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R-145
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B-0
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R-0
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G-230
B-247
R-85
G-67
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R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
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13
We Hold These Truths To Be Self-Evident…
David M. Rubenstein
Co-Founder & Co-Chief Executive Officer
February 26, 2014
Important Information
This presentation has been prepared by The Carlyle Group L.P. (“Carlyle”) and may only be used for informational purposes only. This
presentation provides an overview of Carlyle and is not intended to be taken by, and should not be taken by, any individual recipient as
investment advice, a recommendation to buy, hold or sell any security, or an offer to sell or a solicitation of offers to purchase any security. An
offer or solicitation for an investment in an investment fund managed or sponsored by Carlyle or its affiliates (“Fund”) will occur only through an
offering memorandum and related purchase documentation, and subject to the terms and conditions contained in such documents and in the
Fund’s operative agreements.
By accepting this presentation, the recipient agrees that it will, and will cause its representatives and advisors to, use the information contained
herein for informational purposes only. Recipient also agrees that neither this presentation nor the information contained herein may be
copied, disclosed or provided, in whole or in part, to third parties without the prior written consent of Carlyle. This presentation may not be
referenced, quoted or linked by website, in whole or in part except as agreed to in writing by Carlyle.
Certain information contained in this presentation has been obtained from published and non-published sources prepared by other parties,
which in certain cases have not been updated through the date hereof. While such information is believed to be reliable for the purpose used
in this presentation, Carlyle does not assume any responsibility for the accuracy or completeness of such information and such information
has not been independently verified by Carlyle. Except where otherwise indicated herein, the information provided in this presentation is based
on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect
information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. References to portfolio
companies are presented to illustrate the application of Carlyle’s investment process only and should not be considered a recommendation of
any particular security or portfolio company. Information about recommendations over the last year is available upon request. It should not be
assumed that recommendations made in the future will be profitable or will equal the performance of past recommendations.
Statements contained in this presentation that are not historical facts are based on current expectations, estimates, projections, opinions
and/or beliefs of Carlyle. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be
placed thereon. Certain information contained in this presentation constitutes “forward-looking statements,” which can be identified by the use
of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “forecast,” “project,” “estimate,” “intend,” “continue,”
“target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties,
actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. None of Carlyle or any
of its Funds or representatives makes any assurance as to the accuracy of those predictions or forward looking statements. Carlyle expressly
disclaims any obligation or undertaking to update or revise any such forward-looking statements.
R-145
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G-92
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Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
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9
10
11
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13
What happened in the
private equity industry in 2013?
3
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R-0
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B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
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8
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13
• Largest fundraising
volume since the Great
Recession
• 970 funds were raised
• Record average fund
size of $555 million1
• Funds raised by
geographic focus:
• North America – 63%
• Europe – 23%
• Asia – 9%
• Rest of World – 4%
4
Global Private Equity Fundraising Volume Was Up 26% In 2013 But
Remains 30% Below The 2008 Peak
$688
$320 $294
$332
$384
$485
$0
$100
$200
$300
$400
$500
$600
$700
$800
2008 2009 2010 2011 2012 2013
Global Private Equity Fundraising Volume
($ billions)
Source: Preqin
Source: Preqin. There is no guarantee these trends will continue.
1 Average fund size calculated for funds with available fund size data. Fund size data is not available for all 970 funds
raised in 2013 so dividing the aggregate fundraising volume by 970 funds does not equal the average fund size raised.
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R-0
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R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
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G-143
B-187
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10
11
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13
• Largest deal volume
since the Great
Recession
• Average purchase price
multiple of 8.8x
• Average leverage
multiple of 5.4x
• Deal volume by
geographic focus:
• North America – 59%
• Europe – 28%
• Asia – 8%
• Rest of World – 5%
5
Global Private Equity Deal Volume Was Up 15% In 2013 But Remains 50%
Below The 2006 Peak
$785 $781
$253
$134
$252
$321 $337
$389
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2006 2007 2008 2009 2010 2011 2012 2013
Global Private Equity Deal Volume
($ billions)
Source: Preqin
Source: Thomson One & S&P Leveraged Commentary Data, Q4 2013 Update. There is no guarantee these trends will
continue.
