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Bloomberg Brief | Private Equity 2013 Global Review
3
2013 TiMeline
Jan. 17: SurveyMonkey.com raises the largest venture round of
the year with early investors selling about $444 million in equity.
The recap valued the company at $1.35 billion, an early example
of a trend of soaring valuations for online companies in 2013.
Jan.
Quote of the year
“In our business, the biggest driver of returns is
the multiple of cash flow we can sell the business
at five years from now. I think that has more risk
today than it’s had at any moment since 2007
.
”
April 18: Silver Lake Management
garners $10.3 billion for its
latest fund, the largest ever pool
dedicated to technology buyouts.
— Joe Baratta, Blackstone’s global head of
private equity, speaking at the Bloomberg Link
Dealmakers Summit in London.
May
July 24: A circuit court rules
that two Sun Capital Partners
funds that owned a bankrupt
company with pension
fund obligations could be
responsible for that company’s
withdrawal liability.
Aug.
Apr.
Mar.
Feb.
Jan. 23: NewGlobe Capital
launches, intending to buy
interests in end-of-life funds.
April 12: KPS Capital Partners closes
on a $3.5 billion special situations fund.
The fund drew more than $9 billion of
interest, according to one LP, showing
how easily GPs with strong performance
are raising money.
Feb. 14: Berkshire Hathaway and
3G Capital’s $27.4 billion purchase
of HJ Heinz, the largest buyout of
the year, is announced.
Jun.
May 23: Alaska Permanent Fund Corp. authorizes up to
$450 million for private equity co-investments in fiscal
2014, joining others like University of California Regents
and New Mexico Educational Retirement Board in
expressing more interest in the low-fee strategy.
SEP.
Quote of the year
“It’s like going into a haunted house, and every
time you go around a corner some ghost pops
up, and then a witch flies down on a broom,
and then you go into another room and some
devil tries to stab you with a pitchfork.
”
OCt.
September: Pantheon
Ventures begins pitching
a private equity fund
to defined contribution
sponsors.
— Jimmy Lee, the chief of investment banking
at JPMorgan, describing Michael Dell’s
encounter with Wall Street in an interview with
Bloomberg News. Dell’s sale to its founder and
Silver Lake was completed on Oct. 29.
July 22: CVC
Capital Partners
amassed 10.5 billion
euros for a fund, the
largest raised by a
European firm since
the financial crisis.
June 19: Riverstone
Holdings raises
$7.7 billion for a new
fund, more than its
$6 billion target, as
interest in energy
deals rises.
July
Nov. 1: Energy Future pays
off about $270 million in
interest on its debt, delaying
the restructuring and likely
bankruptcy of the largest
leveraged buyout of all time.
July 10: The SEC
votes to allow private
equity firms to
advertise they are
raising money.
NOV.
Nov. 6: Twitter goes public at $26
a share, giving backers including
Union Square Ventures and Spark
Capital paper returns in excess of
$1 billion. Bloomberg calculates that
at least 10 U.S. VC firms generated
more than $1 billion in returns from
IPOs and acquisitions in 2013.
Dec. 11: Blackstone’s Hilton IPO
prices at $20, giving Blackstone
a paper profit of $8.5 billion.
That ranks with Apollo Global
Management’s profit from
LyondellBasell Industries as one
of the two biggest of all time.
Dec.
Nov. 16: Former Treasury secretary Timothy Geithner says he’ll join
Warburg Pincus as president. Other former Washingtonians joining
private equity in 2013: former CIA director David Petraeus and former
NATO Supreme Allied Commander in Europe Wesley Clark.
Dec. 3: Oregon Investment Council’s Jay
Fewel, a pioneer in investing in private
equity, says he will step down after 24 years.
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Bloomberg Brief | Private Equity 2013 Global Review
4
THE BIG PICTURE
Fundraising Soars on Interest in Buyout, Real Assets, Debt, Real Estate Funds
Fundraising rose by more than one-third from last year’s $315 billion. Real asset funds more than doubled their year-ago totals. Buyout,
the largest category, rose by more than 50 percent, and debt, real estate and growth also gained. Venture fell by 10 percent, and funds
of funds and secondary funds both saw big declines.
Asia Pacific Asia Pacific
Developed
Emerging
Any
Buyout
Debt
Fund of Funds
Growth
Real Assets
Real Estate
Secondary
Venture
Grand Total
60,539
31,346
6,430
6,893
24,741
24,875
12,488
5,231
172,544
3,275
52
10,230
13
178
1,921
989
3,356
123
3,628
987
17,496
Eastern
Europe
8,507
160
268
100
132
9,167
Latin
America and
Caribbean
1,396
673
780
497
Middle East
and Africa
North
America
Western
Europe
Grand
Total
1,918
170
72,266
21,961
2,087
6,686
11,135
14,874
1,414
13,784
144,208
47,352
8,335
513
2,903
5,491
7,393
462
1,822
74,271
205,483
61,877
9,190
20,245
43,287
51,394
14,526
22,696
428,698
901
50
221
161
421
3,842
195
3,542
Source: Bloomberg. Amounts represent capital closed in 2013. Non-dollar amounts have been converted.
Exits Dominated in 2013 as Federal Reserve Taper Talk Took Center Stage
Many firms focused on returning capital to investors and paring down portfolios ahead of an eventual rise in interest rates. As the chart
shows, the total value of M&A sales and IPOs of PE-backed companies topped PE dealmaking in five of the last seven months of 2013.
60000
Deal Volume
IPO Offer Volume
M&A Exit Volume
50000
40000
30000
20000
10000
0
$M
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Source: Bloomberg
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5
Bloomberg Brief | Private Equity 2013 Global Review
Fundraising in Charts
Compiled by Jennifer Rossa, Inessa Collier and Adam KRuithof
In 2013, 1,034 funds raised about $429 billion globally, up from around $315 billion in 2012. The average size of a buyout fund holding
a final close in 2013 was about $1.5 billion, up from about $700 million in 2012, as more very large funds held final closes. The average
size VC fund was $152 million, more or less flat with 2012’s $154 million.
2013 Fundraising By Type
24%
# of Funds
12%
3% 10%
5%
12% 2%
Source: Bloomberg
3% 5%
7%
Debt
26%
Volume
15%
Buyout
11%
Fund of Funds
3% 13%
Real Assets
Real Estate
11%
14%
Secondary
Venture
22%
# of Funds
Growth
48%
6%
2012 Fundraising by Type
8%
8%
6%
4%
4%
Source: Bloomberg
Debt
27%
Fund of Funds
Growth
43%
Volume
6%
Buyout
12%
9%
11%
Other
Real Assets
10%
Real Estate
Secondary
Venture
Buyout and real assets increased their shares of a bigger pie, driven by
interest in energy funds and more large funds in the market. Funds of
funds still face tough times as direct access to firms has gotten easier.
As the popups show, large-cap funds increased their share of the buyout
pool to 40 percent from 21 percent. In the venture category, early-stage
funds took share from multi-stage ones in 2013 relative to 2012.
2013 Fundraising by Region
2012 Fundraising by Region
23%
1%
2%
4%
12%
17%
40%
3%
Source: Bloomberg
2%
8%
1% 4%
Volume
Asia Pacific Developed
1%
1%
34%
47%
Asia Pacific Emerging
North America
Latin America and Caribbean
Middle East and Africa
Multiple
Eastern Europe
Western Europe
Western Europe captured more market share by volume in 2013, likely on
the region’s better macroeconomy. We reclassed funds targeting both Asia
Pacific Developed and Asia Pacific Emerging to “Multiple” this year.
# of Funds
23%
2%
12%
46%
2%
3%
11%
1%
2%
6%
3%
3%
2%
Volume
1%
1%
Asia Pacific Emerging
2%
32%
Source: Bloomberg
Asia Pacific Developed
48%
Asia Pacific Emerging &
Developed
North America
Latin America and Caribbean
Middle East and Africa
Multiple
Eastern Europe
Western Europe
While fund managers in Africa and some parts of Latin America say they
saw more investor interest in 2013, that has yet to translate into those
areas capturing a larger percentage of commitments.
EXPLORE THE WORLD OF PRIVATE EQUITY
PEM
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
<GO>
# of Funds
6. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
FUNDRAISING IN CHARTS
6
Compiled by Jennifer Rossa and Scott Johnson
Sweet Spot for Funds Is $100 Million-$500 Million; Lots of VC Fund Launches
Buyout
Venture
Real Estate
Growth
Fund of Funds
Real Assets
Number of Funds With 2013 Closes (by Size)
Debt
Secondary
Distribution of Funds by Size of Final Close
$10B or more
$5B to <$10B
The $100 million to $500 million range was by far the most
popular size for funds of all types holding final closes in 2013. The
sub-$50 million category was also popular among venture funds,
largely due to small seed funds holding closes. The sector breakdown of funds raising $1 billion or more is as follows: 35 buyout,
three venture, 18 real estate, 14 debt, three growth, one fund of
funds, 10 real asset funds, and four secondary funds.
$2B < $5B
$1B to <$2B
$500M to <$1B
$100M to <$500M
$50M to <$100M
Less than $50M
Source: Bloomberg
0
30
60
90
120
150
180
210
Distribution of Fund Launches by Type
Data compiled by Bloomberg shows that 31 percent of funds that
launched in 2013 and have yet to hold a close were in the venture
category. In contrast, among funds holding closes, only 24 percent were VC, as shown on page 5.
