Private Equity 2012 Review

PRIVATE
EQUITY
2012 Review &
2013 outlook
January 2013

01.09.13 www.bloombergbriefs.com Bloomberg Brief | Private Equity 2

Contents Timeline
click on orange triangles for interactive features

fundraising Exits
overview A round-up of trade MONTH ACTIONS
A snapshot of 2012 sales, secondary
fundraising data and buyouts and IPOs. Republican presidential candidate and Bain Capital co-founder Mitt Romney releases his tax return, showing he paid
JAN an effective tax rate of 13.9 percent on income of $21.6 million in 2010.
fund launch predic- Page 12-13
tions for 2013. Ripplewood Capital-backed Hostess Brands files for bankruptcy protection.
Pages 3-5 top iPOs
A glance at 2012’s Nigel Doughty, co-founder of British private equity firm Doughty Hanson, dies aged 54.
LP COMMITMENTS largest private equity FEB A consortium that includes Apollo Global Management agrees to buy EP Energy for $7.2 billion, in what will be the
Investors’ alloca- and venture-backed largest buyout of the year.
tion strategies and IPOs.
calendar dates for Page 14 U.S. President Barack Obama signs the Jobs Act into law, easing IPO registration requirements for start-ups and
the coming year. promising changes to how funds can be marketed.
Pages 6-7 VOICES
GPs and LPs share MAR Morgan Stanley Private Equity Asia makes its largest-ever investment, with its $300 million backing of China’s Tianhe
BUYOUT DEALS their views on the Chemicals Group.
Global buyout trans- past year and give Zayo Group announces a $472 million equity round of funding, the largest of 2012.
actions during 2012 predictions for 2013.
by sector, size and Pages 15-17
geography. Behrman Capital proposes a secondary deal to investors to keep some of the companies in its 2001 fund alive, follow-
APR
ing the lead of Willis Stein & Partners, which offered a similar deal to its LPs in February.
Page 8-9 NEWS TRENDS
A look at the most
venture rounds mentioned terms in Accel Partners, Tiger Global Management and Digital Sky Technology offer some of their shares in Facebook as the
Global venture capi- 2012’s private equity social network company goes public. Its shares subsequently tank, stifling VC-backed IPOs for months.
tal deals by sector, news coverage Carlyle Group goes public, following Oaktree Capital’s IPO a month earlier.
size and geography. Page 18
Page 10-11 MAY Michael Moritz steps back from daily management at Sequoia Capital after disclosing that he has a rare illness.
The Ewing Marion Kauffman Foundation makes waves with its 51-page study claiming that LPs should accept blame
for weak returns from venture capital.
Bloomberg Brief Private Equity
2012 Review & 2013 Outlook Scott Schoen leaves buyout firm Thomas H. Lee Partners after 26 years.

Newsletter Ted Merz European venture firm DN Capital earns a 20x return on its sale of U.K. mobile platform Apsmart to Thomson Reuters.
Executive Editor tmerz@bloomberg.net
+1-212-617-2309 JUN KKR agrees to sell a stake in Alliance Boots to Walgreens in what will be the biggest exit of the year.
Bloomberg News Larry Edelman Joseph Rice III, aged 80, steps down as chairman of Clayton, Dubilier & Rice.
Managing Editor ledelman3@bloomberg.net
+1-617-210-4621
Private Equity Editors JUL Bain Capital completes the fundraising for its $2.3 billion second Asia fund.

Jennifer Rossa Susannah Birkwood
jrossa@bloomberg.net sbirkwood4@bloomberg.net
+1-212-617-8074 +852-2744-4822
AUG Bain Capital co-founder Mitt Romney is formally nominated as the Republican U.S. presidential candidate.
Private Equity Reporters
Sabrina Willmer Ari Levy
swillmer2@bloomberg.net alevy5@bloomberg.net Both Providence Equity Partners and CVC Capital Partners agree to sell stakes in their management companies to
+1-212-617-2515 +1-415-617-7113
large limited partners.
Data Editors
PAG announces a final close on $2.4 billion for its debut private equity fund, an Asia-focused buyout vehicle that will
Jill Lewandosky Inessa Collier SEPT
principally target China deals.
jlewandosky@bloomberg.net icollier1@bloomberg.net
212-617-4414 212-617-1187 Bain Capital, KKR and Merrill Lynch are accused of price fixing in a lawsuit brought by the ex-shareholders of
Adam Kruithof hospital management firm HCA.
akruithof1@bloomberg.net
609-279-5006 Blackstone Group closes what is believed to be the largest real estate fund ever at $13.3 billion.
Newsletter Nick Ferris Debt issued to fund private-equity dividends reaches $54 billion for this year. Six companies sell PIK-toggle bonds to
Business Manager nferris2@bloomberg.net fund these payouts.
+1-212-617-6975 OCT
Advertising bbrief@bloomberg.net French fund managers predict that President Francois Hollande’s proposed tax increases on carried interest profits
+1-212-617-6975 may be “the death of private equity in France.”
Reprints & Lori Husted Paul M. Wythes, one of Silicon Valley’s earliest venture capitalists as co-founder of Sutter Hill Ventures, dies aged 79.
Permissions lori.husted@theygsgroup.com
+1-717-505-9701 Advent International raises $10.8 billion for its seventh fund, the largest pool raised for private-equity investments in
To subscribe via the Bloomberg terminal type BRIEF two years.
<GO> or on the web at www.bloombergbriefs.com NOV
Terra Firma Capital agreed to buy U.K. defense-employee housing operator Annington Homes from Nomura for $5.1
To contact the editors: econbrief@bloomberg.net billion, the third largest private equity deal of the year.
This newsletter and its contents may not be forwarded
or redistributed without the prior consent of Bloomberg. The Newtown school shooting leads Cerberus Capital Management to put Freedom Group, the largest U.S. gun-
Please contact our reprints and permissions group listed maker, up for sale.
above for more information DEC
Focus Media agrees to be bought by a consortium of investors led by Carlyle Group in a $3.7 billion deal that will be
© 2013 Bloomberg LP. All rights reserved.
China’s largest leveraged buyout.

