Enterprise Capital Report 2011

Enterprise Capital Report 2011 November 2011 CREATING LASTING VALUE

About EVCA The European Private Equity & Venture Capital Association EVCA is the voice of European private equity and venture capital. We promote the interests of our more than 1,200 members, to ensure they can conduct their business effectively. EVCA engages policymakers and promotes the industry among key stakeholders, including institutional investors, entrepreneurs and employee representatives. EVCA develops professional standards, research reports and holds professional training and networking events. EVCA covers the whole range of private equity, from early-stage venture capital to the largest buyouts. Disclaimer The information contained in this report has been produced by EVCA, based on PEREP_Analytics data and third parties information. While the EVCA has made every effort to ensure the reliability of the data included in this report, EVCA cannot guarantee the accuracy of the information collected and presented. Therefore, EVCA cannot accept responsibility for any decision made or action taken based upon this report or the information provided herein. Copyright information No part of this publication may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. Copyright enquiries should be directed to EVCA, Tel: + 32 2 715 00 20. Copyright EVCA November 2011

Contents 1. Introduction 7 2. Investments 8 Figure 2.1 - Investments by Size and Quarter - Amount 10 Figure 2.2 - Investments by Size and Quarter - Number of Companies 11 Figure 2.3 - Investments by Type and Quarter - Amount 12 Figure 2.4 - Investments by Type and Quarter - Number of Companies 13 Figure 2.5 - Investments by Type and Annual Equity Ratio Level - as % of Amount 14 Figure 2.6 - Evolution of Investments (Index Q1 2007 = 100) and GDP Growth in Europe 15 Figure 2.7 - Investments by Size and Type - as % of Amount (2007-2009) 16 Figure 2.7 - Investments by Size and Type - as % of Amount (2010-H1 2011) 17 Figure 2.8 - Overview Investment by Location - as % of Amount invested 18 Figure 2.9 - Overview Investment by Location - as % of Number of Companies 19 Figure 2.10 - Investments by Region and Type - as % of Total Amount (2007-2009) 20 Figure 2.10 - Investments by Region and Type - as % of Total Amount (2010-H1 2011) 21 Figure 2.11 - Investments by Region and Type - as % of Number of Companies (2007-2009) 22 Figure 2.11 - Investments by Region and Type - as % of Number of Companies (2010-H1 2011) 23 Figure 2.12 - Investments by Region and Size - as % of Total Amount (2007-2009) 24 Figure 2.12 - Investments by Region and Size - as % of Total Amount (2010-H1 2011) 25 Figure 2.13 - Investments by Region and Size - as % of Number of Companies (2007-2009) 26 Figure 2.13 - Investments by Region and Size - as % of Number of Companies (2010-H1 2011) 27 Table 2.1 - Buyout Split - Equity vs. Transaction Value (data only available for buyout) 28 Figure 2.14 - Sources of Buyouts (data only available for buyouts and since Q1 2008) - as % of Amount 29 Figure 2.15 - Investments by Sector - Amount ( billion) 30 Table 2.2 - Investments by Sector - Amount ( thousands) 31 Figure 2.16 - Investments by Sector - Number of Companies 32 Table 2.3 - Investments by Sector - Number of Companies 33 Figure 2.17 - Investments by Sector and Type - as % of Amount (2007-2008) 34 Table 2.4 - Investments by Sector and Type - Amount ( thousands) (2007-2008) 35 Figure 2.17 - Investments by Sector and Type - as % of Amount (2009-2010) 36 Table 2.4 - Investments by Sector and Type - Amount ( thousands) (2009-2010) 37 Figure 2.17 - Investments by Sector and Type - as % of Amount (H1 2011) 38 EVCA Enterprise Capital Report 2011 I 3

Table 2.4 - Investments by Sector and Type - Amount ( thousands) (H1 2011) 39 Figure 2.18 - Investments by Sector and Size - as % of Amount (2007-2008) 40 Table 2.5 - Investments by Sector and Size - Amount ( thousands) (2007-2008) 41 Figure 2.18 - Investments by Sector and Size - as % of Amount (2009-2010) 42 Table 2.5 - Investments by Sector and Size - Amount ( thousands) (2009-2010) 43 Figure 2.18 - Investments by Sector and Size - as % of Amount (H1 2011) 44 Table 2.5 - Investments by Sector and Size - Amount ( thousands) (H1 2011) 45 Figure 2.19 - Geographic Origin of Investments - as % of Amount 46 Figure 2.20 - Overview of Initial vs. Follow-on Investments - as % of Amount 47 Table 2.6 - Initial vs. Follow-on Investments by Type - by Amount 48 Table 2.7 - Initial vs. Follow-on Investments by Size - by Amount 49 Figure 2.21 - Syndication Trend by Type of Investment - as % of Amount 50 Figure 2.22 - Syndication as % of Buyout Investment Amount 51 Figure 2.23 - Syndication as % of Growth Investment Amount 52 Figure 2.24 - Syndication as % of Replacement Capital and Rescue/Turnaround Investment Amount 53 Figure 2.25 - Investment by Number of Employees - as % of Amount 54 Figure 2.26 - Investment by Number of Employees - as % of Number of Companies 55 Table 2.8 - Investments by Number of Employees and by Type of Investment (2007-H1 2011) - as % of Amount 56 Table 2.9 - Investments by Number of Employees and by Size of Investment (2007-H1 2011) - as % of Amount 57 Figure 2.27 - Investment Trend by Number of Employees - as % of Amount 58 Figure 2.28 - Investment Trend by Number of Employees - as % of Number of Companies 59 3. Financing 60 Figure 3.1 - Senior Loan Volume - LBO Transactions 61 Figure 3.2 - European Pro rata vs. Institutional LBO Activity (2005-2008) 62 Figure 3.2 - European Pro rata vs. Institutional LBO Activity (2009-H1 2011) 63 Figure 3.3 - Rolling Three-month Weighted Average Spreads of all European New-issue LBOs 64 Figure 3.4 - Maturity schedule by par outstanding 65 Figure 3.5 - Average P/E* ratios for European Private Equity-backed Buyouts 66 Figure 3.6 - Debt-to-EBIT Ratios for Buyouts* 67 Figure 3.7 - Average Deal Structures for European Private-equity-backed Buyouts: Deals below 100m 68 Figure 3.8 - Average Deal Structures for European Private-equity-backed Buyouts: Deals above 100m 69 4 I EVCA Enterprise Capital Report 2011

4. Divestments 70 Figure 4.1 - Evolution of Divestments by Type 72 Figure 4.2 - Divestments by Region - Amount at cost 73 Figure 4.3 - Divestments by Region - Number of Companies 74 Figure 4.4 - Divestment by Region and Type - Amount at cost 75 Figure 4.5 - Divestment by Region and Type - Number of Companies 76 Figure 4.6 - Divestment by Exit Method - Number of Companies 77 Figure 4.7 - Divestment by Exit Method and Type - Number of Companies 78 Figure 4.8 - Divestments by Sector - Amount at cost 79 Figure 4.9 - Divestments by Sector and Type - Amount at cost 80 Figure 4.10 - Write-offs by Sector 81 Figure 4.11 - Write-offs by Sector and Type - Amount at cost 82 Figure 4.12 - Divestments by Exit Method compared to Western Europe M&A and IPO market - Number of Companies 83 Figure 4.13 - Divestments by Exit Method compared to Western Europe M&A and IPO market - Number of Companies 84 5. Value Creation 85 Figure 5.1 - Deals by Vintage Year and Exit Year 87 Figure 5.2 - Deals by Enterprise Value at Entry and Exit 87 Figure 5.3 - Deals by Geography 88 Figure 5.4 - Deals by Sector 88 Figure 5.5 - Gross IRR Return Attribution - Median (%) 89 Figure 5.6 - Gross IRR Return Attribution - Average (%) 89 Figure 5.7 - Gross Multiple of Cash Return Attribution - Median (%) 90 Figure 5.8 - Gross Multiple of Cash Return Attribution - Average (%) 90 Figure 5.9 - Earnings Enhancement vs. Returns 91 Figure 5.10 - Exit Method vs. Returns (Median) 91 EVCA Enterprise Capital Report 2011 I 5

6. Fundraising 92 Figure 6.1 - Funds Raised by Fund Stage Focus 2007-H1 2011 - Amount 94 Figure 6.2 - Funds Closed by Fund Stage Focus 2007-H1 2011 - Amount 95 Figure 6.3 - Fundraising per Region (% of European Total Amount) 96 Table 6.1 - Incremental Fundraising - by Region and Focus - Amount 97 Figure 6.4 - Fundraising by Type of Investor (LP) - as % of Amount 98 Figure 6.5 - Fundraising by Type of Investor (LP) and Focus - as % of Amount 99 Figure 6.6 - Geographic Sources of Funds raised - Amount 100 Table 6.2 - Ranking of Top Limited Partners Location per European Fundraising Year 101 Figure 6.7 - Number of Funds at Final Closings - Split by Fund Size 102 Figure 6.8 - Funds at Final Closings Split by Fund Size - Amount 103 Figure 6.9 - Funds at Final Closings by Region and Split by Fund Size - Number of Funds (2007-2009) 104 Figure 6.9 - Funds at Final Closings by Region and Split by Fund Size - Number of Funds (2010-H1 2011) 105 7. Methodology and Definitions 106 6 I EVCA Enterprise Capital Report 2011

1. Introduction It is with pleasure that we bring you the 2011 EVCA Enterprise Capital Report on investment, fundraising and divestment activity across Europe in the year to June 2011. Further, the financing environment and value creation are illustrated. Venture Capital Minority Investments Private Equity Enterprise Capital Majority Investments Not only is this report in a new format, with contributions and analysis from practitioners and academics, but we have also changed the name. The terminology of our former Buyout Report failed to properly reflect the private equity investment life cycle. We have therefore introduced the concept of enterprise capital, which, like venture capital, sits under the umbrella of the private equity governance model, but pertains to investment in more established businesses that want to internationalise, professionalise or develop their products and services. There is still room for the term buyout in our industry lexicon, but its correct place is as a transaction type when private equity is used to acquire all or the majority of an established business using leverage rather than as a descriptor for our entire investment model. Enterprise capital is a vital component in the economy, providing both finance, expertise and sound governance to Europe s aspirational businesses. This report is intended to give an in-depth guide as to the activity of Europe s enterprise capital investors both GPs and LP. While 2011 may well turn out to be a game of two halves in terms of headline activity, patient investment, such as enterprise capital, is not unduly perturbed by short term volatility, but focuses on creating lasting value. My thanks go to colleagues on the Mid Market Council for driving this initiative, as well as contributors to this report, Craig Donaldson of HgCapital, Jon Herbert of Lloyds Acquisition Finance, Professor Tim Jenkinson of the Saïd Business School at the University of Oxford, Professor Dr Kaserer of the Technical University of Munich and to David Chamberlain of Capstone. Karsten Langer Karsten Langer has been a partner with The Riverside Company since 2006. He currently leads the firm s investment and portfolio management activities in the Benelux and France. Prior to this role, he spent three years building up Riverside s pan-european origination team. Previously, Karsten Langer was Managing Partner of an independent corporate finance firm in Brussels, advising on numerous transactions across Europe for blue-chip multinationals and private equity firms. He also spent five years with GE Capital Europe, including as Chief Operating Officer of TIP and Modular Space, and in corporate business development. Karsten Langer started his career with Danske Bank in Copenhagen. He holds a BSc (econ) from the Copenhagen Business School and a Masters in Management from EAP European School of Management (now ESCP Europe), and speaks English, French, Danish, German, Portuguese and basic Dutch. Karsten Langer is currently Chairman of the EVCA (European Private Equity and Venture Capital Association). EVCA Enterprise Capital Report 2011 I 7

2. Investments Living in an investment environment marked by significant sovereign debt problems, a weakened financial system and decelerating growth in Western economies, investor sentiment is, and will remain, very erratic in the short and medium term. Public markets are more volatile than ever, the private equity M&A market in which we operate oscillates in short cycles, and emotions trump experience and judgement. These conditions are the friends of the patient and diligent investor. Taking a focused approach and sticking to tested fundamental principles can still yield solid results. Taking a longer view, the combination of a patient, committed approach that private equity offers companies will continue to be attractive because the need for change in businesses will be greater than ever. The challenge of making radical changes, either as a listed company, a state owned enterprise or a family company will become more difficult in these volatile markets, and debt finance will be scarcer and often more expensive. Judiciously invested enterprise capital can help support and grow European businesses though this challenging period and yield substantial rewards for investors. Therefore it is promising to see that the latest EVCA investment data illustrates that the 12 months to June 2011 have seen the continued rebound, from the depressed levels of 2009, in investment levels for private equity transactions of all sizes. In particular Q4 of 2010 was the busiest period (by value and number of deals) since Q4 2007 for investments above 150m EV size range [Figure 2.1]. Pleasingly, for almost all readers of this report, since the middle of 2010 we have also seen a decline in rescue and turnaround investments made in Europe [Figure 2.7]. Nevertheless, private equity operates with a clear time lag, as investments take months of due diligence and preliminary work. It is likely that the investment data for second half of 2011 will show a decline, as the euro-zone debt crisis and economic uncertainty continues to impact bank balance sheets and overall confidence. However, there is increasing evidence that strong private equity managers can outperform other asset classes across market cycles the long-term prospects for our industry are as solid as ever. There has been a marked, sustained increase in the value of mid-market buyout investments [Figure 2.3] announced from Q1 2010 through to Q2 2011. That this part of the market has been particularly buoyant should come as little surprise. Investment in small and medium sized enterprises is not overly dependent on capital market cycles. Supporting a small mid-market business does not require huge syndicated banking deals or leveraged loan issuance. As can be seen in Table 2.1 across more than 250 mid-market investments in 2010 and H1 2011 the ratio of equity to debt averages over 50%. We should hope that such conservative capital structures will allow these businesses room to re-invest in growth and job creation over the next stage of the cycle. Indeed, return attribution studies of European middle market private equity investments have shown that revenue growth and margin improvement have historically been the primary drivers of private equity returns, across markets cycles, not leverage or market timing. We should therefore be hopeful that this remains the case for these recent investments. 8 I EVCA Enterprise Capital Report 2011

The starkest trend of the last 12-18 months is the marked increase in secondary buyouts, with one private equity investor acquiring a business from a prior private equity backer [Figure 2.14]. Over the last 18 months around 40% of all private equity buyout investments were of this type. Much has been made in the press recently that the preponderance of these pass the parcel deals illustrate that public market investors are wary of private equity backed IPOs. While there may be some merit to this, to our mind not enough has been made of the other side of the equation. Management teams in companies backed by private equity look out at the public market and see flash-crashes, huge intra-day volatility, short-term earnings horizons and an inability to appreciate and support long-term investment for growth, and increasingly appreciate the benefits of private capital. A number of our own management teams strongly preferred further backing by enterprise capital over a return to public ownership or listed trade acquirers, and this is certainly true across the wider industry. Most of these investments should perform well, and display low volatility of returns. Across Europe, the majority of businesses involved in secondary investments will have been well-managed and grown strongly over the last three to five years with the support of their private equity backers, including through the 2008-09 downturn. Hopefully they will enjoy similar support and growth with their new backers. Craig Donaldson Craig Donaldson is a Partner of HgCapital and a member of its Executive, Investment, Portfolio Review and Valuation Committees. He has more than 20 years of experience advising institutional investors on alternative investment management strategies. Previous professional responsibilities have included investment acquisitions and dispositions, portfolio management, financial analysis, fundraising and client services. Craig has overall responsibility for client service and fundraising, he coordinates fund co-investment and manages the firm's annual business planning and strategy work. EVCA Enterprise Capital Report 2011 I 9