Fund Launches
31%
3%
8%
Source: Bloomberg
Buyout
26%
9%
11%
4%
Debt
8%
Fund of Funds
Growth
Real Assets
Real Estate
Secondary
Venture
Number of Firms That Beat, Met, Missed Target
Exceeded Target
Buyout
Venture
0
Met Target
Number of Funds Closing in 2013
20
40
60
80
Missed Target
100
120
Secondary funds exceeded their targets 74 percent of the time in
2013, data compiled by Bloomberg shows. Buyout funds exceeded target 64 percent of the time. At the other end of the spectrum
venture funds and funds of funds beat stated targets only 30
percent of the time.
Real Estate
Debt
Growth
Real Assets
Secondary
Fund of Funds
Source: Bloomberg
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7. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
7
VIEWS: Asia/Emerging Markets
COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER
India’s Underdog Status; Election Concerns in Brazil; African Growth
Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have
done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say:
Steven Cowan, managing director at 57 Stars
Story: Appetite for emerging markets equities experienced a cyclical decline in investor sentiment as a result of
renewed confidence in the U.S. As a result of this shift, but also the return to market of many U.S. and European
private equity firms, emerging markets private equity witnessed a drop in capital-raising activity. We expect this
evolution could be quite positive with respect to the investment environment over the next few years.
One thing I’d have done differently: In retrospect, I would have made fewer New Years’ resolutions. And, I’d
have kept more of them.
Worry: We continue to keep our eyes on the Federal Reserve and the impact it may have on global markets.
Surprise: The potential for returning investor interest in India if there is strong equity market performance, election results which are perceived to be positive, and rupee appreciation.
Veronica John, senior adviser at Diamond Dragon Advisers in Singapore
Story: Investors have started giving more attention again to Southeast Asia, to more developed Asian markets
like Japan and just having an overall re-think of what their portfolio allocation is going to look like in the next
three years, given that they don’t want to concentrate so heavily on India and China. They want diversification.
Worry: Investors continue to maintain a herd mentality. You don’t go into private-equity markets when they’re hot.
You go into them when they’re not so hot. We still have significant challenges in convincing prospective LPs to
commit to high-quality GPs in markets that are out of favor, such as India.
Surprise: The situation in China is a little more troubling than people are predicting. There’s going to be an
upswing in social unrest; growth may slow considerably more than predicted; Bank NPLs will be higher than
expected and more difficult to work out. Also, India may make the necessary policy changes to come back.
Haide Lui, principal at HarbourVest in Hong Kong
Story: Unexpectedly large number of home run deals and liquidity events across Asia, particularly from VC.
One thing I’d have done differently: I wish I had spent more time on solid ground rather than on planes.
Worry: Negative impact on valuation and ultimately on performance if the larger firms choose to deploy dry powder quickly rather than be selective and deploy at a slower pace.
Surprise: Despite slowing economic growth in China, a sustained stream of liquidity and strong exits.
Davinder Sikand, Partner & Head of Sub-Saharan Africa Business, The Abraaj Group
Biggest 2014 investment-related worry: There is nothing that is particularly worrying for us. Although there are
more players entering our markets, we see this as healthy competition.
Surprise of the year in 2014: If there isn’t an increase in transactions like Fan Milk, given the attractive opportunities that exist for deal-making and growth on the continent. Sub-Saharan Africa has the youngest population in
the world, and will continue adding to its workforce, thereby growing its middle and consumer classes.
Christopher Meyn, senior partner and head of private equity at Gavea Investimentos
Story of 2013: 2013 was a markedly slower year for Brazilian PE. Despite solid long-term fundamentals in Brazil,
a slowdown in the economy and concerns around a somewhat heavy-handed federal government appear to
have reduced the appetite for PE investing and fundraising. Additionally, extremely selective local equity capital
markets and more cautious strategic buyers limited realization opportunities in 2013.
One thing I’d have done differently: We could have built a stronger cash war chest at portfolio companies during the first half when interest rates were lower and lenders had strong appetite for putting money to work. The
significant tightening of local credit markets occurred earlier than expected.
Worry: October elections and, to some extent a potentially “dead” June with Brazil hosting the World Cup, will
likely create uncertainty and volatility. Caution is the key word for 2014.
Surprise: I believe we could very well see a re-opening of local capital markets particularly in the beginning and
at the end of the year. I also think we could see some positive surprises with presidential elections. The markets
seem to be pricing in “more of the same” whereas Gávea thinks there is upside in either a regime change or
simply with a better, more focused existing party re-election.
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Bloomberg Brief | Private Equity 2013 Global Review
8
Largest funds
Firms Find Bigger Is Better in 2013
In 2013, 81 funds held final closes on more than $1 billion, up from 49 in 2012. Funds of $2 billion or more are shown here. The year’s
largest fund, Apollo Investment Fund VIII, raised $17.5 billion. The largest 2012 fund: Blackstone’s $13.3 billion Real Estate Partners VII.
Return of the Generalist Mega Funds
Fund Name
1
2
3
4
5
6
7
8
9
10
11
12
12
14
15
15
15
15
19
20
21
22
23
24
25
26
27
27
27
30
31
32
33
34
34
36
37
38
39
40
41
42
42
Strategy
Region
Apollo Investment Fund VIII LP
CVC Capital Partners VI LP
Carlyle Partners VI LP
Warburg Pincus Private Equity XI LP
Silver Lake Partners IV LP
KKR North America Fund XI LP
Riverstone Global Energy & Power Fund V LP
Apax Europe VIII LP
Fifth Cinven Fund LP
Brookfield Infrastructure Fund II LP
Lone Star Real Estate Fund III LP
EIG Energy Fund XVI LP
KKR Asia Fund II LP
Lone Star Fund VIII LP
Highbridge Principal Strat - Mezz Partners II LP
Blackstone/GSO Capital Solutions Fund II
Providence Equity Partners VII LP
EnCap Energy Capital Fund IX LP
Nordic Capital Fund VIII LP
Brookfield Strategic RE Partners LP
Triton Fund IV LP
Starwood Distressed Opp Fund IX Global
AXA LBO Fund V LP
Platinum Equity Capital Partners III LP
Macquarie European Infrastructure Fund 4
Dover Street VIII LP
KPS Special Situations Fund IV LP
Blackstone RE Debt Strategies II LP
TowerBrook Investors IV LP
Crescent Mezzanine Partners VI LP
ICG Europe Fund V
HgCapital 7 LP
Highbridge Principal Strat - Spec Loan Fund III LP
Wayzata Opportunities Fund III LP
MBK Partners III Inc
Cerberus Institutional Partners V LP
InSight Venture Partners VIII LP
Oaktree Real Estate Opportunities Fund VI LP
Trilantic Capital Partners V LP
Blackstone Real Estate Partners Europe IV LP
Equistone Partners Europe Fund IV LP
Crown Global Secondaries III PLC
NB Secondary Opportunities Fund III LP
Buyout
Buyout
Buyout
Buyout
Buyout
Buyout
Buyout
Buyout
Buyout
Real Assets
Real Estate
Real Assets
Buyout
Debt
Debt
Debt
Buyout
Real Assets
Buyout
Real Estate
Buyout
Real Estate
Buyout
Buyout
Real Assets
Secondary
Debt
Debt
Buyout
Debt
Debt
Buyout
Debt
Debt
Buyout
Buyout
Growth
Real Estate
Buyout
Real Estate
Buyout
Secondary
Secondary
North America
Western Europe
North America
Any
Any
North America
Any
Western Europe
Western Europe
Any
Any
Any
Asia Pac Developed
North America
Any
Any
Any
North America
Western Europe
Any
Western Europe
Any
Western Europe
Any
Western Europe
Any
Any
Any
Any
Any
Western Europe
Western Europe
North America
North America
Asia Pac Emerging
Any
North America
Any
North America
Western Europe
Western Europe
Any
Any
Sector
Generalist
Generalist
Generalist
Generalist
Technology
Generalist
Energy
Generalist
Generalist
Infrastructure
Real Estate
Energy
Generalist
Real Estate
Generalist
Generalist
Communications
Energy
Generalist
Real Estate
Generalist
Real Estate
Generalist
Generalist
Infrastructure
Generalist
Generalist
Real Estate
Generalist
Generalist
Generalist
Generalist
Generalist
Generalist
Generalist
Generalist
Technology
Real Estate
Generalist
Financials
Generalist
Any
Any
Total ($M) Notes
17,500
13,831
13,000
11,200
10,300
8,300
7,700
7,586
7,083
7,000
6,600
6,000
6,000
5,085
5,000
5,000
5,000
5,000
4,790
4,400
4,245
4,200
3,787
3,750
3,607
3,600
3,500
3,500
3,500
3,400
3,362
3,048
3,000
2,700
2,700
2,610
2,570
2,300
2,187
2,076
2,017
2,000
2,000
Largest fund since financial crisis
Took seven months to raise
Includes $1B from the firm and employees
Cut fees for big clients
Its first fund raised without partner Carlyle
Offered dollar option on concerns over euro
Offered fee discounts for early LPs
The second largest infrastructure fund
Biggest fund for global property deals
Offered fee discount for first close
Less than half the size of predecessor
Cut fund target by 25%
Took eight months to raise
Saw more than $9B of interest
Raised in four months
Carry rises to 25% on net IRR of 25%+
Formerly Lehman Brothers’ merchant bank
First solo fund from Barclays’ spinout
Source: Bloomberg. Non-dollar figures have been converted.
