Mid-Market Private Equity

Date: Tuesday, April 30, 2013 Time: 2:30-3:30 PM

Room: Wilshire Ballroom

Sokoloff

Dry powder in global buyout funds

259

383

443487 487

428393

358 368

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010 2011 2012 YTD 2013

Dry powder, US$ billions

Source: Preqin.

Dry powder in U.S. buyout funds

149

239257

271 272

242

216

190 186

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011 2012 YTD 2013

Dry powder, US$ billions

Source: Preqin.

Dry powder in global buyout funds by size

Source: Preqin.

15% 13% 13% 12% 11% 13% 14% 14% 13%

21% 20% 20% 20% 18% 20% 22% 24% 23%

30%25% 24% 24% 27% 26% 26% 27% 28%

35% 42% 42% 45% 43% 41% 38% 35% 36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012 YTD

2013

$4,500M+

$1,500M-

$4,500M

$500M-

$1,500M

Under

$500M

Dry powder, percent

Private equity investment holding time – median holding period

by exit year

4.16

3.67 3.573.84 3.93

4.744.94

5.37

0

1

2

3

4

5

6

2005 2006 2007 2008 2009 2010 2011 2012

Median holding period by exit year

Source: Pitchbook.

Secondary buyouts as a percentage of total buyouts

7.7%

9.0%8.2%

6.5%

4.1%

10.9%

10.8%

17.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2005 2006 2007 2008 2009 2010 2011 2012

Percent of total buyouts

Source: Pitchbook.

Median returns for public pension funds by asset class

0%

2%

4%

6%

8%

10%

12%

14%

Private Equity Fixed Income Real Estate Listed Equity Total Portfolio

Median returns

Sources: Preqin, Bain & Company.

Global buyout deal composition by year

0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

>10B 5B-10B 1B-5B 500M-1B 100M-500M <100M

Buyout deal value, percent of global buyout value

$500M-$5B=66% of deal value

Sources: Preqin, Bain & Company.

Leveraged finance volume

$94 $144 $144$69

$164$287

$218$346

$295

$480 $535

$157 $77

$234 $375

$465

$389

$624 $679

$226 $241

$521 $593

$811

-$50

$50

$150

$250

$350

$450

$550

$650

$750

$850

2005 2006 2007 2008 2009 2010 2011 2012

Leveraged Loan High Yield

Volume, US$ billions

Sources: S&P Capital IQ LCD.

Average pro forma adjusted debt/EBITDA

5.3x 5.4x

6.2x

4.9x

4.0x

4.7x5.2x 5.3x

0x

1x

2x

3x

4x

5x

6x

7x

2005 2006 2007 2008 2009 2010 2011 2012

Average pro forma adjusted debt/EBITDA

Sources: S&P.

Acquisition financings as a percent of total financings

23.5%

43.6%

35.6%33.2%

11.7%10%

15%

20%

25%

30%

35%

40%

45%

50%

2009 2010 2011 2012 YTD 2013

Percent of total financings

Source: S&P LCD.

Global private equity fundraising

145

225 243234

109

77 79 91

35

198

243 243229

128117 119 117

32.1

0

50

100

150

200

250

300

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011 2012 YTD

2013

Fundraising, US$ billions Number of funds

Source: Preqin.

U.S. PE fundraising by fund size

20%12% 12% 10% 8%

29%14% 11%

15%

13% 9% 10% 9%

28%

18%11%

43%

44%32% 32% 39%

43%

52%

52%

22%31%

46% 48% 44%

0%16%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012

$5B+

$1B-$5B

$500M-$1B

Under

$500mm

Fundraising by fund size

Source: Pitchbook.

Volpert

Purchase price multiples

10.0x

11.2x

9.4

9.6

9.8

10

10.2

10.4

10.6

10.8

11

11.2

11.4

Mid cap LBOs Large cap LBOs

Average EBITDA purchase multiple

Source: Capital IQ.

Leverage multiples

3.4x

4.3x

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Mid cap LBOs Large cap LBOs

Total debt/LTM EBITDA at acquisition

Source: Capital IQ.

Fund performance

1.49x

1.39x

1.3

1.35

1.4

1.45

1.5

Middle market funds Large cap funds

Average fund multiple11.8

10.0

9

9.5

10

10.5

11

11.5

12

Middle market funds Large cap funds

Average fund net IRR, percent

Source: Preqin.

Fund performance

0%

5%

10%

15%

20%

10-Year 15-Year 20-Year 25-YearU.S. Buyout Funds <$350 million U.S. Buyout Funds$350 million - $1 billion

U.S. Buyout Funds $1 billion - $3.5 billion U.S. Buyout Funds > $3.5 billion

S&P 500

End-to-end pooled return (net to LPs), percent

Source: Cambridge Associates.

