2009 European Performance Figures
June 2010
Methodology for Performance Benchmarks
 All calculations are done at the fund level by Thomson Reuters based on cash flows and
NAVs reported by participating GPs
 Returns are net of management fees and carried interest
 Returns are calculated with cash flows in Euros for European figures
 Cash flow database contains since its inception 1,375 European independent funds,
representing €313bn of committed capital
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 at beginning of period as capital outflow, Net
Asset Value at end of period, and actual cash flows in between
2
Annualised net pooled IRR
Annualised net pooled IRR from inception to 31-Dec-2009
European private equity funds formed 1980-2009
Stage
No. of funds
Pooled IRR
Multiples
Multiples (as % of TVPI)
DPI
RVPI
TVPI
DPI
RVPI
Early-stage
418
-1.3
0.38
0.57
0.95
40.0%
60.0%
Development
196
6.5
0.74
0.54
1.28
57.8%
42.2%
Balanced
164
2.1
0.52
0.57
1.09
47.7%
52.3%
All venture
778
1.6
0.51
0.56
1.07
47.7%
52.3%
Small buyout
289
12.5
1.14
0.40
1.54
74.0%
26.0%
Mid buyout
66
15.4
1.06
0.48
1.54
68.8%
31.2%
Large buyout
51
18.7
1.16
0.38
1.54
75.3%
24.7%
Mega buyout
52
8.4
0.69
0.52
1.21
57.0%
43.0%
All buyout
458
11.9
0.83
0.49
1.32
62.9%
37.1%
Generalist
139
9.1
1.02
0.39
1.41
72.3%
27.7%
1,375
8.9
0.80
0.48
1.28
62.5%
37.5%
All private equity
Source: Thomson Reuters
3
Horizon IRRs by Stages
Investment Horizon Returns for period ending 31-Dec-2009
European private equity funds formed 1980-2009
Fund type
1-year
3-year
5-year
10-year
20-year
Early-stage
-2.6
-4.7
-0.8
-3.5
-1.3
Development
11.5
0.7
3.3
1.4
6.9
Balanced
-0.7
-3.0
1.5
-1.4
2.1
All venture
1.0
-3.1
0.8
-1.8
1.6
Buyout
7.2
-3.9
8.3
8.0
11.4
Generalist
36.9
-5.2
7.2
4.3
9.3
All private
equity
7.7
-3.9
6.5
5.2
8.9
Source: Thomson Reuters
4
Top-Quarter Performance
European top-quarter funds formed 1980-2009
Stage
Sample
size
Top-quarter
pooled IRR
*Overall
upper
quartile IRR
Early-stage
104
12.0
1.0
Development
49
18.0
8.8
Balanced
41
13.5
5.5
All venture
196
13.6
3.3
Buyout
116
30.2
17.0
Generalist
35
22.9
7.7
All private
equity
345
21.8
9.1
* Funds must equal or exceed this IRR to qualify as top-quarter funds.
Source: Thomson Reuters
5
Top-Half Performance
European top-half funds formed 1980-2009
Stage
Sample
size
Top-half
pooled IRR
**Overall
median IRR
Early-stage
209
6.3
-3.8
Development
96
13.8
-0.5
Balanced
80
7.7
-0.9
All venture
390
9.1
-2.2
Buyout
229
19.8
6.2
Generalist
68
10.6
-0.1
All private
equity
688
14.1
-0.4
** Funds must meet or exceed this IRR to qualify as top-half funds.
Source: Thomson Reuters
6
Performance Ranking
Net IRR since inception per quarter
Net IRR for upper,
median, lower quartile
Percentile
100%
21.8
75%
9.1
5.8
-0.4
50%
-2.9
-6.3
25%
-19.4
0%
Net pooled IRR for the quarter
Source: Thomson Reuters
7
Top-Quarter Horizon IRRs
Annualised net pooled since inception and horizon IRR
European top-quarter funds formed 1980-2009
Stage
No. of
funds
Pooled
IRR
3-year
5-year
10-year
Early-stage
104
12.0
3.2
8.6
8.3
Development
49
18.0
11.0
15.5
14.1
Balanced
41
13.5
4.4
5.0
4.1
All venture
196
13.6
6.1
9.5
9.2
Buyout
116
30.2
13.2
32.7
22.5
Generalist
35
22.9
-3.2
41.1
26.9
All private
equity
345
21.8
5.7
26.5
17.9
Source: Thomson Reuters
8
Top-Half Horizon IRRs
Annualised net pooled since inception and horizon IRR
European top-half funds formed 1980-2009
Stage
No. of
funds
Pooled
IRR
3-year
5-year
10-year
Early-stage
209
6.3
-0.6
4.0
2.8
Development
96
13.8
7.4
10.5
9.8
Balanced
80
7.7
1.2
7.2
3.1
All venture
390
9.1
2.0
6.5
4.4
Buyout
229
19.8
6.3
24.4
15.5
Generalist
68
10.6
-5.8
10.0
6.1
All private
equity
688
14.1
3.1
16.8
11.5
Source: Thomson Reuters
9
Buyout Returns by Fund Sizes
Short-, medium-, and long-term returns reflected by net horizon IRRs to 31 December 2009
European Private Equity Funds formed 1980-2009
Fund size
($)
No. of
funds
Pooled
IRR
1-year
3-year
5-year
10-year
0-500m
355
13.6
5.3
0.7
8.0
7.4
500m-1bn
51
18.7
-9.1
-0.2
7.8
8.8
1bn+
52
8.4
8.6
-5.7
8.5
8.1
All buyout
458
11.9
7.2
-3.9
8.3
8.0
These results refer to the fund size, not the deal size; while fund sizes are
defined in USD, the returns are computed in EUR.
