PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 Fig. 1: Horizon IRRs Fig. : Rolling One-Year Horizon IRRs 5 3 5 Annualized Return 15 1 5 1 Year to 3 Years to 5 Years to 1 Years to Venture Capital Fund of Funds Mezzanine Distressed Private Equity Private Equity One-Year Horizon IRR 15 1 5-5 1 Year to Mar-13 1 Year to Sep-13 1 Year to Mar-1 1 Year to Sep-1 1 Year to Mar-15 1 Year to Sep-15 1 Year to Mar-1 1 Year to Sep-1 1 Year to Mar-17 1 Year to Sep-17 1 Year to Venture Capital Fig. 3: Rolling Three-Year Horizon IRRs Fig. : Horizon IRRs by Fund Size* 5 Three-Year Horizon IRR 15 1 5 Venture Capital Annualized Return 15 1 Mega Large Mid Small 3 Years to Mar-13 3 Years to Sep-13 3 Years to Mar-1 3 Years to Sep-1 3 Years to Mar-15 3 Years to Sep-15 3 Years to Mar-1 3 Years to Sep-1 3 Years to Mar-17 3 Years to Sep-17 3 Years to 5 1 Year to 3 Years to 5 Years to Fig. 5: Horizon IRRs by Fund Primary Geographic Focus Annualized Return 5 15 1 North America Europe Asia DATA SOURCE Preqin s online platform is the industry s most extensive source of net-to-lp private capital fund performance, with full metrics for over 9, named vehicles. For more information, or to arrange a demonstration, please visit: www.preqin.com/privateequity 5 1 Year to 3 Years to 5 Years to *Size ranges: Vintage 199-199: Small $mn, Mid $1mn-$5mn, Large > $5mn Vintage 1997-: Small $3mn, Mid $31mn-$75mn, Large $751mn-$bn, Mega > $bn Vintage -: Small $5mn, Mid $51mn-$1,5mn, Large $1,51mn-$.5bn, Mega > $.5bn 1 Preqin Ltd. / www.preqin.com
PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 Fig. : Assets under Management by Dry Powder ($bn) Unrealized Value ($bn) 3. 3. 1 3..3 3.1 1.5 3 1. 3....7 9.9 1.1 117.1.5 15. 13. 5. 1. 5. 1. 17.3.1 3.. 39. 71. 1.3 11. 55.7 15.3 57. 1 5. 91.7 17 3.9 1. Fig. 9: Change in NAVPS and Share Price of Listed Private Equity by Quarter Fig. 7: Assets under Management by Geographic Focus Geographic Focus Dry Powder ($bn) Fig. 1: Median s by Fund Type Unrealized Value ($bn) North America 9. 1,. Europe 3. 793.9 Asia 319.5 1. Latin America.3 59.5 Diversified Multi-Regional 5.7 51.7 Australasia 1.1 9. Middle East & Israel.. Africa 9.7.1 Fig. : Assets under Management by Fund Type Fund Type Dry Powder ($bn) Unrealized Value ($bn) Private Equity 1,.7,35.9 Real Estate 1.7 53.9 Private Debt 5.9.3 Infrastructure 15. 9. Natural Resources Only 7. 15.5 Average Change in NAV from Previous Quarter 35 3 5 15 1 5-5 -1-15 - Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Median 35 3 5 15 1 5 Private Capital Venture Capital Real Estate 15 1 17 Change in NAVPS of Listed Private Equity Change in Share Price of Listed Private Equity Private Equity Online -5 1997 199 1999 1 3 Fig. 11: J-Curve: Annual Median s by 15 Vintage Vintage PREQIN S PRIVATE EQUITY DATA PLATFORM Median 1 5-5 -1-15 - Vintage Vintage Vintage Vintage Vintage Vintage Vintage Preqin provides unrivalled data and intelligence on private equity and venture capital, including fundraising, fund managers, institutional investors, fund performance, deals and exits, service providers, fund terms and conditions and more. : info@preqin.com : www.preqin.com/privateequity -5 1 3 5 7 9 1 11 1 Investment Year Vintage Preqin Ltd. / www.preqin.com
PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 Fig. 1: PrEQIn Quarterly Index: All Strategies vs. Index (Rebased to 1 as of 31 December ) Index Return (Rebased to 1 as of 31-Dec-) 7 5 3 1 31-Dec- 3-Jun-1 31-Dec-1 3-Jun- 31-Dec- 3-Jun-3 31-Dec-3 3-Jun- 31-Dec- 3-Jun-5 31-Dec-5 3-Jun- 31-Dec- 3-Jun-7 31-Dec-7 3-Jun- 31-Dec- 3-Jun-9 31-Dec-9 3-Jun-1 31-Dec-1 3-Jun-11 31-Dec-11 3-Jun-1 31-Dec-1 3-Jun-13 31-Dec-13 3-Jun-1 31-Dec-1 3-Jun-15 31-Dec-15 3-Jun-1 31-Dec-1 3-Jun-17 31- PrEQIn PrEQIn Private Equity PrEQIn PrEQIn Venture Capital PrEQIn Real Estate PrEQIn Fund of Funds PrEQIn Distressed Private Equity Fig. 13: Consistent Top