The LargesT PrivaTe equiTy Firms in The WorLd

Anatomising the impact of the PEI 50

Edited by Wanching Leong and David Snow

In conjunction with:
A PRIVATE EQUITY INTERNATIONAL PUBLICATION

contents
INTRODUcTION ThE PEI 50 2008 sEcTION A: PEI 50 By the Numbers
Fundraising Deal Activity Deals by Industry Deals by Region Fees Operations Index of charts

IV VII 9
10 12 20 25 28 30 33

21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50.

General Atlantic PAI partners First Reserve corporation EQT Partners hellman & Friedman cinven Bridgepoint clayton, Dubilier & Rice Teachers Private capital charterhouse capital Partners Lehman Brothers Private Equity Thomas h. Lee Partners Bc Partners AXA Private Equity NGP Energy capital Management Oaktree capital Management Marfin Investment Group sun capital Partners Doughty hanson & co. Jc Flowers & co. TA Associates Eurazeo New Mountain capital MatlinPatterson WL Ross & co. Encap Investments Madison Dearborn Partners Barclays Private Equity Onex Welsh, carson, Anderson & stowe

159 165 171 177 183 189 195 201 207 213 219 225 231 237 243 249 255 261 267 273 279 285 291 297 303 309 315 321 327 333

SECTION B: PEI 50 Firm Profiles

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. The carlyle Group Goldman sachs Principal Investment Area TPG Kohlberg Kravis Roberts cVc capital Partners Apollo Global Management Bain capital Permira Apax Partners The Blackstone Group Warburg Pincus 3i Group Advent International Terra Firma capital Partners American capital Providence Equity Partners silver Lake Partners cerberus capital Management AIG Investments Fortress Investment Group

35
37 45 51 57 63 69 75 81 87 93 99 105 111 117 123 129 135 141 147 153

ABOUT DEALOGIc ABOUT PEI MEDIA

339 340

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III

Introduction
ABOUT The LargesT PrivaTe equiTy Firms in The WorLd This book is an in-depth look at the private equity firms that are annually ranked in the PEI 50, Private Equity Internationals proprietary list of the largest private equity direct-investment programmes in the world. The Largest Private Equity Firms in the World should be of great interest to anyone who needs to better understand how the largest private equity firms differ from one another, as well as the impact they have on global markets, both individually and in aggregate. We have divided the book roughly into two sections. The first section, called By the Numbers, looks at the aggregate impact that the largest private equity firms in the world have had on the global markets. Given that these 50 firms control the bulk of all capital committed to private equity, it is appropriate to use these statistics as a proxy for private equitys role in the broader economy. The second section of this book profiles each of the PEI 50 firms in apples-to-apples categories. You will find information about personnel and capital under management, strategy descriptions and a brief report on what the firms have been up to recently. Each profile includes a recent article about the firm from a PEI Media publication. Crucially, in partnership with Dealogic, we have built snapshots of each PEI 50 firms private equity transaction activity. In all cases, the deal activity is confined to the period between 1 January 2003 and 15 April 2008 this is the same window we use in collecting fundraising information for the PEI 50 rankings. The deal data will allow you to compare investment and exit activity among the largest private equity firms, as well as to see how the firms compare to each other by way of sector and geographic deal activity. ABOUT ThE PEI 50 Over the years, the editorial staff at PEI Media have periodically received calls from readers with the question: Do you have a list of the biggest private equity firms? No, we would answer, we do not. And, we would sometimes add, no one else has such a list, either, at least not one that can be viewed as methodologically sound. Certainly there have been lists and ranks within private equity, but none that we considered to be sufficiently apples-to-apples. Lists of traditional limited partnership funds, for example, left off major investors with non-traditional funding sources. Some lists have featured both direct investors and fund of funds managers. Other lists that have purported to be US-only have counted capital earmarked for Europe. And so on, and so on. Indeed, measuring the size of a private equity firm is a complicated endeavour. We faced many obstacles, among these: no information and too much information. We also faced more fundamental challenges: defining what we mean by private equity, firm and size. Unlike a publicly traded corporation, which has a convenient market capitalisation or reported revenue to track, private equity firms can be sized up using any number of methods, and the firms themselves have no obligation to disclose anything about themselves to the public. A random tour through the websites of several private equity firms reveals a mishmash of size markers. Some firms tout capital deployed, others tout capital returned to investors. Some describe funds raised over the life of the firm, others give the size of the current fund. Some give the value of the investment portfolio, others note the total revenue generated by the portfolio companies. Many firms allude to assets under management, whatever that means. As with many other aspects of private equity, there is no one standard for measuring size.