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R-0
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B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
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G-143
B-187
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G-127
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B-217
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10
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• Second highest exit
volume on record
• Record ~1,350 exits
• Exit count by type:
• Trade sale – 51%
• Sale to GP – 26%
• IPO – 19%
• Restructuring – 3%
• 2013 matched 2010 for
record 19% of exits via
IPO
6
Global Private Equity Exit Volume Was 14% Above The 2007 Pre-Great
Recession Peak
$163
$266
$116
$81
$222
$313
$285
$303
$0
$50
$100
$150
$200
$250
$300
$350
2006 2007 2008 2009 2010 2011 2012 2013
Global Private Equity Exit Volume
($ billions)
Source: Preqin Source: Preqin. There is no guarantee these trends will continue.
R-145
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B-46
R-145
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B-0
R-0
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B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
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10
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13
Purchase Price Multiples & Equity Contributions Are Generally Back To
Pre-Great Recession Levels
Source: S&P Leveraged Commentary Data, Q4 2013 Update. 7
8.4x 8.4x
9.7x
9.1x
7.7x
8.5x 8.8x 8.7x 8.8x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013
LBO Purchase Price Multiples
32% 33% 33%
43%
51%
44% 42%
39%
37%
0%
10%
20%
30%
40%
50%
60%
2005 2006 2007 2008 2009 2010 2011 2012 2013
LBO Equity Contributions
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R-0
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B-179
R-189
G-230
B-247
R-85
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B-113
R-118
G-92
B-150
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co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
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G-226
B-146
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B-187
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10
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13
Self-evident truths about
the private equity industry
8
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G-230
B-247
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R-118
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co
lors
in
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ferr
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ord
er
for
best
resu
lts
1
2
3
4
5
6
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9
10
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13
Emerging markets have emerged
and will increasingly play a larger
role in private equity
9
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R-0
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B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
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co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
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G-143
B-187
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B-127
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G-217
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13
Emerging Markets Now Account For More Than Half Of Global GDP
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Emerging Markets’ Share Of Global GDP
10 Source: Carlyle Analysis of IMF Data as of 12/31/13.
2013=54%
2004=38%
Emerging markets account for
~85% of the global population
today vs. only 68% in 1950
Emerging markets are expected
to account for more than half
of global GDP growth from
2013 to 2018
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B-0
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B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
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G-127
B-127
R-219
G-217
B-217
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Emerging Markets Have Increased As Both A Source Of And Destination
For Private Equity Capital
Source: Thomson One & Preqin Private Equity Quarterly. 11
5%
13%
0%
2%
4%
6%
8%
10%
12%
14%
2002 2013
Rest-of-World (Ex. North America
& Europe) Share of Deal Value
11%
20%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2006 2012
Rest-of-World (Ex. North America
& Europe) Share of Capital
Commitments
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R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
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B-35
Text C
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White
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9
