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Confidential Information

GLOBAL PRIVATE MARKETS RESEARCH

ASSET VALUATION REVIEW

Historical Enterprise Value to
EBITDA Multiples for
Information Technology
Companies1
3Q2009 Net Asset Valuation
EV / EBITDA
Report and Outlook
As of Date Multiple
12/31/2005 10.90x Venture Funds May Be Significantly Overvalued
12/31/2006 11.10x
12/31/2007 10.30x
12/31/2008 4.93x
6/30/2009 7.32x October 26, 2009

Source: Capital IQ, Bloomberg
2005-2007 VENTURE FUND NAVs OVERVALUED 40.1%

We estimate that venture funds with 2005-2007 vintages worldwide
may have overstated net asset values by approximately 40.1% on
Historical Enterprise Value to average as of June 30, 2009. Our analysis is based on a comparison
EBITDA Multiples for of the cumulative percentage change in (a) stated net asset values of
Industrial Companies5 selected venture funds with 2005-2007 vintages having total capital
commitments of approximately $44 billion vs. (b) enterprise value to
EV / EBITDA
As of Date Multiple
EBITDA multiples of selected publicly-traded information technology
companies having a total market capitalization of approximately $250
12/31/2005 9.75x
12/31/2006 9.57x billion for the period December 31, 2005 to June 30, 2009. In
12/31/2007 9.69x summary, the venture funds wrote up net asset values approximately
12/31/2008 5.23x 7.28% during the period, while the information technology companies’
6/30/2009 6.54x enterprise value to EBITDA multiples contracted approximately
32.84%. (Please see Table 1).
Source: Capital IQ, Bloomberg

2005-2007 BUYOUT FUND NAVs REASONABLY VALUED
If you have any questions
regarding the matters discussed We estimate that buyout funds with 2005-2007 vintages worldwide
in this report, please contact your have nominally overstated net asset values by approximately 2.50%
relationship manager at on average as of June 30, 2009. Our analysis is based on a
NYPPEX, or send an email to
comparison of the cumulative percentage change in (a) stated net
research@nyppex.com.
asset values of selected buyout funds with 2005-2007 vintages
* * * * having total capital commitments of approximately $318 billion vs. (b)
enterprise value to EBITDA multiples of selected publicly-traded
This report is provided by industrial companies having a total market capitalization of
NYPPEX, LLC for research approximately $449 billion for the period December 31, 2005 to June
subscribers. It is for
30, 2009. In summary, the buyout funds wrote down net asset values
informational purposes only and
notwww.nyppex.com
intended to be construed as approximately 30.35% during the period, while the industrial
investment, legal or tax advice. companies’ enterprise value to EBITDA multiples contracted
approximately 32.92%. (Please see Table 2).

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3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

SECONDARY BIDS MAY DECLINE 23% FOR VENTURE FUNDS DUE TO OVERSTATED NAVs

We believe, the median secondary bid for interests in venture funds worldwide may decline as much as 23% to
49.32 in 2010 vs. 64.12 as of September 30, 2009 (expressed as a percentage of net asset value) due to
concerns about overstated net asset values, and therefore, the ability to generate exits in the near term. In turn,
we expect greater secondary supply. This process may have begun in the 3Q2009 when Stanford University
announced secondary offerings in premier venture names such as Sequoia Capital and Kleiner Perkins. As
secondary buyers adjust assumptions that net asset values are overstated 40.1% from 10% (our estimate) for
venture funds with 2005-2007 vintages, we expect secondary bids to be adjusted lower for the venture fund
sector. In general, secondary bids could be recalculated as follows: 64.12 / [1+ (.40 - .10)] = 49.32. Then,
(64.12 – 49.32) / 64.12 = 23% lower prices.

SECONDARY BIDS MAY INCREASE 25% FOR BUYOUT FUNDS AS BUYERS ADJUST FOR FAIRLY VALUED NAVs

We believe, the median secondary bid for interests in buyout funds worldwide may increase 25% to 59.47 in
2010 versus 47.58 as of September 30, 2009 (expressed as a percentage of net asset value) due to higher
confidence regarding the accuracy of net asset values, and therefore, the ability to generate exits in the near
term. This process appears to have begun with the RailAmerica, Inc. IPO from Fortress Investment Group,
which priced on October 13, 2009. As secondary buyers adjust assumptions that net asset values are
reasonably valued rather than overstated 20% (our estimate) for buyout funds with 2005-2007 vintages, we
expect secondary bids to be adjusted higher for the buyout fund sector. In general, secondary bids could be
recalculated as follows: 47.58 / (1 - .20) = 59.47. Then, (59.47 – 47.58) / 47.58 = 25% higher prices.

