Private Equity: Data | News | Analysis

The Private Equity

Breakdown 4Q 2009
PitchBook Data, a private equity-focused research firm, has published a comprehensive set of statistics analyzing
United States private equity investment activity through the first three quarters of 2009. Year to date, there have been
654 private equity deals and $33 billion in disclosed deal amounts, a figure that is roughly 60% less than the 1,532
deals closed in the first three quarters of 2008. The most recent quarter saw not only fewer deals done -- 201 were
closed -- but also much smaller deals in size, totaling just $7 billion in disclosed deal amounts. These results continue
the downward trend initiated almost 2 years ago.

While investment activity continues at a significantly slower pace, the decline appears to be leveling off, indicating
that the bottom may have been attained or is near. A number of other factors, including an increase in newly
announced deals and a steady rise in the median deal amount over the last year, provide positive indications that a
change in direction may be occurring.

Total Private Equity Deal Flow

Source: PitchBook

Deal volume is beginning to stabilize as investors search for undervalued opportunities.

The number of deals in 3Q 2009 declined 6.1% from 214 in 2Q 2009.
The capital invested in 3Q 2009 declined 42% from $12 billion in 2Q 2009.

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PE Tr ansactions (Count) PE Tr ansactions (Count)

by Industry Sector Through 3Q 2009 by Region Through 3Q 2009

Source: PitchBook
Source: PitchBook

Business Products & Services (B2B) represented the largest portion of Investment activity continued to be fairly evenly dispersed throughout
deal flow (31%) as investors shifted their attention away from the United States. The South saw the most distinct increase in private
Consumer Products & Services (B2C) (25%), which tied B2B through equity activity during the third quarter of 2009, rising 38% from 2008
1H09 with 28%. Energy and Information Technology held steady during to represent 11% of deal flow.
the quarter after declining significantly at the end of 2008. Healthcare
and Energy were the only industries to see increases in the number of
deals closed over last quarter.

Percent of PE Tr ansactions Percent of PE Investment

(Count) by Deal Size (Total $ Amount) by Deal Size

Source: PitchBook Source: PitchBook

Lower middle-market and growth equity deals under $50 million
remained the most popular during the third quarter of 2009
(approximately 60% of deal flow). However, in what may be a promising
sign, activity in the two classifications above it made significant gains
over the second quarter of 2009 (not shown on chart).
Deals over $2.5 billion continue to decline as investors shift their focus
to middle and lower middle-market deals where all-equity transactions
are more prevalent and financing is slightly easier to obtain. Deals from
$500 million to $1 billion and $50 million to $250 million have grown in
popularity as investors pursue add-ons to strengthen their current
platform companies.

Source: PitchBook Source: PitchBook

*Through ³Q ²⁰⁰⁹

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Distressed Companies Find A place in Private Equity

Buyouts of Companies in Chapter 11 and % of Total Deal Flow
Distressed investing as a percentage of the total private equity deal flow has been increasing steadily since the beginning of the year.
Year to date, PE firms have acquired over 25 bankrupt companies, investing above $3.2 billion. Additionally, there are 16 similar deals
announced this year that have yet to close. Distressed companies come with their challenges, but represent an attractive investment
opportunity for PE firms because of their relatively low price, and cleaner post-bankruptcy balance sheets. The number of buyouts of
bankrupt companies will most likely continue to rise as more companies run into trouble and private equity firms become more comfort-
able with distressed investing.

Source: PitchBook

Median Deal Amount by Year Median Deal Amount by Deal Type

Source: PitchBook
Source: PitchBook

Median deal size increased to pre-recession levels as investors shifted their
focus back toward the middle and upper-middle markets. This trend will be
tested as private equity activity increases in the coming quarters.
The median deal size for both Buyout and All Other categories made
significant gains over the same numbers from last quarter. The median Buyout
moved from $37 million at the end of the second quarter to $54 million.
Similarly, All Other deals moved from $18 million to $35 million over the same
period. (1H09 numbers from 3Q 2009 Breakdown)

*Through ³Q ²⁰⁰⁹

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The State of Private Equity Fundr aising

PitchBook’s aggregated data and statistics for US private equity fundraising in the first three quarters of 2009 show that 61 funds were
closed, raising over $98 billion for private equity investment. The third quarter of 2009 saw 11 funds closed for a total of $14.43 billion,
versus 19 funds closed for a total of $28 billion during the second quarter of 2009. Funds over $500 million led fundraising activity in the
third quarter, representing 90% of funds closed during the quarter and over $14 billion in total.

