2009 Annual Report AXA Private Equity
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Transcript of 2009 Annual Report AXA Private Equity
AXAPRIVATEEQUITYANNUALREPORT2009
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
$25 billion advised or managed*
AXA Private Equity is among the leading global private equity firms with
$25 billion of assets managed or advised for major international investors.
Since 1996, its constant focus on the long-term growth of its investments has
generated sustained and stable returns.
With 230 employees and eight offices in Paris, Frankfurt, London, New
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.
Mezzanine
Arranger
Acquisition financing
$3 billion
Infrastructure
Brownfield
Greenfield
$2 billion
Funds of funds
Primary
Secondary
Early secondary
Mandates
Direct funds
Small cap
Mid cap
Venture
Co-investment
$7 billion$13 billion
Private EquityFirm of the Year
Financial TimesMergermarket European
M&A Awards 2009
* As of December 31, 2009
summary
Foreword of the CEO
Company profile
What’s new in 2009?
Key facts and figures InvestmentsDivestmentsNew partnerships
Corporate review
A story of sustained growthOur storyA cohesive management teamBest-in-class reportingA loyal and diversified investor baseClient-oriented support Rigorous internal governanceCorporate social responsibilityPromoting excellence
Investment review
InfrastructureFunds of fundsDirect fundsMid cap Small cap Venture capitalCo-investmentMezzanine
Glossary
10_12_23_26_
32_ 33_34_36_37_38_39_40_44_
48_52_58_60_62_64_67_72_
right time, and our ability to grow compa-
nies with the help of our international
network, set us apart. As such, we are
confident that those carefully-chosen new
companies and partners you read about in
the following pages will play a part in our
continued success in the years to come.
We are committed to helping our entrepre-
neurs transform their businesses and
expand into new markets with the support
of private capital.
foreword of the CEO
Within today’s challenging economic
environment, our distinctive culture and
investment strategy has resulted in a solid
performance, reinforcing the trust of all of
our investors around the world.
Our approach towards investments in
companies and private equity funds has
always been characterized by discipline.
This year has been no different. Our caution
in selecting the right investments at the
We support entrepreneurs in the international expansion of their businesses
/ 5
Dominique Senequier
Our industry has continued to be in the
spotlight in 2009. We welcome such
scrutiny. Responsible investment by
private equity requires moderate use of
leverage and sharing of the value created
among all parties, which is the case at
AXA Private Equity. In fact, an ethical
code frames our every interaction with
companies, funds, investors and partners.
Each individual within the firm is trusted
to ensure we subscribe to ever-improving
socially responsible standards.
Looking ahead, we are well-placed to build
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
infrastructure assets, given that we are one
of the few investors with experience of
investing in this sector
Responsible investment by private equity requires moderate use of leverage and sharing of the value created among all parties
• maintaining our market-leading approach
and performance in funds of funds thanks
to our vigilance, excellent market timing
and best-in-class monitoring standards.
Emerging markets will play a key role in
shaping the world economy in the years to
come. At AXA Private Equity, we have been
embracing the opportunities afforded by
our global reach for some years.
We are looking forward to building upon
this strong platform in 2010.
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.
company profile
OUR VALUESAt AXA Private Equity, we have always
prided ourselves on maintaining a distinc-
tive corporate culture underpinned by
values that define the way we work with
investors, portfolio companies, co-investors,
other funds and our employees.
• Responsible behaviour: complying with
the rules laid down by our regulators is a
baseline requirement for us. In addition,
we challenge each AXA Private Equity
employee to go beyond what is expected
and find ways to work responsibly and
with consideration for our impact upon
companies, communities and people.
• Service orientation: investors and
companies like to be treated individually.
They recoil from standard approaches.
We take time to l isten, understand
individual needs and find the best solution
for mutual benefit.
• Investment discipline: caution is our
watch-word. Every decision, from initial
investment through build-up to divestment,
is made with the most stringent due
diligence and attention to the appropriate
process.
BRINGING OPERATIONAL VALUE TO OUR COMPANIES AXA Private Equity’s investment philo-
sophy has always been broader than mere
financial engineering. In the context of the
economic upheaval that characterized
2009, our main objective was to continue
to support our portfolio companies
through these difficult times and secure
their development in the years ahead.
At the same time, we continually reassured
our investors by providing detailed, regular
assessments of the funds’ future cash
flows.
It is our duty and our commitment to
be a reliable, responsible and engaged
shareholder. So, we mobilized our resources
and network to provide our companies
with the advice they needed to deal with
these tough conditions, while ensuring
they remained focused on growth over
the long-term. Using our long-established
monitoring procedures and forecasting
systems, we helped management of our
portfolio companies adhere to good
corporate governance structures and
protocols.
/ 7
Funds of funds
Primary, early secondary and secondary
MezzanineDebt product
between senior debt and equity
InfrastructureBrownfield and
greenfield
Co-investmentMinority interests in major transactions €20–100m per transaction
Venture capitalInnovation and growth financing€2m to €5m investment in IT, internet and energy sector
Mid cap Majority investmentsin companiesvalued between €100m and €2bn
Small cap Investments in medium-sized companies with a valuation of under €100m
Active across a diversified range of asset classes
Investing across all industries (selection from our portfolio)
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 figures2009: a year of solid returns
165 investors
2.6 funds per investor on average
7,500 underlying companies in funds of funds portfolio
150 companies in direct portfolio
500 funds in portfolio
$18.6 billioncommitted since 1996
Funds of fundsAXA Secondary Fund III (vintage 2004) 50.1% net IRRAXA 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 fundsAXA LBO Fund II (vintage 2000) 33.0% net IRRAXA 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.
Fund performance examples (as of December 31, 2009)*
Our cautious investment approach and rigorous monitoring have helped us build one of the best track records in the private equity industry.
What’s new in 2009? / Corporate review / Investment review / 11
* for mid cap, small cap and co-investment where we have a lead position** for small and mid cap
5 divestments in 2009
15 investments
in 2009
3 build-ups in portfolio companies in 2009*
3x net Debt / EBITDA
20% sales growth of our portfolio companies
since acquisition*
In 2009, we strengthened and grew our companies.
2009 was not just about stabilizing
and strengthening our companies’
fundamentals. Keen to capitalize upon
opportunities presented by the downturn,
we created value by initiating and securing
several bolt-on acquisitions for companies
within our portfolio. Three build-ups took
place in 2009. Unipex acquired Codibel
in March, Löwen Play acquired Vrakas in
April, and Gerflor acquired Ketonen during
the course of the year.
In a market environment characterized
by reduced transaction opportunities,
AXA Private Equity managed to secure
several investments, most of them during
the second half of the year: a total of 15
investments and five divestments across
the direct funds, funds of funds, mezzanine
and infrastructure activities.
In 2010, we will continue to provide operational support to our investments.
We are well-placed to take advantage of
new opportunities that may arise in the
coming months. But new investments
will be made with our usual caution and
limited leverage. We have purposefully
accumulated a reserve of undrawn
commitments across our funds, so that
we may react quickly and seize new
opportunities with advantageous terms.
The funds of funds team is also well
positioned to invest in very large secondary
opportunities.
Awards
Best Private Equity Firm in France
Southern European Private EquityFirm of the Year
Dominique Senequier, European Private Equity Most Influential Woman
Enel Rete Gas European Oil and Gas Deal
**
Interview with Frédéric Roche (CEO)Investment Date_ August 2009Country_ FranceSales 2009_ €26mEmployees_ 10
Why did you choose to partner
with AXA Private Equity?
A few months ago, a competitive
bid was organized and AXA Private
Equity was chosen to acquire 100%
of the shares of the company. Its reputation of reliability and
professionalism played a key role
in the decision. Having personally
met with many investors, I was
also able to appreciate the team’s
acute understanding of the
company’s industrial vision. Finally,
its commitment and its capacity to
support our growth strategy helped
make the difference.
What kind of resources does
the team provide you with?
With 15 wind farms mainly situated
within a 300 km radius of Paris, and
a total capacity of 163 MW, Kallista
is one of the most important wind
farm platforms in France. Our
objective is to reinforce our position
in the French and European wind
market and open it up to new
technologies. The AXA Private
Equity infrastructure team has the
capacity to create synergies via its
existing portfolio assets, such as
Saur, Sanef, Tozzi Wind Farms and
Tre & Partners. It will use Kallista as
a platform for all of its renewable
energy activities. Last but not least,
having a shareholder that is as well
established as AXA Private Equity
in the European market is extremely
reassuring and favors our long-term
development.
What does your growth strategy
depend on?
As of today, Kallista owns wind
farms. We would like to expand our
activities to evolve in the coming
years into a more comprehensive
and lucrative business which
includes project development,
operating and maintenance,
and reporting. Building on our
expertise, we also plan to expand
our infrastructure base and
develop new projects in wind
and solar energy across Europe.
Although capital intensive in the
first stages of development, such
infrastructure projects traditionally
exhibit low correlation to economic
cycles and generate stable and
recurrent returns.
2009 investments infrastructure
KALLISTA Renewable energy
How would you characterize
the potential for green energies?
