quartile spread of over 15% in 2012 vintages relative to a comparable spread of just 9.7% in While top-quartile managers are displaying greater IRRs, especially with LPs continuing to funnel money back into top performers, the decline in lower-quartile benchmarks in recent vintages may also be a result of newer, niche, and distressed fund strategies coming to market, without having deployed capital yet. Thus, the pooled returns of those vintages have remained depressed, yet we should continue to see many of those benchmarks inch higher as these select strategies begin to bear fruit in coming years. Global VC IRR quartiles by vintage year Vintage Year Top Quartile IRR th percentile Median 75th percentile % 10.7% 17.4% 18.7% 22.4% 35.9% 18.8% 33.0% Median 4.7% 6.2% 9.1% 11.1% 13.6% 19.9% 10.8% 14.9% Bottom -0.5% -3.8% 1.7% -0.2% 5.9% 7.7% 1.5% 3.3% 8

9 Private Equity IRRs As we look at 10-year horizon IRRs for PE vehicles, those returns continue to flatten, an unsurprising observation giving the continued effect of aging portfolio companies acquired during or near the latest recession, along with the increased pressure we ve seen recent market volatility induce in the private markets. While attractive valuations have been sustained for many portfolio companies, a variety of other businesses have had difficulty exiting at levels previously achieved in the last couple of years, thus forcing GPs to either hold on to companies or, in certain situations, potentially accept lower multiples two occurrences that can bog down IRRs. Since the last edition of this report, only vehicles with less than $250 million in capital have experienced an uptick in 10-year horizon IRRs. Vehicles of this size have housed a large set of M&A targets and PE-backed add-ons, contributing to an increase in exit cash flows and an increase in deal IRRs for these vehicles as their portfolio companies continue to be highly sought after by acquisitive buyers. Looking at shorter-term three-year to five-year horizon IRRs, FoF and secondaries continue to outperform. We ve seen an uptick in whole-fund secondaries where GPs look to acquire remaining assets of aging vehicles. As these vehicles have wound down, smaller GPs with industry focuses can look to take advantage of these assets if they fall within their industry specialties, and thus, smaller secondary vehicles looking for such opportunities have been able to create significant value for their investors via this strategy. The proliferation of LPs narrowing their GP focuses also continues to impact the PE space. With that, FoF have reached slightly increased popularity from LPs looking to sophisticate their manager selection Global PE horizon IRR by size bucket 20% 15% 10% 5% 0% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1-year 3-year 5-year 10-year PE horizon IRR by region process and FoF GPs have been able to find successes handpicking outperforming managers as they also enjoy increased transparency from the funds they look to place their clients in. Under $250M $250M-$1B $1B+ 1-year 3-year 5-year 10-year U.S. PE funds European PE funds Rest of World PE funds 9

10 PE Fund Return Multiples Global average PE DPI multiples over time by vintage 1.4x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x Years since inception As the median PE-backed asset coming to market in 2015 was able to do so in just over five years after initial investment, it s no coincidence we ve seen an impressive 1.41x TVPI multiple for 2009 vintage funds. Recent vintages have yet to deploy massive amounts of capital, which we re likely to see continue over the next few quarters. That said, distressed opportunities have led many managers to earmark significant amounts of capital for such opportunities, and thus, as these transactions can occur at significant discounts, we could see certain multiples decline slightly as commitments are first drawn down before seeing total fund values climb over the next 12 months and beyond. Global median PE fund return multiples by vintage 1.68x 1.67x 0.08x 0.11x 1.57x 1.53x 1.57x 0.24x 1.37x 1.42x 0.34x 1.00x 1.35x 0.48x 0.87x 1.44x 0.65x 0.76x 1.36x 1.41x 0.71x 0.83x 0.60x 0.61x 1.24x 0.95x 0.27x 1.19x 0.99x 0.12x 1.14x 1.02x 0.08x Median of DPI Median of RVPI Median of TVPI 10