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With the creation of the PEI 50, upon which this report is based, we have sought to apply a single standard of measurement to the private equity firms we surveyed globally in search of the biggest 50. In brief, our standard is the amount of capital raised for direct private equity investment in rolling five year periods. In 2008, we measured capital raised from 1 January 2003 up to press time at 15 April 2008. In our inaugural PEI 50 ranking, we captured fundraising from 1 January 2002 to mid-April 2007. We selected this five-year capital-raise standard for PEI 50 after close consultation with a number of industry experts. The PEI 50 methodology is, we believe, both forward-looking and sufficiently inclusive of recent history. It accounts for the dry powder that a firm has attracted from investors recently as well as indicates the scope of its recent investment activity. We certainly considered other approaches. One was to combine the value of undrawn capital commitments with the value of unrealised portfolio investments a statistic that one major consultant has named exposure. There were at least two problems with the exposure approach. First, many contacts we spoke with felt it would overly reward older private equity programmes with vast portfolio holdings but not much new fundraising to speak of. Second, general partners today still do not follow any one standard for valuing their portfolios, and hence their portfolio valuations remain highly subjective, and often change depending on who theyre talking to and in what setting. The PEI 50s methodology is flexible enough to capture capital formed for different private equity strategies raised in different vehicles by different kinds of firms (for example, 3i Group, American Capital, Eurazeo, General Atlantic, Marfin and Teachers Private Capital). In these cases we have estimated the amount of capital formed for direct private equity investment over the same time period. We think it is essential that these firms be listed alongside the more traditional limited partnership-based firms. The private equity business will become more and more varied as it develops, and we want the PEI 50 to measure size regardless of whether it comes in a limited partnership or a publicly traded vehicle or some other innovative model. That said, the PEI 50 does have rules and we

have sought to apply these as consistently as possible. We have also sought out the best information available, with information provided directly by the firms in question given highest value. Where firms have not helped us on background, we have sought out the best information available from databases, press reports and other publicly available sources. Below are a number of additional definitions and rules that we applied to the PEI 50. We are certain that not all of our readers will agree with these rules, and were also certain that we havent been able to pinpoint every piece of information we needed to build a pristine list. But we are certain that we have been dogged in our pursuit of the most comprehensive and accurate information possible, and we have endeavoured to apply the PEI 50 methodology to this information in as exacting a fashion as possible. We hope to see the resulting PEI 50 list become a useful point of reference in a growing and transforming industry. PEI 50 RULEs AND DEFINITIONs The PEI 50 is a ranking of private equity firms globally by size. It is the only apples-to-apples comparison of dedicated, direct-investment private equity programmes. The PEI 50 is not a performance ranking, nor does it constitute investment recommendations. The PEI 50 rankings are based on the amount of private equity direct-investment capital raised over a roughly five-year period leading up to press time. For 2008, the five-year window spans from January 1 2003 to 15 April 2008. Where two firms are determined to have raised an equal amount of capital, we give the higher rank to the firm with the larger individual fund. AccURAcY AND cONFIDENTIALITY We give highest priority to information that we receive from the private equity firms themselves, always on background. When the private equity firms themselves confirm details, we seek to trust, but verify. Some details simply cannot be verified by us, and in these cases we defer to the honour system. In order to encourage cooperation from private equity firms that might make the PEI 50, we do not disclose which firms have aided us on background and which have not. Lacking confirmation of details from the firms themselves, we seek to corroborate information

