PEI Annual Fundraising Review of 2014

by Private Equity International’s Research and Analytics Team | January 2015
Research and Analytics
Annual Fundraising Review 2014
»» FUNDRAISING COOLS OFF IN
2014, BUT REMAINS ROBUST
»» NORTH AMERICAN BUYOUTS
REAFFIRMED AS INVESTORS’
MOST POPULAR PRIVATE
EQUITY STRATEGY
»» INVESTOR CAPITAL RETURNS
TO EMERGING ASIA
»» DECLINE IN PRIVATE
CORPORATE
DEBT FUNDRAISING
»» GPS EYE FEWER
OPPORTUNITIES FOR
SECONDARIES FUNDS
»» LP CONCERN SHIFTS
TOWARDS AVAILABILITY
OF DEBT AND VALUATIONS

RESEARCH AND ANALYTICS ANNUAL REVIEW | 2014
1
The data used in this review is collated and compiled by the Private Equity International
Research & Analytics team in London, New York and Hong Kong, using the data included in
your Private Equity International Platinum subscription. For more information, please contact
your account manager:
Jack Griffiths in London on +44 (0) 20 7566 5468 or jack.g@peimedia.com
Ryan Ng in Hong Kong on +852 2153 3140 or ryan.n@peimedia.com
Andre Anderson in New York on +1 646 545 6296 or andre.a@peimedia.com
REPORT EDITOR:
Sasha Batica
Senior Research Analyst
London
Private Equity International
T: +44 (0) 20 7566 5465
E: sasha.b@peimedia.com
RESEARCH AND ANALYTICS:
Dan Gunner
Director of Research and Analytics
T: +44 (0) 20 7566 5423
E: dan.g@peimedia.com
Andrew Kang
New York
T: +1 646 581 9296
E: andrew.k@peimedia.com
Shawn Wang
Hong Kong
T: +852 2153 3247
E: Shawn.w@peimedia.com
CONTRIBUTORS:
Thelma Azolukwam, Sophie
Colby, Andrew Kang, Daniel
Humphrey-Rodriguez, Devaangi
Shah, Shawn Wang, Courtney Yip,
Karina Zinkiewicz.
While 2014’s fundraising level is likely to increase in
the coming weeks as more information is released, the
$370.4 billion raised represents a cooling from 2013’s
whopping $430.8 billion haul. This slowdown may be
perceived as a sign of diminishing investor interest in the
asset class, but 2013’s success was fuelled by LPs who
rushed to put record cash distributions from GPs back into
private equity, therefore a fundraising plateau might have
been expected. As Richard Anthony of Evercore points out
in our interview, the fundraising environment is still robust.
One reason that distributions were so great for some in 2013 was an uptick in
valuations. Through a combination of cheap debt and increased competition
for deals, many GPs were presented with good opportunities to sell some of
their holdings.
However, as our annual LP perspectives study confirmed, despite benefitting from
this strong pricing, cheap debt and valuations are now the biggest concern for LPs
– as it means that new investments are becoming expensive.
Market concerns may be seeping down to GPs too. Although on aggregate there is
21 percent more capital being targeted by GPs currently in market compared to
12 months ago, the average target size per fund has actually fallen. This may be
an indication that GPs feel less confident about putting capital to work in 2015.
2014 ends on a positive note, yet with the market becoming increasingly more
crowded, many will be wondering how the returns of late are to be generated again.
Happy New Year and we hope that you enjoy the review.
Sasha Batica
Introduction