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Bloomberg Brief | Private Equity 2013 Global Review
9
Future Funds: likely in market in 2014
Compiled by Sabrina Willmer
North America Buyout/Energy/Distressed
Firm Name
ABRY Partners
American Industrial
Partners
American Securities
ArcLight Capital Holdings
Bertram Capital
Bison Capital
Blackstreet Capital
Blackstone Energy
Partners
Castanea Partners
Centerbridge Partners
Charlesbank Capital
Partners
CI Capital Partners
Cressey & Company
EnCap Flatrock
Energy Investors Funds
Energy Spectrum Capital
Francisco Partners
Freeman Spogli & Co.
The Gores Group
J.F. Lehman & Company
JLL Partners
JMI Equity
Kayne Anderson Capital
Advisors (growth equity)
Kelso & Company
Kinderhook Industries
Lightyear Capital
Lincolnshire Management
Linden LLC
Littlejohn
Madison Dearborn
Partners
Mason Wells
Merit Energy Company
Monomoy Capital Partners
Natural Gas Partners
Pfingsten Partners
Prairie Capital
Prophet Equity
Quantum Energy Partners
Resilience Capital
Partners
Seidler Equity Partners
Sheridan Production
Partners
Silver Lake Sumeru
Spectrum Equity
Fund #
Fund VIII
Previous Fund Size
$1.6 billion
Fund VI
$700 million
Fund VII
Fund VI
Fund III
Fund V
Fund III
$3.6 billion
$3.3 billion
$500 million
$218 million
$91 million
Fund II
$2.5 billion
Fund IV
Fund III
$575 million
$4.4 billion
Fund VIII
$1.5 billion
Fund III
Fund V
Fund III
Fund V
Fund VII
Fund IV
Fund VII
Fund IV
Fund IV
Fund VII
Fund VIII
$620 million
$385 million
$1.75 billion
$1.71 billion
$999 million
$2 billion
$735 million
$2 billion
$575.5 million
More than $800 million
$875 million
Fund III
$100 million
Fund IX
Fund IV
Fund IV
Fund V
Fund III
Fund V
$5.1 billion
$300 million
$954 million
$835 million
$375 million
$1.34 billion
Fund VII
$4.1 billion
Fund IV
Fund IX
Fund III
Fund X
Fund V
Fund VI
Fund II
Fund VI
$525 million
$912 million
$400 million
$3.6 billion
$525 million
$300 million
$275 million
$2.5 billion
Fund IV
$225 million
Fund V
$260 million
Fund III
$1.8 billion
Fund II
Fund VII
$1.1 billion
$680 million
Firm Name
Sycamore Partners
Symmetric Capital
TA Associates
Thoma Bravo
Thomas H. Lee Partners
TPG Capital
Vista Equity Partners
Waud Capital Partners
Welsh, Carson, Anderson
& Stowe
Wynnchurch Capital
Fund #
Fund II
Fund II
Fund XII
Fund XI
Fund VII
Fund VII
Fund V
Fund IV
Previous Fund Size
More than $1 billion
$202 million
$4 billion
$1.275 billion
$8 billion
$19.8 billion
$3.5 billion
$463 million
Fund XII
$3.7 billion
Fund IV
$603 million
Fund #
Fund XII
Fund V
Fund V
Fund V
Previous Fund Size
$475 million
$625 million
$270 million
$625 million
Fund X
$675 million
Fund XIII
$2.56 billion
Fund #
Fund I
Fund IV
Previous Fund Size
N/A
EUR2 billion
Fund III
EUR575 millions
Fund V
Fund V
EUR4.8 billion
EUR350 million
Fund X
EUR4 billion
Fund X
Fund III
Fund III
Fund VIII
Fund IV
Fund V
Fund II
2014 Fund
Fund II
Fund V
Fund II
Fund IV
GBP437 million
GBP800 million
EUR200 million
$1.5 billion
GBP375 million
$5.9 billion
$100 million
EUR220 million
GBP450 million
EUR250 million
SEK 5 billion
EUR670 million
GBP250 millio
Fund III
EUR375 million
Fund VI
Fund VI
EUR1.1 billion
EUR150 million
U.S. Venture
Firm Name
Accel Partners
Founders Fund
Flagship Ventures
GGV Capital
Lightspeed Venture
Partners
Oak Investment Partners
European Funds
Firm Name
Adamant Ventures
Altor Equity Partners
AnaCap Financial
Partners
Bridgepoint
Capiton
Charterhouse Capital
Partners
ECI Partners
Exponent Private Equity
Gilde Equity Management
HitecVision
Inflexion Private Equity
KKR Europe
Life Sciences Partners
Paragon Partners
Phoenix Equity Partners
ProA Capital
Segulah
Silverfleet Capital
Sovereign Capital
Stirling Square Capital
Partners
Waterland
Xenon Private Equity
continued on next page
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Bloomberg Brief | Private Equity 2013 Global Review
10
Future Funds Continued...
continued from previous page
Secondaries
Firm Name
Coller Capital Ltd.
Pantheon
Fund of Funds
Fund #
Fund VII
Fund V
Previous Fund Size
$5.5 billion
$3 billion
Mezzanine Funds
Firm Name
Accel-KKR
Structured Capital
Audax Private Equity
Caltius Capital Management
Kayne Anderson Senior
Credit
Summit Partners
Firm Name
Private Advisors
Siguler Guff
Fund #
Fund VI
Distressed Fund V
Previous Fund Size
$340 million
$1.3 billion
Asian Funds
Fund #
Previous Fund Size
Fund II
$180 million
Fund IV
Fund V
$1 billion
$500 million
Fund II
$350 million
Fund V (subordinated debt
$840 million
fund)
Firm Name
Capital Today
CITIC Private Equity
Hahn & Company
Hao Capital
Legend Capital
Lunar Capital
Northstar Group
SAIF Partners
Unitas Capital
Fund #
Fund III
Fund II
Fund II
Fund III
Fund VI
Fund IV
Fund IV
Fund V
Fund IV
Previous Fund Size
$400 million
$990 million
$750 million
$400 million
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$820 million
$1.25 billion
$1.2 billion
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11. 01.21.14 www.bloombergbriefs.com
11
Bloomberg Brief | Private Equity 2013 Global Review
Investors
LP Commitment Plans in 2014
LP Name
2014 PE/Alts Plan
Allocation strategy for 2014
2013 Commitments
AUM*
Primary/secondary and co-invests in U.S./Europe turnaround, small/
mid-sized buyouts; U.S./Asia VC and growth; global real assets
Funds focused on buyouts, debt, distressed debt, turnaround, growth,
venture capital and international strategies
70% to U.S./30% to Europe. Mostly small/mid-market buyout funds
60% to buyouts, 15% to credit-related strategies, 15% to growth equity
and 10% to opportunistic
Lower mid-market buyouts in Europe and the U.S.
Mostly U.S. small and mid-market buyout funds. Also, looking at secondaries and mezzanine finance strategies
More than $500M to about
40 managers
$5B
$200M
$13.7B
EUR350M
EUR5.5B
$260.9B as
of Aug. 31
EUR3B
$12.3B as
of June 30
$30Mto $50M
Looking for a broad range of funds, mostly in developed markets
About $45M
About $2B
HarbourVest Partners
Similar to 2013
U.S., Europe, Asia, EM across primary, secondary, and direct coinvestments, private equity (venture, growth, buyout), private debt.
About $3B
More than
$35B
Illinois State Board of
Investment
Kansas Public Employees
Retirement System
Kentucky Retirement
Systems
L.A. County Employees
Retirement Association
About $125M to 5 PE
funds
Mostly mid-market buyout funds of $500 million to $1 billion in size
Expect to commit $96M
$13.5B
$350M
Targeting investments across multiple sectors
$275M
$15.3B as
of Oct. 31
Adveq Management
Arkansas Teacher
Retirement System
ATP Private Equity Partners
California Public Employees' Retirement System
Danske Private Equity
Employees' Retirement
System, State of Hawaii
Fort Worth Employees'
Retirement Fund
Expects to keep the
same pace as 2013
$230M
EUR350M
As much as $6B during FY13-14
EUR300M
$200M
About $3B for the fiscal year so far
EUR200M
Targeting $200M
Build out international program, invest in smaller mid-market buyout
funds in the U.S. and structured equity-focused managers
"Emphasis will be on small buyouts, international investments, venture
capital and special situations."
About $350M by year-end
$15B
$952M to 11 funds, $100M emerging
managers, $300M coinvestments
$300M-$350M
50% to buyouts, 30% to special situations and 20% to VC
$280M
$42.3B as
of June 30
$17.3B as
of Nov. 19
$250M
Balanced approach focusing on Europe, North America, Asia and
secondaries. Final allocation of funding is client led
$280M
Mostly small to mid-market buyout funds in North America
$135M
No specific strategies
$240M
PE focus is on buyout funds of $500 million to $2 billion in North
America, Europe and Latin America
50% to buyouts, 30% to special situations and 20% to VC. More private
credit for clients, opportunistic co-investments and secondaries
North American small buyout funds
About $320M to PE and $330M to
infra/energy
EUR25B
$3B
$32B
$250M
NA
NA
$3B
$8B as of
Nov. 30
Continuation of previous strategies in the U.S., Europe and Asia, including distress and intellectual property
$250M plus into private assets
$9.5B plus
Alternative strategy deferred until new consultants for the program are
able to participate and the strategic review has been completed.
NA
~$18B
Mostly buyout. Will explore non-U.S./special situations funds (energy,
secondary, distressed, co-invests, emerging markets)
$50M each to 2 PE funds during
FY13
$11.4B as
of Aug. 31
State Universities
$250M to PE funds
Retirement System, Illinois
NA
About $300M in FY13
$16B
Teachers Retirement
System of Louisiana
For FY14,up to $1.25B
$350M-$450M to buyout funds, up to $50M to VC, $125M-$175M to real
About $860M in private markets
estate, $275M-$350M to mezz/distressed debt funds, up to $50M to infra
in FY13
funds, $125M-$175M to commodities. Mostly U.S.-focused funds.