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Fundraising Click on orange triangles for interactive features

2012 Fundraising by Region, Type ($ Millions)
Asia Pacific Asia Pacific Eastern Latin America Middle East North Western Asia Pacific Emerging Grand
Multiple
Developed Emerging Europe and Caribbean and Africa America Europe & Developed Total

Buyout $2,137 $1,913 $3,142 $386 $900 $51,388 $52,510 $16,378 $6,500 $135,255

Debt $544 $232 $22,393 $6,202 $7,237 $470 $37,078

Fund of Funds $1,287 $92 $6,176 $2,286 $303 $1,643 $11,788

Growth $690 $3,914 $517 $916 $944 $6,877 $4,838 $232 $56 $18,985

Other $1,000 $25 $1,025

Real Assets $325 $9,523 $5,249 $3,872 $647 $19,616

Real Estate $2,171 $852 $684 $1,264 $480 $16,326 $14,301 $4,948 $645 $41,671

Secondary $22,599 $1,825 $303 $24,726

Venture $1,415 $120 $214 $180 $10,134 $11,938 $1,181 $6 $25,188

Grand Total $4,998 $9,926 $4,463 $3,105 $2,828 $146,416 $99,175 $34,453 $9,967 $315,330

Source: Bloomberg. Amounts represent capital closed in 2012. Non-dollar amounts have been converted.

Buyout Firms Dominate, Real Estate Second Funds Targeting Multiple Regions Are Popular

# of Funds # of Funds 2% 6% Asia Pacific Developed
Buyout 12%
2%
22% Debt
8% 27% 2% 11% 3%3% Asia Pacific Emerging
8% Fund of Funds 1% 2%
Asia Pacific Emerging &
Growth Developed
43%
3% 13% Other 32% North America
Volume 23% Volume
Real Assets Latin America and
6%
10% 1% Caribbean
14% Real Estate 46%
6% 48% Middle East and Africa
4% 1%
12% Secondary 2%
4% 9% 3% Multiple
Venture
11%

Source: Bloomberg Source: Bloomberg

Buyout firms raised $135 billion in 2012. The average size buyout fund Developing Asia was the most popular emerging market for fundraising in
was about $700 million. The average size VC fund was about $154 million. 2012, making up 8 percent of funds raised and 6 percent of capital.

SHOP FOR PREMIUM RESEARCH, DATA AND NEWS

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funds
Blackstone Tops 2012 Fundraising List With Latest Real Estate Fund
Blackstone Real Estate Partners VII LP held a final close on $13.3 billion in 2012. Advent International GPE VII LP was second, closing
on 8.5 billion euros, the largest pool raised for private equity investments in two years. The largest venture fund to close in 2012 was
New Enterprise Associates 14 LP, which raised $2.6 billion.

