Benchmarking Private Equity - EMPEA€¦ · 3/10/2014 · Measuring and Benchmarking Private...

Measuring and Benchmarking Private Equity Performance An EMPEA Professional Development Webcast – 11 March 2014

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An EMPEA Professional Development Webcast

Measuring and Benchmarking Private Equity Performance

An EMPEA Professional Development Webcast with Capital Dynamics, HEC School of

Management and Siemens Venture Capital

Measuring and Benchmarking Private Equity Performance An EMPEA Professional Development Webcast – 11 March 2014 Confidential 2

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Part 1, Ivan Herger Measuring performance Benchmarking performance Part 2, Oliver Gottschalg Measuring Absolute and Relative Aggregate & Annual Returns A Concept for Measuring Risk: The PERACS Portfolio Risk Curve How to Empirically Identify 'Relevant Competitor Funds‘ Intuitive Validity of the Empirical Approach Hypothetical Example: Relevant Peer TVPI Benchmark Panel Discussion and Audience Q&A

Confidential 4

Contents


Presenter

Ivan Herger Managing Director and Head of Solutions Capital Dynamics


Definitions DPI: Distributed to Paid In DPI = distributions / draw downs TVPI: Total Value to Paid In TVPI = (distributions + NAV) / draw downs Properties Easy to understand and calculate Doesn’t give information about timing of cash flows

“Buys you lunch”

Confidential 6

Money multiples


Definition The IRR of an investment is the discount rate at which the net present value of the capital calls (negative cash flows) plus the net present value of the distributions (positive cash flows) equals zero Properties Annualized rate of return Accounts for the amount of money and the length of time it has been invested Early cash flows have a bigger influence than later cash flows Bigger investments have a bigger influence than smaller investments No analytical solution possible, algorithmic approximation required “Doesn’t buy you lunch”

Confidential 7

!

Taking into account timing: internal rate of return (IRR)


Since inception IRR Take all cash flows of a fund/portfolio since inception Treat the ending NAV as a distribution (portfolio is sold at NAV at the end) Calculate the IRR

Result dependent on ending NAV Horizon return Chose a horizon, e.g. 5 years, 10 years Treat the initial NAV as a capital call (portfolio is bought at NAV at the start) Take all cash flows of a fund/portfolio between initial time and ending time Treat the ending NAV as a distribution (portfolio is sold at NAV at the end) Calculate the IRR

Result dependent on starting and ending NAV

Confidential 8

Applications of IRR


Calculation Treat the initial NAV as the initial value Treat the ending NAV as the end value Take into account interim cash flows by placing them at start, end or in between (Dietz) Calculate return for the period Properties Simple analytic calculation Heavily dependent on valuations Compounding possible, but may be problematic

Confidential 9

Periodic return, time weighted return (TWR)


Fund managers of publicly quoted assets: periodic returns • Average periodic return shows the average performance over time, independently of

the amount of assets under management

Fund managers have no control over the cash-in (new investors) and cash-out flows (redemption) from the fund, so that IRR does not represent the manager’s skill

Private equity fund managers: internal rate of return Timing of investments and divestments is a major component of the value generation

with private equity investments and this does not get captured with periodic returns

Why IRR makes sense for private equity fund managers


Direct comparison Compares the investments that were made to similar investments.

“Given a precise asset allocation, how good were the investment choices we made?” Opportunity cost comparison Compares the investments that were made to other possible investments (opportunity costs)

“If we had chosen a different asset allocation/commitment pacing/ticket size, what would our

returns have been?

Confidential 11

Why are you benchmarking?


Single fund

Fund of funds

Portfolio of funds Asset class

Confidential 12

What are you benchmarking?


Example KKR 2006 Fund, performance as of September 30, 2013*: IRR 7.78%, multiple: 1.4x Peer group performance (all US buyout funds with vintage year 2006): IRR Multiple Top quartile (75th percentile): 11.49% 1.54x Median (50th percentile): 7.98% 1.36x Bottom quartile (25th percentile): 4.33% 1.18x KKR 2006 is in the 3rd quarter for IRR (48th percentile), and in the 2nd quarter for multiple (50th percentile)

Application For single funds

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Source: quarterly performance report of Washington State Investment Board, http://www.sib.wa.gov/financial/pdfs/quarterly/ir093013.pdf