$300M-$500M
Mostly looking at U.S. buyout funds
Los Angeles Fire & Police
Munich Private Equity
Partners
Nebraska Investment
Council
New Hampshire Retirement System
PKA Alternative
Investment Partners
About $300M
$1.8B
About $150M to 5
managers
$200M-250M to 5 to 7
PE/debt funds
$600M to PE funds,
$200M to energy/infra
Portfolio Advisors
$3B
RCP Advisors
Rhode Island State Investment Commission
SD County Employees
Retirement Association
SF City and County
Employees' Retirement
System
$250M-$300M
$100M-$120M to 5-8
PE partnerships
School Employees Retirement System of Ohio
Tennessee Consolidated
Retirement System
Texas Employees
Retirement System
West Virginia Investment
Management Board
Similar to 2013
Commit up to $400M
for 9 months from
Dec.
$150M-$250M to PE
funds during fiscal
2014
$1.25B to 6 to 10 funds
Mostly buyout funds globally
and coinvestments
$25M to a VC FoF, $25M to an int’l FoF, $40M each to 5-6 managers; 60$250M-$275M
80% in N. America, up to 20% W. Europe, up to 10% other regions.
expect to commit $874M
Roughly $600M in FY2013
Estimated $250 million by year-end
Source: Compiled by Sabrina Willmer with assistance from Susannah Birkwood *AUM represent most recent available.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
$2.3B
$18.8B as
of June
$6.6B as of
Sept. 30
$15.3B as
of Sept. 30
$37.5B as
of June 30
$24.5B as
of October
$15B
12. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
12
VIEWS: NORTH AMERICAN INVESTORS
COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER
Liquidity; Hot Housing Markets; Learning Japanese
Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have
done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say:
Steven Costabile, a managing director and global head of private funds group at PineBridge Investments
Story: The continued story starting in 2012 of very good liquidity coming off legacy portfolios.
One thing I’d have done differently: I would have done more of the things that we had been doing.
Worry: Some aspects of developed market private equity valuations and leverage have reached pre-2008 levels.
Surprise: That we actually make it through 2014 without getting any surprises!
Vijoy Chattergy, chief investment officer of the Employees’ Retirement System of the State of Hawaii
Story: The move by PE firms into the U.S. housing market. The buying of defaulted residential properties, led by
firms like Blackstone, seemed to move to a new level as they began to IPO some restructured properties. The
impact is well beyond just private real estate investing.
One thing I’d have done differently in 2013: Held a smaller allocation to TIPS, and been less fearful of inflation
in general.
Worry: Continued bickering in DC and focus on curbing deficits instead of stimulating growth and employment.
Surprise: U.S. growth prospects are less tied to the Federal Reserve balance sheet than is widely perceived; Europe’s growth prospects are much worse than widely perceived.
Jim Herrington, private and public equity investment officer, West Virginia Investment Management Board
One thing I’d have done differently: Worked more proactively and creatively to find allocation in over-subscribed funds.
Worry: A rise in interest rates that is too fast.
Surprise: Resurgence of venture capital, and tanking in some emerging markets.
Yegin Chen, investment officer, acting as head of private equity, at San Diego County Employees Retirement Association
Story: Greater awareness of economic and political risks in several previously-hot developing markets.
One thing I’d have done differently: Learned more Japanese.
Worry: Increasing political & economic stresses in some developing markets.
Surprise: Developments (of a positive sort) involving China.
Make an IMpact wIth
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13. 01.21.14 www.bloombergbriefs.com
INVESTORS IN CHARTS
Bloomberg Brief | Private Equity 2013 Global Review
13
Compiled by Jennifer Rossa and Scott Johnson
Pensions Desire Smaller Funds; Development Banks Play Big Role in Emerging Markets
For the first time, we took the limited partner commitment data we compile throughout the year and analyzed it to find out where investors are putting money to work. The data is compiled primarily from public pension meeting minutes and development bank disclosures,
and is by no means comprehensive, but does show trends such as development banks’ support of Middle Eastern and African funds
and public pensions’ interest in diversifying their commitments beyond the mega buyout funds.
Public Pensions Like Buyout, Real Estate
Buyout
Venture
Coinvestment
Separate account
1%
4% 3% 1%
4%
4%
Real Estate
Real Assets
Fund of Funds
Distressed, Special Opp.
Debt
Secondary
Growth
Development Banks Support MENA Funds
Any
Number of Commitments by Fund Strategy
6%
7%
11%
42%
17%
Corporates, Endowments, FoF,
Insurance, Pension, SWFs
Source: Bloomberg
45%
5% 3%
10%
2%1%
17%
17%
Development Banks
Value of
Commitments
MENA =
<1%
LatAm =
0%
Asia
Europe
Latin America
35%
37%
48%
#of
43%
Commitments
10%
MENA
North America
Commitments by Region of Focus
9%
12%
11%
5%
Corporates, Endowments, FoF,
Insurance, Pension, SWFs
Source: Bloomberg
16%
2%
20%
6% 13%
31%
11%
25%
18%
26%
21%
Development Banks
Public pensions, which dominate the pie chart on the left, are most interested in buyout funds, where they can put the largest amounts of money
to work. Development banks’ key role in promoting growth is apparent.
Public pensions continue to struggle to figure out how to access emerging markets. By number of commitments, development banks were most
involved in the Middle East and Africa in 2013.
Public Pensions Diversify Beyond Mega Funds
Largest Funds of 2013 Leave No Stones Unturned
$100 Million to $500 Million
$1 Billion to $5 Billion
More Than $10 Billion
13%
#of
Commitments
45%
49%
22%
Corporates, Endowments, FoF,
Insurance, Pension, SWFs
Source: Bloomberg
38%
3%
1%
12%
14% 26%
57%
49%
Development Banks
Development banks play a bigger role in promoting emerging managers
and smaller funds. Still, the data backs up pension plan claims of being
more interested in committing to mid-market funds than they used to be.
Apollo Investment Fund VIII
CVC Capital Partners VI
KPS Special Situations Fund IV
Vista Foundation Fund II
Levine Leichtman Capital Partners V
Top Funds by
Commitments
Riverside Capital Appreciation Fund VI
Triton Fund IV LP
Olympus Growth Fund VI
EnCap Energy Capital Fund IX
DCPF VI Oil and Gas Coinvestment Fund
0
Source: Bloomberg
5
10
15
20
Fittingly, the two largest funds raised last year, Apollo VIII and CVC VI,
collected the largest number of publicly disclosed commitments. KPS and
Vista Foundation Fund also appear to have diverse investor bases.
EXPLORE THE WORLD OF PRIVATE EQUITY
PEM
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
<GO>
As Much as $100 Million
$500 Million to $1 Billion
$5 Billion to $10 Billion
2%
Value of
6%
Commitments
16%
8%
8%
16% 14%
1%
Commitments by Fund Target
14. 01.21.14 www.bloombergbriefs.com
2014 LP Meeting Calendar
Bloomberg Brief | Private Equity 2013 Global Review
14
Compiled by jingya Gao
click on calendar entries for expanded lists
JANUARY
FEBRUARY
PENSION FUND
PENSION FUND
21
Massachusetts PRIM - Investment
Committee
4
22
New Jersey State Investment Council
5
22
Pennsylvania State Employees'
Retirement System
6
23
New York City Teachers' Retirement
System -Board Meetings
23
Pennsylvania Public School Employees' Retirement System
12
29
New York State Teachers' Retirement
System -Board Meetings
17
29
Oregon Investment Council
30
New Mexico Public Employees Retirement Association -Board Meetings
MAY
6
12
18
19
19
Massachusetts PRIM - Board
Meeting
California State Teachers' Retirement
System
Alaska Retirement Management Board
Washington State Investment Board
-Private Market Committee
Los Angeles County Employees' Retirement Association Investment Board
MERS of Michigan
Florida SBA Investment Advisory
Committee
California Public Employees' Retirement System
Illinois Teachers Retirement System
North Carolina Investment Advisory
Committee
JUNE
MARCH
5
6
6
12
12
13
13
17
17
18
APRIL
PENSION FUND
PENSION FUND
Oregon Investment Council
California State Teachers' Retirement
System
Washington State Investment Board
-Private Market Committee
Los Angeles County Employees' Retirement Association Investment Board
Pennsylvania State Employees'
Retirement System
MERS of Michigan
Pennsylvania Public School Employees' Retirement System
California Public Employees' Retirement System
Florida SBA Investment Advisory
Committee
Massachusetts PRIM - Investment
Committee
Massachusetts PRIM - Board
Meeting
California State Teachers' Retirement
System
Washington State Investment Board
-Private Market Committee
Los Angeles County Employees' Retirement Association Investment Board
MERS of Michigan
California Public Employees' Retirement System
Illinois Teachers Retirement System
Pennsylvania State Employees'
Retirement System
Alaska Retirement Management Board
JULY
1
2
3
9
9
14
14
23
24
30
Oregon Investment Council
AUGUST
PENSION FUND
1
1
1
8
14
19
20
21
22
28
PENSION FUND
PENSION FUND
PENSION FUND
California State Teachers' Retirement
System
Pennsylvania Public School Employees' Retirement System
Washington State Investment Board
-Private Market Committee
MERS of Michigan
Los Angeles County Employees' Retirement Association Investment Board
California Public Employees' Retirement System
Massachusetts PRIM - Investment
Committee
Alaska Permanent Fund Corp.
