Preqin Private Equity Spotlight January 2011

Dear Spotlight reader
We are very pleased to be able to offer a 10% discount for Spotlight readers for places at the SuperReturn conference in
Berlin 28 February 3 March.
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a one-stop learning and networking shop, packed with interaction and high value face-to-face opportunities. 1300 global
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Ill be giving a State Of The Union address in the morning during the Secondaries Summit, and hope to see you there.
Kindest regards
Mark OHare

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Private Equity Spotlight
January 2011
Fund Manager Spotlight:
How has the number of private equity
rms in operation changed over recent
years? We investigate.
Page 6.
Performance Spotlight:
Public pension funds are among the most
experienced types of investor in the asset
class; we look at the returns that they
have been achieving.
Page 8.
Deals Spotlight:
We examine deals and exits in 2010,
both of which have recovered to pre-crisis
levels.
Page 9.
Investor Spotlight:
Using information from recent interviews
with investors; we look at the investor
outlook for private equity in 2011.
Page 13.
Secondaries Spotlight:
What is the likelihood of investors buying
and selling on the secondaries market in
the next 24 months?
Page 17.
Conferences Spotlight:
The months private equity events.
Page 18.
Investor News:
All the latest news on private equity
investors.
Page 22.
Feature
2011: A Year of Recovery?
Although fundraising hit its lowest point in six years, the value of deals made in the year
recovered to pre-crisis levels. As capital once again starts to ow through the industry, we
examine the implications for the asset class in 2011, and highlight some of the key trends for
the new year.
Page 4.
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Welcome to the latest edition
of Private Equity Spotlight, the
monthly newsletter from Preqin
providing insights into private
equity performance, investors and
fundraising. Private Equity Spotlight
combines information from our online
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Investor Intelligence, Fund Manager
Proles, Funds in Market, Secondary
Market Monitor and Deals Analyst.
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January 2011
Volume 7 - Issue 1
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4
2010 saw activity in the private equity-backed buyout market
recovering to reach the kind of levels not seen since the onset of the
nancial crisis. Q4 in particular represented a very strong quarter,
with $64bn of new deals announced the highest since Q2 2008
and $72bn in exits the highest quarter of all time. 2011 is already
continuing on similar path, with high-prole deals such as Thomas H.
Lees buyout of Acosta and Advents buyout of The Priory Group in
the pipeline, and a number of high prole IPOs and other exits also
slated.
The story in the fundraising market was less encouraging, with the
$225bn raised over the course of the year being the lowest total
since 2004. However, fundraising is to an extent a lagging indicator.
Funds, especially in the current environment, take some time to
raise, and the dearth of new vehicles achieving a nal close is more
a reection of lacking institutional investor condence in 2009 than
anything else. Although the 2009 fundraising gures are higher,
a considerable amount of funds that held a nal close during that
period gathered the majority of their commitments before Lehman
Brothers went under in late 2008.
With institutional investors remaining reluctant to commit new capital,
the difculties seen in the fundraising market of 2009 led to many
prominent fund managers delaying fundraising efforts until investor
sentiment and cash ow became more positive. As a result, although
the number of funds out there remained relatively high, many of the
larger, more established rms were holding back, and the number of
funds on road fell.
The success stories of rms such as Inexion (raising 375mn within
four months of launch), and Atlas Capital Holdings (closing nearly
50% above target on $365mn) show that for rms with strong past
performance and a well-informed, strong investor base, fundraising
was indeed possible, and in quick time at, or even above, targeted
amounts. This is certainly encouraging news for a number of other
rms planning to launch funds this year.
The signicant pick-up in activity is leading to capital now being
pulled through the private equity cash cycle once again, and as a
result, it will be necessary for investors to make new investments
if they wish to maintain their allocations to the asset class. In
December 2010 we interviewed 100 leading LPs from around the
world, revealing that not only do the majority of investors intend to at
least maintain their exposure to private equity (96%), 37% actually
expect to increase allocations in the longer term. In terms of their
planned activity, 78% expect to match or exceed 2010 investment
levels, with 45% expecting to commit more capital in 2011 compared
with 2010.
Of course, the other effect of the increase in investment activity is that
many fund managers are now running low on
dry powder, and will need to hit the road in order
to gain the new commitments that will allow
them to invest in new companies in the current
cycle. We have already seen major rms such
as BC Partners, Vestar Capital Management
and Berkshire Partners initiating new fundraising
activity, while other signicant rms including
Providence Equity Partners are also primed to
launch.
In recent months the total number and value of
funds on the road has increased following two
years of slow decline, and this total is certain
to increase further in 2011. Although there are
more investor dollars out there, they are being
spent with more care and consideration than
ever before, and there are still nowhere near
enough to satisfy the ambitions of the 1,600
rms seeking $600bn worldwide.
Consolidation in the private equity industry is
a long process, and it is only now that the total
number of active private equity rms is starting
to decline in certain sectors, as rms that last
raised capital at the turn of the millennium reach
the tail-end of their lifecycles and slowly close
up shop, with not so many new rms being
established to replace them. With the last major
fundraising cycle being seen between 2005 and
2008, the majority of rms that are not able to
raise new capital in the current market will still
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The fnal fundraising fgures for 2010 were the lowest since 2004, but Tim Friedman takes a look at the
potential for recovery in 2011.
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continue to operate for a number of years yet some coming back
to market in the future while others only continuing to operate as
long as they still hold an investment portfolio.
Those that are able to communicate strong past performance and
a compelling investment strategy for the current environment will
nd fundraising to be possible, but those entering the market will
nd an investor community which has changed signicantly since
the bumper conditions of four years ago.
Investors are looking to reduce the number
of existing relationships they hold, and will be
scrutinizing re-ups with great care. Nothing is
guaranteed.
Looking at geographies, Asia and other
emerging markets such as Latin America will
grow to represent a major part of the portfolio
for a large number of institutions. European
managers had a particularly challenging year
in 2010, and with AIFM legislation serving
to add additional burden to managers and
investors alike, 2011 could again present
difculties for the industry. US managers
should see conditions steadily improving as
certain institutions look to put capital to work
for the rst time since 2008.
In terms of strategy, mid-market funds,
distressed vehicles, and growth and
development capital funds will represent
popular strategies, and we are also likely to
see up an uptick in secondaries activity as
fund prices stabilize and specialist players
such as Coller and Lexington raise additional
capital to add to the signicant reserves
gathered by other prominent rms in recent
years.
We have already seen an increase in
the levels of capital being called up and
distributed, and we expect such activity to
remain at a relatively high level as rms
put remaining dry powder from older
vintages to work and exit some of the
investments made during the previous
cycle. The recovery in fund NAVs is
expected to continue, and notwithstanding
some casualties, we expect condence in
private equity as an asset class to return
in 2011.
Data Source:
2011 Preqin Global Private
Equity Report
Equity Report provides the ultimate
guide to the latest occurrences in
the global private equity market.
