BCG Private Equity Market Analysis

Private Equity Market Analysis & Sizing 2012
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High-level overview of the PE industry landscape
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
LP interests / direct
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
Fund placement agents
PE/VC associations
Consultants
&
Business angels
associations and networks
PE transactions
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks / AMs
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Secondary funds
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
PE transactions: All time high reached in 2007

PE activity currently rebounding from low in 2009
14,000
1,000
12,000
800
10,000
600
8,000
6,000
835
400
+143%
441
200
57
47
60
2001
2002
2003
129
4,000
351
208
257
243
2010
2011
2,000
100
0
2004
2005
2006
Nr. of deals
2007
2008
2009
Deal value (in USDbn)1
1. Only transactions with disclosed deal value considered. In general, Thomson Reuters VentureXpert has no official size limit. The database derives the data from several sources: (1) verified
industry press and press releases, (2) surveys of the industry routinely conducted by Thomson Reuters, and (3) SEC filings as well as other filings that are regularly monitored by Thomson Reuters.
Source: Thomson Reuters VentureXpert, BCG
&
PE transactions: Next to direct investments, the number of

abandoned transactions is considerably large
Number of completed and abandoned
investments in private targets 2007-2011
Assumptions on
abandoned deals
Deal range
% of firm s w hich do
not get financed /
acquired
USD 0-0.5m
90%
USD 0.5-2m
75%
USD 2-15m
60%
USD 15-35m
40%
USD >35m
30%
No of
transactions
49'300
45'028
Deal range
% of deals w .
disclosed value
2007-2011
USD 0-0.5m
2%
USD 0.5-2m
4%
USD 2-15m
21%
USD 15-35m
16%
USD >35m
56%
43'636
44'016
21932
22123
10816
10952
10888
10941
2010
Deals by PE funds
2011
50000
45000
40000
35000
24779
22632
30000
Assumptions on share of
disclosed deals
39'170
19959
25000
20000
11178
9692
15000
10823
10000
5000
13343
12704
8928
0
2007
2008
Abandoned deals
(no financing received)
2009
Direct investments
in private firms2
2. Refers to all investments in private targets according to Zephyr minus all PE deals listed in Thomson Reuters VentureXpert.
Source: Thomson Reuters VentureXpert, Zephyr, BCG
&
PE transactions: Majority of deals made in VC segment

Buyouts are leading by deal volume
Number of PE transactions by type
Deal volume of PE transactions by type

Deal volume1 (USDbn)
No of deals
14,000
13'343
12'704
8'928
10'888
900
10'941
835
351
100
257
243
12,000
600
10,000
8,000
300
6,000
65%
60%
0
0
2007
2008
2009
2010
2011
2007
Other Private Equity
Buyout
Mezzanine
Venture Capital
2008
2009
2010
2011
Generalist Private Equity

&
PE transactions: Deal activity and volume clearly dominated

by developed markets
Number of PE transactions
by geography1
Deal volume of PE transactions

by geography1
Deal volume2 (USDbn)
No of deals
15,000
13'343
12'704
8'928
10'888
1,000
10'941
12,000
800
9,000
600
6,000
400
835
351
100
257
243
85%
3,000
200
84%
0
2007
2008
2009
2010
2011
RoW
2007
Asia
Europe
2008
2009
2010
2011
Americas
1. Geography refers to the location of the target company. 2. Only transactions with disclosed deal value considered. In general, Thomson Reuters VentureXpert has no official size limit. The
database derives the data from several sources: (1) verified industry press and press releases, (2) surveys of the industry routinely conducted by Thomson Reuters, and (3) SEC filings as well as
other filings that are regularly monitored by Thomson Reuters.
&
PE transactions: Similar development across regions

Europe most volatile
Americas:
Top 5 countries1
Europe:
Top 5 countries1
Asia:
Top 5 countries1
No of deals
No of deals
9,000
No of deals
3,500
2,000
-35%
-40%
-30%
3,000
+20%
7,500
+19%
+33%
1,500
2,500
6,000
2,000
1,000
4,500
1,500
3,000
1,000
1,500
500
500
0
0
2007
2008
2009
Other
2010
2011
0
2007
2008
2009
2010
2011
2007
2008
Brazil
Other
Argentina2
Canada
Spain3
France
Hong
Mexico
United States
Sweden
United Kingdom
Japan
Germany
2009
Other
2010
2011
India
Kong4
South Korea
China
1. Geography refers to the location of the target firm. 2. Argentina ranked Nr. 6 in 2008 and Nr. 7 in 2010. 3. Spain ranked ranked Nr. 6 in 2007. 4. Hong Kong ranked Nr. 6 in 2008 and 2010. In
general, Thomson Reuters VentureXpert has no official size limit. The database derives the data from several sources: (1) verified industry press and press releases, (2) surveys of the industry
routinely conducted by Thomson Reuters, and (3) SEC filings as well as other filings that are regularly monitored by Thomson Reuters.
&
PE transactions: 76% of all transactions are small- to mid-cap