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using available news reports, press releases, third-party databases, etc. DEFINITIONs & cLARIFIcATIONs Private equity: The definition of private equity, for the purposes of the PEI 50, means capital raised for a dedicated programme of investing directly into primarily private businesses. This includes equity capital for buyouts, growth equity, venture capital, control-oriented distressed investment capital and mezzanine debt. Further definitions are below. Capital raised: This means capital definitively committed to a private equity direct investment programme. In the case of a fundraising, it means the fund has had a final or official interim close on or after January 1, 2003. The full amount of a fund may be counted if it has closed on or after this date. The full amount of an interim close (a real one, not a soft-circle) that has occurred recently, even if no official announcement has been made, may also be counted. We also count capital raised through other means, such as LP co-investment vehicles, deal-by-deal LP co-investment capital, publicly traded vehicles, recycled capital, and earmarked annual contributions from a sponsoring entity. Further rules are below. Why does mezzanine debt count as private equity? We count mezzanine debt raised by firms that are primarily engaged in private equity investing. We only count equity raised for these funds, not the leveraged buying power. Mezzanine debt frequently involves warrants for equity stakes, and has historically been counted alongside buyout capital by industry media and data services groups. Furthermore, a number of important private equity firms blend their equity and subordinated debt investment pools. It was a tough call, but we feel that mezzanine capital should be included in the measurement of a private equity firms overall size in the market, and so did most of our expert contacts. What does not count as private equity direct investment capital? We do not count funds raised for strategies that primarily focus on funds of funds, real estate,

debt, hedge funds and infrastructure. What about opportunistic investors? As with many hedge funds, some large entities have the ability to do private equity deals on an opportunistic basis. We do not include these groups in the rankings. What counts as capital raised? Limited partnerships: Most private equity capital is raised through blind-pool funds. Co-investment capital: Where possible and appropriate, we count LP co-investment vehicles as well as opportunistic LP co-investment capital raised by private equity sponsors. Public entities: We count the capital raised by private equity firms that happen to be publicly traded. We also count capital raised in the format of public vehicles controlled by private equity firms so long as those public entities primarily commit capital to direct private equity programmes. In some cases we have used capital deployed in direct private equity situations as a proxy for capital raised for such opportunities. Affiliated programmes: We count private equity capital raised by affiliated entities so long as the firm has control over those entities, or the vehicles raised bear the branding of the firm. Contributions from sponsoring entities: Where a larger entity has earmarked capital to the firm for a dedicated, direct private equity programme, we count the amount of capital the firm has drawn down from that entity for direct private equity deals over the defined five-year period. What does not count as capital raised? Expected capital commitments, or soft circled capital. Opportunistic capital: An entity that has the ability to opportunistically do large private equity deals, but does not have a dedicated programme or team for doing so, will not be counted. In other words, a large group that has the ability to tap $40 billion in equity wont be counted unless that equity has been segregated into a specific vehicle or programme and assigned a dedicated private equity direct-investment team that is actively scouting for deals.

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The PEI 50 2008

The PEI 50 is Private Equity International magazines ranking of the 50 largest private equity firms in the world. Our method of measuring size is intended to capture a firms heft in the market going forward, as well as the scope of its recent deal activity. We use an apples-to-apples methodology: the amount of private equity direct-investment capital raised or created over the past five years (see p. IV for our methodology). This list is global and includes a broad range of dedicated private equity investment platforms, from private managers of blind-pool limited partnerships to publicly-traded investment firms to public pension affiliates. Now in its second year, the rankings show a vastly increased base of capital controlled by the top 50, as well as a rearranged lineup of players, reflecting a changing industry.
2008 Rank
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

