PitchBook PE Breakdown 2010

PitchBook
Annual Private Equity

Breakdown 2010
Private Equity: Data | News | Analysis
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Table Of Contents
Private Equity Deal Flow Overview ........................................ 3
Deal Details ............................................................................ 4
Deal Flow By Industry ............................................................ 5
Deal Flow By Industry (Cont’d)............................................... 6
Deal-Related League Tables ................................................... 7
Private Equity Exits Overview ................................................ 8
Private Equity Exits Details .................................................... 9
Private Equity Fundraising Overview ..................................... 10
Fundraising League Tables ..................................................... 11
Private Equity Fund Returns Overview .................................. 12
About PitchBook..................................................................... 13
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Private Equity Deal Flow

U.S. private equity deal flow for 2009 was down 50% from 2008 and 65% from 2007 to 979 completed deals, a level not seen since 2003. A
closer look at deal activity for the year shows it was dominated by lower and middle-market deals, which accounted for over 90% of the
deal flow. Total invested capital declined from $205 billion in 2008 to $43 billion in 2009. 75% of the $162 billion difference is due to the
drop in deals over $1 billion, a direct result of the credit crisis. However, these larger investments did begin to recover somewhat in the
second half of 2009 with four completed investments over $1 billion versus just one in the first half of the year. PE investment seemed to
turn a corner in the fourth quarter with deal flow increasing for the first time in a year and total capital invested jumping to its highest
quarter total of the year at $15.3 billion. It was also a slow year for exits with only 224 liquidity events, the least since 2002. Leading the
decline were exits through sales to strategic acquirers, which were 54% less than in 2008 and 65% less than in 2007. One bright spot in
the exit market was the return of IPOs, with 25 completed PE-backed offerings during the year.
U.S. Private Equity Deal Flow - Yr The first three quarters of 2009 were extremely difficult for private
equity on all fronts. Investors spent more time with their portfolios,
bankers, and advisors focusing on how to survive rather than thrive.
However, in the fourth quarter, debt markets began to thaw and
deal and exit flow increased.
The coming year will continue to provide plenty of challenges for

private equity investors, but if the economy continues to stabilize
and debt becomes more available, 2010 should prove to be a more
fruitful year than 2009.
Source: PitchBook
U.S. Private Equity Deal Flow - Qtr
Source: PitchBook
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Median Deal Amount by Year Deal Activity by Geogr aphy
Source: PitchBook
Source: PitchBook
The median deal amount dropped slightly in 4Q to $45 million Despite an overall drop in deal flow by 50%, the geography of
but was still significantly better than the $20 million in 1Q and U.S. private equity investment changed very little from 2008.
2Q. In the second half of 2009, the median deal amount rose The largest change for any region was the Southeast, which
to $50 million—a level comparable to pre-crash medians— increased its share by 3 percentage points. The state with the
signaling that middle market valuations are stabilizing and the most PE-related investments was California with 126 deals,
deal landscape is regaining some semblance of normalcy. followed by Texas with 97 and New York with 83.
Percent of PE Tr ansactions Percent of PE Investment

(Count) by Deal Size (Total $ Amount) by Deal Size
Source: PitchBook Source: PitchBook
Private equity deals in the lower and middle-market (under Larger deals ($1 billion and above) continued their retreat
$250 million) continued their upward trend, accounting for from the high-water mark of 2007 when they accounted for
86% of the deal flow in 2009. The chart above shows that 78% of total capital invested. The breakdown of investment by
private equity does not consist solely of mega-deals, but is in deal size shows that 2009 was closer to 2004, with a more
fact dominated by much smaller deals in the middle-market. even distribution and a much bigger middle-market presence.
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Business Products & Services (B2B)

The Business Products and Services (B2B) industry, which
includes Commercial Products, Commercial Services, and
Transportation sub-sectors, saw 80 completed U.S. deals
in 4Q and 158 in the 2H09. For 4Q 2009, the total deal
count came in just above the 2009 B2B average of 78
deals per quarter. Year-over-year, the 312 B2B deals in
2009 as compared to the 686 in 2008 represents a 55%
decline in deal activity. The fact that the amount of deals
per quarter was tightly clustered around the average is a
testament to private equity’s relatively stable investment
in the industry during 2009.
Source: PitchBook
Consumer Products & Services (B2C)