PE transactions1 2007-2011 by size
No of deals
100%
80%
60%
Deal volume
7%
16%
40%
76% of all PE transactions conducted

from 2007 to 2011 were smaller than
USD 200m, representing 9% of total
deal volume
59%
25%
76%
51%
20%
21%
0%
7%
2%
> USD 1000m
USD 50-200m
USD 201-1000m
USD <50m
9%
&
PE transactions (<USD 200m): VC in Americas represents the

biggest market
Overview of PE deals up to USD 200m, 2007-2011
(based on cumulative number of deals)
64%
20%
11%
100%
2%
3%
RoW
2%
Asia
13%
Europe
23%
80%
60%
40%
Americas 62%
20%
0%
0%
20%
40%
60%
Venture Capital
80%
Buyout
100%
Generalist Mezz- Other
PE
anine PE
In general, Thomson Reuters VentureXpert has no official size limit. The database derives the data from several sources: (1) verified industry press and press releases, (2) surveys of the industry
routinely conducted by Thomson Reuters, and (3) SEC filings as well as other filings that are regularly monitored by Thomson Reuters.
&
10
PE transactions (<USD 200m): Buyouts in Americas

dominate deal volume
Overview of PE deals up to USD 200m, 2007-2011
(based on cumulative deal volume1 in USDbn)
24%
54%
15%
3%
4%
100%
80%
RoW
5%
Asia
15%
Europe
31%
Americas
49%
60%
40%
20%
0%
0%
20%
Venture Capital
40%
60%
Buyout
80%
100%
Generalist Mezz- Other

PE
anine PE
&
11
GPs / PE funds
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
12
Active GPs: Majority of GPs are small and mid-cap

GPs by type
No of GPs with at least
1 new fund since 2007

n = 2807
100%
80%
5%
4%
6%

n = 2807
Other PE
12%
GPs by geography
GPs by fund size1
100%
Mezzanine
Fund of Funds
n = 2807
7%
>USD 1bn
8%
USD 501m-1bn
80%
100%
80%
Generalist
33%
USD 101-500m
60%
23%
Balanced Stage
60%
60%
40%
23%
Buyouts
40%
40%
52%
20%
27%
0%
USD 0-100m
20%
20%
0%
0%
6%
RoW
19%
Asia
21%
Europe
54%
Americas
Venture Capital2
1. Total amount of capital committed to latest fund. 2. Venture Capital includes seed, early and later stage funds.
&
13
Active GPs (<USD 0.5bn fund size): VC, Balanced stage, and
Buyout most prevalent
Overview of GPs with fund size < USD 0.5bn
(based on number of active GPs, 2007-2011)
29%
25%
20%
6%
5%
4%
11%
100%
80%
RoW
4%
Asia
24%
Europe
21%
60%
40%
Americas 51%
20%
0%
0%
20%
Venture Capital1
40%
60%
Balanced Stage
Buyouts
80%
Generalist FoFs Mezzanine
100%
Other
PE
1. Venture Capital includes seed, early and later stage funds.

&
14
PE fundraising
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
15
PE fundraising: Still significantly below all time high in 2007

Funds raised (in USDbn)
No of funds raised
600
1,400
1,200
500
1,000
-52%
400
800
300
529
514
600
415
200
400
322
255
100
184
99
102
177
148
185
200
0
2001
2002
2003
2004
2005
2006
Nr. of funds raised
2007
2008
2009
2010
2011

&
16
PE fundraising: Increased activity in small/mid-cap segment
Funds raised by type

No of funds raised
1,200
952
1,000
800
47
55
70
600
400
No of funds raised
187
223
1,200
1068
196
136
Funds raised by fund size1
54
50
82
Other PE
800
Buyouts
231
Venture Capital2
200
600
234
2010
2011
>USD1bn
USD 501m -1bn
952
29
21
RoW
283
Asia
118
Europe
646
Americas
228
USD 101-500m
301
1068
1,000
800
600
400
200
242
76
79
1,200
1068
361
Fund of Funds
213
No of funds raised
74
79
1,000
Generalist
Mezzanine
952
Funds raised by geography
147
400
496
554
USD 0-100m
548
200
Balanced stage
0
0
2010
2011
2010
2011
1. Total amount of capital committed to a fund by its LPs and GPs. 2. Venture Capital includes seed, early and later stage funds.
&
17
PE fundraising: USD 255bn funds raised in 2011
Funds raised by size1
Funds raised by type