For more information, or to view
sample pages, please visit: www.
preqin.com/reports
As outlined earlier in this edition of Spotlight,
the economic downturn has continued to affect
private equity fundraising, with the 2010 gures
down on the previous year. The effect of the
downturn can also be seen on the number of
new rms establishing private equity funds for the
rst time. Fig. 1 shows the number of new fund
managers joining the private equity sector each
year (calculated using the vintage of their rst fund
to represent their year of establishment). Any rms
that have not raised a fund in the past 10 years are
considered to have become inactive. The gures
only include rms managing commingled private
equity funds, and do not include private equity rms
that do not raise distinct private equity funds (i.e.
those that manage corporate or personal capital and
those that manage third-party capital without pooling
into commingled private investment vehicles).
The graph shows that the total number of active
fund managers in the industry fell for the rst time
ever during 2010, to approximately 4,130, down
from the 2009 gure of around 4,180. This is as a
result of both fewer new rms entering the industry
due to the recent downturn and a signicant number
of rms becoming inactive due to their most recent
fund being of a 2000 vintage, particularly venture
capital rms established during the dot-com boom
that have not been successful in raising any further
venture funds since.
The number of new fund managers joining the
sector peaked in 2007, with over 400 new rms
managing funds with this vintage. Each year since
has witnessed a steady decline in the number
of new rms, with just over 130 fund managers
entering the industry in 2010. The 2010 gure
only includes rms that have reached one or more
interim closes on their debut funds in order to
begin making investments. There are a number of additional rms
raising their rst funds that have yet to reach an initial close. Given
the current state of the private equity fundraising market, it is likely
that some of these rms will be forced to abandon their fundraising
efforts. More than 180 rms became inactive as of 2010, exceeding
the number of new rms joining the industry and resulting in the rst
fall in the total number of active private equity fund managers.
Number of Active Buyout and Venture Firms over Time
Figs. 2 and 3 show the number of active venture and buyout
fund managers over time respectively. Fig. 2 demonstrates that
the decrease in the total number of active venture rms in 2010
accounts for most of the fall in the total number of active rms in
the private equity industry as a whole over the year, with more than
140 venture rms having become inactive as a result of having last
raised a fund during the dot-com era. Just under 50 venture rms
joined the sector in 2010, meaning that the total number of active
venture rms has fallen by around 100 since last year.
Fund Managers
The Number of Firms in Existence
Download Data
The economic downturn has not only afected private equity fundraising but, as Sam Meakin investigates,
it has also resulted in the frst ever decrease in the number of private equity frms in existence.
Number of Active Private Equity Firms
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Fig. 1: Number of Active Private Equity Firms over Time
(by Vintage of First Fund Raised)
Source: Preqin
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Fig. 2: Number of Active Venture Firms over Time
Source: Preqin
N
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F
i
r
m
s
Leveraged Buyouts
International Venture Capital
Financial Regulatory Reform
Distressed Investing
Private Equity in Emerging Markets
Venture Capital
Value Creation
Middle Market
Private Equity in Europe
Limited Partner Perspectives
Glenn Hutchins
Co-Founder and Co-Chief Executive
Silver Lake
Howard Marks
Chairman
Oaktree Capital Management
Tom Stemberg
Managing General Partner
Highland Consumer Fund
Keynotes
For information & registration: www.whartonpeconference.org
Panels
Sponsors
Fund Managers
The Number of Firms in Existence
Download Data
In comparison, the total number of active buyout
fund managers has only decreased slightly, more as
a result of the very small number of new rms rather
than a particularly large number of rms dropping
out and becoming inactive, as Fig. 3 shows. The
number of new buyout rms joining the sector each
year peaked in 2007 at more than 70 and has fallen
steadily each year since, with less than 20 in 2010.
The other rm types follow similar patterns, with
the annual number of new rms having fallen in
recent years and the total number of active rms
stabilizing. The one exception to this is private
equity infrastructure rms, where the number of
new rms in 2010 is higher than the 2009 gure,
and few rms have become inactive as the sector is
relatively new.
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Fig. 3: Number of Active Buyout Firms over Time
Source: Preqin
N
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Data Source:
2011 Preqin Private Equity Compensation and Employment Review
A source of reliable and accurate information on the latest trends in private equity compensation and employment is a vital tool
enabling decision-makers and advisors to examine existing compensation practices against wider industry benchmarks.
For more information, or to view sample pages, please visit: www.preqin.com/compensation
Public pension funds are important and experienced investors in
private equity and on average allocate 5.5% of their capital to the asset
class. Preqin data shows that the 20 largest public pension funds have
allocated a total of $224 billion to private equity, and their high capital
reserves make fund managers keen to attract this type of investor.
Private equity investments provide diversity within the pension funds
investment portfolio, and have the potential to yield high returns.
Preqin examined the nancial statements of over 150 public pension
funds from North America, Europe and the UK to ascertain how
well their investments in both listed and non-listed equities were
performing. Median returns gures across one-, three-, ve- and ten-
year horizon periods were generated and show that the private equity
investments made by the pension funds considered were performing
well, with positive returns across each time period. Private equity and
xed income were the only investment types to generate positive
returns across all horizons; other asset classes fell into the red at
some point.
Fig.1 shows the median returns across one-, three-, ve- and ten
year horizons earned by pension funds from private and listed
equities, xed income, hedge funds and real estate. As of Q2 2010,
xed income, hedge funds, listed equity and private equity are
showing positive one-year returns. Real estate returns, however, are in
the red over the same horizon period. All asset classes show positive
returns across ve and ten years, but across the three-year horizon
only xed income and private equity show positive returns, 7.6% and
0.6% respectively. This phase does of course include the onset of
the nancial crisis, the impact of which was most severe on the xed
income and real estate markets.
The overall portfolio performance of these public pension funds follows
a similar trend showing positive returns across one-, ve- and ten-year
horizons with three-year horizons in the red at -4.1%. Real estate and
listed equity are showing more negative three-year returns of -11.3%
and -9.5% respectively, illustrating the importance of portfolio diversity
to ensure that risk is spread across the various asset classes.
Fig. 2 shows the one-year returns by quarter from December 2008
to June 2010. One year private equity returns increased during the
second quarter of 2010 from 10.6% to 15.4%. During the same period
however, listed equity one year returns fell from 55.2% to 14.8%,
reecting the turbulence in the public markets caused by recent
European sovereign debt issues, while the total investment portfolio
also decreased from 31.9% to 13.3%.
The one quarter delay in reporting schedules for private equity is
evident between Q2 2009 and Q3 2009. While the one year returns
of other equity classes were recovering in Q2 2009, private equity one
year returns only start to show signs of recovery in Q3 2009. This is
due to their returns being calculated using the net asset value reported
by the GP from the previous quarter. Despite the increased uncertainty
in the public markets, both private and listed equity show positive
returns across one year in Q2 2010.