The Consumer Products and Services (B2C) industry,
which includes Apparel, Consumer Durables and Non-
Durables, Media, Restaurants, Hotels, Leisure, Retail,
Transportation, and Non-Financial Services sub-sectors,
saw U.S. deal count fall to 46 deals from 48 over the last
quarter of 2009, representing a 4% quarterly decline. For
4Q 2009, the total deal count came in at well below the
2009 B2C average of 58 deals per quarter. Throughout
the year, there was a steady and significant decline in the
number of B2C deals per quarter as private equity
investors turned to industries less impacted by the
meltdown.
Source: PitchBook
Information Technology
The Information Technology (IT) industry, which includes
Communication and Networking, IT Hardware, Semicon-
ductors, IT Services, and Software sub-sectors, saw an
average of 34.25 deals per quarter. IT represented 14% of
total PE deal flow, the highest ever for the industry.
Comparing this year to last year, the 137 IT deals in 2009
versus the 183 in 2008 represented a 25% decline in
activity, half the decrease of PE investment overall. The
top investors in the industry for 2009 were Marlin Equity
Partners, The Carlyle Group, Thoma Bravo and Warburg
Pincus with four deals apiece.
Source: PitchBook
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Healthcare
The Healthcare industry, which includes Devices and
Supplies, Technology Systems, Pharmaceuticals and
Biotechnology, and Services sub-sectors, saw U.S. deal
count fall to 31 from 35 over the last quarter of 2009,
representing an 11% quarterly decline. For 4Q 2009, the
total deal count came in at just under the 2009 Health-
care average of 31.25 per quarter. When comparing this
year to last year, the 125 Healthcare deals in 2009 as
compared to the 233 in 2008 represents a 46% decline in
year-over-year activity. The median deal amount for the
industry fell significantly in 2009 to $18.5 million, a 60%
decline from 2008 and a 71% drop from 2007.
Source: PitchBook
Energy
The Energy industry, which includes Equipment, Explora-
tion, Production and Refining, Services, and Utilities
sub-sectors, saw U.S. deal count rise in 2H09 to 39 from
30 in 1H09, representing a 30% increase. On an annual
basis, deal flow plummeted in 2009 by 61% to 69 from
176 in 2008. The most active energy sub-sector in 2009
was Exploration, Production & Refining with 31 deals.
Investment in Energy was clearly affected by the fall in
energy prices, but as they continue to stabilize, look for
PE’s interest in this industry to rebound.
Source: PitchBook
Financial Services
The Financial Services industry, which includes Capital
Markets Institutions, Commercial Banks, and Insurance
sub-sectors, saw U.S. deal count skyrocket to 19 from 8
over the last quarter of 2009, representing a 137.5%
quarterly increase. However, for 4Q 2009, the total deal
count came in at just above the 2009 B2B average of 17
deals per quarter, a number which was brought down by
an unusually slow third quarter. Year-over-year, the 68
Financial Services deals in 2009 as compared to the 137
in 2008 represents a 50% drop in activity.
Source: PitchBook
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Most Active Private Equity Most Active Private Equity

Investors in 2009 Service Providers in 2009
By Number of Investments By Number of Deals Serviced
Investor Name Deal Count Top Law Firms in Private Equity1

Parthenon Capital Partners 14
Jones Day
The Riverside Company 11
The Carlyle Group 10 Kirkland & Ellis
Oaktree Capital Management 10 Latham & Watkins
Platinum Equity 10 Shearman & Sterling
Kohlberg Kravis Roberts 9 Sullivan & Cromwell
Sun Capital Partners 9 Skadden, Arps, Slate, Meagher & Flom
Warburg Pincus 9 Simpson Thacher & Bartlett
The Blackstone Group 8 Blank Rome
GTCR Golder Rauner 8 Wachtell Lipton Rosen & Katz
Veronis Suhler Stevenson 8
Paul Weiss Rifkind Wharton & Garrison
Apollo Investment Management 7
Bain Capital 7 1 by counsel provided on transactions
Golden Gate Capital 7