Figure 2.1 - Investments by Size and Quarter - Amount 8 7 6 5 billion 4 3 2 1 0 2007 2008 2009 2010 H1 2011 in thousands Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil > 300 mil 449,254 416,762 578,721 564,774 583,014 691,939 703,965 493,339 572,010 609,278 569,155 593,572 587,647 555,334 602,115 681,341 403,048 436,727 1,171,200 1,258,465 1,647,348 1,598,000 1,297,850 1,400,966 1,313,541 1,013,286 528,125 862,163 852,032 846,848 914,302 1,038,831 959,414 976,693 757,072 1,063,854 2,984,177 3,164,672 2,719,366 3,097,731 2,922,095 3,635,372 3,836,296 1,802,962 917,643 770,334 1,470,154 1,386,185 1,033,946 2,485,754 2,260,013 1,985,354 1,633,677 1,788,583 4,896,853 3,470,532 3,393,632 4,380,077 2,603,109 3,156,421 2,898,263 1,957,484 975,987 660,609 1,118,711 2,247,434 1,351,997 1,185,661 2,661,416 2,295,952 2,123,728 2,558,983 2,764,440 4,264,079 2,993,471 3,299,970 2,141,710 2,388,437 1,762,461 737,152 577,532 212,440 270,000 1,991,632 2,300,697 1,818,331 1,871,577 2,604,629 1,477,931 1,889,738 3,126,115 3,834,481 6,819,510 2,026,013 2,390,602 1,765,094 4,348,589 646,498 625,352 356,481 0 435,000 1,285,822 1,688,636 1,491,733 3,081,073 1,162,277 1,405,372 10 I EVCA Enterprise Capital Report 2011

Figure 2.2 - Investments by Size and Quarter - Number of Companies 400 350 300 250 200 150 100 50 0 2007 2008 2009 2010 H1 2011 Number of companies Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil > 300 mil 207 227 275 257 276 312 315 299 352 354 314 361 324 353 400 394 213 257 121 128 149 152 143 137 139 112 59 91 85 82 106 106 109 100 71 91 91 105 91 99 108 121 124 61 31 30 54 49 43 76 78 72 57 59 46 39 36 44 29 35 31 18 10 8 13 27 16 14 30 25 23 27 11 18 12 12 8 10 9 4 2 1 1 9 10 8 9 11 6 9 6 10 12 5 5 4 7 2 2 1 0 1 3 4 3 6 3 3 EVCA Enterprise Capital Report 2011 I 11

Figure 2.3 - Investments by Type and Quarter - Amount 10 8 billion 6 4 2 0 2007 2008 2009 2010 H1 2011 in thousands Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Large and Mega Mid-market Small Growth Replacement Capital and Rescue/ Turnaround 5,714,236 7,848,560 9,343,958 5,325,983 4,532,312 3,523,043 6,111,049 1,233,650 1,002,884 568,921 270,000 2,072,182 3,027,293 3,105,760 3,073,809 5,685,701 2,401,401 3,295,109 6,780,734 5,685,702 5,137,141 6,186,635 4,324,568 5,314,630 5,215,292 2,817,392 845,429 989,609 1,522,431 2,534,399 1,668,224 2,541,282 3,404,737 3,628,961 3,145,723 3,763,090 1,295,779 1,145,913 1,624,456 1,614,503 1,136,771 1,279,284 1,167,916 806,457 548,673 680,425 643,438 588,479 659,312 703,891 767,591 859,722 569,696 796,753 1,104,743 1,104,480 1,398,875 1,425,089 1,585,409 2,490,026 1,827,138 1,430,109 1,258,061 806,241 1,064,150 1,360,052 1,521,318 1,750,503 1,862,213 1,232,495 1,191,120 1,178,383 496,547 624,336 647,616 414,354 359,321 431,246 541,719 363,114 541,602 426,110 780,034 945,558 598,264 671,111 737,917 218,163 249,792 109,921 12 I EVCA Enterprise Capital Report 2011

Figure 2.4 - Investments by Type and Quarter - Number of Companies 400 350 300 250 200 150 100 50 0 2007 2008 2009 2010 H1 2011 Number of companies Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Large and Mega Mid-market Small Growth Replacement Capital and Rescue/ Turnaround 17 27 21 15 13 10 15 5 3 2 1 7 10 11 10 15 7 12 106 115 100 118 101 113 113 51 15 22 40 48 37 62 69 74 62 66 217 204 244 250 213 224 216 180 137 148 128 118 114 139 143 152 104 117 78 106 127 109 151 180 192 186 209 214 208 238 245 263 318 275 151 214 47 54 59 50 71 68 63 59 77 83 81 101 83 65 61 71 37 24 EVCA Enterprise Capital Report 2011 I 13

Figure 2.5 - Investments by Type and Annual Equity Ratio Level - as % of Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 l Large and Mega l Mid-market l Small l Growth l Replacement Capital and Rescue/ Turnaround Equity ratio level - Annual basis 37.1 47.8 51.5 35.6 38.0 27.0 41.1 18.6 23.9 16.4 6.3 27.6 40.5 35.4 31.2 48.9 31.8 36.0 44.1 34.6 28.3 41.3 36.2 40.8 35.1 42.4 20.2 28.5 35.6 33.8 22.3 29.0 34.6 31.2 41.6 41.2 8.4 7.0 9.0 10.8 9.5 9.8 7.9 12.1 13.1 19.6 15.0 7.9 8.8 8.0 7.8 7.4 7.5 8.7 7.2 6.7 7.7 9.5 13.3 19.1 12.3 21.5 30.0 23.2 24.9 18.1 20.4 20.0 18.9 10.6 15.8 12.9 3.2 3.8 3.6 2.8 3.0 3.3 3.6 5.5 12.9 12.3 18.2 12.6 8.0 7.7 7.5 1.9 3.3 1.2 33.6 33.6 33.6 33.6 44.7 44.7 44.7 44.7 53.1 53.1 53.1 53.1 50.6 50.6 50.6 50.6 47.8 47.8 - Standard & Poor's LCD (Source for Equity Ratio Level) 14 I EVCA Enterprise Capital Report 2011

Figure 2.6 - Evolution of Investments (Index Q1 2007 = 100) and GDP Growth in Europe 140 120 100 80 60 40 20 0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5-3.0 % 2007 2008 2009 2010 H1 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Enterprise Capital investments by amount (Index Q1 2007=100) GDP growth EU 27 (% q/q) 100 107 118 97 78 85 97 43 27 23 28 49 49 57 64 76 54 64 0.8 0.5 0.6 0.5 0.6-0.3-0.6-1.9-2.6-0.3 0.3 0.4 0.4 1 0.5 0.2 0.7 0.2 EVCA Enterprise Capital Report 2011 I 15

Figure 2.7 - Investments by Size and Type - as % of Amount (2007-2009) 100% 80% 60% 40% 20% 0% 2007 2008 2009 in thousands < 5 mil 5-15 mil 15-50 mil 50-150 mil > 150 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil > 150 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil > 150 mil l Rescue/Turnaround l Replacement Capital l Growth l Buyout 61,789 36,479 40,774 0 319,022 86,044 109,442 133,171 0 0 186,382 113,601 219,428 168,000 0 173,164 305,677 289,621 706,327 250,000 200,502 413,733 554,020 198,487 0 201,101 232,922 556,798 824,226 190,845 527,190 899,573 1,629,484 1,650,620 326,320 933,474 1,364,278 2,590,054 1,664,388 780,487 1,145,192 1,092,969 1,213,243 673,495 363,605 1,247,367 4,433,284 10,006,067 13,784,146 28,232,737 1,252,238 3,138,191 8,919,480 8,752,402 15,400,055 811,341 1,649,676 2,554,847 3,337,020 3,913,987 16 I EVCA Enterprise Capital Report 2011

Figure 2.7 - Investments by Size and Type - as % of Amount (2010-H1 2011) 100% 80% 60% 40% 20% 0% 2010 H1 2011 in thousands < 5 mil 5-15 mil 15-50 mil 50-150 mil > 150 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil > 150 mil l Rescue/Turnaround l Replacement Capital l Growth l Buyout 141,282 112,185 79,584 157,660 0 28,042 39,391 83,573 0 0 161,386 278,029 543,486 462,342 289,500 42,122 65,164 101,422 0 0 1,368,051 1,264,227 1,940,991 832,827 960,433 474,656 644,878 503,457 507,706 238,806 755,719 2,234,798 5,201,007 6,042,197 14,892,564 294,956 1,071,493 2,733,807 4,175,006 5,696,511 EVCA Enterprise Capital Report 2011 I 17

Figure 2.8 - Overview Investment by Location - as % of Amount invested 40% 30% 20% 10% 0% in % CEE region Benelux region Southern Europe France Nordic region DACH region The UK & Ireland l 2007 l 2008 l 2009 l 2010 l H1 2011 3.2 11.7 10.9 17.1 9.7 18.4 29.0 4.7 7.9 16.5 16.6 9.2 19.7 25.5 12.3 11.1 16.4 11.5 12.4 13.5 22.6 3.2 7.3 11.9 15.3 13.3 15.2 33.7 4.5 10.1 9.9 19.5 13.5 19.4 23.1 18 I EVCA Enterprise Capital Report 2011

Figure 2.9 - Overview Investment by Location - as % of Number of Companies 40% 30% 20% 10% 0% in % CEE region Benelux region Southern Europe France Nordic region DACH region The UK & Ireland l 2007 l 2008 l 2009 l 2010 l H1 2011 5.2 10.1 12.4 20.0 11.7 16.7 24.0 5.0 8.7 12.5 22.4 12.0 18.8 20.5 5.4 12.2 10.8 18.6 13.7 22.2 17.0 4.9 10.1 10.0 21.1 12.3 23.2 18.3 6.0 9.8 8.2 22.8 11.9 21.6 19.7 EVCA Enterprise Capital Report 2011 I 19

Figure 2.10 - Investments by Region and Type - as % of Total Amount (2007-2009) 100% 30 80% 60% 40% 20% 25 20 15 10 5 Total Amount in billion 0% 0 2007 2008 2009 in thousands Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Amount 9,084,838 6,262,558 1,122,628 1,725,756 637,548 4,032,560 4,532,762 760,659 2,008,113 506,855 1,250,203 1,102,022 430,475 1,062,341 554,360 2,403,761 2,516,811 840,194 728,300 558,803 1,917,157 3,505,402 631,407 1,243,508 353,687 388,016 1,110,889 254,937 782,755 658,492 2,237,255 2,862,244 548,936 488,861 175,947 1,628,602 1,454,984 494,324 596,773 123,514 471,956 647,090 393,899 511,384 394,124 4,292,928 4,378,264 1,666,764 522,109 241,862 2,384,920 2,947,315 1,162,405 1,029,546 191,006 0 515,967 785,473 650,403 293,388 6,104,292 4,651,680 677,515 432,930 80,332 3,683,872 3,407,410 684,251 1,057,196 328,893 447,900 1,194,712 326,008 440,913 215,623 565,063 527,872 347,436 549,717 88,860 390,487 850,550 236,809 682,157 5,568 905,000 827,657 134,947 354,955 177,545 3,544,601 2,590,783 477,178 585,517 399,501 1,362,457 973,459 420,574 715,389 185,876 450,912 493,530 135,278 685,753 399,771 28,232,737 23,790,213 5,680,651 5,033,188 2,182,853 15,400,055 17,671,882 4,390,428 7,332,681 1,695,399 3,913,987 5,891,867 2,461,016 4,488,503 2,693,304 20 I EVCA Enterprise Capital Report 2011

Figure 2.10 - Investments by Region and Type - as % of Total Amount (2010-H1 2011) 100% 30 80% 60% 40% 20% 25 20 15 10 5 Total Amount in billion 0% 0 2010 H1 2011 in thousands Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Amount 5,908,559 3,287,272 637,872 1,956,756 929,144 910,654 1,751,649 218,237 883,215 100,623 1,954,217 1,101,610 282,869 808,001 341,371 960,268 258,720 100,757 250,740 83,130 1,962,430 1,662,982 424,341 823,038 140,996 675,113 1,277,915 107,686 142,542 45,085 1,944,322 1,838,063 1,012,450 863,177 110,958 962,931 1,135,690 558,188 546,647 53,221 2,267,498 1,867,477 254,338 1,071,142 281,863 1,676,504 1,023,405 250,628 269,070 17,713 150,000 337,151 172,569 515,385 41,734 187,146 392,628 83,745 89,541 3,270 705,538 1,148,649 206,077 329,030 379,390 323,895 1,068,808 47,207 187,747 56,671 14,892,564 11,243,204 2,990,517 6,366,528 2,225,454 5,696,511 6,908,813 1,366,449 2,369,503 359,713 EVCA Enterprise Capital Report 2011 I 21

Figure 2.11 - Investments by Region and Type - as % of Number of Companies (2007-2009) 100% 1,000 80% 60% 40% 20% 800 600 400 200 Total Number of Companies 0% 0 2007 2008 2009 Number of companies Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Number of Companies 22 121 176 104 36 12 92 122 143 49 3 24 86 138 41 7 48 113 41 27 5 62 88 67 37 2 20 44 85 33 8 44 104 47 24 5 35 104 62 32 2 18 71 91 57 11 69 223 55 41 7 69 232 113 44 0 11 143 120 56 16 92 122 62 30 8 69 143 120 44 2 28 88 183 74 2 16 47 31 8 2 19 30 45 4 2 13 26 45 8 12 41 77 37 27 4 23 68 49 33 2 9 37 108 53 78 431 862 377 193 43 369 787 599 243 13 123 495 770 322 22 I EVCA Enterprise Capital Report 2011

Figure 2.11 - Investments by Region and Type - as % of Number of Companies (2010-H1 2011) 100% 1,000 80% 60% 40% 20% 800 600 400 200 Total Number of Companies 0% 0 2010 H1 2011 Number of companies Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround Large/Mega Buyout MidMarket Buyout Small Buyout Growth Replacement Capital + Rescue/ Turnaround l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Number of Companies 19 66 93 168 32 3 37 37 68 9 6 27 47 91 34 4 6 18 27 9 5 34 74 100 39 1 24 17 41 11 6 33 165 205 30 4 18 70 75 10 5 47 73 273 65 5 21 44 88 10 1 8 27 55 8 1 6 14 24 1 2 20 43 92 51 1 16 17 29 10 44 235 522 984 259 19 128 217 352 60 EVCA Enterprise Capital Report 2011 I 23

Figure 2.12 - Investments by Region and Size - as % of Total Amount (2007-2009) 100% 18 16 80% 60% 40% 20% 14 12 10 8 6 4 2 Total Amount in billion 0% 0 2007 2008 2009 in thousands < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Amount 548,414 1,159,155 3,469,901 4,251,998 3,519,390 5,884,471 550,750 1,008,367 3,327,767 2,459,019 2,189,624 2,305,423 471,259 553,168 1,054,369 870,404 268,370 1,181,833 260,653 883,345 1,426,726 1,673,385 1,701,195 1,102,566 277,800 796,728 1,980,555 2,510,921 1,534,632 550,525 245,981 355,393 941,926 1,072,927 578,861 0 207,815 595,782 1,159,876 2,112,514 1,388,998 848,257 245,351 601,766 1,192,867 629,611 603,452 1,025,150 355,444 445,657 601,596 543,800 471,956 0 497,778 1,514,225 2,087,566 2,709,430 1,845,208 2,447,720 663,366 1,017,430 2,067,960 1,581,515 523,920 1,861,000 576,611 769,101 553,917 345,602 0 0 227,767 647,545 1,855,523 3,111,621 2,076,737 4,027,554 380,247 703,632 2,297,032 2,096,839 1,005,962 2,677,910 321,249 409,059 861,550 585,397 447,900 0 97,171 401,902 636,500 378,312 165,063 400,000 123,301 346,637 565,677 589,468 540,487 0 107,582 172,792 213,029 838,095 633,605 435,000 169,913 473,057 1,329,855 1,903,833 2,625,369 1,095,552 231,443 551,084 764,866 747,904 631,683 730,775 265,890 383,999 317,929 746,515 450,912 0 2,009,511 5,675,012 11,965,946 16,141,093 13,321,959 15,806,120 2,472,257 5,025,644 12,196,725 10,615,277 7,029,760 9,150,783 2,344,016 3,089,168 4,544,315 5,002,741 2,851,604 1,616,833 24 I EVCA Enterprise Capital Report 2011

