Venture Capital Horizon IRR by Fund Size

advertisement
: Fall 2010
PitchBook 4Q 2010 Private Equity Reporting Deck
Request a demonstration or training:
Email: [email protected]
Phone: 877-267-5593
For additional analysis or slides:
Email: [email protected]
Phone: 206-623-1986
About the PitchBook Platform
PitchBook is an independent and impartial research firm dedicated to providing premium data, news
and analysis to the private equity industry. As a specialty-focused information resource, PitchBook's
core strength is its ability to meticulously collect, organize and analyze hard to find private equity and
venture capital deal and fund data.
PitchBook’s mission is to provide its clients with the highest quality private equity information, with an
acute focus on deals and companies. PitchBook aims not only to offer market-leading proprietary data,
but to also provide the tools that help industry professionals effectively find, share and use information
to make better decisions.
Three Aspects of Private Equity
Fundraising, Investment & Exits Trends
Fundraising
Investment
Exits
Private Equity
Investment
Capital Invested Through 3Q 2010 Surpasses 2009
Number of Deals Closed and Total Capital Invested by Year
$700
3500
$605
$600
3000
2987
2524
$500
2500
2170
2041
$400
2000
1661
$300
$300
$200
1228
$213
904
826
$33
1027
1000
$126
$83
$50
1500
$173
670
$100
1300
$57
$39
$76
$0
500
0
2000
2001
* Through 3Q 2010
2002
2003
2004
2005
Capital Invested ($B)
2006
2007
Number of Deals
2008
2009
2010*
Source: PitchBook
2010 Capital Invested Continues Upward Trend
Number of Deals Closed and Total Capital Invested by Quarter
$250
900
785
744
$200
647
646
800
$208
745
713
696
700
624
$150
546
498
607
529
583
$145
$131
$125$127
468
500
504
387
$100
$85
$63
$42 $41
$50
600
$58
$69
$68
$42
335
352
305
308
376
316
335
300
200
$39
$27
400
$21 $16
$8 $11
$22 $18
$31 $28
$0
100
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2005
2006
2007
Capital Invested ($B)
2008
Number of Deals
2009
2010
Source: PitchBook
Middle-Market Deal Activity Increases
Percentage of Deal Volume (count) by Deal Size Range
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2003
2004
2005
Under $50M
$50M-$250M
* Through 3Q 2010
2006
$250M-$500M
2007
2008
2009
2010*
$500M-$1B
$1B-$2.5B
$2.5B+
Source: PitchBook
Middle-Market Grabs Over 50% of Capital
Percentage of Deal Volume (capital) by Deal Size Range
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2003
2004
2005
Under $50M
$50M-$250M
* Through 3Q 2010
2006
$250M-$500M
2007
2008
2009
2010*
$500M-$1B
$1B-$2.5B
$2.5B+
Source: PitchBook
Midwest the Top Region for PE Investment
Percentage of Deal Volume (count) by Region
West Coast
14%
Mid Atlantic
10%
Southwest
1%
Midwest
24%
Southeast
16%
South
17%
* Through 3Q 2010
Mountain
6%
Northeast
12%
Source: PitchBook
B2B Holds Onto Highest Volume of Deals
Percentage of Deal Volume (count) by Industry
100%
Business Products
and Services (B2B)
90%
Consumer Products
and Services (B2C)
80%
70%