Direct comparison with peer group


Method randomly build similar portfolios from a database of single funds, i.e. replicate the portfolio Compute performance of the replicated portfolio Benchmark own portfolio against distribution of performance of replicated portfolios Example Large institutional investor, IRR: 6.7% Top quartile: 6.91% Median: 5.82% Bottom quartile: 4.76% -> Institutional investor has a 2nd quartile portfolio (71st percentile) Application For fund of funds and portfolios Peer group: direct comparison: similar portfolios (same number of funds; for each funds same commitment

size, geography, strategy, vintage year as in the portfolio) opportunity cost comparison: similar portfolios, with certain constraints relaxed (e.g. keeping the

commitment amounts constant, but relaxing the strategy allocation)

Confidential 14

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

Top QuartileSecond QuartileThird QuartileBottom QuartileReplicated Portfolio

Portfolio replication


Pooled returns vs. median returns Single fund benchmark vs. portfolio benchmark vs. industry benchmark Gross returns vs. net returns

Confidential 15

Common pitfalls connected with private benchmarks


Method Direct comparison between private equity returns and public market returns not possible PME is a method to compare returns by building a public market investment with a private equity

investment pattern PME (Bannock, Long, Nickels, Coller, Reyes) Invest into the public market whenever a capital call occurs Divest from the public market whenever a distribution occurs Compare ending NAV of private equity investment with value of public market investment Problem of shorting

PME+ (Capital Dynamics) Same as PME, but distributions are scaled such that the ending value of the public market

investment is the same as the NAV of the private equity portfolio No shorting

Other variants of PME KS-PME, MIRR

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Public Market Equivalent (PME)


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PME cash flows are identical, with the exception of the final NAV

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Identical Capital Calls

Identical Distributions

Different NAV

IRRPE = 22.7% IRRPME = 21.2%

Source: Capital Dynamics, conceptual chart


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PME+ scales distributions to end with an equivalent final valuation

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Identical Capital Calls

Scaled Distributions

Identical NAV

IRRPE = 22.7% IRRPME+ = 13.0%

Source: Capital Dynamics, conceptual chart


-10%

-5%

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5%

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30%19

85

1986

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IRR

Vintage year

Note: 2009 - 2012 vintage year performance is too immature to be meaningful. Private equity Internal Rate of Return (IRR) is net of fund expenses, management fees, and carried interest. Source: Capital Dynamics analysis based on Thomson One data up to December 31, 2012 including US and European VC and buyout funds with vintage years 1985 to 2008 (2,821 funds); PME+ methodology used to benchmark private equity returns.

Private equity - recession years in the US and Europe Private Equity Public Equity MSCI World TR

Confidential 19

Private Equity outperformance

Private equity vintage year returns demonstrated outperformance over public equity


Presenter

Oliver Gottschalg Associate Professor, Strategy and Business Policy HEC School of Management Founder and Head of Research, PERACS Independent PE Track Record Analytics and Certification


Measuring Absolute and Relative Aggregate Returns: From TVPI to « PERACS Multiple »

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2.6x 2.1x

TVPI(MOIC)

PERACSMultiple

Consideration of opportunity cost of capital

PERACS Multiple of each investment is calculated as a variable-rate Profitability Index, i.e. the ratio of Present Value of Distributions (or NAVs) over Present Value of Takedowns , using the MSCI Global Index as discount rate.

Seen from the LP-Perspective, each Capital Call has an "opportunity cost" as the money is not available to be invested elsewhere until the corresponding

distribution. The PERACS Multiple explicitly considers this opportunity cost, approximated by the returns to the MSCI Global index

Easy-to-Apply Methodology

2.6x 2.9x

TVPI(MOIC)

PERACSMultiple

"Opportunity Costs" turn negative in downcycle


Measuring Absolute and Relative Annual Returns

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The "PERACS Rate of Return" is an annualized measure of investment returns that avoids the biases of IRR (and related measures) based on the explicit consideration of the investment duration, i.e. the time between the (capital weighted) average cash outflow and the (capital weighted) average inflow.

Easy-to-Apply Methodology

From Total Return Multiple to PERACS Rate of Return

* PERACS Rate of Return = (TVPI^(1/Duration in years))-1 ** PERACS Alpha = (PERACS Multiple^(1/Duration in years))-1

From Total Return Multiple to PERACS Alpha

2.6x 26%

TVPI(MOIC)

PERACSRate of Return*

Annualizing returns based on duration:

4.4 yrs

Annualizing returns based on duration:

4.4 yrs

2.1x 18%

PERACSMultiple

PERACSAlpha**

The "PERACS Alpha" is the corresponding measure of annual value creation relative to the 'opportunity cost' of not investing in the public market.