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13
Emerging Markets Are Still Relatively Under-Penetrated By Private Equity
Source: Emerging Markets Private Equity Association Q4 2013 Industry Statistics. 12
1.03% 1.04%
0.24% 0.19% 0.20%
0.09% 0.09% 0.04% 0.09% 0.05%
1.02%
0.89%
0.28% 0.20%
0.13% 0.12%
0.07%
0.06%
0.04% 0.01%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
US UK S. Korea India Brazil SSA China S. Africa Japan MENA
Private Equity Investment As A % of GDP
R-145
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B-242
R-61
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B-46
R-145
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B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
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White
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R-0
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9
10
11
12
13
Sovereign wealth funds will become the
largest single source of capital
for private equity firms, replacing
U.S. public pension funds
13
R-145
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B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
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Text C
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rs
White
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9
10
11
12
13
SWF Assets Have Increased By More Than $4 Trillion In Less Than A Decade
And Are Projected To Grow Faster Than U.S. Public Pension Fund Assets
Source: 2014 Preqin Sovereign Wealth Fund Review and PWC Asset Management 2020: A Brave New World. There is no
guarantee these trends will continue. 14
$1.4
$5.4
$8.9
$-
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
2004 2013 2020P
Sovereign Wealth Fund Assets Under Management ($ trillions)
R-145
G-213
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B-46
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B-0
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G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
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B-255
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R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Sovereign Wealth Funds Have Quadrupled Their Share Of Commitments To
Private Equity Funds Since 2010
SWFs
3%
All Other
Investors
97%
2010
Source: Dow Jones Private Equity Analyst Sources of Capital Survey, 5/29/13. There is no guarantee these trends will continue. 15
SWFs
13%
All Other
Investors
87%
2013
% of Total Commitments To Private Equity Funds
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
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B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Individual investors (including non-accredited
investors) will become a larger part of the
private equity investor base
16
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Mass Affluent Assets Under Management Are Larger And Faster Growing
Than High Net Worth Assets Under Management
Source: PWC Asset Management 2020: A Brave New World. 17
$42
$60
$100
$-
$20
$40
$60
$80
$100
$120
2004 2012 2020P
Mass Affluent AUM
($100k - $1mm net worth)
$ trillions
$38
$52
$77
$-
$20
$40
$60
$80
$100
$120
2004 2012 2020P
High Net Worth AUM
($1mm+ net worth)
$ trillions
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
US Retirement Plans Alone Have $20 Trillion In AUM
Source: Investment Company Institute Fact Book 2013. There is no guarantee these trends will continue. 18
$3
$5 $3
$5 $6
$9
$11
$20
$-
$5
$10
$15
$20
$25
2002 2012
Total Value of US
Retirement Plans ($ trillions)
IRAs Defined Contribution Plans Other (Incl. Defined Benefit Plans)
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Individual Investors Have Almost Doubled Their Share Of Capital
Commitments To Private Equity In Just The Past Few Years
Source: 2014 Preqin Global Private Equity Report. There is no guarantee these trends will continue. 19
10%
19%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2008-2010 2011-2013
Industry-Wide % of Capital Committed by
High Net Worth Individuals & Family Offices
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Returns will continue to come
down but private equity will still
outperform public equities
20
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Returns Have Come Down Over The Past 20 Years
Source: Cambridge Associates LLC U.S. Private Equity Index and Selected Benchmark Statistics. As of 9/30/13. Excludes
vintages with less than 3 years of performance. 21
0%
5%
10%
15%
20%
25%
30%
35%
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
U.S. Private Equity Fund Pooled Net IRR By Vintage
Median = 15%
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
8% 8% 7% 7%
11% 11%
13%
26%
29%
0%
5%
10%
15%
20%
25%
30%
5-Year 10-Year 20-Year
Buyout Fund Net Returns vs. Public Equity Total Returns
(5-,10-, & 20-year net returns)
