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AXA

PRIVATE
EQUITY
ANNUAL
REPORT
2009
This document contains information, including details of investment performance, in respect of funds which are closed to new investors.
Past performance is not necessarily indicative of future returns on these or other funds. The value of investments may fall as well as rise.
Private equity investments are illiquid and there is no guarantee that they can be sold at valuation levels.

It shall not be viewed as investment advice, and does not constitute an offer to sell, a solicitation of any offer to buy, or the basis
for any contact for the purchase or sale of any investment.
The portfolio companies financial data are issued by the companies.

Unless otherwise mentioned, figures are as of December 31, 2009 and the exchange rate that applies is €1 = US$1.43.
AXA Private Equity
Global Investments, the European Way

Private Equity AXA Private Equity is among the leading global private equity firms with
$25 billion of assets managed or advised for major international investors.
Firm of the Year Since 1996, its constant focus on the long-term growth of its investments has
generated sustained and stable returns.
Financial Times
Mergermarket European With 230 employees and eight offices in Paris, Frankfurt, London, New
M&A Awards 2009 York, Singapore, Milan, Zurich and Vienna, AXA Private Equity offers its
partners - companies management and investors - access to a broad and solid
network across Europe, North America and Asia.

A diversified set of asset classes including direct funds, funds of funds,


infrastructure and mezzanine means that AXA Private Equity has the expertise
and mindset to provide more than just financing.

$25 billion advised or managed*

Funds of funds Direct funds


Primary Small cap
Secondary Mid cap
Early secondary Venture
Mandates Co-investment

$13 billion $7 billion

Mezzanine Infrastructure
Arranger Brownfield
Acquisition financing Greenfield

$3 billion $2 billion
* As of December 31, 2009
summary

Foreword of the CEO


Company profile

What’s new in 2009?


10_ Key facts and figures
12_ Investments
23_ Divestments
26_ New partnerships

Corporate review
32_ A story of sustained growth
33_ Our story
34_ A cohesive management team
36_ Best-in-class reporting
37_ A loyal and diversified investor base
38_ Client-oriented support
39_ Rigorous internal governance
40_ Corporate social responsibility
44_ Promoting excellence

Investment review
48_ Infrastructure
52_ Funds of funds
58_ Direct funds
60_ Mid cap
62_ Small cap
64_ Venture capital
67_ Co-investment
72_ Mezzanine

Glossary
foreword of
the CEO

We support entrepreneurs in the international


expansion of their businesses
Within today’s challenging economic right time, and our ability to grow compa-
environment, our distinctive culture and nies with the help of our international
investment strategy has resulted in a solid network, set us apart. As such, we are
performance, reinforcing the trust of all of confident that those carefully-chosen new
our investors around the world. companies and partners you read about in
the following pages will play a part in our
Our approach towards investments in continued success in the years to come.
companies and private equity funds has We are committed to helping our entrepre-
always been characterized by discipline. neurs transform their businesses and
This year has been no different. Our caution expand into new markets with the support
in selecting the right investments at the of private capital.
Responsible investment
by private equity requires
moderate use of leverage
and sharing of the value
created among all parties
Our industry has continued to be in the • maintaining our market-leading approach
spotlight in 2009. We welcome such and performance in funds of funds thanks
scrutiny. Responsible investment by to our vigilance, excellent market timing
private equity requires moderate use of and best-in-class monitoring standards.
leverage and sharing of the value created
among all parties, which is the case at Emerging markets will play a key role in
AXA Private Equity. In fact, an ethical shaping the world economy in the years to
code frames our every interaction with come. At AXA Private Equity, we have been
companies, funds, investors and partners. embracing the opportunities afforded by
Each individual within the firm is trusted our global reach for some years.
to ensure we subscribe to ever-improving
socially responsible standards.
We are looking forward to building upon
Looking ahead, we are well-placed to build this strong platform in 2010.
upon our long-term strategy:

• stabilizing and strengthening our portfo-


lio companies and capitalizing upon our
network and resources to grow them
internationally

• benefiting from consistent returns in Dominique Senequier


infrastructure assets, given that we are one
of the few investors with experience of
investing in this sector

/5
company profile

Our investment approach


Active since 1996, AXA Private Equity is an experienced investor with a meticulous approach
to generating consistently good returns. Because our portfolio is diversified across a range of
asset classes, sectors and geographies, we are able to capitalize upon a variety of opportunities
for our investors. Our global reach across Europe, North America and Asia benefits our partner
portfolio companies, which are often looking for support to expand internationally.

We are cautious and highly disciplined in the investments we make, having reasonable
recourse to external leverage. Yet it is also within our ability to move fast to seize the right
opportunities which has resulted in consistent returns and an enviable track record during
the last 14 years. Our teams take a long-term view and are committed to creating operational
value and sustainable growth. We believe we are successful because of the close ties we
develop with the management of our portfolio companies and partner funds.

BRINGING OPERATIONAL OUR VALUES


VALUE TO OUR COMPANIES At AXA Private Equity, we have always
AXA Private Equity’s investment philo- prided ourselves on maintaining a distinc-
sophy has always been broader than mere tive corporate culture underpinned by
financial engineering. In the context of the values that define the way we work with
economic upheaval that characterized investors, portfolio companies, co-investors,
2009, our main objective was to continue other funds and our employees.
to support our portfolio companies
through these difficult times and secure • Responsible behaviour: complying with
their development in the years ahead. the rules laid down by our regulators is a
At the same time, we continually reassured baseline requirement for us. In addition,
our investors by providing detailed, regular we challenge each AXA Private Equity
assessments of the funds’ future cash employee to go beyond what is expected
flows. and find ways to work responsibly and
with consideration for our impact upon
It is our duty and our commitment to companies, communities and people.
be a reliable, responsible and engaged • Service orientation: investors and
shareholder. So, we mobilized our resources companies like to be treated individually.
and network to provide our companies They recoil from standard approaches.
with the advice they needed to deal with We take time to listen, understand
these tough conditions, while ensuring individual needs and find the best solution
they remained focused on growth over for mutual benefit.
the long-term. Using our long-established • Investment discipline: caution is our
monitoring procedures and forecasting watch-word. Every decision, from initial
systems, we helped management of our investment through build-up to divestment,
portfolio companies adhere to good is made with the most stringent due
corporate governance structures and diligence and attention to the appropriate
protocols. process.
Active across a diversified range of asset classes

Co-investment Infrastructure
Minority interests Brownfield and
in major transactions greenfield
€20–100m per transaction

Mid cap Mezzanine


Majority investments Debt product
in companies between senior debt
valued between and equity
€100m and €2bn

Small cap
Investments
in medium-sized
Funds of funds
companies with Primary, early secondary
a valuation and secondary
of under €100m

Venture capital
Innovation and growth financing
€2m to €5m investment in IT,
internet and energy sector

Investing across all industries (selection from our portfolio)

/7
we maintain
performance
thanks to a
high level
of discipline
What’s new in 2009?
Key facts and figures
Investments
Divestments
New partnerships
key facts and figures
2009: a year of solid returns

Our cautious investment approach and rigorous


monitoring have helped us build one of the best
track records in the private equity industry.

Fund performance examples (as of December 31, 2009)*


Funds of funds
AXA Secondary Fund III (vintage 2004)  50.1% net IRR
AXA Early Secondary Fund II (vintage 2004)  17.5% net IRR

AXA Secondary Funds ranked n° 6 most influential investor in The Wall Street Journal
(March 17, 2009)

Direct funds
AXA LBO Fund II (vintage 2000) 33.0% net IRR
AXA LBO Fund III (vintage 2005) 9.4% net IRR

AXA LBO Fund III ranked n°3 in terms of performance in the Financial Times
(April 15, 2009)

AXA Expansion Fund I (vintage 2002) 16.9% net IRR

* Past performance is no guarantee of future performance. Valuations may move up or down over time.
The above figures do not cover the entirety of all funds managed and/or advised by AXA Private Equity.
Only the performance of certain major funds is presented here. All the figures are presented after
management fees and carried interest.

150 companies $18.6 billion


in direct portfolio committed since 1996

500 funds
in portfolio 165 investors
7,500
2.6 funds
underlying
per investor
companies
in funds of funds portfolio on average
In 2009, we strengthened
and grew our companies.
15 investments
in 2009
2009 was not just about stabilizing
a n d st re n g t h e n i n g o u r co m p a n i e s ’ 5 divestments
fundamentals. Keen to capitalize upon in 2009
opportunities presented by the downturn,
we created value by initiating and securing
several bolt-on acquisitions for companies 3 build-ups
within our portfolio. Three build-ups took in portfolio companies in 2009*
place in 2009. Unipex acquired Codibel
in March, Löwen Play acquired Vrakas in
April, and Gerflor acquired Ketonen during 3x net Debt / EBITDA**
the course of the year.

In a market environment characterized 20% sales growth


by reduced transaction opportunities, of our portfolio companies
AXA Private Equity managed to secure since acquisition*
several investments, most of them during
the second half of the year: a total of 15 * for mid cap, small cap and co-investment where we have
a lead position
investments and five divestments across ** for small and mid cap
the direct funds, funds of funds, mezzanine
and infrastructure activities.

In 2010, we will continue Awards


to provide operational
support to our investments. Enel Rete Gas
European Oil and Gas Deal
We are well-placed to take advantage of
new opportunities that may arise in the
coming months. But new investments Best Private Equity Firm
will be made with our usual caution and in France
limited leverage. We have purposefully
accumulated a reserve of undrawn Southern European
commitments across our funds, so that Private Equity
we may react quickly and seize new Firm of the Year
opportunities with advantageous terms.
Dominique Senequier,
The funds of funds team is also well
European Private Equity
positioned to invest in very large secondary Most Influential Woman
opportunities.

What’s new in 2009? / Corporate review / Investment review / 11


2009 investments
infrastructure

Interview with Frédéric Roche (CEO)


Investment Date_ August 2009
Country_ France
Sales 2009_ €26m
Employees_ 10

KALLISTA
Renewable energy
Why did you choose to partner Tre & Partners. It will use Kallista as How would you characterize
with axa Private Equity? a platform for all of its renewable the potential for green energies?
A few months ago, a competitive energy activities. Last but not least, There is a growing demand for
bid was organized and AXA Private having a shareholder that is as well more environmentally-friendly
Equity was chosen to acquire 100% established as AXA Private Equity energies across Europe. Moreover,
of the shares of the company. in the European market is extremely because wind and other renewable
Its reputation of reliability and reassuring and favors our long-term energies are available naturally,
professionalism played a key role development. and thus to some extent, are
in the decision. Having personally i n ex h a u s t i b l e , t h ey p r e s e n t
met with many investors, I was What does your growth strategy good business opportunities in
also able to appreciate the team’s depend on? the coming years. In the context
a c u t e u n d e r st a n d i n g o f t h e As of today, Kallista owns wind of rising oil prices, developing
company’s industrial vision. Finally, farms. We would like to expand our the capabilities in such fields
its commitment and its capacity to activities to evolve in the coming helps secure countries’ energy
support our growth strategy helped years into a more comprehensive independence and international
make the difference. and lucrative business which competitiveness. Compared to its
includes project development, neighbors, France is still behind and
What kind of resources does o p e ra t i n g a n d m a i n te n a n ce, there is an obvious need to catch
the team provide you with? and reporting. Building on our up. Now is the time to seize the
With 15 wind farms mainly situated expertise, we also plan to expand opportunity and fully benefit from
within a 300 km radius of Paris, and o u r i n f ra s t r u c t u re b a s e a n d the growth potential.
a total capacity of 163 MW, Kallista develop new projects in wind
is one of the most important wind and solar energy across Europe.
farm platforms in France. Our Although capital intensive in the
objective is to reinforce our position first stages of development, such
in the French and European wind infrastructure projects traditionally
market and open it up to new exhibit low correlation to economic
technologies. The AXA Private cycles and generate stable and
Equity infrastructure team has the recurrent returns.
capacity to create synergies via its
existing portfolio assets, such as
Saur, Sanef, Tozzi Wind Farms and
Wind farm in Breteuil-Paillart (Picardie region).