While fundraising has slowed compared to the breakneck pace of the last two years, moves by LPs such as CalPERS, CalSTRS and
Pennsylvania SERS to increase their allocations to private equity are a positive sign for fundraisers in the near term. Look for the rate of
fundraising to continue its modest pace as investors decide how best to utilize the almost $400 billion in unspent capital amassed over the
previous two years (as reported by PitchBook in June 2009).†

Fundr aising Activity Largest Funds Closed Through 3Q 2009

Firm Fund Size ($M)
Apollo Investment Management Apollo Investment Fund VII 14,000
The Carlyle Group Carlyle Partners V 13,700
First Reserve First Reserve Fund XII 9,000
The Carlyle Group/Riverstone Carlyle/Riverstone Global En & Pwr Fund IV 6,000
Lindsay Goldberg Lindsay Goldberg III 4,700
The Blackstone Group Blackstone Real Estate Partners Europe III 4,517
TA Associates TA XI 4,000
Welsh, Carson, Anderson & Stowe WCAS XI 3,700
TCW/Crescent Mezzanine TCW/Crescent Mezzanine Partners V 2,850
Quantum Energy Partners Quantum Energy Partners V 2,500
Walton Street Capital Walton Street Real Estate Fund VI 1,700
Source: PitchBook Charlesbank Capital Partners Charlesbank Equity Fund VII 1,500
Odyssey Investment Partners Odyssey Investment Partners Fund IV 1,500
Pine Brook Road Partners Pine Capital Partners 1,430
The Riverside Company Riverside Capital Appreciation Fund V 1,170
The number of funds raised year to date declined 57%
Providence Equity Partners Providence TMT Special Situations Fund 1,140
compared to 143 funds closed through 3Q 2008.
Total capital raised year to date declined 60% compared to Great Hill Partners Great Hill Equity Partners IV 1,130
the $254 billion raised through 3Q 2008. Oak Hill Capital Partners OHA Strategic Credit Fund 1,125
Huntsman Gay Global Capital Huntsman Gay Capital Partners Fund 1,100
The Carlyle Group Carlyle Asia Growth Partners IV 1,040
Source: PitchBook Platform

Capital R aised by Fund Size Fund Count by Fund Size

Source: PitchBook Source: PitchBook

Funds closed above $500 million received over 90% of all capital
committed in 3Q 2009.
No funds over $5 billion were closed during 3Q 2009.
Fewer new commitments for mega-funds are anticipated as limited
partners shift their sights toward middle-market funds where deals are
still being done.
The majority of new funds fall between $500 million and $5 billion. However,
the low number of additions means that there is no appreciable change in the
distribution of closed funds year to date in 2009.
*Through ³Q ²⁰⁰⁹
†See PitchBook’s ‘US PE Capital Overhang Report’ in the
PitchBook Library: www.pitchbook.com/2Q_2009.html

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Most Active Private Equity Investors Most Active Private Equity Service
Through 3Q 2009 Providers Through 3Q 2009
By Number of Investments By Number of Deals Serviced

Investor Name Deal Count Top Law Firms in Private Equity1

Parthenon Capital 11
Jones Day
Oaktree Capital Management 7
Kirkland & Ellis
Platinum Equity 7
Latham & Watkins
Thoma Bravo 7
Shearman & Sterling
Angelo Gordon & Company 6
Skadden, Arps, Slate, Meagher & Flom
Kohlberg Kravis Roberts 6
Sullivan & Cromwell
Marlin Equity Partners 6
Wilson Sonsini Goodrich & Rosati
Sun Capital Partners 6
Willkie Farr & Gallagher
The Carlyle Group 6
Morgan, Lewis & Bockius
The Riverside Company 6
Warburg Pincus 6 Blank Rome
Bain Capital 5 DLA Piper Rudnick Gray Cary
Golden Gate Capital 5 1 by counsel provided on transactions

Hart Capital 5
J.F. Lehman & Company 5
Milestone Partners 5
Top Investment Banks & Advisors2
Houlihan Lokey Howard & Zukin
Stonington Partners 5
Goldman Sachs
Summit Partners 5
William Blair & Company
The Blackstone Group 5
Harris Williams
Welsh, Carson, Anderson & Stowe 5
Morgan Stanley
Advent International 4
Piper Jaffray
American Capital 4
Apollo Investment Management 4 Lazard Middle Market
Banc of America Capital Investors 4 Alvarez & Marsal Holdings
Battery Ventures 4 Montgomery & Company
Catalyst Investors 4 2 by number of advisory roles in transactions

Clearview Capital 4
Cortec Group 4
General Atlantic 4 Top Lenders in Private Equity3
GTCR Golder Rauner 4 Bank of America
H.I.G. Capital 4 CIT Group
Hellman & Friedman 4 Wells Fargo
KPS Capital Partners 4 GE Capital
Pegasus Capital Advisors 4 U.S. Bancorp
Perseus 4 TriState Capital Bank
Pfingsten Partners 4 PNC Financial Services Group
Providence Equity Partners 4 Babson Capital Partners
Riverside Partners 4 Wells Fargo Foothill
RoundTable Healthcare Partners 4 Fifth Third Bank
Sterling Partners 4 JP Morgan
Stockwell Capital 4 Madison Capital Funding
Veronis Suhler Stevenson 4 3 by number of financings provided
Source: PitchBook
Wayzata Investment Partners 4
Source: PitchBook

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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.
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segment, every deal size and every private equity deal type from announcement to
exit.
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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
announcement.
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