Alternative Measures of annual returns

Subject to inherent bias of IRR method

Avoids "Reinvestment assumption bias" of IRR

Absolute Performance Measure

IRR PERACS Rate of Return

Performance Measurement relative to public markets

PME-IRR and its variations PERACS Alpha

BACKUP

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Approach used to assess Income Inequality across countries

0

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Brazil China Perfect

Cum

ulat

ive

Inco

me

Shar

e

Cumulative Population Share

A Concept for Measuring Risk: The PERACS Portfolio Risk Curve Inspired by Lorenz curve in Macroeconomics

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Similar to the 'Gini Coefficient' for wealth distribution, we capture the distribution of performance in a single measure, the 'PERACS Risk Coefficient', which makes it possible to compare and benchmark the risk of different PE portfolios in a measure that is independent of the performance of these portfolios. The 'PERACS Risk Coefficient' measures the area underneath a given risk curve relative to the area underneath the diagonal line at a 45 degree angle.


The "PERACS Investment Risk Curve" of a Typical PE Fund

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-20%

0%

20%

40%

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80%

100%1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79

% o

f val

ue c

reat

ion

Number of transactions

Alpha Contributors

Alpha Drags

Vertex

Break Even Point

Insight Overall assessment of the distribution (uniform vs. expo-nential) of returns in the portfolio as a new risk measure for PE portfolios. Benchmarking Comparison with average perform-ance distribution from HEC PE database, based on different portfolio characteristics.

Generic Example

Calculations available in: Chau-Nan Chen, Tien-Wang Tsaur and Ton-Shieng Rhai, Oxford Economic Papers, New Series, Vol. 34, No. 3 (November 1982), pp. 473–478.


PERACS Investment Risk Curve by % of Deals

Doughty Hanson & Co – Aggregate (Fund IV + V)

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0.90 0.91 0.61

0 0.5 1

Benchmark EU

Since 2005 Large-Cap

DH

PERACS Risk Coefficient

The PERACS Investment Risk Curve illustrates the portion of the cumulative PERACS Alpha generated by the poorest-performing x% of the portfolio (as measured by % of deals). The PERACS Risk Coefficient expresses the skewedness of returns from 0 (perfectly uniform) to 1 (perfectly concentrated Alpha).

Real-World Client Example


PERACS Investment Risk Curve by % of Deals

Nordic Capital Fund V versus Fund VI

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0.90 0.91 0.59 0.45

0 0.5 1

Benchmark EU

Since 2005 Large-Cap

Nordic Capital Fund V

Nordic Capital Fund VI

PERACS Risk Coefficient

The PERACS Investment Risk Curve illustrates the portion of the cumulative PERACS Alpha generated by the poorest-performing x% of the portfolio (as measured by % of deals). The PERACS Risk Coefficient expresses the skewedness of returns from 0 (perfectly uniform) to 1 (perfectly concentrated Alpha).

Real-World Client Example

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Beyond the Vintage Year Quartile: The PERACS 'Relevant Peer Benchmark'

Fact

Existing vintage year benchmarks are of limited accuracy: • Vintage criterion groups funds with very different investment focus • Does not account for market dynamics where funds with similar focus from

consecutive vintages compete for similar deals and LP commitments

Problem Self-selection of peers is often seen by LPs as subjective and potentially biased

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Idea PE funds should be benchmarked against their 'relevant peers'

Empirically derive funds that directly compete with a given GP for investment opportunities to objectively capture funds active in the same 'space' within the PE universe

Solution

An Innovative PE Performance Benchmark based on empirically-derived 'Relevant Competitor Funds'


An example of how to empirically identify 'Relevant Competitor Funds’

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Assessment of investment activity by 'strategic cells'

• Compose data set on fund-level performance and investment activity (individual deals) of large sample of PE funds

• Define a space within the PE universe ("strategic cell") as the combination of a given: – Industry sector (GICS classification at the 2-digit level) – Region – Investment time period (based on 3-year window around date of

investment) and – Size category (based on time-varying deal-size quartile)