Performance
Private Equity Returns for Public Pension Funds
Download Data
Public pension funds are amongst the most established investors in private equity Bronwyn Williams
examines one of their chief motivations for investing in the asset class.
Performance:
PE Returns for Public Pension Funds
-15
-10
-5
0
5
10
15
20
1 Year 3 Years 5 Years 10 Years
Fixed Income
Hedge Funds
Listed Equity
Private Equity
Real Estate
Total Investmen
Portfolio
Fig. 1: Median Returns of Public Pension Plans by Asset Class as
of 30 June 2010
M
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R
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(
%
)
Time Period
Source: Preqin
-60
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Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010
Listed
Equity
Private
Equity
Total
Investmen
Portfolio
Fig. 2: One-Year Median Returns to 30 June 2010: Private Equity
vs. Total Investment Portfolio and Listed Equity
Quarter
Source: Preqin
M
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R
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(
%
)
Deals and Exits in 2010 Deals
Download Data
Q4 represents a record-breaking quarter for exits from private equity buyouts.
Deals Spotlight:
Deals and Exits in 2010
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No. of Deals Aggregate Deal Value ($bn)
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No. of Deals Aggregate Deal Value ($bn)
Fig. 2: Annual Number and Aggregate Value of PE-Backed Buy-
outs Globally, 2006 - 2010
N
o
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o
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D
e
a
l
s
Fig. 1: Quarterly Number and Aggregate Value of PE-Backed
Buyouts Globally, Q1 2006 - Q4 2010
47%
53%
23%
7%
20%
7%
4%
3%
3%
26%
3% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No. of Deals Aggregate Value of Deals
LBO Add-on Growth Capital Recapitalization Public to Private PIPE
Fig. 4: Breakdown of Number and Aggregate Value of PE-
Backed Deals in 2010 by Type
P
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End of year results suggest the private equity deals sector has
recovered following the nancial crisis, with both the value and
volume of deals and exits returning to, or exceeding, pre-crisis
levels.
Private Equity-Backed Exits in 2010
811 PE-backed exits occurred in 2010, with an aggregate exit
transaction size of $203bn. This is almost three times the
aggregate exit value seen in 2009, ($73.6bn), with Q4 exit value
at $71.8bn the highest quarterly gure on record.
Private Equity-Backed Deals in 2010
The largest deal announced during 2010 was the $5.3bn public-
to-private acquisition of Del Monte Foods Company by Kohlberg
Kravis Roberts, Vestar Capital Partners and Centerview
Partners, which was announced in November 2010.
Almost half of all deals announced globally in 2010 were
leveraged buyouts, accounting for 53% of the aggregate deal
value worldwide during the quarter.
Public-to-private deals contributed 26% of the aggregate value
of deals globally during 2010, but made up less than 5% of the
number of deals.
In Q4 2010, 593 private equity buyout deals were announced,
with an aggregate value of $64.2bn. This is a 6% increase in
aggregate value from Q3, when 593 deals worth $60.6bn were
announced.
A
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$
b
n
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
North America Europe Asia and Rest of World
Fig. 3: Quarterly Aggregate Value of PE-Backed Buyouts by
Region, Q1 2008 - Q4 2010
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Source: Preqin
Source: Preqin
Source: Preqin
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Deals
Deals and Exits in 2010
Download Data
26%
16% 16%
13%
10%
6%
5% 5%
3%
19%
18% 18%
10%
8%
10% 10%
5%
3%
0%
5%
10%
15%
20%
25%
30%
I
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No. of Deals Aggregate Deal Value
Backed Deals in 2010 by Industry
P
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55%
6%
20%
12%
9%
24%
9%
12%
7%
46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No. of Deals Aggregate Deal Value
Less than $100mn $100-249mn $500-999mn
$250-499mn $1bn or More
Backed Deals in 2010 by Value Band
Name Date Type
Deal Size
(mn)
Currency Buyers Sellers Industry Location
Del Monte Foods
Company
Nov-10 Public To Private 5,300 USD Centerview Partners, Kohlberg
Kravis Roberts, Vestar Capital
Partners
Food US
Tomkins plc Jul-10 Public To Private 3,150 GBP CPP Investment Board, Onex
Corporation
Engineering UK
NBTY Jul-10 Public To Private 4,048 USD Carlyle Group Food US
Extended Stay May-10 Buyout 3,925 USD Blackstone Group,
Centerbridge Capital Partners,
Paulson & Co.
Leisure US
CommScope Oct-10 Public To Private 3,900 USD Carlyle Group Communications US
Interactive Data
Corporation
May-10 Public To Private 3,700 USD Silver Lake, Warburg Pincus Financial
Services
US
Sunrise
Communications
Sep-10 Buyout 3,300 CHF CVC Capital Partners TDC A/S Telecoms
MultiPlan, Inc. Jul-10 Buyout 3,100 USD BC Partners, Silver Lake Carlyle
Group, Welsh,
Carson,
Anderson &
Stowe
Healthcare IT US
J Crew Group, Inc Nov-10 Public To Private 3,000 USD Leonard Green & Partners,
TPG
Retail US
Name
Date
Acquired
Firms Investing
Transaction
Size (mn)
Exit
Date
Exit
Type
Currency
Sold
to
Exit Transaction
Size (mn)
Chrysler Financial
Corp*
May-07 Cerberus Capital Management $7,400 Dec-10 Trade Sale USD Toronto-
Dominion Bank
$6,300*
HCR Manor Care
Inc.*
Jul-07 Carlyle Group $6,300 Dec-10 Asset Sale USD HCP Inc $6,100*
Cognis Nov-01 Permira, GS Capital Partners 2,975 Jun-10 Trade Sale EUR BASF plc 3,100
Talecris
Biotherapeutics, Inc.
Mar-05 Cerberus Capital Management,
Ampersand Ventures
$590 Jun-10 Trade Sale USD Grifols $3,400
MultiPlan, Inc. Feb-06 Carlyle Group, Welsh Carson
Anderson & Stowe
$1,000 Jul-10 Sale to GP USD BC Partners,
Silver Lake
$3100
Fig. 7: Largest Buyouts Globally 2010
Fig. 8: Notable PE-Backed Exits Globally 2010
*denotes partial exit
Source: Preqin
Source: Preqin
Source: Preqin
Source: Preqin
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Key Stats: 2010 in Focus
Q1 saw the highest amount of capital raised; $73bn was raised
during the period.
Q2 saw the highest number of funds close; 147 nished the
fundraising cycle between April and June.
Venture funds were the most prolic, with 102 reaching a nal
close in 2010 raising an aggregate $20.4bn.
Funds that reached a nal close in 2010 spent an average of
20.4 months on the road up from 9.6 months in 2004.
Buyout funds accounted for the largest
proportion of the aggregate capital raised;
$68.5bn was collected by 88 such funds that
closed in 2010.
