2. IMPORTANT NOTICE
These Preliminary Presentation Materials (the “Preliminary Information”) have been prepared solely for informational purposes and are being furnished solely by
Franklin Park Associates, LLC (“Franklin Park”) and other authorized persons for use by prospective investors in preliminary discussions regarding a purchase of
limited partnership interests (the “Interests”) in Franklin Park International Fund 2010, L.P., (the “Fund”). There is no representation or warranty as to the accuracy or
completeness of such information and no one shall have any liability for any representations (express or implied) contained in, or for any omissions from, this
Preliminary Information or any other written or oral communications transmitted to the recipient by Franklin Park, its representatives, or its affiliates (collectively
“Franklin Park”) in the course of the recipientʹs evaluation of a prospective investment in the Fund.
Under no circumstances is this Preliminary Information to be used or considered as an offer to sell or a solicitation of an offer to buy, any Interests. Any such offering
may be made only by the Fundʹs private placement memorandum (as supplemented from time to time, the “Memorandum”) and the definitive provisions provided for
in the Limited Partnership Agreement, Subscription Agreement and other operative documents of the Fund, which should be read carefully by potential investors and
their advisors. The discussion herein is qualified in its entirety by reference to the detailed information, including the substantial risks associated with an investment in
the Fund, which will appear in the Memorandum and other definitive Fund documents.
This Preliminary Information is not intended to be relied upon as the basis for an investment decision, and this Preliminary Information is not, and should not be
assumed to be, complete. In making an investment decision, interested parties should conduct their own investigation and analysis of the data and descriptions set forth
in this Preliminary Information and must rely on their own examination of the investment opportunity, including the merits and risks involved. Potential investors will
be given the opportunity to review the documentation that will govern the rights and obligations of the parties. Qualified prospective purchasers will also be provided
with the opportunity to request additional information relating to the Fund. Purchase of the Interests is suitable only as an investment for, and will be offered only to
persons who have, directly or through qualified representatives, the ability to evaluate the merits and risks of an investment in the Interests and the ability to assume
the economic risks involved in such investment.
The contents of this Preliminary Information are not to be construed as legal, accounting, business or tax advice. Each prospective investor should consult its own
attorney, accountant, business advisor, and tax advisor as to legal, accounting, business, and tax advice. Neither Franklin Park nor any of its affiliates is recommending
that any recipient of this Preliminary Information invest in the Interests, and none of them represent or warrant that the Interests are a suitable investment for such
recipient.
The nature of and risks associated with the Fundʹs investments may differ from those investments and strategies undertaken historically by Franklin Park. There can be
no assurance that the Fundʹs investments will perform as well as past investments by Franklin Park, that the Fund will be able to avoid losses. Moreover, because the
investment criteria that govern investments by the Fund may not govern the investments and investment strategies of the other investment vehicles managed by
Franklin Park, such investments conducted in accordance with such criteria, and the results they yield, may not be directly comparable with, and may differ
substantially from, the other investment vehicles managed by Franklin Park.
Certain information contained herein constitutes “Forward Looking Statementsʺ, which can be identified by the use of forward looking terminology such as “may,“
will,“ “should,” “expect,” “anticipate,“ “project,” “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or comparable terminology. Due to various
risks and uncertainties including those set forth under ʺRisk Factorsʺ in the Memorandum, actual events or results or the actual performance of the Fund may differ
materially from those reflected or contemplated in such Forward Looking Statements.
No person has been authorized to give any information or to make any representations other than to be contained in the Memorandum regarding the eventual offering,
if any, of the Interests. Any investment in the Interests is subject to substantial risks, certain of which are referenced herein. A more complete description of certain risks
involved can be found in the Memorandum. Such risks should be carefully considered by prospective investors before they make any investment decision.
FranklinPark 1
3. EXECUTIVE SUMMARY
• Franklin Park is offering its retainer advisory clients allocation to Franklin Park International Fund
Purpose
2010, L.P., a private equity fund‐of‐funds targeting non‐U.S. private equity funds.
