Performance of Private Equity Funds in Central and Eastern Europe and the CIS Data to 31 December 2008
1 EBRD in Private Equity EBRD s portfolio of funds: over 15 years of investing in the asset class 119 funds 73 fund managers USD 3.0 billion in commitments (EUR 2.5 billion) to funds with capital of USD 15.9 billion (EUR 12.8 billion) 1,041 underlying investments; 729 exited Largest PE Fund investment program dedicated to the region* Note: EBRD tracked portfolio only to end December 2008, excludes real estate funds * Russia, CIS and CSE
2 EBRD Database Best available sample of PE performance in central and south east Europe (CSE), Russia and CIS Tracks all gross investments made by a basket of EBRD invested funds as well as net returns to EBRD ( tracked portfolio ) Measured in both USD and EUR* Obligatory reporting by fund managers, analysed by EBRD reflects comprehensive performance No survivor bias resulting from only best fund managers reporting * Bloomberg exchange rate used as of date of signing (commitments), transaction date (cash flows) or valuation date (NAV)
3 Definitions EBRD Sponsored Funds funds established at EBRD's initiative in countries where no private sector funding was available for private equity funds. These funds are supported with significant donor grants, and EBRD investment represents usually over 90% of fund capital. Institutional Quality Funds (IQs) identified based on criteria established by Cambridge Associates. These include the characteristics of the investors in the fund, fund size relative to peers, and availability of data. Survivor Funds funds managed by managers who have or are expected to raise a follow-on fund.
4 Region CSE Countries - Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, FYR Macedonia, Poland, Romania, Serbia, Montenegro*, Slovak Republic and Slovenia CIS Countries Armenia*, Azerbaijan, Belarus*, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Russia, Tajikistan*, Turkmenistan, Uzbekistan*, and Ukraine * There are no fund sub-investments in these countries as of end December 2008
Overview
2008 PE Investment as a % of GDP 0.8% 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% *GDP Source: IMF, World Economic Outlook Database, April 2009 ** Baltics include: Estonia, Latvia, Lithuania Source: EVCA/PEREP Analytics, RVCA and EBRD Estimates 5 Slovenia UK Sweden Montenegro* Denmark France Netherlands Hungary Europe Finland Germany Baltics* Norway Italy Switzerland Czech Republic Bulgaria Ukraine* Portugal Spain Croatia Belgium Romania Poland Ireland Greece Austria Slovakia Bosnia&Herzegovina* Serbia
6 Fund Raising vs Investments CSE 1,600 1,400 Annual Investments Commitments Raised by Year 1,200 USD Millions 1,000 800 600 400 200 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: EBRD tracked portfolio only
7 Fund Raising vs Investments CIS 2,500 Annual Investments Commitments Raised by Year 2,000 USD Millions 1,500 1,000 500 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: EBRD tracked portfolio only
8 EBRD Commitments Over Time 500 450 400 350 Russia/CIS Private CSE Privately Sponsored Russia/CIS Donor CSE Donor USD Millions 300 250 200 150 100 50 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: CSE and CIS, EBRD tracked portfolio only
9 EBRD Net Portfolio - to end 2008 3,000 2,500 NAV USD Millions 2,000 1,500 1,000 Returned 500 0 Funds Committed Paid-In NAV + Returned Note: CSE and CIS, EBRD tracked portfolio only
Returns Data
10 Gross Snapshot: All Funds 14,000 USD 12,000 10,000 8,000 6,000 Fully Realised (Including WO) Partially Realised Unrealised Overall 1.73x 20% USD 2,923m FR 2.59x 22.1% USD 7,557m 4,000 USD 498m PR 2.8x 31.7% USD 1,395m 2,000 USD 4,037m UR 0.98x -1.3% USD 3,945m USD 3,945m 0 Investments at Cost Total Value USD 7,458m USD 12,897m Note: Excluding underlying investments of funds in which the EBRD sold on its interest.