There is a growing demand for
more environmentally-friendly
energies across Europe. Moreover,
because wind and other renewable
energies are available naturally,
and thus to some extent, are
inexhaust ib le , they present
good business opportunities in
the coming years. In the context
of rising oil prices, developing
the capabilities in such fields
helps secure countries’ energy
independence and international
competitiveness. Compared to its
neighbors, France is still behind and
there is an obvious need to catch
up. Now is the time to seize the
opportunity and fully benefit from
the growth potential.
What’s new in 2009? / Corporate review / Investment review / 13
Wind farm in Breteuil-Paillart (Picardie region).
2009 investments infrastructure
Investment Date_ February 2009Activity_ Renewable energyCountry_ ItalySales 2009_ €48mEmployees_ 3
AXA Private Equity and the industrial company, Tozzi
Group, have established a joint venture to invest in
the Italian renewable energy sector. The joint venture,
TRE & Partners S.p.a, acts as a holding company and
comprises investments in wind farms, hydroelectric
and solar projects in Italy. TRE & Partners consists of
Tozzi Group assets – wind farms and hydroelectric
projects already in operation - as well as projects
currently under development or construction with
a total gross capacity above 400 MW. Tozzi Group
owns 55% of TRE & Partners, with AXA Private Equity
holding the remaining shareholding.
Investment Date_ May 2009Activity_ Natural gas distributionCountry_ ItalySales 2009_ €318mEmployees_ 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.
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 2009Activity_ Renewable energyCountry_ FranceSales 2009_ €26mEmployees_ 10
AXA Private Equity has acquired 100% of Kallista
Energies Renouvelables and Kallista France, which is
held through Holding Energies Renouvelables (“HER”),
a holding company dedicated to renewable energy
investments in France and with which the firm plans
to make further investments. The assets represent one
of the most important wind farm platforms in France
and comprise 15 wind farms with a total capacity of
163 MW, mainly situated 300 km from Paris. Synergies
arising from AXA Private Equity’s existing portfolio
will help boost Kallista’s growth and reinforce its
position in France.
2009 investments direct funds - mid cap
Investment Date_ December 2009Activity_ Multi-sector cateringCountry_ FranceSales 2009_ €408mEmployees_ 12,200
Newrest is a global catering company created in 1995
in Toulouse. Today it is present in 32 countries.
In this transaction, AXA Private Equity acquired 22.5%
of the shares of the company and the management
increased its shareholding from 61.3% to 67.5%, other
financial investors completing the shareholding
structure.
The company serves diversified markets such as
Airlines (58% of total revenues), Retail and Business,
Catering and Support Services. AXA Private Equity’s
international network and resources will support
the Group’s growth and reinforce its diversification
strategy.
Investment Date_ November 2009*Activity_ Home-shopping TV channelCountry_ GermanySales 2009_ €379mEmployees_ 500
HSE 24 is Germany’s second TV home-shopping
channel and number one in Austria and German-
speaking Switzerland. It offers 24-hour programming
produced at three studios in Ismaning near Munich.
With 500 employees, mainly dedicated to customer
order processing through call centers, the company
offers customers a product catalogue of about 22,000
different products in the areas of beauty, wellness,
jewelry, home and living, household goods, fashion,
sports, house and garden as well as home electronics,
half of which are new to the market. AXA Private
Equity’s involvement will provide the company with a
solid foundation for the future.
*Closing March 2010
What’s new in 2009? / Corporate review / Investment review / 15
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.
Interview with Olivier Sadran and Jonathan Stent-Torriani (co-CEOs)Investment Date_ December 2009Country_ FranceSales 2009_ €408mEmployees_ 12,200
2009 investments direct funds - mid cap
NEWRESTMulti-sector catering
Why did NEWREST look
for a new shareholder?
Created in 1995, Newrest is
a mature company that was
about to enter a new phase of
its development. During the
previous 15 years, the Group had
regularly evolved: after five years
of operations, Newrest joined the
Compass group in 2000 and then
regained its independence through
a management buyout in 2005. In early 2009, it was clear that
some of its shareholders wished to
exit. At the same time, Newrest was
looking to meet new challenges
and needed additional means to
fuel its growth strategy. Under
the agreement, achieved with
no leverage, AXA Private Equity
acquired 22.5% of the equity, the
management and employees
increased their stake from 61.3% to
67.5%, 10% remained with existing
shareholders. The transaction was
designed to allow shareholders to
fully focus on creating operational
value.
How would you define
your collaboration
with AXA Private Equity?
Newrest is a dynamic company
which is present in 32 countries
and has doubled revenues since
1995. We believe entrepreneurial
spirit and initiative are key to our
success. The management and
employees of Newrest hold the
majority of the company’s capital. AXA Private Equity is our chosen
partner and we have regular
interaction. The team efficiently
challenges us and demonstrates
a perspective and proactivity that
are in line with the way we work.
What is NEWREST’s
growth strategy?
Over the years, the Group has
extended its range of food services
through a multi-sector catering
model. Inflight catering generates
58% of total revenues, Retail and
Business Solutions (catering
concepts), along with Catering and
Support Services (management of
restaurants, cafeteria and reception
rooms) make up the rest.
Newrest’s strategy is aimed at
taking ful l advantage of the
numerous opportunities in the
booming food industry. We plan
to consolidate our international
reach and expand our services into
untapped sectors. Having access
to AXA Private Equity’s worldwide
network is a clear advantage for
us. Our focus is to consolidate
our positions in Europe and in the
Middle East and to improve our
penetration of the South American
market. We are one of the few
global players in the industry. To
ensure continuous growth, we
will focus on markets, such as oil
exploration and production fields,
where we see good potential.
What’s new in 2009? / Corporate review / Investment review / 17
School cafeteria - French Polynesia
Investment Date_ December 2009Activity_ Stave-wood and barrel makerCountry_ FranceSales 2009_ €60mEmployees_ 280
Founded in 1928, Charlois is an historic and leading
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 - small cap
Investment Date_ December 2009Activity_ Professional trainingCountry_ FranceSales 2009_ €168mEmployees_ 1,138
Founded 80 years ago, Cegos is now Europe’s leader
in professional training. The group progressively
expanded into various areas of training such as
e-learning and face-to-face training, in diversified
markets such as finance, management, human
resources, marketing and sales. Cegos is operational
in 28 countries. The transaction was achieved with
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
its position in e-learning and diversify its offer through
new technologies. It will also boost its international
growth and improve its penetration of the UK and
German markets, possibly through build-ups.
The small cap team resumed investments in the second half of the year and completed three attractive investments with good valuations and growth prospects.
Investment Date_ October 2009Activity_ Call center services providerCountry_ AustriaSales 2009_ €38mEmployees_ 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
the largest office is located in Berlin. CCC has grown
dynamically in recent years. International development
is a priority for CCC. Therefore, the company aims
to expand its presence abroad, possibly through
build-ups, in order to better meet the needs of its
international clients.
premium wine producers all around the world, with
around 80% of the production of casks sold abroad. In
December 2009, with the help of AXA Private Equity
which acquired 31% of the new entity, Charlois Group
merged with Saury Group, the fifth largest barrel
maker in the market with a production of 50,000
barrels per year and vats used for quality wines and
brandy. AXA Private Equity’s track record in working
with family businesses means we are able to support
the Group’s international expansion strategy. The
investment team will also bring to Charlois expertise
on governance processes in companies facing
significant change.
Investment Date_ June 2009Activity_ Project portfolio management software
Founded in 1996, Planisware is a leading software
company specialising in project and product
management software.
What’s new in 2009? / Corporate review / Investment review / 19
2009 investments direct funds - venture capital
Investment Date_ September 2009Activity_ Internet community cashback site
Founded in 2000, eBuyClub acts as a social network
of purchasers and offers various services to facilitate
on-line purchases and create savings.
Investment Date_ January 2009Activity_ Software components & related services
Founded in 1999, Lusis is both a software and a
consulting company. Lusis delivers mission critical
systems to banks, finance transport and services
companies. With a workforce of 100 employees
based in France and Luxembourg, the company has
a healthy cash position and has experienced double-
digit growth since it was founded.
Investment Date_ July 2009Activity_ Domain name operator
INDOM is the leading French registrar for businesses,
offering a complete range of services with a view to
optimizing, administering and securing their domain
names. The company is well equipped to capitalize
upon opportunities arising from changes in its
market, such as the creation of new extensions and
the launch of individual country domain names. This
collaboration will secure the company for the future
and help with its penetration of the market.
Investment Date_ March 2009Activity_ Software producer
Goto Software is an emailing software publisher.
The company runs three businesses: anti-spam
technologies (Vade Retro), e-mail software
(Sarbacane) and games applications (bridge
software). GOTO Software is profitable and has
secured dynamic growth since 2004. AXA Private
Equity will provide resources and expertise to take
advantage of the booming market and help expand
the company’s client base.
Investment Date_ October 2009Activity_ Rich media and web TV content publisher and producer
Brainsonic is one of the European leaders in the
production of rich media and internet TV for
communications, marketing and training.
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.
Reinvestments
Investment Date_ August 2009Activity_ Solar energy
Aviccia designs and installs turn-key solar panels
on large roofs for customers due to its combined
expertise in construction and photovoltaic facilities.
It is also developing a business producing renewable
energies based on rented roofs, which it equips and
operates.