What’s new in 2009? / Corporate review / Investment review / 13


2009 investments
infrastructure

In 2009, the infrastructure team completed three major investments


in the energy sector: TRE & Partners and Enel Rete Gas in Italy,
and Kallista in France.

Investment Date_ August 2009 Investment Date_ February 2009


Activity_ Renewable energy Activity_ Renewable energy
Country_ France Country_ Italy
Sales 2009_ €26m Sales 2009_ €48m
Employees_ 10 Employees_ 3

AXA Private Equity has acquired 100% of Kallista AXA Private Equity and the industrial company, Tozzi
Energies Renouvelables and Kallista France, which is Group, have established a joint venture to invest in
held through Holding Energies Renouvelables (“HER”), the Italian renewable energy sector. The joint venture,
a holding company dedicated to renewable energy TRE & Partners S.p.a, acts as a holding company and
investments in France and with which the firm plans comprises investments in wind farms, hydroelectric
to make further investments. The assets represent one and solar projects in Italy. TRE & Partners consists of
of the most important wind farm platforms in France Tozzi Group assets – wind farms and hydroelectric
and comprise 15 wind farms with a total capacity of projects already in operation - as well as projects
163 MW, mainly situated 300 km from Paris. Synergies currently under development or construction with
arising from AXA Private Equity’s existing portfolio a total gross capacity above 400 MW. Tozzi Group
will help boost Kallista’s growth and reinforce its owns 55% of TRE & Partners, with AXA Private Equity
position in France. holding the remaining shareholding.

Investment Date_ May 2009


Activity_ Natural gas distribution
Country_ Italy
Sales 2009_ €318m
Employees_ 1,289

Enel Rete Gas is the subsidiary of the Enel Group


operating in the distribution of natural gas in Italy.
It has a market share of about 12% in terms of the
amount of gas distributed, with more than 2 million
users connected to the grid and approximately
3.2 billion cubic meters of gas distributed to more
than 1,200 municipalities in 2009.
2009 investments
direct funds - mid cap

We adopted a cautious approach in 2009 due to the decrease


in available debt and high valuations. However, the team seized
two opportunities in France and Germany during the last quarter,
with very attractive conditions.

Investment Date_ December 2009 Investment Date_ November 2009*


Activity_ Multi-sector catering Activity_ Home-shopping TV channel
Country_ France Country_ Germany
Sales 2009_ €408m Sales 2009_ €379m
Employees_ 12,200 Employees_ 500

Newrest is a global catering company created in 1995 HSE 24 is Germany’s second TV home-shopping
in Toulouse. Today it is present in 32 countries. channel and number one in Austria and German-
In this transaction, AXA Private Equity acquired 22.5% speaking Switzerland. It offers 24-hour programming
of the shares of the company and the management produced at three studios in Ismaning near Munich.
increased its shareholding from 61.3% to 67.5%, other With 500 employees, mainly dedicated to customer
financial investors completing the shareholding order processing through call centers, the company
structure. offers customers a product catalogue of about 22,000
The company serves diversified markets such as different products in the areas of beauty, wellness,
Airlines (58% of total revenues), Retail and Business, jewelry, home and living, household goods, fashion,
Catering and Support Services. AXA Private Equity’s sports, house and garden as well as home electronics,
international network and resources will support half of which are new to the market. AXA Private
the Group’s growth and reinforce its diversification Equity’s involvement will provide the company with a
strategy. solid foundation for the future.
*Closing March 2010

What’s new in 2009? / Corporate review / Investment review / 15


2009 investments
direct funds - mid cap

Interview
with Olivier Sadran and
Jonathan Stent-Torriani
(co-CEOs)
Investment Date_ December 2009
Country_ France
Sales 2009_ €408m
Employees_ 12,200

NEWREST
Multi-sector catering
Why did Newrest look How would you define Newrest’s strategy is aimed at
for a new shareholder? your collaboration t a k i n g f u l l a d va n t a g e o f t h e
C re a te d i n 1 9 9 5 , N ew re s t i s with AXA Private Equity? numerous opportunities in the
a m a t u re co m p a ny t h a t wa s Newrest is a dynamic company booming food industry. We plan
about to enter a new phase of which is present in 32 countries to consolidate our international
i t s d eve l o p m e n t . D u r i n g t h e and has doubled revenues since reach and expand our services into
previous 15 years, the Group had 1995. We believe entrepreneurial untapped sectors. Having access
regularly evolved: after five years spirit and initiative are key to our to AXA Private Equity’s worldwide
of operations, Newrest joined the success. The management and network is a clear advantage for
Compass group in 2000 and then employees of Newrest hold the us. Our focus is to consolidate
regained its independence through majority of the company’s capital. our positions in Europe and in the
a management buyout in 2005. AXA Private Equity is our chosen Middle East and to improve our
In early 2009, it was clear that partner and we have regular penetration of the South American
some of its shareholders wished to interaction. The team efficiently market. We are one of the few
exit. At the same time, Newrest was challenges us and demonstrates global players in the industry. To
looking to meet new challenges a perspective and proactivity that ensure continuous growth, we
and needed additional means to are in line with the way we work. will focus on markets, such as oil
fuel its growth strategy. Under exploration and production fields,
the agreement, achieved with What is Newrest’s where we see good potential.
no leverage, AXA Private Equity growth strategy?
acquired 22.5% of the equity, the Over the years, the Group has
management and employees extended its range of food services
increased their stake from 61.3% to through a multi-sector catering
67.5%, 10% remained with existing model. Inflight catering generates
shareholders. The transaction was 58% of total revenues, Retail and
designed to allow shareholders to Business Solutions (catering
fully focus on creating operational concepts), along with Catering and
value. Support Services (management of
restaurants, cafeteria and reception
rooms) make up the rest.
School cafeteria - French Polynesia

What’s new in 2009? / Corporate review / Investment review / 17


2009 investments
direct funds - small cap

The small cap team resumed investments in the second half


of the year and completed three attractive investments with
good valuations and growth prospects.

premium wine producers all around the world, with


Investment Date_ December 2009
around 80% of the production of casks sold abroad. In
Activity_ Professional training
Country_ France December 2009, with the help of AXA Private Equity
Sales 2009_ €168m which acquired 31% of the new entity, Charlois Group
Employees_ 1,138 merged with Saury Group, the fifth largest barrel
maker in the market with a production of 50,000
Founded 80 years ago, Cegos is now Europe’s leader barrels per year and vats used for quality wines and
in professional training. The group progressively brandy. AXA Private Equity’s track record in working
expanded into various areas of training such as with family businesses means we are able to support
e-learning and face-to-face training, in diversified the Group’s international expansion strategy. The
markets such as finance, management, human investment team will also bring to Charlois expertise
resources, marketing and sales. Cegos is operational on governance processes in companies facing
in 28 countries. The transaction was achieved with significant change.
limited leverage, provided by six banks, which enabled
AXA Private Equity to acquire 15% of the shares and
the management team and employees to increase
their stake to 65%. Investors will back a development
project to take full advantage of the training sector’s
growth potential and increase the Group’s turnover by
more than 50% by 2014. Cegos will seek to reinforce
Investment Date_ October 2009
its position in e-learning and diversify its offer through
Activity_ Call center services provider
new technologies. It will also boost its international Country_ Austria
growth and improve its penetration of the UK and Sales 2009_ €38m
German markets, possibly through build-ups. Employees_ 2,000

Competence Call Center AG (CCC) is a European


operator of customer care centers. Founded in 1998,
the Austrian-headquartered firm currently operates
eight call centers in six countries. CCC has plans
for further expansion into Austria and elsewhere in
Europe. The company employs 2,000 people and
Investment Date_ December 2009
Activity_ Stave-wood and barrel maker the largest office is located in Berlin. CCC has grown
Country_ France dynamically in recent years. International development
Sales 2009_ €60m is a priority for CCC. Therefore, the company aims
Employees_ 280 to expand its presence abroad, possibly through
build-ups, in order to better meet the needs of its
Founded in 1928, Charlois is an historic and leading international clients.
wood manufacturer and barrel maker. It has been
successful in optimizing its production process
through acquisitions and now consists of two stave-
wood makers, two cask manufacturers and a pallet
manufacturer. Stave wood and barrels are sold to
2009 investments
direct funds - venture capital

2009 continued to be an active year for venture funds: four


investments and three reinvestments were completed in France
in various sectors: solar energy, internet and information technology.

Investment Date_ August 2009 Investment Date_ January 2009


Activity_ Solar energy Activity_ Software components & related services

Aviccia designs and installs turn-key solar panels Founded in 1999, Lusis is both a software and a
on large roofs for customers due to its combined consulting company. Lusis delivers mission critical
expertise in construction and photovoltaic facilities. systems to banks, finance transport and services
It is also developing a business producing renewable companies. With a workforce of 100 employees
energies based on rented roofs, which it equips and based in France and Luxembourg, the company has
operates. a healthy cash position and has experienced double-
digit growth since it was founded.

Reinvestments
Investment Date_ July 2009
Activity_ Domain name operator

INDOM is the leading French registrar for businesses,


offering a complete range of services with a view to Investment Date_ October 2009
Activity_ Rich media and web TV content publisher
optimizing, administering and securing their domain
and producer
names. The company is well equipped to capitalize
upon opportunities arising from changes in its Brainsonic is one of the European leaders in the
market, such as the creation of new extensions and production of rich media and internet TV for
the launch of individual country domain names. This communications, marketing and training.
collaboration will secure the company for the future
and help with its penetration of the market.

Investment Date_ September 2009


Activity_ Internet community cashback site

Investment Date_ March 2009 Founded in 2000, eBuyClub acts as a social network
Activity_ Software producer of purchasers and offers various services to facilitate
on-line purchases and create savings.
Goto Software is an emailing software publisher.
The company runs three businesses: anti-spam
te c h n o l o g i e s ( Va d e Re t ro) , e - m a i l s o f t wa re
(Sarbacane) and games applications (bridge
software). GOTO Software is profitable and has
Investment Date_ June 2009
secured dynamic growth since 2004. AXA Private
Activity_ Project portfolio management software
Equity will provide resources and expertise to take
advantage of the booming market and help expand Founded in 1996, Planisware is a leading software
the company’s client base. company specialising in project and product
management software.