Figure 2.12 - Investments by Region and Size - as % of Total Amount (2010-H1 2011) 100% 18 16 80% 60% 40% 20% 14 12 10 8 6 4 2 Total Amount in billion 0% 0 2010 H1 2011 in thousands < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Amount 513,365 904,333 2,257,475 2,267,507 3,669,013 3,107,910 185,412 432,851 895,808 1,200,847 811,402 338,058 225,183 493,035 1,066,767 748,865 1,321,217 633,000 72,648 174,980 223,720 222,000 960,268 0 264,432 566,029 1,114,958 1,105,937 1,033,384 929,047 78,613 184,396 487,709 822,509 0 675,113 748,011 913,794 1,169,340 993,503 916,649 1,027,673 258,486 649,188 612,723 773,350 570,730 392,201 340,075 375,701 1,103,481 1,273,995 1,104,971 1,544,095 116,504 268,310 578,724 597,278 838,123 838,382 141,993 253,127 316,198 355,522 150,000 0 71,130 66,677 233,031 198,346 187,146 0 193,379 383,219 736,850 749,698 400,000 305,538 56,982 44,525 390,544 868,382 0 323,895 2,426,438 3,889,239 7,765,068 7,495,026 8,595,234 7,547,263 839,775 1,820,926 3,422,260 4,682,712 3,367,668 2,567,648 EVCA Enterprise Capital Report 2011 I 25

Figure 2.13 - Investments by Region and Size - as % of Number of Companies (2007-2009) 100% 1,400 80% 60% 40% 20% 1,200 1,000 800 600 400 200 Total Number of Companies 0% 0 2007 2008 2009 Number of companies < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Number of Companies 190 117 105 46 13 11 187 102 100 31 9 6 200 53 38 10 1 3 94 78 46 18 7 3 97 85 62 24 6 1 112 37 29 12 3 0 109 57 34 21 6 2 123 70 38 8 3 2 171 44 23 6 2 0 203 132 65 25 8 4 297 94 78 14 3 4 240 73 18 5 0 0 154 62 66 32 8 8 211 79 79 18 5 3 291 47 32 7 2 0 39 41 21 4 1 1 41 32 22 7 3 0 57 18 9 8 3 1 81 49 40 17 10 3 91 52 27 7 2 2 157 35 11 10 2 0 870 536 377 163 53 32 1,047 514 406 109 31 18 1,228 307 160 58 13 4 26 I EVCA Enterprise Capital Report 2011

Figure 2.13 - Investments by Region and Size - as % of Number of Companies (2010-H1 2011) 100% 1,400 80% 60% 40% 20% 1,200 1,000 800 600 400 200 Total Number of Companies 0% 0 2010 H1 2011 Number of companies < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil l UK & Ireland l Southern Europe l Nordics l France l DACH l CEE l Benelux Total Number of Companies 197 88 70 24 16 7 71 38 34 14 3 1 112 50 38 9 6 1 33 19 7 4 4 0 145 63 36 14 4 2 52 16 16 9 0 1 316 101 37 9 4 2 106 49 20 8 3 1 363 40 48 15 5 3 112 26 21 4 4 2 58 26 11 5 1 0 31 6 6 2 1 0 139 41 22 9 1 1 45 6 12 9 0 1 1,330 409 262 85 37 16 450 160 116 50 15 6 EVCA Enterprise Capital Report 2011 I 27

Table 2.1 - Buyout Split - Equity vs. Transaction Value (data only available for buyout) Amounts in thousands Equity Value (Euro thsd) Transaction Value Euro thsd Number of companies Equity Value / Transaction Value 2007 Small 6,142,499 13,235,922 804 46% Mid-market 19,708,887 55,437,261 384 36% Large 10,748,262 37,113,814 50 29% Mega 21,103,953 125,143,387 50 17% Total buyout 57,703,601 230,930,384 1271 25% 2008 Small 5,606,882 11,380,162 783 49% Mid-market 17,163,468 42,904,901 301 40% Large 4,860,448 13,223,816 19 37% Mega 9,831,568 35,693,787 19 28% Total buyout 37,462,366 103,202,667 1122 36% 2009 Small 3,377,859 5,476,538 530 62% Mid-market 6,222,731 10,357,276 80 60% Large 1,128,225 2,415,121 4 47% Mega 1,538,055 5,205,290 3 30% Total buyout 12,266,870 23,454,225 612 52% 2010 Small 4,820,803 8,138,237 578 59% Mid-market 12,391,036 23,688,032 153 52% Large 5,310,539 10,723,475 17 50% Mega 6,603,907 20,616,276 11 32% Total buyout 29,126,285 63,166,020 751 46% H1 2011 Small 1,927,756 3,433,996 229 56% Mid-market 7,048,258 14,154,418 100 50% Large 3,801,663 8,788,068 12 43% Mega 1,194,095 3,634,148 3 33% Total buyout 13,971,772 30,010,631 344 47% 28 I EVCA Enterprise Capital Report 2011

Figure 2.14 - Sources of Buyouts (data only available for buyouts and since Q1 2008) - as % of Amount 100% 80% 60% 40% 20% 0% 2008 2009 2010 H1 2011 in thousands Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 l Capital market l Corporate l Family & private l Institutional l Privatisation & state owned l Receivership l Private equity firm l Unknown 2,733,274 1,283,040 1,871,370 452,838 884,350 82,482 234,266 314,675 124,601 845,643 1,927,261 1,371,336 98,776 605,676 707,202 1,630,403 386,109 427,182 342,674 770,727 841,827 1,912,029 464,541 1,299,192 1,180,676 1,195,873 1,924,717 1,978,112 623,098 465,477 490,543 626,313 251,385 294,322 221,040 827,219 655,249 1,427,084 757,546 639,497 602,542 508,663 53,548 2,500 4,911 158,249 333,629 215,789 82,151 189,541 525,463 450,134 219,609 1,310,378 407,163 474,502 0 0 0 10,069 118,627 0 0 0 150,446 0 0 0 0 0 0 0 0 0 274 3,317 0 332 42,056 46,349 20,646 23,288 0 132,810 1,091,135 1,602,322 2,364,751 725,262 266,270 422,113 379,482 1,010,261 3,075,997 2,002,114 2,538,313 4,865,968 2,595,883 3,398,225 4,785,394 5,133,215 7,376,574 2,457,586 199,777 450,204 677,103 941,003 316,476 280,419 602,088 768,044 487,740 756,964 EVCA Enterprise Capital Report 2011 I 29

Figure 2.15 - Investments by Sector - Amount ( billion) Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0 2 4 6 8 10 12 l 2007 l 2008 l 2009 l 2010 l H1 2011 30 I EVCA Enterprise Capital Report 2011

Table 2.2 - Investments by Sector - Amount ( thousands) 2007 2008 2009 2010 H1 2011 Agriculture 414,823 120,268 74,342 190,352 101,540 Business & industrial products 9,945,041 8,408,086 2,237,142 3,842,326 2,186,602 Business & industrial services 8,100,430 4,491,788 1,879,161 3,302,244 734,553 Chemicals & materials 2,986,771 2,395,493 546,900 907,032 789,678 Communications 9,280,351 5,066,689 2,050,543 3,951,027 1,347,791 Computer & consumer electronics 2,494,495 2,347,349 1,308,154 3,052,533 1,892,582 Construction 2,995,863 2,327,455 411,483 502,527 595,156 Consumer goods & retail 8,941,744 6,441,555 2,719,311 7,917,855 2,762,649 Consumer services: other 6,358,255 3,067,423 1,707,178 3,776,944 1,902,969 Energy & environment 1,214,401 4,229,320 1,179,070 1,082,454 463,882 Financial services 3,193,337 2,495,042 2,084,348 2,252,045 1,283,822 Life sciences 5,298,985 3,607,718 2,345,510 4,649,952 1,924,668 Real estate 181,362 18,870 68,454 185,836 58,224 Transportation 3,348,380 1,229,723 614,680 2,077,840 656,180 Unknown 165,404 243,666 222,403 27,301 691 Total investment 64,919,642 46,490,446 19,448,677 37,718,267 16,700,988 EVCA Enterprise Capital Report 2011 I 31

Figure 2.16 - Investments by Sector - Number of Companies Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0 50 100 150 200 250 300 350 400 l 2007 l 2008 l 2009 l 2010 l H1 2011 32 I EVCA Enterprise Capital Report 2011

Table 2.3 - Investments by Sector - Number of Companies 2007 2008 2009 2010 H1 2011 Agriculture 15 15 17 25 6 Business & industrial products 362 379 303 276 98 Business & industrial services 232 212 189 227 76 Chemicals & materials 57 51 41 53 23 Communications 155 151 155 170 76 Computer & consumer electronics 121 142 147 189 72 Construction 62 72 45 80 32 Consumer goods & retail 276 303 227 340 107 Consumer services: other 146 153 130 157 66 Energy & environment 58 87 75 102 41 Financial services 80 81 55 68 36 Life sciences 147 143 137 162 73 Real estate 10 10 10 10 9 Transportation 73 68 48 81 28 Unknown 11 44 75 14 3 Total investment 1,805 1,911 1,654 1,954 746 EVCA Enterprise Capital Report 2011 I 33

Figure 2.17 - Investments by Sector and Type - as % of Amount (2007-2008) 2007 2008 Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l Large/Mega Buyout l MidMarket Buyout l Small Buyout l Growth l Replacement Capital and Rescue/Turnaround 34 I EVCA Enterprise Capital Report 2011

Table 2.4 - Investments by Sector and Type - Amount ( thousands) (2007-2008) Replacement Replacement Capital + Capital + Large/ MidMarket Small Rescue/ Large/ MidMarket Small Rescue/ Mega Buyout Buyout Buyout Growth Turnaround Mega Buyout Buyout Buyout Growth Turnaround 2007 2008 Agriculture 192,094 172,828 35,106 14,795 0 0 35,752 37,292 43,819 3,405 Business & industrial products 3,207,030 4,556,402 1,348,135 329,526 503,948 2,197,307 4,162,756 1,033,015 718,253 296,756 Business & industrial services 3,750,213 2,753,157 818,809 597,029 181,222 1,270,542 1,650,037 456,177 986,943 128,089 Chemicals & materials 1,520,570 1,145,073 192,407 116,536 12,185 1,463,000 730,615 66,821 96,062 38,994 Communications 4,956,280 2,607,502 379,652 938,223 398,694 2,682,208 1,077,996 359,002 873,996 73,488 Computer & consumer electronics 622,549 1,118,628 316,992 279,079 157,248 761,128 782,920 302,137 327,582 173,582 Construction 1,955,100 714,660 175,033 135,993 15,077 1,406,808 459,016 285,265 118,686 57,681 Consumer goods & retail 3,645,981 3,341,660 995,820 425,784 532,499 1,587,757 2,997,983 688,527 883,179 284,108 Consumer services: other 3,501,251 2,110,826 477,261 240,282 28,636 0 1,669,966 344,100 768,215 285,141 Energy & environment 0 284,215 166,127 630,818 133,241 2,498,602 961,513 190,809 542,437 35,959 Financial services 1,579,639 1,045,016 137,086 375,967 55,629 703,575 699,039 70,065 816,191 206,173 Life sciences 2,062,259 1,954,723 389,721 750,565 141,717 668,643 1,921,178 196,724 790,663 30,511 Real estate 0 89,825 5,316 86,221 0 0 0 8,498 5,339 5,033 Transportation 1,239,771 1,780,999 241,424 63,815 22,371 160,487 508,113 146,838 354,615 59,671 Unknown 0 114,700 1,762 48,556 386 0 15,000 205,160 6,700 16,806 Total investment 28,232,737 23,790,213 5,680,651 5,033,188 2,182,853 15,400,055 17,671,882 4,390,428 7,332,681 1,695,399 EVCA Enterprise Capital Report 2011 I 35

Figure 2.17 - Investments by Sector and Type - as % of Amount (2009-2010) 2009 2010 Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l Large/Mega Buyout l MidMarket Buyout l Small Buyout l Growth l Replacement Capital and Rescue/Turnaround 36 I EVCA Enterprise Capital Report 2011

Table 2.4 - Investments by Sector and Type - Amount ( thousands) (2009-2010) Replacement Replacement Capital + Capital + Large/ MidMarket Small Rescue/ Large/ MidMarket Small Rescue/ Mega Buyout Buyout Buyout Growth Turnaround Mega Buyout Buyout Buyout Growth Turnaround 2009 2010 Agriculture 0 17,800 16,189 40,353 0 0 45,746 60,483 79,529 4,594 Business & industrial products 0 712,669 418,261 525,601 580,610 1,318,948 1,291,683 363,454 526,985 341,257 Business & industrial services 356,481 340,783 303,461 431,832 446,604 757,546 1,226,794 428,477 757,474 131,953 Chemicals & materials 0 203,856 63,556 180,455 99,032 363,579 278,794 83,152 90,819 90,687 Communications 991,264 458,248 219,151 309,744 72,136 1,565,950 1,197,937 243,420 755,623 188,097 Computer & consumer electronics 0 709,270 157,385 227,449 214,049 1,159,966 1,080,343 189,222 518,647 104,355 Construction 0 153,864 94,860 154,820 7,938 0 191,449 133,366 97,106 80,606 Consumer goods & retail 720,000 303,051 418,344 687,568 590,348 3,579,334 2,456,657 610,191 788,583 483,090 Consumer services: other 270,000 830,274 184,239 278,694 143,971 1,467,454 823,733 241,265 578,709 665,782 Energy & environment 270,000 238,280 46,311 598,905 25,574 366,655 267,043 136,107 283,878 28,770 Financial services 833,386 721,965 50,988 260,107 217,901 900,342 570,469 97,886 681,634 1,714 Life sciences 472,856 1,102,966 289,920 415,701 64,066 2,298,789 1,135,721 229,412 931,337 54,692 Real estate 0 0 316 58,280 9,858 0 155,376 3,020 19,696 7,743 Transportation 0 98,841 128,852 235,013 151,975 1,114,000 521,457 167,462 233,474 41,447 Unknown 0 0 69,183 83,981 69,239 0 0 3,600 23,034 667 Total investment 3,913,987 5,891,867 2,461,016 4,488,503 2,693,304 14,892,564 11,243,204 2,990,517 6,366,528 2,225,454 EVCA Enterprise Capital Report 2011 I 37

Figure 2.17 - Investments by Sector and Type - as % of Amount (H1 2011) H1 2011 Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l Large/Mega Buyout l MidMarket Buyout l Small Buyout l Growth l Replacement Capital and Rescue/Turnaround 38 I EVCA Enterprise Capital Report 2011

