PRIVATE EQUITY PERFORMANCE BENCHMARKS FVCA SPRING SEMINAR, RUKA, FINLAND DAVID BERNARD 23 APRIL 2009.

PRIVATE EQUITY PERFORMANCE BENCHMARKSFVCA SPRING SEMINAR, RUKA, FINLAND

DAVID BERNARD23 APRIL 2009

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THOMSON REUTERS’ PRIVATE EQUITY PERFORMANCE DATABASE

• Maintained by Thomson Reuters (formerly known as Thomson Venture Economics) since 1988, online since 1991

• Available online in Thomson ONE and VentureXpert, where you can define your own performance sample (by country, vintage, size, focus, etc.)

• 1971 US funds formed 1969-2008, in partnership with NVCA

• 1310 European funds formed 1979-2008, in partnership with EVCA

• 191 Canadian funds formed 1981-2008, in partnership with CVCA

• 140 Asia-Pacific funds formed 1980-2008

• 82 funds of funds

• Thomson Reuters has long-standing relationships with national and regional Private Equity and Venture Capital Associations worldwide

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SOURCES

• ~50% from GPs upon request from LPs who contract our benchmarking services

• ~50% from GPs who need data for their own benchmarking and fund raising needs

• Since we get data from LPs in addition to GPs there is not a consistent or significant self reporting bias

• We calculate IRR ourselves (we do not use self-reported IRRs) based on the underlying cashflows, and we verify against general partner financial reports to LPs

• We treat confidentiality very carefully – all data reported is strictly anonymous

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PRINCIPAL MEASURES• Cumulative IRR Since Inception

• Cumulative Realisation Multiples

• Time Weighted Return

• Investment Horizon Return

• Monthly Cash Flows

• Public Market Comparables – Index method

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EUROPEAN PRIVATE EQUITYCUMULATIVE IRR BY VINTAGE YEAR AS OF 31-DEC-08

-80

-60

-40

-20

0

20

40

60

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Vintage Year

Ne

t IR

R S

inc

e In

ce

pti

on

(%

)

VC funds Buy-out funds

Source: Thomson Reuters / EVCA

J-curveeffect?

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US PRIVATE EQUITYCUMULATIVE IRR BY VINTAGE YEAR AS OF 31-DEC-08

-60

-40

-20

0

20

40

60

80

100

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Vintage Year

Ne

t IR

R S

inc

e In

ce

pti

on

(%

)

VC funds Buy-out funds

.

Source: Thomson Reuters / NVCA

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EUROPEAN PRIVATE EQUITY FUNDS FORMED 1980-2008NET RETURNS SINCE INCEPTION AS OF 31-DEC-2008

Stage Number Pooled IRR Average DPI IRR Standard Deviation

Early Stage 346 -1.2% 0.42 23.1%

Balanced 201 3.3% 0.51 28.6%

Development 219 8.7% 0.83 29.2%

All Venture Funds 761 3.1% 0.54 26.6%

Buy-outs 0-$250m* 263 12.3% 1.16 27.7%

Buy-outs $250m-$500m 63 17.9% 1.24 26.8%

Buy-outs $500m-$1bn 48 18.2% 1.19 27.9%

Buy-outs $1bn+ 50 10.3% 0.72 24.8%

All Buy-Out Funds 425 13.6% 0.88 27.4%

Generalist 120 9.1% 1.02 18.9%

All Private Equity Funds 1310 10.0% 0.85 26.7%

Source: Thomson Reuters / EVCA

* fund size

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US PRIVATE EQUITY FUNDS FORMED 1969-2008NET RETURNS SINCE INCEPTION AS OF 31-DEC-2008

Stage Number Pooled IRR Average DPI Standard Deviation

Seed Capital 68 9.3% 0.98 33.7%

Early Stage 536 19.7% 1.14 60.1%

Balanced 456 13.6% 1.17 24.5%

Later Stage 206 13.3% 1.17 26.9%

All Venture Funds 1266 15.3% 1.15 43.9%

Buy-outs 0-$250m* 182 15.5% 1.32 22.2%

Buy-outs $250m-$500m 116 17.1% 1.24 20.7%

Buy-outs $500m-$1bn 98 11.8% 1.05 18.7%

Buy-outs $1bn+ 138 9.3% 0.71 22.5%

All Buy-Out Funds 534 11.2% 0.83 21.7%

Generalist 38 9.4% 0.63 19.9%

Mezzanine 72 8.0% 0.85 9.8%

All Private Equity Funds 1971 12.6% 0.91 37.3%

Source: Thomson Reuters / NVCA

* fund size

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IRR SINCE INCEPTION AND MULTIPLES