Funds That Raised More Than $1 Billion and Held Final Closes in 2012
Total
Fund Name Strategy Region Sector Placement Agent
Raised ($M)
Park Hill Real Estate Group, Merrill Lynch Pierce Fenner
1 Blackstone Real Estate Partners VII LP Real Estate Multiple Real Estate $13,300
& Smith, UBS Financial Services, JP Morgan Securities
2 Advent International GPE VII LP Buyout Multiple Generalist $8,500 None
3 BC European Capital IX Buyout Multiple Generalist $8,359 None
Mitsubishi Corp Asset Management, Credit Suisse
4 Global Infrastructure Partners II LP Real Assets Multiple Infrastructure $8,250
Securities
5 AXA Secondary Fund V LP Secondary Multiple Generalist $7,100 None
6 Green Equity Investors VI LP Buyout North America Generalist $6,250 None
7 Coller International Partners VI LP Secondary Multiple Generalist $5,500 None
8 Oaktree Opportunities Fund IX LP Debt Multiple Generalist $5,000 None
9 Ares Corporate Opportunities Fund IV LP Buyout Multiple Generalist $4,700 AE Holding Group
10 Mount Kellett Capital Partners II LP Debt Multiple Generalist $4,000 None
10 GSO Capital Opportunities Fund II Debt Multiple Generalist $4,000 None
12 American Securities Partners VI LP Buyout North America Generalist $3,640 Greenhill & Co, Phoenix Capital Advisory
13 NGP Natural Resources X LP Buyout Multiple Energy/Renewables $3,586 None
14 Vista Equity Partners Fund IV LP Buyout Multiple Technology $3,500 None
15 Denham Commodity Partners Fund VI LP Buyout Multiple Energy/Renewables, Materials $3,000 Park Hill Group LLC
15 Capital International Private Equity Fund VI Growth Multiple Generalist $3,000 Mvision Private Equity Advisors
17 CS Strategic Partners V LP Secondary Multiple Generalist $2,900 Credit Suisse Securities (USA) LLC
18 Avenue Europe Special Situations Fund II Debt Western Europe Generalist $2,780 None
19 Summit Partners Growth Equity Fund VIII Growth Multiple Generalist $2,700 Eaton Partners LLC
20 New Enterprise Associates 14 LP Venture North America Generalist $2,600 None
20 Partners Group Secondary 2011 LP Secondary Multiple Generalist $2,600 None
22 Metalmark Capital Partners II LP Buyout North America Generalist $2,572 None
23 Blackstone Energy Partners LP Real Assets Multiple Energy/Renewables $2,500 Deutsche Bank Securities, Morgan Stanley Barney
24 PAG Asia I LP Buyout Asia Pacific Emerging Generalist $2,400 Park Hill Group LLC
25 Carlyle Realty Partners VI Real Estate North America Real Estate $2,340 Citigroup Global Markets Inc.
25 Sentient Global Resources Fund IV LP Real Assets Multiple Natural Resources $2,300 None
Asia Pacific Emerging,
25 Bain Capital Asia Fund II LP Buyout Generalist $2,000 None
Asia Pacific Developed
28 TPG Growth II LP Growth Multiple Generalist $2,000 TPG Capital BD LLC
29 Centerbridge Special Credit Partners II LP Debt Multiple Generalist $2,000 None
30 EnCap Flatrock Midstream Fund II LP Real Assets North America Energy/Renewables $1,750 None
31 Fortress Japan Opportunity Fund II Real Estate Asia Pacific Developed Real Estate $1,650 Fortress Capital Formation
32 Roark Capital Partners III LP Buyout North America Generalist $1,559 Lazard Freres & Co LLC
33 Baring Vostok Private Equity Fund V LP Buyout Eastern Europe Generalist $1,500 UBS Securities
33 Andreessen Horowitz Fund III LP Venture Multiple Technology $1,500 None
35 BlueMountain Credit Opportunities Fund I LP Debt Multiple Generalist $1,400 None
36 Carlyle Energy Mezzanine Opportunites Fund LP Debt Multiple Energy/Renewables $1,380 None
37 OHA European Strategic Credit Fund Debt Western Europe Generalist $1,350 Credit Suisse Securities (USA), LLC
37 FountainVest China Growth Capital Fund II LP Growth Asia Pacific Emerging Generalist $1,350 UBS Securities
39 Morgan Stanley Private Markets Fund V LP Fund of Funds Multiple Generalist $1,300 Morgan Stanley Smith Barney LLC
Fortress Group, RBC Wealth Mgmt, Morgan Keegan,
39 Portfolio Advisors Secondary Fund II LP Secondary Multiple Generalist $1,300
Alternative Investments Co.
41 Thoma Bravo Fund X LP Buyout North America Technology $1,250 None
41 Audax Private Equity Fund IV Buyout North America Generalist $1,250 None
41 KKR Natural Resources Real Assets Multiple Energy/Renewables $1,250 None
44 Axiom Asia Private Equity Fund III LP Fund of Funds Asia Pacific Emerging Generalist $1,150 Probitas Partners
44 Prudential Capital Partners IV Debt North America Generalist $1,150 Terrain Placement Services
46 Patron Capital LP IV Real Estate Western Europe Real Estate $1,132 Monument Group Inc
47 Harvest Partners VI LP Buyout North America Generalist $1,100 Credit Suisse Securities (USA) LLC
47 Carlyle US Equity Opportunity Fund LP Buyout North America Generalist $1,100 Foreside Fund Services LLC
49 Meridiam Infra. North America Fund II LP Real Assets Multiple Infrastructure $1,050 Campbell Lutyens & Co.
Source: Bloomberg. Non-dollar figures have been converted.

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Buyout deals
U.S. Seen as Haven for Deals Amid Global Slowdown in 2012
The U.S. dominated deal volume this year as Europe’s fiscal crisis persisted and developing world economies slowed. The U.K., Austra-
lia, Germany, and Canada rounded out the top five.

Largest Buyouts of 2012
Announce Value Target
Rank Target Name Acquirer Name Seller Name Sector
Date ($m) Location
Access Industries, Apollo Global Management, Korea
1 24-Feb EP Energy Global El Paso 7,150 Energy Houston
National Oil Corp, Riverstone Holdings
2 18-Jul Cequel Communications Holdings BC Partners Holdings, CPPIB 6,580 Communications St. Louis
3 19-Nov Annington Homes Terra Firma Capital Partners Nomura Holdings 5,091 Real Estate U.K.
4 30-Aug DuPont Performance Coatings Carlyle Group Du Pont 4,900 Basic Materials Australia
Abu Dhabi Investment Authority, British Columbia Invest-
5 16-May Open Grid Europe ment Management Corp, ERGO Versicherungsgruppe, E.ON SE 4,078 Utilities Germany
Macquarie Group, Muenchener Rueckversicherungs
6 5-Dec Primaris Retail REIT KingSett Capital, Ontario Pension Board 4,043 Real Estate Canada
7 25-Jul United Technologies units Carlyle Group, BC Partners United Technologies Corp 3,460 Industrial
CDH Investments Fund, China Everbright, CITIC Capital
8 13-Aug Focus Media Holding 3,427 Media Hong Kong
Partners, Carlyle Group, FountainVest Partners
9 15-Aug Getty Images Carlyle Group Hellman & Friedman 3,300 Communications Seattle
10 17-Feb TransUnion Corp Advent International Corp, Goldman Sachs Capital Partners Madison Dearborn Partners 3,000 Financial Services Chicago
11 5-Jun Party City Holdings Thomas H Lee Partners 2,690 Retail New York
12 26-Nov McGraw-Hill Education Business Apollo Global Management McGraw-Hill Cos 2,500 Consumer Products New York
13 29-Feb Ahlsell AB CVC Capital Partners Goldman Sachs Group, Cinven 2,404 Industrial Sweden
14 17-Oct Nine Entertainment Co Holdings Apollo Capital Management, Oaktree Capital CVC Capital Partners Group 2,384 Media Australia
Goldman Sachs Capital
15 26-Nov USI Holdings Corp Onex Corp 2,300 Financial Services New York
Partners
Source: Bloomberg

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Venture Rounds click on orange triangles for interactive features

Venture Firms Favor the Familiar: North America, Tech
Start-ups raised $32.5 billion in 2012, Bloomberg data show. Venture firms, facing a tough fundraising and exit environment, appeared to
be sticking to their core competencies, investing in familiar regions and familiar industries.