2
Fundraising Analysis
2014’s capital haul is robust
and represents a healthy
engagement towards the
asset class from LPs. Although
the graph (on right) appears
to show a sharp decline from
2013’s value, we expect the
gap to be small when more
fundraising information
becomes available.
$370.45bn
The total capital
raised in 2014
666
Total funds
to hold a
final close
TMT
The most popular sector
for specialist funds,
representing 8% of
2014’s capital haul
Secondaries
The strategy with the
largest increase in capital
– 22% year on year
$370.45
BILLION
Venture Capital /
Growth Equity
$0.70bn
Fund of Funds
/ Co-Investment
$0.06bn
Buyout / Corporate
Private Equity
$5.47bn
Latin America $6.23bn
Venture Capital /
Growth Equity
$1.40bn
Fund of Funds /
Co-Investment
$1.14bn
Buyout / Corporate
Private Equity
$1.45bn
Middle East/Africa $3.99bn
Venture Capital /
Growth Equity
$35.57bn
Secondaries
$1.67bn
Mezzanine / Debt
$20.94bn
Fund of Funds /
Co-Investment
$5.86bn
Distressed /
Turnaround
$0.73bn
Buyout / Corporate
Private Equity
$80.43bn
North America $145.19bn
Venture Capital /
Growth Equity
$11.03bn
Secondaries
$0.61bn
Mezzanine /
Debt
$0.14bn
Fund of Funds /
Co-Investment
$1.14bn
Distressed /
Turnaround
$1.74bn
Buyout / Corporate
Private Equity
$21.55bn
Asia-Paciﬁc $36.21 bn
Venture Capital /
Growth Equity
$18.74bn
Secondaries
$21.48bn
Mezzanine /
Debt
$12.67bn
Fund of Funds /
Co-Investment
$8.54bn
Distressed /
Turnaround
$3.91bn
Buyout / Corporate
Private Equity
$63.14bn
Global $128.49bn
Europe $50.34bn
Mezzanine /
Debt
$15.40bn
Venture Capital /
Growth Equity
$6.42bn
Secondaries
$1.23bn
Fund of Funds /
Co-Investment
$1.94bn
Distressed /
Turnaround
$2.57bn
Buyout / Corporate
Private Equity
$22.79bn
2008 2009 2010 2011 2012 2013 2014
Funds
closed
907
624
744 779
713 732
666
$541.2bn
$247.7bn
$228.9bn
$284.9bn
$324.1bn
$423.2bn
$370.4bn
Capital
raised
YEAR
Source: Private Equity International
Figure 1: Fundraising cools in 2014

3
Figure 2: Top 10 final closes of 2014
2014’s largest fund raised $7.48bn less than 2013’s largest, Apollo
Investment Fund VIII
Fund Name Fund Manager Capital
Raised ($m)
Geographic
Focus
Strategy
Hellman & Friedman
Capital Partners VIII
Hellman &
Friedman LLC
$10,900.00 Global Buyout /
Corporate
Private Equity
AXA Secondary Fund
VI
Ardian $9,000.00 Global Secondaries
Lone Star Fund IX Lone Star Funds $7,400.00 Global Mezzanine /
Debt
Bain Capital Fund XI Bain Capital $7,300.00 Global Buyout /
Corporate
Private Equity
Permira V Permira Advisers $6,970.96 Global Buyout /
Corporate
Private Equity
Clayton, Dubilier &
Rice Fund IX
Clayton Dubilier
& Rice
$6,430.00 North
America
Buyout /
Corporate
Private Equity
Centerbridge Capital
Partners III
Centerbridge
Partners
$6,000.00 Global Buyout /
Corporate
Private Equity
Vista Equity Partners V Vista Equity
Partners
$5,780.00 North
America
Buyout /
Corporate
Private Equity
Onex Partners IV Onex $5,660.00 North
America
Buyout /
Corporate
Private Equity
BDT Capital Partners
Fund II
BDT Capital
Partners
$5,210.00 North
America
Buyout /
Corporate
Private Equity

4
Figure 3: Total capital raised for private corporate debt funds
Debt related strategies fall out of favour with LPs in 2014
Fundraising for private corporate debt funds took a knock in 2014, falling by 30 percent.
With many banks returning to corporate lending, GPs faced increased competition for
deals. It should be noted that we expect this figure to improve slightly as more information
is released over the coming weeks.
However, it would appear that GPs are still confident in the strategy going into 2015, with
fund managers hoping to raise $98.9 billion (as of December 31st 2014.) Assuming that
GPs fulfil their ambitions, we should expect to see a significantly larger capital haul for
private corporate debt in 2015.
$84.8bn
TotalCapitalRaised($bn)
$20.6bn
$35.7bn
$40.3bn
$50.9bn
$70.2bn
$49.1bn
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
2008 2009 2010 2011 2012 2013 2014