2009 investments direct funds - small cap
CHARLOISStave-wood and barrel maker
Why did you open your company
to a financial partner like
AXA Private Equity?
Six generations of Charlois have
run this company. As a family
business, we managed to grow at
a decent pace, recently acquiring
two firms: Berthomieu in 2006 and
Malviche in 2008. As we opened
to new markets and diversified
our client base, sustaining our
growth implied a change of scale.
We were looking for a financial
boost, one that would help us
secure new acquisitions. Teaming
up with a financial partner like AXA
Private Equity, used to dealing with
family-owned companies facing
similar issues as ours, was a clear
advantage.
How would you describe AXA
Private Equity’s contribution
during the merger with Saury?
As a family-owned firm, it is
paramount for us to preserve our
identity. But, at the same time, we
need to open ourselves to external
expertise and knowledge. When
we discussed a possible merger
with Saury, it became obvious we
could not complete such a sizeable
acquisition without external help.
That is where AXA Private Equity
came in. It demonstrated a true
understanding of our sector,
and the quality of its network of
partners clinched it: one of its
investors had previously been
involved in a deal with Saury
and understood our needs and
concerns. We benefited from its
input on strategic guidance, during
and after the transaction. Now,
the merged group stands out as
the first completely integrated
high quality barrel maker, going
upstream from wood processing
to barrel making. Both the Charlois
and Saury brands retain their
separate identities, production
materials and sales operations, 75%
of which are realized abroad.
Tell us more about your growth
plans?
With the merger and the change
of scale, Charlois had to evolve:
we reorganized our internal
processes, introduced new reporting
procedures and rationalized our
corporate governance rules and
mechanisms.
The expertise and resources
provided by AXA Private Equity,
which has been regularly dealing
with s imi lar s i tuat ions , was
truly beneficial to us. Our group
organization is now fully adapted
to meet new challenges and
sustain accelerated growth. Our
sector is likely to consolidate and
we are well positioned to reinforce
our market shares through build-
ups. Charlois’s goal is to expand
its presence internationally. AXA
Private Equity’s global reach will
help us identify possible build-up
targets.
Interview with Sylvain Charlois (CEO)Investment Date_ December 2009Country_ FranceSales 2009_ €60mEmployees_ 280
What’s new in 2009? / Corporate review / Investment review / 21
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.
2009 investmentsfunds of funds and mezzanine
Investment Date_ December 2009Commitment_ €32m
Acquisition of a portfolio of seven US and European
buyout fund interests.
Investment Date_ September 2009Commitment_ €55m
Acquisition of two US and European buyout fund
interests.
Initial Investment Date_ November 2007Activity_ Watertight joints manufacturingCountry_ FranceCommitment_ €12m
In November 2007, AXA Private Equity invested €12m
of mezzanine finance in Siem Flexitallic, one of the
leading worldwide suppliers in watertight joints for
highly demanding applications including energy and
nuclear industry, chemicals, pharmaceuticals and
petrochemicals. Following a covenant reset for the US
Group in June 2009, the mezzanine holders agreed
on a capital increase of €2m.
Initial Investment Date_ December 2005Activity_ Automative applierCountry_ GermanyCommitment_ €10m
Neumayer holds a leading position as an automotive
supplier in Germany and operates seven plants -
one in the US, one in Italy, one in Brazil and four in
Germany. The company’s performance sharply
deteriorated in 2009 as a result of the worldwide
crisis and its impact on the automotive industry.
A consensual restructuring solution was reached in
June 2009 through which AXA Private Equity was able
to achieve a satisfactory solution with a mezzanine
and senior debt haircut. AXA Private Equity invested
€3m in super senior debt, transferred part of its
mezzanine to senior debt, and will be entitled to some
equity.
Funds of funds investments
Sawgrass Siem Flexitallic
Allen
Mezzanine investment
Mezzanine reinvestments
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.
Investment Date_ June 2009Activity_ Commercial and strategic analysis for the oil and gas industryCountry_ UKCommitment_ €19m
In June 2009, AXA Private Equity invested €19m in
the mezzanine facility for the acquisition of Wood
Mackenzie by Charterhouse. 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.
What’s new in 2009? / Corporate review / Investment review / 23
2009 divestments
Date of Sale_ September 2009Activity_ SoftwareCountry_ FranceTime Held_ 8 years
In September 2009, we sold the shares to ORSYP,
an international software company. During eight years,
AXA Private Equity supported the growth of Sysload.
Over that period, Sysload secured its position as a
leading player in the supervision of IT infrastructures
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
production) and sustained a growth rate of 25% per
year for the past five years.
Date of Sale_ January 2009
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
specialists in Germany. The mezzanine has been fully
repaid by a senior recapitalization allowed by a low
leverage level.
Date of Sale_ June 2009
Time Held_ 1 year
Exit Type_ Secondary LBO
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.
Date of Sale_ January 2009
Leading Funds_ TPG / Goldman Sachs
Activity_ Mobile telecom operator
Country_ USA
Time Held_ 1 year and 2 months
AXA Private Equity sold its participation in Alltel,
the fifth largest wireless communications services
operator in the US, following the sale of the company
to Verizon.
Date of Sale_ November 2009
Activity_ ShipyardCountry_ France
Sales 2009_ €150m
Employees_ 930Time Held_ 4 years
In November 2009, after four years as a shareholder
of the company, AXA Private Equity sold its 40% stake
in Piriou to the management. During this period, we
have placed our expertise, resources and network at
the company’s disposal.
Venture
Small cap
Mezzanine
Co-investment
Interview with Pascal Piriou (CEO)Date of Sale_ November 2009Country_ France
Sales 2009_ €150mEmployees_ 930Time Held_ 4 years
2009 divestment direct funds - small cap
PIRIOUShipyard
Why did you decide to team up
with a private equity investor?
After 40 years of running a
successful 100% family-owned
business , the company was
facing two major challenges.
Some of our family shareholders
wanted to exit and we needed to
secure the company during and
after this period of transition. At the same time, the company
was undergoing rapid industrial
changes and it was necessary to
find sustainable means to finance
our international expansion. We
looked for a financial partner able
to provide strategic guidance and
fuel our accelerating growth. In
2006, we had already launched
the Mauritius subsidiary and had
just opened another one in Nigeria.
Those were large investments
and Piriou was not organized to
manage that industrial conversion
on its own. We chose AXA Private
Equity because of its moderately-
leveraged financial offering and
its proposed solutions for our
governance issues.
How did AXA Private Equity
help with PIRIOU’s corporate
governance?
AXA Private Equity had a good
understanding of our rationale and
our future needs. It helped stabilize
issues around our ownership
and came up with solut ions
to consolidate our corporate
governance structure. We set up a
Supervisory Board, implemented
better reporting rules and put
together a Group organization
compatible with our growth plans. A great deal was achieved in the
four years AXA Private Equity
partnered with us. In 2009, the
time was right for the management
to resume control of the capital
and for AXA Private Equity to exit
on good terms.
How would you describe the
collaboration with AXA Private
Equity?
AXA Private Equity held 40%
of the shares and posit ively
contributed to the development
of the company during four years.
Throughout this period, its team
acted as allies, but also challenged
us in a constructive way. The
firm’s solid network in Asia helped
expand our global presence and
enabled us to get closer to our
customers. The opening of our
Vietnamese shipyard in 2006
provided us with access to one of
the busiest shipping areas in the
world. With AXA Private Equity’s
support, Piriou moved from a
family company mainly focused
on building fishing boats into an
international diversified group.
Sales have increased from €65m
to € 150m and we now have a
930 strong workforce.
What’s new in 2009? / Corporate review / Investment review / 25
“ Franche Terre ” 90 meter fishing boat built by PIRIOU.
In October 2009, the Caisse de dépôt
et placement du Québec (The Caisse)
and AXA Private Equity decided to join
forces and share their respective market
knowledge and networks in North
America, Europe, Asia and the Middle
East to foster their portfolio companies’
international development. AXA Private
Equity and The Caisse are longstanding
partners. The Caisse has been one of
AXA Private Equity’s historical investors. This agreement marks a new stage in
collaboration and trust between the two
partners.
BROADER EXPERTISE AND SHARED RESOURCESVia the new partnersh ip, Québec
businesses will be able to benefit from
AXA Private Equity’s solid international
network, which is particularly far-reaching
in Europe and Asia. The Caisse’s experience
and multi-market knowledge, especially in
North America, will be useful in supporting
the global growth of businesses. This
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 WORLDProductivity levels, globalization and
transfer of ownership are some of the
major challenges business leaders are
facing, both in Québec and Europe.
By placing practical tools at the disposal
of portfolio companies, the alliance
contributes in a concrete way to the
growth of businesses. AXA Private Equity
and The Caisse will help companies seize
new business development opportunities:
joining a global distribution network,
searching for suppliers, developing joint
ventures, forming an alliance with a foreign
company, or acquiring an international
competitor.
MAkING THE PARTNERSHIP WORkA dedicated task force was set up to
implement the partnership and facilitate
exchanges between teams. An initial
screening of portfolio companies, both at
AXA Private Equity and at The Caisse, led
to the identification of thirty businesses
in various sectors (e.g. pharmaceutical,
natural ingredients, IT…) with cross-border
growth potential. Portfolio companies from
each party have been brought together to
enable the development of new business
opportunities.