Sample size

Pooled IRR since inception Upper quartile

Pooled DPI

Pooled RVPI

Pooled TVPI

All funds

Venture funds

Buyout funds

Finnish funds 127 9.4% -5.0% 24.0% 10.5% 0.85 0.46 1.32

Nordic funds 220 12.7% -0.7% 27.5% 9.3% 0.80 0.62 1.42

European funds 1310 10.0% 3.1% 13.6% 9.8% 0.85 0.49 1.34

US funds 1971 12.6% 15.3% 11.2% 14.8% 0.91 0.51 1.42

Source: Thomson Reuters

Note: Data is continuously updated and is therefore subject to change. Nordic includes Norway, Sweden, Finland and Denmark.Calculation in € for European funds, in US$ for US funds, as of 31/12/2008

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EUROPEAN PRIVATE EQUITY FUNDS FORMED 1980-2008NET INVESTMENT HORIZON RETURN AS OF 31-DEC-2008

1-year 3-year 5-year 10-year 20-year

Early Stage -16.2% -2.2% -0.4% -2.6% -1.2%

Balanced -19.2% 1.6% 2.6% 0.6% 3.3%

Development Stage -17.9% 0.3% 4.2% 4.1% 8.9%

All Venture Funds -18.9% -0.2% 2.0% 0.3% 3.1%

Buy-outs 0-$250m* -23.6% 5.4% 8.2% 9.4% 12.3%

Buy-outs $250m-$500m -19.7% 10.2% 15.5% 18.7% 16.7%

Buy-outs $500m-$1bn -15.8% 11.6% 11.5% 19.7% 18.2%

Buy-outs $1bn+ -31.3% 3.9% 13.1% 10.4% 10.3%

All Buy-Out Funds -30.0% 5.7% 12.4% 12.4% 13.5%

Generalist -9.5% 5.5% 7.9% 8.0% 9.2%

All Private Equity -28.8% 4.3% 9.3% 8.7% 10.0%

Source: Thomson Reuters / EVCA

* fund size

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US PRIVATE EQUITY FUNDS FORMED 1969-2008NET INVESTMENT HORIZON RETURN AS OF 31-DEC-2008

1-year 3-year 5-year 10-year 20-year

Seed/Early Stage -20.6% 1.7% 3.7% 36.0% 21.8%

Balanced -26.9% 4.6% 8.4% 13.5% 14.5%

Later Stage -6.8% 9.5% 8.7% 7.5% 14.5%

All Venture Funds -20.9% 4.2% 6.4% 15.5% 17.0%

Buy-outs 0-$250m* -11.0% 2.6% 7.5% 4.6% 12.2%

Buy-outs $250m-$500m -20.6% 7.4% 11.3% 7.9% 11.3%

Buy-outs $500m-$1bn -9.6% 5.3% 10.9% 6.6% 10.9%

Buy-outs $1bn+ -24.9% 1.1% 7.6% 5.5% 8.7%

Buy-Out Funds -23.9% 2.2% 8.4% 5.9% 9.8%

Mezzanine 6.6% 3.5% 4.2% 4.8% 7.5%

All Private Equity -23.6% 3.4% 7.9% 7.9% 11.9%

Source: Thomson Reuters / NVCA

* fund size

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INVESTMENT HORIZON PERFORMANCE

Source: Thomson ReutersNote: Data is continuously updated and is therefore subject to change. Nordic includes Norway, Sweden, Finland and Denmark.Calculation in € for European funds, in US$ for US funds, as of 31/12/2008

1-year 3-year 5-year 10-year 20-year

Finnish funds -18.1% 9.4% 14.1% 9.7% 9.4%

Finnish venture funds (71 funds, €1.6bn) -23.8% -3.6% -2.2% -5.5% -5.0%

Finnish buyout funds (36 funds, €2.8bn) -13.2% 15.1% 21.6% 26.4% 24.0%

Nordic funds -24.6% 10.0% 9.5% 13.6% 12.7%

European funds -28.8% 4.3% 9.3% 8.7% 10.0%

US funds -23.6% 3.4% 7.9% 7.9% 11.9%

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PRIVATE EQUITY AND PUBLIC MARKET COMPARATORS

*Comparators are Internal Rates of Return (IRR). IRRs for public market indices are calculated by investing the equivalent cash flows that were invested in private equity into the public market index. Then an equivalent IRR is calculated for each index.

Source: Thomson Reuters

Net Pooled IRR Since Inception to the End of Each Year

-10

-5

0

5

10

15

20

2000

2001

2002

2003

2004

2005

2006

2007

2008

IRR

(%

)

Morgan Stanley Euro Equity HSBC Small Company

JP Morgan Euro Bonds European Private Equity

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FOR MORE INFORMATION

David Bernard

Vice-President – Investment Banking & Private Equity

[email protected]

+33 6 87 97 87 81

Rosette Tyers

Private Equity Research Manager - EMEA

[email protected]

+44 20 7542 9066

Data contributions & surveys