Performing Fund Managers 1 Years ($mn) Quartile ing Inflexion Private Equity Partners UK,331 5 5 1. Rhône Group US,7 1. Brookfield Capital Partners Canada 5,9 3 3 1. Clearview Capital US 575 3 3 1. Main Capital Partners Netherlands 31 3 3 1. FIMI Israel,7 5 1 1. Veritas Capital US,55 5 1 1. AUCTUS Management Germany 53 3 1 1.5 Wynnchurch Capital Partners US 1, 3 1 1.5 Vista Equity Partners US,917 5 1.33 CapStreet Group US 59 3 1 1.33 DFW Capital Partners US 577 3 1 1.33 Egeria Capital Management Netherlands,59 3 1 1.33 Harvest Partners US 3,7 3 1 1.33 Industrial Growth Partners US 1, 3 1 1.33 Montefiore Investment France 9 3 1 1.33 Nautic Partners US,1 3 1 1.33 Palatine Private Equity UK 93 3 1 1.33 TowerBrook Capital Partners UK 1, 3 1 1.33 Triton Partners Jersey 9,91 5 1. Fig. 1: Consistent Top Performing Growth Fund Managers 1 Years ($mn) Quartile ing Ampersand Capital Partners US 95 5 5 1. Trustbridge Partners China 3, 5 5 1. KJK Capital Finland 3 3 1 1.33 LLR Partners US,953 1.5 Spectrum Equity US 3,55 3 1.7 Genesis Capital Czech Republic 17 3 1 1.7 Insight Venture Partners US 1,11 3 1.75 Lombard Investments US 35 1 3 1.75 Technology Crossover Ventures US,73 5 1 1. 3 Preqin Ltd. / www.preqin.com
PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 Fig. 15: Consistent Top Performing Venture Capital Fund Managers 1 Years ($mn) Quartile ing Benchmark Capital US 1,97 3 3 1. Foresite Capital US 1,5 3 3 1. Avalon Ventures US 55 5 1 1.17 OrbiMed Advisors US 5,39 5 1 1. Sequoia Capital US 13,3 5 1 1. General Catalyst Partners US 3,35 3 1 1.5 Vickers Venture Partners Singapore 37 3 1 1.5 Matrix Partners US 1,5 1.33 Target Partners Germany 5 3 1 1.33 Peregrine Ventures Israel 75 3 1 1.33 AJU IB Investment South Korea 793 3 1 1.33 Forbion Capital Partners Netherlands 55 3 1 1.33 Third Rock Ventures US 1,55 3 1 1.33 DN Capital UK 3 1 1.33 Pontifax Israel 3 1 1.33 Goodwell Investments Netherlands 17 3 1 1.33 Cottonwood Technology Fund US 37 3 1 1.33 CRCM Ventures US 9 3 1 1.33 Future Venture Capital Japan 19 3 1 1.33 CRV US 1, 5 3 1. GGV Capital US 3,533 5 3 1. Fig. 1: Consistent Top Performing Private Equity Fund of Funds Managers 1 Years ($mn) Quartile ing ATP Private Equity Partners Denmark, 1. Storebrand Asset Management Norway 1, 9 3 1.33 Weathergage Capital US 5 1.33 Bowside Capital US 95 3 1 1.33 Nordea Private Equity Denmark 33 3 1 1.33 Twin Bridge Capital Partners US 1, 3 1 1.33 Franklin Park US 113 1 1.3 Greenspring Associates US,97 7 5 1 1.3 Aberdeen Standard Investments UK 3,51 1.5 Axiom Asia Singapore 3,55 1.5 BlackRock Private Equity Partners US 3,537 1.5 Siguler Guff US,3 9 1 1.7 Darwin Ventures US 1 3 1.7 LGT Capital Partners Switzerland 1,3 3 1 1.7 Schroder Adveq Switzerland,15 3 1 1.7 Industry Ventures US,9 3 1.75 Spur Capital Partners US 3 1.75 HQ Capital International US,5 1 1.75 TrueBridge Capital Partners US 35 1.3 Bay Hills Capital US 1 3 1 1.3 Preqin Ltd. / www.preqin.com
PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 THE IMPORTANCE OF PME BENCHMARKING Investors and fund managers alike frequently benchmark private equity returns against s in order to gauge the relative performance of their investments. For LPs, it is an important exercise which can inform portfolio construction decisions and help to evaluate the performance of one asset class against another. For fund managers, it forms a key aspect of fund marketing to help secure LP commitments. Private equity returns, however, are not directly comparable with indices, due to the asset class s illiquid nature and irregular timing of cash flows. The industry has long used the analogy of comparing apples with oranges when discussing the difficulties of evaluating the differences between private equity and performance. The development of the equivalent (PME) measure of returns provides a more meaningful, like-for-like comparison. PME metrics