H.I.G. Capital 7 Top Investment Banks & Advisors2
Marlin Equity Partners 7 Houlihan Lokey Howard & Zukin
Millennium Technology Ventures 7 Goldman Sachs
Sterling Partners 7
JP Morgan
Summit Partners 7
Alvarez & Marsal
Thoma Bravo 7
Lazard Middle Market
Welsh, Carson, Anderson & Stowe 7
Moelis & Company
American Securities Capital Partners 6
Harris Williams & Co.
Angelo Gordon & Company 6
Morgan Stanley
Falconhead Capital 6
Citigroup
Hellman & Friedman 6
William Blair & Company
Huntington Capital 6
Jefferies & Company
J.F. Lehman & Company 6
Bank of America Merrill Lynch
Milestone Partners 6
Providence Equity Partners 6 2 by number of advisory roles in transactions
Wayzata Investment Partners 6

Advent International 5 Top Lenders in Private Equity3
American Capital 5 Bank of America
Banc of America Capital Investors 5 Wells Fargo
Cerberus Capital Management 5 GE Capital
Clearview Capital 5 PNC Financial Services Group
General Atlantic 5 CIT Group
Graham Partners 5 Golub Capital
Hart Capital 5 Babson Capital Partners
KPS Capital Partners 5 Fifth Third Bank
Navigation Capital Partners 5 U.S. Bancorp
Pegasus Capital Advisors 5 Wells Fargo Foothill
Perseus 5 TriState Capital Bank
Pfingsten Partners 5 Wachovia Bank
RoundTable Healthcare Partners 5 Madison Capital Funding
Stonington Partners 5
3 by number of financings provided
TPG Capital 5 Source: PitchBook
Source: PitchBook
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Private Equity Exits - 2009

Exits were few and far between for U.S. private equity investors in 2009, totaling only 161, which represents a 50% drop from 2008
and a 67% decline from 2007. This decline was attributable to a number of credit crisis and recession-related factors, including
declines in valuations tied to the public markets, an all but shut IPO market, poor portfolio company performance, a lack of
available leverage for all investors, and a limited availability of capital for corporate acquirers. As these effects began to ease in
2H09, exit activity increased by 33% over 1H09, led by 19 IPOs in 4Q. PE firms are also currently feeling a great deal of pressure
from their limited partners to provide distributions to help ease liquidity issues and to fund capital calls. Still many investors opted
instead to focus on improving portfolio company balance sheets and performance in preparation for better exit opportunities in
2010 and 2011.
The biggest impact on 2009 exit activity was the 54% fall in sales
U.S. Private Equity Exits (Count) by Type - Yr
to strategic acquirers (corporate acquisitions) from 2008, which
accounted for almost 75% of the drop in 2009 exit activity. This
was a result of the fact that many strategic acquires did not have
the spare capital or ability to raise debt for acquisitions that they
had in previous years.
The return of the IPO market was one of the most notable
stories in private equity during 2009. A total of 25 companies
were taken public by PE firms during the year, raising $6.7
billion. A number of these IPOs did not represent full exits but
were used as a means of raising capital to pay down debt and
providing investors with partial returns. With 49 U.S. PE-backed
companies currently in IPO registration, 2010 will likely see more
and bigger IPOs.
Source: PitchBook
U.S. Private Equity Exits (Count) by Type - Qtr
Source: PitchBook
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Private Equity Exits by Type Private Equity Exits by Industry
Source: PitchBook
Source: PitchBook
The big story for private equity exits in 2009 was the return of Not too surprisingly, the two biggest industries for private
the IPO market. There were 25 completed PE-backed IPOs in equity investment were also the top two industries for exits in
2009; five times more than in 2008. Secondary transaction 2009. There were 51 exits of B2B companies totaling $3.7
activity (where a PE firm sells its investment directly to billion and 44 exits of B2C companies totaling $4.9 billion. The
another PE firm) was significantly slower in 2009, with only 35 Information Technology industry came in third with 24 exits
deals as compared to 99 in 2008 and 185 in 2007. Sales to totaling $9.8 billion.
strategic acquirers remained the most common exit, which
accounted for 62% of all exits in 2009.
Selected Private Equity Exits in 2009 *Values in millions
Company Name Seller Name(s) Exit Type Entry Val.* Exit Val.*
Alltel TPG Capital, GS Capital Partners Strategic $27,500 $28,100
Triumph Healthcare TA Associates Strategic $185 $570
Axygen Scientific American Capital Strategic $181 $400
Atlantic Inertial Systems J.F. Lehman & Co. Strategic $140 $375
Birds Eye Foods Vestar Capital Partners 2nd LBO $781 $2,038
Datatel Thoma Bravo, Trident Capital 2nd LBO $265 $570
LMS Intellibound MCG Capital 2nd LBO $19.7 $40.5
Rosetta Stone Norwest Equity Partners, IPO $85 $366
ABS Capital Partners
Avago Technologies Kohlberg Kravis Roberts, IPO $2,660 $3,538
Silver Lake Partners
Vitamin Shoppe Irving Place Capital IPO $320 $454
Source: PitchBook
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Private Equity Fundr aising in 2009