300
185

300
255
57
200
Other PE
300
255
58
10
10
10
33
Venture
2010
150
Capital2
123
>USD1bn
Buyouts
0
2011
4
36
RoW
56
Asia
44
Europe
152
Americas
24
45
USD 501m -1bn
100
37
50
103
255
200
150
86
100
Balanced stage
13
15
26
56
200
Fund of Funds
25
Mezzanine
185
250
Generalist
16
150
50
250
250
100
185
Funds raised by geography
69
USD 101-500m
15
18
USD 0-100m
2010
2011
47
50
121
0
2010
2011
1. Total amount of capital committed to a fund by its LPs and GPs. 2. Venture Capital includes seed, early and later stage funds.
&
18
LPs / PE Investors
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
19
LPs / Investors: Family offices and Endowments with

significant "outstanding dry powder"
Main types of investors in PE by outstanding dry powder1
Share of outstanding
dry powder by
PE investors2
~ USD 500bn
100%
100%
~6%
~6%
~10%
80%
~15%
60%
~16%
40%
~17%
20%
~30%
0%
Public
pension
funds
Insurance
companies
Private
pension
funds
Financial
institutions
SWFs and
government
agencies
Family offices
and
foundations
Endowments
Outstanding
dry powder2
1. Data based on a proprietary database of more than 3'000 commitments by LPs to PE built by BCG and IESE in 2009. The database draws from publicly available data on LPs and PE funds, as
well las from commercial databases including Preqin, Thomson Reuters VentureXpert, Dow Jones Directory of Alternative Investment Programs and Dealogic. In addition, in-depth interviews with
more than 30 LPs and GPs in the US and Europe were conducted. 2. Dry powder is the capital committed by investors into PE funds minus both the capital invested by the firm managing the fund
and the capital investors will not be able to provide.
Note: Fund of funds are not included as LPs because they are intermediaries and not original sources of capital. However they play an important role as distributors of about 10-15% of all LP
commitments to PE funds
Source: BCG-IESE database
&
20
LPs / Investors: Trend towards direct investments

Direct investments of LPs in private firms1
Survey of Family Offices2
Direct investments of LPs in private firms

% of surveyed LPs
100%
80%
60%
65%
59%
40%
20%
0%
51%
No direct investments
83%
are planning to increase or maintain their direct

investments in private firms over the next two years
67%
of respondents said they were seeking outsized

returns from direct investing
63%
source direct investments primarily from

friends and family
Yes co-investment only

26%
Yes co-investm. and propr. investing

Yes proprietary investing only
16%
23%
10%
9%
9%
10%
13%
10%
Survey
2006
Survey
2007/2008
Survey
2010
LP plans for direct investments over next three years

% of surveyed LPs
100%
3%
3%
5%
Decrease
direct investments
72%
67%
54%
No change
25%
31%
Survey
2006
Survey
2007/2008
> 60%
of family offices that responded said they were not

satisfied with the fee structure at private equity finds
80%
60%
59%
40%
20%
41%
prefer to invest in direct deals as opposed to

more traditional private equity funds
Increase
direct investments
0%
Survey
2010
1. Based on Coller Capital Global Private Equity Barometer 2006, 2007/2008 and 2010. 2. 2010 Survey of 62 families advised by McNally Capital with average AuM of USD 250m.
Source: Coller Capital Global Private Equity Barometer 2006, 2007/2008 and 2010, McNally Capital/New York Times, BCG
&
21
LPs / Investors - Family Offices: SFOs tend to have higher

PE allocation
Types of family offices
Allocation to Private Equity

% of assets allocated
to private equity
Single family office

(SFO)
Multi family office

(MFO)
Broad service offering

Cost efficiency through economies of
scale
Virtual family office

(VFO)
Network of service providers without

physical infrastructure
Less administration, therefore lower costs
Exclusive FO for one family

Highest form of confidentiality
15%
10%
Main areas of services
12%
5%
Investmentrelated
services
Asset allocation
Manager selection
& monitoring
Education of family
members
13%
9%
0%
US SFOs
Reporting
Tax services
Financial admin Administrationrelated
Legal services
services
Banking
Relation mgmt
Familyrelated
services
Estate planning
Risk management/
insurance
Philanthropy
Security & concierge
services
EU SFOs
according to
Wharton Global Family
Alliance Survey (2008)
Worldwide
SFOs
according to
IMD/EVCA
Survey
Source: Wharton Global Family Alliance, IMD/EVCA, BCG

&
22
LPs / Investors - Family Offices: Broad range of estimates

about existing number of family offices
Family office estimates cited in the press
"Right now, there are about 3'000 family offices in America."
Barrons (Sep 28, 2009)
Term "family office" often used for

single or multi-family offices only or
including all types of family offices
"Currently, there are approximately 1'000 single

family offices in the world."
Family Office Association / Wharton Global
Family Alliance (2008)
"EVCA estimates that

there are around 500
smaller family offices
active in Europe, of
which between 80
and100 can be
considered as large"
European Venture
Capital Association,
IMD (2007)
"The universe of US-based Single