Communications, Consumer, Tech Draw Most VC North America Dominates Venture Volume

# of Basic Materials Africa
Rounds # of 18%
27% 1% Communications Rounds 13% N. Amer
22%
Consumer, Cyclical 2%
31% 37% 3% CEE
Consumer, Non-cyclical
Value 1% 7%
Energy 6% Value Asia-Pac
6%
2% Financial 1%
6% 5% MENA
6% Industrial
2% 77% LatAm
3% Utilities 72%
27% 4%
Technology W. Europe
21%


Healthcare deals, included largely in consumer non-cyclical, attracted Western Europe attracted the second most capital, with four rounds of
$6.6 billion of capital; and energy/clean energy, about $1.5 billion. $100 million or more: Deezer, CureVac, Mapper Lithography, and Spotify.

U.S.-Based Start-ups Get Lion’s Share of Venture Funding

U.S. start-ups received $24 billion of venture funding in 2012, exceeding the U.K., the second country on the list at $1.8 billion, by more than a factor of
10. India was in third place at $1.3 billion, followed by Canada and Germany. China was seventh, after France.

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Venture Rounds
Venture Rounds of More Than $100 Million
Bandwidth infrastructure company Zayo Group raised $472 million in equity, the largest round of 2012, and $2.87 billion in debt to fund
its purchase of publicly traded AboveNet. The round, from a combination of buyout and venture firms, was led by GTCR LLC.

2012’s Largest Venture Rounds
Value Target
Rank Announced Target Name Investors Sector
($M) Location

1 19-Mar Zayo Group LLC Battery Ventures, Centennial Ventures, Charlesbank Capital Partners, GTCR LLC 472 Communications Infrastructure Colorado

2 24-Jan SquareTrade Inc Bain Capital Partners 238 Financial Services California

3 8-Aug Square Inc Citi Ventures, Rizvi Traverse Management, Starbucks Corp 200 Internet Services California

4 5-Mar Drilling Info Inc Battery Ventures, Eastern Advisors Capital, Insight Venture Partners 165 Energy Texas

5 6-Jun Fanatics Inc Andreessen Horowitz, Insight Venture Partners 150 E-commerce Florida

5 31-Jan Flipkart Online Services Pvt Ltd Accel Partners, Tiger Global Management 150 E-commerce India

5 24-Aug Flipkart Online Services Pvt Ltd Naspers, Accel Partners, Tiger Global Management, Iconiq Capital 150 E-commerce India

8 28-May Fisker Automotive Inc. Kleiner Perkins Caufield & Byers, New Enterprise Associates 148 Automobiles California

9 2-Apr Sapphire Energy Inc Arrowpoint Partners, Monsanto, Arch Venture Partners, Venrock Associates 144 Renewable energy California

10 26-Jul Alarm.com Inc Technology Crossover Ventures 136 Consumer Products Virginia

11 6-Oct Deezer Access Industries LLC, Indivest Pte Ltd 131 E-commerce France

Accel Partners, IDG Capital Partners, Morgan Stanley Investment Management,
12 10-Apr Legend Pictures LLC 128 Media California
Thiel Capital, Tomorrow Ventures

Bessemer Ventures, DFF Growth, General Atlantic, New Enterprise Associates,
13 1-Aug Box.net Inc 125 Internet Services California
SAP Ventures, Scale Venture Partners, Social Capital Partners

13 24-Jul NantPharma LLC Blackstone Group 125 Pharmaceuticals California

Andreessen Horowitz, Atomico, Baroda Ventures, DoCoMo Capital, First Round
15 18-Jul Fab.com Inc 120 E-commerce New York
Capital, Mayfield Fund, Menlo Ventures, Phenomen Ventures, Pinnacle Ventures

American Refining and Biochemical, DAG Ventures, Generation Investment
16 12-Apr Harvest Power Inc 110 Renewable energy Maine
Management, Kleiner Perkins Caufield & Byers, True North Venture Partners

17 18-Sep CureVac GmbH Dievini Hopp BioTech Holding GmbH 105 Pharmaceuticals Germany

18 10-Jul Elevance Renewable Sciences Inc Total SA,Genting Bhd 104 Renewable energy Illinois

18 26-Sep Fisker Automotive Inc. Advanced Equities, Kleiner Perkins Caufield & Byers, New Enterprise Associates 104 Automobiles California

ASM International NV, Hoving & Partners SA, Parcom Capital BV, Rusnano,
20 23-Aug Mapper Lithography BV 101 Semiconductors Netherlands
Technolution BV, ADP Industries, Demcon

Source: Bloomberg, NVCA

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Exits click on orange triangles for interactive features

Exits Via M&A Slowed in 2012
M&A exits for private equity firms totaled about $143 billion in 2012. The numbers here reflect both debt and equity for M&A exits.