Fundraising was no easy task for U.S. private equity firms in 2009. The current $400 billion† private equity capital overhang, limited
partner liquidity issues and economic turbulence clearly had a negative effect on fundraising. Only 88 funds closed during the year
with a total of $140 billion in commitments, a 58% drop from 2008, representing a level the industry has not seen since before 2005. A
notable fundraising trend in 2009 was the continued progression toward larger-sized funds, with funds of $500 million and above
accounting for over 50% of the funds closed and 90% of the capital raised.
It was not all bad news in 2009, though. There were a number of very successful fundraising efforts by firms with strong track records
such as those by The Riverside Company and Marlin Equity. The easing of the recession and the rebound in the public markets during
the second half of the year helped fund valuations recover and offset the liquidity effects felt by many LPs during the first part of the
year. In 2010, a large number of private equity firms that are nearly through their committed capital or fund investment horizons are
expected to start marketing new funds. If the markets continue their rebound and private equity firms are able to start exiting invest-
ments, limited partners should be eager to loosen their purse strings and invest in what will likely be a competitive 2010 vintage.
†See PitchBook’s ‘US PE Capital Overhang Report’ in the PitchBook Library: www.pitchbook.com/2Q_2009.html
Fundr aising by Year Fundr aising by Quarter
Fundr aising (Count) by Fund Size Fundr aising ($) by Fund Size
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Largest Closed Funds of 2009

Fund Investor Amount ($M)
Apollo Investment Fund VII Apollo Investment Management $14,700
Carlyle Partners V The Carlyle Group $13,700
First Reserve Fund XII First Reserve $9,000
Hellman & Friedman Capital Partners VII Hellman & Friedman $8,800
Riverstone/Carlyle Global Energy and Power Fund IV Riverstone Holdings/The Carlyle Group $6,000
Clayton Dubilier & Rice Fund VIII Clayton Dubilier & Rice $5,000
Lindsay Goldberg III Lindsay Goldberg $4,700
TA XI TA Associates $4,000
Welsh, Carson, Anderson & Stowe XI Welsh, Carson, Anderson & Stowe $3,700
Ares Corporate Opportunities Fund III Ares Management $3,600
Quantum Energy Partners V Quantum Energy Partners $2,500
Selected Funds Currently In Market
Fund Investor Target Amount ($M)

Mega-Funds:
Blackstone Capital Partners VI The Blackstone Group $15,000
Lone Star Fund VII Lone Star Funds $12,000
Madison Dearborn Capital Partners VI Madison Dearborn Partners $7,500
Middle-Market Funds:
Behrman Capital IV Behrman Capital $1,000
Perseus Partners VIII Perseus $750
Quintana Energy Partners II Quintana Capital Group $650
Lower-Middle Market Funds:

Fulham Investors III Fulham & Co. $250
Blue Wolf Capital II Blue Wolf Capital $250
Peppertree Capital Fund II Peppertree Capital Management $150
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Private Equity IRRs - 2009

PitchBook Data has recently released a new addition to its private equity database platform with private equity and venture
capital fund returns data and analysis tools. The data provides a comprehensive look at PE and VC fund performance with
returns metrics such as IRR (Internal Rate of Return), DPI (Distributed over Paid in), and TVPI (Total Value over Paid in) for over
2,600 funds as well as 30,000 commitment and distribution records for institutional investors and limited partners.
This new data shows a number of interesting trends, one of which is the consistent outperformance of PE funds relative to VC
funds since the burst of the tech bubble. Also worth noting is that, according to the data collected by PitchBook, the best
performing funds on average are private equity funds with commitments over $1 billion, which, for mature vintages (funds more
than 5 years old), have outperformed the rest of the industry in 5 of the last 7 mature vintage years since 1998. Additionally,
mega funds (funds with commitments over $5 billion) have the highest median IRR at 11.7% for all mature funds and the highest
25th-percentile IRR at 9.32% (meaning 25% of the funds have an IRR below 9.32% and 75% have a higher IRR).
Vintage Year
Source: PitchBook
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• IRR and Returns Multiples for 2,600 PE & VC Funds
• 30,000 Viewable Commitment & Distribution Records
• Powerful and Simple Tools for:
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• Interactive Reports on Top Institutional Investors’ Portfolios Request a Demo
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Your Single Source for Quality Private Equity Data