Financial Services
60%
Energy
50%
40%
Healthcare
30%
Information
Technology
20%
10%
Materials &
Resources
0%
1Q
2Q
3Q
2007
4Q
1Q
2Q
3Q
2008
4Q
1Q
2Q
3Q
2009
4Q
1Q
2Q
2010
3Q
Source: PitchBook
Capital Shifts Away from B2C
Percentage of Deal Volume (capital) by Industry
100%
Business Products
and Services (B2B)
90%
Consumer Products
and Services (B2C)
80%
70%
Financial Services
60%
Energy
50%
40%
Healthcare
30%
Information
Technology
20%
10%
Materials &
Resources
0%
1Q
2Q
3Q
2007
4Q
1Q
2Q
3Q
2008
4Q
1Q
2Q
3Q
2009
4Q
1Q
2Q
2010
3Q
Source: PitchBook
Private Equity
Exits
Exits Up 64% from 3Q 2009
Quarterly PE Exits by Corporate Acquisition, IPO and Secondary Sale
180
158
160
140
134
116
120
116
97
100
85
Percentage of capital invested by industry
80
59
60
39
40
20
0
1Q
2Q
3Q
2006
4Q
1Q
2Q
3Q
4Q
1Q
2Q
2007
Corporate Acquisition
3Q
2008
IPO
4Q
1Q
2Q
3Q
2009
Secondary Transaction
4Q
1Q
2Q
3Q
2010
Source: PitchBook
Median Exit Value Climbs in 2010
Median Exit Size ($M)
$300
$250
$250
$246
$200
$200
$200
$180
$176
$165
$155
Percentage of capital invested by$138
industry
$150
$109
$115
$126
$135
$100
$85
$50
$0
2004
*As of 9/30/2010
2005
2006
Corporate Acquisition
2007
2008
Secondary Transaction
2009
2010*
Source: PitchBook
PE Firms Holding onto Companies Longer
Average Time from Buyout to Exit
5
4.9 Yrs
Average Years Held
4.7 Yrs
4.2 Yrs
4.1 Yrs
4
Percentage of capital invested by industry
3.9 Yrs
3.8 Yrs
3.8 Yrs
2004
2005
2006
3
2007
2008
2009
2010
Year Sold
* Through 3Q 2010
Average Holding Period of Exits
Source: PitchBook
Private Equity
Fundraising
PE Fund Closings on Pace with 2009
Number of Funds Closed and Total Capital Raised by Year
$350
300
248
$300
250
226
208
$250
210
200
$200
150
128
104
$150
100
$100
69
50
$50
$0
$98
$156
$212
$308
$322
$145
$71
2004
2005
2006
2007
2008
2009
2010*
Capital Raised ($B)
# of Funds Raised
0
* Through 3Q 2010
PE Fundraising Levels Off in 3Q 2010
Number of Funds Closed and Total Capital Raised by Quarter
$120
80
74
70
$100
60
55
$80
47
$60
50
44
40
34
28
28
$40
30
25
20
16
20
12
$20
10
$0
$103
$107
$75
$37
$63
$40
$17
$25
$23
$29
$20
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
2008
2009
Capital Raised ($B)
# of Funds Raised
2010
0
Growing Fund Size Trend Continues
Percentage of US PE Funds (Count) by Size
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2004
Under $100M
* Through 3Q 2010
2005
$100M-$250M
2006
2007
$250M-$500M
2008
$500M-$1B
2009
$1B-$5B
2010*
$5B+
Source: PitchBook
$1B - $5B Funds Dominate Capital Raised
Percentage of Capital Raised by Size – US Funds
100%
90%
80%
70%
74%
60%
50%
40%
30%
20%
10%
0%
2004
Under $100M
* Through 3Q 2010
2005
$100M-$250M
2006
2007
$250M-$500M
2008
$500M-$1B
2009
$1B-$5B
2010*
$5B+
Source: PitchBook
Fund Returns
Overview
PE Leads in Average IRR Since 2000
Average Fund IRR by Vintage Year
25%
22%
20%
Net IRR (%) Since Inception
15%
13%
12%
J-Curve
10%
4%
5%
Vintage Year
0%
1998
1999
2000
2001
2002
2003
2004
2005
2006
-5%
-3%
-10%
-15%
-9%
-11%
-12%
-20%
As of 3/31/2010