Exit Volume Declines From 2011 Consumer Noncyclicals Lead Exits
2500 700

Billions
Exit Volume (RHS)
Deal Volume (RHS) 600 # of Exits 7% 4%
2000 8% Basic Materials
Exit Deal Count (LHS) 7% 3%
500 10% Communications
Deal Count (LHS)
1500 16% 11% Consumer, Cyclical
400
29% 11%
Consumer, Non-cyclical
300
1000 9% Value Energy
200 Financial
7%
500 23%
100 37% Industrial

14% Technology
0 0 4%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Exit volume lagged deal volume by more than $40 billion in 2012. In 2011, The biggest industry for exits was consumer non-cyclicals, which included
exit volume was almost on pace with deal volume. KKR’s sale of a stake in Alliance Boots, the biggest exit of the year.

Largest Portion of Exits Are From N. Amer. Cos. Larger Exits Dominate Volume

1%
15%

21% 16%
5% 3% 25% Africa Asia-Pac Large
33%
35% 2% 9% Large Midmarket
2% CEE-Russia N. Amer Volume
1% Value
1%
1% 16%
Mega
1% MENA LatAm 54%
1% 55%
Number Number 12% Small

W. Europe Small Midmarket
49% Number 42%


North America and Western Europe dominated exit volume. Asia lagged, Exits classed as large made up 54 percent of volume and 15 percent
with $7.5 billion of announced exits in 2012. of exit count in 2012.

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Exits
Exits Via M&A Most Prevalent in Developed Markets
Private equity firms sold $76.4 billion worth of U.S.-based companies. U.K.-based companies accounted for $13.8 billion of exits. Round-
ing out the top five were Sweden, Switzerland - home of Alliance Boots, the largest exit of the year - and Iceland.

Largest M&A Exits of 2012
Value Target
Rank Announced Target Seller Acquirer target Sector
($M) Location
1 19-Jun Alliance Boots KKR & Co Walgreen 6,595.7 Retail Switzerland
2 25-Apr Actavis Group Novator EHF Watson Pharmaceuticals 5,610.4 Healthcare Iceland
General Atlantic, Ospraie Management, Soros Fund
3 29-May Gavilon Group Marubeni Corp 5,600.0 Agriculture Omaha, Neb.
Management
4 15-Mar NDS Group News Corp, Permira Advisers Cisco Systems 5,000.0 Technology U.K.
5 21-Dec Aviation Business/Avio Finmeccanica, Cinven Group General Electric 4,300.0 Industrial Italy
6 4-Dec Gambro Investor AB, EQT Partners Baxter International 4,019.9 Healthcare Sweden
7 29-Aug Goodman Global Group Hellman & Friedman Daikin Industries 3,700.0 Industrial Houston
8 3-Apr StarBev CVC Capital Partners Group Molson Coors Brewing 3,532.5 Consumer Products Czech Republic
9 15-Aug Getty Images Hellman & Friedman Carlyle Group 3,300.0 Communications Seattle
10 23-Jan Cordillera Energy Partners III Encap Investments Apache Corp 3,092.9 Energy Denver
Advent International,
11 17-Feb TransUnion Madison Dearborn Partners 3,000.0 Financial Services Chicago
Goldman Sachs Capital Partners
11 5-Aug AOT Bedding Super Ares Management, OTPP Advent International 3,000.0 Consumer Products Atlanta
Apollo Global Management, Bain Capital Partners,
Kansas City,
13 21-May AMC Entertainment Holdings CCMP Capital Advisors, Carlyle Group, Spectrum Equity Dalian Wanda Group 2,600.0 Media
Mo.
Investors, Weston Presidio
14 19-Mar Caiman Eastern Midstream Caiman Energy (Enstar Investments, Highstar Capital) Williams Partners 2,500.5 Energy Dallas
15 29-Feb Ahlsell Goldman Sachs Group, Cinven Group CVC Capital Partners 2,404.3 Industrial Sweden
Source: Bloomberg

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top Buyout- and Venture-Backed IPOs
Top 20 PE-Backed IPOs For 2012
Value IPO Percent
Price Company Target Industry Industry
(USD Share Change Select Backers Type
Date Name country Group Sector
MIL) Price From IPO
20%
0% Goldman Sachs Group Inc/The, Directors & Execu- IPO, Primary Share, Secondary
-20% United
05/17 Facebook Inc 16,006.9 38.0 -40%
FB US
Internet Communications tive Officers, DST Global Solutions Ltd, T Rowe Price Share, VC Backed, VC Exit, PE
-60% States
Jan Apr Jul Oct Group Inc, Tiger Global Management LLC Backed, PE Exit
40%
20% 6837 HK
Haitong Securities 0% Diversified PAG Asia Capital, Oman Investment Fund, Leading Local1st, Primary Share, PE
04/20 1,845.5 10.6 -20% China Financial
Co Ltd -40% Finan Serv Investment & Securities Co Ltd Backed, HK H Shares
Jan Apr Jul Oct
30% Jan Apr Jul Oct
30%
IHH MK
IHH Healthcare 20%
Healthcare- Consumer, IPO, Primary Share, Secondary
07/12 1,328.5 2.8 10% Malaysia Abraaj Capital Ltd
Bhd 0% Services Non-cyclical Share, PE Backed, PE Exit
Jan Apr Jul Oct
60% Jan Apr Jul Oct
60%