benchmark the performance of a fund, or a group of funds, against an appropriate public market index while accounting for the timings of the fund cash flows. When PME values are generated for many funds, they can be used as an alternative measure of ranking fund performance, while controlling for broader market behaviour. Preqin provides PME benchmarks and individual fund-level PME comparisons on its online databases, which already provide net-to-lp fund performance metrics for over 9, named private equity vehicles globally. The PME tool enables the comparison of private equity returns against six indices using a choice of three PME methodologies: Kaplan-Schoar PME, Long-Nickels PME and PME+. All of the methodologies utilize the since-inception cash flow data Preqin holds for over,1 funds. The table below provides an overview of the three PME methodologies Preqin now offers, along with their specific strengths and weaknesses. Having the ability to employ a number of different PME methodologies is highly desirable to an investor, but it is also important to maintain awareness that each is fundamentally an approximation until the funds are fully realized. PME Benchmarking Methods Offered by Preqin Benchmark Metric Outperformance if: Description of Calculation Strengths Weaknesses KS-PME (Kaplan- Schoar) Ratio Value above one Calculated by discounting the private capital fund cash flows by the index value. The discounted distributions plus the current remaining value are divided by the discounted contributions to obtain the ratio. The calculation looks at the ratio of outflows to inflows as opposed to generating an IRR, which is time dependent and easily manipulated. Easy to interpret. Ignores the timings of cash flows. LN PME (Long- Nickels) Annualized Rate Estimated PME IRR < Fund IRR Contributions to private capital fund are converted to an equal purchase of shares in the public index. Distributions represent liquidation of share in public index. IRR calculation uses same contributions and distributions as private capital fund, but with a different final period remaining value. LN PME IRR is directly comparable to the private capital fund IRR, allowing an apples-to-apples comparison. IRR sensitive to early distributions. Large distributions could cause a negative PME final period remaining value, making PME IRR calculation computationally impossible. Capital Dynamics PME+ Annualized Rate Estimated PME IRR < Fund IRR Uses a fixed scaling factor (Lambda) to modify each distribution to ensure the PME final period remaining value is the same as the private capital fund remaining value. IRR calculation uses modified contributions and distributions but same final period remaining value. As for LN PME, with the added benefit of avoiding a final period negative remaining value, making PME IRR calculation possible in more cases. PME+ does not match the cash flows perfectly. 5 Preqin Ltd. / www.preqin.com
PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 PME BENCHMARKS Fig. 17: KS PME: All Regions 1.3 Fig. : KS PME: North America 1.3 1. 1.1 1. KS PME Using 1. 1.1 1. KS PME Using.9.9.. 1 3 15 1 17 1 3 15 1 17 Fig. 19: KS PME: Europe Fig. : KS PME: Asia & Rest of World 1.5 1.15 1. 1.3 1. 1.1 KS PME Using MSCI Europe TR 1.5.95.5 KS PME Using S&P 5 TR 1.75.9 15 1 17.5 15 1 17 Fig. 1: LN PME: All Regions Fig. : LN PME: North America 1 1 1 1 <, private 1 1 1 1 <, private 1 3 1 3 Preqin Ltd. / www.preqin.com
PRIVATE CAPITAL PERFORMANCE UPDATE: Q 17 Fig. 3: LN PME: Europe Fig. : LN PME: Asia & Rest of World 1 1 1 1 < Net IRR, private capital has outperformed the MSCI Europe TR 1 1 1 1 < Net IRR, private capital has outperformed the Fig. 5: PME+: All Regions Fig. : PME+: North America 1 1 1 1 1 1 1 1 1 3 1 3 Fig. 7: PME+: Europe 1 1 1 1 MSCI Europe TR Fig. : PME+: Asia & Rest of World 1 1 1 1 7 Preqin Ltd. / www.preqin.com