North Carolina Investment Advisory
Committee
Oregon Investment Council
California State Teachers' Retirement
System
Los Angeles County Employees' Retirement Association Investment Board
MERS of Michigan
Pennsylvania State Employees'
Retirement System
Pennsylvania Public School Employees' Retirement System
Washington State Investment Board
-Private Market Committee
California Public Employees' Retirement System
Massachusetts PRIM - Board
Meeting
Illinois Teachers Retirement System
Alaska Retirement Management
Board
Los Angeles County Employees' Retirement Association Investment Board
California State Teachers' Retirement
System
Washington State Investment Board
-Private Market Committee
California Public Employees' Retirement System
Nebraska Investment Council
Pennsylvania Public School Employees' Retirement System
Massachusetts PRIM - Board
Meeting
Los Angeles County Employees' Retirement Association Investment Board
MERS of Michigan
SEPTEMBER
4
11
11
11
12
12
16
17
24
26
OCTOBER
PENSION FUND
4
10
11
15
17
18
22
23
24
24
Washington State Investment Board
-Private Market Committee
Los Angeles County Employees' Retirement Association Investment Board
Texas County & District Retirement
System
California Public Employees' Retirement System
Pennsylvania State Employees'
Retirement System
Alaska Retirement Management
Board
Florida SBA Investment Advisory
Committee
Massachusetts PRIM - Investment
Committee
North Carolina Investment Advisory
Committee
Oregon Investment Council
PENSION FUND
2
2
7
8
8
13
17
22
29
29
Pennsylvania Public School Employees' Retirement System
Washington State Investment Board
-Private Market Committee
Massachusetts PRIM - Board
Meeting
Los Angeles County Employees' Retirement Association Investment Board
MERS of Michigan
California Public Employees' Retirement System
Texas Teacher Retirement System Board Meeting
Rhode Island State Investment
Commission
New York State Teachers' Retirement
System -Board Meetings
Pennsylvania State Employees'
Retirement System
9
10
10
14
15
16
22
23
23
30
MERS of Michigan
Massachusetts PRIM - Investment
Committee
New York State Teachers' Retirement
System -Board Meetings
Pennsylvania State Employees'
Retirement System
Oregon Investment Council
NOVEMBER
5
6
12
13
14
17
17
19
20
20
6
12
13
13
13
18
19
22
26
27
Arizona State Retirement System
Nebraska Investment Council
Rhode Island State Investment
Commission
DECEMBER
PENSION FUND
Oregon Investment Council
Washington State Investment Board
-Private Market Committee
Los Angeles County Employees' Retirement Association Investment Board
MERS of Michigan
Massachusetts PRIM - Investment
Committee
California Public Employees' Retirement System
Nebraska Investment Council
North Carolina Investment Advisory
Committee
Texas Teacher Retirement System Board Meeting
University of Michigan Regents Board
Wisconsin Investment Board
California Public Employees' Retirement System
Texas Employees' Retirement System
PENSION FUND
2
3
4
4
5
8
8
10
10
10
Massachusetts PRIM - Board
Meeting
Oregon Investment Council
Alaska Retirement Management
Board
Washington State Investment Board
-Private Market Committee
Illinois State Board of Investment Investment Committee
Florida SBA Investment Advisory
Committee
Pennsylvania Public School Employees' Retirement System
Alaska Permanent Fund Corp.
Los Angeles County Employees' Retirement Association Investment Board
Pennsylvania State Employees'
Retirement System
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
15. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
15
VIEWS: EUROPE
COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER
Bifurcation in Fundraising; Large European GPs’ Success
Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have
done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say:
Klaus Ruhne, partner at ATP Private Equity Partners
Story: That we are back before Lehman in terms of pricing of deals and debt.
One thing I’d have done differently: Run a marathon.
Worry: No growth.
Surprise: Fed and ECB increase key interest rates.
John Morrison, a managing director at Munich Private Equity Partners
Story: Bifurcation in the fundraising market – an increased spread between funds in demand and those that
struggle to raise capital.
One thing I’d have done differently: More active management of legacy portfolio stakes.
Worry: Short termism amongst investors – private equity is a long term asset class and has to be recognized as such.
Jim Strang, a managing director at Hamilton Lane
Story: The notable success of some of the larger European GPs in fundraising. There were more one-time
closes amongst this group that I think anyone would have figured at the start of the year.
One thing I’d have done differently: Pushing GPs harder in investment period extension conversations, of
which there were quite a few.
Worry: The big worry is the economy in mainland Europe. Clearly there’s been somewhat of a recovery over the
last few months but it’s hard to see a sustained recovery with the challenges remaining in the banking system
and indeed the labor markets.
Surprise: Scotland votes for independence, signaling a breakup of the U.K.
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16. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
16
Buyout Deals & Exits
Private Equity Firms Do $223 Billion of Deals Globally
There were about $223 billion of buyouts
globally in 2013, up from $181 billion in
2012. A $3 billion offer for Commonwealth
Property Office Fund boosted Australia’s
total. The biggest buyout in China was the
$913 million purchase of Giant Interactive
Group by Baring Private Equity, much
smaller than 2012’s biggest deal in the
country, the $3.5 billion takeover of Focus
Media. Southern Europe showed some
signs of recovery, with the $873 million
buyout of Club Mediterranee in France
and CVC Capital’s $1.5 billion secondary
deal for Cerved Group in Italy. German
volume topped $10 billion thanks to two
$4 billion deals, for Springer Science and
ista International.
—Jennifer Rossa
Firms Exit Companies Worth About $134 Billion via M&A
Globally, private equity firms sold companies worth about $134 billion in 2013, up
from about $125 billion in 2012, according
to data compiled by Bloomberg. Southern
Europe showed some strength on the exit
front as well, with the $1.6 billion sale of
Mivisa Envases in Spain by Blackstone
Group and others, the $850 million sale
by L Capital and others of Groupe SMCP
to KKR in France, and Finmeccanica and
First Reserve’s $1 billion exit of Ansaldo
Energia in Italy in addition to the Cerved
secondary.
FIND ETFs THAT TRADE
AT A 52 WEEK HIGH
EQS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
<GO>
—Jennifer Rossa
17. 01.21.14 www.bloombergbriefs.com
Deals & Exits
Bloomberg Brief | Private Equity 2013 Global Review
Four of the top 10 buyout deals — and 14 of the 33 deals worth $1 billion or more — were also exits,
showing the continued importance of secondary deals.
Largest PE Firm Acquisitions
*
Target Name
Acquirer
Largest PE Firm Sales
Seller
Value
($M)
2/14 HJ Heinz Co
Berkshire Hathaway,
3G Capital
27,403.30
2/5 Dell Inc
MSD Capital, Silver Lake
Management
16,435.60
DE Master
4/12
Blenders 1753 NV
Joh A Benckiser SE
Credit Suisse Group, Lone
Royal Park
Star Funds
Investments
GIC, Insight Venture Partner,
BMC Software Inc Bain Capital Partners,
Golden Gate Capital
Warburg Pincus,
Neiman Marcus
CPPIB, Ares Management
TPG
Springer
GIC Special InvestBC Partners Holdings
Science+Business
ments, EQT Partners
HUB International Hellman & Friedman
Apax Partners
Charterhouse
ista International CVC Capital Partners
Capital Partners
Gardner Denver
KKR
Apache Gulf of
Riverstone Holdings (FieldApache Corp.
Mexico wells
wood Energy)
Cerberus Capital ManageNew Albertsons
ment, Kimco Realty, Klaff
Supervalu
Realty, Lubert-Adler Partners
Commonwealth
CPPIB, Dexus Property
Property Office
Group
Portfolio of
Newcastle Investment, AGF
HSBC Holdings
consumer loans Holding, Blackstone Group
Banco Santander
General Atlantic,
(half of asset
Warburg Pincus
mgmt division)
Davis Advisors, Leonard
Activision Blizzard Green & Partners, Tencent Vivendi
Holdings
Scout24
Hellman & Friedman
Deutsche Telekom
CeramTec
Cinven Ltd
Rockwood Holdings
Terminal
Global Infrastructure
Mediterranean
Investment
Partners
Shipping Co SA
JMI Equity Fund, Hellman
Applied Systems
Bain Capital Partners
& Friedman
Unit4
Advent International
Panasonic
KKR & Co LP
Panasonic Corp
Healthcare
7 shopping
Starwood Capital Group
Westfield Group
centers/U.S
ING Life Insurance
MBK Partners
ING Groep NV
Korea
Leonard Green &
Brickman Group
KKR
Partners
Clessidra, Bain
Cerved Group
CVC Capital Partners
Capital Partners
Alberta Investment
Vue Entertainment
Doughty Hanson
Management, OMERS PE
Public Sector Pension
AirPort GmbH
Hochtief
Investment
Coinmach Service, Pamplona Capital
Babcock & Brown
AIR-Serv Group
Management LLP
CSM's Bakery
Rhone Capital
Corbion NV
Supplies business
9,614.90
4/27 RPI portfolio asset
8,730.10
5/6
6,735.72
9/9
6/19
8/5
4/18
3/8
7/18
1/10
10/11
3/5
5/31
7/26
11/21
6/16
4/1
11/26
11/18
9/27
9/16
7/9
11/11
1/2
6/10
5/7
5/15
3/25
Source: Bloomberg
* Date announced
17
6,000.00
4,422.66
4,400.00
4,054.80
3,850.19
3,750.00
3,300.00
3,203.78
3,200.00
2,612.20
2,340.00
2,018.85
1,984.68
1,929.00
1,800.00
1,698.23
1,677.34
1,640.00
1,610.64
1,600.00
1,488.10
1,455.05
1,439.24
1,400.00
1,352.19
*
Target Name
Acquirer
Seller
Value
($M)
5/27 Bausch & Lomb
Warburg Pincus,
Valeant Pharmaceuticals Welsh Carson
Anderson & Stowe
8,700.00
9/9 Neiman Marcus
CPPIB, Ares
Management
6,000.00
Warburg Pincus, TPG
MIP Tower
American Tower
Holdings
Springer Sci6/19
BC Partners Holdings
ence +Business
8/5 HUB International Hellman & Friedman
Macquarie Infrastructure Partners, PGGM NV
GIC Special Investments, EQT Partners
Apax Partners
Charterhouse Capital
4/18 ista International CVC Capital Partners
Partners
LIXIL Group Corp, Devel- Credit Suisse Asset
9/26 Grohe Group
opment Bank of Japan Management LLC, TPG
Madison Dearborn
9/3 Yankee Candle
Jarden Corp
Partners
7/1 19 TV Stations
Tribune Co.