What’s new in 2009? / Corporate review / Investment review / 19


2009 investments
direct funds - small cap

Interview with Sylvain Charlois (CEO)


Investment Date_ December 2009
Country_ France
Sales 2009_ €60m
Employees_ 280

CHARLOIS
Stave-wood and barrel maker
Why did you open your company That is where AXA Private Equity The expertise and resources
to a financial partner like came in. It demonstrated a true provided by AXA Private Equity,
AXA Private Equity? understanding of our sector, which has been regularly dealing
Six generations of Charlois have and the quality of its network of w i t h s i m i l a r s i t u a t i o n s , wa s
run this company. As a family partners clinched it: one of its truly beneficial to us. Our group
business, we managed to grow at investors had previously been organization is now fully adapted
a decent pace, recently acquiring involved in a deal with Saury to meet new challenges and
two firms: Berthomieu in 2006 and and understood our needs and sustain accelerated growth. Our
Malviche in 2008. As we opened concerns. We benefited from its sector is likely to consolidate and
to new markets and diversified input on strategic guidance, during we are well positioned to reinforce
our client base, sustaining our and after the transaction. Now, our market shares through build-
growth implied a change of scale. the merged group stands out as ups. Charlois’s goal is to expand
We were looking for a financial the first completely integrated its presence internationally. AXA
boost, one that would help us high quality barrel maker, going Private Equity’s global reach will
secure new acquisitions. Teaming upstream from wood processing help us identify possible build-up
up with a financial partner like AXA to barrel making. Both the Charlois targets.
Private Equity, used to dealing with and Saury brands retain their
family-owned companies facing separate identities, production
similar issues as ours, was a clear materials and sales operations, 75%
advantage. of which are realized abroad.

How would you describe AXA Tell us more about your growth
Private Equity’s contribution plans?
during the merger with Saury? With the merger and the change
As a family-owned firm, it is of scale, Charlois had to evolve:
paramount for us to preserve our we re o rg a n i ze d o u r i n te r n a l
identity. But, at the same time, we processes, introduced new reporting
need to open ourselves to external procedures and rationalized our
expertise and knowledge. When corporate governance rules and
we discussed a possible merger mechanisms.
with Saury, it became obvious we
could not complete such a sizeable
acquisition without external help.
Barrels at the Berthomieu cooperage.
Less than 1% of the global wine production matures in French oak barrels in the most prestigious cellars of France and the whole world.

What’s new in 2009? / Corporate review / Investment review / 21


2009 investments
funds of funds and mezzanine

The fund of funds team clearly remained very selective about


investments in 2009. Two acquisitions at the end of the year
were completed, with exceptional conditions.
The mezzanine team primarily focused on direct investments and
portfolio monitoring to anticipate difficulties and secure position.

Funds of funds investments mezzanine reinvestments

Sawgrass Siem Flexitallic


Investment Date_ December 2009 Initial Investment Date_ November 2007
Commitment_ €32m Activity_ Watertight joints manufacturing
Country_ France
Acquisition of a portfolio of seven US and European Commitment_ €12m
buyout fund interests.
In November 2007, AXA Private Equity invested €12m
Allen of mezzanine finance in Siem Flexitallic, one of the
leading worldwide suppliers in watertight joints for
Investment Date_ September 2009 highly demanding applications including energy and
Commitment_ €55m nuclear industry, chemicals, pharmaceuticals and
petrochemicals. Following a covenant reset for the US
Acquisition of two US and European buyout fund Group in June 2009, the mezzanine holders agreed
interests. on a capital increase of €2m.

Mezzanine investment
Initial Investment Date_ December 2005
Activity_ Automative applier
Country_ Germany
Commitment_ €10m
Investment Date_ June 2009
Activity_ Commercial and strategic
analysis for the oil and gas industry Neumayer holds a leading position as an automotive
Country_ UK supplier in Germany and operates seven plants -
Commitment_ €19m one in the US, one in Italy, one in Brazil and four in
Germany. The company’s performance sharply
In June 2009, AXA Private Equity invested €19m in deteriorated in 2009 as a result of the worldwide
the mezzanine facility for the acquisition of Wood crisis and its impact on the automotive industry.
Mackenzie by Charterhouse. Wood Mackenzie is A consensual restructuring solution was reached in
a global leader specializing in the collection and June 2009 through which AXA Private Equity was able
dissemination of information for the energy industry, to achieve a satisfactory solution with a mezzanine
primarily focused on oil and gas. The company and senior debt haircut. AXA Private Equity invested
also conducts third party research and provides €3m in super senior debt, transferred part of its
consultancy services. mezzanine to senior debt, and will be entitled to some
equity.
2009 divestments

Venture Co-investment

Date of Sale_ September 2009 Date of Sale_ January 2009


Activity_ Software Leading Funds_ TPG / Goldman Sachs
Country_ France Activity_ Mobile telecom operator
Time Held_ 8 years Country_ USA
Time Held_ 1 year and 2 months
In September 2009, we sold the shares to ORSYP,
an international software company. During eight years, AXA Private Equity sold its participation in Alltel,
AXA Private Equity supported the growth of Sysload. the fifth largest wireless communications services
Over that period, Sysload secured its position as a operator in the US, following the sale of the company
leading player in the supervision of IT infrastructures to Verizon.
and quality control for information systems. Sysload
has conquered a significant proportion of the European
market and is pursuing growth internationally.
It has more than 900 customers (30,000 licences in Mezzanine
production) and sustained a growth rate of 25% per
year for the past five years.

Date of Sale_ January 2009


Small cap Time Held_ 3 years and 3 months
Exit Type_ Recapitalization

Schneider is a German leader in B2B and B2C mail


order sales. The group also provides marketing
services and is one of the leading mail order catalogue
Date of Sale_ November 2009 specialists in Germany. The mezzanine has been fully
Activity_ Shipyard repaid by a senior recapitalization allowed by a low
Country_ France leverage level.
Sales 2009_ €150m
Employees_ 930
Time Held_ 4 years

In November 2009, after four years as a shareholder


of the company, AXA Private Equity sold its 40% stake Date of Sale_ June 2009
in Piriou to the management. During this period, we Time Held_ 1 year
have placed our expertise, resources and network at Exit Type_ Secondary LBO
the company’s disposal.
Wood Mackenzie is a global leader specializing in
the collection and dissemination of information for
the energy industry, primarily focused on oil and gas.
The company also conducts third party research and
provides consultancy services. The mezzanine has
been fully repaid by the sale of the company from
Candover to Charterhouse.

What’s new in 2009? / Corporate review / Investment review / 23


2009 divestment
direct funds - small cap

Interview with Pascal Piriou (CEO)


Date of Sale_ November 2009
Country_ France
Sales 2009_ €150m
Employees_ 930
Time Held_ 4 years

PIRIOU
Shipyard
Why did you decide to team up How did AXA Private Equity Throughout this period, its team
with a private equity investor? help with Piriou’s corporate acted as allies, but also challenged
Af te r 4 0 ye a r s o f r u n n i n g a governance? us in a constructive way. The
successful 100% family-owned AXA Private Equity had a good firm’s solid network in Asia helped
business, the company was understanding of our rationale and expand our global presence and
facing two major challenges. our future needs. It helped stabilize enabled us to get closer to our
Some of our family shareholders issues around our ownership customers. The opening of our
wanted to exit and we needed to and came up with solutions Vietnamese shipyard in 2006
secure the company during and to consolidate our corporate provided us with access to one of
after this period of transition. governance structure. We set up a the busiest shipping areas in the
At the same time, the company Supervisory Board, implemented world. With AXA Private Equity’s
was undergoing rapid industrial better reporting rules and put support, Piriou moved from a
changes and it was necessary to together a Group organization family company mainly focused
find sustainable means to finance compatible with our growth plans. on building fishing boats into an
our international expansion. We A great deal was achieved in the international diversified group.
looked for a financial partner able four years AXA Private Equity Sales have increased from €65m
to provide strategic guidance and partnered with us. In 2009, the to € 1 5 0 m a n d we n ow h ave a
fuel our accelerating growth. In time was right for the management 930 strong workforce.
2006, we had already launched to resume control of the capital
the Mauritius subsidiary and had and for AXA Private Equity to exit
just opened another one in Nigeria. on good terms.
Those were large investments
and Piriou was not organized to How would you describe the
manage that industrial conversion collaboration with AXA Private
on its own. We chose AXA Private Equity?
Equity because of its moderately- AXA Private Equity held 40%
leveraged financial offering and o f t h e s h a re s a n d p o s i t i ve l y
its proposed solutions for our contributed to the development
governance issues. of the company during four years.
“ Franche Terre ” 90 meter fishing boat built by Piriou.

What’s new in 2009? / Corporate review / Investment review / 25


new partnerships
sharing a worldwide network

Building on existing strong ties, Caisse de dépôt


et placement du Québec and AXA Private Equity
formed a partnership to support businesses
expanding abroad.
In October 2009, the Caisse de dépôt By placing practical tools at the disposal
et placement du Québec (The Caisse) of portfolio companies, the alliance
and AXA Private Equity decided to join contributes in a concrete way to the
forces and share their respective market growth of businesses. AXA Private Equity
k n ow l e d g e a n d n e t wo r k s i n N o r t h and The Caisse will help companies seize
America, Europe, Asia and the Middle new business development opportunities:
East to foster their portfolio companies’ joining a global distribution network,
international development. AXA Private searching for suppliers, developing joint
Equity and The Caisse are longstanding ventures, forming an alliance with a foreign
partners. The Caisse has been one of company, or acquiring an international
AXA Private Equity’s historical investors. competitor.
This agreement marks a new stage in
collaboration and trust between the two Making the partnership work
partners. A dedicated task force was set up to
implement the partnership and facilitate
Broader expertise exchanges between teams. An initial
and shared resources screening of portfolio companies, both at
V i a t h e n ew p a r t n e r s h i p , Q u é b e c AXA Private Equity and at The Caisse, led
businesses will be able to benefit from to the identification of thirty businesses
AXA Private Equity’s solid international in various sectors (e.g. pharmaceutical,
network, which is particularly far-reaching natural ingredients, IT…) with cross-border
in Europe and Asia. The Caisse’s experience growth potential. Portfolio companies from
and multi-market knowledge, especially in each party have been brought together to
North America, will be useful in supporting enable the development of new business
the global growth of businesses. This opportunities.
partnership fully illustrates the AXA Private
Equity philosophy to help businesses it
invests in, develop both industrially and
geographically.

Meeting the challenges


of today’s business world
Productivity levels, globalization and
transfer of ownership are some of the
major challenges business leaders are
facing, both in Québec and Europe.
new partnerships
Caisse de dépôt et placement du Québec

1/7AA3232p>ÐB
/F/>@7D/B33?C7BG
3B>:/13;3<B2C?Cp031

By opening its network


Caisse de dépôt
et placement to our portfolio companies,
du Québec this partnership represents
The Caisse is a leading
a major opportunity for
financial institution Québec-based companies
managing funds primarily
for public and private to accelerate their cross-border
pension and insurance development.
companies.
Normand Provost
Net assets under management Executive Vice-President, Private Equity and Chief Operations
Caisse de dépôt et placement du Québec

CAD 131.6bn
as of December 31, 2009

What’s new in 2009? / Corporate review / Investment review / 27


new partnerships
Principles for Responsible Investment (UN PRI)

In May 2009, AXA Private Equity became one of the first private equity signatories to
the Principles for Responsible Investment issued by the United Nations (“UN PRI”),
demonstrating its renewed commitment towards responsible investment.

AN ACTIVE ADVOCATE
The objective of the Principles for Responsible Investment is to ensure that investors
take account of Environmental, Social and Governance (“ESG”) issues in their investment
decisions and practices as shareholders. The code also proposes ways in which to
implement these principles. AXA Private Equity has been active in putting those actions
into practice and is keen to act as a leading proponent of ethical and responsible
investment in the private equity community and beyond.

