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1. DIGEST142
May 23, 2014
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Insurance Asset Managers Have High Expec-
tations for PE in 2014
KKR Mulls Asia’s Largest PE Deal of the Year
Preqin Confirms Where the Women Are in PE
Why Brazil is a PE Dream Market
Recovering European M&A Market Gets
Hostile
Quote of the Week: Public Private Equity
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INSURANCE ASSET MANAGERS HAVE
HIGH EXPECTATIONS FOR PE IN 2014
Insurers are highly optimistic about private
equity returns over the next 12 months, and
continue to believe equity asset classes will
outperform fixed income assets, according to
the latest Goldman Sachs Asset Management
Survey of 233 Chief Investment Officers (CIOs)
and Chief Financial Officers (CFOs) represent-
ing insurers with over USD 6 trillion in global
balance sheet assets. The survey, which is
considered an industry bellwether, revealed
that a large proportion expect private equity
(26%) to deliver the highest returns in the
coming year. The second most favored as-
set class in the ranking is US equities (17%),
followed by European equities (13%). CFOs
expressed greater optimism than CIOs, as
31% believe investment opportunities are im-
proving, and only 29% believe they are getting
worse. Risk is mainly perceived as a result of
credit and equity market volatility. the results
KKR MULLS ASIA’S LARGEST PE DEAL OF
THE YEAR
of the survey show that insurers are focused on the search for returns. They view corporate bonds and
public equities as either overvalued or fairly valued; as a result, they are more willing to seek non-
traditional asset classes that can offer higher total return potential and compensation in exchange for
illiquidity. (Image source: Insurance Insider)
This week’s buyout of the week is another packaging one, like last week’s Mauser deal. The WSJ says
that KKR is in “advanced talks” to buy Singapore packaging company Goodpack Ltd. for at least USD1
billon. If the deal goes through, it could be one of the biggest acquisitions by a private-equity firm in
Asia so far this year, says the Journal.
The DealMarket Digest actually had several other choices for buyouts greater-than-one-billion-dollars
this week. It is changed days since this time last year when deal sizes were smaller and large deals
fewer and far between. Other large transactions in the works are Clayton, Dubilier & Rice rumored
targeting of Healogics Inc, which would be a purchase from PE rival Metalmark Capital Holdings for
about USD 1 billion, and the potential sale of Red Lobster, which has 680 outlets in the United States
and Canada, to the private equity firm Golden Gate Capital for USD 2.1 billion in cash.

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PREQIN CONFIRMS WHERE THE WOMEN
ARE IN PE
A research note from Preqin this week revealed
that female senior execs are more prevalent
by a large margin on the LP side than in the
GP side of the private equity industry. Women
account for 22% of institutional investors’ se-
nior private equity investment professionals
compared to just 11% of senior roles at private
equity firms, reports Preqin. The data confirms
what has long been observed when looking at
the gender and title of speakers and panelists at
PE industry conferences, at least by the Deal-
Market Digest’s editor.
Preqin says that North America-based institu-
tional investors employ women in senior private
equity positions at 26%, while PE firms employ women at about 11%. Institutional investors based in
Asia-Pacific have a higher proportion of women at 17% in private equity investment staff, and in Eu-
rope, women account for 17%, compared to 12% for private equity firms based in Asia-Pacific and 9.7%
for firms based in Europe. Women are best represented in senior private equity roles at foundations
(37%), followed by endowment plans (32%) and government agencies (27%). (Image source: Preqin)
WHY BRAZIL IS A PE DREAM MARKET
Brazil might be in the head- lines because it’s hosting
the World Cup, but it is in the private equity media news
for different reasons. Brazil has become the darling of
Latin America’s private equity market, despite slowing in
Brazil fundraising last year. When asked to explain why
in a Bloomberg TV broadcast, Cate Ambrose, President of
Latin American Venture Capi- tal Association, points to its
stable economy over the last 10 years. It has moved beyond
the uncertainty and volatility its economy was once known
for, she said. Globalization and demand from China for its
natural resources are contrib- uting to its attractiveness.
Ambrose added that the region has recently found new oil
and gas resources. Brazil was also relatively “unscathed”
by the financial crisis in 2008 and 2009. “It was a blip on
the charts for Brazil as the banks were secure with
consumer demand coming back online much faster than the
rest of the world,” says Ambrose. Target sectors for PE investors include those driven by the emerging
Brazilian middle class, specifically retail, healthcare, education, and fast food.

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Dealogic has news this week that M&A dealmaking is getting hostile globally as the above graphic
shows. In Europe, the volume jump was largely driven by Pfizer’s USD 122.6bn hostile bid for Astra-
Zeneca announced on the 2nd May 2014. It is the third largest hostile M&A deal on record, according to
dealogic. As a result, Europe is the most targeted region for global hostile M&A transactions with USD
143.8bn due to six deals, up from just USD14.8bn in the same 2013 period. It is also the highest year
to date volume since 2007, reports dealogic. North America follows with USD121.2bn in 2014 year to
date, again the highest year to date level on record. (Image source: dealogic)
RECOVERING EUROPEAN M&A MARKET
GETS HOSTILE
QUOTE OF THE WEEK: PUBLIC PRIVATE
EQUITY
“As a CFO, I never market, or make a pitch. My approach is: give people the facts and let them make
their own decisions.
Who said it: Laurence Tosi, Blackstone Group Chief Financial Officer
In context: Laurence Tosi is the CFO of one of a handful of publicly traded
PE giants in the US. He not only is involved in Blackstone’s busy dealflow
(acquisitions and exits), he oversees four divisional CFO’s and about 65
CFOs in underlying portfolio companies and business units. Tosi was in the
news back in 2011 when Apple tried to poach him from Blackstone. The
quote above is from an interview published this week by Bloomberg confer-
ences where he spoke for 30 minutes about his experience after joining

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Blackstone post-IPO. It was a challenge because potential buyers of the stock did not understand the
private equity business. He says investors would look at the financial reports which showed USD 85
billion in assets, at the time, and a lean payroll, 800 employees at the time, and say to him, “It is great.
What is it? I don’t know what it is, but it’s great!” In the meantime, he’s learned how to communicate
the PE story and he makes it attractive by delivering the facts. Blackstone now has more than USD 272
billion in assets under management as of Mar 2014. His view on M&A between companies is that the
rash of deals underway right now should have been done two years ago when prices were lower. He
said, “The time to buy is when growth is scarce”, but he conceded how hard it is to get businesses to
take that kind of risk when the cycle is not clearly bottoming out. He still believes Blackstone stock is
undervalued compared to other asset managers, given his company’s 50% profit margin, 25% growth
rate, and high dividend payouts to shareholders.
Where we found it: Bloomberg

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Editor: Valerie Thompson, Zurich
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