Family Offices is estimated at 2'500"
Family Wealth Alliance (2010)
"A more realistic estimate is likely to be
closer to 1,000 [SFOs] just in Europe."
Wall Street Journal (Jun 14, 2010)
"There are somewhere between 3'000
and 5'000 family offices in the US."
FT (Jul 31, 2011)
Research reports are generally

focused on specific geographic
regions
Inconsistent use of term "family
office" and geographical focus leads
to a wide range of estimates about
number of existing family offices
worldwide
Need for estimation of worldwide number of firms

dedicated to family offices services
Source: Barron's, Family Wealth Alliance, Financial Times, Wall Street Journal, Family Office Association / Wharton Global Family Alliance, EVCA/IMD, BCG Global Wealth Market-Sizing Database
&
23
LPs / Investors - Family Offices: BCG estimates ~7'070 firms

dedicated to family offices service
Potential client universe1
Number of firms dedicated to FO services
No of UHNW households
(> USD 100m AuM)
No of firms dedicated
to family office services
15000
8000
~ 1700
~ 12300
6000
~ 2000
10000
~ 680'
~ 7'070
RoW
Total
~ 800
~ 2'590
~ 3700
4000
5000
~ 3'000
~ 4900
2000
0
Europe
Americas
Asia-Pacific
RoW
Europe
Total
Americas
Asia-Pacific
Europe: ~3000 existing firms dedicated to FO services resulting

in a ratio of ~0.6 firms/UHNW household2
Americas: Family offices originated in the US, i.e. generally
larger penetration assumed (Assumption: 0.7 firms/UHNW
household)
Asia / RoW3 : Currently underrepresented in terms of firms with
FO services, but strong growth prospects (Assumption: 0.4
firms/UHNW household)
~ AuM USD 100m needed to make

direct investments of USD 1m+
1. Includes single family offices, multi family offices and other family office service providers (e.g. EAMs). 2. Based on a comprehensive BCG study about European family office services.
3. Citigroup expects the number of family offices in Asia to triple over the next decade.
Source: BCG Global Wealth Market-Sizing Database, Citigroup, BCG
&
24
Corporate M&A: key group within PE, often underestimated

BCG estimation of number of
corporates with M&A department
Main tasks of corporate M&A dep.
Assumptions:
Number of firms with sales of more than USD 500m
Firms who conducted at least one M&A deal since 2000
% of surveyed executives who see the primary responsibility

of corporate development teams in the following areas1 :
1. M&A strategy and target
identification
84%
2. Valuation and analytics
83%
No of corporates2
10000
3. Leading negotiations
79%
4. Deal pipeline management
76%
~ 9'000
8000
~2'500
6000
~3'000
4000
5. Financial due dilligence
73%
2000
~3'500
0
Americas
EMEA
Asia-Pacific
Total
1. Based on Deloitte survey. 2. Based on Orbis - Bureau van Dijk database.

Source: Deloitte Corporate Development 2010, Orbis - Bureau van Dijk, BCG
&
25
Secondaries
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
26
Secondaries: Most secondary deals are LP interest sales
Basic transaction types
Secondary deal volume by type
Sale of LP interests
Secondary direct/buyout
LP sells its interest in a PE

fund or a portfolio of interests
to another investor
Seller get paid for previously
funded investments and is
released from future capital
calls
Secondary direct: Refers to

the sale of an entire portfolio of
firms or firm participations by a
GP
Secondary buyout: GP sells
a single portfolio company to
another private equity fund
Buyer and seller motivation

Buyer of LP interests
Need for liquidity (e.g. unable

to meet capital calls)
Unsatisfactory performance
of PE funds
Change in asset allocation
Regulatory changes
...
Exploit market inefficiencies/

discounted investment opp.
Invest in an identifiable
portfolio of assets
Gain access to future funds of
top-performing GPs
...
Source: UBS Private Funds Group estimates, BCG
25
15
20
15
&
20
22
4
(17%)
Directs
18
(83%)
LP
interests
7
(33%)
4
(27%)
10
Seller of LP interests
Est. deal
volume (in USDbn)
1 (15%)
11
(73%)
13
(67%)
8
(85%)
0
2007
2008
2009
2010
Secondary deal volume dominated by LP interest sales
27
Secondaries: Fundraising stable USD 26bn dry powder

promises ongoing secondary deal flow
Number of secondary funds raised
Dry powder at leading secondary funds
No of funds raised
25
Est. dry powder