We are committed
to responsible behavior,
not only for ethical reasons
but also because we believe
that this will have a positive
impact on the growth of
the companies in which
we are shareholders.
Dominique Senequier, CEO
How we apply the six UN Principles for Responsible Investment.
6 UN PRI PRINCIPLES OUR ACTIONS

• Incorporate ESG issues into •E


 SG analysis is a standard part of the investment
investment analysis and due diligence in all investment areas.
decision-making processes

•B
 e active owners and • Companies of our last mid cap fund are subject to a
incorporate ESG issues into our yearly ESG evaluation, which is conducted with the help
ownership policies and practices of a specialized consultant.
• We promote an active policy consisting in sharing
capital gains with all employees when existing from
our portfolio companies.

•S
 eek appropriate disclosure •O
 ur fund of funds team has compiled a questionnaire
on ESG issues by the entities which will encourage the entities in which we invest
in which we invest (primary commitments) to disclose their ESG-related
actions.

•P
 romote acceptance and • We were closely involved with the first
implementation of the conference in France on ESG matters in the
Principles within the private equity industry.
investment industry • As a member of its Steering Committee, we take
an active part in the Private Equity workplan
of the UN PRI.

•W
 ork together to •W e have issued our own Corporate
enhance effectiveness in Responsibility Charter which sets out our
implementing the Principles commitment to investors, investments,
employees, society and the environment.
• An internal multi-disciplinary working group
is dedicated to the CSR policy, including ESG
criteria promotion and implementation.

•R
 eport on activities and • This report, and the forthcoming corporate and social
progress towards implementing responsibility section of our website, are part of our
the Principles commitment to demonstrate the incorporation of
the Principles into our business.

What’s new in 2009? / Corporate review / Investment review / 29


we are
committed to
excellence,
ethics and
the long term
Corporate review
A story of sustained growth
Our story
A cohesive management team
Best-in-class reporting
A loyal and diversified investor base
Client-oriented support
Rigorous internal governance
Corporate social responsibility
Promoting excellence
a story of
sustained growth
14 years of consistent development

Since its creation in 1996, AXA Private Equity has managed sustained, consistent growth
in assets under management, which stands at $25 billion in 2009. Over the years,
we have diversified our activities, which now range from direct investments to funds of
funds, infrastructure and mezzanine. AXA Private Equity has demonstrated top quartile
returns since inception in all its areas of expertise.

BUILDING A GLOBAL GLOBAL REACH, LOCAL KNOWLEDGE


INVESTMENT CAPACITY With 230 employees based in eight offices
AXA Private Equity has progressively worldwide, our teams have a practical
developed a solid network of experts and understanding of the challenges and
partners around the world, in Europe, North opportunities relative to their local and
America and Asia. This network helps regional markets. This in-depth knowledge
provide our teams with a comprehensive of local market dynamics is critical to
understanding of global market trends, developing quality partnerships with
facilitates investment sourcing, favors management teams and investors.
reactivity and makes it easier to access the
best transactions in the market.

Assets under management


(in billion dollars)

26 25
23

14
8
0.1 0.2 6
0.2 0.8 1.9 2.6
3.1 4.5
6
199 97
19 98
19 99
19 00
20 01
20 02
20 03
20 04
20 05
20 06
20 07
20 08
20 09
20
our story

2009 Partnership with The Caisse


de dépôt et placement
du Québec (Canada)

230 employees

2008 Zurich and Vienna offices open

2007 Milan office opens

2005 Singapore office opened by Christophe Florin


Launch of co-investment, mezzanine and Asia funds
Launch of infrastructure business
More than 100 employees

2001 Frankfurt office opened by Stephan Illenberger


Launch of primary funds of funds business

1999 London and New York offices open

1998 Start of secondary funds of funds business


by Vincent Gombault and Christophe Florin
Launch of first venture capital fund

1997 Launch of LBO business by Dominique Gaillard

1996 Dominique Senequier founds AXA Private Equity

What’s new in 2009? / Corporate review / Investment review / 33


a cohesive
management team

AXA Private Equity Executive Board Members*


Vincent Gombault Dominique Senequier Stephan Illenberger
Managing Director, Chief Executive Officer Managing Director, Germany
Funds of Funds Dominique Senequier joined AXA Before launching AXA Private
Vincent Gombault joined AXA Group in early 1996 and founded Equity’s German-based business
Private Equity in 1998 and manages AXA Private Equity. At GAN from in 2001, Stephan Illenberger
the firm’s funds of funds activities. 1987 to 1995, she created and spent three years as a Managing
He spent seven years in AXA Group’s developed the subsidiary GAN Partner of Doertenbach & Co,
Industrial Holdings department and Participations. Prior to that, she an independent management
was also an Investment Manager was Group Acquisitions Manager company. Previously, he was Head
in the M&A department of Société at GAN and spent five years with of Corporate Finance Germany at
Générale. He began his career at the the French Insurance Commission. NatWest Markets and CEO of York
French Trade Commission in Detroit, Education: Ecole Polytechnique. Hannover. From 1987 to 1992 he was
USA. He is also a lecturer at ESSEC. DEA in Banking and Monetary Director of Bayerische Vereinsbank
Education: Master in Financial Economics from the Sorbonne in the M&A department. He started
Techniques from ESSEC. DESS in University. Member of the Interna- his career with McKinsey and TA
Banking and Finance. Degree in Law. tional Actuarial Association. Associates.
Master’s degree in Economics from Education: MBA from the University
Paris X University, Nanterre. of Munich. MA in Economics from
Chicago University.
DOMINIQUE GAILLARD CHRISTOPHE FLORIN
Managing Director, Chief Operating Officer
Direct funds Managing Director, Asia We value
Dominique Gaillard joined AXA
Private Equity in 1997 and manages
Christophe Florin joined AXA
Private Equity in 1998 to participate
entrepreneurship
d i re c t i nve st m e n t a c t i v i t i e s .
Previously, he spent seven years
in the development of the funds of
funds business and has directed the
in private equity.
Dominique Senequier
with Charterhouse France where Asian business since 2005. He is also Chief Executive Officer
he was a Director and member of responsible for the Administration
the Executive Board. He began his and Finance, Legal and Human
career at Péchiney. Resources departments. Previously,
Education: Ecole Polytechnique. he worked in GAN’s unlisted
Ecole Nationale des Ponts et Chaus- company investments team, at
sées. Institut d’Administration des Développement et Partenariat and
Entreprises. Master of Science from also at Crédit National.
UC Berkeley. Education: MBA in Finance from
Université de Laval, Quebec. Degree
from Sciences Po. Paris.

* From left to right.


All the members of the Executive Board have worked together
since the early years of the company.

Vincent Gombault, Dominique Senequier, Stephan Illenberger, Dominique Gaillard, Christophe Florin (from left to right).

What’s new in 2009? / Corporate review / Investment review / 35


best-in-class reporting

Since 1996, throughout the different generations of funds, investors have regularly
renewed their commitment to AXA Private Equity. The client base is diverse, including
private and public pension funds, family offices, high-net-worth individuals, insurance
companies, funds of funds and government agencies. More than 80% of AXA Private
Equity’s 165 investors are based outside France and more than 46% outside Europe.

Frequent and direct communication In 2010, IntraLinks, the client online


with investors is critical: our team of reporting interface, will cover all of AXA
nine local relationship managers based Private Equity’s funds, both direct and
in North America, Continental Europe, funds of funds. Investors may access the
United Kingdom, Asia and the Middle East reporting information they need, such
maintains close contact with clients, swiftly as capital calls, through a unique and
addressing their inquiries and organizing comprehensive online tool.
regular meetings to discuss progress.
According to strict regulatory requi-
Transparency and reactivity rements, AXA Private Equity has
Our investor relations team is continually harmonized all client templates to provide
improving the quality of information we thorough and detailed information on
provide and the service we offer. We funds’ underlying assets. On top of the
are commited to being transparent and Annual Advisory Boards and Annual
reactive to investors. General Meetings, two global Investor
Meetings have taken place this year, one
A general survey was conducted among in New York, the other in Paris, at which
more than 100 investors to assess their more than 160 institutions from all over
satisfaction with our service. As a result, the world were present.
this year AXA Private Equity initiated
quarterly investor conference calls with
investors preceded by a presentation
updating investors on key actions and
performance during the last quarter.
The session is monitored and recorded
and made available to those who cannot
attend in real time.
a loyal and diversified
investor base

Geographical breakdown* Breakdown by type of investors*

6%
Funds of
54% funds
Europe
52%
7% Pension
Asia-Australia funds
Middle-East 9%
Government
agencies

14%
Insurance
companies

9%
39% Others 10%
Family Offices/
North America
High-Net-Worth Individuals

165 investors
90% re-up(1)
for our main funds

80% of investors
based outside France

* As of December 31, 2009 – Excluding investments by AXA Group


(1) Percentage of existing investors who reinvested in a new generation of funds

What’s new in 2009? / Corporate review / Investment review / 37


client-oriented support

International network of
Investor Relations Managers
14 people in the Investor Relations team clear and strict policies on personal trading
develop the product line offered to of securities, control and use of non-public
clients and are in charge of relations with information, gift policy and handling
investors. Nine regional correspondents employee complaints (whistle blowing).
are specifically responsible for providing
i n fo r m a t i o n re g a rd i n g t h e re g i o n s Diligent management of
where they operate: North America, investment vehicles
Continental Europe, Switzerland, United Among the 50 people in the Finance &
Kingdom, Asia and the Middle East. Administration Department, 30 financial
Every day, they are supported by the controllers are in charge of 210 investment
Client Servicing team for reporting vehicles and assess production, valuation
issues and by the Product Management and performance calculations, fund
te a m fo r d u e d i l i g e n ce p ro ce ss e s . launching analysis and integration of new
They are backed by a professional activities. Each controller is dedicated to
communications team in charge of one product line without overlaps and
organizing client events and sharing key all are organized into eight dedicated
information with the investors on a regular teams: LBO, co-investment, infrastructure,
basis. retail, secondary funds, primary funds,
mezzanine and mandates.
Dedicated risk management, The legal team consists of ten professionals
control and compliance teams who manage the structuring and follow-
F i ve p e o p l e a re f u l l y d e d i c ate d to up of the investment vehicles and advise
Internal Controls, Risk Management and investment teams on investments and
Compliance issues. AXA Private Equity’s divestments.
Compliance Standards and Policies include

Maintaining “best-in-class” standards and


following rigorous processes is critical
to ensuring our continued strong
performance and investor commitment.
Edouard Boscher, Head of Investor Relations
rigorous internal
governance

Behaving ethically is a cornerstone of our corporate


strategy at AXA Private Equity.