European fundraising was particularly poor; 122
European-focused funds closed in 2010 raising
an aggregate $50.2bn. The 118 Asia and Rest
of World-focused funds that closed accounted
for $41.1bn, with $134.6bn being raised by 242
North America-focused funds.
The largest fund to close in 2010 was
Blackstone Capital Partners VI, a buyout fund
that raised a total of $13.5bn. (Although no
longer in market, the fund is reportedly still
allowing existing investors to increase their
commitments and so the nal fund size may
increase.)
Other signicant vehicles to close in 2010
include Real Estate Turnaround Consortium, a
real estate fund which closed on $5.6bn, and
Stone Point Capitals Trident Fund V, which
raised $3.5bn at nal close in December.
Oaktree Capital Managements OCM Opportunities Fund VIII
was the largest distressed debt fund to close in 2010, raising
$4.4bn.
Results for infrastructure were positive in 2010; 25 such
funds closed globally raising an aggregate $27.3bn in capital
commitments, suggesting the sector is enjoying something of a
recovery following a poor year in 2009.
Fundraising
Fundraising in 2010
Download Data
Private equity fundraising reached a new low in 2010, we uncover the full results in more detail.
Fundraising Spotlight:
Fundraising in 2010
0
50
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200
250
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450
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No. Funds
Raised
Aggregate
Commitments
($bn)
Fig. 1: Quarterly Global PE Fundraising, Q1 2004 - Q4 2010
Source: Preqin
49
21 21
19.4
6.5
5.7
0
10
20
30
40
50
60
North America Europe Asia and Rest of World
No. of
Funds
Aggregate
Capital
Raised
($bn)
918
1,304
1,624
1,561 1,562
1,522
1,547
1,592
360
705
888.4
698.5
636
560.3 571.5
594.9
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan-07 Jan-08 Jan-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
No. Funds
Raising
Aggregate
Target ($bn)
Fig. 3: Funds on the Road over Time,
January 2008 - January 2011
Fig. 2: Geographic Split of Funds Closed in Q4 2010
Source: Preqin
Source: Preqin
10.6
11.1
11.4
14.9
15.5
20.4
0
5
10
15
20
25
2005 2006 2007 2008 2009 2010
Fig. 4: Average Time Taken for Funds to Achieve a Final Close by Year of Fund
Close
Source: Preqin
Fund Firm Type
Amount
Closed (mn)
Manager
Country
Fund
Focus
Trident Fund V Stone Point Capital Buyout 3,500 USD US US
Sheridan Production Partners II Sheridan Production Partners Natural Resources 1,800 USD US US
CHAMP Buyout III CHAMP Private Equity Buyout 1,480 AUD Australia ROW
Littlejohn Fund IV Littlejohn & Co. Buyout 1,340 USD US US
ATP Private Equity Partners IV ATP Private Equity Partners Fund of Funds 1,000 EUR Denmark Europe
Wellspring Capital Partners V Wellspring Capital Management Buyout 1,200 USD US US
Partners Group Real Estate
Secondary 2009
Partners Group
Real Estate
Secondaries
750 EUR Switzerland Europe
Newbury Equity Partners II Newbury Partners Secondaries 1,024 USD US US
Rushmore Value Fund Rushmore Properties Real Estate 965 USD US US
JMI Equity Fund VII JMI Equity Growth 875 USD US US
Fund Firm Type
Amount
Closed (mn)
Manager
Country
Fund
Focus
Blackstone Capital Partners VI Blackstone Group Buyout 13,500 USD US US
Real Estate Turnaround
Consortium
Brookeld Asset Management Real Estate 5,565 USD Canada US
Morgan Stanley Real Estate
Fund VII Global
Morgan Stanley Real Estate Real Estate 4,700 USD US ROW
OCM Opportunities Fund VIII Oaktree Capital Management Distressed Debt 4,400 USD US US
Energy Capital Partners II Energy Capital Partners Infrastructure 4,335 USD US US
Madison Dearborn Capital
Partners VI
Madison Dearborn Partners Buyout 4,100 USD US US
Alinda Infrastructure Fund II Alinda Capital Partners Infrastructure 4,097 USD US US
Trident Fund V Stone Point Capital Buyout 3,500 USD US US
OCM Principal Opportunities
Fund V
Oaktree Capital Management Distressed Debt 3,331 USD US US
GSO Capital Solutions Fund
Blackstone
Group
Distressed Debt 3,250 USD US US
Fig. 5: Top 10 Largest Funds to Hold a Final Close in Q4 2010
Fig. 6: Top 10 Largest Funds to Hold a Final Close in 2010
Fundraising
Fundraising in 2010
Download Data
Data Source:
Preqins Funds in Market database
contains details of over 1,500 private
equity funds on the road seeking capital,
plus information on every vehicle that has
closed since 2003. For more information
about this product and how it can assist
you, please visit:
www.preqin.com/m
A
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(
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)
Investor Outlook for 2011 Investors
Download Data
Fundraising conditions for private equity funds in 2010 were
extremely challenging for GPs. 489 funds reached a nal close
during the year, raising a total of $228bn, less than was raised
by funds that closed the year before. At present, there are 1,616
funds on the road, seeking a combined $626bn, and many more
are expected to launch in the coming months, meaning that
fundraising in 2011 is set to remain just as competitive.
Fortunately for GPs seeking to raise capital, 2011 looks set to
witness some improvement in private equity fundraising levels
and investor appetite for new investments is relatively strong.
Preqin interviewed more than 100 institutional investors in private
equity funds located around the world in December 2010 in order
to nd out their plans for future investments and their attitudes
to the market at present. 58% of LPs told us they had made new
commitments to private equity funds in 2010. In 2011, however,
62% of respondents are intending to make new commitments
to private equity funds. An additional 30% had yet to nalize the
timing of their next investments and so the proportion of LPs
looking to actively make new commitments in 2011 may end up
much higher.
The capital made available by LPs for new commitments in 2011
is also, in many cases, greater than was set aside in 2010. As
shown in Fig. 1. 36% of respondents intend to commit more to
funds in 2011 than in 2010 and a further 32% plan to commit the
same amount. An important 18% of respondents did not make
new commitments to private equity funds in 2010 but expect
to do so in 2011, evidence that many LPs that had suspended
their private equity investments during 2009-2010 are intending
to return to the asset class in 2011. Just 14% of those surveyed
intend to commit less capital to funds.
So where are investors set to place their capital in the year
ahead and what are they looking for?
Key Strategies in 2011
Fig. 2 shows the areas of the private equity market that LPs are
intending to invest in over the course of 2011. Respondents were
invited to name any fund types that they felt t these categories
and were not prompted to give their opinions on each fund type
individually. Therefore the results represent the types of fund that
are at the forefront of LPs minds.