(in USDbn)
Lexington Partners
US
5.1
Goldman Sachs Private Equity
US
3.9
Pantheon Ventures
UK
3.2
Landmark Partners
US
2.5
CS Strategic Partners
US
2.2
AlpInvest Partners
NL
2.0
Partners Group
CH
1.9
1.9
HarbourVest Partners
US
1.9
Coller Capital
UK
1.7
stable
20
15
10
Country
Firm
22
16
14
11
18
17
14
0
2005
2006
2007
2008
2009
2010
2011
Secondary fundraising volume
Axa Private Equity

25
20
15
~ USD 26bn
23
10
5
Total
stable
14
14
7
11
10
2010
2011
Ratio of dry powder at leading secondary funds

to secondary deal volume in 2010 currently ~1.2x
0
2005
2006
Source: Preqin, BCG
2007
2008
2009
&
28
Secondaries: Pricing improved considerably

Pricing of private equity assets1
% discount to
net asset value
50
40
30
Pricing of private equity

assets improved
considerably from
Q4 2009 to Q1 2011
36.9
36.8
34.0
31.6
33.9
30.9
26.5
21.1
18.1
20
12.5
10
17.2
18.0
13.4
15.5
13.1
11.7
12.1
In Q1 2011, the average

discount to NAV for
private equity assets is at
13.1%
Discounts for buyout
assets are the lowest
(3% discount to NAV)
3.0
0
Q4 2009
Q1 2010
Q2 2010
Buyout
Q3 2010
Venture
Based on the average high bids received for UBS-advised transactions.

Source: UBS Private Funds Group estimates, BCG
Q4 2010
Q1 2011
All PE
&
29
Secondaries: Secondary segment still marginal compared to

rest of the PE market and not on top of LP agendas
Relative importance
of the secondary market
Outlook: LP areas of interest

% of LPs who plan to focus most of their attention on
investing in the following areas (up to 5 choices possible)1 :
Share of the secondary market

in % of total PE market
100%
6%
USD 243bn
(92%)
1. US mid-cap buyouts
46%
2. Growth capital funds
USD 255bn
(96%)
1068
(98%)
39%
3. US small-cap buyouts
~ USD 22bn
(8%)
4%
37%
4. EU small-cap buyouts
USD 10bn
(4%)
2%
33%
5. Asia country-focused funds
18
(2%)
30%
...
0%
No of funds raised
2011
Deal volume
2010
(in USDbn)
Funds raised
2011
(in USDbn)
Rest of PE market
14. Secondary funds
13%
Secondary
1. According to Probitas Research LP survey.

Source: Probitas Research - Private Equity Deskbook 2011, BCG
&
30
Service providers
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
31
Summary: ~ 25000 PE specialists identified across ~4'200

M&A service providers
4212 service providers identified1
No of firms
PE specialists across service providers
Service providers involved in

at least one M&A deal since 2009
Financial advisors
11'043
Law firms
8'803
Accountants
2'422
Consultants
1'514
PR advisors
898
5000
315
4000
256
4212
523
1289
3000
2000
1829
1000
0
Law
firms
Financial
PR
Advisors advisors
Consultants
Accountants
Total of PE specialists across

service providers
Total
24'680
Type of service provider

1. The analysis is based on league table credit of advisors in all M&A transactions recorded in mergermarket since January 2009. mergermarket includes transactions worldwide with at least USD5m
deal value. If the deal value is not disclosed and cannot be confirmed to be greater than or equal to USD 5m, deals are included if the targets revenue is greater than USD 10m. League table credit is
given to firms advising any of the principals (bidder, target or seller) or the parent companies of the principals on a transaction. Where there is more than one advisor, each is credited with the full deal
value of the transaction.
Source: mergermarket, BCG
&
32
Law firms: ~8'800 PE specialists

Most active law firms since 2009
No of deals advised since 2009

2000
Identified
firms
Law firm
1829
617
1500
1000
46
243
Freshfields Bruckhaus Deringer

Linklaters
Allen & Overy LLP
DLA Piper
CMS
Clifford Chance LLP
Baker & McKenzie
Latham & Watkins LLP
Jones Day
White & Case LLP
923
500
0
1
deal
2-10
deals
11-100
deals
>100
deals
Multiplier
15
25
Potential
number of
PE
specialists
923
3'085
3'645
1'150
=
Average
Deal value
(in EURm)
460'381
368'361
241'571
57'255
57'135
222'898
64'322
185'166
56'706
85'248
Nr. of Countries
deals w. office
601
587
546
519
516
495
404
338
331
316
15
19
26
30
29
26
41
13
19
25
24
Assuming one PE specialist per

country a multiple of
~25 for the most active firms
seems reasonable
= 8'803
&
33
Number of deals advised by law firms1
No of law firms
Fin. advisors: ~11'000 PE specialists