• For example, all US upper-mid-cap automotive deals made between 1997 and 2000 fall into the same 'strategic cell'


Calculating the 'strategic overlap score' between two PE funds • Measure the percentage of activity (based on the investment volume and the # of deals) in each

"strategic cell" for each PE fund • Calculate the "strategic overlap" for each pair of PE funds as the sum of joint activity (i.e. the

minimum of the percentages invested in a given strategic cell by both funds) over all strategic cells

• A strategic overlap of 1 means that a firm invests exactly like the average firm – a score of 0 indicates that no other firm makes similar investments

How to empirically identify 'Relevant Competitor Funds'*

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Identification of relevant competitor fund based on 'strategic overlap score' • 'Comparable' funds that should be benchmarked against each other can then be derived as

a function of the 'strategic overlap score' • For example, we consider funds as 'relevant competitors' whenever their 'strategic overlap

score' (by investment volume) exceeds 15% – and consider the degree of 'competitive overlap' in the calculation of the benchmark:

The 'Relevant Competitor Benchmark' (RCB) for a given fund is the average perform-ance of all its 'relevant competitors', weighted by their 'strategic overlap score'


Intuitive Validity of the Empirical Approach

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Illustrative Example based on Data Provided by Thomson Reuters

Fund to be benchmarked: Large Cap Europe Fund

List of Relevant Competitors (by order of strategic overlap) • BC European Capital VII • Third Cinven Fund, The • Blackstone Capital Partners IV, L.P. • CVC European Equity Partners III LP • KKR European Fund • Hellman & Friedman Capital Partners IV, L.P. • Charterhouse Capital Partners VI • Carlyle Europe Partners, L.P.

Example for most relevant 'Competitor Funds' according to our method:


Hypothetical Example: Relevant Peer TVPI Benchmark

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3.3x

2.5x 2.4x 2.2x 2.1x

1.4x

Fund A Fund B Fund C

Focal Fund TVPI Relevant Peer Benchmark TVPI

Mega Partners, LLC – Aggregate

Key Insights into two distinct GP skills: • High Relevant Peer

Benchmark = Superior Target Choice

• Focal Fund beats Relevant Peer Benchmark = Superior Execution / Implementation


Panel Discussion and Audience Q&A

Ivan Herger Managing Director and Head of Solutions Capital Dynamics

Oliver Gottschalg Associate Professor, Strategy and Business Policy HEC School of Management

Klaus Grünfelder CFO and Managing Director Siemens Venture Capital GmbH


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Launched in 2008, EMPEA has hosted almost 40 webcasts to date drawing more than 5,000 participants from 70 countries and over 900 unique firms.

• Market Based Solutions for Impact Investing

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• Identifying and Mitigating Risks in Southeast Asian Investments

• Investment Spotlight: Secondaries

• The Appeal of Africa: Maximizing Investment Opportunities While Mitigating Risk

• EMPEA Guidelines: A Legal and Regulatory Framework for Global Private Equity

• Private Equity Fund Structuring, Oversight and Administrative Matters

• LP Outlook for Emerging Markets: Preview of EMPEA’s 2012 LP Survey Results

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• Investment Spotlights: Emerging Europe & Mexico

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Webcast Topics have included: • Private Equity in North Africa: What Every

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• Private Equity Investing in the Middle East, North Africa and South Asia

• Evolving Key Terms & Conditions in Today’s EM PE

• How Will the ILPA Principles Shape GP-LP Relationships in Emerging Markets?

• Strategies to Address and Prevent LP Defaults

• Role of the Secondaries Industry in Emerging Markets Private Equity

• Corporate Governance in Emerging Markets Private Equity

• Frontier Markets & Beyond

• The Future of Growth Markets: More Than Just a BRIC in the Wall

EMPEA Professional Development Webcasts


For follow-up questions on this or other webcasts, please contact Emily Sandhaus at [email protected] or +1.202.333.8171. For Members-Only Research Requests, please contact [email protected] or +1.202.333.8171. Please also visit www.empea.org for further information.

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Ivan Herger, Managing Director Capital Dynamics Bahnhofstrasse 22 6301 Zug Switzerland Phone: +41 41 748 8424 Mobile: +41 76 314 8424 Email: [email protected]

www.capdyn.com

London New York Zug Beijing* Tokyo Hong Kong Silicon Valley Sao Paulo Munich Birmingham Seoul Brisbane Shanghai* Scottsdale

* Capital Dynamics China is a legally separate company operating under a strategic cooperation with the Capital Dynamics group.