• Target of $100 million, with total maximum commitments of $200 million.
Fund Size
• Retainer clients will be offered up to 10% of their annual target private equity commitments.
• One year commitment period.
Term
• Annual subscriptions.
• Build a diversified portfolio of private equity funds investing in emerging and developing international
Strategy
private equity markets.
• Primary focus on emerging economies.
Geographic Focus
• Flexibility to invest in other geographies.
• No management fees and carry.
Fees & Expenses
• Partnership expenses are paid pro rata by limited partners.
FranklinPark 2
4. INVESTMENT RATIONALE
Evidence of high absolute and risk‐adjusted realized returns.
Africa India
No. Ave. % of No. Ave. % of
Year Realized Year Realized
Firm Realized Investment Realized Firm Realized Investment Realized
Founded ROI Founded ROI
Deals ($m) Losses Deals ($m) Losses
African Capital Alliance Ltd 1997 11 4.4x 5.0 18% Actis India 2004 31 3.8x 5.9 11%
Brait Private Equity 1992 44 3.4x 7.2 22% CX Partners 1995 11 3.5x 12.6 n/a
Ethos Private Equity 1982 32 3.4x 11.0 5% Jacob Ballas Capital India 1995 3 4.1x 6.5 0%
UTI Ventures 2000 18 4.0x 1.2 n/a
Central & Eastern Europe Latin America
No. Ave. % of No. Ave. % of
Year Realized Year Realized
Firm Realized Investment Realized Firm Realized Investment Realized
Founded ROI Founded ROI
Deals ($m) Losses Deals ($m) Losses
AIG Capital Partners 1998 11 3.8x 19.2 0% Angra Partners 1998 4 5.8x 50.7 0%
Riverside Company 1988 12 3.9x 7.9 20% Patria Investimentos 1994 8 5.1x n/a n/a
Royalton Partners 1999 4 3.3x 15.3 0% Southern Cross Group 1998 7 3.6x 32.3 4%
Russia Partners Management 1994 12 3.5x 7.7 11%
China
No. Ave. % of
Year Realized
Firm Realized Investment Realized
Founded ROI
Deals ($m) Losses
Baring Private Equity Asia 1998 20 3.9x 17.2 10%
CDH Investments 2002 10 5.4x 11.6 4%
China Renaissance Capital 2006 5 3.6x 17.7 0%
Prax Capital 2003 3 6.8x 6.0 0%
SAIF Partners 2001 22 4.9x 10.4 55%
Source: Franklin Park manager database. Results sourced from managers’ most recent track record presentations.
FranklinPark 3
5. WHY FRANKLIN PARK?
• Seasoned team with over 12 years of international private equity experience. Since 2003, have served as private advisor to
Overseas Private Investment Corporation (OPIC) covering Asia, Latin America, Middle East and Africa.
• Established relationships with leading emerging market managers. Our principals are responsible for advising on $1 billion in
private equity commitments to emerging market fund managers.
• A proven record of creating and managing commingled fund‐of‐funds for our clients. In 2008, we offered the first fund‐of‐funds
vehicle that enabled our clients to access the venture capital market.
• Proactive deal sourcing and rigorous due diligence processes. Over the last 12 years, our senior team has reviewed close to 1,000
non‐U.S. fund offerings. The team’s aggregate experience reviewing international funds since 1997 is summarized below (as of
December 31, 2009):
International Due Diligence (1997‐2009)
Initial Manager Site Client
Region Reviews Meetings Visits Commitments
Africa 58 12 9 5
Asia 166 59 9 0
Europe 437 224 109 25
Latin America 90 25 9 6
Middle East 84 34 4 3
Global 154 60 14 4
Total 989 414 154 43
Note: Table includes experience at Franklin Park and prior firm.
• The vehicle will deliver access to both difficult to access and small funds. The fund‐of‐funds is an efficient means to access funds
that are oversubscribed, have quick fundraisings or are too small to access directly. Given our stable and highly diverse client
base, we are viewed as a preferred investor.