Only PitchBook tracks the entire private equity lifecycle and every party involved:
limited partners, �inancial sponsors & investors, target companies, service
providers and key professionals. By dynamically linking these parties, PitchBook
makes it easy to identify relationships and networks. Additionally, it actively
researches target companies the entire time they are in an investor’s portfolio so
you’ll always be up-to-date on the crucial details of a transaction and the
company’s progress.
Broadest Private Equity Coverage
The PitchBook Platform contains information on over 25,000 private equity-
backed companies, investors, and service providers, across every industry
segment, every deal size and every private equity deal type from announcement to
exit.
Deepest Level of Detail
PitchBook’s mission is to provide hard-to-�ind information on private equity: the
details you can only �ind through direct contact with key players and painstaking
background research.
PitchBook researches deal amounts and valuations, target company �inancials and price multiples, capitalization structures, deal terms,
investor information and service provider contact information. It also tracks deal stakeholders and participants – not just �inancial
sponsors and investors, but also the many other �inancial, legal, and advisory �irms associated with taking a deal through to completion.
What Makes PitchBook Different
Deal monitoring and research through the entire lifecycle. Without exception, PitchBook actively researches and reports
on companies from announcement to �inal exit. PitchBook captures the full �inancing story, much more than just a snapshot of the deal’s
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Full spectrum coverage. PitchBook covers the full spectrum of private equity deals: all sizes, all industries, and all types.
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PitchBook

Annual Private Equity

Private Equity: Data | News | Analysis

Better data. Better decisions.

Better Data. Better decisions.

Deal Details ............................................................................ 4

Deal Flow By Industry ............................................................ 5

Deal Flow By Industry (Cont’d)............................................... 6

Deal-Related League Tables ................................................... 7

Private Equity Exits Overview ................................................ 8

Private Equity Exits Details .................................................... 9

Private Equity Fundraising Overview ..................................... 10

Fundraising League Tables ..................................................... 11

Private Equity Fund Returns Overview .................................. 12

Better Data. Better decisions.

Private Equity Deal Flow

The coming year will continue to provide plenty of challenges for

Better Data. Better decisions.

Median Deal Amount by Year Deal Activity by Geogr aphy

Percent of PE Tr ansactions Percent of PE Investment

Source: PitchBook Source: PitchBook

Better Data. Better decisions.

Business Products & Services (B2B)

Consumer Products & Services (B2C)

Better Data. Better decisions.

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Most Active Private Equity Most Active Private Equity

Investor Name Deal Count Top Law Firms in Private Equity1

Golden Gate Capital 7

Wayzata Investment Partners 6

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Private Equity Exits - 2009

U.S. Private Equity Exits (Count) by Type - Qtr

Better Data. Better decisions.

Private Equity Exits by Type Private Equity Exits by Industry

Selected Private Equity Exits in 2009 *Values in millions

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Private Equity Fundr aising in 2009

Fundr aising by Year Fundr aising by Quarter

Source: PitchBook Source: PitchBook

Source: PitchBook Source: PitchBook

Source: PitchBook Source: PitchBook

Better Data. Better decisions.

Largest Closed Funds of 2009

Carlyle Partners V The Carlyle Group $13,700

First Reserve Fund XII First Reserve $9,000

Lindsay Goldberg III Lindsay Goldberg $4,700

Ares Corporate Opportunities Fund III Ares Management $3,600

Quantum Energy Partners V Quantum Energy Partners $2,500

Selected Funds Currently In Market

Fund Investor Target Amount ($M)

Perseus Partners VIII Perseus $750

Quintana Energy Partners II Quintana Capital Group $650

Lower-Middle Market Funds:

Blue Wolf Capital II Blue Wolf Capital $250

Peppertree Capital Fund II Peppertree Capital Management $150

Better Data. Better decisions.

Private Equity IRRs - 2009

PitchBook’s NEW Fund Returns Module is Here!

Better Data. Better decisions.

Your Single Source for Quality Private Equity Data

What Makes PitchBook Different