NAVs TO IMPACT EXIT OPPORTUNITIES

In general, we believe venture funds with 2005-2007 vintages will continue to experience difficulty generating
exits and distributions. However, the primary reason will increasingly be due to overvalued portfolio companies
based on enterprise value to EBITDA multiples, as opposed to weak IPO or M&A market conditions. Of note, in
2008, our selected venture funds with 2005-2007 vintages wrote down asset values only 8.28% on average,
while our selected information technology companies’ enterprise value to EBITDA multiples contracted 52.1%.

In contrast, buyout funds with 2005-2007 vintages in general responded to public criticism in the 4Q2008 and
1Q2009 regarding overstated net asset values. Today, we believe buyout funds with 2005-2007 vintages are
carrying portfolio companies at reasonable valuations based on enterprise value to EBITDA multiples, and are
well positioned to generate distributions and exits. Of note, in the first half of 2009, our selected buyout funds
with 2005-2007 vintages wrote down asset values by 4.50% on average, despite the fact that our selected
industrial companies’ enterprise value to EBITDA multiples expanded 25.05%.

There are three instances where our view regarding exits for venture funds with 2005-2007 vintages may not
be applicable: 1) a venture-backed portfolio company is not in the information technology sector, which is the
benchmark sector utilized for this Report; 2) a venture-backed portfolio company’s valuation at exit is based on
a revenue multiple or valuation method other than enterprise value to EBITDA, which is the benchmark
valuation methodology utilized for this Report; and 3) a 2006 or 2007 venture fund made new investments at
lower enterprise value to EBITDA valuation multiples than the multiples utilized for new investments made in
2005, which was the base year for this Report.

CONFIDENTIAL INFORMATION 2
3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

TABLE 1 Historical Enterprise Value to EBITDA Multiples for Selected Information Technology Companies
vs. Net Asset Values of Selected 2005-2007 Venture Funds

Information Technology Company Sector Venture Funds
(H)
(B) (E) (F) (G) Cumulative
(A) NYPPEX (C) (D) NYPPEX YOY Cumulative Percentage
IT Sector IT Sector YOY Cumulative Venture Percentage Percentage NAV
EV / EBITDA EV / EBITDA Percentage Percentage Fund Change in Change in Overvalued
As of Date Multiples1 Index2 Change Change Index3 NAV4 NAV (Undervalued)
(G-D)

12/31/2005 10.90x 1000 N/A N/A 1000 N/A N/A N/A
12/31/2006 11.10x 1018 +1.83% +1.83% 1000 +0.02% +0.02% -1.81%
12/31/2007 10.30x 945 -7.21% -5.50% 1104 +10.42% +10.44% +15.95%
12/31/2008 4.93x 452 -52.14% -54.77% 1013 -8.28% +1.30% +56.07%
6/30/2009 7.32x 672 +48.48% -32.84% 1073 +5.91% +7.28% +40.13%

Information Technology Company Sector Profile Venture Funds Profile
As of Date Oct. 12, 2009 As of Date June 30, 2009
Number of Exchanges 37 Vintages 2005 to 2007
Total Market Capitalization $250 billion Total Capital Commitments $44 billion
Number of Companies 750 Number of Funds 98
Regions Regions
United States 34.09% United States 80.80%
Europe 15.91% Europe 6.11%
Rest of World 50.00% Rest of World 13.09%

Source: NYPPEX, Capital IQ, Bloomberg, Preqin, Venture Economics

CONFIDENTIAL INFORMATION 3
3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

TABLE 2 Historical Enterprise Value to EBITDA Multiples for Selected Industrial Companies
vs. Net Asset Values of Selected 2005-2007 Buyout Funds

Industrial Company Sector Buyout Funds
(B) (H)
(A) NYPPEX (E) (F) (G) Cumulative
Industrial Industrial (C) (D) NYPPEX YOY Cumulative Percentage
Sector Sector YOY Cumulative Buyout Percentage Percentage NAV
EV / EBITDA EV / EBITDA Percentage Percentage Fund Change in Change in Overvalued
As of Date Multiples5 Index6 Change Change Index7 NAV4 NAV (Undervalued)
(G-D)
12/31/2005 9.75x 1000 N/A N/A 1000 N/A N/A N/A
12/31/2006 9.57x 982 -1.85% -1.85% 1086 +8.63% +8.63% +10.48%
12/31/2007 9.69x 994 +1.25% -0.62% 1227 +12.99% +22.74% +23.36%
12/31/2008 5.23x 536 -46.03% -46.36% 729 -40.58% -27.07% +19.29%
6/30/2009 6.54x 671 +25.05% -32.92% 697 -4.50% -30.35% +2.57%