Table 2.4 - Investments by Sector and Type - Amount ( thousands) (H1 2011) Replacement Capital + Large/ MidMarket Small Rescue/ Mega Buyout Buyout Buyout Growth Turnaround H1 2011 Agriculture 0 88,040 0 11,850 1,650 Business & industrial products 946,570 887,706 182,446 106,606 63,275 Business & industrial services 0 392,624 169,882 138,310 33,737 Chemicals & materials 476,608 229,670 27,651 8,708 47,042 Communications 0 1,007,181 98,371 230,829 11,410 Computer & consumer electronics 1,238,171 349,113 140,858 148,361 16,080 Construction 215,000 160,026 82,224 133,222 4,684 Consumer goods & retail 953,641 1,093,493 158,105 445,749 111,660 Consumer services: other 187,146 1,407,198 153,984 110,792 43,849 Energy & environment 234,000 108,000 42,465 78,804 613 Financial services 392,201 260,479 57,272 573,871 0 Life sciences 702,291 722,573 167,119 309,251 23,434 Real estate 0 20,299 29,325 8,600 0 Transportation 350,883 182,412 56,597 64,010 2,278 Unknown 0 0 150 541 0 Total investment 5,696,511 6,908,813 1,366,449 2,369,503 359,713 EVCA Enterprise Capital Report 2011 I 39

Figure 2.18 - Investments by Sector and Size - as % of Amount (2007-2008) 2007 2008 Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l < 5 mil l 5-15 mil l 15-50 mil l 50-150 mil l 150-300 mil l >300 mil 40 I EVCA Enterprise Capital Report 2011

Table 2.5 - Investments by Sector and Size - Amount ( thousands) (2007-2008) 15-50- 150-15- 50-150- < 5 mil 5-15 mil 50 mil 150 mil 300 mil >300 mil < 5 mil 5-15 mil 50 mil 150 mil 300 mil >300 mil 2007 2008 Agriculture 27,235 22,667 68,392 104,436 192,094 0 26,123 38,393 55,752 0 0 0 Business & industrial products 367,243 1,269,854 2,154,125 2,946,789 1,990,144 1,216,887 420,099 1,073,610 2,643,061 1,906,009 1,424,832 940,475 Business & industrial services 274,248 881,606 1,807,746 1,386,617 1,245,955 2,504,258 298,329 566,122 1,434,736 922,059 274,044 996,498 Chemicals & materials 50,192 172,937 326,719 916,355 776,018 744,552 45,142 97,231 452,961 337,158 0 1,463,000 Communications 218,478 381,982 979,792 2,317,499 2,241,989 3,140,611 224,843 445,148 762,355 802,135 1,181,683 1,650,525 Computer & consumer electronics 157,134 270,157 466,858 977,797 622,549 0 220,563 289,105 524,410 552,143 0 761,128 Construction 53,583 149,646 223,890 613,643 853,767 1,101,333 139,974 246,657 321,696 212,320 563,808 843,000 Consumer goods & retail 288,325 965,940 1,953,214 1,769,262 1,720,863 2,244,140 358,696 820,701 2,012,602 1,661,799 1,121,733 466,024 Consumer services: other 164,923 423,758 1,071,470 1,196,854 1,558,520 1,942,731 143,184 412,930 1,174,801 1,336,508 0 0 Energy & environment 87,284 234,767 462,387 279,963 150,000 0 93,440 293,745 572,661 770,872 1,302,866 1,195,736 Financial services 43,932 213,508 818,504 537,755 754,654 824,985 98,023 122,835 551,911 556,211 331,665 834,397 Life sciences 181,609 467,400 939,220 1,648,497 678,445 1,383,814 218,679 285,133 1,079,170 1,356,094 668,643 0 Real estate 13,577 0 111,743 56,042 0 0 7,657 11,213 0 0 0 0 Transportation 71,045 220,791 477,888 1,338,885 536,963 702,808 106,425 165,233 595,610 201,968 160,487 0 Unknown 10,704 0 104,000 50,700 0 0 71,080 157,586 15,000 0 0 0 Total investment 2,009,511 5,675,012 11,965,946 16,141,093 13,321,959 15,806,120 2,472,257 5,025,644 12,196,725 10,615,277 7,029,760 9,150,783 EVCA Enterprise Capital Report 2011 I 41

Figure 2.18 - Investments by Sector and Size - as % of Amount (2009-2010) 2009 2010 Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l < 5 mil l 5-15 mil l 15-50 mil l 50-150 mil l 150-300 mil l >300 mil 42 I EVCA Enterprise Capital Report 2011

Table 2.5 - Investments by Sector and Size - Amount ( thousands) (2009-2010) 15-50- 150-15- 50-150- < 5 mil 5-15 mil 50 mil 150 mil 300 mil >300 mil < 5 mil 5-15 mil 50 mil 150 mil 300 mil >300 mil 2009 2010 Agriculture 5,573 30,969 37,800 0 0 0 47,041 76,601 66,711 0 0 0 Business & industrial products 434,112 446,261 597,248 759,521 0 0 292,354 485,124 880,074 865,826 171,366 1,147,583 Business & industrial services 264,791 452,917 383,752 421,220 0 356,481 309,884 497,482 817,887 741,787 935,204 0 Chemicals & materials 58,130 65,728 232,542 190,500 0 0 53,645 129,783 186,073 173,952 363,579 0 Communications 250,466 225,663 308,914 274,236 365,912 625,352 214,772 353,655 861,174 955,476 616,243 949,707 Computer & consumer electronics 216,724 199,238 375,217 516,975 0 0 276,107 274,188 608,321 733,951 597,574 562,392 Construction 69,826 94,451 191,205 56,000 0 0 103,318 110,472 175,449 113,288 0 0 Consumer goods & retail 313,393 494,921 515,456 484,696 475,845 435,000 379,669 762,871 1,513,094 1,496,354 2,437,445 1,328,422 Consumer services: other 149,441 249,797 449,436 588,505 270,000 0 197,583 342,816 680,650 603,906 1,277,951 674,038 Energy & environment 103,177 137,301 288,699 216,289 433,605 0 140,552 208,203 257,043 110,000 0 366,655 Financial services 77,623 96,795 298,500 778,043 833,386 0 56,628 89,422 390,036 414,410 617,731 683,818 Life sciences 222,248 377,757 555,893 716,756 472,856 0 200,241 313,242 916,149 921,531 1,097,141 1,201,648 Real estate 11,912 12,243 44,300 0 0 0 12,493 17,966 50,376 105,000 0 0 Transportation 59,300 135,355 220,025 0 200,000 0 128,321 213,943 362,031 259,545 481,000 633,000 Unknown 107,302 69,774 45,327 0 0 0 13,830 13,471 0 0 0 0 Total investment 2,344,016 3,089,168 4,544,315 5,002,741 2,851,604 1,616,833 2,426,438 3,889,239 7,765,068 7,495,026 8,595,234 7,547,263 EVCA Enterprise Capital Report 2011 I 43

Figure 2.18 - Investments by Sector and Size - as % of Amount (H1 2011) H1 2011 Agriculture Business and industrial products Business and industrial services Chemicals and materials Communications Computer and consumer electronics Construction Consumer goods and retail Consumer services: other Energy and environment Financial services Life sciences Real estate Transportation Unknown 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l < 5 mil l 5-15 mil l 15-50 mil l 50-150 mil l 150-300 mil l >300 mil 44 I EVCA Enterprise Capital Report 2011

Table 2.5 - Investments by Sector and Size - Amount ( thousands) (H1 2011) 15-50- 150- < 5 mil 5-15 mil 50 mil 150 mil 300 mil >300 mil H1 2011 Agriculture 3,500 10,000 0 88,040 0 0 Business & industrial products 93,913 258,414 235,574 652,132 946,570 0 Business & industrial services 99,532 181,976 200,915 252,131 0 0 Chemicals & materials 38,033 10,368 151,289 113,380 152,713 323,895 Communications 82,444 192,167 273,560 799,620 0 0 Computer & consumer electronics 93,036 164,813 311,112 85,452 225,000 1,013,171 Construction 48,954 108,026 223,176 0 215,000 0 Consumer goods & retail 127,440 274,681 643,245 763,641 466,143 487,499 Consumer services: other 50,089 145,491 698,819 821,424 187,146 0 Energy & environment 54,794 67,088 20,000 88,000 234,000 0 Financial services 19,159 146,537 176,754 310,365 238,806 392,201 Life sciences 67,960 186,068 366,823 601,526 702,291 0 Real estate 9,381 28,544 20,299 0 0 0 Transportation 50,850 46,753 100,694 107,000 0 350,883 Unknown 691 0 0 0 0 0 Total investment 839,775 1,820,926 3,422,260 4,682,712 3,367,668 2,567,648 EVCA Enterprise Capital Report 2011 I 45

Figure 2.19 - Geographic Origin of Investments - as % of Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in thousands Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 l Outside Europe l Intra-European l Domestic 500,103 1,274,629 528,418 911,245 149,638 684,024 451,528 99,322 3,467 37,852 181,568 199,204 26,437 332,231 684,880 11,397 110,395 168,626 6,422,987 4,835,730 4,029,073 4,152,302 2,868,068 3,970,337 2,782,938 1,661,849 1,092,929 677,480 909,650 2,666,066 926,341 2,459,785 2,009,221 2,987,262 3,328,461 1,688,934 8,468,948 10,298,632 13,594,556 9,903,017 8,920,675 8,383,868 11,628,648 4,889,551 3,100,254 2,755,974 3,188,833 4,635,399 6,521,633 5,980,531 7,152,166 8,626,383 4,118,876 7,285,696 46 I EVCA Enterprise Capital Report 2011

Figure 2.20 - Overview of Initial vs. Follow-on Investments - as % of Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Initial for the company Follow-on investment for the company Unknown Initial for the private equity firm 64.7 64.6 70.9 54.0 54.2 60.3 55.7 45.4 65.9 46.3 42.2 55.0 38.4 57.2 48.7 48.0 52.0 41.8 35.0 35.1 22.6 38.2 41.3 32.6 39.5 46.0 32.1 51.8 55.5 43.0 61.6 42.5 51.3 48.3 47.9 57.8 0.3 0.2 6.5 7.8 4.6 7.1 4.8 8.6 2.0 1.9 2.2 2.0 0.1 0.3 0.0 3.6 0.0 0.4 72.0 74.5 79.6 70.8 69.9 76.7 76.2 65.5 71.4 67.1 52.2 71.3 82.9 87.7 86.1 83.6 86.8 87.4 EVCA Enterprise Capital Report 2011 I 47

Table 2.6 - Initial vs. Follow-on Investments by Type - by Amount Replacement Capital + in % Large/Mega Buyout MidMarket Buyout Small Buyout Growth Rescue/ Turnaround 2007 Initial for the company 68 67 62 45 36 Follow-on investment for the company 29 29 35 48 62 Unknown 3 4 3 7 1 Initial for the private equity firm 77 78 69 55 60 2008 Initial for the company 61 59 60 34 37 Follow-on investment for the company 35 36 32 54 56 Unknown 4 5 8 12 7 Initial for the private equity firm 81 82 77 40 48 2009 Initial for the company 75 59 57 38 30 Follow-on investment for the company 25 39 40 60 67 Unknown 0 2 3 3 3 Initial for the private equity firm 88 77 72 45 41 2010 Initial for the company 43 57 62 48 25 Follow-on investment for the company 55 42 38 51 75 Unknown 2 1 0 0 0 Initial for the private equity firm 96 89 82 61 65 H1 2011 Initial for the company 27 59 61 49 43 Follow-on investment for the company 73 41 38 50 57 Unknown 0 0 0 1 0 Initial for the private equity firm 88 96 86 63 68 48 I EVCA Enterprise Capital Report 2011

Table 2.7 - Initial vs. Follow-on Investments by Size - by Amount in % < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil 2007 Initial for the company 55 58 67 61 60 71 Follow-on investment for the company 41 39 30 35 36 25 Unknown 4 3 3 5 4 3 Initial for the private equity firm 59 67 78 72 76 78 2008 Initial for the company 40 52 56 48 51 71 Follow-on investment for the company 48 38 38 47 39 29 Unknown 11 10 6 5 11 0 Initial for the private equity firm 50 66 72 71 77 84 2009 Initial for the company 34 44 51 55 71 66 Follow-on investment for the company 61 53 45 45 29 34 Unknown 5 3 4 0 0 0 Initial for the private equity firm 43 59 65 70 77 88 2010 Initial for the company 41 53 50 52 43 48 Follow-on investment for the company 58 46 49 48 57 47 Unknown 1 0 1 0 0 5 Initial for the private equity firm 55 70 78 87 97 95 H1 2011 Initial for the company 42 57 61 53 33 27 Follow-on investment for the company 56 43 39 47 67 73 Unknown 2 0 0 0 0 0 Initial for the private equity firm 56 79 88 93 100 74 EVCA Enterprise Capital Report 2011 I 49

Figure 2.21 - Syndication Trend by Type of Investment - as % of Amount 60% 50% 40% 30% 20% 10% 0% in % 2007 2008 2009 2010 H1 2011 l Buyout l Growth l Replacement Capital + Rescue/Turnaround 41 48 36 35 32 30 25 24 32 28 16 119 32 30 24 50 I EVCA Enterprise Capital Report 2011

Figure 2.22 - Syndication as % of Buyout Investment Amount 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l < 5 mil l 5-15 mil l 15-50 mil l 50-150 mil l 150-300 mil l > 300 mil 2 3 7 3 3 9 8 15 8 11 17 19 24 20 24 27 23 28 19 30 16 23 12 17 17 30 25 14 33 15 EVCA Enterprise Capital Report 2011 I 51

Figure 2.23 - Syndication as % of Growth Investment Amount 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l < 5 mil l 5-15 mil l 15-50 mil l 50-150 mil l 150-300 mil l > 300 mil 7 12 27 20 19 11 16 20 15 40 37 30 26 33 16 33 34 12 13 26 12 8 15 20 0 0 0 0 0 0 52 I EVCA Enterprise Capital Report 2011

Figure 2.24 - Syndication as % of Replacement Capital and Rescue/Turnaround Investment Amount 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l < 5 mil l 5-15 mil l 15-50 mil l 50-150 mil l 150-300 mil l > 300 mil 16 21 15 12 18 16 40 13 18 21 11 19 47 61 61 57 20 26 8 0 0 0 0 0 0 0 0 0 0 0 EVCA Enterprise Capital Report 2011 I 53

Figure 2.25 - Investment by Number of Employees - as % of Amount 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l Up to 250 employees (SMEs) l 250-1,000 employees l More than 1,000 employees 13 16 25 19 20 24 22 48 21 24 63 62 27 60 56 54 I EVCA Enterprise Capital Report 2011

Figure 2.26 - Investment by Number of Employees - as % of Number of Companies 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l Up to 250 employees (SMEs) l 250-1000 employees l More than 1,000 employees 51 54 64 62 60 28 15 15 22 23 20 31 21 17 17 EVCA Enterprise Capital Report 2011 I 55

Table 2.8 - Investments by Number of Employees and by Type of Investment (2007-H1 2011) - as % of Amount Replacement Capital in % Large/Mega Buyout MidMarket Buyout Small Buyout Growth and Rescue/Turnaround 2007 Up to 250 employees (SMEs) 2.4 14.2 52.8 33.4 35.8 250-1,000 employees 15.7 34.2 29.7 24.8 25.8 More than 1,000 employees 81.8 51.7 17.6 41.9 38.4 2008 Up to 250 employees (SMEs) 4.4 17.4 54.4 18.7 43.3 250-1,000 employees 5.0 36.4 30.8 23.1 22.1 More than 1,000 employees 90.7 46.2 14.9 58.2 34.7 2009 Up to 250 employees (SMEs) 14.3 24.7 55.7 30.5 11.0 250-1,000 employees 18.5 32.0 31.8 19.5 39.2 More than 1,000 employees 67.2 43.4 12.5 50.0 49.8 2010 Up to 250 employees (SMEs) 3.7 20.6 60.8 46.1 16.9 250-1,000 employees 12.2 36.0 26.7 13.8 19.5 More than 1,000 employees 84.2 43.4 12.5 40.1 63.6 H1 2011 Up to 250 employees (SMEs) 5.3 25.7 57.6 34.1 5.4 250-1,000 employees 15.0 31.1 33.2 19.2 56.5 More than 1,000 employees 79.7 43.2 9.2 46.7 38.0 56 I EVCA Enterprise Capital Report 2011