• Given single year commitment period and annual subscriptions, clients can make annual investment decisions, rather than being
locked in for multiples years like traditional fund‐of‐funds.
FranklinPark 4
6. INVESTMENT TARGET REGIONS
Primary focus on emerging and developing private equity markets.
CEE
Sample managers fundraising in 2010
Advent CEE
AIG New Europe
China
Orchid Asia
Prax Capital
Pan Asia
Affinity
AIF Capital
India
Latin America
Barings India
Angra Partners Multiples
GP Investimentos Peepul
Patria Investimentos
Southern Cross Africa
African Capital Alliance Australia
Ethos
Archer
Ironbridge
Primary Focus Markets Emerging economies expected to sustain high economic growth, particularly Brazil, India, China and certain countries in Africa and C&E Europe.
Secondary Focus Markets Developing eastern private equity markets, particularly Australia, Japan, South Korea and certain countries in the Middle East and SE Asia.
Tertiary Focus Markets Developing western private equity markets, particularly Italy, Spain and certain Benelux and Nordic countries.
Source: Worldatlas.com
FranklinPark 5
7. INVESTMENT OPPORTUNITIES
Region Market Description PE Manager Opportunities
• Africa has averaged a 5.0% growth rate over the last decade. Egypt, • DFIs have been significant investors in PE funds in the
Nigeria and South Africa are the largest economies comprising more
region. However, dominant local firms like Ethos Private
Africa than 50% of the region’s GDP.
Equity, Brait Capital and Emerging Capital Partners have
• South Africa has the most mature private equity market which began in
1984 and is largely buyout and growth capital focused. attracted international institutional investors.
• CEE has a combined GDP estimated at $2.7 trillion for 2009 with an • CEE has a number of local PE funds for example Polish
Central & average growth rate of 4.2% over the last 10 years.
Enterprise, Royalton Partners, Innova and Russia Partners.
Eastern Europe • The Czech Republic, Poland and Russian Federation have the most
(“CEE”) In addition to several PE firms with Western European
robust private equity market that is predominantly growth capital
focused with emerging mezzanine and buyout strategies. heritage like Advent, Apax and Barings.
• China is the largest economy in Asia and has averaged a 9.6% GDP
• China’s PE market comprises of local firms like CDH and
growth rate in the last 10 years.
China SAIF, and international private equity firms such as Actis
• The majority of private equity firms were established in the last five
and Carlyle.
years and focus largely on growth capital.
• India is the second fastest growing economy in Asia, after China, with • India has a number of local PE firms such as Multiples and
GDP growth rates of 6% to 7% for the last decade. ICICI. In addition to several PE firms with U.S. and
India
• The majority of private equity firms were established in the last five European heritage like Actis, Barings, India Value Fund
years and focus largely on growth capital. and Jacob Ballas.
• Latin America has a combined GDP estimated at $3.6 trillion for 2009. • The PE market is dominated by country focused local firms
Argentina, Brazil and Mexico are the largest economies comprising more like Patria and GP Investimentos in Brazil. In addition to
Latin America
than 70% of the region’s GDP. Pan Latin America focused firms like Southern Cross and
• Private equity funds have been raised in the region since the mid‐1990s. Advent South America.
Source: IMF and Franklin Park Database.
FranklinPark 6
8. KEY TERMS
Partnership Franklin Park International Fund 2010, L.P., (the “Partnership”) is a limited partnership established as a
Delaware entity.
General Partner Franklin Park Series 2010, G.P.
Investment Objective The Partnership’s investment objective is to realize long‐term compounded returns in excess of those
available through conventional investments in the public equity markets. The Partnership intends for
substantially all investments to be in non‐U.S. private equity funds.
Offering Size The Partnership is seeking capital commitments of up to $200 million. Offered on a pro rata basis, up to
10% of each client’s annual target commitments.
