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2007 European Private Equity Activity Survey

Prof. Stefano Caselli, member of Governing Body of PEREP_Analytics™ Professor of Banking and Finance, Bocconi University Milan. 2007 European Private Equity Activity Survey. Methodology.

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2007 European Private Equity Activity Survey

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  1. Prof. Stefano Caselli, member of Governing Body of PEREP_Analytics™ Professor of Banking and Finance, Bocconi University Milan 2007 European Private Equity Activity Survey

  2. Methodology • Data collected via survey questionnaires and reliable public sources (coverage rate by number of players: 60%) • Europe: for deals, it is defined either by the location of PE firm or of target as referenced in the source; for fundraising it covers funds managed from Europe or 100% targeted to Europe; • Fundraising: only formal closings included with committed amount; • Investments: only equity value captured, debt also IF provided by PE funds (bank leverage excluded); • Divestments: measured at amount at cost divested (not proceeds).

  3. Evolution Activity Flows Source: PEREP_AnalyticsEurope = location of PE firm

  4. 2007 Fundraising – Profile Incremental amount raised for each 2007 closing Source: PEREP_Analytics

  5. 2007 Fundraising – Profile Incremental amount raised for each 2007 closing Source: PEREP_Analytics

  6. 2007 Fundraising – Profile Full amount raised at 2007 final closings for independent funds Source: PEREP_Analytics

  7. Typology of LPs behind the 2007 fundraising Source: PEREP_Analytics

  8. Location of LPs behind 2007 Fundraising 4.3%  North America 26.4%  21.3% 5.5% 5.8% 12.2%  Rest of World 14.3%  0.9%  AustralAsia 9.3% 

  9. 2007 Fundraising by Country of Management 6.3%  56.2%  4.2%  10.5%  2.2%  20.6% 

  10. European investments at €68.3 Billion (Equity only from private equity funds) Source: PEREP_Analytics Europe = location of PE firm

  11. INVESTMENTS BY STAGE By amount inv By number inv Growth Rate Amt 2007% share 2006 % share 2007 % share 2006 % share 07/06 Mega buyouts 17.7% 26.1% 0.5% 0.4% -31% Large buyouts 20.4% 10.2% 1.0% 0.4% +103% Mid - market buyouts 32.5% 25.9% 7.9% 3.7% +27% Small 6.8% 6.8% 18.6% 18.4% +1% All buyouts 77.4% 68.9% 27.9% 22.8% +11% Replacement capital 5.7% 5.2% 1.8% 3.6% +11% Expansion 12.9% 15.4% 35.6% 41.1% -16% Early stage 4.1% 10.5% 34.6% 32.5% -61% Total in % 100.0% 100.0% 100.0% 100.0% Total in numbers (€ mil) 68,500 67,800 6,160 10,318 Investments by stage of financing Source: PEREP_Analytics; Europe = location of target

  12. Investments by Country of Management 7.8% 50.8% 6.5% 13.6% 1.5% 19.9%

  13. European Divestments by Segment Venture Buyouts # div # div € 1.4 bn € 6.2 bn 364 226 € 4.0 bn € 0.6 bn 496 278 € 0.5 bn € 3.7 bn 65 265 2007 Top Exit routes: Trade Sale Repayment of principal loans Source: PEREP_AnalyticsEurope = location of target Sale to another PE house

  14. 2007 2006 2007 2007 2007 2007 Am. N° Am. N° Am. N° Am. N° Am. N° Am. N° 10.7 17.3 10.7 18.7 18.4 21.6 9.1 7.0 24.8 13.7 3.4 4.9 5.6 19.0 8.8 24.0 14.6 24.5 3.8 5.9 13.3 15.1 5.1 7.9 12.1 11.4 13.8 8.7 17.4 12.8 11.0 8.0 8.2 9.0 12.2 6.5 13.5 7.7 15 9.7 6.2 5.0 14.9 14.2 10.9 8.8 17.3 14.8 10.0 6.7 - - 6.0 5.1 10.8 10.6 10.4 7.8 7.4 12.3 13.4 11.4 16.2 8.5 9.5 8.2 14.2 18.9 8.5 12.6 20.6 19.8 12.4 7.7 15.3 13.5 7.1 4.9 13.5 14.3 10.3 8.2 10.1 13.8 4.7 4.2 2.3 2.5 10.5 4.8 3.6 2.9 1.1 2.6 4.3 2.0 Main Sectors All Private Equity Investments VC inv. Buyout inv. VC div. Buyout div. In percentages Life sciences Computer and consumer electronics Communications Consumer goods and retail Consumer services: other Business and industrial products Business and industrial services Energy and environment Source: PEREP_AnalyticsEurope = location of target

  15. Conclusions • Despite record fundraising in 2006 and difficult market conditions in second half of 2007, appetite of investors towards the asset class remains undeterred as reflected by the 2007 fundraising figures; • What drives private equity deal making is mid-market buyouts by amount invested and expansion deals by number of investments; • Venture backed companies are exited mainly by trade sale, while buyout backed companies are sold mainly to other private equity firms. Main sectors divested are life sciences for venture-backed companies and business and industrial products for buyout backed companies in 2007. www.perepanalytics.eu

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