Small to mid-market buyout funds are continuing to attract a
signicant degree of investor interest, with 52% of respondents
naming them as a fund type they plan to make commitments to
in 2011.
Interest in venture funds is also relatively high, with 28% of
investors spoken to in December 2010 stating an intention to
invest in these funds over the course of 2011.
Other fund types to attract particular investor interest at present
include large to mega buyout funds (named by 13% of investors
as a fund type they intend to make commitments to during 2011),
mezzanine funds (named by 12%) and funds of funds (named by
13%).
Interest in Emerging Markets
Emerging markets have continued to attract a considerable
degree of interest from investors. 70% of respondents to our
December 2010 survey either currently invest or will consider
Following in-depth interviews with investors around the world, Helen Kenyon looks at where these institutions
plan to place their capital in 2011.
Investor Outlook for 2011:
LPs Plans for New PE Investments
3%
9%
3%
4%
9%
9%
12%
13%
13%
28%
52%
0% 10% 20% 30% 40% 50% 60%
Other
None
Secondaries Funds
Cleantech
Growth
Distressed Private Equity
Mezzanine
Funds of Funds
Large to Mega Buyout
Venture
Small to Mid-Market Buyout
Fig. 2: Areas of the Market Investors Are Seeking to Invest in
over 2011
Proportion of Respondents
Fig. 1: Amount of Capital Investors Plan to Commit to Private
Equity Funds in 2011 Compared to 2010
Source: Preqin
Source: Preqin
investing in emerging markets, in comparison to
67% of respondents to our survey the year before.
We are still seeing investors consider gaining
exposure to emerging markets for the rst time.
One such LP, a Nordic insurance company,
told us, We havent invested in Asia or other
emerging markets yet apart from a trial
private equity investment in Russia but we are
considering it. We like Russia and Latin America.
Fig. 3 shows the regions or countries within
emerging markets that investors told us were
presenting the best opportunities for investment at
present. As with Fig. 2, investors were invited to
name regions or countries they nd attractive.
Half of respondents told us China was particularly
attractive and 52% named Asia. A North American
asset manager, for example, told us that it is
looking to invest in Asian growth equity for the
high returns.
Other regions and countries to attract signicant attention from
investors include India (named by 35% of respondents), Brazil
(28% of respondents) and South America (26% of respondents).
How Can GPs Stand Out from the Crowd?
What can GPs do to improve their chances of securing
commitments to their funds? During our December 2010 LP
survey, we asked investors how they feel GPs can stand out from
the crowd in 2011.
For most LPs, a strong, consistent track
record will unsurprisingly remain essential.
As a European private sector pension
fund told us, GPs need to show a decent
track record, recent realized performance,
a stable portfolio and good returns in the
last two to three years, a value-added
aspect and a stable team even during the
downturn. Many investors are also looking
for managers to bring something more to the
table than a strong track record; a European
family ofce stated managers need to
offer something off the beaten track... a
differentiated strategy.
LPs are increasingly looking for GPs to
offer interesting opportunities to co-invest
in certain portfolio companies. One LP, a
family ofce in Western Europe, stated, We
like good terms on co-investment deals and
more sweetheart deals.
Fund terms and conditions have remained
important to investors. A Canadian LP told
us GPs will need to offer LP-friendly terms,
close to ILPA [Institutional Limited Partners
Association] standards, a good track record
and a good team. Greater transparency is
also important: a Swedish corporate investor
said it required more transparency on fund
structure and a European LP said, GPs will need to be more
open and forthcoming with information.
Investors to Watch in 2011
Preqin contacts LPs on a daily basis to nd out about their
investments in private equity funds. A sample of LPs we have
spoken to recently that are set to actively invest in private equity
funds in 2011 is included in Fig. 4.
Business Information
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Private Equity
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Expert insights from:
AXA Private Equity
LGT Capital Partners
Pomona Capital
Parish Capital
Capital Dynamics
Allianz Capital Partners
GED Capital
UBS Investment Bank
Campbell Lutyens
AXON Partners
Elm Capital Associates
Nova Capital Management
Adveq
Alpha Russia & CIS
Secondary L.P.
SL Capital Partners
Hermes GPE
HarbourVest
Cogent Partners
17 Capital
Ibersuizas Capital Advisers
Pinebridge Investments
ARCIS Capital Limited
Alpinvest
Investors
Investor Outlook for 2011
Download Data
9%
11%
13%
20%
26%
28%
35%
50%
52%
0% 10% 20% 30% 40% 50% 60%
Middle East
Russia
Africa
CEE
South America
Brazil
India
China
Asia
Fig. 3: Regions and Countries within Emerging Markets That Are Viewed as
Presenting the Best Opportunities in the Current Financial Climate
Source: Preqin
Proportion of Respondents
FEATURED PUBLICATION:

Equity Report

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Investor Outlook for 2011 Investors
Download Data
Alliance Trust Equity Partners Investment Trust
Location: UK Total Assets: 3bn Target PE Allocation: 10% of Total Assets Current PE Allocation: 3.3% of Total Assets
Alliance Trust Equity Partners plans to invest up to 100mn in private equity funds in 2011. New investments will primarily be made
with existing managers in its portfolio but it will also consider establishing new relationships with GPs during this time. It seeks to invest
in Western Europe-focused small and mid-cap buyout funds, to which it expects to commit 10-20mn each. The investment trust has
been progressively more active in the private equity market over the last few years and expects to commit more capital in 2011 than it
did in 2010 in anticipation of a greater availability of attractive investment opportunities.
Cathay Life Insurance Insurance Company
Location: Taiwan Total Assets: $75bn Target PE Allocation: 2% of Total Assets Current PE Allocation: 0.3% of Total Assets
Having signicantly reduced the pace of its commitments to private equity funds in the wake of the nancial downturn, Cathay Life
Insurance is now intending to ramp up its activity in the asset class in 2011 to match 2009 levels. It anticipates signicantly increasing
the number of GP relationships it possesses, from 20-30 at present to 40-50 in the future. It looks to invest in small to mid-market
buyout funds and funds of funds and is also considering adding some exposure to emerging markets to its portfolio.
CDC Group Government Agency
Location: UK Total Assets: 2.5bn
Current PE Allocation: 55.7% of Total
Assets
In 2011, CDC Group plans to commit around $300mn to approximately 10 new funds and it will also look to form some new GP
relationships in the coming year. The government agency will continue to focus on investing in vehicles targeting Africa and South Asia,
including the Mekong region. It primarily invests in growth and infrastructure funds, and also has some exposure to venture funds. CDC
Group will also seek co-investment opportunities over the next 12 months.