Table 2.9 - Investments by Number of Employees and by Size of Investment (2007-H1 2011) - as % of Amount in % < 5 mil 5-15 mil 15-50 mil 50-150 mil 150-300 mil >300 mil 2007 Up to 250 employees (SMEs) 64.8 49.1 26.2 8.8 5.2 0.0 250-1,000 employees 21.2 31.7 40.3 28.6 19.5 13.3 More than 1,000 employees 14.0 19.2 33.6 62.6 75.3 86.7 2008 Up to 250 employees (SMEs) 59.8 47.9 26.1 5.4 0.0 6.7 250-1,000 employees 23.8 32.1 39.6 27.6 0.0 7.6 More than 1,000 employees 16.4 20.1 34.3 67.1 100.0 85.8 2009 Up to 250 employees (SMEs) 58.6 41.8 26.6 13.4 22.7 0.0 250-1,000 employees 23.5 37.3 28.1 32.4 12.6 25.2 More than 1,000 employees 17.9 21.0 45.3 54.2 64.7 74.8 2010 Up to 250 employees (SMEs) 60.9 51.2 30.9 14.4 12.1 0.0 250-1,000 employees 23.5 27.7 31.8 30.0 11.3 11.4 More than 1,000 employees 15.6 21.2 37.3 55.6 76.6 88.6 H1 2011 Up to 250 employees (SMEs) 71.9 52.0 37.0 15.0 9.5 0.0 250-1,000 employees 19.1 33.9 31.2 31.9 13.6 15.3 More than 1,000 employees 9.1 14.2 31.9 53.2 76.9 84.7 EVCA Enterprise Capital Report 2011 I 57

Figure 2.27 - Investment Trend by Number of Employees - as % of Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Up to 250 employees (SMEs) 250-1,000 employees More than 1,000 employees 13 15 11 14 17 20 14 16 19 31 29 22 14 28 20 13 18 22 24 25 20 28 31 23 16 19 14 41 24 28 22 19 27 16 16 30 63 60 69 58 52 57 70 65 67 28 47 50 64 53 53 71 66 48 58 I EVCA Enterprise Capital Report 2011

Figure 2.28 - Investment Trend by Number of Employees - as % of Number of Companies 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Up to 250 employees (SMEs) 250-1,000 employees More than 1,000 employees 49 50 51 50 55 54 50 57 60 60 61 63 55 59 61 60 59 60 28 26 25 31 27 25 29 26 20 26 21 20 23 22 25 21 22 23 23 24 24 19 18 21 21 17 20 14 18 17 22 19 14 19 19 17 EVCA Enterprise Capital Report 2011 I 59

3. Financing 2010 saw a very welcome and material rebound in leverage loan volumes in Europe, admittedly from the depressed levels of 2009. This trend has continued into the first half of 2011 with volumes exceeding the whole of 2010. However, the outlook for the remainder of 2011 looks much weaker as the political and economic issues facing Europe increase caution amongst investors and lenders. The growth in 2010 started largely as a bank club market but as confidence grew through the year and as institutional debt investors returned, bank underwriting volumes started to grow. In part this reflected the strengthening of secondary debt prices, such that primary issuance could compete with the returns available to secondary buyers. 2010 also saw the emergence of a healthy high yield bond market in Europe, for the first time, offering sponsors an attractive alternative to the loan markets. This gathered pace in the first half of 2011, though volatility has returned to the market in the third quarter and new high yield issuance for the LBO market has paused. The 2010 loan vintage was characterised by low leverage, strong margins and deals funded with large equity cheques. Documentation was also robust. These characteristics have mostly continued into 2011, though the trends have been towards higher leverage and lower margins. In part this has been driven by a substantial uplift in institutional loan liquidity, not via new issuance, but from early repayments and refinancing of existing credits within loan portfolios, and a desire to reinvest in new deals. This liquidity has reduced in Q3, and with rising funding costs for banks, the trend in loan margins is upward, and appetite to underwrite has receded. The outlook for deal volume and loan issuance for the remainder of 2011 looks challenging, though full year volumes will show good growth over 2010. Jon Herbert Jon Herbert is the Head of Acquisition Finance at Lloyds Banking Group. Prior to the integration with Bank of Scotland, he ran Lloyds activities within the structured debt market which included Acquisition Finance, as well as businesses in Project Finance, Ship Finance, Rail Finance and Equipment Leasing. Jon has spent his entire career within the bank, mostly in Structured Finance and Corporate Banking. 60 I EVCA Enterprise Capital Report 2011

Figure 3.1 - Senior Loan Volume - LBO Transactions 400 300 billion 200 100 0 in billion 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 l European Market l US Market 15.31 18.98 25.58 27.60 29.56 44.12 103.73 115.93 140.02 48.61 4.66 19.38 20.48 79.38 65.45 36.71 34.79 54.54 92.44 116.89 186.90 214.73 38.18 16.92 89.67 99.33 Source: Standard & Poor's LCD EVCA Enterprise Capital Report 2011 I 61

Figure 3.2 - European Pro rata vs. Institutional LBO Activity (2005-2008) 80 60 billion 40 20 0 2005 2006 2007 2008 in billion Institutional Pro Rata Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 8.40 18.03 14.44 12.43 19.57 14.28 19.15 20.63 30.75 44.89 9.94 11.71 4.12 13.36 6.06 0.60 10.48 16.55 12.62 9.99 13.21 9.14 6.78 13.06 15.00 16.62 4.62 6.49 4.77 8.96 9.98 0.73 Source: Standard & Poor's LCD 62 I EVCA Enterprise Capital Report 2011

Figure 3.2 - European Pro rata vs. Institutional LBO Activity (2009-H1 2011) 80 60 billion 40 20 0 2009 2010 H12011 in billion Institutional Pro Rata Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0.46 0.68 0.22 0.86 3.01 1.99 2.82 2.33 4.69 4.55 0.30 0.41 0.18 1.54 1.85 1.09 3.58 2.53 4.56 6.67 Source: Standard & Poor's LCD EVCA Enterprise Capital Report 2011 I 63

Figure 3.3 - Rolling Three-month Weighted Average Spreads of all European New-issue LBOs 600 400 200 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Institutional Pro Rata Source: Standard & Poor s LCD Wtd. Avg. ProRata spread (WAPR) is the average RC/TLa spread weighted by the sizes of the RC and TLa tranches. Wtd. Avg. Institutional Spread (WAIS) is the average TLb/TLc spread weighted by the size of the TLb and TLc tranches[1]. E refers to Euribor. 64 I EVCA Enterprise Capital Report 2011

Figure 3.4 - Maturity schedule by par outstanding 2016 20% 2017 9% 2018 2% 2011 1% 2012 2% 2013 9% 2014 22% Year Billion l 2011 0.73 l 2012 1.91 l 2013 9.52 l 2014 22.53 l 2015 36.48 l 2016 20.90 l 2017 9.30 l 2018 2.14 Source: Standard & Poor s LCD Based on all facilities in the European Leveraged Loan Index (ELLI) universe, priced and unpriced. 2015 35% EVCA Enterprise Capital Report 2011 I 65

Figure 3.5 - Average P/E* ratios for European Private Equity-backed Buyouts 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 0-10m 10-100 mil 100-250 mil 250-500 mil > 500 mil 6.2 5.8 7.2 7.8 7.3 7.4 6.8 8.1 6.6 7.8 5.3 5.6 10.5 11.6 11.1 9.9 10.8 11.5 10.2 11.0 11.5 9.9 12.6 14.8 12.7 13.3 8.6 12.4 14.0 13.9 14.9 16.4 15.2 12 15.3 13.7 11.7 9.8 12.0 13.3 11.6 18.8 16.7 17.1 14.6 7.2 18.1 14.0 12.0 10.5 14.0 12.6 15.4 17.6 20.0 19.2 18.4 11.7 15.4 12.8 Source: cmbor.com/barclays Private Equity/Ernst & Young * P/E ratios here are defined as deal price divided by EBIT 66 I EVCA Enterprise Capital Report 2011

Figure 3.6 - Debt-to-EBIT Ratios for Buyouts* 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 0-50m 50-500 mil > 500 mil 4.7 4.9 5.8 5.4 5.3 4.9 3.9 5.0 3.8 3.4 3.4 2.7 6.1 5.2 6.5 7.5 7.2 9.1 7.6 9.0 6.8 6.5 5.8 6.9 5.9 5.0 8.0 7.2 9.6 13.1 12.9 13.5 9.8 4.7 10.1 0.0 Source: cmbor.com/barclays Private Equity/Ernst & Young * The sample includes all buyouts, not only private-equity backed buyouts. However, as non-private-equity-backed buyouts are typically smaller in size (i.e. sub- 10m deals), the data is still representative for private-equity-backed buyouts. EVCA Enterprise Capital Report 2011 I 67

Figure 3.7 - Average Deal Structures for European Private-equity-backed Buyouts: Deals below 100m 100% 9,000 8,000 80% 60% 40% 20% 7,000 6,000 5,000 4,000 3,000 2,000 million 1,000 0% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 l Other Finance l Loan Note l Debt l Mezzanine l Equity Total financing ( million) 3.5 5.6 6.8 3.4 3.2 6.4 4.8 4.6 4.6 2.5 3.6 0.0 2.1 2.7 6.7 2.8 4.0 3.2 3.5 4.4 5.3 1.6 2.4 3.3 39.3 45.2 47.5 49.6 46.6 48.3 47.0 46.4 37.7 29.1 22.5 22.0 4.8 4.4 3.2 1.9 3.3 3.0 4.5 4.0 2.8 1.2 1.0 2.2 50.5 42.2 35.9 42.4 42.9 39.1 40.3 40.6 49.6 65.6 70.6 72.5 7,740 6,252 4,601 4,796 5,010 4,886 4,560 5,455 4,078 1,799 2,590 1,425 Source: cmbor.com/barclays Private Equity/Ernst & Young 68 I EVCA Enterprise Capital Report 2011

Figure 3.8 - Average Deal Structures for European Private-equity-backed Buyouts: Deals above 100m 100% 120,000 80% 100,000 60% 40% 80,000 60,000 40,000 million 20% 20,000 0% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 l Other Finance l Loan Note l Debt l Mezzanine l Equity Total financing ( million) 5.2 9.1 4.0 3.0 1.7 1.8 1.2 0.9 1.0 0.0 0.2 7.4 0.7 3.4 2.7 0.2 0.7 0.6 1.3 0.2 1.5 0.9 0.7 0.0 53.2 49.6 53.1 53.6 57.3 55.9 56.3 57.9 44.7 37.2 37.8 38.4 9.2 8.8 9.1 8.5 10.2 9.8 9.1 6.7 8.6 1.8 1.6 6.0 31.7 29.1 31.1 34.7 30.1 32 32.1 34.3 44.2 60.1 59.6 48.2 30,591 27,468 42,136 41,258 44,344 69,936 87,499 96,536 37,756 60,49 29,214 10,071 Source: cmbor.com/barclays Private Equity/Ernst & Young EVCA Enterprise Capital Report 2011 I 69

4. Divestments The private equity model is explicitly one of buy-to-sell. A healthy market for exits enables the cycle to keep turning. If realizations dry up, LP s asset allocation often goes off-target, fundraising dries up, performance particularly as measured by IRR suffers, carried interest hurdles are missed, or the payment of carry is delayed, and the whole system operates less smoothly. The financial crisis in 2008 hit exits hard but have things recovered in Europe since? Before looking at the evidence in this section it is worth remembering that there were unprecedented levels of investment into portfolio companies in 2006 and 2007. Normally, these might reappear into the system as exits 3 or 4 years later so we should see lots of realization activity in 2010 and 2011. So the relevant benchmark is not really the historical levels the expected level should be much higher given the growth of investment. So what does the data show? Before trying to answer that question, it is worth remarking that this data does NOT track realized cash. Since it can be difficult to obtain information on exit values, the data focuses on two measures divestments according to their cost, upon which good data is available, and the number of realization events. Both need careful interpretation. Cost will usually be a fraction of the realized amount, at least in aggregate. And there can be multiple realization events for a single company for instance if there is an initial distribution followed by a final sale. So the number of realization events does not refer to the number of companies exited. However, the time series variation in these measures is certainly informative on the state of the market for exits. Overall, there are clear signs of increased realizations in Europe in 2010, after the low level of activity in 2008 and 2009. The number, and cost value, of exits for both buyouts and growth capital increased noticeably in 2010, with particularly strong recoveries in the UK, France and Benelux. Secondary sales bounced back in 2010, but were still in number only half the level of 2007. There was also some opening of the IPO window, which had been firmly shut in 2008 and 2009 during which there were only 4 PE-backed IPOs. The 15 IPOs in 2010 were certainly a welcome reversal. However, for all these rays of sunshine there remains the issue that the stock of portfolio companies waiting to exit is probably at an all-time high given the pre-crisis level of investment activity noted earlier. The market will have to recover much more strongly to clear this backlog. Of course, many of these investments may take much longer to turn a profit, having been bought at high multiples and facing lower exit multiples. 70 I EVCA Enterprise Capital Report 2011

It is probably too early to call a sustained recovery on exits. The first half of 2011 held up well for buyouts, but it is noticeable that the number, and cost value, of growth capital divestments fell sharply. Continued turbulence in financial markets, and the Eurozone crisis, hardly make this a good time to sell with only brave buyers prepared to venture into the market. The other critical factor is the return of the IPO market for the large and mega buyouts that constitute a large proportion of the current stock of portfolio companies. For many of these, secondary sales or purchases by trade buyers are unlikely, but IPOs remain extremely challenging in Europe. Without stronger exits, fundraising will remain very challenging and the prospects of carried interest payments fade, or are, at best, delayed. And as the revenues of the GPs are revised downwards, so teams shrink or fragment. Continued patience will be required before the cycle of investment and exits gets back into equilibrium. Tim Jenkinson Tim Jenkinson is Professor of Finance at the Saïd Business School at the University of Oxford, and is Director of the Oxford Private Equity Institute. He is also Chairman of the economic consulting firm Oxford Economic Research Associates (Oxera), a director of the UK-listed investment fund PSource Structured Debt (LSE: PSD), and an academic adviser to KPMG's Global Valuation Institute. He has consulted for a large number of companies, regulators, government agencies and industry associations. He is a Professorial Fellow of Keble College, Oxford. Tim joined the Saïd Business School in 2000. He was previously in the economics department at Oxford University, which he joined in 1987, and has also spent periods as a Visiting Professor at Dartmouth College. He initially studied economics as an undergraduate at Cambridge University, before going as a Thouron Fellow to the University of Pennsylvania, where he obtained a Masters in Economics. He then returned to the UK and obtained a DPhil in Economics from Oxford. EVCA Enterprise Capital Report 2011 I 71

Figure 4.1 - Evolution of Divestments by Type 25,000 1,000 20,000 800 Amount at cost in million 15,000 10,000 5,000 600 400 200 Number of Companies 0 0 2007 2008 2009 2010 H1 2011 Amount at cost ( million) l Rescue/Turnaround l Replacement Capital l Growth l Buyout 63 165 72 218 32 818 409 693 389 529 1,941 990 1,441 2,226 471 20,842 9,924 7,189 14,185 9,065 Number of Companies Rescue/Turnaround Replacement Capital Growth Buyout 17 42 43 50 13 68 46 38 29 14 192 173 250 424 101 899 639 409 513 274 72 I EVCA Enterprise Capital Report 2011

