1. DIGEST 81
SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 81
1 TPG Capital in Billion Dollar Exit
1 Preqin’s Highs and Lows for 2012
2 What’s Hot Among Ultra-wealthy
Investors
3 Private Equity’s Challenges for 2013
• Altius Associates
Ten Largest PE Deals of the Year
3 2012
• Privco Research
4 Quote of the Week:
The Attraction of US Buyouts
February 01, 2013

2. TPG CAPITAL IN BILLION DOLLAR EXIT
This week’s deal of the week is actually an exit for TPG Capital, which is reportedly selling Copano
Energy to Kinder Morgan Energy Partners for USD 3.22 billion. According to reports online, TPG will
achieve a 41 percent premium on its USD 300 million investments made in the gas and oil infrastructure
company that operates in Texas and Oklahoma, if the deal goes through.
PREQIN’S HIGHS AND LOWS FOR 2012
Image source: Preqin
January is the month to get the dealmaking and investment highlights of the previous year from the
leading industry research teams. This week Preqin does not disappoint.
The Highs
• Preqin’s latest data shows that PE funds that closed in the final quarter of the year raised a similar
amount to those closed in the previous quarter and it expects Q4 totals to increase by around 10-
20% over Q3 as further information becomes available.
• A record 1,949 funds are currently on the road seeking an aggregate USD 797.1 billion (see graphic)
• North American deal flow reached a post-Lehman high in 2012, with 2,866 buyout deals announced
valued at USD 254.6 billion.
• Quarterly infrastructure fundraising hits four-year high in Q4 2012 with a “significant” USD 11.9
billion raised by the eight unlisted infrastructure funds
• PE real estate fundraising reaches highest quarterly total since Q3 2008 with twenty-eight closed-
end real estate funds raising an aggregate of USD 22.6 billion, more than double the USD 10.7 billion
raised in Q3 2012.
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3. The Lows
• VC deals activity continued to slide in Q4 2012 with a 6% drop in the number and 5% decline in the
value of deals in comparison to Q3 2012, and a 13% and 23% decline in number and value from Q2
2012. Between 2011 and 2012 the aggregate value of deals announced dropped by 22%.
WHAT’S HOT AMONG ULTRA-WEALTHY
INVESTORS
According to the latest quarterly report Tiger 21, a club of wealthy investors, its members are shifting
portfolio assets more towards public and private equity than in previous quarters.
Key Findings
• Private equity allocation rose six
percentage points from the fourth quarter
of 2011 to 19%, and was up 10 points
from a low of 9% in fourth quarter 2010.
• Public equity allocation was up three
percentage points to 24% from fourth
quarter 2011.
• Fixed income allocation eked out a one-
point increase to 14% in the fourth
quarter, remaining basically flat after
having fallen seven percentage points in
the second quarter of 2012.
• Real estate allocation fell by three points
from fourth quarter 2011 to 21%.
• Hedge fund allocation was at 7%, down
two points from fourth quarter 2011.The
research is from TIGER 21 whose members
collectively manage approximately USD 19
billion in investable assets. Members are
entrepreneurs, CEOs, inventors and top
executives with backgrounds in financial
services, real estate, industrial and
consumer goods, legal services,
entertainment and medicine.
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4. PRIVATE EQUITY’S CHALLENGES FOR
2013
Altius Associates published the ten challenges currently facing the PE industry last week (via Zephyr’s
mandaportal). We selected five out of ten.
The rest you can find in the report here.
1. European buyout funds must find a profitable way to exit the boom year deals.
2. US buyout funds facing high valuations. Rising purchase price multiples for high quality companies,
which over the last year have hovered at around 9.0x earnings before interest, taxes, depreciation
and amortization (EBITDA) and sometimes more will be a challenge.
3. Secondary market players get more competitive - attractive opportunities are a challenge to find in
an increasingly transparent and crowded market.
4. Investor Relations has to rise to challenge of more demanding LPs - more information and greater
transparency. GPs are now meeting face to face with significant LPS on a quarterly basis, with full
portfolio reviews, including all major changes, cash flow statements and details of drawdowns,
distributions and any valuation changes. Many GPS many have doubled their staffing in the last five
years.
5. The China challenge for PE investors is threefold - not all RMB private equity firms have
experienced and professional teams, there is a risk that funds are raised by government bodies for
political motives and competition is increasing as a result of large scale RMB fundraising.
TEN LARGEST PE DEALS OF THE YEAR
2012
We found a good analysis of the top deals of the year on PrivCo this week, making it clear that 2012 was
a much better year for dealmaking than the ones that went before. Secondary sales kept activity levels
up and in the US market there was a return to the use of high debt levels in leveraged buyouts. More
analysis, as well as lists of top advisors and other private equity highlights of the year are in the link
above. PrivCo publishes exclusive financial data on over 164,000 private companies, as well as over
45,000 private company deal details.
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5. PrivCo’s Top 10 Largest Private-Equity Deals for 2012 (USD billion)
EP ENERGY CORP (Headquarters: Houston, TX) Acquired By P.E. Buyers: 7.2
Apollo, Riverstone, Access Industries, Korea National Oil Corporation
CEQUEL COMMUNICATIONS (St. Louis, MO) Acquired By BC Partners, 6.6
Canada Pension Plan Investment Board
DUPONT PERFORMANCE COATINGS (Wilmington, DE) Acquired By 4.9
Carlyle
FOCUS MEDIA (Shanghai, China) Acquired By Carlyle, Fountainvest, 3.7
China Everbright, CITIC Capital, Jason Nanchun Jiang
HAMILTON SUNDSTRAND INDUSTRIAL (Windsor Locks, CT) Acquired By 3.5
Carlyle, BC Partners
GETTY IMAGES (Seattle, WA) Acquired By Carlyle, Getty Images 3.3
management, the Getty Family
TRANSUNION (Chicago, IL) Acquired By Goldman Sachs Capital Partners, 3.2
Advent
PARTY CITY (Elmsford, NY) Acquired By Thomas H. Lee Partners 2.7
MCGRAW-HILL EDUCATION (New York, NY) Acquired By Apollo 2.5
USI INSURANCE (Briarcliff Manor, NY) Acquired By Onex Corporation 2.3
QUOTE OF THE WEEK:
THE ATTRACTION OF US BUYOUTS
"More and more, North America is the pretty girl at the
dance instead of the ugly stepsister... North America is
really where the growth is. It's going to be a very
exciting market in 2013.”
Who said it: Cliff Roesler, a partner in Birmingham-based Angle Advisors-Investment Banking LLC
In Context: M&A dealmaking is expected to climb in the US this year for a number of reasons, unique
to that region of the world. The article makes it clear that PE will play a big role in the M&A figures for
the year. In the above quote Roesler was talking about not only about general M&A but also some real
opportunities he sees in the automobile sector.
Where we found it: Crains Detroit
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6. The Dealmarket Digest empowers members of Dealmarket by providing
up-to-date and high-quality content. Each week our in-house editor sifts
through scores of industry and academic sources to find the most
noteworthy news items, scoping trends and currents events in the global
private equity sector. The links to the sources are provided, as well as an
editorialized abstract that discusses the significance of the articles
selected. It is a free service that embodies the values of the Dealmarket
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Editor: Valerie Thompson, Zurich
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