Source: Thomson Reuters
10
Venture Returns by Fund Sizes
Short-, medium-, and long-term returns reflected by net horizon IRRs to 31 December 2009
European Private Equity Funds formed 1980-2009
Fund size
($)
No. of
funds
Pooled
IRR
1-year
3-year
5-year
10-year
0-50m
474
4.8
0.0
-3.2
2.0
1.0
50m-100m
143
0.2
3.3
-3.2
-0.3
-2.5
100m+
161
0.5
0.9
-3.0
0.7
-2.6
All venture
778
1.6
1.0
-3.1
0.8
-1.8
These results refer to the fund size, not the deal size; while fund sizes are
defined in USD, the returns are computed in EUR.
Source: Thomson Reuters
11
Performance by Vintage Years
Annualised net pooled IRR by vintage years as of 31-Dec-2009
Funds formed :
1980-1984
1985-1989
1990-1994
1995-1999
2000-2004
2005-2009
Fund size
IRR
DPI
IRR
DPI
IRR
DPI
IRR
DPI
IRR
DPI
IRR
DPI
Venture
6.3
1.64
8.3
1.55
11.8
1.50
1.6
0.62
-3.6
0.27
-1.2
0.07
Buyout
9.2
1.88
13.6
1.65
18.6
2.04
12.3
1.35
18.1
1.20
-9.0
0.11
Generalist
7.7
1.78
7.2
1.06
10.4
1.37
11.2
1.10
22.7
1.26
0.5
0.07
All private
equity
6.8
1.69
8.6
1.20
16.7
1.88
9.9
1.19
12.6
1.02
-7.7
0.11
Source: Thomson Reuters
12
European 5-Year Rolling IRRs
30
20
%
+8.3%
10
+7.2%
+0.8%
0
-10
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Venture
Buyout
Generalist
Source: Thomson Reuters
13
19
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
9
20 9
0
20 0
0
20 1
0
20 2
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
09
19
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
9
20 9
0
20 0
0
20 1
0
20 2
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
09
%
20
%
5-Year Rolling IRRs by Regions
Europe
USA
50
50
40
40
30
30
10
+8.3%
0
+0.8%
-10
Venture
Venture
Buyout
20
10
+5.3%
0
+4.3%
-10
Buyout
Source: Thomson Reuters
14
European Venture 3-,5-,10-Year Rolling IRRs
30
25
20
15
%
10
5
+0.8%
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
-1.8%
-5
-3.1%
-10
-15
3-Year IRR
5-Year IRR
10-Year IRR
Source: EVCA/Thomson Reuters
15
European Buyouts 3-,5-,10-Year Rolling IRRs
35
30
25
20
15
+8.3%
5
+8.0%
%
10
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
-3.9%
-5
-10
-15
3-Year IRR
5-Year IRR
10-Year IRR
Source: EVCA/Thomson Reuters
16
European Private Equity 3-,5-,10-Year Rolling IRRs
30
25
20
15
10
%
+6.5%
5
+5.2%
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
-3.9%
-5
-10
-15
3-Year IRR
5-Year IRR
10-Year IRR
Source: EVCA/Thomson Reuters
17
Comparators
Annualised net pooled IRR from inception to 31-12-2009
Stage
European
Private Equity
Return
JP Morgan
Euro Bonds
HSBC Small
Company
index
Morgan
Stanley Euro
Index
Early-stage
-1.3
9.6
6.4
-0.3
Development
6.5
9.5
8.1
4.4
Balanced
2.1
8.6
6.0
1.4
All venture
1.6
9.5
6.7
3.0
Buyout
11.9
10.2
7.2
-0.7
Generalist
9.1
9.9
6.7
5.6
All private
equity
8.9
9.8
6.9
0.9
Source: Thomson Reuters
18
Comparators
Annualised net pooled IRRs from inception to 31-12-2009
20
15
+9.8%
10
%
+8.9%
+6.9%
5
+0.9%
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
-5
Morgan Stanley Euro Equity
HSBC Small Company Equity
JP Morgan Euro Bonds
European Private Equity
*Comparators are Internal Rates of Return (IRR). IRRs for public market indices are calculated by investing the equivalent
cash flows that were invested in private equity into the public market index. Then an equivalent IRR is calculated for each
index. Calculations based on methodology proposed by J Coller and published by A Long and C Nickles.
Source: Thomson Reuters
19
Conclusions
§ Stable long-term return for private equity at 8.9%
§ Top-quarter private equity funds return 21.8%
§ Five-year returns remain strong at 6.5%
§ While three-year returns are impacted by the economic crisis, one-year
returns are back into positive territory at 7.7%
§ Regional rankings remain unchanged (five-year horizon IRRs): European
buyouts (8.3%), US buyouts (5.3%), US venture (4.3%) and European
venture (0.8%)
§ The since-inception private equity net IRR outperformed the equity returns
achieved by the public equity comparators (HSBC Small Company Index at
6.9% and Morgan Stanley Euro Index at 0.9%), and was slightly behind the
return of JP Morgan Euro Bonds Index at 9.8%
20