Kansas Public Employees Retirement System Public Pension Fund
Location: US Total Assets: $12bn Target PE Allocation: 6% of Total Assets Current PE Allocation: 2.9% of Total Assets
Kansas Public Employees Retirement System (KPERS) is seeking to forge two or three new fund manager relationships over the
course of 2011 in addition to re-upping with existing GPs in its portfolio. Its focus in 2011 is likely to be on growth equity as well as small
and mid-cap buyout funds as it feels these fund types are offering the best opportunities at present. It is also interested in investing in
Asia in the future and expects to gain this exposure via funds of funds. As of Q4 2010, KPERS was halfway to its target allocation to
private equity and plans to continue to build up its portfolio over the next few years.
Sumitomo Trust and Banking Company Bank
Location: Japan Total Assets: $221bn Current PE Allocation: 0.8% of Total Assets
Sumitomo Trust and Banking Company (STBC) is optimistic about the private equity markets in Japan and Greater China and is
looking to commit to up to nine funds in 2011. STBC makes commitments of $5-25mn per fund and seeks vehicles managed by GPs
with proven track records, although it will consider spin-offs. It is interested in establishing new relationships with fund managers. The
bank is looking to invest in mid-cap buyout funds and venture funds in the coming year.
UJA Federation of New York Foundation
Location: US Total Assets: $1.1bn Target PE Allocation: 10% of Total Assets Current PE Allocation: 10% of Total Assets
UJA Federation of New York is planning to commit $30mn across three new private equity funds in 2011. It is looking to forge some
new relationships with managers and also considers investing with spin-off teams. It views mid-market buyout funds as particularly
attractive at present. It also has an interest in emerging markets, in particular Brazil, India and China, and is considering gaining
exposure to these markets. In the longer term, the foundation expects its allocation to private equity to increase.
Fig. 4: Investors to Watch in 2011
Source: Preqin
Data Source:
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Fig. 1: Breakdown of Secondary Fund of Funds Managers by Total
Number of Secondaries Funds Managed
62%
83%
11%
2%
17%
12%
10%
3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Buying Selling
Highly Likely
Possible
Opportunistically
Unlikely
Source: Preqin
Fig. 2: Investors Likelihood of Buying and Selling Private Equity
Fund Stakes on the Secondary Market in the Next 24 Months
Secondaries News
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Secondaries Spotlight
Secondaries
Secondaries Spotlight
According to Preqins unique pricing model, a $10,000,000 commitment to the median 2008 buyout fund - which would have called
$3,190,000 and has a reported net asset value (NAV) of $2,807,200 - would today fetch $2,286,127 on the secondary market, or
approximately 81% of its NAV.
Lexington Partners has agreed to purchase a private equity
portfolio from Lloyds Banking Group.
It was recently announced that US-based secondary fund of funds
manager, Lexington Partners, has agreed to acquire a GBP 470
million private equity portfolio from subsidiaries of Lloyds Banking
Group. The portfolio consists of 33 European mid-market private
equity funds. The portfolio is reported to include stakes in funds
managed by Doughty Hanson & Co and Bridgepoint Capital. The
secondary market transaction is expected to complete in Q1 2011.
Cuyahoga Capital Partners recently began fundraising for its
latest secondaries fund.
Cuyahoga Capital Partners was established in January 2011 after
Key Capital Corporation (KCC), the private equity fund of funds
team of KeyCorp (the parent company of KeyBank), spun out to
form an independent organization. Cuyahoga Capital Partners
recently started fundraising for its latest dedicated secondaries
vehicle, Cuyahoga Capital Partners IV. The vehicle has a USD 125
million target and is expected to hold its rst close within the next
two months on approximately USD 70-80 million. Cuyahoga Capital
Partners IV will look to purchase stakes in a variety of fund types
including venture, buyout and mezzanine and will generally target
deals less than USD 25 million in value.
Fig. 1 shows that 44% of active managers are managing or
raising their rst dedicated secondaries fund. A signicant
11% of secondary fund of funds managers have raised six
or more such vehicles, demonstrating that a number of rms
have a large amount of experience in this specialist sector.
Managers with numerous secondaries funds have generally
raised the largest funds and have raised signicant amounts
of capital over the years, and therefore continue to dominate
the market in spite of the increasing number of new, smaller
managers.
Fig. 2 represents investors likelihood of buying and selling
private equity fund stakes on the secondary market within
the next 24 months. A substantial 38% of investors have
expressed some level of interest for purchasing fund
stakes on the secondary market and a considerable 17%
of investors are potentially interested in selling fund stakes
on the secondary market within the next 24 months,
demonstrating a slight increase in investors appetite for
taking part in secondary market transactions over the past
year.
Data Source:
Secondary Market Monitor (SMM) is a service available
free of charge to accredited LPs. The service enables LPs
to obtain indicative pricing indications on all or part of their
private equity and private equity real estate portfolios.
www.preqin.com/smm
Download Data
Antonia Lee examines the latest activity on the secondaries market.
Conferences
Date: 27 - 28 January, 2011
Location: The Westin Times Square, New York
Organiser: DealFlow Media
The Activist Investor Conference provides a forum for
the examination of the issues raised by investors and
the responses of corporations. Whether you are an
investor or corporate manager, you will learn about the
latest strategies and tactics, regulatory changes, and
hear real case studies of effective proxy campaigns and
successful corporate defenses.
Information: www.dealow.com/activist
The Activist Investor Conference 2011
Date: 24-25 January, 2011
Location: Marriot Hotel, Grosvenor Square, London
Organiser: London School of Economics
The LSE Alternative Investments Conference is the worlds
largest student conference on private equity and hedge
funds. The conference takes place in the Marriot Hotel
in Grosvenor Square, London. Last year students from
over 70 universities attended, and delegates participated
in a mixture of keynote speeches, panel discussions and
seminars.
Information: www.lseaic.com
LSE Alternative Investments Conference
Conferences Spotlight: Forthcoming Events
Conference Dates Location Organizer
Foundations, Endowment & Not for Prot Investment Summit 18 - 19 January 2011 Toronto Strategy Institute
Clean-Tech Investor Summit 19 - 20 January 2011 Palm Springs, CA IBF and Clean Edge
Emerging Markets Summit: BRIC & Beyond 19 January 2011 New York iGlobal Forum
India Investment Convention 24 - 25 January 2011 Dubai Fleming Gulf
LSE Alternative Investments Conference 24 - 25 January 2011 London LSE
Public-Private Partnership in Emerging Markets Conference 24 - 26 January 2011 Kuala Lumpur KW Group
4th Annual Investment Performance Analysis and Risk
Management 2011
24 - 25 January 2011 Hong Kong IQPC
Private Placements Industry Investment Forum 24 - 26 January 2011 Miami IIR USA
Innovative Fundraising Options and Opportunities 26 - 27 January 2011 Silicon Valley
Financial Research
Associates
The Activist Investor Conference 27 - 28 January 2011 New York DealFlow Media
Mexico Investment Summit 2011 31 January - 2 February 2011 Mexico Terrapinn
Private Equity World Australia 2 - 4 February 2011 Melbourne Terrapinn
Date: 8-9 February, 2011
Location: Le Mridien Piccadilly Hotel, London
Organiser: C5
Building on C5s market-leading private equity series -
we are pleased to introduce a new, exciting European
Secondary Private Equity Forum. Right now, you have a
unique opportunity to shape the future of this increasing
important capital management tool; network with the
buyers and sellers of fund interests on the secondary
market thus making the most out of the existing
opportunities
Information: http://www.c5-online.com/SEC.htm
European Secondary Private Equity
Date: 4 February, 2011
Location: Hyatt at the Bellevue at Philadelphia, PA
Organiser: Wharton, University of Pennsylvania
Welcome to Whartons Private Equity and Venture
Capital Conference. The theme, Moving Forward
in Uncertain Times: Navigating a New Economic,
Regulatory, and Financial Reality, provides an
opportunity to discuss key issues that impact private
equity and venture capital rms, investors, and the way
forward for the various industry stakeholders.