Most active fin. advisors since 2009

1500
30
157
Identified
firms
Financial advisor
1289
KPMG
Rothschild
PwC
Deloitte
Goldman Sachs
Morgan Stanley
Lazard
Credit Suisse
UBS Investment Bank
Ernst & Young
489
1000
613
500
0
1
deal
2-10
deals
11-100
deals
>100
deals
Multiplier
10
20
80
Potential
number of
PE
specialists
613
4'890
3'140
2'400
=
Average
Deal value
(in EURm)
44'060
245'446
39'462
26'401
549'510
476'915
227'329
439'148
329'863
23'115
Nr. of Countries
deals w. office
508
498
459
405
383
378
365
349
327
301
152
42
149
150
31
42
27
50
50
140
83

seems reasonable
= 11'043
&
34
Number of deals advised by fin. advisors1
No of fin. advisors
PR advisors: ~900 PE specialists

Most active PR advisors since 2009

600
Identified
firms
55
PR advisor
523
168
FTI Consulting
Brunswick Group
Finsbury Group
Citigate
Maitland
Barabino & Partners
Tulchan Communications
Abernathy MacGregor Group
400
294
200
0
1
deal
2-10
deals
11-100
deals
>100
deals
Multiplier
Potential
number of
PE
specialists
294
336
220
48
=
Pelham Bell Pottinger

M:Communications
Average
Deal value
(in EURm)
223'962
362'094
217'821
53'721
85'591
36'515
36'327
93'864
24'448
29'442
Nr. of Countries
deals w. office
466
377
274
273
153
122
96
91
88
87
24
11
7
30
1
4
1
1
1
3
8

seems reasonable
= 898
&
35
Number of deals advised by PR advisors1
No of PR advisors
Consultants: ~1'500 PE specialists
400
Identified
firms
72
300
19
Consultants
315
224
200
100
0
1
deal
2-10
deals
11-100
deals
>100
deals
Multiplier
10
30
30
Potential
number of
PE
specialists
224
720
570
=0
Leading consultancy firms2

Countries
w. office
McKinsey & Co
Boston Consulting Group
A.T. Kearney
Booz & Company
Roland Berger SC
Bain & Company
Oliver Wyman
Arthur D. Little
Monitor Group
L.E.K. Consulting
55
42
38
34
33
30
25
20
17
14
Average
31

seems reasonable
= 1'514
1. The analysis is based on league table credit of advisers in all M&A transactions recorded in mergermarket since January 2009. mergermarket includes transactions worldwide with at least USD5m
deal value. If the deal value is not disclosed and cannot be confirmed to be greater than or equal to USD 5m, deals are included if the targets revenue is greater than USD 10m.
&
36
Number of deals advised by consultants1
No of consultancy firms
Accountants: ~2'400 specialists

Most active accountants since 2009

300
6
59
1
deal
2-10
deals
11-100
deals
>100
deals
Multiplier
10
110
110
Potential
number of
PE
specialists
182
Identified
firms
200
Accountants
256
Ernst & Young

PwC
KPMG
Deloitte
Grant Thornton UK
BDO
Baker Tilly International
182
100
590
990
660
=
PKF (UK) LLP

Mazars LLP
Accuracy
Average
Deal value
(in EURm)
157'737
86'376
113'870
60'132
5'296
8'326
591
298
408
2'748
Nr. of Countries
deals w. office
774
498
476
413
158
152
35
21
17
14
140
149
152
150
100
135
100
125
67
9
113

seems reasonable
= 2'422
&
37
Number of deals advised by accountants1
No of accountants
Fund services
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
38
PE Placement agents: Usage of placement agents

varies significantly by PE fund type
PE placement agent universe
Main service
Fund placement agents specialize in raising capital on
behalf of private equity funds by finding institutional
investor which are willing to invest
~130
Leading placement agents by capital placed
Usage of placement agents

By
geography
Europe
Yes (48%)
No (52%)
Asia and RoW
Yes (47%)
No (53%)
North America
Yes (42%)
Buyout
By
fund
type
Yes (65%)
Mezzanine
Yes (50%)
Firm
Park Hill Group
No (58%)
No (35%)
No (50%)
Venture
Yes (32%)
No (68%)
Fund of Funds
Yes (29%)
No (71%)
placement agents identified
Nr. of funds
placed
(in USDbn)
Agg. capital
placed
(in USDbn)
22.4
Credit Suisse Private Fund Group
17
11.9
MVision Private Equity Advisers
13
11.1
UBS Investment Bank Private Funds Group
7.6
Greenhill Fund Placement Advisory Group
6.5
Atlantic-Pacific Capital
5.9
Probitas Partners
5.1
Campbell Lutyens
4.9
Capital and Marketing Group
4.9
Lazard Private Fund Advisory Group
4.8
Source: Private Equity International A guide to fund placement specialists, Preqin, BCG
&
39
PE Fund administrators: Fund administrators provide a wide

range of services to PEs
PE fund administrator universe
Services offered by PE fund admin.