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.
What’s new in 2009? / Corporate review / Investment review / 27What’s new in 2009? / Corporate review / Investment review / 27
new partnerships Caisse de dépôt et placement du Québec
By opening its network to our portfolio companies, this partnership represents a major opportunity for Québec-based companies to accelerate their cross-border development.Normand ProvostExecutive Vice-President, Private Equity and Chief OperationsCaisse de dépôt et placement du Québec
Caisse de dépôt et placement du Québec
The Caisse is a leading
financial institution
managing funds primarily
for public and private
pension and insurance
companies.
Net assets under management
CAD 131.6bnas of December 31, 2009
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
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.
new partnerships Principles for Responsible Investment (UN PRI)
What’s new in 2009? / Corporate review / Investment review / 29
• Incorporate ESG issues into investment analysis and decision-making processes
• ESG analysis is a standard part of the investment due diligence in all investment areas.
• Be active owners and incorporate ESG issues into our ownership policies and practices
• Companies of our last mid cap fund are subject to a yearly ESG evaluation, which is conducted with the help of a specialized consultant.
• We promote an active policy consisting in sharing capital gains with all employees when existing from our portfolio companies.
• Seek appropriate disclosure on ESG issues by the entities in which we invest
• Our fund of funds team has compiled a questionnaire which will encourage the entities in which we invest (primary commitments) to disclose their ESG-related actions.
• Promote acceptance and implementation of the Principles within the investment industry
• We were closely involved with the first conference in France on ESG matters in the private equity industry.
• As a member of its Steering Committee, we take an active part in the Private Equity workplan of the UN PRI.
• Work together to enhance effectiveness in implementing the Principles
• We have issued our own Corporate Responsibility Charter which sets out our 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.
• Report on activities and progress towards implementing the Principles
• This report, and the forthcoming corporate and social responsibility section of our website, are part of our commitment to demonstrate the incorporation of the Principles into our business.
6 UN PRI PRINCIPLES OUR ACTIONS
How we apply the six UN Principles for Responsible Investment.
we are committed to
excellence, ethics and
the long term Corporate review
A story of sustained growthOur story
A cohesive management teamBest-in-class reporting
A loyal and diversified investor baseClient-oriented support
Rigorous internal governanceCorporate social responsibility
Promoting excellence
a story of sustained growth14 years of consistent development
BUILDING A GLOBAL
INVESTMENT CAPACITY
AXA Private Equity has progressively
developed a solid network of experts and
partners around the world, in Europe, North
America and Asia. This network helps
provide our teams with a comprehensive
understanding of global market trends,
facilitates investment sourcing, favors
reactivity and makes it easier to access the
best transactions in the market.
GLOBAL REACH, LOCAL KNOWLEDGE
With 230 employees based in eight offices
worldwide, our teams have a practical
understanding of the challenges and
opportunities relative to their local and
regional markets. This in-depth knowledge
of local market dynamics is critical to
developing quality partnerships with
management teams and investors.
0.1 0.2 0.2 0.8 1.9 2.6 3.1 4.56
8
14
23
26 25
1996
19971998
1999
20002001
2002
2003
2004
2005
2006
2007
2008
2009
Assets under management (in billion dollars)
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.
Partnership with The Caisse de dépôt et placement
du Québec (Canada)
230 employees
Zurich and Vienna offices open
Milan office opens
Singapore office opened by Christophe FlorinLaunch of co-investment, mezzanine and Asia funds
Launch of infrastructure businessMore than 100 employees
Frankfurt office opened by Stephan IllenbergerLaunch of primary funds of funds business
London and New York offices open
Start of secondary funds of funds business by Vincent Gombault and Christophe Florin
Launch of first venture capital fund
Launch of LBO business by Dominique Gaillard
Dominique Senequier founds AXA Private Equity
What’s new in 2009? / Corporate review / Investment review / 33
our story
2009
2008
2007
2005
2001
1999
1998
1997
1996
a cohesive management team
VINCENT GOMBAULTManaging Director,
Funds of Funds
Vincent Gombault joined AXA
Private Equity in 1998 and manages
the firm’s funds of funds activities.
He spent seven years in AXA Group’s
Industrial Holdings department and
was also an Investment Manager
in the M&A department of Société
Générale. He began his career at the
French Trade Commission in Detroit,
USA. He is also a lecturer at ESSEC.
Education: Master in Financial
Techniques from ESSEC. DESS in
Banking and Finance. Degree in Law.
Master’s degree in Economics from
Paris X University, Nanterre.
DOMINIQUE GAILLARDManaging Director,
Direct funds
Dominique Gaillard joined AXA
Private Equity in 1997 and manages
direct investment activit ies.
Previously, he spent seven years
with Charterhouse France where
he was a Director and member of
the Executive Board. He began his
career at Péchiney.
Education: Ecole Polytechnique.
Ecole Nationale des Ponts et Chaus-
sées. Institut d’Administration des
Entreprises. Master of Science from
UC Berkeley.
DOMINIQUE SENEQUIERChief Executive Officer
Dominique Senequier joined AXA
Group in early 1996 and founded
AXA Private Equity. At GAN from
1987 to 1995, she created and
developed the subsidiary GAN
Participations. Prior to that, she
was Group Acquisitions Manager
at GAN and spent five years with
the French Insurance Commission.
Education: Ecole Polytechnique. DEA in Banking and Monetary
Economics from the Sorbonne
University. Member of the Interna-
tional Actuarial Association.
CHRISTOPHE FLORINChief Operating Officer
Managing Director, Asia
Christophe Florin joined AXA
Private Equity in 1998 to participate
in the development of the funds of
funds business and has directed the
Asian business since 2005. He is also
responsible for the Administration
and Finance, Legal and Human
Resources departments. Previously,
he worked in GAN’s unlisted
company investments team, at
Développement et Partenariat and
also at Crédit National.
Education: MBA in Finance from
Université de Laval, Quebec. Degree
from Sciences Po. Paris.
STEPHAN ILLENBERGERManaging Director, Germany
Before launching AXA Private
Equity’s German-based business
in 2001, Stephan I l lenberger
spent three years as a Managing
Partner of Doertenbach & Co,
an independent management
company. Previously, he was Head
of Corporate Finance Germany at
NatWest Markets and CEO of York
Hannover. From 1987 to 1992 he was
Director of Bayerische Vereinsbank
in the M&A department. He started
his career with McKinsey and TA
Associates.
Education: MBA from the University
of Munich. MA in Economics from
Chicago University.
AXA Private Equity Executive Board Members*
We value entrepreneurship in private equity.Dominique SenequierChief Executive Officer
* From left to right.
What’s new in 2009? / Corporate review / Investment review / 35
Vincent Gombault, Dominique Senequier, Stephan Illenberger, Dominique Gaillard, Christophe Florin (from left to right).
All the members of the Executive Board have worked together since the early years of the company.
best-in-class reporting
Frequent and direct communication
with investors is critical: our team of
nine local relationship managers based
in North America, Continental Europe,
United Kingdom, Asia and the Middle East
maintains close contact with clients, swiftly
addressing their inquiries and organizing
regular meetings to discuss progress.
TRANSPARENCY AND REACTIVITY
Our investor relations team is continually
improving the quality of information we
provide and the service we offer. We
are commited to being transparent and
reactive to investors.
A general survey was conducted among
more than 100 investors to assess their
satisfaction with our service. As a result,
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.
In 2010, IntraLinks, the client online
reporting interface, will cover all of AXA
Private Equity’s funds, both direct and
funds of funds. Investors may access the
reporting information they need, such
as capital calls, through a unique and
comprehensive online tool.
According to strict regulatory requi-
rements , AXA Pr ivate Equity has
harmonized all client templates to provide
thorough and detailed information on
funds’ underlying assets. On top of the
Annual Advisory Boards and Annual
General Meetings, two global Investor
Meetings have taken place this year, one
in New York, the other in Paris, at which
more than 160 institutions from all over
the world were present.
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.
What’s new in 2009? / Corporate review / Investment review / 37
a loyal and diversified investor base
165 investors
80% of investorsbased outside France
90% re-up(1)
for our main funds
* As of December 31, 2009 – Excluding investments by AXA Group (1) Percentage of existing investors who reinvested in a new generation of funds
Geographical breakdown* Breakdown by type of investors*
6% Funds of
funds
14% Insurancecompanies
10% Family Offices/High-Net-Worth Individuals
52% Pensionfunds
9% Government
agencies
9% Others39%
North America
54% Europe
7% Asia-Australia
Middle-East
client-oriented support
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
INTERNATIONAL NETWORk OF
INVESTOR RELATIONS MANAGERS
14 people in the Investor Relations team
develop the product line offered to
clients and are in charge of relations with
investors. Nine regional correspondents
are specifically responsible for providing
information regarding the regions
where they operate: North America,
Continental Europe, Switzerland, United
Kingdom, Asia and the Middle East.
Every day, they are supported by the
Client Servicing team for reporting
issues and by the Product Management
team for due di l igence processes.
They are backed by a professional
communications team in charge of
organizing client events and sharing key
information with the investors on a regular
basis.