Closing Date June 2010 target.
Investment Period One year.
Term The earlier of (i) the liquidation of the last fund investment or (ii) 15 years.
Asset Management Fees None.
Carried Interest None.
Administrative Fee or The Partnership will reimburse the General Partner for all organizational, legal, accounting and other
Partnership Expenses: administration expenses.
Investment Restrictions: No more than 25% of commitments will be committed to any single fund.
FranklinPark 7
9. PROFESSIONAL SERVICE PROVIDERS
Auditors Legal Counsel
KPMG LLP Reed Smith LLP
1601 Market Street 1650 Market Street
Philadelphia, PA 19103‐2499 Philadelphia, Pennsylvania 19103
Telephone: (267) 256‐7000 Telephone: (215) 851‐8100
Facsimile: (267) 256‐7200 Facsimile: (215) 851‐1420
FranklinPark 8
11. OVERVIEW
10 Year GDP Annual Growth Rates Market Opportunities
15%
• In the last decade, emerging economies’ growth rates have consistently surpassed growth
10%
rates of developed economies.
5% • Emerging economies account for less than 10% of global private equity market. Private
equity in these markets is a relatively young strategy and thus is characteristically less
0%
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2 0 0 9 E 2 0 10 E
Africa
efficient and competitive.
-5% CEE
China
• Private equity investments as a percentage of GDP in emerging economies have been below
Ind ia
-10%
So uth America
0.1% for the last 5 years.
• Capital markets are mostly unsophisticated and still developing, as a result, growth capital
Private Equity Penetration Rates (Investments/GDP)
is the predominant investment strategy.
0.9% US
Euro pe • A significant number of private equity managers in several of the markets were established
0.8%
Em e rging M kts
0.7% in the last five years.
0.6%
0.5%
0.4%
0.3%
0.2%
Market Risks
0.1%
0.0% Risks the Fund will potentially be exposed to include:
2005 2006 2007 2008 2009
• Economic volatility: fluctuations in GDP growth rates, rates of inflation, capital
Comparative Top Quartile Net IRRs Over Time, as of 9/30/2009 reinvestments and balance of payments.
Emerg ing Eco no mies • Government instability: due to authoritarian governments, military rule or hostile relations
35% US
Wes tern Euro p e with neighboring countries.
25%
• Currency fluctuations: that increase the volatility of investment valuations due to local
15% currency denominated cash flows that are highly exposed to exchange rate fluctuations.
5%
• Absence of regulatory and compliance oversight: governing confidentiality and disclosure
of information, money laundering, disclosure and enforcement of legal rights.
-5% 19 9 7 19 9 8 19 9 9 2000 2001 2002 2003 2004 2005 2006 2007
Vintag e Year
• Level of manager experience: and the skills and expertise of key personnel will directly
-15%
affect the performance of underlying investments.
Source: Thomson One, IMF, Franklin Park Database and Cambridge Associates.
FranklinPark 10
12. AFRICA
10 Year GDP Annual Growth Rates Market Overview
22%
Eygpt • Egypt, Nigeria and South Africa are the largest economies in Africa with a combined
Nige ria
17% S o uth Afric a estimated GDP of $1.1 trillion in 2009 and average growth rates of 5.0% over the last 10
years.
12% • In the period 2007 to 2009, the region raised $6.9 billion of private equity capital and Egypt,
Nigeria and South Africa attracted 62% of the funding.
7%
• South Africa has the most mature private equity market which began in 1984 and is largely
2% buyout and growth capital focused.
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2 0 10 E • There is limited competition in the Nigerian and Egyptian markets with a few GPs that are
-3%
based locally.
Private Equity Activity • The region has active public markets, however trading is typically low and concentrated. As
a result, exits have historically been through M&A transactions.
• The IFC, OPIC, Proparco and DEG have been instrumental anchor investors for a number of
Sub‐Sahara North Africa
GPs in the region.