Name of firm
The Carlyle Group Goldman Sachs Principal Investment Area TPG Kohlberg Kravis Roberts CVC Capital Partners Apollo Global Management Bain Capital Permira Apax Partners The Blackstone Group Warburg Pincus 3i Group Advent International Terra Firma Capital Partners American Capital Providence Equity Partners Silver Lake Partners Cerberus Capital Management AIG Investments Fortress Investment Group General Atlantic PAI partners First Reserve Corporation EQT Partners Hellman & Friedman Cinven Bridgepoint Clayton, Dubilier & Rice Teachers Private Capital Charterhouse Capital Partners Lehman Brothers Private Equity Thomas H. Lee Partners BC Partners AXA Private Equity NGP Energy Capital Management Oaktree Capital Management Marfin Investment Group Sun Capital Partners Doughty Hanson & Co. JC Flowers & Co. TA Associates Eurazeo New Mountain Capital MatlinPatterson WL Ross & Co. EnCap Investments Madison Dearborn Partners Barclays Private Equity Onex Welsh, Carson, Anderson & Stowe

Headquarters
Washington DC New York Fort Worth (Texas) New York London New York Boston London London New York New York London Boston London Bethesda (Maryland) Providence (Rhode Island) Menlo Park (California) New York New York New York Greenwich (Connecticut) Paris Greenwich (Connecticut) Stockholm San Francisco London London New York Toronto London New York Boston London Paris Irving (Texas) Los Angeles Athens Boca Raton (Florida) London New York Boston Paris New York New York New York Houston Chicago London Toronto New York

capital raised over last five years*

$52 billion $49.05 billion $48.75 billion $39.67 billion $36.84 billion $32.82 billion $31.71 billion $25.43 billion $25.23 billion $23.3 billion $23 billion $22.98 billion $18.32 billion $17 billion $17 billion $16.36 billion $15.6 billion $14.9 billion $14.22 billion $14.0 billion $13.3 billion $12.98 billion $12.82 billion $12.47 billion $12 billion $11.93 billion $11.7 billion $11.38 billion $10.69 billion $10.52 billion $10.22 billion $10.1 billion $9.26 billion $9.24 billion $8.84 billion $8.4 billion $8.15 billion $8 billion $7.44 billion $7 billion $6.83 billion $6.75 billion $6.69 billion $6.67 billion $6.65 billion $6.58 billion $6.5 billion $6.43 billion $6.17 billion $5.88 billion

2007 Rank
1 3 5 2 10 12 8 6 7 4 14 13 43 15 23 9 19 34 N/A 27 18 35 22 21 16 11 36 47 20 24 25 30 29 N/A N/A 49 N/A 28 37 N/A 39 N/A N/A N/A N/A N/A 32 N/A 33 42

* * * * * * * * * *

*Notes: Five years defined as 1 January 2003 to 15 April 2008.

All euro figures were converted to US dollars at 1.57 exchange rate. Other currencies were converted at current prices.

Legend:

same rank as 2007

higher rank than 2007

lower rank than 2007

PEI 50 debut

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VII

PEI 50 BY ThE NUMBERs DEaLs BY INDUsTRY

TOP INDUsTRIEs FOR PEI 50 IPO ExITs

1 January 2003 - 15 april 2008 Rank 1 2 3 4 5 6 7 8 9 Financial sponsor Industrials Communications, Media & Entertainment Consumer & Retail Financial Institutions Technology Energy & Natural Resources Healthcare Transportation Business Services Deal Value ($m) 18,879 16,949 15,517 14,381 11,593 9,177 5,755 3,513 3,337 # Deals 36 31 33 26 52 21 38 8 14 Source: Dealogic

TOP INDUsTRIEs FOR aLL FINaNcIaL sPONsOR IPO ExITs

1 January 2003 - 15 april 2008 Rank 1 2 3 4 5 6 7 8 9 Financial sponsor Industrials Consumer & Retail Financial Institutions Communications, Media & Entertainment Technology Energy & Natural Resources Healthcare Business Services Transportation Deal Value ($m) 33,026 28,000 21,940 21,457 20,838 20,346 14,458 7,844 6,241 # Deals 113 105 67 54 153 54 116 67 31 Source: Dealogic