DEDICATED RISk MANAGEMENT,
CONTROL AND COMPLIANCE TEAMS
Five people are ful ly dedicated to
Internal Controls, Risk Management and
Compliance issues. AXA Private Equity’s
Compliance Standards and Policies include
clear and strict policies on personal trading
of securities, control and use of non-public
information, gift policy and handling
employee complaints (whistle blowing).
DILIGENT MANAGEMENT OF
INVESTMENT VEHICLES
Among the 50 people in the Finance &
Administration Department, 30 financial
controllers are in charge of 210 investment
vehicles and assess production, valuation
and performance calculations, fund
launching analysis and integration of new
activities. Each controller is dedicated to
one product line without overlaps and
all are organized into eight dedicated
teams: LBO, co-investment, infrastructure,
retail, secondary funds, primary funds,
mezzanine and mandates.
The legal team consists of ten professionals
who manage the structuring and follow-
up of the investment vehicles and advise
investment teams on investments and
divestments.
What’s new in 2009? / Corporate review / Investment review / 39
rigorous internal governance
Standards of corporate responsibility
are laid out in the AXA Private Equity
compliance manuals and our Code of
Conduct. They endorse the following
principles: priority of investors’ interests,
in tegr i ty, conf ident ia l i ty, loya l ty,
transparency and security. Above all, our
culture demands responsible behavior
from every individual working with the
firm. Below are some of the ways in which
we ensure we are exceeding industry
standards and investors’ requirements.
COMMITTED TO IMPROVING
INDUSTRY STANDARDS
AXA Pr ivate Equity engages with
other market players and takes an
active part in professional discussions
around the industry’s working practices.
We participated in industry consultations
regarding the rules and regulations
applicable to FCPRs (French regulated
funds) and in the AFIC/AFG working group
(French Private Equity and management
associations) responsible for drafting the
new Code of Ethics for the professions.
AXA Private Equity provided its expertise
to private equity regulators in Singapore
and has recently been working with Abu
Dhabi regulators to help them define
private equity regulation locally.
RECOGNIZED FOR OUR INTERNAL
CONTROLS AND PROCESSES
In December, we obtained our fourth
annual SAS 70 Type II certification*, which
confirms the efficiency of our internal
controls and processes.
Once again, no fai l ings have been
identified by PricewaterhouseCoopers.
This certification is an internationally
recognized audit standard designed
to provide information to be used for
financial reporting purposes by clients and
investors of AXA Private Equity and their
independent auditors.
Achieving SAS 70 certif ication is of
particular importance for AXA Private
Equity’s compliance with Sarbanes-Oxley
legislation and reflects the firm’s ongoing
commitment to maintaining a strong
control environment.
ACCREDITED
PERFORMANCE REPORTING
AXA Private Equity has also renewed its
GIPS** certification attesting to the firm’s
compliance with the internationally
recognized funds’ performance presentation
standards.
* Statement on Auditing Standards No. 70 established by the American Institute of Certified Public Accountants
** GIPS: “Global Investment Performance Standards“.
Behaving ethically is a cornerstone of our corporate strategy at AXA Private Equity.
AXA Private Equity is regulated by:• AMF (French Financial Markets Authority)
• SEC (US Stock Exchange Commission)
• FSA (UK Financial Services Authority)
What’s new in 2009? / Corporate review / Investment review / 39
Under the leadership of Dominique
Senequier, a dedicated CSR (Corporate
Social Responsibility) working group
was set up this year, gathering managing
directors from our mid cap, small cap,
infrastructure and fund of funds teams
as well as senior executives from human
resources , purchas ing , corporate
development & communications, investor
relations and compliance.
This year, not only did we sign the UN PRI
(Principles for Responsible Investment)
but we became member of its private
equity steering committee and issued our
own CSR charter. We also co-organized
the first conference in France on the
application of ESG (Environment, Social,
Governance) criteria in the private equity
industry in July 2009.
corporate social responsibility
an active commitment
ACTING AS A RESPONSIBLE COMPANY
We believe diversity equals strength.
For example, 44% of all employees are
female, including our CEO, the head of our
mezzanine activities and two managing
directors in the mid cap team.
We also seek to build an environmentally
fr iendly workplace by using paper
produced from forests managed according
to sustainable development principles.
80% of our reporting is now electronic.
We sort waste and control our electricity
consumption.
Of course, our governance and compliance
principles are stringent. We focus on
ensuring good risk management practices,
adherence to regulation, comprehensive
employee engagement and careful
reputation management.
AXA Private Equity is committed to socially responsible behavior, both as a shareholder
in portfolio companies and as a company in its own right.
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
PROMOTING CSR
ACTIONS AT PORTFOLIO LEVEL
Our responsible approach extends to
our portfolio companies. When we are
a majority shareholder, we share up
to 5% of capital gains realized with all
employees when unwinding successful LBO
transactions. This helps in aligning interests
of all stakeholders. Employees contribute
to the creation of the value in a company.
Prior to each new investment we make,
ESG criteria are assessed within our
investment memoranda, both for our direct
funds and primary funds of funds. Beyond
ESG implementation within AXA Private Equity companies
• to investors: newsletter
• to employees: presentation at seminar, internal newsletter
• to public: annual report, website, conferences, associations
• assessment of ESG criteria and action plan in investment memoranda
communication
• external consultant consolidates information and provides independent ratings on AXA LBO Fund IV companies
the initial investment stage, we carry out
environmental due diligence in portfolio
companies with industrial operations
and support initiatives aimed at reducing
the ecological impact of their activities.
This year, we commissioned an external
consultant to provide independent ratings
for each of the portfolio companies in our
latest mid cap fund. We will repeat the
exercise on an annual basis.
For each investment opportunity, environmental, social and governance factors are systematically assessed.Dominique Gaillard, Member of the Executive Board, direct funds
before investing during investment
What’s new in 2009? / Corporate review / Investment review / 41
> >
corporate social responsibility
case studies
DIANA INGREDIENTS
Diana Ingredients specializes in
producing and commercializing
natural ingredients for the food
industries (pet food, aromas,
culinary ingredients and natural
extracts). AXA Private Equity
invested in the company in 2007.
Since then, Diana Ingredients has
reinforced its position and its
international presence. It has 19
production sites and markets its
products in Europe, America,
Australia and Asia. The company
employs 1 , 300 peop le and
generated €322m of revenues in
2009. Its development strategy
and its business model include
s o l i d a n d co n c re te s o c i a l
responsibility commitments.
RESPONSIBLE HUMAN
RESOURCES MANAGEMENT
Diana Ingredients has worked
hard to create an attractive and
efficient working environment for
its employees. It has implemented a
training program for non-qualified
employees, enabling them to certify
their skills through a recognized
diploma. A diverse workforce
is important to the business.
Women represent more than one
third of the workforce and 51%
of the management. Moreover,
Diana Ingredients has partnered
with Atlas, a company which
places people with disabilities in
employment.
In 2009, the compensation system
was overhauled and now includes
a profit sharing policy for all
employees.
STRICT HEALTH
AND SAFETY POLICIES
Health & Safety issues are closely
monitored. Strict regulations and
policies have been implemented:
regular reporting procedures
help prevent accidents and rapi-
dly manage potential incidents.
A Director for Operational Excellence
is responsible for supporting health
and safety best practices; he is
backed by a network of dedicated
correspondents in the Group’s
different entities.
Foreword of ceo / 43
MAISONS TRECOBAT
AXA Private Equity invested in
Trecobat, the house builder, in
2007. Trecobat builds about 1,000
houses per year. The company
expanded its range of products,
such as wooden houses, and
invested heavily in innovation.
BUILDING
POSITIVE ENERGY HOUSES
Trecobat recently developed
the Positive Energy House, an
innovative home that produces
more energy from renewable
energy sources than it imports
f rom externa l sources . The
company was able to develop such
a product using a combination of
microgeneration technology and
low-energy building techniques,
At the 2009 Innovative Houses Challenge, held in Copenhagen, Trecobat was awarded the Golden Medal in the “ Positive Energy House” category and the Jury’s Special Price for all categories.
such as passive solar building
design, insulation and careful site
selection and placement.
Trecobat is currently building
90 houses as part of the French
Housing Ministry project “A house
for 15 euros per day”. Partly
financed by local municipalities,
these homes will have a minimum
area of 85 m2 and will be equipped
with a heating pump.
Trecobat also built 12 HQE certified
(High Quality Environmental
standard) individual houses in a test
zone as part of the “ Brest Métro-
pole Océane ” municipal initiative.
What’s new in 2009? / Corporate review / Investment review / 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
Master of Finance at the University of
Cergy Pontoise in France, and two grants
were given to students of the University
of Frankfurt under the “House of Finance”
program.
Frateli workshop at AXA Private Equity Paris office “How to prepare for Universities and Business Schools admission interviews”
Sofia, a Fratelli mentee, was
admitted at HEC Business School and spent six months as
an intern in our office in New York.
Created in 2004 by young professionals
concerned wi th promot ing equa l
opportunities, Frateli’s objective is to
provide a mentoring program to 18-year-
old students born into underprivileged
families. Nine employees from AXA Private
Equity provide coaching and mentoring
to young students from various academic
backgrounds, guiding them on their
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.