Information: www.whartonpeconference.org/
Whartons Private Equity and Venture Capital
London Business School
7
th
Annual Private Equity Conference
11 February 2011
http://www.londonpeconference.org/
Vincenzo Morelli, Partner
TPG Capital
John Moulton, Founder
Better Capital
Johannes Huth, Head of Europe
KKR
Keynote Speakers Panels
Value Creation:
Driving LP Returns through Operational Excellence
Fundraising:
Attracting Capital in an Uncertain Environment
Emerging Markets:
Funding Opportunities Beyond the BRICs
Venture Capital:
Funding Novel Opportunities and Seeking Out
Hidden Gems
Featuring speakers from:
3i
Actis Capital
Altius Associates
Campbell Lutyens
Carlyle
Lloyds Development Capital
Morgan Stanley
Motorola Ventures
Pantheon Ventures
Phoenix Equity Partners
Tickets and Information Available at:
hhhhhttp://www.londonpeconference.org/
Tickets and Information Available at: Ti
Sponsors
Conferences
Date: 11 February, 2011
Location: London Business School
Organiser: London Business School
TURNING THE CORNER Delivering Value over the
Next Decade looks to the shift that several major industry
players are making from creating value through leverage,
to value from operational excellence and core growth at a
time when limited partners are diversifying commitments
across investment platforms, older vintages are nally
being realized, and new investment themes are beginning
to be uncovered.
Information:
http://londonpeconference.org
London Business School Private Equity Conference
Date: 15 - 17 February, 2011
Location: Sao Paolo, Brazil
Organiser: ICBI
Register by 14/1/2011 to SAVE up to $700
Plus receive a 10% Discount - quote VIP Code:
FKR3A3LPRWEB when registering
In response to the phenomenal interest in Latin
American private equity by international & regional LPs,
SuperReturn Latin America shall take place on February
15-17 2011 in Sao Paulo, Brazil.
The event promises to continue SuperReturns unique
ability to attract international pension funds, sovereign
wealth funds, family ofces and wealth managers who
are already investing or looking to invest in the region. In
addition, local pension funds and wealth managers have
already started to conrm their attendance, meaning that
fund managers will be able to network and mingle with a
huge variety of LPs investing in the region.
Information: www.icbi-events.com/FKR3A3LPRWEB
A
SuperReturn Latin America 2011
Conferences
Hear From 50+ Local & International LPs Including:
Partilhe Experincias com + de 50 LPs Locais e Internacionais, Incluindo:
Nicolas Drapeau
Director For
Private Markets
BIMCOR
Michael Dymond
Portfolio Manager
Private Capital
UNIVERSITIES SUPERANNUATION
SCHEME
Otvio Vieira
Director Of Investments
SAFDI GESTO DE
PATRIMNIO
Julie Gray
Principal, Private Investments,
Funds & Secondaries,
CANADA PENSION PLAN
INVESTMENT BOARD
Pedro Grados
CIO
PROFUTURO AFP
David Roux
Co-Founder &
Chairman
SILVER LAKE
Jeremy Coller
CIO
COLLER CAPITAL
Antonio Bonchristiano
Co-Chairman &
Co-CEO
GP INVESTIMENTOS
Alexander Navab
Member and Co-Head
of North American
Private Equity, KKR
Jonathon Bond
Partner, Head of Investor
Development Group
ACTIS
Conference organised by ICBI
LP Summit:
15th February 2011/15 Fevereiro
Main Conference:/Conferncia Principal
16-17th February 2011
16-17 de Fevereiro
Renaissance Hotel, Sao Paulo, Brazil
ICBI
Inscreva-
se At 14
De Janeiro E
Economize
$700
1
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The Latin American Private Equity & Venture Capital Summit
O Summit Latino-Americano Sobre Private Equity & Venture Capital
www.superreturnlatam.com
From The
Producers of:
LP Summit
Tuesday 15th February 2011
One day summit dedicated to the opinions of local &international LPs. Expert LP speakers include:
SAFDI GESTO DE PATRIMNIO, FACHESF, BLACKROCK, PRIVATE EQUITY
PARTNERS, AT&T, IFC, SVB CAPITAL, QUANTUM WEALTH MANAGEMENT,
BROOKFIELD ASSET MANAGEMENT plus many more....
LP Summit
Tera-Feira, 15 de Fevereiro de 2011
Inscreva-se j e garanta a sua vaga no dia dedicado s opinies de LPs e Fundos de Fundos locais e
internacionais. Os expert LPs palestrando incluem:
SAFDI GESTO DE PATRIMNIO, FACHESF, BLACKROCK, PRIVATE EQUITY
PARTNERS, AT&T , IFC, SVB CAPITAL, QUANTUM WEALTH MANAGEMENT,
BROOKFIELD ASSET MANAGEMENT, e muitos mais....
Book by
14th January
and save
$700
Livre Para
Fundaes,
Doaes, Fundos
De Penso e
Fundos
Soberanos
Free For
Foundations,
Endowments,
Pension
Funds & SWFs
P
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M
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Network With Industry Titans, Including:
Faa Networking com os Tits da Indstria, Incluindo:
Media partners Supporting
organisation
Co-sponsors
Date: 15 - 16 March, 2011
Location: Swisstel Krasnye Holmy, Moscow, Russia
Organiser: C5
C5s Annual CIS Private Equity and Venture Capital
Forum is, no doubt, one of the most anticipated events
in the private equity calendar. This prestigious and highly
acclaimed event has been running for the past 7 years
and established itself as the key meeting place for leading
LPs, GPs, venture capitalists, investment banks and
lawyers active in this region.
Information: www.c5-online.com/CISPE
CIS PRIVATE EQUITY AND VENTURE CAPITAL
Date: 28 February - 2 March, 2011
Location: Royal Garden Hotel, London
Organiser: Terrapinn
The African Investment Summit 2011 is the only
conference that brings together European Investors,
Asset Managers and African businesses to help
promote this exciting frontier market. With over 3 days
of expert case studies from top speakers and over 14
hours of dedicated networking time.