Standards of corporate responsibility O n ce a g a i n , n o fa i l i n g s h ave b e e n


are laid out in the AXA Private Equity identified by PricewaterhouseCoopers.
compliance manuals and our Code of This certification is an internationally
Conduct. They endorse the following recognized audit standard designed
principles: priority of investors’ interests, to provide information to be used for
i n t e g r i t y, c o n f i d e n t i a l i t y, l oy a l t y, financial reporting purposes by clients and
transparency and security. Above all, our investors of AXA Private Equity and their
culture demands responsible behavior independent auditors.
from every individual working with the
firm. Below are some of the ways in which Achieving SAS 70 certification is of
we ensure we are exceeding industry particular importance for AXA Private
standards and investors’ requirements. Equity’s compliance with Sarbanes-Oxley
legislation and reflects the firm’s ongoing
Committed to improving commitment to maintaining a strong
industry standards control environment.
A X A P r i va t e E q u i t y e n g a g e s w i t h
other market players and takes an Accredited
active part in professional discussions performance reporting
around the industry’s working practices. AXA Private Equity has also renewed its
We participated in industry consultations GIPS** certification attesting to the firm’s
regarding the rules and regulations compliance with the internationally
applicable to FCPRs (French regulated recognized funds’ performance presentation
funds) and in the AFIC/AFG working group standards.
(French Private Equity and management
* Statement on Auditing Standards No. 70 established by
associations) responsible for drafting the the American Institute of Certified Public Accountants
new Code of Ethics for the professions. ** GIPS: “Global Investment Performance Standards“.
AXA Private Equity provided its expertise
to private equity regulators in Singapore
and has recently been working with Abu AXA Private Equity
Dhabi regulators to help them define
is regulated by:
private equity regulation locally.
• AMF
Recognized for our internal (French Financial Markets Authority)
controls and processes • SEC
In December, we obtained our fourth (US Stock Exchange Commission)
annual SAS 70 Type II certification*, which • FSA
confirms the efficiency of our internal (UK Financial Services Authority)
controls and processes.

What’s new in 2009? / Corporate review / Investment review / 39


corporate social
responsibility
an active commitment

AXA Private Equity is committed to socially responsible behavior, both as a shareholder


in portfolio companies and as a company in its own right.

Under the leadership of Dominique acting as A RESPONSIBLE COMPANY


Senequier, a dedicated CSR (Corporate We believe diversity equals strength.
Social Responsibility) working group For example, 44% of all employees are
was set up this year, gathering managing female, including our CEO, the head of our
directors from our mid cap, small cap, mezzanine activities and two managing
infrastructure and fund of funds teams directors in the mid cap team.
as well as senior executives from human We also seek to build an environmentally
resources, purchasing, corporate fr ie n dly wor k place by u sin g paper
development & communications, investor produced from forests managed according
relations and compliance. to sustainable development principles.
80% of our reporting is now electronic.
This year, not only did we sign the UN PRI We sort waste and control our electricity
(Principles for Responsible Investment) consumption.
but we became member of its private Of course, our governance and compliance
equity steering committee and issued our principles are stringent. We focus on
own CSR charter. We also co-organized ensuring good risk management practices,
the first conference in France on the adherence to regulation, comprehensive
application of ESG (Environment, Social, employee engagement and careful
Governance) criteria in the private equity reputation management.
industry in July 2009.

Improving performance responsibly


We believe being a responsible investor will improve our long-term
performance by taking into account the interests of all stakeholders:
• Reducing risks on portfolio companies and funds
• Improving management practices of portfolio companies and funds
• Making us a preferred shareholder and employer
For each investment opportunity,
environmental, social and governance
factors are systematically assessed.
Dominique Gaillard, Member of the Executive Board, direct funds

PROMOTING CSR
ACTIONS AT PORTFOLIO LEVEL
Our responsible approach extends to the initial investment stage, we carry out
our portfolio companies. When we are environmental due diligence in portfolio
a majority shareholder, we share up companies with industrial operations
to 5% of capital gains realized with all and support initiatives aimed at reducing
employees when unwinding successful LBO the ecological impact of their activities.
transactions. This helps in aligning interests This year, we commissioned an external
of all stakeholders. Employees contribute consultant to provide independent ratings
to the creation of the value in a company. for each of the portfolio companies in our
Prior to each new investment we make, latest mid cap fund. We will repeat the
ESG criteria are assessed within our exercise on an annual basis.
investment memoranda, both for our direct
funds and primary funds of funds. Beyond

ESG implementation within AXA Private Equity companies

before investing
•a
 ssessment
> •during investment > communication
external consultant
• to investors:
of ESG criteria consolidates newsletter
and action plan information and
in investment provides independent • t o employees:
memoranda ratings on AXA LBO presentation at
Fund IV companies seminar, internal
newsletter

• t o public: annual
report, website,
conferences,
associations

What’s new in 2009? / Corporate review / Investment review / 41


corporate social
responsibility
case studies

Diana Ingredients
Diana Ingredients specializes in diploma. A diverse workforce
producing and commercializing is important to the business.
natural ingredients for the food Women represent more than one
industries (pet food, aromas, third of the workforce and 51%
culinary ingredients and natural of the management. Moreover,
extracts). AXA Private Equity Diana Ingredients has partnered
invested in the company in 2007. with Atlas, a company which
Since then, Diana Ingredients has places people with disabilities in
reinforced its position and its employment.
international presence. It has 19 In 2009, the compensation system
production sites and markets its was overhauled and now includes
products in Europe, America, a profit sharing policy for all
Australia and Asia. The company employees.
employs 1,300 people and
generated €322m of revenues in Strict Health
2009. Its development strategy and Safety policies
and its business model include Health & Safety issues are closely
solid and concrete social monitored. Strict regulations and
responsibility commitments. policies have been implemented:
regular reporting procedures
Responsible human help prevent accidents and rapi-
resources management dly manage potential incidents.
Diana Ingredients has worked A Director for Operational Excellence
hard to create an attractive and is responsible for supporting health
efficient working environment for and safety best practices; he is
its employees. It has implemented a backed by a network of dedicated
training program for non-qualified correspondents in the Group’s
employees, enabling them to certify different entities.
their skills through a recognized
Maisons trecobat
AXA Private Equity invested in
Trecobat, the house builder, in
such as passive solar building
design, insulation and careful site
At the 2009
2007. Trecobat builds about 1,000 selection and placement. Innovative Houses
houses per year. The company
expanded its range of products, Trecobat is currently building Challenge, held
such as wooden houses, and 90 houses as part of the French in Copenhagen,
invested heavily in innovation. Housing Ministry project “A house
for 15 euros per day”. Partly Trecobat was
Building
positive energy houses
financed by local municipalities,
these homes will have a minimum
awarded the
Trecobat recently developed area of 85 m2 and will be equipped Golden Medal
the Positive Energy House, an with a heating pump.
innovative home that produces in the “ Positive
more energy from renewable
energy sources than it imports
Trecobat also built 12 HQE certified Energy House”
(High Quality Environmental
from external sources. The standard) individual houses in a test category and the
company was able to develop such
a product using a combination of
zone as part of the “ Brest Métro-
pole Océane ” municipal initiative.
Jury’s Special Price
microgeneration technology and for all categories.
low-energy building techniques,

Foreword review
What’s new in 2009? / Corporate review / Investment of ceo / 43
promoting excellence
committed to education

AXA Private Equity has developed a


program to strengthen links between
the business world and education via
student sponsorships, grants to non-profit
organizations and mentoring programs.

In 2009, AXA Private Equity allocated ten


grants for students through partnerships
with universities and contributed to two
non-profit organizations. We funded
the studies of three students at Ecole
Polytechnique, five exchange programs to
the USA for students of the International
Frateli workshop at AXA Private Equity Paris office
“How to prepare for Universities and Business Schools Master of Finance at the University of
admission interviews” Cergy Pontoise in France, and two grants
were given to students of the University
of Frankfurt under the “House of Finance”
program.

Sofia, a Fratelli
mentee, was Created in 2004 by young professionals
concerned with promoting equal
admitted at HEC opportunities, Frateli’s objective is to

Business School and provide a mentoring program to 18-year-


old students born into underprivileged

spent six months as families. Nine employees from AXA Private


Equity provide coaching and mentoring
an intern in our to young students from various academic
backgrounds, guiding them on their
office in New York. academic choices and career plans.

Created in 2006, Un Avenir Ensemble’s


main objective is to assist students from
underprivileged backgrounds in France.
The association has set up a mentoring
program for young people with potential
who lack financial resources or guidance.
Three employees of AXA Private Equity
are mentors in the program.
promoting excellence
human resources team and policy

The Human Resources approach aims at fostering the development of professional


competences via an individual approach, capitalizing on its internal resources as well as
encouraging the ongoing acquisition of best practices from external professionals. In this
team of five, areas such as Compensation & Benefits, Recruitment or Training are each
covered by a dedicated specialist.

Internal Mobility Short Mobility program


In 2009, nine employees moved internally Aimed at strengthening cohesion between
to another position within the company. the members of the funds of funds team
located throughout our eight offices,
A vast range the Short Mobility Program provides the
of training programs opportunity for its members to work in
In 2009, internal knowledge-sharing another country for three months. In 2009,
sessions led by various teams and open to three employees took part in the program.
all employees gathered 196 participants.
128 employees took part in external Young Analyst
training courses. Over the year, 57% of Graduate Program
all staff completed at least one external A year after joining the company, young
course. analysts participate in a nine-month
program consisting of three periods of
Internal mentorship program three months in different departments
Every new employee with less than three within the firm. In 2009, 13 analysts took
years’ experience takes part in the internal part in the program, and were sent to one
mentoring program. In 2009, eight new of the eight AXA Private Equity offices
mentoring pairs were added to the nine around the world, sharing the daily life
already existing. More pairs will join the of a different team and discovering new
program in early 2010. An Engagement expertise.
Charter for the new mentors and mentees
has been drafted and will be included in
the 2010 program.

What’s new in 2009? / Corporate review / Investment review / 45


we cover
the full range
of the private
equity
asset class
Investment Review
Infrastructure
Funds of funds
Direct funds
Mid cap
Small cap
Venture
Co-investment
Mezzanine
infrastructure

Low risk asset with


attractive, long-term returns

€1.3 billion
At A X A P r i va te E q u i t y, we h ave a
strong track record in infrastructure.
As an asset class, it has an attractive managed and/or advised by AXA
r i s k /r e t u r n p r o f i l e . I n f ra s t r u c t u r e Private Equity’s Infrastructure team
investments are equity or quasi-equity

$41 trillion
products displaying low correlation
with other asset classes and business
cycles and offering inflation protection. global infrastructure needs by 2030
They are long-term (usually 20 years)
Source: AXA Private Equiy
investments associated with limited risk of
capital loss and strong visibility, generating
regular and sustained yield and returns. AXA Private Equity’s strengths lie in our
solid institutional and financial network,
Active since 2005, the infrastructure team our expert knowledge of regulated sectors,
of 12 professionals has committed more and our proven experience in working
than €860 million and manages and/or with the public and private sectors. We
advises €1.3 billion of assets in sectors have a well established, high performing
including water, waste, motorways and track record, market recognition and
energy. international presence. Our financial
capabilities and valuation, reporting and
The team primarily focuses on the legal structuring provide our partners with
European market and brownfield projects the tools they need to operate effectively
(i.e. acquisition of an operating company and continue to grow.
through privatization, buyout or private
placement), with an opportunistic stance
on greenfield projects (i.e. new infrastruc-
ture development).

With their good risk/return profile,


infrastructure investments are attractive
for investors looking for low volatility and
consistent returns over the long term.
Mathias Burghardt, Head of infrastructure
The right timing
In 2010, conditions are converging to Due to the economic context, many
create a favorable environment for seizing industrial companies are currently selling
the opportunities infrastructure presents. whole or part of their non-core assets. New
Governments are supporting infrastructure opportunities are arising from institutional
investments as part of their stimulus investors seeking to deleverage or create
policies to boost economic growth. As the liquidity through the sale of infrastructure
sector is highly regulated, infrastructure assets. European regulatory requirements
projects benefit from friendly legal may le ad to unbundling of ce rtain
frameworks and market entry conditions. infrastructure assets.