Oak Hill Capital Partners
Apollo Global ManageCharter Com3/19
Liberty Media Corp
ment, Crestview Partmunications
ners, Oaktree Capital
Softlayer Tech- International Business
6/4
GI Partners
nologies
Machine
Goldman Sachs Capital
AssuraMed
2/14
Cardinal Health
Partners, Clayton
Holding
Dubilier & Rice
JMI Equity Fund,
11/26 Applied Systems
Bain Capital Partners
Hellman & Friedman
12/2 Digital Insight
NCR Corp
Thoma Bravo
Mivisa Envases
Blackstone Group, N+1
10/31
Crown Holdings
SAU
Private Equity
Leonard Green &
11/11 Brickman Group KKR
Partners
Clessidra, Bain Capital
1/2 Cerved Group
CVC Capital Partners
Partners
Vue
Alberta Investment Man6/10
Doughty Hanson
Entertainment
agement, OMERS PE
Coinmach SerPamplona Capital
5/15 vice, AIR-Serv
Babcock & Brown
Management
Group
8/11 ARINC
Rockwell Collins Inc
The Carlyle Group
Intermediate Capital
5/3 Allflex Holdings BC Partners Holdings
Group, Electra Partners
Chemlogics
10/7
Solvay
One Equity Partners
Group
6/24 PRA International KKR
Genstar Capital
650 Madison
Highgate Holdings,
6/1
The Carlyle Group
Avenue
Crown Acquisitions
Private Investor, Oak4/29 R&R Ice Cream PAI Partners
tree Capital
CCMP Capital Advisors
8/19 Edwards Group Atlas Copco
LLC, Unitas
Mitchell
Norwest Equity Partners,
9/5
KKR
International
Aurora Capital Group
2/5 NuCO2
Praxair
Aurora Capital Group
Carmel Capital
Royal Bank of Scotland Terra Firma Capital
8/2
II Sarl
Pension Fund
Partners
30 shopping
5/15
DDR Corp
Blackstone Group
centers
9/6
4,800.00
4,422.66
4,400.00
4,054.80
3,954.33
2,740.02
2,725.00
2,637.88
2,000.00
1,940.00
1,800.00
1,650.00
1,631.88
1,600.00
1,488.10
1,455.05
1,400.00
1,390.00
1,350.00
1,345.00
1,300.00
1,300.00
1,211.67
1,200.00
1,100.00
1,100.00
1,069.67
1,062.00
Click the table headlineS for further details
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
18. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
18
VIEWS: NORTH AMERICAN BUYOUT/GROWTH
COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER
Return to Normalcy; Falling Purchase Price Multiples; Bitcoin’s Lure
Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have
done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say:
Jeff Drazen, managing partner at Bertram Capital
One thing I’d have done differently: Moved more aggressively to make mobile a more integrated component of
our go-to-market strategy even where it is not obvious.
Worry: We have been overly conservative in our new platform selection and have focused on existing platform
development through acquisitions. This may result in a more concentrated portfolio than we originally planned
for, which could have its own attendant strengths and weaknesses.
Surprise: Valuation inflation beyond our wildest expectations, fueled by aggressive lending practices.
Ned Fleming, founder and managing partner of SunTx Capital Partners
Story: The strength of the high-yield market has turned it into a tremendous resource for smaller companies that
are looking to reinvest capital, without sacrificing financial and operational flexibility. To illustrate this point, one of
our portfolio companies, Carolina Beverage Group, a supplier of numerous domestic and international beverage brands, recently closed on a $130 million bond offering that was quite in demand. It created liquidity for LPs
coupled with growth capital.
One thing I’d have done differently: Researched and better understood the possibilities of the Bitcoin.
Worry: An increase in unnecessary regulation rooted in ideology, which often does not improve the business
environment, but rather stunts growth particularly for small businesses.
Surprise: There will be increased fundraising. Republicans and Democrats will show they can work together.
The price of oil will go down 25 percent.
Stewart Kohl and Béla Szigethy, co-CEOs, Riverside Company
Story: The beginnings of a return to normalcy in the PE world. The tremendous disruptions of 2008 and 2009
are now firmly in the rear view mirror. Soon sellers won’t even need to show the plummet in sales and earnings
on their five-year performance charts. 2012 was impacted by the tax law changes bringing forward M&A volume
from 2013 as sellers took advantage of the lower rates. As a result, the first half of 2013 was deathly quiet. We
bought almost all of the 17 companies in our class of 2013 in the second half of the year and enter 2014 with a
much stronger pipeline than 12 months ago. Fundraising also began its return to normalcy as LPs everywhere
recognized their need to maintain exposure to PE.
One thing I’d have done differently: Sell even more companies in North America and Northern Europe – we
sold a lot (11) but it is the best time to sell in the 25-year history of Riverside. Our investors – including our own
folks in the GP – simply love the distributions.
Worry: Falling purchase price multiples. We plan to sell another 15 companies next year and should have that
many or more ready to exit in 2015. So my greatest fear is the end of the Great Seller’s Market that began in
2010 – likely due to a contraction in the record setting expansionist monetary policies by central banks leading to
higher interest rates followed by lower purchase price multiples. Of course, as an eager buyer of quality companies this would also be a delight leading to a busier year on the buy side.
Blair Thomas, chairman and chief executive officer of EIG Global Energy Partners
Story: The unraveling of Eike Batista’s energy and resources empire in Brazil, particularly because the Brazilian government stood aside and is letting the market and the court system sort out the situation. Chaos like this
sometimes creates opportunity. We were able to step in and purchase control of LLX, Batista’s energy-focused
“super-port” at what we believe is a very attractive valuation.
One thing I’d have done differently: We should have accelerated our plans to establish a captive MLP to dropdown several mature assets from our existing energy portfolios. The MLP market, like most every yield-oriented
investment product, has been very receptive to new issues in 2013.
Worry: Our industry is cyclical and vintage year returns are usually inversely related to the amount of capital
flowing into new funds. We’re not yet back to 2008 levels overall but the amount of capital being committed to
funds targeting North American upstream and midstream energy specifically is certainly at an all-time high. The
challenge will be sourcing and exercising pricing discipline in a crowded market.
Surprise: In the domestic energy space, natural gas prices will recover more quickly than people expect as the
era of drilling uneconomic wells comes to an end.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
19. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
PE-Backed IPOs {IPO <GO>}
Compiled by Scott johnson and jennifer rossa
Two of Top Three PE-Backed IPOs Are Energy Companies
Price
Date
10/15
Company
Name
Plains GP
Holdings LP
Select Backers
Occidental Petroleum
Corp, Energy & Minerals
Group, Kayne Anderson
$2,912
22
Consumer,
Cyclical
United
States
Blackstone sold no shares at the IPO. It owns 752.5 million shares, valued at
$16.7 billion at the Dec. 31 price of $22.25. It invested around $6.5 billion, giving it a paper profit of more than $10 billion. It's subject to lockups that begin
to expire 6 months after the IPO and fully expire 18 months after.
Energy
United
States
An entity controled by the PE backers sold 3.4 million shares at the IPO for
proceeds of about $150 million.
Consumer,
Cyclical
Britain
Blackstone and CVC were granted an overallotment option of 30.4 million
shares.
Germany
United
States
The PE firm owners sold all 57.1 million shares in the offering, making
$965 million.
Industrial
Belgium
CVC invested around EUR523 million and got back around EUR2.1 billion.
Consumer,
Non-cyclical
United
States
CD&R and others contributed equity of $915 million to the 2011 buyout. The
firm sold no shares at IPO. Its stake was valued at almost $5B billion as of
Dec. 31.
Consumer,
Cyclical
United
States
Shares priced below range. Investors in the buyout paid an average of
$19.99 a share for their stake.
Consumer,
Non-cyclical
United
States
TPG, Bain, 3i Group and Temasek sold 10.6 million of the shares in the IPO
for about $400 million in proceeds. The company previously paid dividends
to its shareholders of at least $920 million.
Consumer,
Cyclical
Italy
PE owners raised about EUR784 million in the IPO. Eurazeo invested EUR305
million to buy some of Carlyle's stake in 2011.
Financial
Sep
15-month lockup.