Large Buyout Low Low • Local GPs include: Capital Alliance and Helios in Nigeria, Abraaj Capital in Egypt, Ethos
Mid Market Buyout High Low Private Equity and Brait Capital in South Africa.
• The region also has Pan‐Africa funds like: Actis, Emerging Capital Partners and Kingdom
Growth Equity High High Zephyr Africa Management Company.
Turnaround Low Low
Venture Capital Low Low
South Africa’s 10 Year M&A and PE Activity
9%
P E Inve s tm e nts
$ 50 bn M &A Ac tivity 8%
P E % o f M &A
7%
$ 40 bn
6%
$ 30 bn 5%
4%
$ 20 bn
3%
2%
$ 10 bn
1%
$ 0 bn 0%
2001 2002 2003 2004 2005 2006 2007 2008
Source: Thomson One, IMF, and Franklin Park Database.
FranklinPark 11
13. CENTRAL & EASTERN EUROPE (“CEE”)
10 Year GDP Annual Growth Rates Market Overview
12% C ze c h R e public
10%
P o la nd • CEE has a combined GDP estimated at $2.7 trillion for 2009 with an average growth rate of
R us s ia n F e de ra tio n
8% 4.2% over the last 10 years.
6%
• The Czech Republic, Poland and Russian Federation are the major economic growth drivers
4%
2% in the region. In the last 10 years, the three countries contributed more than 65% to the
0%
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2 0 0 9 E 2 0 10 E
region’s GDP.
-2%
-4% • Private equity activity is more mature in the Czech Republic, Poland and Russian
-6% Federation and is predominantly mid market buyout and growth capital focused.
-8%
-10%
• Fundraising peaked in 2007 at $3.8 billion, of which 90% was targeted for private equity in
Russia.
Private Equity Activity
• In the last five years the region’s debt markets have matured with several European banks
establishing operations in the region thus providing competitive pricing for acquisition
Czech Poland Russia
financing.
Large Buyout Low Low Low
• In addition, the region has several experienced and established mezzanine providers:
Mid Market Buyout Low High High including Accession Mezzanine, Darby Overseas, Syntaxes Capital and Western European
funds with dedicated teams.
Growth Equity High High High
• M&As and IPO listings in the Euro zone have been the historical route for private equity
Turnaround Low Low Low
exits.
Venture Capital Low Low Low
• There are a number of local PE funds for example Polish Enterprise, Royalton Partners,
10 Year Private Equity Fundraising Innova and Russia Partners. In addition to several PE firms with Western European heritage
like Advent, Apax and Barings.
C ze c h
$ 3,000 m P o la nd
R us s ia
$ 2,000 m
$ 1,000 m
$0 m
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Thomson One, IMF and Franklin Park Database.
FranklinPark 12
14. CHINA
10 Year GDP Annual Growth Rates Market Overview
14%
C hina
• China is the largest economy in Asia and home to 20% of the world’s population.
12% US A
De ve lo ping As ia • In 2009, China had an estimated GDP of $4.8 trillion and has averaged 9.6% GDP growth
10%
rate in the last 10 years.
8%
• As a result of the global recession, China’s growth slowed from 13.0% in 2007 to 8.5% in
6%
2009.
4%
• In 2001, de‐regulations on foreign investments in China fuelled the growth of private
2%
0%
equity.
-2%
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2 0 10 E
• Private equity investments in China predominantly comprise of minority interests in
-4%
growth capital strategies.
• Buyout strategies are less prominent due to limited leverage, regulatory commitments and
Private Equity Activity difficulty in obtaining control stakes from entrepreneur owned companies.
• Since 2006, 150 China focused funds attracted $18.1 billion in private equity commitments:
China
peaking in 2008 at $8.9 billion.
Large Buyout Low
• Private equity exits have traditionally been driven by IPOs.
Mid Market Buyout Low • There are currently a few local tenured private equity firms, including: CDH, SAIF, China
Renaissance Capital, as well as U.S. and European heritage firms such as Actis, Barings
Growth Equity High
and Carlyle.