Figure 4.2 - Divestments by Region - Amount at cost 100% 80% 60% 40% 20% 0% in million 2007 2008 2009 2010 H1 2011 l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 6,834 2,960 2,179 6,170 3,040 3,199 1,718 1,720 1,578 716 2,422 975 1,064 1,450 888 3,660 2,109 1,648 3,223 1,258 4,338 2,369 2,116 3,074 1,896 398 193 111 228 1,303 2,813 1,163 557 1,294 996 EVCA Enterprise Capital Report 2011 I 73

Figure 4.3 - Divestments by Region - Number of Companies 100% 80% 60% 40% 20% 0% Number of companies 2007 2008 2009 2010 H1 2011 l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 367 213 145 179 65 121 90 71 72 36 149 75 72 114 62 153 172 95 169 77 184 199 249 325 106 37 24 22 30 12 150 113 77 116 42 74 I EVCA Enterprise Capital Report 2011

Figure 4.4 - Divestment by Region and Type - Amount at cost 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in million Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 6,484 276 74 2,623 102 235 1,767 272 139 5,205 676 289 2,796 105 140 2,199 626 374 1,214 491 13 1,146 534 40 1,277 225 76 589 29 98 2,121 232 69 897 41 36 903 111 49 1,338 99 13 841 36 11 3,272 173 215 2,022 43 45 1,586 61 1 2,838 271 114 1,181 69 7 4,099 199 40 2,134 141 94 1,435 234 446 2,521 485 68 1,647 44 205 193 184 21 121 71 1 52 50 9 91 136 1 1,253 50 0 2,475 250 88 914 102 148 298 179 80 915 333 46 758 138 100 EVCA Enterprise Capital Report 2011 I 75

Figure 4.5 - Divestment by Region and Type - Number of Companies 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 Number of companies Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 335 28 9 156 43 19 111 25 10 126 47 9 51 12 2 74 32 17 60 28 5 38 24 9 45 23 4 27 5 4 115 25 12 66 5 4 41 21 11 69 36 10 39 19 4 126 16 12 150 18 8 79 15 1 103 56 15 63 13 2 122 46 16 112 51 38 90 120 44 97 197 31 57 38 12 20 15 2 17 6 1 8 15 1 9 20 1 9 3 0 107 30 16 78 22 13 42 30 5 64 45 9 28 11 3 76 I EVCA Enterprise Capital Report 2011

Figure 4.6 - Divestment by Exit Method - Number of Companies 100% 80% 60% 40% 20% 0% Number of companies 2007 2008 2009 2010 H1 2011 l Repayment of silent partnerships l Trade sale l Sale to management (MBO) l Write-offs l Sale to another private equity house l Repayment of principal loans l Sale of quoted equity l Divestment by other means l IPO l Sale to financial institution l Unknown 23 57 92 163 37 338 258 166 192 92 141 104 110 151 45 38 65 124 131 25 208 185 77 180 96 234 125 70 100 63 38 15 42 48 15 39 30 11 12 14 37 3 1 15 7 74 54 22 18 11 141 46 41 27 5 EVCA Enterprise Capital Report 2011 I 77

Figure 4.7 - Divestment by Exit Method and Type - Number of Companies 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 Number of companies Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround l Repayment of silent partnerships l Trade sale l Sale to management (MBO) l Write-offs l Sale to another private equity house l Repayment of principal loans l Sale of quoted equity l Divestment by other means l IPO l Sale to financial institution l Unknown 9 11 3 11 29 17 11 56 27 16 128 19 5 26 6 259 54 26 204 38 20 106 47 15 118 62 15 67 19 7 107 25 9 72 27 6 61 41 8 67 73 13 34 9 2 27 3 9 44 13 8 61 41 22 63 58 10 11 12 2 184 16 12 156 18 14 62 13 3 136 39 9 85 6 5 191 32 14 87 22 16 43 26 1 51 42 7 46 15 2 27 7 4 11 4 0 23 14 5 27 17 5 7 8 0 30 7 2 20 6 4 9 1 1 12 0 0 12 2 0 27 8 2 3 0 0 1 1 0 12 3 0 6 1 1 60 12 3 33 18 3 14 8 0 11 5 2 8 1 2 106 24 11 43 1 2 34 8 0 20 5 2 3 2 0 78 I EVCA Enterprise Capital Report 2011

Figure 4.8 - Divestments by Sector - Amount at cost 100% 80% 60% 40% 20% 0% in million 2007 2008 2009 2010 H1 2011 l Agriculture l Business & industrial products l Business & industrial services l Chemicals & materials l Communications l Computer & consumer electronics l Construction l Consumer goods & retail l Consumer services l Energy & environment l Financial services l Life sciences l Real estate l Transportation l Unknown 283 16 0 46 15 3,465 2,338 1,414 2,174 1,285 2,955 1,464 962 1,151 581 1,554 675 113 349 1,599 2,395 829 1,302 1,903 2,984 1,426 755 339 980 324 275 128 268 311 152 3,797 1,840 2,304 4,107 1,120 2,718 863 861 2,998 642 1,399 667 291 256 61 445 239 503 434 322 1,051 846 406 1,631 829 23 5 6 60 0 1,400 797 532 601 181 478 26 92 16 0 EVCA Enterprise Capital Report 2011 I 79

Figure 4.9 - Divestments by Sector and Type - Amount at cost 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in million Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround l Agriculture l Business & industrial products l Business & industrial services l Chemicals & materials l Communications l Computer & consumer electronics l Construction l Consumer goods & retail l Consumer services l Energy & environment l Financial services l Life sciences l Real estate l Transportation l Unknown 266 17 0 11 4 1 0 0 0 27 0 20 14 1 0 3,096 268 100 2,152 87 99 1,142 179 93 1,867 218 89 1,191 31 64 2,508 386 61 1,335 105 24 840 112 10 1,014 115 23 556 7 18 1,235 219 100 441 229 5 58 3 52 330 18 0 1,305 101 192 2,168 100 127 794 26 9 784 508 11 1,452 423 28 2,969 15 1 1,224 200 2 653 59 44 206 103 30 632 203 146 278 26 19 227 12 37 106 19 4 255 14 0 253 47 12 136 16 0 3,172 494 131 1,657 60 123 2,081 69 154 3,701 302 104 1,095 25 1 2,643 56 20 711 83 69 718 128 15 2,589 269 140 575 67 0 1,154 4 241 441 226 0 253 30 7 122 132 2 8 30 24 399 46 0 232 8 0 49 82 372 335 97 1 84 4 233 911 111 28 678 55 112 300 90 16 1,464 167 0 694 134 0 23 0 0 1 4 0 1 5 0 5 53 3 0 0 0 1,363 19 18 701 12 84 473 54 4 390 169 41 159 14 8 454 9 16 11 14 0 28 64 0 4 12 0 0 0 0 80 I EVCA Enterprise Capital Report 2011

Figure 4.10 - Write-offs by Sector 100% 80% 60% 40% 20% 0% in thousands 2007 2008 2009 2010 H1 2011 l Agriculture l Business & industrial products l Business & industrial services l Chemicals & materials l Communications l Computer & consumer electronics l Construction l Consumer goods & retail l Consumer services l Energy & environment l Financial services l Life sciences l Real estate l Transportation l Unknown 0 0 366 3,458 150 11,053 42,838 633,872 765,509 42,925 19,921 68,700 605,349 13,364 75,631 34 17,500 0 2,949 0 3,871 35,903 286,401 517,079 1,887,366 144,751 132,464 53,658 62,706 11,816 150 10,304 150,554 123,378 0 69,475 115,323 468,774 636,299 135,588 64,393 126,530 465,788 1,365,113 16,273 197 0 71,805 17,200 17,913 0 5,647 385,910 77,467 0 1,662 988 51,614 196,230 72,862 0 0 0 0 0 0 10,850 410,094 14,823 13,834 16,368 2,680 1,000 1,995 0 EVCA Enterprise Capital Report 2011 I 81

Figure 4.11 - Write-offs by Sector and Type - Amount at cost 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in thousands Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround Buyout Growth Replacement Capital + Rescue/ Turnaround l Agriculture l Business & industrial products l Business & industrial services l Chemicals & materials l Communications l Computer & consumer electronics l Construction l Consumer goods & retail l Consumer services l Energy & environment l Financial services l Life sciences l Real estate l Transportation l Unknown 0 0 0 0 0 0 0 216 150 3,458 0 0 100 50 0 10,052 1 1,000 40,495 1,999 344 572,023 35,679 26,170 702,321 8,675 54,513 22,371 20,554 0 19,921 0 0 65,915 2,300 485 597,438 5,548 2,363 4,341 2,881 6,142 75,631 0 0 34 0 0 17,500 0 0 0 0 0 2,824 125 0 0 0 0 0 0 3,871 35,903 0 0 216,065 70,336 0 278,074 239,005 0 1,886,616 750 0 144,751 0 0 125,472 6,960 31 51,064 2,594 0 54,042 8,004 660 0 2,116 9,700 150 0 0 9,152 0 1,152 150,554 0 0 120,588 2,790 0 0 0 0 32,027 1,267 36,180 111,519 3,804 0 440,208 5,895 22,671 540,737 95,038 525 133,958 630 1,000 53,210 0 11,183 126,530 0 0 465,612 175 1 1,300,717 64,396 0 14,998 1,275 0 0 0 197 0 0 0 71,105 0 700 0 17,200 0 0 17,913 0 0 0 0 3,847 1,800 0 14,000 0 371,910 38,271 39,196 0 0 0 0 1,662 0 0 600 388 0 49,597 2,017 0 192,857 3,373 0 72,862 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100 10,750 0 404,551 3,350 2,193 7,073 7,750 0 13,834 0 0 4,700 168 11,500 680 2,000 0 1,000 0 0 180 1,815 0 0 0 0 82 I EVCA Enterprise Capital Report 2011

Figure 4.12 - Divestments by Exit Method compared to Western Europe M&A and IPO market - Number of companies 800 25,000 Number of companies 600 400 200 20,000 15,000 10,000 5,000 Number of companies (M&As all Western Europe only) 0 0 Number of companies 2007 2008 2009 2010 H1 2011 l Repayment of silent partnerships l Trade sale l Sale to management (MBO) l Write-offs l Sale to another private equity house l Repayment of principal loans l Sale of quoted equity l Divestment by other means l IPO l Sale to financial institution l Unknown IPOs - Western Europe M&As all Western Europe (excl. IPOs, joint ventures and share buybacks) 23 57 92 12 5 338 258 166 195 45 141 104 110 131 11 38 65 124 15 96 208 185 77 100 15 234 125 70 163 37 38 15 42 49 63 39 30 11 184 8 37 3 1 18 25 74 54 22 153 93 141 46 41 27 14 718 348 123 251 143 19,314 16,398 14,790 14,503 8,142 - Source of Western Europe M&A and IPO Data: Zephyr, a Bureau van Dijk product EVCA Enterprise Capital Report 2011 I 83

Figure 4.13 - Divestments by Exit Method compared to Western Europe M&A and IPO market - Number of companies 800 25,000 Number of companies 600 400 200 20,000 15,000 10,000 5,000 Number of companies (M&As all Western Europe only) 0 0 Number of companies 2007 2008 2009 2010 H1 2011 l IPO & Sale of quoted equity l Sale to another private equity house l Trade sale / Sale to management (MBO) / Sale to financial institution IPOs - Western Europe M&As all Western Europe (excl. IPOs, joint ventures and share buybacks) 72 18 43 60 22 208 184 75 160 89 547 415 295 360 148 718 348 123 251 143 19,314 16,398 14,790 14,503 8,142 - Source of Western Europe M&A and IPO Data: Zephyr, a Bureau van Dijk product 84 I EVCA Enterprise Capital Report 2011

5. Value Creation Return Attribution in Mid-Market Buyout Transactions New Evidence from Europe The following contribution is an excerpt from Kaserer, Christoph (2011): Return Attribution in Mid-Market Buyout Transactions New Evidence from Europe, CESifo Research report No. 2011-01, CESifo Group Munich. I. In this study we use a data set provided by the European Private Equity and Venture Capital Association (EVCA). On a fully anonymous basis financial information on 332 European fully exited mid-market buyout deals undertaken by 15 different EVCA member firms over the period 1990 to 2011 was collected. Compared to other studies it turns out that average (median) deal size is relatively low at 125mn ( 68mn). Similar is true for the average debt ratio which is at 35%. Also, the average percentage of ownership acquired by the private equity firm is at a relatively low 55%, indicating that several minority participations are in the data set. All these numbers suggest that this data set is unique in the sense that it does not primarily cover the large LBO market (as is done in most other studies), but actually the midmarket buyout segment. II. The average (median) money multiple of the sample deals is 2.93 (2.36), while the average (median) IRR is 40.2% (29.0%). It should be pointed out that these return estimates are in a similar range as reported in other studies. III. IV. As far as the different exit methods are concerned, it consistently turns out that exiting a deal via a secondary transaction (i.e. selling to another private equity or financial investor) generates a significantly higher return. In fact, the median money multiple for a deal exited via a secondary transaction was 3.0. For trade sales or IPOs the median multiple is only 2.4. As far as the regional distribution of the deals is concerned we do not find significant differences in a consistent manner. Also other deal characteristics, like entry and exit dates, stage focus, syndication and duration do not have a statistically measurable impact on deal returns. We report weak evidence that deal size has a positive impact on deal returns. We find that sales growth has a statistically and economically significant impact on deal returns. Doubling the revenues from entry to exit generates an increase in the IRR of 7.9 percentage points or an almost 0.9 increase in the money multiple. Also the effect of an EBITDA margin improvement is economically relevant according to our estimation, even though this effect cannot be identified from a purely statistical perspective. EVCA Enterprise Capital Report 2011 I 85

V. As far as multiple enhancement is concerned we consistently do not find any evidence supporting the hypothesis that it is a significant performance driver in European mid-market buyout transactions. Also, in accordance with other findings in the literature we do not find any statistically significant impact of the leverage on deal returns. Moreover, the effect seems to be rather small from a pure economic perspective. In fact, the median money multiple of the 50% of the deals with the highest debt to EBITDA ratio was 2.5, while it was 2.3 for the 50% of the deals with the lowest leverage. This supports the view that even if there is a leverage benefit, in a competitive bidding process its value may be reaped by the seller of the target firm instead of the buyer. VI. In order to quantify the relative impact of earnings enhancement, multiple enhancement and the leverage effect on the overall deal return in European buyout transactions we develop a novel methodology for the return decomposition. This is due to the fact that decomposition techniques used in the literature tend to be biased because of methodological problems. VII. We estimate that the IRR contribution stemming from earnings enhancement is in the range of two thirds to three quarters of the overall deal return. Among the different earnings enhancement drivers sales growth turns out to be the most important one. The return contribution due to multiple enhancement is very small or even negative. The contribution stemming from the leverage effect is in the range of about one third. An overview of this IRR decomposition is given in Figure 6.6. This leverage contribution is, of course, a substantial effect from an economic perspective, even though it is clearly lower than other estimates reported in the literature. However, as we do not find any statistically significant impact of leverage on deal returns, we do not know to what extent this result is driven by an estimation bias or data noise. Money multiple decomposition in principle comes to similar results, even though there is much more variation in relative return contributions. This may be caused by data noise or other technical reasons. VIII. Crosschecking the robustness of this return decomposition by an OLS regression approach corroborates the expedience of our methodology. Dr. Christoph Kaserer Christoph Kaserer is co-director of the Center for Entrepreneurial and Financial Studies (CEFS) and Full Professor of Finance at Technische Universität München (TUM). His area of expertise is private equity, corporate finance, financial markets, and asset management. Christoph Kaserer published his research in leading international and German academic journals. He is among the top 100 worldwide downloaded authors on the Social Science Research Network (ssrn.com). He is also active as an adviser of large private companies, private equity funds and public institutions. Recently, he acted as an expert to the German Government in the context of private equity and venture capital regulation. Since 2008, he is the Chairman of the Governing Body of the Private Equity Research Exchange Platform (PEREP) established by EVCA. Before joining TUM School of Management, he became Full Professor of Financial Management and Accounting at Université de Fribourg, Switzerland, in 1999. From 2005 to 2010 he was the Dean of TUM School of Management at Technische Universität München. The School of Management was founded in 2002. According to recently published university rankings, TUM School of Management is among the top 10 business administration departments at German universities. 86 I EVCA Enterprise Capital Report 2011