MSCI World Index All Buyout Funds Top Quartile Buyout Funds
But Top Quartile Private Equity Funds Have Significantly Outperformed
Public Equities Over A Variety Of Time Horizons
22 Source: Cambridge Associates, Thomson One Financial as of 9/30/13. There is no guarantee these trends will continue.
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Private Equity’s Focus On Value Creation Will Drive Outperformance
Source: Goldman Sachs, BCG-IESE estimate. 23
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Leverage Era (1980s) Multiple Expansion Era
(1990s)
Earnings Growth Era
(2000s)
Operational
Improvement (2010s)
Source of Value Creation
Operational Improvement Multiple Arbitrage Leverage
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Allocations to private equity
will continue to increase
24
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
18%
8% 9%
5% 4%
3%
28%
13% 12%
6% 6%
3%
0%
5%
10%
15%
20%
25%
30%
Family Offices Endowments Foundations Public Pension
Funds
Private Sector
Pension Funds
Insurance
Companies
Private Equity Allocation as a Percent of Total Assets
2009 2013
Source: 2013 Preqin Investor Network Global Alternatives Report & Preqin 2014 Global Private Equity Report. There is no
guarantee these trends will continue. 25
Allocations To Private Equity Have Gone Up Across-The-Board
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Almost 40% Of Investors Are Below Their Target Allocation To Private
Equity And Almost 40% Of Investors Plan To Increase Their Allocation
Source: 2014 Preqin Global Private Equity Report. 26
39%
44%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-13
Proportion of Investors Relative
To Their Target Allocation
Above Target Allocation
At Target Allocation
Below Target Allocation
36%
53%
10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-13
Investors’ Intentions for Private
Equity Allocations
Increase Allocation
Maintain Allocation
Decrease Allocation
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
The private equity industry will be seen as
mainstream rather than alternative
27
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Private Equity AUM Has Grown At A 20% CAGR Since 1980 And
Now Stands At $3.5 Trillion
$0.0 $0.0 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.2 $0.3
$0.4
$0.7 $0.8 $0.8 $0.9
$1.0
$1.2
$1.7
$2.3 $2.3
$2.5
$2.8
$3.0
$3.3
$3.5
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
1980199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013
Global Private Equity AUM ($ trillions)
Source: Preqin Source: 2013 Preqin Investor Network Global Alternatives Report and McKinsey. 28
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Alternatives Have Doubled Their Share Of Total Asset Management AUM
In Just The Past Decade
• Alternatives AUM is $6 trillion today vs. $2 trillion a decade ago (14% CAGR)
• Asset management AUM is $62 trillion today vs. $38 trillion a decade ago (6% CAGR)
Source: BCG Global Asset Management 2013 Report: Capitalizing On The Recovery. There is no guarantee these trends will
continue. 29
5%
10%
0%
2%
4%
6%
8%
10%
12%
2003 2012
Alternatives AUM As A % Of Total Asset Management AUM
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Public firms will become more common;
larger firms will get a greater
share of commitments
30
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Seven Private Equity Firms Have Gone Public Since 2007
Note: Year respective firm went public. Presented for illustrative purposes only. 31
(2007)
(2007)
(2007)
(2010) (2011)
(2012) (2012)
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Investors Are Increasing Commitments To Global Alternative Asset
Managers
Driving Factors
• Stability
• Consistency of returns
• Brand
• Size
• Transparency
• Global Presence
• Value Added
• Public Visibility
Source: Preqin. Industry fundraising includes Buyout, Growth, Real Estate, Natural Resources, Mezzanine, Distressed, Early/Venture,
Balanced, , Special Situation, Timber, and Turnaround. Represents the rolling 3-year average market share of The Carlyle Group &
US publicly traded peers relative to overall industry wide fundraising. There is no guarantee these trends will continue. 32
Slide animation – no print issues
6.8%
10.9%
2006 2013
Market Share of Fundraising (3-year
rolling average) of publicly traded
alternative asset managers as a % of
total industry fundraising1
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Private equity firms will continue to diversify
their product offerings
33
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Today Non-Corporate Private Equity Assets Make Up A Larger Share Of
Publicly Traded Alternatives Firms’ AUM
Source: SEC Filings. Calculated as the median of non-corporate private equity assets / total assets for Carlyle, Blackstone,
Apollo, KKR, & Oaktree. Calculated as of each company’s respective IPO date and 9/30/13. 34
47%
66%
0%
10%
20%
30%
40%
50%
60%
70%
IPO Q4 2013
Median Non-CPE Assets As A % Of Total AUM
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Interest rates will rise but cheap credit
will be readily available
35
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
0%
25%
50%
75%
100%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Bank vs. Non-Bank Share of Highly Leveraged Loans
Banks Non-Banks
Banks (14%)
Non-Banks (86%)
Source: S&P LCD Quarterly Q4 2013. Non-banks include: institutional investors, insurance companies, and finance companies. 36
Non-Bank Lenders Provide A Significant Majority Of The Types Of Loans
Used In Private Equity Transactions
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Interest Costs For Corporate Borrowers Have To Rise 200 Basis Points Just
To Reach Pre-Great Recession Levels
Source: St. Louis Federal Reserve. B-Rate Corporate Spread represents BofA Merrill Lynch US High Yield B Option-Adjusted
Spread. 37
4.4%
1.2%
3.3%
4.5%
7.7%
5.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2005-2007 2013
Avg. 5 Year Treasury Avg. B-Rated Corporate Spread
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Europe will be the market of focus in 2014
38
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Europe’s Economy Has Reached The Bottom
• GDP: ~$17 trillion
• The European Union economy accounts
for nearly one-quarter of the global
economy
• Growth of just 1.2% will add more than
$750 billion to global GDP. This is the
same contribution to global GDP that
China generates by growing at 8.5%.