Realogy Holdings 40%
RLGY US United Apollo Global Management LLC, Paulson & Co Inc,
10/10 1,242.0 27.0 20% Real Estate Financial IPO, Primary Share, PE Backed
Corp 0% States Directors & Executive Officers
Jan Apr Jul Oct
100% Jan Apr Jul Oct
100%
ZIGGO NA
50% Nether- Telecommu- IPO, Secondary Share, PE
03/20 Ziggo NV 1,235.5 18.5 Communications Cinven Ltd, Warburg Pincus & Co
0% lands nications Backed, PE Exit
Jan Apr Jul Oct
50% Jan Apr Jul Oct
60%
40%
20%
DKSH SW
Switzer- IPO, Secondary Share, PE
03/19 DKSH Holding AG 977.7 48.0 0% Advertising Communications Warburg Pincus LLC, Cinven Group Ltd
-20% land Backed, PE Exit
Jan Apr Jul Oct
30%Jan Apr Jul Oct
30%
IHH SP
IHH Healthcare 20%
Healthcare- Consumer, IPO, Primary Share, PE
07/12 791.1 1.1 10% Malaysia Abraaj Capital Ltd
Bhd 0% Services Non-cyclical Backed, PE Exit
Jan Apr Jul Oct
150% Jan Apr Jul Oct
150%
100%
WDAY US United
10/11 Workday Inc 732.6 28.0 50% Software Technology Greylock Partners, New Enterprise Associates Inc IPO, Primary Share, VC Backed
0% States
Jan Apr Jul Oct
20% Jan Apr Jul Oct
20%

Allison Transmis- 0%
United Auto Parts & Consumer, IPO, Secondary Share, PE
03/14 690.3 23.0 -20% Onex Corp, Carlyle Group
sion Holdings -40%
ALSN US
States Equipment Cyclical Backed, PE Exit
Jan Apr Jul Oct
0% Jan Apr Jul Oct
0%
-20%
United PL Propylene LLC, Lindsay Goldberg & Co LLC, York IPO, Primary Share, Secondary
05/03 PetroLogistics LP 595.0 17.0 -40% Chemicals Basic Materials
-60%
PDH US
States Capital LLC, PetroLogistics LLC Share, PE Backed, PE Exit
Jan Apr Jul Oct
60% Jan Apr Jul Oct
60%
VNTV US
40%
United Commercial Consumer, Non- IPO, Primary Share, PE
03/21 Vantiv Inc 575.0 17.0 20% Advent International Corp, Fifth Third Bancorp
0% States Services cyclical Backed, PE Exit
Jan Apr Jul Oct
20% Jan Apr Jul Oct
20%
SRC US
Spirit Realty 10% United
09/19 500.3 15.0 REITS Financial Highland Capital Management LP, TPG Axon Capital IPO, Primary Share, PE Backed
Capital Inc 0% States
Jan Apr Jul Oct
50%Jan Apr Jul Oct
50%
Metal
0% United
03/28 Rexnord Corp 490.3 18.0 RXN US Fabricate / Industrial Apollo Global Management IPO, Primary Share, PE Backed
-50% States
Jan
Jan
Apr
Apr
Jul
Jul
Oct
Oct
Hardware
50%

0% United Oil & Gas IPO, Primary Share, Secondary
04/11 MRC Global Inc 477.3 21.0 MRC US Energy Goldman Sachs Group Inc
-50%
Jan Apr Jul Oct
States Services Share, PE Backed, PE Exit
10%

Berry Plastics 0%
United Packaging & Apollo Global Management LLC, Graham Berry
10/03 470.6 16.0 -10%
Industrial IPO, Primary Share, PE Backed
Group Inc -20%
BERY US
States Containers Holdings LP
Jan Apr Jul Oct
40% Jan Apr Jul Oct
40%
FET US
Forum Energy 20%
United Oil&Gas IPO, Primary Share, Secondary
04/11 435.8 20.0 0%
Energy SCF Partners Ltd, Directors & Executive Officers
Technologies Inc -20% States Services Share, PE Backed, PE Exit
Jan Apr Jul Oct

100%
TUMI US
Household
50%
United Consumer, Non- Directors & Executive Officers, Doughty Hanson & IPO, Primary Share, Secondary
04/18 Tumi Holdings Inc 388.7 18.0 0%
Products /
-50% States cyclical Co Managers Ltd, Stockwell Capital LLC Share, PE Backed, PE Exit
Jan
0%Jan
Apr
Apr
Jul
Jul
Oct
Oct
Wares
0%

Ningbo Cixing -50% Machinery- IPO, Primary Share, PE
03/16 336.0 35.0 300307 CH China Industrial Zhejiang Zheshang Venture Capital
Co Ltd -100% Diversified Backed, China A Shares
Jan Apr Jul Oct
Jan Apr Jul Oct
0%

Bros Eastern -20%
Consumer, CITIC Private Equity Fund I/Mianyang Fund, IPO, Primary Share, PE
06/01 320.6 13.6 -40% China Textiles
Co Ltd -60%
601339 CH
Cyclical CPEChina Fund LP, Goldenstone Investment Ltd Backed, China A Shares
Jan Apr Jul Oct
Jan
100% Apr Jul Oct
100%
PANW US
Palo Alto Net- 50% United Telecommu- Greylock Partners, Sequoia Capital Operations IPO, Primary Share, Secondary
07/19 299.5 42.0 Communications
works Inc 0% States nications LLC, Globespan Capital Partners Share, VC Backed
Jan Apr Jul Oct

Source: Bloomberg

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18


VOICES By Sabrina Willmer, Ari Levy, and Susannah Birkwood

Mitt Romney Was Big 2012 Story; U.S. Government ‘Dysfunction’ on Investors’ Minds in 2013
Bloomberg Brief: Private Equity asked a number of private equity and venture capital executives, as well as limited partners, to share the
industry highlights of 2012 and make predictions for the coming year.