11 Gross Snapshot: CSE 9,000 8,000 7,000 6,000 Fully Realised (Including WO) Partially Realised Unrealised Overall 1.71x 19% USD 4,901m USD 5,000 4,000 3,000 2,000 1,000 FR 2.28x 20.1% USD 2,153m PR 3x 36.1% USD 1,289m USD 430m UR 1.01x 0.8% USD 2,571m USD 2,605m 0 Investments at Cost USD 5,154m Total Value USD 8,795m Note: Excluding underlying investments of funds in which the EBRD sold on its interest.
12 Gross Snapshot: CIS 5,000 4,000 3,500 Fully Realised (Including WO) Partially Realised Unrealised USD 3,000 2,500 2,000 USD 770m Overall 1.78x 22.3% FR 3.45x 26% USD 2,656m 1,500 USD 68m PR 1.55x 10.8% USD 106m 1,000 500 UR 0.91x -5.1% USD 1,466m USD 1,340m 0 Investments at Cost USD 2,304m Total Value USD 4,102m Note: Excluding underlying investments of funds in which the EBRD sold on its interest.
13 EBRD Gross Cash Flow from Funds 2,500 2,000 Annual Investments by funds (cash out) Annual Proceeds to funds (cash in) USD Millions 1,500 1,000 500 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Annual Year Note: CSE and CIS Note: Cash movement between funds and the underlying portfolio companies
14 EBRD Net Horizon Returns: All Funds Returns as at December 31 2008 One Year Three Years Five Years Ten Years Since Inception USD EBRD Private Equity Portfolio* -27.7% 18.9% 34.8% 15.4% 12.6% Cambridge Emerging Markets Venture Capital & Private Equity Index** -35.2% 15.5% 28.4% 15.2% N/A EUR EBRD Private Equity Portfolio* -24.4% 12.1% 33.6% 12.2% 10.2% EVCA, All Private Equity** -30.5% 2.6% 8.1% 8.0% 9.6% Source: Cambridge Associates, EVCA/Thomson Reuters, Bloomberg and EBRD, revised March 2009 * EBRD tracked portfolio pooled end-to-end return, net of fees, expenses, donor grants and carried interest. Excludes property funds, and includes liquidated partnerships. ** Pooled end-to-end return, net of fees, expenses, and carried interest. The "Since Inception" figure represents the net pooled IRR since inception for funds formed between 1980 and 2008.
EBRD Net Horizon Returns: Breakdown 15 USD EUR Returns as at December 31 2008 EBRD Private Equity Portfolio -All One Year Three Years Five Years Ten Years Since Inception -27.70% 18.90% 34.80% 15.4% 12.6% CSE -21.67% 18.67% 29.11% 13.91% 11.52% Russia/CIS -37.84% 18.21% 42.85% 17.20% 13.87% CSE/Survivors -22.19% 16.41% 28.28% 17.29% 14.73% Russia/CIS Survivors -37.49% 10.87% 38.48% 21.50% 19.42% EBRD Private Equity Portfolio -All -24.44% 12.10% 33.60% 12.20% 10.20% CSE -17.82% 12.62% 28.50% 11.38% 9.74% Russia/CIS -35.81% 10.17% 41.22% 13.01% 10.75% CSE/Survivors -18.25% 10.81% 27.22% 14.91% 13.21% Russia/CIS Survivors -35.36% 3.92% 36.06% 16.51% 15.75%
16 Net Vintage Groups 3.5 3.0 2.5 TVPI DPI IRR 50% 40% 30% 20% 2.0 1.5 1.0 0.5 10% 0% -10% -20% -30% -40% 0.0-50% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Multiple IRR Vintage Year Note: TVPI = Total Value Paid In, DPI = Distributions to Paid In, 2008 IRR excluded due to the proportion of valuation vs disbursements, data for CSE and CIS
Trends
17 Investments by Country to end 2008 Central Asia*** 3% Western CIS & Caucasus*** 3% Czech Republic & Slovakia 9% Romania 8% Hungary 7% Baltics 6% Others* 4% Bulgaria 7% Poland 28% Russia 25% *Others include: Albania, Bosnia, Croatia, Macedonia, Serbia and Slovenia ** Western CIS and Caucasus include: Azerbaijan, Georgia, Moldova and Ukraine ***Central Asia include: Kazakhstan, Kyrgyz Republic and Turkmenistan Note: since inception
