Our weekly pick of Private Equity and Venture Capital News.

1. DIGEST 77
SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 77
Coller Capital Says More Money to
1 Flow to PE Next Year, and at a Faster
Pace
1 CBInsights Scopes the Tech IPO
Pipeline for 2013
• CB Insights Study
Five Trends in Successful PE
2 Fundraising in 2012
• Unquote report
3 LATAM PE Investment Dips
• Reuters WTE report
Hamilton Lane to Provide
3 Technology to Clients for Better
Reporting
4 Quote of the Week: Same Asset, Different
Valuation
December 14, 2012

2. COLLER CAPITAL SAYS MORE MONEY
TO FLOW TO PE NEXT YEAR, AND AT A
FASTER PACE
LPs are increasing their allocations to PE after some significant backtracking in the wake of the global
financial crisis, according to Coller Capital’s latest PE Barometer report. More than three times as many
LPs (30%) plan to increase their target allocation to private equity over the next 12 months as to
reduce it (9% of LPs). One third of investors are accelerating their commitments to PE.
Investors in PE are upbeat about returns despite expecting loan defaults amongst PE backed firms in
Europe and greater skepticism about Asia-Pacific dealmaking conditions. A large majority (80%) of
investors expect net PE returns of greater than 11% over the next 3 to 5 years. The report has some
sobering sentiments. For example, half of North American LPs plan to reduce their number of GP
relationships in the next two years, while two thirds of LPs expect buyout default rates in Europe to
increase over the next 2 to 3 years, and 43% of private equity investors think the risk-reward equation
in China is getting worse.
INSIGHTS SCOPES THE TECH IPO
PIPELINE FOR 2013
There are 472 VC and private equity-backed
technology companies with valuations of over
EUR 100 million, which makes for a rich pool
of potential technology IPOs in New Year for
the companies that survive and thrive in the
next 12 months. A report by CB Insights
highlights the investor, sector and financing
trends observed among what it describes as
tech's most promising rising stars.
Image source: CB Insights
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3. Here are four key findings by CB Insights
• Some of the largest companies in the tech IPO pipeline are funded by large PE investors.
• Almost a fifth of the companies on CB Insights list are backed by private equity firms who either
invested in large expansion capital rounds or in take-private transactions (such as Blackboard and
Sabre Holdings).
• The Tech IPO pipeline favors B2B companies with 80% of companies targeting their products and
services at businesses, despite all the buzz about consumer Internet.
• The top 10 investors list includes many of the high profile VC firms. Leaders are Sequoia Capital and
Intel Capital. The only non-VC institution in the top 10 is Goldman Sachs.
FIVE TRENDS IN SUCCESSFUL PE
FUNDRAISING IN 2012
Luck doesn't account for much in today's market, so how did Advent manage to exceed its target in less
than nine months, while others toil for more than a year? This was the question that unquote’s editors
posed in a story this week that featured analysis of Advent’s latest close, and several other very large
funds that reached significant milestones this year. At under nine months, Advent's fundraise took just
half the time of BC Partners’ EUR 6.5 billion vehicle. It was attributed to its relative and absolute returns,
rather than reduction fees of funds structuring. Loyalty of existing LPs was also a contributing factor, as
was its ability to retain key personnel and partners.
Here are five trends for other large sized fund closings in 2012
• Unquote’s database recorded 72 closings (interim or final) in the first 11 months of 2012, which is
fewer than the same period last year but actually involved a lot more money.
• The first quarter of this year saw a number of sizeable first closes, with Apax Private Equity, IK
Investment Partners and Cinven announcing the commitment of EUR 14 billion in a two week period
though all have yet to reach a final close.
• Fundraising is taking longer because LPs have to process more data than before, on performance,
deals, markets, competition, and key-man or key people.
• Apax, Cinven and Permira worked for more than a year, despite various LP incentives.
• The need to meet with investors is not limited to a GP's investor relations team.
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4. LATAM PE INVESTMENT DIPS
Image source: Reuters
Private equity and venture capital investment in Latin America was down by 60% (to USD 1.79 billion) in
the first half of 2012, according to Reuters. The region has seen an up and down trend in recent years. It
was up from USD 1 billion in 2005 to USD 7.5 billion in 2007, then down to about USD 3 billion in 2008
and 2009. It then spiked the following year to USD 17.2 billion before declining to USD 5.5 billion in
2011. Despite the roller-coastering, the report quotes analysts of the region who say that compared to
other parts of the world, Latin America has a good basis for investment due to a boom in the e-
commerce industry, fueled by a growing middle class across Latin America, as well increased investment
in the Internet and IT sectors.
HAMILTON LANE TO PROVIDE
TECHNOLOGY TO CLIENTS FOR BETTER
REPORTING
Advent’s recent fundraising
success was attributed to its
ability to return money to LPs,
according to Unquote, which we
covered above, but an influential
LP and gatekeeper says that
transparency and reporting is
Image source: iLevel just as important.
Hamilton Lane says investors are choosing one fund manager over another based more on
reporting capabilities than ever before, as reported in Private Equity Wire. Hamilton Lane is
putting its money where its conviction is by investing in a technology platform for its clients
3 and other LPs.
www.DealMarket.com/digest

5. In a quote in the article, Erik Hirsch, chief investment officer of Hamilton Lane said that LPs have
difficulty tracking earnings or debt levels across their private equity portfolio and that technology is the
key enabler of increased transparency. Potential investors are requesting the kind of reporting and
transparency provided by public equities. The new portfolio management platform will be offered by
Hamilton Lane to its clients and other LPs in 2013.
It appears LPs are not the only ones moving towards an advanced technology future, as GPs also exhibit
awareness that there needs to be better reporting and insight into underlying portfolio companies.
Nearly half of the GPs in the poll felt that they fall short in their limited partner reporting or struggle to
understand the reporting demands of their LPs. A poll by iLevel found that 50 per cent of GPs at a
recent industry event plan to increase their back-office headcount over the next 18 months with an eye
to improving their ability to meet LP reporting demands.
QUOTE OF THE WEEK:
SAME ASSET, DIFFERENT VALUATION
“It’s a common problem in the PE
world: two firms hold the same asset
but carry it at wildly different prices.
There’s nothing that irks LPs more
than these sorts of discrepancies in
valuation.”
Image source: Privcap
Who said it: Jennifer Cho Rinehart, Managing Partner, MVision Private Equity Advisers
In Context: In a roundtable broadcast on Privcap, Cho along with Pawan Chatuverdi, Partner, Altius
Associates, and Matthew Pedley of The Blackstone Group shared best practices in conducting and
facilitating portfolio-level due diligence. Privcap dubbed it the brave new world of transparency in
fundraising. Cho said that when valuing portfolio companies it is in the best interest of GPs not to be
overly aggressive in their projections. And if a GP gets a call from an LP who questions his valuation
process, he or she should give their LP the most detailed explanation possible for the rationale behind
your valuation. The rest of the discussion reveals that LP demand for data is “emboldened and
undeterred” and that track record data remains the most pressing concern.
Where we found it: Privcap
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6. The Dealmarket Digest empowers members of Dealmarket by providing
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noteworthy news items, scoping trends and currents events in the global
private equity sector. The links to the sources are provided, as well as an
editorialized abstract that discusses the significance of the articles
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Editor: Valerie Thompson, Zurich
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