11 PE Fund Cash Flows Fund managers continue to reward LPs with distributions as a seller s market has allowed GPs to exit assets at attractive multiples. While these multiples underpin the control PE managers have in sale negotiations, it also has made it more difficult to locate attractive deals at affordable prices and thus, contributions have increased at a slower pace. Through 2Q 2015, net cash flow out of PE vehicles to LPs came in at $64.5 billion, an uptick of close to 20% relative to what was accumulated through 1Q Our returns data is lagged, so as we continue to see data roll out over the next few quarters, fund cash flow trends may remain the same through 2015, however, we expect to see an increase in contributions. Recent volatility in the markets has created an increasing divide in pricing among higher and lower quality assets and as we ve seen an uptick in specialized vehicles come to market, we think these players will begin calling down capital to deploy into niche and/or distressed areas. YEAR TOTAL CONTRIBUTIONS ($B) TOTAL DISTRIBUTIONS ($B) NET CASH FLOW ($B) 2001 ($60.0) $26.2 ($33.9) 2002 ($80.2) $33.2 ($47.0) 2003 ($83.1) $58.8 ($24.3) 2004 ($120.8) $143.7 $ ($143.1) $158.9 $ ($230.0) $181.6 ($48.4) 2007 ($302.9) $222.7 ($80.2) 2008 ($316.7) $124.7 ($192.0) 2009 ($166.8) $66.6 ($100.2) 2010 ($253.9) $176.2 ($77.6) 2011 ($256.3) $264.5 $ ($267.7) $332.8 $ ($226.1) $408.9 $ ($309.6) $479.0 $ * ($151.3) $215.8 $64.5 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 6/30/

12 Venture Capital IRRs The marked improvement in horizon IRRs at the long term for funds under $100 million is due to the most recent influx of fund returns data in this edition of the report, and consequently is quite subject to timeframes as well as the spate of exit activity that continued through Viewing these horizon IRRs through a temporal lens still results in the conclusion that the venture asset class faces long-term liquidity issues, with the best returns seen at the three-year and five-year marks. That is likely due to difficulties in liquidating aging portfolio holdings more than anything else, which pushes out fund lifetimes. Hence, the datasets may well be skewed somewhat, but are still illustrative of the timeline necessary for successful realization. Furthermore, largest funds still substantially outpace all other vehicle size ranges, reinforcing how the venture power law of returns doesn t just apply to portfolio investments, but also to the industry as a whole: An exponentially small fraction of firms will realize the majority of gains. The recent uptick in shorter-term horizon IRRs, which was by and large sustained through the end of the first half of 2015, may have been dispersed among a greater population of VC funds than is typical given the healthy exit environment of the time. But a correction of unrealized gains much of the recent venture boom was, of course, based on such paper gains will likely result in a normalization of sorts around the proportion of successful funds, with only top-tier managers seeing pleasing outcomes. 15% 10% 5% 0% -5% 15% 10% 5% 0% The power law of venture returns applies both to portfolios and fund managers. Global VC horizon IRR by size bucket 1-year 3-year 5-year 10-year *As of 6/30/2015 Under $100M $100M-$250M $250M-$500M $500M+ VC horizon IRR by region *As of 6/30/ year 3-year 5-year 10-year U.S. VC funds Rest of World VC funds 12

13 VC Fund Return Multiples Striking a positive note for venture fund backers, average TVPI multiples across a range of vintages rose once more since the last installment of this quarterly report series. Across that timeframe, 2007 Global average VC DPI multiples over time by vintage 0.8x 0.7x 0.6x 0.5x 0.4x 0.3x 0.2x 0.1x 0.0x *As of 6/30/2015 and 2008 VC vintages saw their respective TVPIs increase, while the average DPI multiple of 2007 boomed from 0.49x to 0.65x. Given such increases, examining median returns seemed worthwhile; charting them Years since inception out below lends some highly useful color to our analysis. Interestingly, 2010 vintages exhibit the highest overall median TVPI, with the likely culprit behind that lofty figure the recent swell in venture valuations. The median post-recession vehicle retains a clear majority of its overall value in residual value. Realizing returns from vehicles of those vintages, which were markedly affected by the global recession, was bound to be a prolonged affair, but the vigorous seller s market of last year helped to, at the least, augment the value of many funds. That said, many vintages have a predominant share of value yet to be manifested in reality as opposed to on paper. Accordingly, VC investors looking to liquidate are likely set to rely on strategic M&A carrying forward at an elevated level through 2016, helping unlock much of the value still to be translated from vintages between 2007 and Global median VC fund return multiples by vintage 1.09x 1.17x 1.17x 1.05x 1.26x 1.40x 1.38x 1.51x 1.48x 1.59x 1.27x 1.19x 0.77x 0.15x 0.79x 0.20x 0.72x 0.22x 0.40x 0.55x 0.64x 0.63x 0.41x 0.84x 0.53x 0.90x 0.30x 0.93x 0.21x 1.21x 0.26x 1.23x 0.02x 1.10x 1.13x Median of DPI Median of RVPI Median of TVPI *As of 6/30/