18 Exits by Country to end 2008 By Investment Cost By Exit Proceeds Western CIS & Caucasus*** 2% Bulgaria Central Asia*** 3% Czech Republic & Slovakia 11% Romania 9% Hungary 9% Baltics 4% Western CIS & Caucasus*** 4% Central Asia*** 8% Czech Republic & Slovakia 10% Romania 13% Hungary 6% Baltics 3% Others* 5% Others* 2% Bulgaria 2% 6% Poland 35% Russia 20% Poland 26% Russia 22% *Others include: Albania, Bosnia, Croatia, Macedonia, Serbia and Slovenia ** Western CIS and Caucasus include: Azerbaijan, Georgia, Moldova and Ukraine ***Central Asia include: Kazakhstan, Kyrgyz Republic and Turkmenistan Note: since inception
19 Investments by Sector to end 2008 Wholesale & Retail 10.1% Agriculture & Forestry, 1.04% Construction, 5.8% Consumer, 11.1% Manufacturing, 7.1% Pharma & Medical, 6.2% TIM, 32.4% Services, 21.9% Primary & Energy, 4.1% Note: since inception, in USD, CSE and CIS
20 Exits by Sector to end 2008 By Investment Cost By Exit Proceeds Wholesale & Retail 10.1% Agriculture & Forestry, 1.67% Construction 4.9% Consumer, 17.5% Agriculture & Forestry, 0.65% Wholesale & Retail 10.1% Construction, 3.9% Consumer, 12.3% Manufacturing Manufacturing 6.9% TIM, 29.9% Services, 17.7% Primary & Energy, 4.4% 9.4% Pharma & Medical, 4.2% TIM, 38.3% Services, 15.8% Primary & Energy, 9.5% Pharma & Medical, 5.2% Note: since inception, in USD, CSE and CIS
21 Investments by Stage Over Time Investment cost, USD Millions 900 800 700 600 500 400 300 200 Expansion Sec. Purchase / Buyout Other Seed/Early Stage 100 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: CSE and CIS Vintage Year
22 Exits by Stage Over Time 1,200 Expansion Other Secondary Purchase / Buyout Seed/Early Stage Exit Proceeds, USD Millions 1,000 800 600 400 200 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: excludes write offs, CSE & CIS Exit Year
Performance by Exit Type to end 2008 23 5,000 4,500 4,000 3,500 Investment Cost Exit Proceeds & Cash Returns Multiple 4.0 3.5 3.0 USD Millions 3,000 2,500 2,000 2.5 2.0 1.5 Multiple 1,500 1,000 1.0 500 0.5 0 Write Off MBO Other Trade Sale Public Market 0.0 Note: CSE & CIS, fully realised deals, including write-offs, since inception
24 Gross Vintages & Money Multiples USD Millions 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Investment Cost Total Investment Value TVPI All TVPI FR 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Vintage Year 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Multiple Note: Includes write-offs, CSE and CIS
Investor Data
25 Investor by Type Trends 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 18.42% 7.82% 16.80% Banks and Insurance Corporate Investors Fund of Funds IFI and Govt Pension Funds 20.47% 12.26% 12.91% 29.62% 26.55% Others 12.54% 11.37% 14.80% 16.43% 1992-2007 2008 Note: CSE and CIS. Includes EBRD (in IFI/Govt), tracked portfolio, in USD (Excludes property funds)
26 Investor Type by Vintage Year 4,000 3,500 Banks Corporate Investors Fund of Funds IFI and Govt Others Pension Funds USD Millions 3,000 2,500 2,000 1,500 1,000 500 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: EBRD tracked portfolio, Includes EBRD (in IFI and Govt)
27 Investors by Origin Over Time 4,000 3,500 Europe Other USA EBRD 3,000 USD Millions 2,500 2,000 1,500 1,000 500 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: EBRD tracked portfolio, CSE and CIS funds
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