1. Where is European Private Equity Heading? - 2005 European Private Equity Statistics Gemma Postlethwaite, Thomson Financial 16 March 2006

2. 2 Investment Activity Methodology  Data collected from GPs via survey questionnaires, response rate 62.3% for 1,450 PE firms  Europe is defined as location of the PE fund  Fundraising – only formal closings included  Investments – based on completion date, only equity value (debt only if provided by PE fund)  Divestments – at cost, and a t time of divestment by PE firm

3. 3 A fund raising all-time record at €60bn Source: EVCA/Thomson Financial/ PricewaterhouseCoopers  Sustainable level?  77% of funds raised in 2005 allocated to buyout, vs. 65% in 2004  Banks are back – why?  Pension funds invest massively –baby boomers with a pension shortfall  US fund raising also a record with $173bn, but second to 2000 European Private Equity Funds Raised

4. 4 Investments & divestments growing too € billion Source: EVCA/Thomson Financial/ PricewaterhouseCoopers  Not too much capital overhang  66% of investments in 2005 related to buyout deals, vs. 70% in 2004

5. 5 Is there a leverage bubble? Source: Thomson Financial NB: Based on calculated or reported ratios, for transactions were the data was available

6. 6 Exit prospects look healthy Source: EVCA/Thomson Financial / PricewaterhouseCoopers Divestments – Breakdown by Type M&A Activity, Europe* IPO Activity, Europe* Source: Thomson Financial *Public and private deals

7. 7 Performance Methodology  Data collected from GPs and LPs historically for 1000+ European funds  Returns calculated at fund level, and net of management fees and carried interest  All calculations done by Thomson based on actual cash flows  Pooled IRR: IRR of a group of funds where cash flows have been aggregated together before IRR calculation  Investment horizon return: IRR calculated with Net Asset Value as capital outflow at beginning of period, Net Asset Value at end of period, and actual cash flow in between  DPI: Distribution (in cash or stock) divided by Paid-In capital (‘realised’ ratio)  RVPI: Residual Value divided by Paid-In capital (‘unrealised’ ratio)  TVPI: Total Value divided by Paid-In, sum of DPI and RVPI

8. 8 Investment Benchmarks European Sample

9. 9 European Private Equity Funds Formed 1980-2005 Net IRRs to Investors, Investment Horizon Return as of 31-Dec-2005 Stage1 YR3 YR5 YR10 YR20 YR All Venture25.40.6-4.05.35.7 Buyouts20.97.95.012.612.4 Generalist51.21.2-4.89.78.6 All Private Equity24.15.21.210.29.6 Source: Thomson Financial / EVCA Short term indicators show good performance

10. 10 3-year venture IRR moves into positive territory +0.6% +5.3% Source: Thomson Financial / EVCA European Venture 3-,5-,10-Year Rolling IRRs -4.0%

11. 11 All horizon IRRs in positive territory for buyouts and climbing +7.9% +12.6% Source: Thomson Financial / EVCA European Buyouts 3-,5-,10-Year Rolling IRRs +5.0%

12. 12 Top quarter funds return 23% StagePooled IRR Minimum value Top Quarter Pooled IRR Top Quarter All Venture5.66.123.9 Buyouts12.417.135.3 Generalist8.68.112.4 All Private Equity9.610.423.0 Source: Thomson Financial / EVCA European Private Equity Funds Formed 1980-2005

13. 13 Where is performance coming from? StageDPIRVPITVPI All Venture0.600.611.21 Buyouts0.800.601.40 Generalist0.970.401.37 All Private Equity0.780.571.35 Source: Thomson Financial / EVCA European Private Equity Funds Formed 1980-2005

14. 14 Conclusion: Record Activity  Fundraising record at €59.5bn  Pension funds and banks - main investors with 57.5%  2005 investments steady at €38.5bn, expected to go above €43bn on final data set  Buyouts represent 65.8% by amount invested  Venture represent 72.6% by number of investments  Divestments up 23% at €24.0 billion  Trade sale continues to be the most popular exit route with 24.6% of the total amount divested  Write-offs reduced to 5.5% of total amount divested

15. 15 Conclusion: Improved Performance  Long-term performance  Stays constant at around 10% net IRR  Robust returns for top quarter funds: 35.3% for buyout and 23.9% for venture funds.  Shorter-term performance  Overall 3-year rolling IRR moves up to 5.2% IRR with both buyout and venture returns in positive territory  1-year rolling IRR is an impressive 20.9% for buyout and 25.4% for venture funds

16. 16 Contact the Thomson Research Specialists: Performance: Cornelia Andersson cornelia.andersson@thomson.com +44 20 7014 1202 cornelia.andersson@thomson.com Investment activity: Margherita Del Bianco margherita.delbianco@thomson.com +44 20 7566 1934 How to contribute data?