Carveouts were popular in the U.S.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Private

Secondary

Carve -out

Public-to-private

U.S. buyout deal value

Sources: Bain US LBO deal database, Bain & Company Global Private Equity Report 2013.

Notes: Represents control buyout transactions by US-based firms; includes closed deals only; represents year deals were closed

Boom-year vintage funds have yet to return significant

capital to their LPs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

100%+ DPI

80-<100%DPI

60-<80%DPI

40-<60%DPI

20-<40%DPI

0-<20%DPI

Proportion of distributed to paid-in capital (DPI by number of buyout funds

Sources: Preqin; Bain analysis.

Notes: Includes all buyout funds globally of any size that have held a final close; excludes finds with insufficient data; based on most recent performance, primarily as of Q2 2012

PE funds continue to hold most portfolio assets at values

below what they needed to earn carry

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percent of deals (by count)

>3X

2-3X

1.5-2X

1-1.5X

0.5-1X

0-0.5X

Valuation of unrealized deals

Source: Bain analysis

Notes: Fund vintages in sampe range from 2004-08; analysis includes unrealized investments and partially realized investments; valuation multiples are before payment of fees;

PE firms have different policies regarding how they report the value of portfolio investments.

Most of the capital committed to PE has come from

traditional sources

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1

Other

Government Agencies

Corporate Investors

Endowement Plans

Foundations

Family Offices

Banks & Investment Banks

High-Net-Worth Individuals

Insurance Companies

Private Sector PensionFundsFund of Fund Managers

Public Pension Funds

Percent of capital commited to PE funds, type

Sources: Bain & Company Global Private Equity Report 2013, Preqin 2012 Global Annual Report (FIG. 11.10)

Note: Year of fund close 2009-2011.

Sponsor-to-sponsor deals perform well compared with other

deal types and are significantly less risky

Sources: Bain & Company Global Private Equity Report 2013, data from HEC Paris; analysis by PERACS PE Analysis and Track Record Certification

analysis includes 101 sponsor-to-sponsor deals and 660 other deals, all fully realized.

0%

5%

10%

15%

20%

25%

30%

35%

Pre-2004 Since 2004

Sponsor-to-sponsor Other

Deal alpha (PERACS alpha)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Pre-2004 Since 2004

Sponsor-to-sponsor Other

Deal rate of return (PERACS rate if return)

All funds generated both good deals and bad, but the top

performers produced more winners and fewer losers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Top quartile 2nd Quartile 3rd quartile 4th quartile

>10X

5-10X

2-5X

1-2X

At cost

<1X

Distribution of gross deal returns for sample of buyout funds by quartile

Data: Bain & Company Global Private Equity Report 2013, HEC Buyout Database.

For public pension funds, PE has outperformed other asset

classes over the long term

6.4% 6.4%

12.5%

7.1% 6.7%

0%

2%

4%

6%

8%

10%

12%

14%

Listed Equity Fixed Income Private Equity Real Estate Total InvestmentPortfolio

Median returns for public pension funds

Source: Bain & Company Global Private Equity Report 2013, Preqin.

Note: Data based on review of public pension funds in North America and Europe.

Reynolds

U.S. buyout deal value

0

100

200

300

400

500

600

1980 1984 1988 1992 1996 2000 2004 2008 2012

1990-1999GDP growth and multiple

expansion

2000-2007Liquidity surge and

credit bubble

U.S. buyout deal value, US$ billions

1980-1989Inefficiency of

conglomerates and flourishing junk bond market

Source: Bain U.S. LBO database.

U.S. buyout deal value: 2004-2012

0

100

200

300

400

500

600

US$ billions Public-to-Private Carve Out Sponsor-to-sponsor Private

Source: Bain U.S. LBO database.

U.S. mid-market M&A deal overview

Despite a strong fourth quarter, mid-market M&A activity for

2012 ended the year approximately flat in both value and

volume compared to 2011

Private equity continued to be active in the marketplace as the

volume and value of deals involving financial buyers increased

14.4% and 20.4% respectively in 2012

Source: Thomson Financial.

Middle market deal flow

0

100

200

300

400

500

600

700

800

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012

Capital invested, US$ billion Number of deals closed

Investment by deal size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

>$2.5B

$1-2.5B

$500M - 1B

$100-500M

$25-100M

<$25M

Investments (amount) by deal size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012

Investments (count) by deal size

Middle Market deals represent more than 95% of total deals closed in 2012, accounting for

about half of total deal value. Source: Pitchbook.