PE
VC
FoF
Mezz
All
Source: PitchBook
Private Equity Outperforming in the Long Run
Horizon IRR – Private Equity, Venture Capital and Public Index
50%
40%
Horizon IRR (%)
30%
20%
14%
12%
10%
0%
-3%
1 Yr
2%
1%
3 Yrs
5 Yrs
-10%
As of 3/31/2010
PE
VC
Russell 3000
Source: PitchBook
Returns Bounce Back from 2009 Lows
Median 1-Year Rolling Horizon IRR by Fund Type
30%
21%
20%
17%
20%
17%
PE Fund’s had
an average 1year IRR of
12% for 2010
Rolling 1 Year Horizon IRR (%)
12%
10%
8%
6%
0%
2001
2002
2003
2004
-10%
2005
3%
2006
2007
2008
-1%
2009
2010
-3%
-7%
-14%
-20%
-16%
-18%
-30%
-40%
-38%
PE
VC
FoF
Mezz
ALL
One Year IRR as of Year Ending March 31st
Source: PitchBook
Private Equity
Fund Returns
Outsized Returns for Funds Big and Small
Private Equity Horizon IRR by Fund Size
25%
21%
20%
20%
15%
12%
12%
Horizon IRR (%)
10%
4%
5%
0%
0%
1 Yr
3 Yrs
5 Yrs
-5%
-10%
-15%
-14%
-20%
Under $100M
As of 3/31/2010
$100M-$250M
$250M-$500M
$500M-$1B
$1B-$5B
$5B+
Source: PitchBook
Total Value of PE Funds Rose by 31% Last Year
Weighted 1-Year Change in Total PE Portfolio Value
135%
21.5%
Change (%) in Total Portfolio Value
130%
125%
120%
115%
7.3%
110%
105%
0%
100%
95%
0.6%
0.2%
1.3%
100%
131%
Increase in Remaining Value
Decrease In Remaining Value
Source: PitchBook
Mature Private Equity Funds Well into the Positive
Average Private Equity Return Multiples by Vintage Year
2.0x
1.79
1.8x
J-Curve
1.60
1.55
1.6x
1.4x
1.81
1.38
1.25
1.28
1.2x
1.00
1.0x
0.86
0.82
0.84
2006
2007
2008
0.8x
0.78
0.80
2009
2010*
0.6x
0.4x
0.2x
0.0x
1998
1999
2000
2001
2002
Average of DPI
2003
2004
2005
Average of RVPI
Average of TVPI
*Through 1H 2010
Source: PitchBook
50% of All PE Funds Have a 7.6% IRR or Higher
IRR Quartiles by Fund Size for Mature Private Equity Funds
25th
75th Percentile
$5B+ Percentile
Median
Fund Size Ranges
$1B-$5B
$500M-$1B
$250M-$500M
$100M-$250M
Under $100M
All
-10%
As of 3/31/2010
-5%
0%
5%
10%
Internal Rate of Return (IRR)
15%
20%
25%
Source: PitchBook
$485B of Private Equity Dry Powder
Capital Overhang for Private Equity Funds Raised by US Investors
$159.12
$160
$500
$485
$450
$140
$400
$120
$114.57
$111.67
$350
$100
$300
$80
$250
$200
$60
$39.94
$40
$29.17
$100
$20.33
$20
$2.56
$50
$7.97
$0
$0
2003
$ in Billion
$150
2004
2005
2006
2007
2008
2009
2010
As of 3/31/2010
Cumulative Overhang
Under $100M
$100M-$250M
$250M-$500M
$500M-$1B
$1B-$5B
$5B+
Source: PitchBook
Venture Capital
Fund Returns
Average Venture Capital Fund 5-year Return Around 1%
Venture Capital Horizon IRR by Fund Size
10%
6%
5%
3%
1%
Horizon IRR (%)
0%
1 Yr
-2%
-5%
3 Yrs
5 Yrs
-4%
-10%
-10%
-15%
-18%
-20%As of 3/31/2010
Under $80M
As of 3/31/2010
$80M-$150M
$150M-$250M
$250M-$500M
$500M-$1B
$1B+
Source: PitchBook
Total Value of VC Funds Rose by 14% Last Year
Weighted 1-Year Change in Total VC Portfolio Value
115%
3.8%
Change (%) in Total Portfolio Value
113%
111%
4.3%
1.1%
109%
107%
5.9%
105%
103%
101%
- 1.3%
0.1%
99%
97%
95%
100%
114%
Increase in Remaining Value
Decrease in Remaining Value
Source: PitchBook
