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PRIVATE EQUITY: BUYOUTS Another year of modest fundraising allowed global buyout funds to work off another $150 billion of the global capital overhang over the past year. Fundraising for global buyouts increased year-over-year, while the pace of investing was relatively flat. Global exit activity also was essentially unchanged as measured by number of transactions, but modestly higher in terms of value. Dividend recaps picked up in the fourth quarter and set a new record for the year. 1 Robust credit markets facilitated these partial liquidity events and the attractive credit terms are likely to continue into 2013. Buyout Fundraising and Investing Buyout funds raised $88.4 billion in new capital commitments in 2012, a 12% increase over the prior year. 2 The number of funds raising capital declined by 6% in 2012 despite the increase in fundraising. Commitments to U.S. and European funds both increased in 2012, while less capital was raised for funds based in Asia and other global markets. Just over half of all funds raised were in the U.S. Globally, buyout funds invested significantly more capital than was raised during the year. In 2012, $256.7 billion was invested in 2,904 deals. Over the past three years, a similar pace of activity has reduced the overhang of capital by over $500 billion. 3 Global Buyout - Fundraising $300 $250 $200 $150 $100 $50 Commitments ( billions) Global Buyout - Fundraising $0 Source: Preqin U.S. Europe Rest of World Number of Funds 2007 2008 2009 2010 2011 2012 Page 8 300 250 200 150 100 50 0 Number of Funds FOURTH QUARTER 2012 James W. Angelica Senior Research Analyst “Over the past three years, a similar pace of activity has reduced the overhang of capital by over $500 billion.” © 2013 Fund Evaluation Group, LLC
Buyout Exit Activity Exits increased for the third straight year as managers continued to focus on realizations and returning capital to their investors. Total exits of buyout-backed companies increased 14% year-over-year, driven by increases in trade sales as well as secondary buyouts (the sale of a company from one private equity manager to another). 4 Buyout Performance Page 9 FOURTH QUARTER 2012 Median buyout performance for vintage years 2007 to 2009, was in the range of 9.0% to 9.3%. 5 In the same time frame, top-quartile funds produced results in the mid- to high teens, 500 to 600 basis points above median. 1 Risky Business? PE’s Div Recap Gold Rush, Dow Jones Private Equity Analyst, January 2013 2 Preqin, www.preqin.com, “Global Buyout Fundraising”, January 2013 3 Preqin, www.preqin.com, “Buyout Deal Analysis”, January 2013 4 Preqin, www.preqin.com, “PE Buyout-backed Exits”, January 2013 5 Preqin, www.preqin.com, “Performance Analyst”, January 2013 Global Buyout - Exits - Exits Number of Exits 1,400 1,200 1,000 800 600 400 200 0 Source: Source: Preqin Preqin Global Buyout - Vintage Year Performance 30% 25% 20% 15% IRR Global Buyout - Vintage Year Performance 10% 5% 0% Source: Preqin Upper Quartile Median Lower Quartile 2004 2005 2006 2007 2008 2009 IPO Restructuring Recapitalisation Sale to GP Trade Sale Sale to Management 2007 2008 2009 2010 2011 2012 © 2013 Fund Evaluation Group, LLC
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Page 17 and 18: NATURAL RESOURCES Oil and natural g
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