What’s new in 2009? / Corporate review / Investment review / 45
promoting excellence human resources team and policy
INTERNAL MOBILITY
In 2009, nine employees moved internally
to another position within the company.
A VAST RANGE
OF TRAINING PROGRAMS
In 2009, internal knowledge-sharing
sessions led by various teams and open to
all employees gathered 196 participants.
128 employees took part in external
training courses. Over the year, 57% of
all staff completed at least one external
course.
INTERNAL MENTORSHIP PROGRAM
Every new employee with less than three
years’ experience takes part in the internal
mentoring program. In 2009, eight new
mentoring pairs were added to the nine
already existing. More pairs will join the
program in early 2010. An Engagement
Charter for the new mentors and mentees
has been drafted and will be included in
the 2010 program.
SHORT MOBILITY PROGRAM
Aimed at strengthening cohesion between
the members of the funds of funds team
located throughout our eight offices,
the Short Mobility Program provides the
opportunity for its members to work in
another country for three months. In 2009,
three employees took part in the program.
YOUNG ANALYST
GRADUATE PROGRAM
A year after joining the company, young
analysts participate in a nine-month
program consisting of three periods of
three months in different departments
within the firm. In 2009, 13 analysts took
part in the program, and were sent to one
of the eight AXA Private Equity offices
around the world, sharing the daily life
of a different team and discovering new
expertise.
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.
What’s new in 2009? / Corporate review / Investment review / 45
we cover the full range of the private
equity asset class
Investment ReviewInfrastructure
Funds of fundsDirect funds
Mid capSmall cap
VentureCo-investment
Mezzanine
infrastructure
LOW RISk ASSET WITH
ATTRACTIVE, LONG-TERM RETURNS
At AXA Private Equity, we have a
strong track record in infrastructure.
As an asset class, it has an attractive
r isk/return prof i le . In f rastructure
investments are equity or quasi-equity
products displaying low correlation
with other asset classes and business
cycles and offering inflation protection.
They are long-term (usually 20 years)
investments associated with limited risk of
capital loss and strong visibility, generating
regular and sustained yield and returns.
Active since 2005, the infrastructure team
of 12 professionals has committed more
than €860 million and manages and/or
advises €1.3 billion of assets in sectors
including water, waste, motorways and
energy.
The team primarily focuses on the
European market and brownfield projects
(i.e. acquisition of an operating company
through privatization, buyout or private
placement), with an opportunistic stance
on greenfield projects (i.e. new infrastruc-
ture development).
AXA Private Equity’s strengths lie in our
solid institutional and financial network,
our expert knowledge of regulated sectors,
and our proven experience in working
with the public and private sectors. We
have a well established, high performing
track record, market recognition and
international presence. Our financial
capabilities and valuation, reporting and
legal structuring provide our partners with
the tools they need to operate effectively
and continue to grow.
€1.3 billion managed and/or advised by AXA
Private Equity’s Infrastructure team
$41 trillion global infrastructure needs by 2030
Source: AXA Private Equiy
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
create a favorable environment for seizing
the opportunities infrastructure presents.
Governments are supporting infrastructure
investments as part of their stimulus
policies to boost economic growth. As the
sector is highly regulated, infrastructure
projects benefit from friendly legal
frameworks and market entry conditions.
The combination of an increase in energy
needs and public interest in reducing
carbon emissions will generate new
opportunities in renewable energies.
Due to the economic context, many
industrial companies are currently selling
whole or part of their non-core assets. New
opportunities are arising from institutional
investors seeking to deleverage or create
liquidity through the sale of infrastructure
assets. European regulatory requirements
may lead to unbundling of certain
infrastructure assets.
Moreover, driven by world population
growth, infrastructure has to develop
st ructura l ly. I t i s est imated that
infrastructure needs will reach $41 trillion
by 2030. Now is the time to take advantage
of this emerging opportunity.
Projected annual infrastructure expenditurein the next two decades - Geographic distribution (in US$bn)
Source: CIBC World Markets Research (2009): ‘Capitalizing on the Upcoming infrastructure Stimulus’
300
200 200
153
6060
40
10Europe
China
Non-China Asia
North Americ
a
Russia
Middle East
Latin Americ
a
Africa
What’s new in 2009? / Corporate review / Investment review / 49
infrastructureportfolio
August 09 Renewable energy France 26
May 09 Natural gas distribution Italy 318
February 09 Renewable energy Italy 48
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
December 06 Waste management United Kingdom n.a.*
October 06 Waste management United Kingdom n.a.*
January 06 Motorways France 1,414
Company Investment Date Sector Country
Estimated 2009
Revenues in €m
* Revenues not applicable for projects in construction(1) Closing February 2010(2) Estimated amount end of March 2010
Northumberland
Cornwall
(1)
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 GasEnel Rete Gas was awarded “European Oil & Gas deal of the year” by Project Finance Magazine
SANEF - A16 Motorway (North of France).
Estimated 2009
Revenues in €m
What’s new in 2009? / Corporate review / Investment review / 51
funds of funds
A SELECTIVE APPROACHWe have developed a solid network of
long-term relationships with the most
prestigious private equity managers
around the world. AXA Private Equity has
more than 60 seats on advisory boards of
some of the most important funds.
Many investors have committed large
amounts in private equity funds in recent
years generating a large and sustainable
secondary deal flow for the next few years.
In such a speculative environment, we
adopted a cautious approach, relying on
our deep knowledge of the market, on our
efficient and careful pricing evaluation
method and backed by our unique in-
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
early secondary funds of funds in the last
quarter of 2009.
The early secondary and secondary markets
should remain active in 2010 and 2011,
so AXA Private Equity will seek the best
opportunities at reasonable entry levels. As
investors regain trust in the economy, new
funds should be raised. We will therefore
look into opportunistic timing for primary
investments. With an investment capability
of $2.5 billion on the secondary and early
secondary markets, AXA Private Equity is
well positioned to rapidly seize the best-
performing investment opportunities.
7,500 underlyingcompanies
$1.2 billiondistributed since 2007
$20 billionassessed in 2009 : Secondary funds of funds market deal flow
500 funds in portfolio
AN INTERNATIONAL TEAM IN EIGHT
OFFICES AROUND THE WORLD
AXA Private Equity’s fund of funds team
has become a leader in the international
market: it is based on 33 investment
professionals who operate from eight
offices on three continents, in Europe,
North America and Asia. The team
manages or advises assets of over $13
billion invested in more than 500 funds
around the world, representing a portfolio
of more than 7,500 companies
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.
Performance of secondary funds among the best on the market (as of December 31, 2009)
Vintage Net IRR*Net
multiple*Cash
on cash**Maximum
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).
What’s new in 2009? / Corporate review / Investment review / 53
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
Amounts committed
Number of transactions
8467 77 81
298 307
120
474 501
730
0
1999
20002001
2002
2003
2004
2005
2006
2007
2008
2009
0
0
1
2
3
4
5
6
7
8
9
10
100
200
300
400
500
600
700
800
8
7
4
5
9
5 5
7 7
3
0
funds of fundssecondary and early secondary
220 4801,040
2,854
ASF I - 19
99
ASF II - 2
001
ASF III - 2
004
ASF IV - 2
007
Amounts committed
Number of transactions
2003
2004
2005
2006
2007
2008
2009
0
100
150
200
250
300
50
2
0
4
6
8
10
12
53
264
107
218
275
44
87
6
5
5
10
7
3
2
4 generations of secondary funds(in million USD)
Secondary fundsAmounts committed (in million USD) and number of transactions completed as of December 31, 2009
Early Secondary fundsAmounts committed (in million EUR) and number of transactions completed as of December 31, 2009
What’s new in 2009? / Corporate review / Investment review / 55
15
11
28
43
28
17
21 22
36
41
30
15
1
< 1998
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
funds of fundsprimary
Breakdown by investment strategy* Breakdown by region*
Number of primary funds’ commitments by vintage
7%Others
1%Distressed funds
24%Venture
68% Buyout
* Number of funds as of December 31, 2009
48% North America
8%Asia, Australia
44%Europe
funds of funds
BEST-IN-CLASS
MONITORING SYSTEM
During the past 24 months, AXA Private
Equity has developed its own monitoring
system that enables us to collect detailed
information on funds in which we invest.
The team analyzes and monitors the
majority of the underlying companies of
these funds on a regular basis.
Meet ings and cal ls with the funds’
managers are held on a quarterly basis,
providing opportunities to exchange
information about significant events and
value creation strategies, comparing our
own assumptions with those developed
by the fund managers. Since this year,
our internally-developed database, which
consolidates the transaction and market
data collected over the past ten years,
can be accessed by our 33 investment
professionals within our eight offices
worldwide.
Via the principle of pooled and shared
resources, each member of the team
updates the database directly from internal
documents (e.g. capital calls, distribution
notices, quarterly reports) and external
data, such as market studies.
The volume of information available and
the strict management of the database
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.
AN INNOVATIVE
ARCHIVING PROJECT
Following the creation of the Electronic
Database and Monitoring tools by the
fund of funds team, AXA Private Equity
launched an Archiving Solution, which
allows the company to define which funds
of funds documents must be legally stored,
what their shelf life should be, and the
duration of legal conservation.