TOP 10 INDUsTRIEs FOR aLL IPOs

1 January 2003 - 15 april 2008 Rank 1 2 3 4 5 6 7 8 9 Financial sponsor Financial Institutions Energy & Natural Resources Industrials Consumer & Retail Technology Communications, Media & Entertainment Transportation Healthcare Business Services Deal Value ($m) 264,346 149,245 116,109 85,698 66,910 57,676 48,980 33,308 29,582 # Deals 1,302 1,020 1,198 858 1,138 333 218 530 515 Source: Dealogic

Notes: IPO volumes do not represent the full enterprise value of the portfolio company; for financial sponsor IPOs, numbers include all IPOs regardless of whether the sponsor sold shares or not in the offering

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PEI 50 BY ThE NUMBERs INDEx

PEI 50 Index of charts

FUNDRaIsING
slicing and dicing step change Lions share Fundraising Facts 10 Biggest Funds Raised by the PEI 50

DEaLs BY REGION

DEaL acTIVITY

PEI 50 Deal activity at a Glance sustainable? PEI 50 Deal Volume Feeconomics PEI 50 Buyout Deal Volume comparison Buyout Deal Dominance PEI 50: The 10 Largest Buyout Deals PEI 50: The 10 Most active PE sponsors of Buyout Deals PEI 50 M&a Exit Volume comparison M&a Exit Leaders PEI 50: The 10 Largest PE sponsors of M&a Exits PEI 50: The Most active PE sponsors of M&a Exits PEI 50 IPO sponsored Volume comparison IPO Leaders PEI 50: The 10 Largest PE sponsors of IPO Exits PEI 50: The Most active PE sponsors of IPO Exits

PEI 50 Deals by Region africa Top 5 Financial sponsors by Deal Volume australasia Top 5 Financial sponsors by Deal Volume caribbean Top 5 Financial sponsors by Deal Volume Europe Top 5 Financial sponsors by Deal Volume India subcontinent Top 5 Financial sponsors by Deal Volume Japan Top 5 Financial sponsors by Deal Volume Latin america Top 5 Financial sponsors by Deal Volume Middle East Top 5 Financial sponsors by Deal Volume North america Top 5 Financial sponsors by Deal Volume North asia Top 5 Financial sponsors by Deal Volume southeast asia Top 5 Financial sponsors by Deal Volume

FEEs

PEI 50 Fees Paid to Investment Banks Top 5 Recipients of PEI 50 Fees Paid Top 10 Fee Payers PEI 50 vs. Financial sponsors

OPERaTIONs

DEaLs BY INDUsTRY

Top Industries for PEI 50 Buyouts Top Industries for all Financial sponsor Buyouts Top Industries for all M&a Top Industries for PEI 50 M&a Exits Top Industries for all Financial sponsor M&a Exits Top Industries for all M&a Top Industries for PEI 50 IPO Exits Top Industries for all Financial sponsor IPO Exits Top Industries for all IPOs Top 5 Financial sponsor acquirors by Industry

age is but a Number Dollars Raised per PE pro Where the PEI 50 are Located New York/London vs. the World Office Stats

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50
PEI 50 profile: Welsh, Carson, Anderson & Stowe

50

Welsh, Carson, Anderson & Stowe

2008 PEI 50 rank 2008 PEI 50 five-year fundraising total 2007 PEI 50 rank 2007 PEI 50 five-year fundraising total 50 $5.88 billion 42 $4.7 billion

Founded 1979 headquarters Welsh, Carson, Anderson & Stowe 320 Park Avenue, Suite 2500 New York, New York 10022 USA Tel: +1 212 893 9500; Fax: +1 212 893 9575 Other offices N/A Website www.welshcarson.com Strategy Makes buyout, growth equity and venture capital investments in the information/business services and healthcare industries in North America. Prefers to make control investments. Affiliates N/A SNAPShOT Welsh, Carson, Anderson & Stowe co-founders Bruce Anderson, Russell Carson and Patrick Welsh know how to stick to their knitting. The New York-based firm has stayed committed to the information/business services and healthcare sectors since its founding in 1979. The firm is now investing its $3.5 billion, tenth equity fund alongside its $1.3 billion fourth subordinate debt fund. While busy building portfolios diversified by time, industry, thematic concentration and stage of investment the firm is also reportedly hard at work raising a new fund. The firm says it avoids participating in club deals or consortium investments. Its tenth fund only invested in three such transactions.

