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2009 European Performance Figures

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Title: 2009 European Performance Figures


1
2009 European Performance Figures
  • June 2010

2
Methodology for Performance Benchmarks
  • All calculations are done at the fund level by
    Thomson Reuters based on cash flows and NAVs
    reported by participating GPs
  • Returns are net of management fees and carried
    interest
  • Returns are calculated with cash flows in Euros
    for European figures
  • Cash flow database contains since its inception
    1,375 European independent funds, representing
    313bn of committed capital
  • Definitions
  • Pooled IRR IRR of a group of funds where their
    cash flows have been aggregated together before
    IRR calculation
  • Investment Horizon Return IRR calculated with
    Net Asset Value at beginning of period as capital
    outflow, Net Asset Value at end of period, and
    actual cash flows in between

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