Capital Dynamics Contact Information


Disclaimer

Confidential 37

This document contains information that has been provided by a number of sources not affiliated with Capital Dynamics. This document contains performance information which has been prepared by Investment Management professionals at Capital Dynamics. “Capital Dynamics” comprises Capital Dynamics Holding AG and its affiliates. Capital Dynamics has not verified the information provided. Nothing contained herein shall constitute any representation or warranty and no responsibility or liability is accepted by Capital Dynamics as to the accuracy or completeness of any information supplied herein. This document contains past performance and projected performance information and it must be noted that past performance and projected performance is not a reliable indicator of future results. This document does not constitute an offer to sell or a solicitation of an offer to purchase any securities of any kind in Capital Dynamics, including any of its funds. Any such offer or solicitation shall be made pursuant to a private placement memorandum furnished by Capital Dynamics. This document shall not, nor the fact of its distribution, form the basis for, or be relied upon in connection with, any contract. Before relying on this information in any way, Capital Dynamics advises the recipient of this information (the “Recipient”) to perform independent verification of the data and conduct his or her own analysis hereto with appropriate advisors. Statements contained in this document may include statements of future expectations and other forward-looking statements. Any projections or other estimates in these materials are based upon certain assumptions. Case studies included herein, if any, are for illustrative purposes only, do not necessarily represent any portfolio's performance, and should not be used for the purpose of making an investment decision without the addition of other relevant information, including, but not limited to, a current placement memorandum. Actual events may differ materially from those assumed, which may have a material impact on any projections or estimates provided herein. In addition, certain assumptions may have been made to simplify the document and/ or calculation of projections or estimates. Capital Dynamics does not purport that any such assumptions will reflect actual future events, and reserves the right to change its assumptions without notice to the Recipient. The information contained herein may contain general, summary discussions of certain tax, regulatory, accounting and/ or legal issues. Any such discussions and issues may be generic and may not be applicable to or complete for the Recipient. Capital Dynamics does not offer investment, tax, regulatory, accounting or legal advice and this document should not and cannot be relied upon as such. Prior to entering into any proposed transaction or agreeing to proposals made herein, the Recipient should determine, in consultation with the Recipient’s own legal, tax, regulatory and accounting advisors, the economic risks and merits of any action, as well as the legal, tax, regulatory and accounting consequences of such action. When considering alternative investments, such as private equity funds, the Recipient should consider various risks including the fact that some funds may use leverage and engage in a substantial degree of speculation that may increase the risk of investment loss, can be illiquid, are not required by law to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees, and in many cases the underlying investments are not transparent and are known only to the investment manager. This document is for informational purposes only, is confidential and may not be reproduced in whole or in part (whether in electronic or hard-copy form). Material notes to investors based in China (excluding Hong Kong Special Administrative Region, Macau Special Administratvie Region and Taiwan): Pursuant to the Notice of the General Office of National Development and Reform Commission ("NDRC") on Promoting the Standardized Development of Equity Investment Enterprises (Fa Gai Ban Cai Jin [2011] No. 2864), the fund may only raise investments through private placement, i.e. from specific qualified investors who are capable of identifying and tolerating risks, and cannot be promoted to non-specific and non-qualified investors, directly or indirectly, through public ways. The fund shall entrust an independent custodian for asset custody purposes, except all investors agree otherwise. Diligence Capital, operating in English under the brand Capital Dynamics China, shall attend to the filing with NDRC. The investor should be informed that upon becoming a limited partner of the fund, neither the return of the principal amount nor the distribution of any profit is guaranteed. Any investment in the fund involves certain risks of loss, including but not limited to risks caused by fluctuations in interest rates, currency and other market factors, or credit risk of other partners of the funds or affiliated parties thereof. Neither this document nor any other document or information contained or incorporated by reference herein relating to any investment in the fund may be construed in such a way that Capital Dynamics (a foreign entity) is marketing or doing business in China. The information contained or incorporated by reference herein relating to the investment in the fund does not constitute any offer to sell, or any solicitation or any offer to subscribe or purchase any securities in the PRC. Based in Hong Kong: This document does not constitute or form part of any offer any offer, solicitation or invitation to subscribe or purchase any securities nor shall it or any part of it form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any such offer, solicitation or invitation can only be made by a private placement memorandum, which is available solely on request, on a private basis and will only be extended to a person if that person has first satisfied Capital Dynamics that the person is a "professional investor" within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong). If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Please note that the contents of this document have not been reviewed by any regulatory authority in Hong Kong.