14 VC Fund Cash Flows Through the first half of 2015, global distributions by VCs back to their LPs was well on pace to match or exceed the mammoth $53.9 billion recorded in Contributions boomed in a similarly dramatic fashion, hitting just over $30 billion, already 85% of what 2014 recorded the comparable figure for distributions was 66%. It is worth noting, however, that since $18.7 billion was recorded in 1Q 2015 in the last installment of this report series, the pace of contributions slowed in 2Q Regardless, both fund managers and backers were riding a high tide, with the venture pricing inflation reflected in the sheer heft of contributions, and the optimism of LPs justified by the flow of distributions. However, it must be noted that these strong numbers are all derived from the historic seller s market observed in 2014 and part of The number of venture-backed exits slid throughout 2015, and, while LP sentiment appears Global VC funds annualized cash flow by year to still be long-term bullish on the venture asset class, liquidity to match the hefty sums invested through much YEAR TOTAL CONTRIBUTIONS ($B) of last year, particularly at the late stage, remains a pressing issue. TOTAL DISTRIBUTIONS ($B) NET CASH FLOW ($B) 2001 ($30.6) $12.9 ($17.6) 2002 ($27.0) $12.1 ($14.9) 2003 ($25.7) $31.9 $ ($28.9) $9.1 ($19.8) 2005 ($30.1) $13.5 ($16.6) 2006 ($39.8) $25.7 ($14.1) 2007 ($44.3) $31.8 ($12.5) 2008 ($43.6) $13.3 ($30.3) 2009 ($32.7) $13.8 ($18.9) 2010 ($39.0) $26.9 ($12.1) 2011 ($45.1) $32.1 ($13.1) 2012 ($42.0) $37.8 ($4.2) 2013 ($42.9) $39.2 ($3.7) 2014 ($35.3) $53.9 $ * ($30.0) $35.4 $5.3 $60 $40 Total contributions ($B) Total distributions ($B) Net cash flow ($B) $20 $ * -$20 -$40 -$60 14

15 Select Top Funds by IRR 2005 to 2009 vintage buyout funds over $500M in size 2009 to 2012 vintage growth funds Fund name Vintage IRR DPI Thoma Bravo Fund IX % 2.40x Advent Global Private Equity V % 2.21x H.I.G. Capital Partners IV % 1.54x JLL Partners Fund VI % 0.64x Fund name Vintage IRR DPI Sycamore Partners I % 0.80x Catalyst Investors III % 0.20x Fountainvest China Growth Capital Fund II % 0.10x Lime Rock Partners VI % 0.17x Sentinel Capital Partners IV Odyssey Investment Partners Fund IV Vista Equity Partners Fund III % 1.08x % 1.73x % 2.13x Carrick Capital Partners % 0.00x New Horizon Capital III % 0.22x Chart Capital Partners II % 0.45x 2005 to 2009 vintage U.S. buyout funds < $500M in size Fund name Vintage IRR DPI Atlantic Street Capital I % 1.73x Platinum Group Holdings % 2.63x Vista Foundation Fund I % 1.71x Marlin Equity Partners II % 0.83x Excellere Capital Fund % 2.15x Symmetric Partners % 1.51x Falfurrias Capital Partners I % 2.11x 2007 to 2011 vintage buyout funds in IT 2006 to 2010 vintage U.S. VC funds < $250M in size Fund name Vintage IRR DPI Maveron Equity Partners IV Union Square Ventures Opportunity Fund % 0.85x % 2.30x Avalon Ventures VIII % 2.05x Foundry Venture Capital % 2.44x IA Ventures Fund I % 0.01x Grotech Partners VII % 2.21x 2006 to 2010 vintage European funds over $1B in size Fund name Vintage IRR DPI Fund name Vintage IRR DPI Thoma Bravo Fund IX % 2.40x Vista Foundation Fund % 1.71x Orchid Asia V % 0.77x Spectrum Equity Investors VI Investcorp Technology Partners III Carlyle Europe Technology Partners II % 0.55x % 1.13x % 1.18x AXA Secondary Fund V % 0.50x Graphite Capital Partners VII % 1.63x Triton Fund II % 1.63x Bain Capital Europe Fund III Industri Kapital 2007 Fund % 0.39x % 0.74x Astorg IV % 0.78x CVC European Equity Partners V % 0.81x 15

16 Methodology PitchBook currently tracks close to 34,000 funds around the world and has returns data on over 8,00 vehicles. In this edition of the quarterly Benchmarking Reports, PitchBook examines data from over 5,600 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 2Q 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. 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. 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 Distributions to paid-in (DPI): 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. Remaining value to paid-in (RVPI): A measurement of the unrealized return of a fund as a proportion of the total paid-in, or contributed, capital. Total value to paid-in (TVPI): 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. 16

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