Terrence Mullen, Partner at Arsenal Capital Partners
The private equity story of the year was: Making sense of the “New Crazy Normal” - PE firms trying to determine
the implications of continuing environmental complexity and how to capitalize on it.
The best strategy/region to invest in this year was: High-growth, high value-add small U.S. industrials companies.
My biggest investment focus in the coming year will be: Building, de-risking, and scaling our portfolio companies
into big winners.
My biggest investment-related worry in the coming year is: The continuing dysfunction of the U.S. government
and its anti-growth, anti-business sentiment.

Len Tannenbaum, CEO of Fifth Street Finance
Story: The criticism of Mitt Romney’s private equity past and the attention he drew to the industry as a whole.
Strategy/region: Mezzanine and second lien loans.
Focus next year: One-stop financings for mid-market companies.
Worry: The continued lack of visibility in the U.S. Congress and a fourth year with no budget.

Ian Sigalow, Partner at Greycroft LLC
Story: Mitt Romney and Bain Capital, although the Hostess bankruptcy is giving that a run for its money.
Strategy/region: Emerging software companies.
Focus next year: The same as last year, particularly e-commerce, video, increasing smart phone utilization, and
cloud computing.
Worry: The existence of fewer “true” Series B investors. You always have to make sure companies have a path
to profitability.

Lamar Villere, Director of Private Equity at Tennessee Consolidated Retirement System
Story: The return of the PIK toggles, the dividend recaps, and the other bubbly leverage tools we thought were left
for dead in 2008.
Strategy/region: Ask me in 12 years.
Focus next year: Finding great GPs with aligned interests.
Worry: Frothy leverage leading to high prices for assets.

Jim Herrington, Private and Public Equity Investment Officer, West Virginia Investment Management Board
Story: One written by Sabrina, no doubt.
Strategy/region: Depends on what your portfolio needs were. I don’t have a one-year focus, especially with PE.
Focus next year: Building a good mix of risk/return across the portfolio. Picking the best managers for the next five
to ten years.
Worry: GPs forcing capital at the end of the investment period.

Rainer Ender, Co-head of Investment Management, Adveq
Story: The questioning of private equity’s role in the wider global economy as part of the U.S. presidential election.
Strategy/region: In the Western world, specialized buyout and turnaround managers and venture capital with a
global view on technology innovation.
Focus next year: Outside the Western world, the firm remains very active in pursuing venture capital and growth
opportunities in strong growing economies, such as China and India.
Worry: With the time horizon of private equity, it remains crucial to work thoroughly and pursue a variety of diverse
strategies with select fund managers.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18



Steve Jurvetson, Managing Director of Draper Fisher Jurvetson
Story: The rise of sectors that were largely considered out of favor, like enterprise and disruptive technology.
Strategy/region: Disruptive technology was a key focus for us this year. We’re seeing innovation at an all-time high.
Focus next year: We want to partner with extraordinary entrepreneurs who are starting the next SpaceX and Box.
Worry: Consolidation of investment capital into the hands of too few.

Jeff Brody, Partner at Redpoint Ventures
Story: The failed IPOs of Facebook, Groupon and Zynga.
Strategy/region: Early stage, rationally priced investments with committed and brilliant entrepreneurs, in companies
developing unique and proprietary technology. Brazil and Silicon Valley.
Focus next year: Offline to online. Industry and consumer marketplaces: new payment systems and financial servic-
es, and transportation, marketing/advertising/merchandising systems.
Worry: Too many maturing companies have disappointed investors, making it more challenging and expensive for
deserving companies to access capital.

Peter Fenton, General Partner at Benchmark Capital
Story: Establishing new valuation heights through the Facebook IPO. Time will be the judge, but it may turn out to
have been a fair price, or proof of the reality distortion of Silicon Valley.
Strategy/region: Ubiquitous mobile, which has transformed every part of our world from transport (Uber), communi-
cation (Twitter), discovery (Yelp), to photos (Instagram) and takeout (GrubHub).
Focus next year: The non-obvious yet awe-inspiring new inventions coming from young entrepreneurs.
Worry: The unprecedented levels of starvation for great engineering and design talent.

Scott Sandell, General Partner at New Enterprise Associates
Story: The resurgence of the U.S. IPO market relative to China and the rest of the world. This is a fundamental shift,
in part a response to cooling sentiment toward emerging markets.
Strategy/region: The enterprise sector was a big silver-lined cloud in the consumer internet tempest. Education
technology has also gained a lot of momentum this year, with well over $600 million invested.
Focus next year: Building enduring businesses, especially enterprise and education.
Worry: The threat of macro headwinds looms large with volatility in Europe, in emerging markets and in Washington.

Scott Weiss, Partner at Andreessen Horowitz
Story: GitHub. The world’s largest source code repository took in $100 million in its first and likely only round of
private financing.
Strategy/region: Technical founders in Silicon Valley, a continuing geographic magnet for the startup ecosystem.
Focus next year: The disruptive power of mobile and cloud is accelerating. There will be 50 new franchises in the
enterprise stack across every application and infrastructure layer, e.g. networking, databases.
Worry: Platform risk. As the world is moving quicker than anyone thought to mobile, we have two gorillas in Google
and Apple that lord over most of the mobile ecosystem.