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WELSh, CARSON, ANDERSON & STOWE 50 PROFILE

KEY PEOPLE

Name
Bruce Anderson Russell Carson Patrick Welsh Anthony de Nicola Paul Queally John Almeida, Jr. John Clark D. Scott Mackesy Sanjay Swani Sean Traynor Eric Lee Thomas McInerney Robert Minicucci Thomas Scully Jonathan Rather Fran Higgins

Function
Co-Founder Co-Founder Co-Founder Co-President Co-President Partner Partner Partner Partner Partner Partner Partner Partner Partner CFO Investor Relations

Location
New York New York New York New York New York New York New York New York New York New York New York New York New York New York New York New York

Previous Experience
Executive vice president at Automatic Data Processing Chairman and CEO of Citicorp Venture Capital President at Citicorp Venture Capital Private equity group at Wiliam Blair & Co. General partner at The Sprout Group Media & telecommunications banker at Lehman Brothers General partner at Saunders, Karp & Megrue Research analyst at Morgan Stanley Director at Fox Paine & Co. Healthcare and insurance banker at BT Alex Brown M&A and high technology banker at Goldman Sachs President and CEO of Dama Communications Corp CFO of First Data Corp. President and CEO of the Federation of American Hospitals COO and CFO at Goelet Investment Office JP Morgan Chase

Total partner level PE pros Total PE professionals Whole firm employee count FUNDS PE capital raised since inception Current PE dry powder Value of unrealised PE investment portfolio Stated assets under management, whole firm Recent PE fundraising activity

15 50 60+ $15.9 billion $1.9 billion $8.5 billion N/A

Fund
Welsh, Carson, Anderson & Stowe X WCAS Capital Partners IV

Date closed
May-08 July-08

Amount raised
$3.44 billion $1.28 billion

Select LPs

California Institute of Technology, EDS Retirement Plan, John S. and James L. Knight Foundation, Kansas Public Employees Retirement System, Memorial Sloan Kettering Cancer Center, Orange County Employees Retirement System, Pew Charitable Trusts, Robert Wood Johnson Foundation, Tokio Marine & Nichido Fire Insurance Co. Source: Private Equity Connect

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335

8,000 8,000

(6)(6)

(6)(6) $6,643 $6,643

Value in in $m Value $m (#)(#) of Deals of Deals

66

50 WELSh, CARSON, ANDERSON & STOWE 7,000 7,000 DEAL ACTIVITY

6,000 6,000 5,000 5,000 4,000 WELSh, 4,000

55

44

The following charts, provided by Dealogic, are based on deals, M&A exits and IPOs that involved the(3)(3) participation of this firm. equity 3,000 With the exception of IPO data, the deal volume represents the entire enterprise value of the announced deals in question, even if the 3,000 firm did not provide 100 percent of the equity involved.
2,000 2,000 (2)(2) (2)(2)

CARSON, ANDERSON & STOWE DEAL ACTIVITY

33

22

Announced Deal Volume 1,000 1 January 2003 - 15 April 2008 1,000 $584 $584
00 8,000 7,000 6,000 2003 2003

$1,469 $1,469 $1,025 $1,025 $120 $120 2004 2004 (6) 2005 2005 (6) 2006 2006 2007 2007 $6,643 (0)(0) 2008$m Value 2008 in (#) of Deals 5 11

00 6

Value ($m)

12,000 12,000 5,000 4,000 10,000 10,000 3,000 8,000 8,000 2,000 1,000 6,000 6,000 0 4,000 4,000

Value in in $m Value $m (#)(#) of Deals of Deals

$11,453 $11,453 (3)(3)

(3)(3)

33

1,200 1,200 $1,008 $1,008 (3)

(2)(2)

Value in in $m Value $m (#)(#) of Deals of Deals

4 22 3

1,000 1,000 (2)(2) (2) $1,469 $584 $120 2003 2004 $3,940 $3,940 20051 1 (1)(1) 400 2006 400 $1,025 600 600

22

800 (2) 800 $583 $583 (1)(1) 2007 2008

(1)(1) (0)

1 11 0

2,000 Notes: 2,000 (0)(0) 00 12,000

Brackets indicate number of deals.