% of fund administrators offering service
NAV Calculation
Compliance and
Portfolio Monitoring
Fund Launches/
Fund Establishment
Corporate Services
Tax Services
61%
39%
61%
39%
60%
40%
58%
42%
47%
Cash Mgmt and Provision of Bank Accounts

Register and
Transfer Agency
~40
Exemplary PE fund administrators

Firm
Apex Fund Services
Augentius Fund Administration
Aztec Group
Banque Prive Edmond de Rothschild
BNP Paribas Securities Services
BNY Mellon
Caceis Fastnet
Citco Fund Services
Citi Fund Services
Deutsche Bank Alternative Fund Services
International Financial Services
Ipes
JP Morgan Real Estate and PE Services
Northern Trust
State Street Global Services
53%
42%
58%
41%
59%
Usage of PE fund administrators

By
geography
Europe
Yes (66%)
No (34%)
Asia and RoW
Yes (64%)
No (36%)
North America
Yes (30%)
fund administrators identified

No (70%)
Headquarter
Bermuda
UK
Jersey
Switzerland
France
US
France
Cayman
US
UK
Mauritius
UK
US
US
US
Source: Fund administrator websites, Preqin, BCG

&
40
Associations
7 Fund services
Fund administrators
GPs / PE funds
Buyout
Targets
PE transactions
Mezzanine
Balanced stage
3
Fundraising
Accountants
Source: BCG
LP interests only
Insurance firms
Banks
SWFs
5
Secondaries
Direct only
Non-trad. buyers
Generalist
Family offices
Pension funds
Fund of funds
Endowments
Insurance firms
...
...
...
6 Service providers
Lawyers
Sec. funds / FoFs
Pension funds
Venture Capital
LPs / Investors
8 Associations
Financial advisors
PR advisors
PE/VC associations
Consultants
&
Business angels
41
PE/VC associations: ~ 100 PE/VC associations existing

VC and PE associations fulfill several purposes
Representation /
lobbying
Maintain dialogue with key stakeholders to effect

changes to the tax and regulatory environment
Number of PE/VC associations

No of
associations
100
Networking
Research
Professional
standards
Trainings
Provide opportunities to exchange ideas and increase

cooperation / deal flow between members
Conduct and publish research on issues important to the
venture and private equity industry
Establish and maintain best practice ethical and
professional standards
n = 96
n = 96
International
9
Latin A. 4
Africa / ME.
7
Intern. 2
80
Asia-Pacific
18
60
National
47
Europe
26
Offer trainings to enhance the professional skills and

expertise of practitioners
40
Member groups
Typically core members
Typically associate members
PE / VC Funds
20
Regional
40
North America
39
by type
by region
Investors
0
Service providers
Note: Analysis based on information provided by VC/PE associations

Source: Associations, BCG
&
42
National and International PE/VC associations: Largest

associations focus on developed markets
20 largest national and international PE/VC associations1
Nr. Association
Type of Ass.
Region
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
International
National
National
National
National
National
National
International
National
National
International
National
National
National
National
National
National
National
National
National
Europe
North America
Europe
Europe
North America
Europe
Europe
International
Europe
North America
International
Europe
Asia-Pacific
Asia-Pacific
Europe
Latin America
Asia-Pacific
Europe
Europe
Africa / Middle East
European Private Equity and Venture Capital Association

National Association of Seed and Venture Funds
Association Franaise des Investisseurs en Capital
British Private Equity and Venture Capital Association
National Venture Capital Association
Swiss Private Equity & Corporate Finance Association
Bundesverband Deutscher Kapitalbeteiligungsgesellschaften
Emerging Markets Private Equity Association
Swedish Private Equity & Venture Capital Association
Canada's Venture Capital & Private Equity Association
Institutional Limited Partners Association
Associazione Italiana del Private Equity e Venture Capital
Australian Private Equity & Venture Capital Association
Taiwan Venture Capital Association
Danish Venture Capital and Private Equity Association
Associao Brasileira de Private Equity e Venture Capital
China Venture Capital Association
Nederlandse Vereniging van Participatiemaatschappijen
Asociacin Espaola De Entidades De Capital
South African Venture Capital Association
Members
1200
850
470
450
407
349
320
300
270
268
250
250
231
228
190
170
150
149
143
129
The European Venture

Capital Association
(EVCA) represents the
biggest Private Equity
Association with 1200
members
Five national
associations focusing
on the emerging PE
markets Asia-Pacific,
Latin America and
Africa / Middle East
made it to the Top 20
while the Emerging
Markets Private Equity
Association ranks on
No 8
1. International and national PE/VC associations considered which provide information on number of members. Members include full and associate members
&
43
National and International PE/VC associations: North

