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WEST COAST DATA ROUND UP

Matthew Toole
Buyouts West
November 18, 2008

400 Private Equity M&A as % of Total M&A 25% 1. Worldwide M&A Activity down 37% .600 30% Strategic M&A Private Equity M&A 1.200 20% % Private Equity Activity 1.000 Volume ($bil) 800 15% 600 10% 400 5% 200 0 0% 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 .Private Equity-backed M&A declines 75% over 2007 1.

Private Equity-backed M&A declines 85% over 2007 700 40% Strategic M&A Private Equity M&A 35% 600 Private Equity M&A as % of Total M&A 30% 500 % Private Equity Activity 25% Volume ($bil) 400 20% 300 15% 200 10% 100 5% 0 0% 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 . US M&A Activity down nearly 40%.

Number of West Coast Buyout Investments Decline 2000 180 Buyout Investments by West Coast Firms ($bil) 160 Number of Deals 140 1500 120 Number of Deals Volume ($bil) 100 1000 80 60 500 40 20 0 0 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 . West Coast Buyout Investments up 18% over 2007.

Japan Africa/Middle East Pacific Volume: 1/1/2008-11/17/2008 Volume: 1/1/2007-11/17/2007 . Private Equity Slump is a Global Phenomenon 600 -81% 500 400 Volume ($bil) 300 -59% 200 100 -4% -51% -72% 0 Americas Europe Central Asia/Asia.

less reliant on global debt financing $500 Lo-$500 $500m-$1b $1b-$5b $5b-Hi $400 $300 Value ($bil) $200 $100 $0 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 . Measured decline in mid-market buyouts.

6 4.3 3.4 6.3 300 250 5.Buyouts Impact 500 450 4.5 0 Consumer Products Industrials Financials Consumer Staples High Tech Real Estate Media Materials Retail Telecom Energy and Power Healthcare Financials Energy and Power High Technology Consumer Products and Services Industrials Materials Media and Entertainment Healthcare Telecommunications Consumer Staples Real Estate Retail *Data through 9/30/2008 . Global Buyout Investments by Sector Worldwide Buyouts by Industry Global M&A .3 150 100 8.8 350 Buyout Volume ($bil) 5.9 11 50 9.6 4.8 200 14.5 400 Strategic Volume ($bil) 21.

PE Activity was a Key Driver of the M&A Market and Investment Banking Fees 16000 14000 M&A Exit Equity Exit 12000 Portfolio Activity Buyout Financing Buyout 10000 Fees ($mil) 8000 6000 4000 2000 0 2001 2002 2003 2004 2005 2006 2007 Fees paid by Financial Sponsors Imputed Fee Estimates by Freeman & Co .

HY Activity down 80% over 2007 80000 180 500 900 160 450 800 70000 400 140 700 60000 350 120 600 50000 300 100 500 40000 250 80 400 200 30000 60 300 150 20000 40 200 100 10000 20 50 100 0 0 0 0 '04 '05 '06 '07 '08 '04 '05 '06 '07 '08 High Yield Bonds ($mil) Number of Deals Leveraged Loans ($bil) Number of Deals *Data through 9/30/2008 . Global Retraction in Credit Markets Slows Buyout Activity.

Frozen Exit Markets for Venture and Buyouts US Initial Public Offerings US Mergers & Acquisitions 90 400 80 350 70 300 60 250 50 200 40 150 30 100 20 10 50 0 0 2001 2002 2003 2004 2005 2006 2007 2008* 2001 2002 2003 2004 2005 2006 2007 2008* Venture-backed IPO Buyout-backed IPO Venture-backed M&A Buyout-backed M&A .

Global Private Equity Fundraising 300 Venture Fundraising ($bil) Buyout Fundraising ($bil) 250 200 150 100 50 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* *Data through 9/30/2008 .

West Coast Buyout Fundraising Down 38% from 2007 levels. Number of Funds on Par with Year-Ago 15 25 20 10 Number of Funds 15 Funds ($bil) 10 5 5 0 0 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Funds Raised by West Coast Buyout Firms ($bil) Number of Funds .

Performance Methodology • All calculations are done at the fund level* by Thomson Reuters based on cash flows and NAVs reported by participating LPs and GPs • Cash flow database contains 1800+ US private equity funds (480+ buyout funds) Definitions: • Pooled IRR: IRR of a group of funds where their 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. and actual cash flow in between * net of management fees and carried interest . Net Asset Value at end of period.

60 12.50 10.60 12.70 12.10 4.50 13.40 All Priv Equity 1.00 32.80 11.90 Small Buyouts (8.40 Balanced VC 2.80 11.10 8.10 11.60 Mezzanine 12.40 13.40 5.50 5.40 14.70 7.US Performance Benchmarks Fund Type 1 Yr 3 Yr 5 Yr 10 Yr 20 Yr Early/Seed VC 2.80 8.80 11.70 12.60 Med Buyouts 15.50 14.40 11.30 13.20 8.30 *Data through 6/30/2008 .70 Later Stage VC 15.60 16.40 10.50 All Venture 5.10 Buyouts and Other PE 0.80 Large Buyouts 27.50 7.30 9.90 7.80 16.30 12.90) 11.20 5.40 11.00 Mega Buyouts (1.90 4.40 11.40 8.40) 5.60 10.50 8.90 21.30 All Buyouts 0.10 14.80 7.50 6.90 14.90 5.50 13.10 8.80 11.

US Private Equity Performance Index 20 15 10 5 0 1 yr 3yr 5yr 10yr 20yr -5 -10 All Venture All Buyouts NASDAQ S&P 500 *Data through 6/30/2008 .