$79 $79 (0)(0) $701 $701 2008 2008 00 3

200 200 $97 $97 (0)(0) 00 1,200 2003 2003 2004 2004 (2) 2005 2005 2006 2006

Source: Dealogic
(0)(0) (0)(0)

$11,453 in $m 2003 Value2004 2003 2004 2005(3) 2006 2005 2006 2007(3) 2007 (#) of Deal Announced Deals Volume by Industry

10,000

1 January 2003 - 15 April 2008

(2) 8.0% 8.0% 5.1% 0.4% 5.1% 0.4%

$1,008 1 1,000January 2003 - 15 April 2008

Announced Deal Volume by

Value 2007 in $m2008 2007 2008 Geography (#) of Deals

00 2

8,000

800 $583 (1)

6,000 12.1% 12.1% 43.0% $3,940 43.0% (1)

600

(1)

4,000

400 100% 100% $97 (0) (0) 2004 2005 2006 2007 (0) 2008

2,000 (0) 0 2003 $79 2004 2005 (0) 2006 2007 $701 0 2008

200

0 2003

31.4% 31.4%

5.1% 0.4% Financial Institutions ($4,235m; 2) 2) Financial Institutions ($4,235m; Healthcare ($3,094m; 4) 4) Healthcare ($3,094m; 8.0% Business Services ($1,190m; 7) 7) Business Services ($1,190m; Technology ($783m; 3) 3) Technology ($783m; Transportation ($500m; 1) 1) Transportation ($500m; Others ($39m; 2) 2) Others ($39m; 12.1%

North America ($9,841m; 19) North America ($9,841m; 19)

43.0%

Notes: Brackets indicate value and number of deals.

Source: Dealogic
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Notes: Brackets indicate value and number of deals.

100%

Source: Dealogic
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# deals

3,000 3,000 2,000 2,000 1,000 1,000 0 0 (2) (2) $1,469 $1,469 $1,025 $1,025 $584 $584 $120 $120 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 (0) (0) (2) (2)

2 2

WELSh, CARSON, ANDERSON & STOWE 50 DEAL ACTIVITY 1 1

0 0

Announced M&A Exit Volume 1 January 2003 - 15 April 2008

$11,453 $11,453 (3) (3)

Portfolio Company IPO Exit Volume 1 January 2003 - 15 April 2008

12,000 12,000

Value in $m Value in $m (#) of Deals (#) of Deals

(3) (3)

3 3

1,200 1,200 $1,008 $1,008

(2) (2)

Value in $m Value in $m (#) of Deals (#) of Deals

2 2

10,000 10,000 (2) (2)

1,000 1,000

8,000 8,000

2 2

800 800

Value ($m)

Value ($m)

# deals

6,000 6,000 $3,940 $3,940 (1) (1)

600 600 (1) (1) 400 400

$583 $583

(1) (1)

1 1

4,000 4,000

1 1

2,000 2,000 (0) (0) 0 0 2003 2003 $79 $79 2004 2004 2005 2005 (0) (0) 2006 2006 2007 2007 $701 $701 0 0 2008 2008

200 200 $97 $97 (0) (0) 0 0 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 (0) (0) (0) (0)

0 0

Notes: Brackets indicate number of deals.