Consumer,
Non-cyclical
May
United
States
Financial
Jan
Hilton Worldwide
Blackstone Group
Holdings Inc
$2,706
20
Britain
Communications
France
Jan
10%
HLT US Equity
5%
0%
50%
10/9
11/8
1/31
Antero Resources Corp
Yorktown Partners,
Warburg Pincus, Trilantic Capital Partners
Kirkbi A/S, Blackstone
Merlin EntertainGroup, CVC Capital
ments PLC
Partners
LEG Immobilien
AG
Perry Capital, Whitehall
Funds
Jan
44
30%
Jan
10%
0%
$1,700
315
Jan
10%
8%
6%
4%
2%
0%
-2%
Jan
5%
May
Sep
Jan
MERL LN Equity
May
Sep
Jan
0%
$1,527
44
-5%
-10%
5%
Berkshire Partners,
Rhone Capital
Sep
AR US Equity
20%
LEG GR Equity
-15%
6/12 Coty Inc
May
40%
$1,802
Notes
Energy
PAGP US Equity
15%
12/11
Hover mouse over chart for a larger image
IPO
Value
Performance
Shr
Industry Country
($M)
Since IPO
Price
25%
20%
15%
10%
5%
0%
-5%
19
Jan
$1,140
17.5
May
Sep
Jan
COTY US Equity
0%
-5%
-10%
-15%
-20%
15%
Jan
6/19 bpost SA
CVC Capital Partners
$1,120
14.5
May
Sep
Jan
BPOST BB Equity
10%
5%
0%
-5%
-10%
Jan
60%
8/13
Envision Healthcare Holdings
May
Sep
Jan
40%
Clayton Dubilier & Rice
$1,111
23
EVHC US Equity
20%
0%
40%
6/26
HD Supply
Holdings Inc
Carlyle Group, Bain
Capital Partners, Clayton Dubilier & Rice
$1,101
18
Quintiles Transnational Holdin
TPG Capital, Bain Capital Partners, 3i Group,
Aisling Capital LLC
Eurazeo, Ruffini Partecipazioni, Carlyle Group
Sep
Jan
10%
0%
Jan
$1,089
40
May
Sep
Jan
Q US Equity
20%
15%
10%
5%
0%
60%
12/11 Moncler SpA
May
HDS US Equity
20%
25%
5/8
Jan
30%
Jan
May
Sep
Jan
40%
$1,064
10.2
MONC IM Equity
20%
0%
Jan
10%
3/22 esure Group PLC
Tosca Penta Investments LP
$1,052
290
Carlyle Group, Altice
Finco, Cinven
Jan
-20%
-30%
30%
Numericable
Group
Sep
-10%
ESUR LN Equity
-40%
11/8
May
0%
Jan
May
Sep
Jan
20%
$1,012
24.8
NUM FP Equity
10%
Cinven said in November its third fund generated gains of EUR1.4 billion or 4
times capital from Numericable, including its remaining shares.
0%
Jan
May
Sep
Jan
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
20. 01.21.14 www.bloombergbriefs.com
20
Bloomberg Brief | Private Equity 2013 Global Review
VC By State Compiled by Jennifer Rossa and Shikha Verma
New York’s Up-and-Coming Venture Scene Is Big 2013 Story
Tumblr’s sale to Yahoo! generated a windfall for East Coast investors Union Square Ventures and Spark Capital and boosted the New
York City venture scene. New York and California are the two states where VC funding took the biggest jump in 2013, as the map shows.
New York’s increased by about $850 million, or 47 percent, while California’s rose by more than $1 billion, or 8 percent.
HAVE OUR DATA
MAKE YOUR POINT
ECWB
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WORKBENCH
21. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
VC-Backed IPOs {IPO <GO>}
Compiled by Scott johnson and jennifer rossa
Twitter Tops List of Biggest VC-Backed IPOs of 2013
Price
Date
Company
Name
Select Backers
21
Hover mouse over chart for a larger image
IPO
Value
Performance
Shr
Industry Country
($M)
Since IPO
Price
Notes
200%
11/6 Twitter Inc
9/19 FireEye Inc
Rizvi Traverse Management LLC, JPMorgan Chase
& Co, Spark Capital, Benchmark Capital, DST Global
Solutions Ltd, Union Square Ventures
Sequoia Capital Operations LLC, Norwest Venture
Partners, DAG Ventures LLC, Jafco Co Ltd, SVB
Capital Partners
150%
$2,093
26
20
300%
250%
200%
150%
100%
50%
0%
Veeva Systems
Inc
Emergence Capital Partners
United
States
Twitter's IPO gave several of its backers paper
profits of more than $1 billion.
Communications
United
States
Pre-IPO backers invested $125.5 million at an
average price of $1.23 a share. Sequoia and
Norwest's stakes were both valued at more than
$900 million at the Dec. 31 share price.
Technology
United
States
At IPO, Emergence Capital's $4 million investment was valued at $1.2 billion.
Technology
United
States
NEA invested $29.2 million and has so far sold
shares worth about $480 million.
Communications
United
States
Maveron sold about $54 million of shares at IPO
and holds a stake valued at more than $1 billion
at Dec. 31.
Communications
France
Fred Destin of Atlas Venture tweeted that the
IPO looks like a "fund returner" for Elaia.
Communications
United
States
Shareholders including Austin Ventures and
Norwest sold $106 million of shares in December
and $88 million at IPO. The company raised $313
million at an average of $6.86 a share pre-IPO.
Communications
China
DCM held 16.4% voting power at IPO and was
planning to buy more shares.
Technology
United
States
Accel and Sequoia each own stakes valued at
more than $500 million as of Dec. 31. Investors
put in $108.9 million pre-IPO at an average of
$1.75 a share.
Consumer,
Non-cyclical
United
States
SV Life's 6 million shares were worth about $194
million at year-end.
Consumer,
Cyclical
China
Communications
United
States
Communications
50%
India
0%
$349
150%
10/15
Communications
TWTR US Equity
100%
$300
20
Jan
May
Sep
Jan
FEYE US Equity
Jan
May
Sep
Jan
100%
VEEV US Equity
50%
0%
Jan
150%
5/16
Tableau Software New Enterprise Associates Inc,Meritech Capital
Inc
Partners
$292
31
May
Sep
Jan
DATA US Equity
100%
50%
0%
11/14 zulily Inc
10/30 Criteo SA
7/18 RetailMeNot Inc
August Capital,Maveron LLC, Andreessen Horowitz
Index Ventures, Idinvest Partners, Elaia Partners,
Bessemer Venture Partners, Softbank Capital
Austin Ventures LLC, Norwest Venture Partners,
Institutional Venture Partners, King Holdings Pty Ltd
ACN, Adams Street Partners LLC, Google Ventures,
JPMorgan Chase & Co
$291
$288
22
120%
100%
80%
60%
40%
20%
0%
31
25%
20%
15%
10%
5%
0%
-5%
100%
21
SAIF Partners Ltd, DCM
Sep
Jan
May
Sep
Jan
CRTO US Equity
Jan
May
Sep
Jan
SALE US Equity
80%
$220
May
ZU US Equity
Jan
60%
40%
20%
0%
150%
10/30 58.com Inc
Jan
$215
17
Jan
May
Sep
Jan
100%
WUBA US Equity
50%
0%
150%
12/12
Nimble Storage
Inc
Accel Partners,Sequoia Capital Operations LLC,
LightSpeed Venture Partners
$193
21
Jan
May
Sep
Jan
100%
NMBL US Equity
50%
0%
60%
Jan
May
Sep
Jan
40%
9/24 Ophthotech Corp SV Life Sciences Advisers Inc
$192
22
OPHT US Equity
20%
0%
Jan
150%
11/1
Qunar Cayman
Islands Ltd
May
Sep
Jan
100%
GSR Ventures, Baidu, GGV Capital
$192
15
QUNR US Equity
50%
0%
0%
11/12 Chegg Inc
Insight Venture Partners LP,Gabriel Ventures LLC,
KPCB
Jan
May
Sep
Jan
-10%
$188
12.5
-20%
CHGG US Equity
-30%
-40%
-50%
250%
Jan
May
Sep
Jan
200%
5/27 Just Dial Ltd
Sequoia Capital India Investments III, Tiger Global
$167
530
150%
JUST IN Equity
100%
50%
Chegg's shares have dived since the IPO. IVP,
the biggest VC backer, holds shares valued at
$73.8 million as of Dec. 31. The company has
raised $195 million in VC.
0%
Jan
May
Sep
Jan
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
22. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
22
Biggest Venture Rounds Compiled by Jennifer Rossa and Shikha Verma
A Year of Big Rounds and Bigger Valuations in 2013
Start-ups raised $39.8 billion globally in 2013, up from $35 billion in 2012, according to data compiled by Bloomberg. There were 42
rounds of $100 million or more, up from 28 in 2012.