The combination of an increase in energy Moreover, driven by world population


needs and public interest in reducing growth, infrastructure has to develop
carbon emissions will generate new s t r u c t u r a l l y. I t i s e s t i m a t e d t h a t
opportunities in renewable energies. infrastructure needs will reach $41 trillion
by 2030. Now is the time to take advantage
of this emerging opportunity.

Projected annual infrastructure expenditure


in the next two decades - Geographic distribution (in US$bn)

300

200 200

153

60
60
40
pe
Eu
ro ina ia
Ch As 10
a ca
C hi n
m eri ssi
a
- st
No
n h A Ru Ea
r t ca
N o
dd
l e eri
M i A m rica
tin Af
La

Source: CIBC World Markets Research (2009): ‘Capitalizing on the Upcoming infrastructure Stimulus’

What’s new in 2009? / Corporate review / Investment review / 49


infrastructure
portfolio

AXA Private Equity’s long-term commitment to


support our development is key. Our Group is supported
and positively challenged by the team’s strategic
guidance and understanding of our industrial vision.
Gianclaudio Neri, CEO, Enel Rete Gas
Enel Rete Gas was awarded “European Oil & Gas deal of the year” by Project Finance Magazine

Estimated 2009
Company Investment Date Sector Country Revenues in €m

August 09 Renewable energy France 26

May 09 Natural gas distribution Italy 318

February 09 Renewable energy Italy 48

(1) February 09 Telecom/Rail France n.a.*

August 08 Motorways France n.a.*

June 08 Water and sewerage United Kingdom 1,585(2)

October 07 Hospitals Italy n.a.*

May 07 Renewable energy Italy 22

April 07 Water and waste France 1,517

Northumberland December 06 Waste management United Kingdom n.a.*

Cornwall October 06 Waste management United Kingdom n.a.*

January 06 Motorways France 1,414

* Revenues not applicable for projects in construction


(1)
Closing February 2010
(2)
Estimated amount end of March 2010
SANEF - A16 Motorway (North of France).

What’s new in 2009? / Corporate review / Investment review / 51


funds of funds

Active for the past 12 years in funds of funds, AXA Private Equity has developed
an in-depth knowledge of the market and offers worldwide investors a complete
range of products: primary, early secondary and secondary funds.

a selective approach An international team in eight


We have developed a solid network of offices around the world
long-term relationships with the most AXA Private Equity’s fund of funds team
prestigious private equity managers has become a leader in the international
around the world. AXA Private Equity has market: it is based on 33 investment
more than 60 seats on advisory boards of professionals who operate from eight
some of the most important funds. offices on three continents, in Europe,
Many investors have committed large North America and Asia. The team
amounts in private equity funds in recent manages or advises assets of over $13
years generating a large and sustainable billion invested in more than 500 funds
secondary deal flow for the next few years. around the world, representing a portfolio
In such a speculative environment, we of more than 7,500 companies
adopted a cautious approach, relying on

$1.2 billion
our deep knowledge of the market, on our
efficient and careful pricing evaluation
method and backed by our unique in-
distributed since 2007
house monitoring system, which covers
more than 500 funds. Out of the 90
opportunities studied, the funds of funds
team realized two major investments in
$20 billion
early secondary funds of funds in the last assessed in 2009 : Secondary funds
quarter of 2009. of funds market deal flow
The early secondary and secondary markets
should remain active in 2010 and 2011,
so AXA Private Equity will seek the best 500 funds
opportunities at reasonable entry levels. As in portfolio
investors regain trust in the economy, new
funds should be raised. We will therefore
look into opportunistic timing for primary 7,500
investments. With an investment capability
of $2.5 billion on the secondary and early underlying
secondary markets, AXA Private Equity is
well positioned to rapidly seize the best- companies
performing investment opportunities.
Performance of secondary funds among the best on the market
(as of December 31, 2009)

Net Cash Maximum


Vintage Net IRR* multiple* on cash** Cash at work
multiple***
Secondary funds
AXA Secondary Fund I 1999 39.7% 1.90 x 184.2% 5.9 x

AXA Secondary Fund II 2001 23.1% 1.55 x 135.4% 3.2 x

AXA Secondary Fund III 2004 50.1% 1.66 x 125.6% 5.7 x

Early Secondary funds


AXA Early Secondary Fund I 2003 17.3% 1.41 x 94.2% 3.6 x

AXA Early Secondary Fund II 2004 17.5% 1.57 x 86.5% 2.7 x

AXA Early Secondary Fund III 2005 n.a. 0.94 x 25.3% 1.3 x

Past performance is no guarantee of future performance. Valuations may move up or down over time. These figures do not cover the entirety of the funds
managed and/or advised by AXA Private Equity. Only the performances of certain major funds are presented here.

* After management fees and carried interest.


** Ratio of distributed capital to called up capital.
*** Multiple of distributed capital plus unrealized valuation divided by the net cash at work (i.e. the sum of called-up capital minus the sum of distributed capital).

Our team benefits from a strong track record and has


developed a deep understanding of the market.
Our high-quality network enables us to rapidly seize
the best investment opportunities all over the world.
Vincent Gombault, Executive Board Member, funds of funds

What’s new in 2009? / Corporate review / Investment review / 53


funds of funds
secondary and early secondary

2,854
4 generations of secondary funds
(in million USD)

1,040
220 480

99
19
FI
- 01
20
AS I- 4
FI 00
AS -2 7
II 00
FI -2
AS V
FI
AS

Secondary funds
Amounts committed (in million USD)
and number of transactions completed as of December 31, 2009

800 10
730
9
700 9
8
600 7 8
7 7
500
474 501 7
400
5
5 5
300 4 6
298 307
200 5
100 84
Amounts 67 77 4
0 81 3
committed 120
3
99
19 00 001
20 2 02 2
20 03
20 04 5
20 00 0 1
2 06
20 07 Number of
20 08
0
0 transactions
20
09
20
Early Secondary funds
Amounts committed (in million EUR)
and number of transactions completed as of December 31, 2009

300
264 275 12
250 10

200 218 10

150 6
7 8
5
100 107
5
53 6
50
Amounts 87
committed 0 3
4
44
2
03
20 04 2
20 05
20 6
2 00 07
20 Number of
08 0 transactions
20 9
200
funds of funds
primary

Breakdown by investment strategy* Breakdown by region*

68%
Buyout 8% 48%
Asia, Australia North America
1%
Distressed funds

7%
Others 24% 44%
Venture Europe

* Number of funds as of December 31, 2009

Number of primary funds’ commitments by vintage

43
41

36

28 28 30

15 21 22
17
11

15

8
99
<1 19
98
99
19 00
20 01
20 02
20 03
20 04 1
20 05
20 6
00
2 07
20 08
20 09
20

What’s new in 2009? / Corporate review / Investment review / 55


funds of funds

Best-in-class An innovative
monitoring system archiving project
During the past 24 months, AXA Private Following the creation of the Electronic
Equity has developed its own monitoring Database and Monitoring tools by the
system that enables us to collect detailed fund of funds team, AXA Private Equity
information on funds in which we invest. launched an Archiving Solution, which
The team analyzes and monitors the allows the company to define which funds
majority of the underlying companies of of funds documents must be legally stored,
these funds on a regular basis. what their shelf life should be, and the
duration of legal conservation.
Meetings and calls with the funds’
managers are held on a quarterly basis, AXA Private Equity stands as the first
providing opportunities to exchange private equity player to implement
information about significant events and such an Archiving System, which is
value creation strategies, comparing our certified compliant with both regulatory
own assumptions with those developed requirements and archiving standards.
by the fund managers. Since this year,
our internally-developed database, which
consolidates the transaction and market The database
data collected over the past ten years,
can be accessed by our 33 investment today covers
500 underlying
professionals within our eight offices
worldwide.

Via the principle of pooled and shared funds (325 General


resources, each member of the team
updates the database directly from internal Partners) or more
documents (e.g. capital calls, distribution
notices, quarterly reports) and external than 7,500 portfolio
data, such as market studies.
companies.
The volume of information available and Benoît Verbrugghe,
the strict management of the database Head of AXA Private Equity USA
give the funds of funds team a leading
position in terms of knowledge of the
private equity market. AXA Private Equity’s
unique monitoring system is a valuable
tool in a context where reactivity and
selectivity are key competitive advantages
for fund of funds managers.
Through its funds of funds business, AXA Private Equity gains
exposure both directly to the best fund managers and indirectly
to a very wide range of companies worldwide.

FundS of funds’ portfolio exposure to mAJOR companies


As of June 30, 2009

Company Location Sector % of Portfolio Valuation


Brooks Equipment USA Distribution 3.7%
ILC Industries USA Defence 3.4%
First Data USA Financial services 3.4%
Pelican Products USA Manufacturing 3.0%
TDF France Telecom 2.5%
Dollar General USA Retail 2.3%
IPC Acquisition Italy Consumer goods 2.0%
Keolis France Transport 2.0%
American Home Mortgage USA Financial services 1.9%
Energy Future Holdings USA Energy 1.9%
Groupe France Agricole France Media 1.8%
Selig Sealing USA Manufacturing 1.7%
US Foodservice USA Distribution 1.5%
Pneu Service Italy Distribution 1.5%
Alliance Boots United Kingdom Healthcare 1.4%
Biomet USA Healthcare 1.4%
Elster Germany Energy 1.4%
Peacock Engineering USA Manufacturing 1.4%
Snaam France Construction 1.1%
Cobra Italy Consumer goods 1.1%
Total Top 20 Companies 40%

MAIN GENERAL PARTNERS

America Europe Asia and Australia


Pan American Pan European Pan Asiatic and Australasian
(KKR, Blackstone, Carlyle, TPG, (APAX, BC Partners, Carlyle, Cinven, (Affinity, CVC, KKR, etc.)
TH Lee, Onex, Warburg Pincus, etc.) CVC, Charterhouse, EQT, PAI, Triton,
3i, etc.)

Mid Market Mid Market Mid Market


(Behrman, Brazos, Harvest, KRG, (Astorg, Bencis, Clessidra, (3i, Actis, CDH, ChrysCapital,
Oak Hill, SPL, WCAS, etc.) Lyceum, Mid Europa, Pragma, etc.) CHAMP, HOPU, etc.)

What’s new in 2009? / Corporate review / Investment review / 57


direct funds

AXA Private Equity’s direct funds team invests in companies of all sizes in a variety of
sectors across Europe. We have developed a diverse set of investment vehicles, including
small and mid cap, venture and co-investment. The direct funds team is composed
of 40 professionals based in Paris, Frankfurt, Milan, Vienna and Singapore.

