1. Fundraising & Investor Appetite: CEE as a Mainstream Market? Richard Sachar, Almeida Capital 23 rd September 2008 3 rd Annual Private Equity in CEE

2. LP Allocation LP Appetite Raising a CEE Fund

3. Attractive fund types for LPs worldwide LP APPETITE FUNDRAISING Allocation -1- Source: LP Allocation to Private Equity 2008, Almeida Capital survey (130 LPs) Small Buyout Medium Buyout Special Situations Growth/ Development Capital Cleantech/ Sustainable Energy Large Buyout Mezzanine Venture Capital Direct Secondary Purchase Infrastructure Dedicated Secondary Funds Real Estate

4. … and for European, N American, Asian LPs LP APPETITE FUNDRAISING Allocation -2- Source: LP Allocation to Private Equity 2008, Almeida Capital survey (130 LPs) EuropeNorth AmericaAsia Small Buyout Medium Buyout Special Situations Growth/Development Capital Cleantech/Sustainable Energy Large Buyout Mezzanine Venture Capital Direct Secondary Purchase Infrastructure Dedicated Secondary Funds Real Estate

5. Geographic interest of LPs worldwide Source: LP Allocation to Private Equity 2008, Almeida Capital survey (130 LPs) LP APPETITE FUNDRAISING Allocation -3-

6. Global LPs 2008 allocation changes Allocation Increase Source: LP Allocation to Private Equity 2008, Almeida Capital survey (130 LPs) LP APPETITE FUNDRAISING Allocation -4- Allocation Decrease

7. Experienced investors remain positive LP APPETITE FUNDRAISING Allocation -5- Mid-Market Buyout Growth / ExpansionMezzanineVenture ‘Central European buyout was not affected by the leverage bubble – and is unlikely to be hit too hard by the credit crunch.’ ‘This is a good time to invest with managers in the buyout arena. GPs should be able to pick up some good deals at very reasonable valuations’ Source: Interviews with LPs active in CEE. ‘Expansion capital is interesting across the region but particularly in Russia, which is a huge market, of course.’ ‘Growth/expansion is particularly interesting in CIS.’ ‘Mezzanine has become a very interesting opportunity in CEE.’ ‘The mezzanine market in CEE may catch up with Western European levels over the next couple of years.’ ‘Early stage venture capital is still underdeveloped and there are not enough proven managers.’ ‘There have been some good exits of venture- backed companies, all via trade sales.’

8. Source: Interviews with LPs active in CEE. Experienced LPs believe the market is developing well LP APPETITE MARKET FUNDRAISING -6- ‘We are increasing our CEE exposure in two ways: through GPs focused on the region and via our investments in pan-European funds that are increasingly looking at CEE.’ ‘The awareness and knowledge of private equity has really improved in the region.’ ‘GPs are putting more capital to work and find attractive investment opportunities, which means LPs can increase their allocations.’ ‘With so many more GPs and LPs active in the region, it is easier to carry out due diligence and get referrals.’

9. Source: Interviews with LPs active in CEE. Capital will continue to flow into the region LP APPETITE MARKET FUNDRAISING -7- ‘We look with interest at the next-accession-wave countries and plan to put more money into those.’ ‘Our confidence in the region is increasing and we now have a dedicated CEE fund of funds.’ ‘The amount of capital invested in CEE will always depend on whether the few big players are currently in the market. When they raise money, a lot of capital flows into the region. The smaller funds are too small and too few to make up for it when the big funds are not in the market.’ ‘We are looking at more managers in the region now, particularly in Russia.’

10. Source: Interviews with LPs active in CEE. Experienced investors are happy with the risk LP APPETITE MARKET FUNDRAISING -8- ‘Risk profiles across the region vary enormously. While the EU accession countries are actually quite similar to Western Europe now when it comes to risk, the other countries are different.’ ‘We have no issues with risk in the EU accession countries.’ ‘The EU countries have no extra risk attached, but we are not always so sure about the risk-return profile in the other countries.’

11. Popular countries and regions LP APPETITE MARKET FUNDRAISING -9- Major PE markets ‘Poland and Romania remain favourite destinations for capital.’ ‘While the risk in CIS remains much higher than in CEE, we feel confident that the return potential is high too.’ Risky CIS ‘The growth of the Ukrainian private equity market is limited by the small number of players.’ Ukraine needs to grow ‘Russia’s credentials remain basically unchanged, despite the recent conflict.’ Russia still unchanged Source: Interviews with LPs active in CEE.

12. Disappointments remain LP APPETITE MARKET FUNDRAISING -10- Lack of consistency ‘Team turnover is disappointing as international firms poach talent.’ Source: Interviews with LPs active in CEE. Fear of overcrowding ‘We focus our DD even more on industry sectors now because we worry a few sectors are becoming rather overcrowded.’ Lack of incentives ‘Countries across the region have very different approaches toward providing tax incentives.’ Risk factors ‘Political stability does not go far enough, reform programmes are needed.’ ‘Regulatory risk remains a concern in some parts of the region.’ Segregation and diversity ‘We would like to see private equity markets across CEE link up in a similar way as the Nordic do.’

13. Source: Almeida Capital research Fundraising targets for CEE FUNDRAISING LP APPETITE MARKET Screening or investing in CEE -11- Not interested in CEE 100% = 1006 LPs100% = 1040 LPs

14. Fundraising: what’s different for CEE? Professionally produced and in- depth materials now the ‘norm’ Identify very best quality prospects or fail with timewasters Compelling, well supported story now the ‘norm’ Extensive information requests and LP issue resolution now the ‘norm’ Material preparation LP targetingPresenting the story Project management More detail and more contextual material required CEE General LP targets harder to identify LP misconceptions and lack of knowledge to overcome Much greater support required to get LPs over the line Source: Almeida Capital research CD-Rom D UE D ILIGENCE Strictly Confidential FUNDRAISING LP APPETITE MARKET -12-

15. Fundraising: show me the money ‘Bought-in’ Already investing or allocated ‘On the line’ Need help or push ‘On the way’ Need lots of research & support ‘Miles behind’ Won’t commit during this cycle Source: Almeida Capital research 20% 10% FUNDRAISING LP APPETITE MARKET -13-

16. Fundraising: show me the money Source: Almeida Capital research 20% 10% ‘Bought-in’ ‘On the line’ ‘On the way’ ‘Miles behind’ FUNDRAISING LP APPETITE MARKET -14-

17. Fundraising: dos and don‘ts Focus on LPs that are ‘on-the- line’ Be meticulous and professional about your preparation Commit the right level of resources and support Only use an advisor or agent who has successfully raised money for CEE before Source: Almeida Capital research Lose momentum with ‘researchers’ or ‘timewasters’ Cut corners on planning, due diligence and material preparation Fail to respond to LPs or underestimate the workload Risk your reputation or future on anyone that hasn’t delivered on CEE before   CD-Rom D UE D ILIGENCE Strictly Confidential FUNDRAISING LP APPETITE MARKET -15-

18. Richard Sachar Almeida Capital Limited Burleigh House 357 Strand London WC2R 0HS  +44 (0)20 7845 7575 rsachar@almeidacapital.com -16-