Disclaimer

Confidential 38

Based in Taiwan: The information contained in this document is only for informational purposes. No information in this document constitutes a solicitation or an offer to buy or sell or not to buy or sell any product, instruments or investment, to effect any transactions, or to conclude any legal act of any kind whatsoever. The funds may be made available outside Taiwan for purchase outside Taiwan by persons residing in Taiwan but may not be offered or sold in Taiwan. Based in Japan: The intended recipient understands and acknowledges that upon becoming a limited partner of the fund, neither the return of the principal amount nor the distribution of any profit is guaranteed. Any investment in the interests involves certain risks of loss, including but not limited to risks caused by fluctuations in interest rates, currency and other market factors, or the credit risk of other partners of the funds or affiliated parties thereof. Any person interested in purchasing an interest is advised to read the terms of investment carefully, paying particular attention to those provisions that relate to limitations on the period in which rights relating to such investment can be exercised. The registration statement under Article 4, Paragraph 1 of the Financial Instruments And Exchange Act of Japan ( Act No.25 of 1948 , as amended , “ FIEA”), has not been and will not be filed with respect to the offering of the interests of the fund (the "Interests") as the offering consists of a “solicitation for a small number of people” (as defined in Article 23-13, Paragraph 4 of the FIEA), and the Interests, which are “securities” within the meaning of Article 2, Paragraph 2, Item 6 of the FIEA, will be offered in accordance with Article 2, Paragraph 3, Item 3 of the FIEA, where the Interests shall not be held by 500 or more investors. The offering and sale of the Interests by the general partner is intended to be exempt from the registration requirement under the FIEA in reliance on the exemption provided for in Article 63, Paragraph 1, Item 1 of the FIEA, and the management of the fund's assets by the general partner is intended to be exempt from the registration requirement under the FIEA in reliance on the exemptions provided for in (i) Article 63, Paragraph 1, Item 2 of the FIEA or (ii) Article 16, Paragraph 1, Item 13 of the Cabinet Office Ordinance Concerning Definition Provided in Article 2 of the FIEA. The general partner has not been and will not be registered under the FIEA as “investment management business” (toshi unyo gyo) as defined in Article 28 of the FIEA and no Interests held by an investor can be transferred in any manner whatsoever if the transfer causes the general partner to be registered as “investment management business” under the FIEA. Based in Korea: This document is being provided to you to gauge your preliminary interest in possible investment in the fund, and the provision of this document shall not be construed as marketing or soliciting investment in the fund. The interests/shares of the fund have not been registered with the Financial Supervisory Commission of Korea (the “FSC”) in Korea for public offering under the Financial Investment Services and Capital Markets Act of Korea, and the interests/shares of the fund may not be offered, sold or delivered, or offered or sold to any person for reoffering or resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to applicable laws and regulations of Korea. Furthermore, the interests/shares of the fund may not be resold to Korean residents unless the purchaser of the interests/shares of the fund complies with all applicable regulatory requirements (including, without limitation, governmental approval requirements under the Foreign Exchange Transaction Law and its subordinate decrees and regulations) in connection with the purchase of the interests/shares of the fund. None of the fund, the [General Partner/Investment Manager or any placement agent] makes any representation with respect to the eligibility of any recipients of this document to acquire the interests/shares in the funds under the laws of Korea, including but without limitation the Foreign Exchange Transaction Law and regulations thereunder. Based in the United States of America: Capital Dynamics, Inc. is registered as an Investment Adviser with the Securities and Exchange Commission (SEC). Securities are offered through Capital Dynamics Broker Dealer LLC, a registered broker-dealer with the SEC, and a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC). Any Recipient not interested in the analysis described herein should return this presentation to Capital Dynamics, Inc. or Capital Dynamics Broker Dealer LLC, 645 Madison Avenue 19th floor, New York, NY 10022 USA and contact Capital Dynamics as soon as possible (t. +1 212 798 3400). Based in Switzerland: Material is presented to investors by Capital Dynamics AG. Capital Dynamics AG is registered with the US SEC. It does not constitute a public offering or distribution within the meaning of the Swiss Act on Collective Investment Schemes or the Swiss Code of obligations, respectively. It is addressed to a limited group of qualified investors. Any recipient not addressed by Capital Dynamics AG should return this presentation to Capital Dynamics AG, Bahnhofstrasse 22, 6301 Zug, Switzerland and contact Capital Dynamics AG as soon as possible (t. +41 41 748 84 44).