Transaction size

4.7 5.3 5.84.5 4.9 4.2 4.7 4.1 4.1

2.4

3.23.2

4 3.83.5

3.3 4.13.2

7.1

8.59 8.5 8.7

7.78 8.2

7.3

0

1

2

3

4

5

6

7

8

9

10

Multiples of U.S. buyouts

5.4 5.5 5.3 5.4 5.66 6 6.1 5.9 6.1

6.7 6.5 6.67.1 6.86.7

7.2

6.2

7.8 7.5

0x

1x

2x

3x

4x

5x

6x

7x

8x

9x

2008 2009 2010 2011 2012$10-25 mm $25-50 mm

$50-100 mm $100-250 mm

EBITDA multiples by transaction size

2012 EBITDA multiples for private equity transactions increased year-over-year for

transactions < $50M, but decreased slightly for transactions >$50M Source: Pitchbook.

Historical debt & equity contribution

42.70% 47.20% 52.60% 51.00% 48.20% 47.10%

13.70%16.00%

18.00%12.10% 14.80% 15.60%

43.60% 36.80% 29.40% 36.90% 37.00% 37.30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012Equity Sub Debt Senior Debt

Percentof total capital structure

Equity as a % of total capital structure at 47.1% in 2012

Source: Pitchbook.

Visible demand for debt capital

$0

$500

$1,000

Refi(1) Private Equity(2)

Visible Demand

Leveraged finance demand, US$ billions

0

50

100

150

200

250

2014 2015 2016 2017 2018

Debt maturities: leveraged loans, US$ billions Refinancing Demand: Nearly $564

billion in leveraged loans are scheduled to

come due in the next five years.

Private Equity Demand: Over $348B of

private equity funds sit idle awaiting

deployment, which indicates that $443B of

debt will be needed to fund transaction

Visible Demand: Refinancing and private

equity needs for debt capital are over $1

trillion over next 5 years

Source: Pitchbook.

Collapse of the parallel banking market

13 14 10 1117

26

52

9890

12

1 313

54

26

0

20

40

60

80

100

120

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Global CLO issuance, US$ billions

Supply of capital drastically reduced; CLOS provided 55% of all lending in 2006

– 2007

Industry participants exit

Revolver Term B

Term A Last Out

Senior Tranche

B

Common

Equity

Preferred

Equity

Sub Debt

w/ Warrants

Sub Debt

Fixed Rate

Only

Second

Lien Loans

LIBOR

+250

LIBOR

+300

LIBOR

+350

LIBOR

+400 to 800% 15 -17% 17 - 19% 19 – 22% 23%+

Enterprise

Value Second

Lien Loans

Bank Senior Debt Mezzanine Debt Private Equity

Traditional

Banks

Finance

Companies BDCs

Hedge

Funds

Insurance Companies

Mezzanine Funds

PEF

Non- Bank Senior Debt

Average debt multiples

4 3.8 3.9 4.1 4.2 4.2 4.6 4.3 4 4.2 4.5 4.8

0

2

4

6Mid-market loans, average debt multiple

4.2 4.14.7 4.5 4.7 4.9

4.3 4.6 4.8 4.65.2 5.7

0

2

4

6Large corporate loans, average debt multiple

On average, debt multiples for large corporate loans exceed middle market loans by

approximately 0.5x

Average debt multiples – LBO loans

4.44.8

5.7 5.9

0x

1x

2x

3x

4x

5x

6x

7x

8x

Q1 2012 Q2 2012 Q3 2012 Q4 2012

Large corporate, average debt multiples

4.2 4.4 4.45

0x

1x

2x

3x

4x

5x

6x

7x

8x

Q1 2012 Q2 2012 Q3 2012 Q4 2012

Mid-market, average debt multiples

For LBOs, average debt multiples for large corporate loans exceed middle market loans by

approximately 0.7x

Summary of market terms

Deal component April 2013 April 2012

Cash flow Senior Debt

(Debt/EBITDA)

<$8MM EBITDA 1.50-2.50x

>$10MM EBITDA 2.00-3.00x

>$25MM EBITDA 2.50-4.0x

<$10MM EBITDA 1.50-2.25x

>$15MM EBITDA 2.50-3.50x

>$25MM EBITDA 2.75-4.00x

Total Debt Limit (x EBITDA):

<$8MM EBITDA 3.00-4.25x

>$10MM EBITDA 3.50-4.50x

>$25MM EBITDA 4.00-5.00x

<$10MM EBITDA 3.00-4.00x

>$15MM EBITDA 3.50-4.75x

>$25MM EBITDA 4.00-5.00x

Senior Cash Flow Pricing: L+3.50%-4.50% (bank)