Focus on long-term value creation Meeting stakeholders’ expectations


At AXA Private Equity, we are focused AXA Private Equity conducted a survey
on supporting the growth of companies last year aimed at assessing our practices
in which we invest. As a responsible and investment strategy. More than a
s h a re h o l d e r, A X A P r i va te E q u i t y ’s hundred people, including company
contribution goes beyond pure financial managers, bankers and government
s u p p o r t . Te a m s wo r k c l o s e l y w i t h representatives were interviewed.
companies’ management to provide As a result, we are adapting our approach
strategic guidance and constructively to meet the evolving expectations of these
challenge decisions. Regular dialogue stakeholders.
and mutual trust are fundamental to our
approach. We provide advice on corporate A new CSR
governance, group organization and paradigm for direct funds
management, finance and legal matters As part of a comprehensive effort to
and environment or social responsibility- disseminate responsible practices to
related issues. portfolio companies, AXA Private Equity
hired a consultant to conduct an ESG
We are defined by our cautious approach. (Environment, Social, Governance) analysis
Leverage is kept to a minimum and exit on companies in our fourth generation
conditions are discussed thoroughly at buyout fund. The results have been
the time of investment to the satisfaction shared with these companies, and we are
of all parties. Once we are committed, we monitoring and assisting them in making
closely monitor financial positions, support appropriate changes to their business
management, especially during times of practices.
difficulty, and facilitate access to external
experts through AXA Private Equity’s
international network.

In light of the deteriorated economic


environment in 2009, we spent a great
deal of time and resources monitoring
portfolio companies and providing
guidance to management. We were also
able to capitalize upon the investment
opportunities presented by the downturn,
investing in nine companies: two mid
cap, three small cap and four venture
capital. Continuing our strategy of helping
companies to grow, we assisted in three
build-ups.
direct funds
portfolio

Our portfolio companies are headquartered


in 21 countries around the world.

BELGIUM
BULG

AUSTRIA
DE
NM

ARIA
FIN ANC

AR
LA
FR

GE
K
ND

RM
AN
E

HUN Y
GAR
Y
ITALY
LITHUANIA

S
NETHERLAND
W AY
NOR
D
LAN
PO IN CHINA
A
SP EN KOREA
ED
M

SW
DO
NG

CANADA
KI

UNITED STATES
ED
IT
UN

INDIA

We want to change the rules for private equity.


We believe that AXA Private Equity can set a
benchmark for other investors with our sustainable
approach to company investment.
Dominique Gaillard, Executive Board Member, direct funds

What’s new in 2009? / Corporate review / Investment review / 59


direct funds
mid cap

creating operational value


Focusing on majority or active minority
investments in companies valued between
€100 million and €2 billion, the mid cap
team of 17 professionals has carried
out 41 transactions since its creation We care about
and has participated in over 40 add-on
acquisitions. our companies
We have been very cautious in 2009 and support their
focusing on the monitoring of our portfolio
companies. During the second half of the growth in the
year, we resumed investments.
In 2009, AXA Private Equity invested long term.
€45 million in one transaction, committed Philippe Poletti,
a further €200 million, and has €1 billion of Head of mid cap France, Germany and Italy
available cash to invest by 2013.

Sector diversification

2%
Aerospace and Defence

7%
Construction and 43%
Building Materials Industrials

29%
Consumer Goods
and Services

19%
Technology,
Media
and Telecom
direct funds
mid cap portfolio

AXA Private Equity acquired its shares with no


leverage and the deal enabled the management
to increase its stake. Shareholders can now fully
focus on operational value creation.
Olivier Sadran, co-CEO, Newrest

Estimated 2009
Company Investment Date Sector Country Revenues in €m

December 09 Multi-sector catering France 408

(1)
November 09 TV home-shopping channel Germany 379

May 08 Active ingredients and specialty France/Canada 131


chemicals
April 08 Gaming arcade operator Germany 149

June 07 Natural ingredients for pet food, human food, France 322
beverages & pharmaceuticals
January 07 Specialty chemicals Germany 294

November 06 PVC flooring France 414

October 06 Specialty chemicals France 164

September 06 Airport ground support equipments France 193

May 06 Radio and internet (blogs) France 41

April 06 Concrete sleepers Germany 158

February 06 Licence-free vehicles France 103

November 05 Laundry and home-cleaning products France 325

December 04 PVC profiles for doors and windows Germany 207

(1)
Closing March 2010

What’s new in 2009? / Corporate review / Investment review / 61


direct funds
small cap

Entrepreneur-oriented Eastern Europe


investments The Eastern Europe team, based in Vienna
AXA Private Equity’s small cap team since 2008, has prioritized mid cap, small
focuses on companies with a valuation of cap and expansion deals. 2010 should be
less than €100 million where a majority a year of economic recovery in Central
holding is taken, or less than €500 and Eastern Europe, with interesting and
million in the case of a minority holding. affordable investment opportunities to
Companies are often family companies capitalize upon.
looking for finance in order to continue
their growth, or, where it is necessary, to
increase share capital. AXA Private Equity We support
supports them for an average period of
five years. family-owned
In light of difficult market conditions in
2009, the 13 members of the small cap companies
team scrutinized the cash and working
capital of portfolio companies. We helped to expand
consolidate corporate structures and
processes, and establish efficient reporting internationally
procedures and management forecasting
systems. or to optimize
their capital
structure.
Dominique Gaillard,
Executive Board Member, direct funds
Sector diversification

5%
Construction and
Building Materials
17% 32%
Healthcare and Industrials
Life Sciences

28%
18% Business Services
Technology,
Media and Telecom
direct funds
small cap portfolio

Access to AXA Private Equity’s international network,


together with its excellent knowledge of the
pharmaceutical industry, will help us implement
our growth plans and achieve strategic build-ups.
Pierre Banzet, CEO, Synerlab

Estimated 2009
Company Investment Date Sector Country Revenues in €m
December 09 Professional training France 168

December 09 Stave wood and barrel-maker manufacturer France 60

October 09 Call center Austria 38

December 08 Food ingredients Belgium 36

July 08 B2B information provider France 52

January 08 Manufacturer of hydraulic valves Italy 20

June 07 Manufacturer of generic pharmaceutical France 68


products
May 07 Promotional marketing software France 12

February 07 Single-family houses building company France 88

October 06 Manufacturer of plastic containers Germany 12


and palettes
September 06 Industrial framework for single family houses France 47

May 06 Radio and internet (blogs) France 41

March 06 Claims collection services France 40

July 05 Technical and graphical analysis of financial France 12


markets
September 04 Social contribution, tax and operating cost France 57
reduction consultancy

What’s new in 2009? / Corporate review / Investment review / 63


direct funds
venture capital

Support entrepreneurs Facilitating contacts between


in fostering growth entrepreneurs and investors
Active in venture for almost 14 years, AXA AXA Private Equity sponsored “Tremplin
Private Equity supports firms that have Entreprises”, an event which we have
the potential to transform innovation into supported since its inception 11 years ago.
growth. We always invest at a sufficiently Organized by the French Senate and the
mature phase in their development when ESSEC Business School, it provides an
they are in a position to capitalize upon opportunity for 30 teams of entrepreneurs
their unique proposition. AXA Private to present their projects to investors who may
Equity’s venture team is particularly valued potentially be interested in financing them.
for its entrepreneurial approach and its
expertise in the Information Technology, AXA Private Equity participated in three
Internet and Cleantech sectors. selection committees: Software & Systems,
Internet & Services and Energy, Materials &
We always invest in equity to create Components.
corporate value. There was no noticeable
decline in performance in 2009, with
20 out of 24 portfolio companies profitable.

Our line of action is focused on


supporting entrepreneurs who
turn innovation into growth,
therefore creating value and jobs.
Laurent Foata, Director, venture capital
direct funds
venture capital portfolio

AXA Private Equity truly understands the challenges


facing entrepreneurs and its pragmatic, constructive
approach fully convinced me to partner with the firm.
Thierry Tarnus, Founder, Goto Software

Energy and Environment

Company Investment Date Sector Country

December 09 Equipment for air and water quality measurement (1) France

August 09 Development and installation of turn-key solar panels France

(1)
Listed companies

software and Information technology

Company Investment Date Sector Country

December 09 Publishing of an electronic CAD software (1) France

December 09 IT services (1) France

March 09 Software producer France

January 09 IT Services France

March 08 IT Services specializing in business process outsourcing France

May 07 Promotional marketing software France

December 06 Rich media and web TV content publisher and producer France

November 06 IT Services (1) France

July 05 Windev development environment software France

March 05 Mobile device management software France

January 05 Financial management software France

December 02 Project portfolio management software France

(1)
Listed companies

What’s new in 2009? / Corporate review / Investment review / 65


direct funds
venture capital portfolio

INTERNET AND DIGITAL MEDIA


Company Investment Date Sector Country
July 09 Domain name operator France

February 09 Online shopping search engine (1) France

April 08 Construction and home improvement website France

January 08 Social cataloging France

December 07 Affiliation platform France

January 06 Internet community cashback site France

Telecoms and components


Company Investment Date Sector Country

October 06 Alternative discount telecommunications operator (1) France

July 06 Development and production of diode-pumped solid state France


lasers
September 04 Made-to-measure mobile telecoms terminals manufacturer France

life sciences
Company Investment Date Sector Country
December 06 Development of oncology cell therapies France

July 06 Prenatal diagnosis France

September 04 Cellular therapy for the treatment of inflammatory diseases France

March 04 Molecular diagnosis laboratory Netherlands

September 02 Development of immune modulation drugs France

July 02 Knowledge management platform for life sciences France

(1)
Listed companies
direct funds
co-investment

Collaborating for growth


Our close Via our co-investment activity, we have
established partnerships with several key
international funds and benefited from
AXA Private Equity’s well established ties
relationship private equity managers for large and mid- with other key industry players.

with a large size LBO transactions, involving companies


whose valuation may reach several
A team of five professionals runs the
portfolio and supports existing investments

international hundred million or several billion of euros.


Because of poor economic conditions
such as Keolis and its acquisition of
Effia, a subsidiary of SNCF. One exit was
group such and limited access to debt, 2009 was an
unpredictable year and AXA Private Equity
conducted during the year. AXA Private
Equity is ready to resume investing, with
as TDF remained very cautious on investments. more than €500 million available for
investment in the next two years.
illustrates The firm has invested over €1 billion

our ability to in 32 companies worldwide since 2005,


meaning we are among Europe’s leading
be an active players for such transactions.
The co-investment team has enjoyed
shareholder. privileged relationships with major
Alexandre Motte, Director,
co-investment

Sector diversification
4%
Energy
& Utilities 39%
Technology,
6% Media & Telecom
Healthcare & Life Sciences

12%
Business Services

22%
17% Consumer Goods & Services
Industrials

What’s new in 2009? / Corporate review / Investment review / 67


direct funds
co-investment portfolio

Estimated 2009
Company Investment Date Sector Country Revenues in €m

September 08 Safety closures and aluminium screw caps Italy 311


manufacturer
April 08 Telecom towers operator India 626

March 08 Automatic food & beverage vending Italy 180


machines operator
January 08 Casino entertainment and hotel operator United States 6,408

December 07 Life insurance Korea 4,800

October 07 Electricity generation and distribution United States 6,868

September 07 Payment processing services provider United States 6,366

September 07 Manufacturer of specialty vessels China 1,392

August 07 Manufacturer of automatic United States 1,269


transmissions for commercial vehicles
July 07 Pharmaceuticals and beauty products United Kingdom 20,910
retailer and wholesaler
July 07 Nursing homes operator United States 191

April 07 Passenger transport operator France 3,424

March 07 Mobile network operator Lithuania 192

January 07 Broadcasting and transmission France 1,574


services provider
November 06 Semiconductor components manufacturer United States 2,524

November 06 Equipment rental services supplier United States 923

November 06 Wood-based building materials distributor Finland 333


The relationship with AXA Private Equity has
proven to be constructive in many ways. The firm is
a supportive shareholder and helpful partner for our
development projects.
Olivier Huart, CEO, TDF Group

Estimated 2009
Company Investment Date Sector Country Revenues in €m

September 06 Cable-TV operator Sweden 385

September 06 Semiconductor components manufacturer Netherlands 2,734

August 06 Nursing homes operator France 480

August 06 Roofing materials distributor United States 564

August 06 B2B, media measurement and marketing Netherlands 7,338


information provider
April 06 Kidney dialysis clinics operator United States 254

April 06 Marble and granit distributor Spain 213

February 06 Cable-TV operator Poland 97

December 05 Plastic pipes & fittings B2B retailer France 707

October 05 Electrical parts and supplies B2B France 11,307


distributor
August 05 Multi-facilities services provider (cleaning, Denmark 9,664
property services, office support…)

August 05 Manufacturer of natural ingredients for the Denmark 520


food industry
August 05 Commercial aircraft composite structures United States 2,934
manufacturer
August 05 Fast fit automotive services United Kingdom 1,084

What’s new in 2009? / Corporate review / Investment review / 69


Keolis
case study

2 billion KEOLIS
Passenger transport operator
people KEOLIS is a private passenger transport company, the sixth
use Keolis transport facilities
largest in Europe. The Group operates bus, metro and tram
every year
n e t wo r k s a n d ra i l syste m s , b a s e d o n l o n g - te r m co n t ra c t s

160 subsidiaries (five to ten years) granting exclusivity to manage transport


systems in France and 12 other countries. AXA Private Equity
in 13 countries in Europe, Algeria, invested in the company in 2007, alongside the Caisse de dépôt et
Australia, Canada and United States placement du Québec.