• Spain was the biggest upside surprise in
2013 of all economies. Instead of
contracting at a 1.2% rate as forecast by
the IMF, Spanish GDP was flat, with
growth strengthening throughout the
year and exceeding 1% in Q4-2013.
• Germany has the largest current account
surplus in the world, exceeding China,
thanks to manufacturing export growth
Source: U.S. Bureau of Economic Analysis. 2014 & 2015 Projections from IMF January 2014 World Economic Outlook Update. 39
3.0%
0.4%
-4.4%
2.0% 1.6%
-0.7% -0.4%
1.0% 1.4%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Euro Zone GDP Growth Rate
R-145
G-213
B-242
R-61
G-175
B-46
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-85
G-67
B-113
R-118
G-92
B-150
Use
co
lors
in
pre
ferr
ed
ord
er
for
best
resu
lts
1
2
3
4
5
6
7
8
R-156
G-226
B-146
R-163
G-143
B-187
R-127
G-127
B-127
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
9
10
11
12
13
Europe’s Share Of Private Equity Investment Has Unduly Declined
Source: Thomson One. 40
39%
46%
51% 52%
44%
48%
34% 33%
48%
32%
36%
31%
23%
28%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
European Private Equity Deal Volume As A
Percent Of Total Private Equity Deal Volume
R-145
G-213
B-242
R-61
G-175
B-46
R-156
G-226
B-146
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-163
G-143
B-187
R-85
G-67
B-113
R-118
G-92
B-150
R-154
G-155
B-156
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
European Assets Are Priced At A Substantial Discount
Source: S&Q Capital IQ, Bloomberg EEO. 1. FTSE 100, DAX 30, CAC 40, AEX, Ibex 35, FTSE MIB; arithmetic mean. The EBITDA
multiples and financial indices referenced herein as benchmarks are provided for informational purposes only.
US & European EBITDA
Multiples, 2010-20131
EBITDA Multiples on Major Stock Market
Indexes as of 1/12/13
41
5.00x
6.00x
7.00x
8.00x
9.00x
10.00x
11.00x
European Avg U.S. Value-Weighted
12.3x
7.3x 8.1x
10.1x
9.1x 9.3x 8.9x
8.0x 7.7x 8.2x
6.2x
0.00x
2.00x
4.00x
6.00x
8.00x
10.00x
12.00x
14.00x European Average: 7.8x
R.O.W. Average: 9.4x
EB
ITD
A M
ult
iple
8.2x
7.6x
7%
23%
10.1x
7.8x
R-145
G-213
B-242
R-61
G-175
B-46
R-156
G-226
B-146
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-163
G-143
B-187
R-85
G-67
B-113
R-118
G-92
B-150
R-154
G-155
B-156
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
Truths That Will Become More Self-Evident In The Future
• Private equity enhances the value of companies and generally prevents job loss
• Private equity’s high returns will increasingly be sought by and made available to non-accredited investors
• Current regulations of the private equity industry provide appropriate oversight and protection
• Private equity cannot appropriately be seen as a source of systemic risk
• Private equity will continue to have one of the best risk-return profiles of any area in money management
• Governments should welcome private equity investment and the growth of the private equity industry in their country
42
R-145
G-213
B-242
R-61
G-175
B-46
R-156
G-226
B-146
R-145
G-229
B-0
R-0
G-161
B-224
R-0
G-101
B-179
R-189
G-230
B-247
R-163
G-143
B-187
R-85
G-67
B-113
R-118
G-92
B-150
R-154
G-155
B-156
R-219
G-217
B-217
R-43
G-131
B-35
Text C
olo
rs
White
R-255
G-255
B-255
Dark Blue
R-0
G-74
B-136
Blue
R-0
G-161
B-224
Bonus Truths:
43
100% of private equity funds will
continue to be in the top quartile
All private equity firms will
continue to avoid participation in any auction
The new name for the
private equity industry will be…