L+4.50%-6.50% (non-bank)

L+3.50%-4.50% (bank)

L+4.50%-6.00% (non-bank)

Second Lien Pricing (Avg): <$10MM EBITDA L+9%-12% (1% floor)

>$15MM EBITDA L+7.5%-9% (1% floor) L+8%-10%, (1% floor)

Subordinated Debt Pricing:

<$10MM EBITDA 14%-17%

>$15MM EBITDA 13%-15%

>$20MM EBITDA 11%-14%

<$10MM EBITDA 14%-17%

>$15MM EBITDA 13%-15%

>$20MM EBITDA 12%-14% Sources: SPP Capital.

Summary of market terms

Deal component April 2013 April 2012

“One Stop” Pricing <$8MM EBITDA 10%-12%

>$10MM EBITDA L+7.5%-9%

8.5%-11.5%

L+8%-9% (1% floor)

Warrants Feature:

Coupon only deals the norm in the market

absent compelling circumstances (>4.5x

leverage, sub-$7.5MM EBITDA,

challenged/distressed credits)

Coupon only deals the norm in the market

absent compelling circumstances (>4.5x

leverage, sub-$7.5MM EBITDA,

challenged/distressed credits)

LIBOR Floors: No LIBOR Floor for most bank deals

1.0%-1.5% Libor for non-bank deals

0.0%-1.0% for most bank club deals

1.0%-1.75% for syndicated or non-bank

deals

Mezzanine Opt. Pre-

Payment (first 3 years):

Highly negotiated;

Coupon-only deals: No-Call 1-2 years; (SBIC

5,4,3,2,1)

Highly negotiated;

Coupon-only deals: No-Call 1-2 years

(SBIC 5,4,3,2,1)

Minimum Equity

Contribution:

25%-30% (incl rollover); minimum 20.0%

new cash in 25%-35%

Sources: SPP Capital.

Historical debt limit

0x

1x

1x

2x

2x

3x

3x

4x

4x

5x

2010 2011 2012 2013

Upper Bound Lower Bound

Historical CF senior debt (x EBITDA)

0x

1x

2x

3x

4x

5x

6x

2010 2011 2012 2013

Upper Bound Lower Bound

Historical total debt limit (x EBITDA)

Senior debt limit upper bound peaks at 4x with the total debt limit peaking at 5x

Historical minimum equity contribution

Minimum equity contribution upper bound peaked at 40% back in 2010 and has been constant

at about 35% since February 2012

0%

10%

20%

30%

40%

50%

60%

Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13

Upper Bound Lower Bound

Historical minimum equity contribution

Background

U.S. companies are accumulating hoards of cash

0

20

40

60

80

100

120

140

2000 2012US$ billions

+48B

+47B +43B

+29B +29B

+7B+19B +13B

+133B

+8B

Source: Bloomberg.

Acquiring companies are holding large amounts of cash Percent of total current assets, S&P 500 companies

20

25

30

35

40

45

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Q4 2012: 42%

Q2 2008: 32%

Percent

Source: Bloomberg.

Earnings growth rates favor mid caps

-300

-200

-100

0

100

200

300

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Midcap

Large cap

Small cap

Earnings per share growth, 1995=0

Source: Bloomberg.

U.S. private equity firms are holding high levels of

uncalled capital

0

200

400

600

800

1,000

1,200

2000 2002 2004 2006 2008 2010 2012

Uncalled commitments (dry powder), US$ billions

Source: Pitchbook.

Global private equity firms are holding high levels of

uncalled capital

186 177 258382 443 487 485 427 391 361

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Venture Capital

Real Estate

Other

Mezzanine

Growth

Distressed PE

Buyout

Global private equity uncalled funds, US$ billions

Source: PEGCC.

Target companies are relatively underpriced

7.1

8.5

9

8.5

8.7

7.7

88.1

7.3

7

8

9

2004 2005 2006 2007 2008 2009 2010 2011 2012

Buyout purchase price multiples, valuation/EBITDA

Source: Pitchbook.

Investors focused on smaller mid-market deals

24 29

28 24

0

10

20

30

40

50

60

70

80

90

100

2006 2007 2008 2009 2010 2011 2012

>$2.5B

$1B-$2.5B

$500M-$1B

$100-$500M

$25-$100M

<$25M

Number of investments by deal size, percent of total deal count

Source: Pitchbook.