€3.4 billion An ambitious


industrial project
Strategic acquisition plan
In March 2009, Keolis entered
turnover in 2009: 59% in France, Ke o l i s ’s a i m i s to b e co m e a into an agreement to acquire
41% abroad leading global mobility operator. EFFIA from SNCF. EFFIA is the
Through network, expertise and third French parking operator

24% connections, shareholders support


the management’s development
with 65,000 parking spaces in key
locations such as railway and coach
sales growth since 2007 strategy based on large contract stations.This acquisition is part of
g a i n s , s e l e c t i ve a cq u i s i t i o n s a comprehensive development
45,500 and financial discipline. In three
years, Keolis secured several key
project aimed at diversifying the
Group’s activities and expanding
employees advances.
In 2009, the Group’s turnover
its presence at every stage of
the value chain of urban mobility
and more than reached €3.4 billion and it now has systems. It is also hoping to regain

30,000 drivers
45,500 employees. AXA Private
Equity, together with the Caisse
full control of strategic companies
in which it has a minority stake or is
de dépôt et placement du Québec, in a joint venture.
provide advice on and contacts Expanding its international
for acquisitions abroad, as well as presence is a priority. Keolis
knowledge of regulated markets. plans to build upon its standing
in interurban coach transport in
AXA Private Equity helped Keolis France, but also in the UK and
broaden its understanding of the in German railways. In 2010, it
business by opening its network is actively looking to boost its
to the company and facilitating presence in North America through
access to sector experts, such as opportunistic acquisitions.
Michel Derbesse, the former CEO
of Bouygues Holding company,
today President of Keolis Group’s
Supervisory Board. Keolis signi-
ficantly reinforced its market
position in 2009 by securing major
contracts in Bordeaux, London,
and Melbourne.
AXA Private Equity is a dedicated shareholder,
providing us with the right incentives on management
processes and financial discipline. It brought us truly
valuable insights on our build-up strategy.
Michel Bleitrach, CEO, Keolis

Keolis buses operate inter-city links in more than 70 French departments.

What’s new in 2009? / Corporate review / Investment review / 71


mezzanine

a dynamic team
Mezzanine is a source of subordinated The mezzanine activity at AXA Private
financing, between equity and senior Equity benefits from a strong inter-
debt, which is used in leveraged buyouts national reach and synergies with other
b u t a l s o f o r f i n a n c i n g ex p a n s i o n teams within the firm. The funds have a
projects, acquisitions and shareholder ¤1.2 billion investment capacity to deploy.
reorganizations. The team consists of Through a cautious approach, three main
11 people based in Paris, New York, London priorities will guide investments in the year
and Milan. to come: opportunistically targeting high-
Our diversified portfolio of 51 companies performing buyout transactions, providing
worldwide provides the team with good resources to companies looking into
visibility on market trends and allows for acquisitions and acting as an alternative
benchmarks. Through close and proactive solution to banks, selectively participating
monitoring, we are in general able to in refinancings to extend and amend
anticipate major difficulties and secure our existing maturities on existing debt.
positions.

Sector diversification

2%
Aerospace and Defence
2%
Energy & Utilities
7%
Construction and Building 23%
Materials Consumer Goods
and Services
11%
Technology Media
and Telecom

23%
Healthcare &
Life Sciences
15%
Industrials
17%
Business services
mezzanine
portfolio

Our diversified portfolio provides us


with good visibility on market trends.
Cécile Mayer-Lévi, Head of mezzanine

Estimated 2009
Company Investment Date Sector Country Revenues in €m

June 09 Commercial and strategic analysis to companies United Kingdom 120


operating in the oil and gas industry
November 08 Inspection, audit for building and public works France 434

October 08 Pan-European medical service provider Europe 345

October 08 Specialized medical test laboratory France 226

September 08 Provider of cash automation equipment United Kingdom 356


to financial institutions
September 08 Photo sensor technology Europe/North 166
America
September 08 Laundry detergents and personal care products United States 1,467

August 08 Chain of dental practices United Kingdom 70

August 08 Consulting firm specialized in government United States 2,176


projects
August 08 Civil engineering Canada 130

July 08 Marketing and sale of freight capacity France 25


for cargo and airlines
May 08 Gas springs, dampers and actuators Germany 281
for industrial applications
April 08 Telecom operator Bulgaria 501

April 08 Reinforced fiberglass plastic manufacturer China 37

March 08 Chain of bed and mattress stores United Kingdom 270

What’s new in 2009? / Corporate review / Investment review / 73


mezzanine
portfolio

Estimated 2009
Company Investment Date Sector Country Revenues in €m

February 08 Railway logistics operator Poland 183

February 08 Helicopter operator Italy/Spain 309

January 08 Designer and manufacturer of standard and France 63


custom power supplies, converters and inverters
November 07 Watertight joints France 74

November 07 Telecom and IT France 174

November 07 Crane rentals and sales France 43

November 07 Metrology and calibration services France 87

October 07 Manufacturer and distributor of branded pool France 473


equipment
October 07 Home healthcare services United Kingdom 739

September 07 Ingredients and aromatic product for the food France 66


industry
September 07 Satellite telecommunications France/Norway 477

August 07 Women’s ready-to-wear clothing France 765

August 07 Retail chain for home and office storage solutions United States 382

July 07 Veterinary pharmaceutical laboratory France 392

July 07 Moving company for offices and households France 59

June 07 Mobile telephone operator Lituania 195

May 07 Retail chain of branded discounted products France 145

April 07 Passenger transport operator France 3,424


Estimated 2009
Company Investment Date Sector Country Revenues in €m

March 07 Prefabricated concrete elements France 271

March 07 Blood analysis systems for diagnosing allergies, Sweden 324


asthma
March 07 Aluminium profiles for windows, verandas and Belgium 243
doors
February 07 Specialty chemicals Germany 294

February 07 Consulting firm in information systems Spain 383

January 07 Indoor perfumes France 50

November 06 Cable operator Netherlands 1,280

November 06 Pharmaceutical and cosmetics industry France 107

October 06 Logistics for non strategic purchasing France 138

September 06 Retailer of perfumes and beauty products Italy 355

June 06 Concrete sleepers and system provider Germany 158


for railways
May 06 Radio and internet (blogs) France 41

April 06 Cleaning and rental of flat linen and working France 142
apparel
April 06 Claims collection services France 35

January 06 Engineering for telecommunications France 179

January 06 Licence-free vehicles France 103

December 05 Sub-contractor in the motor industry Germany 394

November 05 Manufacturer of swimming pool covers France 42

What’s new in 2009? / Corporate review / Investment review / 75


Printed on PEFC certified paper, from sustainable forests
by Bis’Art – April 2010

This publication has been prepared


by the AXA Private Equity Communications Department

Graphic Design
RESEARCH STUDIOS PARIS

credits

p.4, 12, 35 ©Richard Cogne p.17 ©Denis Rillardon p.42 ©Diana Ingredients
p.13, 14 ©Kallista p.18 ©Cegos p.43 ©Trecobat
p.14 ©Enel Rete Gas p.18 ©CCC p.44 ©Vincent Girier Dufournier
p.14 ©Tre & Partners p.18, 21 ©Olivier Chatelain p.51 ©Fernand Burger
p.15 ©Elias Badras p.20 ©Christophe Deschanel p.71 ©Keolis
p.15 ©HSE 24 p.24 ©Piriou
p.16 ©Newrest p.25 ©M. Mochet (AFP)
glossary

Build-up GIPS Multiple


A company acquisition Global Investment This is a performance
designed to expand a group Performance Standards. indicator based on the ratio
and generate synergies. These are international ethical of the proceeds received for
standards for an objective the sale of an investment with
Buyout presentation of results and the cost of the initial capital
See LBO. performance. These standards investment.
ensure fair and complete
Closing presentation of past Primary funds of funds
This represents completion of a performance, and transparent Funds of funds which invests
transaction when all participants and complete disclosures. in new funds (less than 15%).
(i.e. directors and financial
investors) sign the final legal GP Private equity
purchase agreement and General Partner. This refers The term “private equity”
consideration is paid over. to companies managing funds. generally concerns investment
in equity in unlisted companies.
Deal flow IRR
This describes investment Internal Rate of Return. SAS 70
opportunities in a market. This is a performance Statement on Auditing
indicator for private equity Standards no. 70. This is an
Direct fundS transactions which measures international certification
A fund investing directly the average annualized return compliant with standards issued
in companies. of an investment that includes by AICPA (American Institute
cash outflows, cash inflows of Certified Public Accountants),
Due diligence and valuation. which details the operating
A series of audit procedures procedures of an asset
enabling an equity investor LBO management firm and assesses
to form an opinion regarding Leveraged Buyout. the effectiveness of internal
the assets, business, This is both debt and equity controls.
organization, financial finance for an acquisition.
situation and outlook LBOs consist of purchasing Secondary
of the company in which a company with the backing fundS of funds
he/she plans to invest. of bank debt. Funds of funds which invests
in funds which are more than
Early secondary LP 50% funded.
fundS of funds Limited Partnership.
Funds of funds for which drawn This is an investment vehicle Sourcing
capital represents between 15% combining investments from Identifying new investment
and 50% of commitments. several partners. opportunities.
The LP is managed
Expansion capital by a General Partner (GP). SRI
This is a segment of private Sustainable and Responsible
equity relating generally to a Mezzanine Investment (SRI).
minority investment in equity, Subordinated debt which
or capital akin to equity, with bridges the gap between Venture capital
a view to fund the growth of equity and senior debt and This is a segment of private
a profitable company with consequently benefits from an equity relating to investment
significant growth outlook. intermediate return. The debt in equity or capital akin
component generates interests to equity, of young companies
Funds of Funds and the equity component or start-ups which have
A fund investing in other funds. provides a potential upside. a significant high-tech content.
PARIS MILAN
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