AXA Private Equity stands as the first
private equity player to implement
such an Archiving System, which is
certified compliant with both regulatory
requirements and archiving standards.
The database today covers 500 underlying funds (325 General Partners) or more than 7,500 portfolio companies.Benoît Verbrugghe, Head of AXA Private Equity USA
What’s new in 2009? / Corporate review / Investment review / 57
MAIN GENERAL PARTNERS
America
Pan American (KKR, Blackstone, Carlyle, TPG, TH Lee, Onex, Warburg Pincus, etc.)
Mid Market (Behrman, Brazos, Harvest, KRG,Oak Hill, SPL, WCAS, etc.)
Europe
Pan European(APAX, BC Partners, Carlyle, Cinven, CVC, Charterhouse, EQT, PAI, Triton, 3i, etc.)
Mid Market (Astorg, Bencis, Clessidra,Lyceum, Mid Europa, Pragma, etc.)
Asia and Australia
Pan Asiatic and Australasian (Affinity, CVC, KKR, etc.)
Mid Market (3i, Actis, CDH, ChrysCapital,CHAMP, HOPU, etc.)
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
Company Location Sector % of Portfolio Valuation
FUNDS OF FUNDS’ PORTFOLIO EXPOSURE TO MAJOR COMPANIESAs of June 30, 2009
40%
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.
direct funds
FOCUS ON LONG-TERM VALUE CREATION
At AXA Private Equity, we are focused
on supporting the growth of companies
in which we invest. As a responsible
shareholder, AXA Private Equity’s
contribution goes beyond pure financial
support . Teams work closely with
companies’ management to provide
strategic guidance and constructively
challenge decisions. Regular dialogue
and mutual trust are fundamental to our
approach. We provide advice on corporate
governance, group organization and
management, finance and legal matters
and environment or social responsibility-
related issues.
We are defined by our cautious approach.
Leverage is kept to a minimum and exit
conditions are discussed thoroughly at
the time of investment to the satisfaction
of all parties. Once we are committed, we
closely monitor financial positions, support
management, especially during times of
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.
MEETING STAkEHOLDERS’ EXPECTATIONS
AXA Private Equity conducted a survey
last year aimed at assessing our practices
and investment strategy. More than a
hundred people, including company
managers, bankers and government
representatives were interviewed.
As a result, we are adapting our approach
to meet the evolving expectations of these
stakeholders.
A NEW CSR
PARADIGM FOR DIRECT FUNDS
As part of a comprehensive effort to
disseminate responsible practices to
portfolio companies, AXA Private Equity
hired a consultant to conduct an ESG
(Environment, Social, Governance) analysis
on companies in our fourth generation
buyout fund. The results have been
shared with these companies, and we are
monitoring and assisting them in making
appropriate changes to their business
practices.
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.
Our portfolio companies are headquartered in 21 countries around the world.
SWEDEN
FINLAND
NORWAY
DENMARK
INDIA
KOREA
CANADAUNITED STATES
CHINA
BELGIU
M
LITHUANIA
NETHERLANDS
GERMANYFRANCE
POLAND
AUSTR
IA
BULG
ARIA
HUNGARYITALY
SPAIN
UNITED K
INGDOM
direct fundsportfolio
What’s new in 2009? / Corporate review / Investment review / 59
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
direct fundsmid 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
and has participated in over 40 add-on
acquisitions.
We have been very cautious in 2009
focusing on the monitoring of our portfolio
companies. During the second half of the
year, we resumed investments.
In 2009, AXA Private Equity invested
€45 million in one transaction, committed
a further €200 million, and has €1 billion of
available cash to invest by 2013.
Sector diversification
7%Construction and Building Materials
19%Technology,
Mediaand Telecom
29%Consumer Goodsand Services
43% Industrials
2%Aerospace and Defence
We care about our companies and support their growth in the long term. Philippe Poletti, Head of mid cap France, Germany and Italy
direct fundsmid cap portfolio
December 09 Multi-sector catering France 408
November 09 TV home-shopping channel Germany 379
May 08 Active ingredients and specialty chemicals
France/Canada 131
April 08 Gaming arcade operator Germany 149
June 07 Natural ingredients for pet food, human food, beverages & pharmaceuticals
France 322
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
Company Investment Date Sector Country
Olivier Sadran, co-CEO, Newrest
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.
(1)
(1) Closing March 2010
Estimated 2009
Revenues in €m
What’s new in 2009? / Corporate review / Investment review / 61
direct fundssmall cap
ENTREPRENEUR-ORIENTED
INVESTMENTS
AXA Private Equity’s small cap team
focuses on companies with a valuation of
less than €100 million where a majority
holding is taken, or less than €500
million in the case of a minority holding.
Companies are often family companies
looking for finance in order to continue
their growth, or, where it is necessary, to
increase share capital. AXA Private Equity
supports them for an average period of
five years.
In light of difficult market conditions in
2009, the 13 members of the small cap
team scrutinized the cash and working
capital of portfolio companies. We helped
consolidate corporate structures and
processes, and establish efficient reporting
procedures and management forecasting
systems.
EASTERN EUROPE
The Eastern Europe team, based in Vienna
since 2008, has prioritized mid cap, small
cap and expansion deals. 2010 should be
a year of economic recovery in Central
and Eastern Europe, with interesting and
affordable investment opportunities to
capitalize upon.
17%Healthcare and
Life Sciences
18%Technology,
Media and Telecom
28%Business Services
32% Industrials
5% Construction and Building Materials
Sector diversification
We support family-owned companies to expand internationally or to optimize their capital structure.Dominique Gaillard, Executive Board Member, direct funds
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.
direct fundssmall cap portfolio
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 products
France 68
May 07 Promotional marketing software France 12
February 07 Single-family houses building company France 88
October 06 Manufacturer of plastic containers and palettes
Germany 12
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 markets
France 12
September 04 Social contribution, tax and operating cost reduction consultancy
France 57
Company Investment Date Sector Country
Estimated 2009 Revenues in €m
Pierre Banzet, CEO, Synerlab
What’s new in 2009? / Corporate review / Investment review / 63
direct fundsventure capital
SUPPORT ENTREPRENEURS
IN FOSTERING GROWTH
Active in venture for almost 14 years, AXA
Private Equity supports firms that have
the potential to transform innovation into
growth. We always invest at a sufficiently
mature phase in their development when
they are in a position to capitalize upon
their unique proposition. AXA Private
Equity’s venture team is particularly valued
for its entrepreneurial approach and its
expertise in the Information Technology,
Internet and Cleantech sectors.
We always invest in equity to create
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 whoturn innovation into growth, therefore creating value and jobs.Laurent Foata, Director, venture capital
FACILITATING CONTACTS BETWEEN
ENTREPRENEURS AND INVESTORS
AXA Private Equity sponsored “Tremplin
Entreprises”, an event which we have
supported since its inception 11 years ago.
Organized by the French Senate and the
ESSEC Business School, it provides an
opportunity for 30 teams of entrepreneurs
to present their projects to investors who may
potentially be interested in financing them.
AXA Private Equity participated in three
selection committees: Software & Systems,
Internet & Services and Energy, Materials &
Components.
direct fundsventure 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
December 09 Equipment for air and water quality measurement (1) France
August 09 Development and installation of turn-key solar panels France
Company Investment Date Sector Country
ENERGY AND ENVIRONMENT
(1) Listed companies
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
Company Investment Date Sector Country
SOFTWARE AND INFORMATION TECHNOLOGY
(1) Listed companies
What’s new in 2009? / Corporate review / Investment review / 65
direct fundsventure capital portfolio
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
Company Investment Date Country
LIFE SCIENCES
October 06 Alternative discount telecommunications operator (1) France
July 06 Development and production of diode-pumped solid statelasers
France
September 04 Made-to-measure mobile telecoms terminals manufacturer France
Company Investment Date Sector Country
TELECOMS AND COMPONENTS
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
Company Investment Date Country
INTERNET AND DIGITAL MEDIA
(1) Listed companies
Sector
Sector
direct fundsco-investment
COLLABORATING FOR GROWTH
Via our co-investment activity, we have
established partnerships with several key
private equity managers for large and mid-
size LBO transactions, involving companies
whose valuation may reach several
hundred million or several billion of euros.
Because of poor economic conditions
and limited access to debt, 2009 was an
unpredictable year and AXA Private Equity
remained very cautious on investments.
The firm has invested over €1 billion
in 32 companies worldwide since 2005,
meaning we are among Europe’s leading
players for such transactions. The co-investment team has enjoyed
privileged relationships with major
international funds and benefited from
AXA Private Equity’s well established ties
with other key industry players.
A team of five professionals runs the
portfolio and supports existing investments
such as Keolis and its acquisition of
EFFIA, a subsidiary of SNCF. One exit was
conducted during the year. AXA Private
Equity is ready to resume investing, with
more than €500 million available for
investment in the next two years.