Figure 5.1 - Deals by Vintage Year and Exit Year Figure 5.2 - Deals by Enterprise Value at Entry and Exit 50% 50% 40% 40% 38% 40% 30% 20% 10% 0% 2% 0% 8% 0% 14% 0% 18% 0% 28% 2% 24% 6% 17% 3% 0% 0% 30% 20% 10% 0% 7% 4% 12% 8% 19% 14% 21% 18% 23% 15% 13% 27% 5% 14% before 1997 1997-1998 1999-2000 2001-2002 2003-2004 2005-2006 2007-2008 2009-2010 after 2010 <10m 10m-25m 25m-50m 50m-100m 100m-200m 200m-500m >500m l Entry l Exit l Entry l Exit Source: C. Kaserer (2011) Source: C. Kaserer (2011) EVCA Enterprise Capital Report 2011 I 87

Figure 5.3 - Deals by Geography Figure 5.4 - Deals by Sector 50% 25% 40% 37% 20% 21% 18% 18% 30% 26% 15% 14% 20% 10% 19% 16% 10% 11% 9% 10% 8% 9% 8% 13% 8% 13% 3% 3% 10% 5% 9% 6% 3% 3% 2% 2% 2% 2% 0% 0% United Kingdom l Country of office l County of deal Source: C. Kaserer (2011) Scandinavia France Benelux Southern Europe DACH EEC Others Industrial goods Business & industrial services Consumer goods & retail Communications Healthcare Consumer services Energy & environment Chemicals & materials Other Construction Consumer electronics Transportation Source: C. Kaserer (2011) 88 I EVCA Enterprise Capital Report 2011

Figure 5.5 - Gross IRR Return Attribution - Median (%) Figure 5.6 - Gross IRR Return Attribution - Average (%) 50% 50% 40% 40% 15% -1% 40% 30% 11% 6% 29% 30% 11% -2% 31% -4% 20% 9% 1% 20% -5% 20% 15% 7% 10% 7% 2% 10% 0% 0%... Sales Growth... Margin Improvement... FCF Effect... Combination Effect... Earnings Enhancement... Multiple Enhancement... Leverage Effect... Combination Effect Overall... Sales Growth... Margin Improvement... FCF Effect... Combination Effect... Earnings Enhancement... Multiple Enhancement... Leverage Effect... Combination Effect Overall Source: C. Kaserer (2011) Source: C. Kaserer (2011) EVCA Enterprise Capital Report 2011 I 89

Figure 5.7 - Gross Multiple of Cash Return Attribution - Median (%) Figure 5.8 - Gross Multiple of Cash Return Attribution - Average (%) 2.5 2.0 0.30 0.26 2.17-0.44 0.40 0.23 2.36 5.0 4.0 1.34-1.46 1.02-1.46 1.5 1.46 0.16 3.0 1.17 3.14 0.23 2.93 1.0 2.0 2.09 0.5 1.0 0.0 0.0... Sales Growth... Margin Improvement... FCF Effect... Combination Effect... Earnings Enhancement... Multiple Enhancement... Leverage Effect... Combination Effect Overall... Sales Growth... Margin Improvement... FCF Effect... Combination Effect... Earnings Enhancement... Multiple Enhancement... Leverage Effect... Combination Effect Overall Source: C. Kaserer (2011) Source: C. Kaserer (2011) 90 I EVCA Enterprise Capital Report 2011

Figure 5.9 - Earnings Enhancement vs. Returns Figure 5.10 - Exit Method vs. Returns (Median) 60% 6.0 60% 6.0 50% 52% 5.0 50% 51% 5.0 40% 40% 4.2 4.0 40% 42% 4.0 30% 3.1 3.0 30% 3.0 31% 3.0 2.4 2.4 22% 2.1 20% 1.9 2.0 20% 18% 1.8 2.0 15% 10% 1.0 10% 1.0 0% 0.0 0% 0% 0.0 0.0 Below median Above median Below median Above median Secondary Trade sale IPO Others Write-off Sales growth Margin growth l IRR l Money multiple l IRR l Money multiple Source: C. Kaserer (2011) Source: C. Kaserer (2011) EVCA Enterprise Capital Report 2011 I 91

6. Fundraising The environment for fundraising in 2010 and the first half of 2011 remains challenging. Clearly general macroeconomic conditions set the tone. However the lack of large buyout funds in the market, rather than an outright failure of GPs to raise funds, is negatively biasing the data. This has particularly been the case in the UK which has suffered substantial declines in fund raising in years 2009/10 but a noticeable recovery in the first half of 2011. This is a positive indicator that conditions will most likely improve. The large and mega buyout funds traditionally account for a significant portion of the capital raised. There have been some notable closes in the mid and upper mid-market with the successful closes of funds such as those managed by Montagu, BC Partners and EQT Partners, which will have a positive impact on the full 2011 figures. Therefore, we expect to see significant improvement in fundraising statistics that will continue into 2012 as other large fund managers such as Apax and Cinven come to market. The overall capital at work in the market is probably not substantially less than that in 2006/7 but, due to maturing European investment portfolios, there is now less to invest in new relationships. GPs, on average, can only expect to get re-ups of 60-70% of commitments from existing investors. Those that do not source their target amount from existing investors will be competing for a smaller pool of total available capital. Investors are also scrutinising their investments, replacing relationships with better performing managers. Hence, we are witnessing the development of a two-speed market with, on one side, GPs with fast fund raises and, on the other side, GPs struggling to raise their funds. In regards to regional activity and certain investment themes, the data is surprising. For H1 2011, the statistics show that no capital has been raised by any type of GP operating in the CEE. This is probably incorrect. The data also reports Portugal as being the fourth most important source of capital, particularly for buyouts, ahead of France, Germany, Switzerland and the Nordics. The buyout statistics are further skewed by banks which would appear to be the source of almost 90% of buyout capital in H1 2011. This would infer that Portuguese banks have been particularly active during this year of the Eurozone crisis. This is not what we see in the market and we expect this anomaly to be ironed out when full year 2011 data become available. The recovery in growth capital fundraising in Q2 2011 is a positive indicator of overall market sentiment: in tough times investors look for investment opportunities with less leverage and more growth orientated value creation strategies. This renewed interest in growth capital funds is shared across the LP investor universe, being far more diversified than that of buyouts and mezzanine. 92 I EVCA Enterprise Capital Report 2011

It is also interesting to note the significant absence of fundsof-funds as a source of capital in H2 2011 for buyout and mezzanine funds. This is a trend that we see set to continue. Funds of funds as a whole have raised less capital for primary fund investing than in previous years. This is a reflection of increasing competition in the fund-of-funds market and a decline in the number of investors that seek exposure to private equity through funds-of-funds: for example smaller insurance companies and pension funds have pulled back from the asset class due to uncertainty around capital requirements under Solvency II and an increasing need for more liquid assets generating a current yield. This in part may explain the shift by a number of fundof-funds managers from primary European markets to secondaries, co-investments and emerging markets. Overall, Europe has now become a mature market for private equity, which is experiencing a profound transformation as a reflection of the evolution in investors appetite and sophistication. David Chamberlain David is responsible for fundraising and origination in the United Kingdom and Scandinavia. David also oversees business development with new clients within Europe. David Chamberlain has over 25 years of experience in private equity and financial management. David spent 16 years with Unigestion, a leading European alternative asset management firm. As Managing Director, he built one of Europe s foremost private equity fund management businesses, exploiting all facets of the primary and secondary markets. He also served as Finance Director of Unigestion and previously worked in investment and financial management with the Continental Grain Group and Deloitte Haskins & Sells in London and Paris. David has a degree in business & accountancy from the City of London Business School and is a qualified Chartered Accountant. EVCA Enterprise Capital Report 2011 I 93

Figure 6.1 - Funds Raised by Fund Stage Focus 2007-H1 2011 - Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 l Mezzanine l Buyout l Growth capital 2,578 1,693 293 325.2 237 0 1,255 34.0 52 295 10 140.0 228 553 105 61.0 850 0.0 18,018 17,986 11,193 11,595.2 13,736 20,212 16,278 15,181.2 2,518 1,827 3,602 2,349.1 4,845 2,604 2,335 1,732.9 5,004 5,676 184 559 316 515.0 188 1,297 1,107 456.1 78 390 347 212.6 1,481 168 701 222.8 348 3,555 94 I EVCA Enterprise Capital Report 2011

Figure 6.2 - Funds Closed by Fund Stage Focus 2007-H1 2011 - Amount 100% 25 80% 20 60% 15 40% 10 20% 5 0% 0 2007 2008 2009 2010 H1 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Amount ( thousands) l Mezzanine l Buyout l Growth capital 2,507,300 1,672,820 196,470 325,000 508,200 0 0 0 640,000 210,000 320,200 0 23,080 680,660 0 0 850,000 0 3,788,620 16,261,140 6,420,000 26,898,640 10,435,490 19,227,830 16,020,710 13,541,940 5,234,590 825,000 2,330,470 966,040 5,060,280 4,415,370 1,766,260 1,675,440 1,520,000 5,916,880 50,690 630,720 260,000 423,890 50,000 1,181,000 1,150,000 110,740 15,000 85,020 100,000 351,300 1,268,190 20,000 162,000 0 0 872,210 Number of Funds Mezzanine Buyout Growth capital 2 7 2 1 3 0 0 0 1 2 1 0 1 2 0 0 1 0 13 23 22 23 22 13 15 18 4 2 6 5 10 7 7 10 5 9 2 3 2 3 1 4 4 2 1 2 1 2 3 1 1 0 0 4 EVCA Enterprise Capital Report 2011 I 95

Figure 6.3 - Fundraising per Region (% of European Total Amount) 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 65.2 64.8 42.0 46.9 71.1 5.9 3.3 24.3 4.3 2.7 8.5 12.5 6.6 9.0 2.7 8.4 9.3 7.3 15.8 17.5 7.4 5.3 10.6 10.5 5.5 0.7 1.4 1.7 1.8 0.0 4.0 3.3 7.5 11.8 0.5 96 I EVCA Enterprise Capital Report 2011

Table 6.1 - Incremental Fundraising - by Region and Focus - Amount in million CEE DACH Nordics Southern Europe UK&Ireland France Benelux Grand Total 2007 Mezzanine 0 230 542 40 3,521 557 0 4,890 Buyout 456 4,292 4,668 3,245 38,677 4,839 2,613 58,792 Growth 5 281 334 545 326 84 0 1,574 Grand Total 461 4,803 5,544 3,830 42,524 5,480 2,613 65,256 2008 Mezzanine 0 398 402 0 0 726 0 1,526 Buyout 893 2,240 8,358 2,027 44,013 5,653 2,224 65,408 Growth 118 1,080 13 284 1,368 104 80 3,048 Grand Total 1,011 3,718 8,774 2,311 45,381 6,483 2,304 69,982 2009 Mezzanine 0 329 21 30 0 117 0 497 Buyout 197 849 743 2,736 4,635 317 821 10,297 Growth 6 80 12 106 328 434 62 1,028 Grand Total 203 1,257 776 2,872 4,962 868 883 11,822 2010 Mezzanine 0 637 60 0 98 152 0 947 Buyout 107 741 1,069 564 5,498 1,937 1,601 11,517 Growth 158 200 221 86 1,453 288 168 2,573 Grand Total 265 1,578 1,349 650 7,050 2,377 1,769 15,037 H1 2011 Mezzanine 0 0 0 0 850 0 0 850 Buyout 0 611 0 345 7,012 2,702 10 10,680 Growth 0 242 411 78 3,107 0 65 3,903 Grand Total 0 853 411 423 10,968 2,702 75 15,433 EVCA Enterprise Capital Report 2011 I 97

Figure 6.4 - Fundraising by Type of Investor (LP) - as % of Amount 100% 80% 60% 40% 20% 0% in % 2007 2008 2009 2010 H1 2011 l Academic institutions l Banks l Capital markets l Corporate investors l Endowments and foundations l Family offices l Fund of funds l Government agencies l Insurance companies l Other asset managers (including PE houses other than fund of funds) l Pension funds l Private individuals l Sovereign wealth funds 0 0 0 0 0 17 9 20 13 39 1 2 3 10 0 2 1 3 2 1 3 5 3 1 1 2 5 5 12 2 17 17 16 16 16 2 2 7 7 1 11 8 14 8 8 5 5 5 6 3 28 37 19 17 16 6 5 3 4 2 6 4 1 5 11 98 I EVCA Enterprise Capital Report 2011

Figure 6.5 - Fundraising by Type of Investor (LP) and Focus - as % of Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in % l Academic institutions l Banks l Capital markets l Corporate investors l Endowments and foundations l Family offices l Fund of funds l Government agencies l Insurance companies l Other asset managers (including PE houses other than fund of funds) l Pension funds l Private individuals l Sovereign wealth funds Growth Buyout Mezzanine Growth Buyout Mezzanine Growth Buyout Mezzanine Growth Buyout Mezzanine Growth Buyout Mezzanine 1 0 0 4 0 0 0 0 0 0 0 0 0 0 0 15 34 25 14 8 29 17 20 22 13 10 48 14 87 0 1 0 2 0 2 0 3 3 0 32 5 0 0 0 0 1 9 3 0 1 3 15 2 0 2 1 3 2 0 0 3 0 1 4 6 0 0 3 1 0 1 0 2 0 0 2 3 0 20 4 4 21 4 5 5 15 2 3 0 0 18 14 16 20 17 7 8 17 6 8 19 12 25 4 0 2 5 2 2 2 7 18 6 19 6 6 12 1 1 0 11 5 10 3 8 20 13 15 14 5 9 7 9 2 25 5 3 11 2 5 2 0 5 0 5 7 1 4 1 0 29 16 22 11 38 27 5 20 31 7 20 14 21 2 50 6 9 0 20 5 0 0 3 2 3 4 2 2 3 0 6 0 7 0 4 0 0 1 0 14 3 0 16 0 25 EVCA Enterprise Capital Report 2011 I 99

Figure 6.6 - Geographic Sources of Funds raised - Amount 100% 80% 60% 40% 20% 0% 2007 2008 2009 2010 H1 2011 in million l Outside Europe l Within Europe Growth Buyout Mezzanine Growth Buyout Mezzanine Growth Buyout Mezzanine Growth Buyout Mezzanine Growth Buyout Mezzanine 72 23,528 1,013 252 33,455 66 8 2,191 51 414 2,393 11 5,079 98 567 1,433 34,794 3,877 2,782 31,894 1,459 1,014 8,048 446 2,149 9,120 935 5,601 3,747 283 100 I EVCA Enterprise Capital Report 2011