Mid-market composed the majority of deal volume

8 10

39 38

32 31

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009 2010 2011 2012

$2.5B+

$1B-$2.5B

$500M-$1B

$100M-$500M

$25M-$100M

Under $25M

Deal volume by deal size, percent of total volume

Source: PEGCC.

LPs continue to strongly favor the mid-market in 2013

0 10 20 30 40 50 60 70

U.S. mid-market buyoutsGrowth capital funds

U.S. small-market buyoutsEuro mid-market buyouts (country-focused)

Euro mid-market buyouts (pan-Euro)Credit strategies

Asian country-focused fundsDistressed debt funds

Energy fundsMezzanine/credit-focused funds

Infrastructure fundsPan-Asian fundsSecondary funds

U.S. venture capitalU.S. large buyouts

Restructuring fundsFund-of-funds

Emerging markets (ex-Asia)Mega buyout funds

Percent of respondents

Source: Probitas.

Notes: Indicates which sectors institutional investors will focus the most attention upon.

Record low ten-year treasury yields

0

2

4

6

8

10

12

14

16

18

1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012

Average: 6.7 percent

Ten-year Treasury yield, percent

Source: Bloomberg.

Record low high-yield bond yields BofA Merrill Lynch U.S. High Yield Master II

4

8

12

16

20

24

1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Yield, percent

Average: 10.9%

Source: Bloomberg.

U.S. firms gained easier access to debt and use of leverage

40

45

50

55

60

65

70

2005 2006 2007 2008 2009 2010 2011 2012

Median debt used in buyouts, percent

2012: 57%

Source: Pitchbook.

Usage of subordinated debt surged

0.6 0.8

3.7 3.3

0

1

2

3

4

5

6

7

8

9

10

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Other

Equity/EBITDA

Subordinated Debt/EBITDA

Senior Debt/EBITDA

EBITDA multiple, by contributions

Source: Deloitte.

Note: Deals under US$ 500 million

Equity contributions to mid-market LBOs

32

46

41

30

32

34

36

38

40

42

44

46

48

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Percent of total mid-market LBOs

Source: Deloitte.

Note: Deals under US$ 500 million

U.S. mid-market M&A value by industry

Source: Deloitte.

Note: Deals less than US$ 500 million, Products* refers to consumer products, while Staples** refers to consumer staples

0

5

10

15

20

25

30

35

Value, US$ billions

20122011

Purchase price multiple remained flat

6.97.7

8.7

7.57.9

65.4

7.7 7.6 7.6

0

1

2

3

4

5

6

7

8

9

10

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Median enterprise value to EBITDA multiple

Source: Deloitte.

Note: Deals less than US$ 500 million,

Private equity continues to be active in M&A marketplace

Source: Deloitte.

Note: Deals less than US$ 500 million,

0

5

10

15

20

25

0

2,000

4,000

6,000

8,000

10,000

12,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Number of deals Percent of total deals

Percent of deals involvingfinancial buyers

Mid cap firms have outperformed small and large cap firms

-100

-50

0

50

100

150

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013

Total return, percent, 2000=0

Midcap

Large cap

Small cap

Source: Bloomberg.

Distressed PE and buyout strategies have outperformed

the broader private equity market

Source: Prequin.

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Distressed

Venturecapital

S&P 500

Fund of funds

Buyout

Real estate

All PE

Private equity fund types, performance, Dec 2000 = 100

U.S. trend in 2012 was again towards smaller transactions

0

20

40

60

80

100

120

140

160

2007 2008 2009 2010 2011 2012

Median deal sizes, US$ millions

PE growth

Buyouts (excluding add-ons)

Source: Pitchbook.

Secondary buyouts exceed corporate acquisitions

as an exit strategy

0

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010 2011 2012

Exit strategies, by use

Corporate acquisition

Secondary buyouts

IPO

Source: Pitchbook.

More firms are sourcing deals from one another

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007 2008 2009 2010 2011 2012

Secondary buyouts, percent of total buyouts

4%

17%

Source: Pitchbook.

Foreign PE firm investments in the U.S. reach a record high

Source: Pitchbook.

0

1

2

3

4

5

6

7

8

9

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Buyouts by foreign private equity firms, percent of total U.S. buyouts

7.6%

Exits vs existing inventory stacked chart

Source: Pitchbook.

-1

0

1

2

3

4

5

6

7

2006 2007 2008 2009 2010 2011 2012

Inventory

Exits

Inventory of PE-backed companies vs number of exits, thousands

Company inventory continues to grow, but at a slower pace

0

100

200

300

400

500

600

700

800

900

1000

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Inventory by investment year

Source: Pitchbook.