Information:
www.terrapinn.com/2011/african-investment-summit/
A
Africa Investment Summit 2011
Book before
21st Jan and
save up to 390
LPs attend for free!
www.terrapinn.com/2011/africainvest
3 content packed days
Private Equity Focus Day
Monday 28 February 2011
Analysing the African Opportunity
Tuesday 1 March
Accessing the African Opportunity
Wednesday 2 March
Take advantage of our
earlybird booking offer and
save up to 390 if you book
before 21st Jan.
Connecting European institutional investors with the African opportunity
Learn from the key European LPs already investing in Africa
Discover what African exposure has worked for top European pension funds, including, Royal County of Berkshire
Pension Fund, British Steel Pension Fund, Commonwealth Education Trust, Hermes Pension Management and Hewitt.
Navigate the challenges surrounding the deployment of European private equity to
secure signicant returns
Gain the insights of the organizations that know whats happening on the ground: hear from the CEOs of the CDC,
Aureos, Proparco and the African Development Corporation as well as the Commonwealth Secretariat, China-Africa
Development Fund, African Development Bank and Emergent Asset Management.
Investigate how to overcome the illiquidity concerns that face investors in Africa
Explore the challenges of investment in Africa with over 20 investors with the experience on the ground to succeed.
Gain the insights into investment in Africa that you need when planning your portfolio strategy for the next decade.
BOOK NOW! online www.terrapinn.com/2011/africainvest | email bianca.geldenhuys@terrapinn.com | phone +44 (0)20 7242 2324 | fax +44 (0)20 7242 1508
Organised by:
Hear from
Richard Laing
CEO
CDC
Luc Rigouzzo
CEO
Proparco
Liliang Teng
Chief
Representative
China-Africa
Development
Fund
Sev Vettivetpillai
CEO
Aureos
Dirke Hoke
CEO
Siemens Africa
Nick Greenwood
Pensions
Manager
Royal County
of Berkshire
Pension Fund
Judy Curry
Finance Director
and Secretary
Commonwealth
Education Trust
Nagi Adel
Hamiyeh
Managing
Director of
Investments
Temasek
Holdings
BOOK NOW! online www.terrapinn.com/2011/africainvest | email bianca.geldenhuys@terrapinn.com | phone +44 (0)20 7242 2324 | fax +44 (0)20 7242 1508
Protable
Alternatives
Conferences
Alberta Investment Management
Corporation (AIMCo) expects to commit
to three to four new funds in 2011.
AIMCo has a target allocation to private
equity of CAD 2.5 billion, equating to 3.7% of
total assets, and currently has approximately
CAD 1.9 billion allocated to the asset class.
The CAD 68.2 billion asset manager made
a number of new commitments in 2010
and expects to commit a further CAD 300
million to private equity funds in 2011. Since
reviewing its investment strategy in 2009,
AIMCo has looked to reduce the number
of GPs in its portfolio as it is looking to
commit more capital to fewer managers,
as well as seeking more direct and co-
investment opportunities. It prefers to invest
in growth equity funds in Asia, as well as
seeking investments in North American
mid-market buyout funds where it can
act as the lead investor and make large
enough commitments to have signicant
co-investment opportunities. In 2011, AIMCo
is unlikely to form any new relationships with
GPs as a number of its existing managers
are returning to market; however, in 2012, it
is likely to have room in its portfolio to forge
some new GP relationships.
California Institute of Technology
Endowment (Caltech) is looking to hire a
new private equity director.
Katie Hardy has left her position as
Director of Investments, Private Equity
at the USD 1.5 billion endowment. It is
actively seeking a replacement. Separately,
Caltech recently hired a new CIO, Scott
Richland, in September 2010. Mr Richland
was president of private investment rm
Lunada Bay Investors. He is expected to
review Caltechs private equity investments
in the coming months, as well as examine
internal stafng. Caltech tends to focus
on private equity and venture investments
in the technology sector. The endowment
manages its private equity investments
in-house.
City of London Corporation Pension
Fund is looking to commit to funds of
funds in 2011.
The GBP 567 million pension fund
for employees of the City of London
Corporation is considering forming some
new fund of funds manager relationships
during 2011 in addition to making re-
up investments. It did not make any
commitments in 2010 and expects its
next commitment to be in early 2011. The
pension fund currently invests with SL
Capital Partners, and has a private equity
target allocation of 5% of total assets. It
is considerably below this at present and
expects the number of GPs in its roster to
increase over the next two years. City of
London Corporation Pension Fund does not
invest in rst-time funds.
Healthcare of Ontario Pension Plan is
looking to invest in a number of new
private equity vehicles over the next 12
months.
The CAD 35 billion Canada-based pension
fund anticipates committing between CAD
200 million and CAD 400 million to several
new private equity vehicles over the next 12
months and expects to invest with a mixture
of existing managers in its portfolio and
managers it has not previously worked with.
The pension fund also considers investing in
rst-time funds and co-investing alongside
GPs directly into portfolio companies.
The pension fund typically looks to gain
exposure to North America and Western
Europe.
Ball State University Endowment expects
its next private equity commitment in H1
2011.
The USD 150 million endowment fund
expects to commit a maximum of USD
6 million to up to two new vehicles over
the next 12 months. It will most likely
commit to fund of funds vehicles with a
focus on distressed private equity and
venture capital as it feels that these
areas are currently presenting attractive
opportunities for investment. It will consider
forging relationships with GPs that it has
not previously worked with and is likely to
make its next commitment in the rst half
of 2011. Ball State University Endowment
maintains a 15% target allocation to private
equity funds and is currently over its target
allocation to the asset class. It expects that
its allocation will fall in line with this target
over the course of the next 12 months as
the rest of its investment portfolio recovers
from the nancial crisis.
San Mateo County Employees
Retirement Association (SamCERA)
has made its maiden private equity
investment.
The USD 2 billion San Mateo County
Employees Retirement Association has
committed USD 20 million to Sheridan
Production Partners natural resources
vehicle, Sheridan Production Partners
II. The fund focuses on oil and gas
investments in the US. SamCERA set aside
a 20% allocation to alternative assets at its
board meeting in August 2010 following an
asset-liability study. It has since conrmed
an 8% target allocation to private equity to
be split 60:20:20 between buyout, venture
capital and debt-related/special situations
vehicles respectively. SamCERA has
delegated the management of this private
equity allocation to its investment consultant,
Strategic Investment Solutions.
More news and updates are available
online for Investor Intelligence and
Secondary Market Monitor subscribers.
In the last month, Preqin analysts
have added 41 new investors
and updated 438 existing investor
proles.
For more information, or to register for
a demo, please visit:
www.preqin.com/II
News
Emma Dineen takes a look at the latest private equity investor news.
Investor News

Preqin Private Equity Spotlight January 2011

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