Turnaround Low
Venture Capital High
10 Year Public Markets Annual Average Returns
7.0% Ho ng Ko ng (HS I)
S ha ngha i (S S EC )
5.0% S &P 500
3.0%
1.0%
-1.0% 19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-3.0%
-5.0%
-7.0%
Source: Thomson One, IMF, Franklin Park Database and Yahoo Finance.
FranklinPark 13
15. INDIA
10 Year GDP Annual Growth Rates Market Overview
14%
India • India is the world’s most populace democracy and has averaged growth rates of 6‐7% over
C hina
12%
De ve lo ping As ia
the past decade: making it the second fastest growing economy in Asia, after China.
10% • The economy has thrived largely because of a strong IT infrastructure, low‐wages and as
8% well as the global outsourcing trend. The IT service sector grew 40%‐50% per year since
6% 1990.
4%
• While there has been private equity activity since the early 1990s, private equity in India
2%
significantly expanded in the last 10 years. India focused private equity firms raised $16.8
0%
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2 0 0 9 E 2 0 10 E billion since 1999.
• Private equity activity largely comprises minority growth capital investments in owner‐
Private Equity Activity
managed small businesses.
India
• The private equity market is largely relationship driven with limited broker intermediation.
Large Buyout Low
• Most of the private equity players in India are new and were established in the last five
Mid Market Buyout Low years. A few have been active in the region for more than a decade, such as Actis, Barings,
Growth Equity High Warburg Pincus and ICICI.
Turnaround Low • Global international private equity firms, including Blackstone and Carlyle, have in recent
periods allocated resources and capital to the region.
Venture Capital Medium
10 Year Public Markets Annual Average Returns
7.0%
B o m ba y (B S ES N)
Ho ng Ko ng (HS I)
5.0%
S &P 500
3.0%
1.0%
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-1.0%
-3.0%
-5.0%
Source: Thomson One, IMF, Franklin Park Database and Yahoo Finance.
FranklinPark 14
16. LATIN AMERICA
10 Year GDP Annual Growth Rates Market Overview
10%
8%
• The largest and more mature economies in Latin America are Argentina, Brazil and Mexico
6% with a combined estimated GDP of $2.6 trillion in 2009 and average growth rates of 2.5%
4% over the last 10 years.
2%
• In the last 10 years, Argentina, Brazil and Mexico have dominated private equity: attracting
0%
19 9 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2 0 0 9 E 2 0 10 E more than 90% of the capital raised in the region.
-2%
-4%
• Fundraising peaked in 2007 and 2008 at $4.5 billion and more than 90% of the capital was
-6% raised by Argentina, Brazil and Mexican focused funds.
-8% • Mid market buyout and growth capital investing are the dominant strategies in the region.
Arge ntina
-10%
B ra zil • The private equity market is typically relationship driven with limited broker
-12% M e xic o
intermediation.
• Capital markets are less sophisticated than the US market and are dominated by local banks.
Private Equity Activity
• The central banks in Mexico, Chile and Brazil are independent and have in recent years
Argentina Brazil Mexico tightened monetary regulations and corporate governance.
Large Buyout Low Medium Low • Leverage for buyouts is available at approximately 1x to 2x EBITDA.
• Exits in the last 5 years have been dominated by M&A activity and a buoyant stock market
Mid Market Buyout High High High
in 2007 and 2008.
Growth Equity High High High • The PE market is dominated by country focused local firms like Patria and GP
Investimentos in Brazil. In addition to Pan Latin America focused firms like Southern Cross
Turnaround Low Medium Low
and Advent South America.
Venture Capital Low Low Low
10 Year Public Market Annual Average Returns
6%
4%
2%
0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-2%
-4%
Arge ntina (M ER V)
B ra zil (B VS P )
-6% M e xic o (M XX)
Source: Thomson One, IMF, Franklin Park Database and Yahoo Finance.
FranklinPark 15