American associations generally larger than their peers
Associations and members by
geographic region
100%
n = 44
= 8071
= 188
2 (5%)
550 (7%)
235 (3%)
340 (4%)
275
78
113
International
Africa/Middle East
Latin America
1561 (9%)
390
North America
3 (7%)
3 (7%)
80%
60%
4 (9%)
8 (19%)
973 (12%)
122
Asia-Pacific
23 (53%)
4412 (55%)
192
Europe
Nr. of
Associations
Members
Members/
Association
The 23 identified European associations count 4412

members, representing 55% of all identified members
The range of European associations is broad: Both,
the smallest association (Slovak Venture Capital
Association, 7 members) and the largest association
(European Venture Capital Association, 1200
members) are European
40%
Generally, North American associations are the

largest with, on average, 390 members per
associations
20%
0%
1. International and national PE/VC associations considered which provide information on number of members. Members include full and associate members.
&
44
Business angels associations and networks/groups: Europe

most fragmented
Business angels associations
Business angels networks/groups
No of associations
28
n = 26
24
International
4
20
No of networks/groups
n = 26
Role of business
angels associations:
Intern. 1
Africa / ME. 1
Latin America
2
North America
2
Act as umbrella
organisations of
business angel groups
Asia-Pacific
4
Raise awareness about

the industry
16
National
22
Europe
16
800
RoW
~ 60
700
600
North America
~ 370
400
Collect data from

member organisations
and conduct research
Provide a platform for
information sharing
n = ~ 830
500
Liaise with policy

makers
12
900
300
200
Europe
~ 400
100
Role of business angels

networks/groups:
Connect angel investors
willing to invest with
entrepreneurs looking for
capital
Business Angel Network

do not make any
investments or
investment decisions
The networks can have a
general or specific
industry focus and are
typically established on a
international, national or
regional level
by type
by region
by region
Source: OECD "Financing high-growth Firms The role of angel investors", Associations, BCG
&
45
Summary: Rough sizing of the PE market

10'941
10'952
22'123
Sec. deal volume:

No of secondaries:
~CHF 21.8b
908
No of GPs / PE funds:
2'807
PE specialists fin. adv.:

PE specialists law firms:
PE specialists account.:
PE specialists consult.:
PE specialists PR advis.:
11'043
8'803
2'422
1'514
898
No of funds raised:
1'068
No of fund administrators:
No of fund placement ag.:
40
130
No of family offices:
No of M&A depart.:
7'070
9'000
No of VC/PE associations:
No of Angel associations:
No of Angel groups/netw.:
96
26
830
No of PE deals:
No of direct deals:
No of abandoned d.:
1. Based on a currency rate of CHF/USD 0.91. Based on 2011 Montana Capital Partners estimate.
Source: BCG
&
46

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Private Equity Market Analysis & Sizing 2012

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Private Equity Market Analysis & Sizing 2012

High-level overview of the PE industry landscape

Sec. funds / FoFs

Fund placement agents

PE transactions: All time high reached in 2007

Deal value (in USDbn)1

PE transactions: Next to direct investments, the number of

PE transactions: Majority of deals made in VC segment

Number of PE transactions by type

Deal volume of PE transactions by type

Other Private Equity

Generalist Private Equity

PE transactions: Deal activity and volume clearly dominated

Deal volume of PE transactions

PE transactions: Similar development across regions

PE transactions: 76% of all transactions are small- to mid-cap

76% of all PE transactions conducted

PE transactions (<USD 200m): VC in Americas represents the

PE transactions (<USD 200m): Buyouts in Americas

Generalist Mezz- Other

Sec. funds / FoFs

Active GPs: Majority of GPs are small and mid-cap

No of GPs with at least

No of GPs with at least

GPs by fund size1

1. Venture Capital includes seed, early and later stage funds.

Sec. funds / FoFs

PE fundraising: Still significantly below all time high in 2007

Nr. of funds raised

Funds raised (in USDbn)

Source: Thomson Reuters VentureXpert, BCG

PE fundraising: Increased activity in small/mid-cap segment

Funds raised by type

Funds raised by fund size1

Funds raised by geography

PE fundraising: USD 255bn funds raised in 2011

Funds raised by size1

Funds raised by type

Funds raised (in USDbn)

USD 501m -1bn

Funds raised (in USDbn)

Funds raised by geography

Sec. funds / FoFs

LPs / Investors: Family offices and Endowments with

LPs / Investors: Trend towards direct investments

Survey of Family Offices2

Direct investments of LPs in private firms

are planning to increase or maintain their direct

of respondents said they were seeking outsized

source direct investments primarily from

Yes co-investment only

Yes co-investm. and propr. investing

LP plans for direct investments over next three years

of family offices that responded said they were not

prefer to invest in direct deals as opposed to

LPs / Investors - Family Offices: SFOs tend to have higher

Allocation to Private Equity