Yegin Chen, Investment Officer, San Diego County Employees Retirement Association
Story: The vilification of private equity in the U.S. presidential campaign.
Strategy/region: Developing markets, especially in Asia.
Focus next year: Developing markets (both private equity and private debt), especially in Latin America.
Worry: Too much public and private capital flowing into developing markets.

Gregory Garrett, Managing Director, Portfolio Advisors
Story: The fund size resetting in the large/mega buyout space. Many managers that raised significantly larger fund
sizes during the 2006-2008 era are now raising smaller funds and taking longer to raise them.
Strategy/region: U.S. energy opportunities, which have generated significant interest from both public and private
investors. Horizontal drilling and hydraulic fracking have opened new reserve opportunities.
Focus next year: Due diligence on managers that can invest in both equity and debt-oriented securities.
Worry: The further economic slowdown across the developed economies.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18



David Sze, Managing Director at Greylock Partners
Story: Reality sets in for the super-angels/micro VCs.
Strategy/region: The Valley, as usual, despite the grumblings of other regions. Software IP in its new forms of con-
sumer internet services, Software as a Service, Big Data analytics, is where the leverage and value creation is.
Focus next year: Mobile social 2.0.
Worry: Macro swamping micro.

Klaus Ruhne, Partner at ATP Private Equity Partners
Story: Succession in large-cap firms.
Strategy/region: Small cap in the U.S.
Focus next year: Distressed and emerging markets.
Worry: Economy and tax issues related to PE.

David Chen, Co-founder of AngelVest
Story: Awareness about angel investing increased since a year ago and I’ve seen more funds and people doing
early stage than before.
Strategy/region: In China, the tier-1 cities of Beijing and Shanghai and their surrounding areas. Mobile technology,
gaming and internet, e-commerce.
Focus next year: Continued focus on mobile and internet, trying also to do cross-border. Investing in companies
that have developed a presence elsewhere but have a technology that can be used in China.
Worry: Getting step-ups for our companies, and exits. Can our companies become more valuable through additional
funding? And can we get our cash out at some point?

Thomas Kubr, Executive Chairman of Capital Dynamics
Story: 2012 still hasn’t returned the industry to a state that we can call “normal” I expected the industry to come back
.
by 2012 at the latest, but it feels a lot like 2010 and 2011.
Strategy/region: Strong companies in strong markets. The question “what’s the best sector, the best country?” is
nonsensical. Anyone who asks that question still hasn’t fully understood what private equity is about.
Focus next year: Looking for great funds that invest in great companies. Much the same as for the last two decades.
Worry: In Asia, it is the future of China; in the U.S., it is a significant loss of confidence; in Europe, it continues to be
the inability to solve their fundamental institutional problems.

Vincent Huang, Partner at Pantheon Ventures Asia
Story: The Chinese market shifted towards more of an RMB market. It’s become more and more pronounced that
the local market is more important now.
Strategy/region: China continued to be one of the more attractive markets.
Focus next year: China, India and Australia will continue to be the three largest markets we focus on, although India
is falling out of favor a bit because the liquidity hasn’t happened.
Worry: Thing cannot be worse: the European crisis, the U.S. fiscal cliff. These issues aren’t going to be solved any
time soon; they will be ongoing.

Sebastiaan van den Berg, Managing Director, HarbourVest Partners Asia
Story: Southeast Asia has continued to be a big driver of activity in Asia Pacific. A lot of people wanted to increase
their exposure to the new funds and the larger incumbent funds being raised there.
Strategy/region: This year was probably an OK year to invest in Southeast Asia, with lower P/E multiples than in
other growth markets. Australia continued to be a steady buyout market.
Focus next year: I’m optimistic that we’ll see much better performance from China overall next year.
Worry: The situation between China and Japan is a cause for uncertainty. [Japan’s prime minister] Shinzo Abe com-
ing back into government brings the risk that tensions could escalate.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18


NEWS TRENDS Type NT <GO> on the terminal to look at story counts

Carried Interest, Rubenstein Among Most Mentioned Terms in Private Equity News Coverage
Mitt Romney’s Bain Capital Past Sparks Carried Interest Tax Debate
350
Number of Stories Mentioning Carried Interest
Mitt Romney says he
300
has no plans to release Obama proposes to
his tax returns tax the debt used in
250 private equity deals

Bain Capital starts raising The second Obama-Romney
200
buyout fund with $6b target debate is aired, drawing
Mitt Romney’s campaign 65.6m viewers
150 releases his tax returns

100

50

0
1/1/12 2/1/12 3/1/12 4/1/12 5/1/12 6/1/12 7/1/12 8/1/12 9/1/12 10/1/12 11/1/12 12/1/12
Source: Bloomberg

Carlyle Group Founder David Rubenstein is 2012’s Most Mentioned PE Executive
80
Rubenstein says Mitt Number of Stories Mentioning David Rubenstein
70 Romney’s taxes shouldn’t be
criticized
60

50
Rubenstein says Korea,
40
Rubenstein donates $7.5m to Taiwan, Indonesia attrac-
fix the Washington Monument tive markets at Bloomberg
Carlyle’s founders claimed
China event
30 not to want to sell shares in
the firm’s IPO
20 Carlyle raises $671
million in its IPO
10

0
1/1/2012 2/1/2012 3/1/2012 4/1/2012 5/1/2012 6/1/2012 7/1/2012 8/1/2012 9/1/2012 10/1/2012 11/1/2012 12/1/2012
Source: Bloomberg

Bloomberg Brief publishes 18 groundbreaking daily and weekly newsletters.
For the full list of titles visit www.bloombergbriefs.com or BRIEF <GO> on your Bloomberg terminal
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