Disclaimer

Confidential 39

Based in the United Kingdom: This document has been issued by Capital Dynamics Limited who is authorised and regulated by the Financial Conduct Authority (“FCA”). This document is addressed only to persons falling within one or more of the following exemptions from the restrictions in section 21 of the Financial Services and Markets Act 2000 (“FSMA”): •authorised firms under FSMA and certain other investment professionals falling within article 19 of the FSMA (Financial Promotion) Order 2005 (“FPO”) and their directors, officers and employees acting for such entities in relation to investment; and •high value entities falling within article 49 FPO and their directors, officers and employees acting for such entities in relation to investment, in addition to other persons who are classified as a Professional Client or Eligible Counterparty in accordance with the rules of the Financial Conduct Authority (“FCA”). Accordingly, this document is not required to comply with the detailed rules on financial promotions in the FCA's Conduct of Business Sourcebook. The distribution of this document to any person in the United Kingdom not falling within one of the above categories is not permitted by the Issuer and may contravene FSMA. No person falling outside those categories should treat this document as constituting a promotion to him, or act on it for any purposes whatsoever. Based in select countries in the European Union (Austria, Belgium, Cyprus, Czech Republic, Denmark, Finland, France, Greece, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Republic of Ireland, Spain, Sweden): Material is presented to investors by Capital Dynamics Ltd. Capital Dynamics Ltd is authorized and regulated by the Financial Conduct Authority (FCA). Any Recipient not interested in the analysis described herein should return this document to Capital Dynamics Ltd, 9 Colmore Row, Birmingham, B3 2BJ, United Kingdom and contact Capital Dynamics as soon as possible (t. +44 121 200 8800). Based in Germany: This presentation is issued and distributed by Capital Dynamics GmbH in accordance with the legal requirements for marketing securities and/or investment funds in Germany. Any recipient not addressed by Capital Dynamics GmbH should return this presentation to Capital Dynamics GmbH, Possartstrasse 13, 81679 Munich, and contact Capital Dynamics GmbH as soon as possible (t. +49 89 2000 4180). Based in Israel: The securities discussed in this presentation have not been and will not be authorized by the Israeli securities authority or any comparable securities authority of any other jurisdiction and no securities authority has confirmed the accuracy or determined the adequacy of this document. The securities discussed in this presentation will not be registered under the securities laws of the state of Israel or any other jurisdiction. The materials in this presentation should be considered only by sophisticated professional investors and only to investors to whom an offer of securities may be made without the requirement to publish a prospectus, and does not involve any public offering. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale is not authorized or to any person to whom it is unlawful to make such offer, solicitation or sale. Based in Australia: This offer is only open to wholesale clients, as that term is defined in the Corporations Act 2001 (Cth) (Act). Prospective investors should not treat the contents of this document as investment advice or advice relating to legal, taxation or any other matters. The offer is issued by Capital Dynamics Investments (Australia) Limited ARBN 145 827 738, a company registered in the United Kingdom. The issuer is operating in Australia under relief issued by the Australian Securities and Investments Commission from the requirement to hold an Australian financial services (AFS) license under the Act and therefore the issuer does not hold an AFS license. The issuer is regulated by the Financial Conduct Authority (FCA) under United Kingdom laws, which differ from Australian laws. Based in other jurisdictions: The distribution of this document in certain jurisdictions may be restricted by law. Persons into whose possession this document comes are required by Capital Dynamics to inform themselves about, and to observe, any such restrictions. This document does not constitute an offer to sell or the solicitation of an offer to purchase any securities in any state or other jurisdiction: (i) in which such offer or invitation is not authorized; (ii) in which the person making such offer or invitation is not qualified to do so; or (iii) to any person to whom it is unlawful to make such offer or solicitation.

Benchmarking Private Equity - EMPEA€¦ · 3/10/2014 · Measuring and Benchmarking Private...

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Transcript of Benchmarking Private Equity - EMPEA€¦ · 3/10/2014 · Measuring and Benchmarking Private...