Industrial Company Sector Profile Buyout Funds Profile
As of Date Oct. 12, 2009 As of Date June 30, 2009
Number of Exchanges 56 Vintages 2005 to 2007
Total Market Capitalization $449 billion Total Capital Commitments $318 billion
Number of Companies 1,201 Number of Funds 106
Regions Regions
United States 26.35% United States 63.51%
Europe 21.99% Europe 30.25%
Rest of World 51.67% Rest of World 6.26%

Source: NYPPEX, Capital IQ, Bloomberg, Preqin, Venture Economics

CONFIDENTIAL INFORMATION 4
3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

TABLE 3 Historical Information Technology Company Sector
Enterprise Value to EBITDA Multiples
vs. S&P 500 Index Returns

Information Technology Company Sector S&P 500 Index

(A) (B) (C) (E) (F)
IT Sector YOY Cumulative (D) YOY Cumulative
EV / EBITDA Percentage Percentage S&P 500 Percentage Percentage
As of Date Multiples Change Change Index Change Change

12/31/2005 10.90x 0.00% 0.00% 1254.42 +0.00% +0.00%

12/31/2006 11.10x +1.83% +1.83% 1418.30 +13.06% +13.06%

12/31/2007 10.30x -7.21% -5.50% 1468.36 +3.53% +17.05%

12/31/2008 4.93x -52.14% -54.77% 903.25 -38.49% -27.99%

6/30/2009 7.32x +48.48% -32.84% 919.32 +1.78% -26.71%

Source: NYPPEX, Capital IQ, Bloomberg

TABLE 4 Historical Industrial Company Sector Enterprise Value to EBITDA Multiples
vs. S&P 500 Index Returns

Industrial Company Sector S&P 500 Index
(A) (B) (C) (E) (F)
Industrial YOY Cumulative (D) YOY Cumulative
EV / EBITDA Percentage Percentage S&P 500 Percentage Percentage
As of Date Multiples Change Change Index Change Change

12/31/2005 9.75x 0.00% 0.00% 1254.42 +0.00% +0.00%

12/31/2006 9.57x -1.85% -1.85% 1418.30 +13.06% +13.06%

12/31/2007 9.69x +1.25% -0.62% 1468.36 +3.53% +17.05%

12/31/2008 5.23x -46.03% -46.36% 903.25 -38.49% -27.99%

6/30/2009 6.54x +25.05% -32.92% 919.32 +1.78% -26.71%

Source: NYPPEX, Capital IQ, Bloomberg

CONFIDENTIAL INFORMATION 5
3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

TABLE 5 Historical Enterprise Value to Revenue Multiples for Selected Information Technology Companies
vs. Net Asset Values of Selected 2005-2007 Venture Funds

Information Technology Company Sector Venture Funds
(H)
(B) (E) (F) (G) Cumulative
(A) NYPPEX (C) (D) NYPPEX YOY Cumulative Percentage
IT Sector IT Sector YOY Cumulative Venture Percentage Percentage NAV
EV / Revenue EV / Revenue Percentage Percentage Fund Change in Change in Overvalued
As of Date Multiples8 Index9 Change Change Index3 NAV4 NAV (Undervalued)
(G-D)

12/31/2005 1.32x 1000 N/A N/A 1000 N/A N/A N/A
12/31/2006 1.29x 977 -2.27% -2.27% 1000 +0.02% +0.02% +2.29%
12/31/2007 1.19x 902 -7.75% -9.85% 1104 +10.42% +10.44% +20.29%
12/31/2008 0.49x 374 -58.49% -62.58% 1013 -8.28% +1.30% +63.87%
6/30/2009 0.66x 498 +33.00% -50.23% 1073 +5.91% +7.28% +57.51%

Information Technology Company Sector Profile Venture Funds Profile
As of Date Oct. 22, 2009 As of Date June 30, 2009
Number of Exchanges 47 Vintages 2005 to 2007
Total Market Capitalization $282 billion Total Capital Commitments $44 billion
Number of Companies 1,626 Number of Funds 98
Regions Regions
United States 38.00% United States 80.80%
Europe 21.28% Europe 6.11%
Rest of World 40.72% Rest of World 13.09%

Source: NYPPEX, Capital IQ, Bloomberg, Preqin, Venture Economics

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3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