Table 6.2 - Ranking of Top Limited Partners Location per European Fundraising Year Ranking 2007 2008 2009 2010 H1 2011 All Funds 1 USA USA United Kingdom United Kingdom United Kingdom 2 United Kingdom United Kingdom USA USA USA 3 Australasia Australasia France France Australasia 4 Germany Canada Italy Switzerland Portugal 5 Netherlands France Germany Germany France Buyout Funds 1 USA USA United Kingdom United Kingdom USA 2 United Kingdom United Kingdom USA USA Australasia 3 Australasia Australasia Italy Switzerland United Kingdom 4 Germany Canada Netherlands France Portugal 5 Netherlands France Germany Belgium France Growth& Mezzanine Funds 1 Germany Switzerland France Australasia United Kingdom 2 Spain France United Kingdom Austria USA 3 United Kingdom Finland Greece Baltic countries Australasia 4 Sweden United Kingdom Austria Belgium Germany 5 Australasia USA Spain Finland - Growth Funds 1 Spain Switzerland France United Kingdom United Kingdom 2 Sweden Greece Greece Australasia Germany 3 Germany Spain Spain France USA 4 United Kingdom USA United Kingdom Germany Spain 5 Denmark United Kingdom Austria Italy Australasia Mezzanine Funds 1 Germany France France Germany USA 2 United Kingdom Finland United Kingdom United Kingdom Australasia 3 Australasia Denmark USA Austria - 4 Sweden Germany Austria Finland - 5 Switzerland United Kingdom Germany Switzerland - EVCA Enterprise Capital Report 2011 I 101

Figure 6.7 - Number of Funds at Final Closings - Split by Fund Size 120 100 80 60 40 20 0 2007 2008 2009 2010 H1 2011 l >= 1,000 l 500-999 l 250-499 l 150-249 l 50-149 l <50 12 14 2 3 2 11 11 3 6 4 25 14 7 10 1 17 16 2 5 8 21 16 9 9 4 17 11 4 9 0 102 I EVCA Enterprise Capital Report 2011

Figure 6.8 - Funds at Final Closings Split by Fund Size - Amount 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 in million 2007 2008 2009 2010 H1 2011 l >= 1,000 l 500-999 l 250-499 l 150-249 l 50-149 l <50 38,642 45,937 5,513 926 3,599 7,208 7,304 1,878 3,660 3,140 8,353 4,456 2,301 3,634 380 2,949 2,874 367 934 1,532 1,913 1,392 904 5,746 508 370 263 115 171 0 EVCA Enterprise Capital Report 2011 I 103

Figure 6.9 - Funds at Final Closings by Region and Split by Fund Size - Number of Funds (2007-2009) 30 25 20 15 10 5 0 2007 2008 2009 Number of funds <50 mil 50-149 mil 150-249 mil 250-499 mil 500-999 mil >= 1,000 mil <50 mil 50-149 mil 150-249 mil 250-499 mil 500-999 mil >= 1,000 mil <50 mil 50-149 mil 150-249 mil 250-499 mil 500-999 mil >= 1,000 mil l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 6 1 2 8 3 10 0 4 3 4 4 9 2 4 0 1 2 1 0 3 6 2 2 0 1 3 2 3 0 0 0 0 2 2 0 1 3 6 0 4 2 1 3 1 1 1 2 2 0 2 0 1 0 0 4 4 4 4 2 0 4 2 5 1 2 2 2 1 0 1 1 0 3 4 4 4 2 0 0 5 5 2 1 1 0 0 0 1 0 0 0 2 0 1 0 0 1 1 0 2 0 0 0 1 0 1 0 0 1 1 1 2 0 1 2 0 0 1 2 0 0 1 0 0 0 0 104 I EVCA Enterprise Capital Report 2011

Figure 6.9 - Funds at Final Closings by Region and Split by Fund Size - Number of Funds (2010-H1 2011) 30 25 20 15 10 5 0 2010 H1 2011 Number of funds <50 mil 50-149 mil 150-249 mil 250-499 mil 500-999 mil >= 1,000 mil <50 mil 50-149 mil 150-249 mil 250-499 mil 500-999 mil >= 1,000 mil l UK & Ireland l Southern Europe l Nordics l France l Dach Region l CEE l Benelux 2 5 1 3 1 3 0 1 2 0 1 1 1 0 1 0 1 0 0 0 0 0 1 0 0 1 1 4 0 0 0 0 2 0 0 0 4 2 0 2 0 0 0 1 2 1 2 1 0 0 1 0 2 0 0 1 2 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 2 0 0 1 0 0 0 0 EVCA Enterprise Capital Report 2011 I 105

7. Methodology and Definitions 7.1 Financing Section 7.1.1 Standard & Poor s LCD data > Pro-rata loans are loans made up of revolving credit facility and an amortising term loan. Amortising term loan (TLa or A-term loan) is a term loan with a progressive repayment schedule. These loans are normally syndicated to banks along with revolving credits as part of a larger syndication. > Institutional term loan (B-term, C-term or D-term loans) is a term-loan facility with a portion carved out for non-bank, institutional investors. These loans are priced higher than amortising term loans because they have longer maturities and bullet repayment schedules. 7.1.2 CMBOR data Transactions by real estate funds and infrastructure funds are excluded from CMBOR s data. Deals in which a private equity firm buys property as an investment are not included. All quoted values derive from the total transaction value of the buyout (enterprise value) and include both equity and debt. > Deal pricing CMBOR computes the average P/E ratios for different deal value ranges by dividing the deal price by EBIT (earnings before interest and tax). > DEBT/EBIT Ratios CMBOR computes DEBT/EBIT Ratios as the Senior Debt divided by EBIT (Earnings before interest and tax). 7.2 Activity Section 7.2.1 Coverage The overall statistics for Europe include: Austria Belgium Baltics Bulgaria Czech Republic Denmark Ex-Yugoslavia Finland France Germany Hungary Norway Ireland Regions were aggregated as follows: Italy Luxembourg The Netherlands Poland Portugal Romania Spain Slovakia Sweden Switzerland Ukraine United Kingdom Benelux (Belgium, Luxembourg, the Netherlands) CEE (Bulgaria, The Baltic countries, Bulgaria, Czech Republic, ex-yugoslavia, Hungary, Poland, Romania, Slovakia, Ukraine) DACH (Austria, Germany, Switzerland) France Nordic (Denmark, Finland, Norway, Sweden) Southern Europe (Greece, Italy, Portugal, Spain) UK & Ireland 106 I EVCA Enterprise Capital Report 2011

A precise response rate for the activity figures covered in this report cannot be computed since some buyout activity is done by generalist funds. However, the coverage rate is representative for the European activity, both by number of private equity players and by the capital they manage. Most of the data is collected via surveys and complemented with reliable public sources of information. 7.2.2 Fundraising The funds included in the statistics are: buyout funds making direct private equity investments growth funds mezzanine private equity funds co-investment funds for buyout, growth or mezzanine deals rescue/turnaround funds The following funds are excluded from the statistics: venture funds generalist funds infrastructure funds real estate funds distress debt funds primary funds-of-funds secondary funds-of-funds Fundraising is captured by two methods: by incremental amount raised in an year if a fund has an intermediary closing of 200m in 2010 and the cumulative amount raised for this fund stands at 500m, 200m only is captured in the 2010 fundraising by final closings captures the total cumulative amount raised at final closing. 7.2.3 Investments Unless stated otherwise, the approach taken in this report is market approach (i.e. investments and divestments are represented by location of the portfolio company). At European level, this means investments in European companies or divestments from European companies, regardless of the location of the private equity firm. > Buyout split Buyout investments are split into four classes: small, mid-market, large, and mega. In this report, the classification is based on the transaction value of the buyout deals. If two syndication partners invest equity values of 100m and 200m respectively for a total transaction value of 600m, the deal will be classified under large deals with equity value of 300m and transaction value 600m. Buyout deals Equity value ( m) Transaction value ( m) Small <15 <50 Mid-market 15 X <150 50 X <500 Large 150 X <300 500 X <1,000 Mega 300 1,000 7.2.4 Divestments Divestments are measured by cost of investment, not proceeds. This is done in order to be able to compare divestments with investments on an equivalent basis. EVCA Enterprise Capital Report 2011 I 107

7.2.5 Number of companies The number of companies represents a distinct list of entities receiving investments throughout the reporting year. For example, if Company A receives two investments in a year, the number of companies will equal one, while the number of investments will equal two. In some cases, subtotals and totals may not appear to add up to the same number of companies as individual items in the tables. This can be explained by understanding the issue of counting distinct entities. For example, if a company received multiple distinct rounds of financing in a year a growth investment of 30m by one investor in January, followed by a 50m buyout in November with two investors the tables would indicate the following: Stage Amount Number of investments Number of companies Growth 30,000 1 1 Buyout 50,000 2 1 Total investment 80,000 3 1 The total number of companies corresponds to the number recorded under Total investment. Any one company can be recorded under several subcategories. The sum of all subcategories can exceed the number stated under Total investment. Therefore, it would appear to have incorrect totals in the number of companies (for both investments and divestments) as the table appears to add up to 2, but the total only shows a total of 1. This will only affect counts of companies, not amounts. However it will make any average more accurate. 7.2.6 Data updates PEREP_Analytics offers to the players the potential to submit surveys and validate previously populated data captured from public information sources at a later stage. Moreover, if a player submits a divestment at a later stage, and the corresponding investment has never been reported or captured, the PEREP_Analyst will create the investment so that no portfolio company is reflected with negative capital flow in the database. Moreover, some information is disclosed on the website of the private equity players at a later stage, after the cut-off for producing our activity reports, and thus is processed in the database at a later moment. For all the above reasons, figures may be updated year on year to reflect the latest available statistics for previously released years starting with 2007. 7.2.7 Definitions Type of investors (fundraising figure): > Corporate investor: Corporations that produce products (manufacturing companies) or deliver non-financial services (it excludes banks, funds-of-funds, insurance companies, pension funds, and other asset managers). > Endowment: An institution that is bestowed money (and possibly other assets) via a donation with the stipulation to invest it and use the gains for specific objectives so that the principal remains intact (for perpetuity, for a defined period of time or until sufficient assets have been accumulated to achieve a designated purpose). > Family office: An office that provides services to one or several families, which include investment management and other services (accounting, tax and financial advice etc). > Foundation: A non-profit organisation through which private wealth is contributed and distributed for public purpose (most often charitable purposes). It can either donate funds and support other organisations, or provide the sole source of funding for their own charitable activities. > Fund-of-funds: A private equity fund that primarily takes equity positions in other funds. 108 I EVCA Enterprise Capital Report 2011

> Other asset manager: Financial institutions (other than bank, endowment, family office, foundation, insurance company or pension fund) managing a pool of capital by investing it across asset classes with the purpose to generate financial returns. It may include direct private equity funds that occasionally do indirect investments, but excludes funds-of-funds that are a stand-alone option. > Public sector: Country, regional, governmental and European agencies or institutions (including structures such as EBRD or EIF). Fund stage focus (fundraising table): > Growth fund: Funds whose strategy is to invest in or acquire relatively mature companies that are looking for capital to expand or restructure operations. They usually represent the first private equity investment in the company. > Buyout fund: Funds whose strategy is to acquire other businesses. > Mezzanine fund: Funds which provide (generally subordinated) debt to facilitate the financing of buyouts, frequently alongside a right to some of the equity upside. Stage definitions (investment tables): Several financing stages can be identified in relation to the stages of development of a private-equity-backed company. These are described as follows and were the stages included in the survey questionnaire: > Growth: It is a type of private equity investment, most often a minority investment but not necessarily, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business. As a round of financing, growth capital tends to be the first private equity backing of the company. Additionally, most investments made by buyout funds into venture type of stages should be defined as growth capital. > Rescue/turnaround: Financing made available to an existing business, which has experienced trading difficulties, with a view to re-establishing prosperity. > Secondary purchase/replacement capital: Minority stake purchase of existing shares in a company from another private equity investment organisation or from another shareholder or shareholders. > Refinancing bank debt: To reduce a company s level of gearing. > Management buyout: Financing provided to enable current operating management and investors to acquire existing product line or business. > Management buy-in: Financing provided to enable a manager or group of managers from outside the company to buy-in to the company with the support of private equity investors. > Public to private: A transaction involving an offer for the entire share capital of a listed target company for the purpose of delisting the company. Management may be involved in the offering. > Other PIPE: A private investment in public equity as a minority or majority stake without taking the company private. > Other (leveraged) buyout: Financing provided to acquire a company (other than MBI, MBO, public to private or other PIPE). It may use a significant amount of borrowed money to meet the cost of acquisition. Mapping the above stages into the main five stages presented in this document leads to the following classification: > Growth: Growth > Rescue/turnaround: Rescue/turnaround > Replacement capital: Secondary purchase/replacement capital, refinancing bank debt > Buyouts: Management buyout, management buy-in, public to private, other PIPE, other (leveraged) buyout Amounts definition: > Equity value: Stricto sensu, amount of capital invested to acquire shares in an enterprise, amount that originates from funds raised by private equity firms focused primarily on direct investments (including also co-investment funds) or incorporated direct private equity firms investing from the balance sheet (evergreen and also direct captive private equity programmes). The equity value includes equity, quasi-equity, mezzanine, unsecured debt and secured debt financing provided by the above mentioned structures. EVCA Enterprise Capital Report 2011 I 109

> Transaction value: The sum of the equity value as described above, to which financing coming from the rest of the syndicate is added (LP co-investors, individuals, entrepreneurs, business angels, management, corporates, funds-of-funds, other asset managers and/or financial institutions), together with the leverage (debt provided by banks or other providers). In other words, stricto sensu transaction value is equal to enterprise value multiplied by percentage ownership by the acquiring syndicate in which at least one financial sponsor (private equity firm) is involved. Sectoral definitions (investment tables): For a complete picture of the sectoral classification and its mapping to the NACE standardised sectoral classification of Eurostat (NACE Rev. 2, 2007), please go to the link: www.evca.eu//uploadedfiles/sectoral_classification.pdf. Sources of buyouts (investment tables): > Capital market: The transaction involves an offer for the partial or entire share capital of a listed target company. > Corporate: The seller of the company is an industrial corporation or the deal is the result of a corporate spin-off. > Family & private: The seller of the company is a(n) (group of) individual(s) or family office(s). > Institutional: The seller of the company is a financial institution (e.g. bank, pension fund, insurance company, endowment, foundation, other asset managers excluding private equity firms). > Privatisation & state owned: The seller of the company is the state either undergoing privatisation or liberalisation of an industry. > Receivership: The sale of the company is triggered by reorganisation procedures to avoid liquidation with the help of a court-appointed trustee. > Private equity firm: The seller of the stake in the company is another private equity firm (secondary buyout). Divestment methods (divestment table): > Divestment on flotation (IPO): An IPO (initial public offering, which is the sale or distribution of a company s shares to the public for the first time by listing the company on the stock exchange) is one way in which a private equity firm can sell its shares and exit an investment. > Repayment of preference shares/loans: If the private equity firm provided loans or bought preference shares in the company at the time of investment, then their repayment according to the amortisation schedule represents a decrease of the financial claim of the firm into the company, and hence a divestment. > Repayment of silent partnership: A silent partnership belongs to the so-called mezzanine financing instruments. It is similar to a long-term bank loan, but in contrast to a loan, a silent partnership is subject to a subordination clause, so that, in the event of insolvency, all other creditors are paid preferentially to the silent partner. The company has to repay the partnership and has to pay interest and possibly a profit-related compensation. The subordination clause gives the capital the status of equity despite its loan character. This financing instrument is well known and often used in Germany. > Sale of quoted equity post-flotation: It includes sale of quoted shares only if connected to a former private equity investment, such as sale of quoted shares after a lock-up period. > Sale to another private equity house: see sale to financial institution. > Sale to financial institution: The sale of company shares to banks, insurance companies, pension funds, endowments, foundations and other asset managers other than a private equity firm. > Trade sale: The sale of company shares to industrial investors. > Divestment by write-off: The write-down of a portfolio company s value to zero or a symbolic amount (sales for a nominal amount). The value of the investment is eliminated and the return to investors is zero or negative. 110 I EVCA Enterprise Capital Report 2011

Fundraising to the next level We have a successful track record in raising capital for private equity and real estate Our ability to differentiate our clients in a highly North America +1.972.980.5800 Europe +41.22.365.4500 Asia +86.21.6124.2668 Securities placed through CSP Securities, LP Member FINRA/SIPC