5.1% 0.4% 5.1% 0.4% 8.0% 8.0%

Notes: IPO volumes do not represent the full enterprise

Source: Dealogic value of the portfolio company; This includes all IPOs regardless of whether the sponsor sold shares or not in the offering; brackets indicate number of deals. Source: Dealogic

12.1% 12.1%

43.0% 43.0%

100% 100%

Welsh, Carson, Anderson & Stowe Fees Paid to Investment Banks 1 January 2003 - 15 April 2008 31.4% 31.4% Total fees Top five fee recipients Top five fee total Financial Institutions ($4,235m; 2) Financial Institutions ($4,235m; 2) Healthcare ($3,094m; 4) Healthcare ($3,094m; 4) Top five % of total fees
Business Services ($1,190m; 7) Business Services ($1,190m; 7) Technology ($783m; 3) Technology ($783m; 3) Transportation ($500m; 1) Transportation ($500m; 1) Others ($39m; 2) Others ($39m; 2)

$753 million JPMorgan, Lehman Brothers, Banc of America, Wachovia, Citi $440 million North America ($9,841m; 19) North America ($9,841m; 19) 58%

Notes: Fees paid on M&A advisory, debt, equity and syndicated loan underwriting. Where fees are not disclosed, Dealogic uses a fee model to estimate revenue on individual transactions. Source: Dealogic

Other Details Number of current portfolio investments Portfolio investments since inception Total equity invested since inception Total deal value

35 150+ N/A N/A

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# deals

337

50 WELSh, CARSON, ANDERSON & STOWE EDITORIAL ExCERPT FROM ThE PEI MEDIA ARChIVE

Welsh Carson bolsters operational team

New York-based Welsh Carson Anderson & Stowe has hired DigitalGlobes Stephen Larned and Unison Site Managements Daniel Lieber as senior operating executives. By Matt Levin New York growth and buyout firm Welsh Carson Anderson & Stowe has hired technology veterans Stephen Larned and Daniel Lieber to bolster its operational team. Larned and Lieber will join Welsh Carsons 13-member team of senior operating executives to assist the firm in deal sourcing, due diligence and improving operational performance within its portfolio companies. Welsh Carson hopes to tap its hires significant experience in the tech and telecom sectors as part of the firms broader focus on information and business services. Larned joins Welsh Carson after working as chief marketing and strategy officer for DigitalGlobe, a provider of high resolution satellite and aerial photos, prior to which he held various executive capacities at Dell Computers. Lieber will depart his post as chief operating officer of Unison Site Management, a specialty investment company that purchases and manages wireless lease rights. Prior to joining Unison, Lieber worked for seven years as an operating principal at Capital Z Financial Services Fund, where he was charged with managing the funds overall portfolio and sat on the board of several public and private companies. Both Larned and Lieber also worked for Boston-based consulting firm Bain & Company. Welsh Carson could not be reached for comment on the story. Welsh Carson, which manages roughly $16 billion (10.3 billion) in assets, has made efforts to expand its operational expertise in recent years. Last year, the firm appointed General Electric Healthcare vice president Anthony Ecock and Oxford Health Plans president Charles Berg as senior operating executives. Founded in 1979 after co-founders Patrick Welsh and Russell Carson spun out from Citigroups venture capital division, the firm maintains a relatively lean team of investment professionals when compared to other private equity firms managing similar amounts of capital. Operational specialists Clayton, Dubilier & Rice, which has raised more than $12 billion in capital since its inception in 1978, possessed a team of 36 investment professionals as of last year, compared to Welsh Carsons 28. Bain Capital, which has raised more than $23.5 billion since its inception in 1984, employed 148 investment professionals as of last year. Welsh Carson is currently investing Welsh Carson Anderson & Stowe X, a $3.4 billion equity fund, and WCAS Capital Partners IV, a $1.3 billion dedicated subordinated debt fund. Some of the firms more notable tech investments include the $725 million purchase last year of TransFirst, a provider of transaction processing services and payment technologies, and the 2001 public offering of data processor Alliance Data Systems, recently the target of a failed Blackstone buyout. Along with business and information services, the firm also focuses on the healthcare sector.

From PrivateEquityOnline.com 6 May 2008

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