Half of the 10 Biggest VC Rounds Are for Non-U.S. Companies
Annc*
1/17
7/7
2/16
8/23
11/22
12/9
10/23
10/11
7/10
2/24
2/20
9/29
12/24
6/8
8/2
6/19
10/9
8/1
10/14
10/4
8/29
5/2
1/15
5/12
4/18
6/11
6/25
12/13
5/2
12/4
2/1
12/6
12/4
11/20
2/20
10/28
1/16
12/12
9/30
9/4
6/20
5/22
Target Name
Investors
SurveyMonkey.com LLC
Mobileye NV
360buy Jingdong Inc
Uber Technologies Inc
Spotify Ltd
Lazada
Value ($M)
Google, Laurel Crown Capital, Social+Capital Partnership, Tiger Global Management, ICONIQ Capital
Blackrock, Fidelity Management, Wellington Management, Sailing Capital, Enterprise Rent-a-Car
Ontario Teachers' Pension Plan Board, Kingdom Holding Co
TPG Capital, Benchmark Capital, Google Ventures
Technology Crossover Ventures
Tesco PLC, Access Industries, Investment AB Kinnevik, Verlinvest
Fidelity National Financial, Valiant Capital Management, Deer Management, Andreessen Horowitz,
Pinterest Inc
FirstMark Capital
ShopRunner Inc
American Express, Alibaba Group, Kynetic
Flipkart Online Services Pvt Ltd Naspers, Tiger Global Management, Accel Partners, ICONIQ Capital
Airwatch LLC
Insight Venture Partners
Pinterest Inc
Valiant Capital Management, Deer Management, Andreessen Horowitz, FirstMark Capital
Palantir Technologies Inc
Founders Fund Management
Palantir Technologies Inc
NA
Fanatics Inc
Temasek Holdings, Alibaba Group
ConforMIS Inc
NA
Tencent Holdings, DoCoMo Capital, Itochu Technology Ventures, Andreessen Horowitz, Menlo
Fab.com Inc
Ventures, RTP Ventures, Pinnacle Ventures LLC, Atomico
Sofina, Morgan Stanley Investment Management, Vulcan Capital, Tiger Global Management,
Flipkart Online Services Pvt L
Dragoneer Investment Group
Hootsuite Media Inc
OMERS Ventures, Accel Partners, Insight Venture Partners
Xero Ltd
Matrix Capital Management, Valar Ventures Management
T Rowe Price, Red Hat, NEA, Salesforce.com, Intel Capital, Sequoia Capital, Altimeter Capital
MongoDB Inc
Management
T Rowe Price, Fidelity Investments, Samsung Ventures America, Greylock Partners, Tiger Global
Pure Storage Inc
Management, Index Ventures, Redpoint Ventures, Sutter Hill Ventures
Intrexon Corp
Third Security LLC
SevOne Inc
Bain Capital Venture Partners
Bloom Energy Corp
Credit Suisse Group AG, E.ON SE
Supercell Oy
Index Ventures, Institutional Venture Partners, Atomico
Lamoda/Russia
Access Industries, Tengelmann Ventures, Summit Partners
BP, ConocoPhillips, PVS Chemicals, Berg & Berg Enterprises, Cenovus Energy, Toyo-Thai, Zachry
Skyonic Corp
Corp, Energy Technology Ventures, Northwater Capital Management
Freedom Financial Network LLC Vulcan Capital
LendingClub Corp
Google, Foundation Capital
Juno Therapeutics Inc
Arch Venture Partners, Alaska Permanent Fund
Truphone Ltd
Roman Abramovich
Macnica, Mail.ru Group, Mitsui & Co Global Investment, Itochu Technology Ventures,
Box Inc
Telefonica Ventures
Zalora
Access Industries LLC, Scopia Capital Management LLC
Moderna Therapeutics Inc
Flagship Ventures
LivingSocial Inc
NA
eRecycling Group Inc
Silver Lake Management LLC, Kleiner Perkins Caufield & Byers
Lynda.Com Inc
Spectrum Equity Investors, Accel Partners
OMERS Administration, Deer Management, Insight Venture Partners, Georgian Partners, Felicis
Shopify Inc
Ventures, FirstMark Capital
Evolent Health Inc
UPMC Health Plan Inc, The Advisory Board Co, TPG Capital
CommonBond Inc
Tribeca Venture Partners, Social+Capital Partnership
Investment AB Kinnevik, Tengelmann Warenhandelsgesellschaft KG, Holtzbrinck Ventures GmbH,
Lazada
Verlinvest SA, Summit Partners LP
Zalora
Investment AB Kinnevik, Tengelmann Warenhandelsgesellschaft KG, Verlinvest SA, Summit Partners LP
Source: Bloomberg, NVCA
* Date announced
Post-Money
Valuation ($M)
444.00
400.00
399.97
361.20
250.00
250.00
1,350
1,500
225.00
3,800
206.00
200.00
200.00
200.00
196.50
177.51
170.00
167.70
600
2,500
6,000
165.00
1,000
3,500
4,000
3,100
160.00
159.50
150.57
150.00
1,200
150.00
150.00
150.00
130.00
130.00
130.00
770
128.00
125.00
125.00
120.00
117.97
1,550
112.00
2,000
112.00
110.00
110.00
105.00
103.00
1,500
100.00
1,000
100.00
100.00
200
100.00
100.00
Click the interactive button for further details
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
23. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
23
VIEWS: NORTH AMERICAN Venture
COMPILED BY SUSANNAH BIRKWOOD, ARI LEVY, JENNIFER ROSSA AND SABRINA WILLMER
The Bitcoin Economy; Cloud Computing’s Rise; U.S. Cleantech Wake-up Call
Bloomberg Brief: Private Equity asked a number of fund managers and investors what the story of 2013 was, one thing they would have
done differently, and their biggest worry and surprise prediction for 2014. Here’s what they had to say:
Mike Volpi, partner at Index Ventures
Story: The return of the enterprise. In 2013 the enterprise technology sector found its stride again with next-generation companies like Workday, ServiceNow, FireEye, Splunk and many others being welcomed into the public
markets.
One thing I’d have done differently: We’ve all been buying some Bitcoin personally for a couple years, but
missed an opportunity as a firm in the Bitcoin economy We’re very excited about the prospects for Bitcoin —
especially outside the U.S. — and we hope to invest in this economy in 2014.
Worry: Silicon Valley has experienced a lot of success in the last couple years and deservedly so. However,
there is a growing concern around the onset of hubris in our culture — both toward the rest of the world and
even amongst ourselves. There is a fine line between confidence and overconfidence.
Surprise: Bill Gates will return to the helm of Microsoft.
Byron Deeter, partner at Bessemer Venture Partners
Story: Despite the high profile IPO of Twitter and the rebound of Facebook’s stock price, the real story of the
year was the coming of age of the cloud computing sector. Boring is the new sexy! Ten new pure play cloud
computing companies went public this year and 21 total since the start of 2012, bringing the total to 38 publicly
traded pure play cloud computing companies.
One thing I’d have done differently: I certainly wish I had conviction earlier on Veeva Systems, we pushed
harder to get into Twitter, I’d anticipated the decline of the rupee and the explosive appreciation of Bitcoin.
Worry: From a short term investment perspective, I worry most that the technology markets may pull back or get
hit by exogenous factors. We also continue to witness high amounts of domestic and international volatility, which
at some point could adversely impact even the very best businesses.
Surprise: It’s quite possible that LinkedIn may pass Salesforce.com in 2014 to become the world’s most valuable
cloud computing company. Most people think of LinkedIn for its powerful consumer internet brand, but at the
core of the LinkedIn business model is one of the most powerful SaaS businesses in the industry.
Andrew Chung, Partner, Khosla Ventures
One thing I’d have done differently: If I had more bandwidth outside of assisting existing portfolio companies,
I would have placed even more bets in the sustainability and “future tech” areas than we did. On the cleantech
side, I see the quieting of the field as an opportunity to cherry-pick technologies outside our portfolio and take
significant stakes at attractive valuations across stages. On the “future tech” side, we continue to look at dislocations that can topple industries or create new ones, in particular, around how advances in computing, big data,
sensors, and robotics can impact/transform commerce, education, health care and agriculture.
Worry: With cleantech under pressure, my two top worries are that fewer entrepreneurs are innovating and that
U.S. investment in the sector is not sufficient to commercialize the technology on the home front. Entrepreneurs
and investors from other countries — particularly China — are willing to take a progressive, long-term view of
cultivating these technologies, and the U.S. risks falling behind.
Surprise: Two surprises: Chinese companies make some big announcements to help fund early commercialization of clean technologies for their country’s survival; U.S. financial investors and policy-makers reawaken to the
need to support and protect clean technologies domestically. For China, it’s no secret that the demand for cleantech is survival-driven. China recently surpassed the U.S. as the leader in deployment of renewables, and the
country is pledging some $80 billion a year of investment into the sector. Companies outside of our portfolio have
seen the other edge of the sword, as many Chinese companies have also eyed distressed cleantech companies
and bought up their IP and assets. If U.S. investors and policy-makers don’t surprise us in 2014 with a move, then
we risk more valuable cleantech IP leaving the U.S.
Mike Maples Jr., managing partner of Floodgate
Story: Twitter IPO
One thing I’d have done differently: Invested in airbnb when I had the chance in 2008.
Worry: Missing out on the next Thunderlizard.
Surprise: A mobile-first app in a whole new category takes off as fast as Uber and Lyft.
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24. 01.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity 2013 Global Review
NEWS TRENDS {NT <GO>}
24
Jennifer Rossa, Bloomberg Brief
Leon Black is Most Mentioned Private Equity Executive of 2013
Apollo Global Management’s Leon
Black edged out other big private equity
firm head honchos for the most mentions on the Bloomberg terminal NT
<GO> search this year, at 329 to 325 for
runner-up Henry Kravis of KKR & Co.
Black’s quote about the exit environment
(see page 2) got lots of play, as did his
interest in fine art and his firm’s bidding
for Hostess early in the year. Blackstone
Group’s Stephen Schwarzman came in
last among the four, with 239 mentions.
Carlyle Group’s David Rubenstein made
a strong push at the end of the year, with
his name appearing in stories about the
Kennedy Center, which he chairs, and
about an exhibit of the Magna Carta. He
bought one of the four surviving copies
and loaned it to the National Archives.
Buyout Kingpin Mentions in Stories Appearing on the Bloomberg
60
"Leon Black" Story Count
"David Rubenstein" Story Count
"Stephen Schwarzman" Story Count
"Henry Kravis" Story Count
50
40
30
20
10
0
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2/1
Source: Bloomberg
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