Footnotes

1. Enterprise Value to EBITDA multiples for approximately 750 publicly-traded companies worldwide having a Global Industry
Classification Standard Code of “Information Technology” and an aggregate market capitalization of approximately $250
billion as of October 12, 2009 (the “Information Technology Sector”). Source: Capital IQ, Bloomberg.
2. The NYPPEX Information Technology Sector EV/EBITDA Index estimates the cumulative percentage change over time in
enterprise value to EBITDA multiples of companies comprising the Information Technology Sector.
Source: Capital IQ, Bloomberg.
3. The NYPPEX Venture Fund Index estimates the cumulative percentage change in net asset values stated by selected venture
funds worldwide having 2005, 2006 and 2007 vintages and total capital commitments of approximately $44 billion as of June
30, 2009. Source: Preqin, Venture Economics.
4. Percentage change in net asset values were adjusted to offset the effect of capital calls and distributions. During the period,
capital calls were deducted and distributions were added to the funds’ ending net asset values.
5. Enterprise Value to EBITDA multiples for approximately 1,201 publicly-traded companies worldwide having a Global Industry
Classification Standard Code of “Industrials” and an aggregate market capitalization of approximately $449 billion as of
October 12, 2009 (the “Industrial Sector”). Source: Capital IQ, Bloomberg.
6. The NYPPEX Industrial Sector EV/EBITDA Index estimates the cumulative percentage change over time in enterprise value
to EBITDA multiples of companies comprising the Industrial Sector. Source: Capital IQ, Bloomberg.
7. The NYPPEX Buyout Fund Index estimates the cumulative percentage change in net asset values stated by selected buyout
funds worldwide with 2005, 2006 and 2007 vintages and total capital commitments of approximately $318 billion as of June
30, 2009. Source: Preqin, Venture Economics.
8. Enterprise Value to Revenue multiples for approximately 1,626 publicly-traded companies worldwide having a Global Industry
Classification Standard Code of “Information Technology” and an aggregate market capitalization of approximately $282
billion as of October 26, 2009 (the “Information Technology Revenue Sector”). Source: Capital IQ, Bloomberg.
9. The NYPPEX Information Technology Sector EV/Revenue Index estimates the cumulative percentage change over time in
enterprise value to revenue multiples of companies comprising the Information Technology Revenue Sector.
Source: Capital IQ, Bloomberg.

Methodology for this Report

Our quarterly approach to analyzing the reasonableness of net asset values stated by venture and buyout funds is based on
comparisons to the cumulative percentage change in enterprise value to EBITDA multiples of selected publicly-traded companies
in comparable sectors for a specified period of time. We believe, this approach is appropriate given that enterprise value to
EBITDA is the standard valuation approach typically utilized by venture and buyout funds when making new investments in private
companies.

We believe, S&P 500 Index returns should not be utilized when analyzing the reasonableness of net asset values stated by
venture and buyout funds, primarily for two reasons: (a) during periods when S&P 500 Index returns are positive as a result of
higher corporate earnings year over year, and price to earnings multiples remain unchanged, one may incorrectly conclude that
the net asset values of venture and buyout funds should be written up; and (b) the S&P 500 Index is comprised of companies
whose market capitalizations are based typically on earnings multiples, whereas venture and buyout funds estimate fair values of
private company holdings based typically on EBITDA multiples, and then make adjustments for the cash balances and long-term
debt of such companies. However, for comparative purposes, we have included historical S&P 500 Index returns vs. the
percentage changes in enterprise value to EBITDA multiples for the Information Technology Sector and Industrial Sector in this
Report. (Please see Tables 3 and 4).

Further, we believe, when analyzing the reasonableness of net asset values stated by venture funds, it may be appropriate to also
consider a comparison to the cumulative percentage change in enterprise value to revenue multiples of selected publicly-traded
information technology companies. To view our analysis utilizing this approach, please see Table 5.

CONFIDENTIAL INFORMATION 7
3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

Important Disclaimer

The NYPPEX Buyout Fund Index and the NYPPEX Venture Fund Index were created to provide a general barometer for the level
of reasonableness of net asset values stated by venture and buyout funds. However, we recognize that this approach has certain
limitations. The methodology used in this Report is not intended to imply that buyout funds only hold portfolio companies in the
Industrials sector or that venture funds only hold portfolio companies in the Information Technology sector. We believe, such
sectors are merely benchmarks for analyzing the reasonableness of net asset values in general, as stated by venture and buyout
funds. Additionally, the results in this Report are not intended to imply that all 2005, 2006 and 2007 buyout funds are reasonably
valued or that all 2005, 2006 and 2007 venture funds are overvalued.

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CONFIDENTIAL INFORMATION 8
3Q2009 NET ASSET VALUATION REPORT AND OUTLOOK

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