Sector diversification
4%Energy & Utilities
6%Healthcare & Life Sciences
12%Business Services
17%Industrials
22%Consumer Goods & Services
39% Technology, Media & Telecom
Company Investment Date Sector Country
Our close relationship with a large
international group such
as TDF illustrates
our ability to be an active shareholder.Alexandre Motte, Director,
co-investment
What’s new in 2009? / Corporate review / Investment review / 67
direct fundsco-investment portfolio
August 07 Manufacturer of automatic transmissions for commercial vehicles
United States 1,269
July 07 Pharmaceuticals and beauty products retailer and wholesaler
United Kingdom 20,910
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 services provider
France 1,574
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
September 08 Safety closures and aluminium screw capsmanufacturer
Italy 311
April 08 Telecom towers operator India 626
March 08 Automatic food & beverage vending machines operator
Italy 180
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
Company Investment Date Country
Estimated 2009 Revenues in €mSector
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 information provider
Netherlands 7,338
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 distributor
France 11,307
August 05 Multi-facilities services provider (cleaning, property services, office support…)
Denmark 9,664
August 05 Manufacturer of natural ingredients for the food industry
Denmark 520
August 05 Commercial aircraft composite structures manufacturer
United States 2,934
August 05 Fast fit automotive services United Kingdom 1,084
Company Investment Date Sector CountryEstimated 2009 Revenues in €m
What’s new in 2009? / Corporate review / Investment review / 69
Estimated 2009 Revenues in €m
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
STRATEGIC ACQUISITION PLAN
In March 2009, Keolis entered
into an agreement to acquire
EFFIA from SNCF. EFFIA is the
third French parking operator
with 65,000 parking spaces in key
locations such as railway and coach
stations.This acquisition is part of
a comprehensive development
project aimed at diversifying the
Group’s activities and expanding
its presence at every stage of
the value chain of urban mobility
systems. It is also hoping to regain
full control of strategic companies
in which it has a minority stake or is
in a joint venture.
Expanding i ts internat ional
presence is a priority. Keolis
plans to build upon its standing
in interurban coach transport in
France, but also in the UK and
in German railways. In 2010, it
is actively looking to boost its
presence in North America through
opportunistic acquisitions.
AN AMBITIOUS
INDUSTRIAL PROJECT
Keol is ’s a im is to become a
leading global mobility operator.
Through network, expertise and
connections, shareholders support
the management’s development
strategy based on large contract
gains, selective acquisit ions
and financial discipline. In three
years, Keolis secured several key
advances.
In 2009, the Group’s turnover
reached €3.4 billion and it now has
45,500 employees. AXA Private
Equity, together with the Caisse
de dépôt et placement du Québec,
provide advice on and contacts
for acquisitions abroad, as well as
knowledge of regulated markets.
AXA Private Equity helped Keolis
broaden its understanding of the
business by opening its network
to the company and facilitating
access to sector experts, such as
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.
Keoliscase study
KEOLISPassenger transport operatorkEOLIS is a private passenger transport company, the sixth
largest in Europe. The Group operates bus, metro and tram
networks and rai l systems, based on long-term contracts
(five to ten years) granting exclusivity to manage transport
systems in France and 12 other countries. AXA Private Equity
invested in the company in 2007, alongside the Caisse de dépôt et
placement du Québec.
2 billion peopleuse Keolis transport facilities
every year
€3.4 billionturnover in 2009: 59% in France,
41% abroad
24%sales growth since 2007
160 subsidiaries in 13 countries in Europe, Algeria,
Australia, Canada and United States
30,000 drivers
45,500employeesand more than
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
What’s new in 2009? / Corporate review / Investment review / 71
keolis buses operate inter-city links in more than 70 French departments.
mezzanine
A DYNAMIC TEAM
Mezzanine is a source of subordinated
financing, between equity and senior
debt, which is used in leveraged buyouts
but a lso for f inanc ing expans ion
projects, acquisitions and shareholder
reorganizations. The team consists of
11 people based in Paris, New York, London
and Milan.
Our diversified portfolio of 51 companies
worldwide provides the team with good
visibility on market trends and allows for
benchmarks. Through close and proactive
monitoring, we are in general able to
anticipate major difficulties and secure our
positions.
The mezzanine activity at AXA Private
Equity benefits from a strong inter-
national reach and synergies with other
teams within the firm. The funds have a
¤1.2 billion investment capacity to deploy.
Through a cautious approach, three main
priorities will guide investments in the year
to come: opportunistically targeting high-
performing buyout transactions, providing
resources to companies looking into
acquisitions and acting as an alternative
solution to banks, selectively participating
in refinancings to extend and amend
existing maturities on existing debt.
Sector diversification
23% Consumer Goods and Services
2%Energy & Utilities
23%Healthcare &Life Sciences
17%Business services
15%Industrials
11%Technology Media
and Telecom
7%Construction and Building
Materials
2%Aerospace and Defence
June 09 Commercial and strategic analysis to companies operating in the oil and gas industry
United Kingdom 120
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 to financial institutions
United Kingdom 356
September 08 Photo sensor technology Europe/North America
166
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 projects
United States 2,176
August 08 Civil engineering Canada 130
July 08 Marketing and sale of freight capacity for cargo and airlines
France 25
May 08 Gas springs, dampers and actuators for industrial applications
Germany 281
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
Company Investment Date Sector CountryEstimated 2009 Revenues in €m
mezzanineportfolio
What’s new in 2009? / Corporate review / Investment review / 73
Our diversified portfolio provides us with good visibility on market trends. Cécile Mayer-Lévi, Head of mezzanine
February 08 Railway logistics operator Poland 183
February 08 Helicopter operator Italy/Spain 309
January 08 Designer and manufacturer of standard and custom power supplies, converters and inverters
France 63
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 equipment
France 473
October 07 Home healthcare services United Kingdom 739
September 07 Ingredients and aromatic product for the food industry
France 66
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
Company Investment Date Sector Country
Estimated 2009 Revenues in €m
mezzanineportfolio
Estimated 2009 Revenues in €m
March 07 Prefabricated concrete elements France 271
March 07 Blood analysis systems for diagnosing allergies, asthma
Sweden 324
March 07 Aluminium profiles for windows, verandas and doors
Belgium 243
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 for railways
Germany 158
May 06 Radio and internet (blogs) France 41
April 06 Cleaning and rental of flat linen and working apparel
France 142
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
Company Investment Date Sector Country
Estimated 2009 Revenues in €m
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 Cognep.13, 14 ©Kallista p.14 ©Enel Rete Gas p.14 ©Tre & Partnersp.15 ©Elias Badras p.15 ©HSE 24p.16 ©Newrest
p.17 ©Denis Rillardonp.18 ©Cegosp.18 ©CCCp.18, 21 ©Olivier Chatelainp.20 ©Christophe Deschanel p.24 ©Pirioup.25 ©M. Mochet (AFP)
p.42 ©Diana Ingredientsp.43 ©Trecobatp.44 ©Vincent Girier Dufournierp.51 ©Fernand Burgerp.71 ©Keolis
glossary
BUILD-UPA company acquisition designed to expand a group and generate synergies.
BUYOUTSee LBO.
CLOSING This represents completion of a transaction when all participants (i.e. directors and financial investors) sign the final legal purchase agreement and consideration is paid over.
DEAL FLOWThis describes investment opportunities in a market.
DIRECT FUNDSA fund investing directly in companies.
DUE DILIGENCEA series of audit procedures enabling an equity investor to form an opinion regarding the assets, business, organization, financial situation and outlook of the company in which he/she plans to invest.
EARLY SECONDARY FUNDS OF FUNDS Funds of funds for which drawn capital represents between 15% and 50% of commitments.
EXPANSION CAPITALThis is a segment of private equity relating generally to a minority investment in equity, or capital akin to equity, with a view to fund the growth of a profitable company with significant growth outlook.
FUNDS OF FUNDSA fund investing in other funds.
GIPSGlobal Investment Performance Standards. These are international ethical standards for an objective presentation of results and performance. These standards ensure fair and complete presentation of past performance, and transparent and complete disclosures.
GPGeneral Partner. This refers to companies managing funds.
IRR Internal Rate of Return. This is a performance indicator for private equity transactions which measures the average annualized return of an investment that includes cash outflows, cash inflows and valuation.
LBO Leveraged Buyout. This is both debt and equity finance for an acquisition. LBOs consist of purchasing a company with the backing of bank debt.
LPLimited Partnership.This is an investment vehicle combining investments from several partners. The LP is managedby a General Partner (GP).
MEzzANINESubordinated debt which bridges the gap between equity and senior debt and consequently benefits from an intermediate return. The debt component generates interests and the equity component provides a potential upside.
MULTIPLEThis is a performance indicator based on the ratio of the proceeds received for the sale of an investment with the cost of the initial capital investment.
PRIMARY FUNDS OF FUNDSFunds of funds which invests in new funds (less than 15%).
PRIVATE EQUITYThe term “private equity” generally concerns investment in equity in unlisted companies.
SAS 70Statement on Auditing Standards no. 70. This is an international certification compliant with standards issued by AICPA (American Institute of Certified Public Accountants), which details the operating procedures of an asset management firm and assesses the effectiveness of internalcontrols.
SECONDARY FUNDS OF FUNDSFunds of funds which invests in funds which are more than 50% funded.
SOURCINGIdentifying new investment opportunities.
SRISustainable and Responsible Investment (SRI).
VENTURE CAPITALThis is a segment of private equity relating to investment in equity or capital akin to equity, of young companies or start-ups which have a significant high-tech content.
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