Venture Capital Funds Still Waiting for Liquidity
Average Venture Capital Return Multiples by Vintage Year
1.4x
1.2x
J-Curve
1.18
0.94
1.0x
0.89
0.86
0.79
0.76
0.8x
0.94
0.93
0.87
0.77
0.82
0.84
2006
2007
2008
2009
0.92
0.6x
0.4x
0.2x
0.0x
1998
*As of 3/31/2010
1999
2000
2001
2002
Average of DPI
2003
2004
2005
Average of RVPI
Average of TVPI
2010*
Source: PitchBook
Over Half of All Venture Capital Funds have Positive IRR
IRR Quartiles by Fund Size for Mature Venture Capital Funds
Over $1B
75th Percentile
25th Percentile
Median
Fund Size Ranges
$500M-$1B
$250M-$500M
$150M-$250M
$80M-$150M
Under $80M
All
-15%
As of 3/31/2010
-10%
-5%
0%
5%
10%
Internal Rate of Return (IRR)
15%
20%
25%
Source: PitchBook
$82B of Venture Capital Dry Powder
Capital Overhang for Venture Capital Funds Raised by US Investors
$25
$90
$81.66
$80
$20.30
$20
$70
$60
$14.33
$15
$50
$10.65
$10.99
$10.96
$9.63
$10
$40
$30
$20
$5
$3.39
$10
$1.39
$0
$0
2003
2004
Cumulative Overhang
2005
Under $80M
2006
$80M-$150M
2007
$150M-$250M
2008
2009
$250M-$500M
2010
$500M-$1B
$1B+
Source: PitchBook
Fund of Funds
Returns
Funds from $500M to $1B Lead 5-Year IRR
Fund of Funds Horizon IRR by Fund Size
20%
18%
15%
14%
10%
9%
Horizon IRR (%)
7%
4%
5%
1%
0%
1 Yr
3 Yrs
-5%
5 Yrs
-5%
-10%
-15%
-16%
-20%
As of 3/31/2010
Under $250M
$250M-$500M
$500M-$1B
$1B-$5B
$5B+
Source: PitchBook
Mature Fund of Funds Posting Strong Multiples
Average Fund of Funds Return Multiples by Vintage Year
1.6x
1.42
1.4x
1.32
1.38
J-Curve
1.34
1.26
1.14
1.2x
1.06
0.93
1.0x
0.87
0.84
2006
2007
0.92
0.95
1.02
2008
2009
2010*
0.8x
0.6x
0.4x
0.2x
0.0x
1998
*As of 3/31/2010
1999
2000
2001
2002
Average of DPI
2003
2004
2005
Average of RVPI
Average of TVPI
Source: PitchBook
Global
Fund Returns
Mature Global PE Funds Average DPI of 1.2x
Average Global Private Equity Return Multiples by Vintage Year
2.41
2.5x
J-Curve
2.0x
1.78
1.54
1.5x
1.75
1.63
1.49
1.17
1.14
1.0x
0.79
0.73
0.72
0.72
0.82
2007
2008
2009
2010*
0.5x
0.0x
1998
1999
*As of 3/31/2010
2000
2001
2002
Average of DPI
2003
2004
2005
Average of RVPI
2006
Average of TVPI
Source: PitchBook
Mature Global VC Funds Average TVPI of 1.25x
Average Global Venture Capital Return Multiples by Vintage Year
1.8x
1.63
1.63
J-Curve
1.6x
1.4x
1.2x
1.37
1.30
1.12
1.13
0.99
0.83
1.0x
0.8x
0.78
0.77
0.77
2006
2007
2008
0.91
0.92
2009
2010*
0.6x
0.4x
0.2x
0.0x
1998
1999
*As of 3/31/2010
2000
2001
2002
Average of DPI
2003
2004
2005
Average of RVPI
Average of TVPI
Source: PitchBook
Contact PitchBook
We welcome and encourage you to request a FREE TRIAL of
the PitchBook Platform.
To schedule a demonstration of the PitchBook Platform, please contact us by phone, email or
through our website, www.pitchbook.com.
Sales
Email: [email protected]
Phone: 877-267-5593
Or for additional slides and analysis
Research
Email: [email protected]
Phone: 206-623-1986
Download
Related flashcards

Investment

58 cards

Investment companies

42 cards

Lehman Brothers

18 cards

Investment banks

66 cards

Create Flashcards