5
In 2014 the global LP community chose North America over Europe for funds targeting
buyout strategies, with the former raising $80.4 billion. The IMF expects the US and
Canada to grow by 3.1 and 2.4 percent respectively in 2015, more than the Eurozone’s
1.3 percent, which may account for the levels of capital raised.
However, a number of notable European fund managers held final closes in 2013. Apax
Partners, Cinven, CVC Capital Partners, Nordic Capital, and Triton Partners all raised
funds in excess of $5 billion for European buyout strategies in 2013. So the drop-off
in 2014 is perhaps understandable, as these funds deploy their raised capital before
seeking further LP backing.
Figure 4: Fundraising for North American and European
buyout funds
Investors prefer North America over Europe for buyout
strategies in 2014
2008 2009 2010 2011 2012 2013 2014
North American Buyout European Buyout
$79.74bn
$78.55
$41.93bn
$79.74bn
$32.97bn
$37.10bn
$52.05bn
$80.43bn
$17.42bn $17.01bn
$26.94
$19.78
$69.48bn
$22.79bn

6
GPs raised $21 billion for emerging market focused funds in 2014, a figure that we
would expect to rise as more information becomes available.
Funds focusing on emerging Asia were most popular, raising $15.1 billion from LPs in
2014. Latin America funds were also popular, receiving $6.3 billion.
The largest of these funds to close in 2014 was the CDH Fund V by CDH Investments,
which received commitments from Alpinvest Partners, Asia Alternatives Management,
GIC Private Limited, and the University of Michigan.
Of course, not all emerging markets have attracted interest from LPs. The pop-out graph
here shows how investment into Russia, Mexico, and Israel specific funds has collapsed by
81%, 83% and 91% year on year as a result of the geo political issues that intensified in 2014.
Figure 5: Emerging Market Fundraising
LPs displayed increased appetite
for emerging markets in 2014
$55.30bn
$20.10bn
$41.52bn
$66.30bn
$44.52bn
$28.20bn
$28.18bn
Emerging Asia
Latin America
Sub-Saharan Africa
Central & Eastern Europe
Two or More Regions
MENA
$0.14bn
$0.75bn
$1.53bn
$4.19bn
$0.82bn
$1.68bn
$0.79bn
$0.14bn $0.15bn
Russia Mexico Israel
2012 2013 2014

7
Figure 6: Funds in market / coming to market
GPs chasing an increasing amount of capital from investors en masse
The two snapshots above represent how much in aggregate private equity fund
managers are currently targeting. Over the two periods, the value has increased by 21
percent, which suggests that 2015’s fundraising scene will be much more competitive.
Interestingly, the number of funds currently in market (2227) vs the 2013 snapshot
(1624), tell us that GPs are on average targeting less for their respective fund offerings
than at the same point last year – $335 million compared to $380 million. This could
mean that GPs are less confident in putting their capital to work going forward.
Secondaries was the only strategy that exhibited a decline over the period, a reflection
perhaps of the level of dry powder within the industry – which Credit Suisse estimates
to be around $50 billion. GPs are now targeting 21 percent less capital for secondaries
funds compared with December 2013.
$0 $100 $200 $300 $400 $500 $600 $700 $800
December
2014
December
2013
Aggregate target size ($bn)
Buyout / Corporate Private Equity
Distressed / TurnaroundFunds of Funds / Co-Investment
Mezzanine / DebtSecondaries
Venture Capital / Growth Equity
$747.08bn
$616.69bn

8
Country in Focus — China
Figure 7: Fundraising for China-specific private equity funds
LPs returned to China-specific private equity funds in 2014, with fundraising
increasing by 62 percent year on year. However, the capital raised in 2014 is still far
off the amount raised in 2011 – 81 percent less – which was a stellar year in terms of
fundraising for all emerging markets.
YunFeng Capital II was the largest fund to close this year, with commitments totalling
$1.1 billion. Alibaba Group and Giant Interactive Group Inc, local corporates, both
backed the fund.
Other international LPs that committed to China funds that closed in 2014 include:
Allianz, Allstate Investments, Partners Group, Princeton University Investment Co. and
Texas County and District Retirement System.
0
20
40
60
80
100
120
140
160
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2008 2009 2010 2011 2012 2013 2014
Nooffundsclosed
Totalcapitalraised($bn)
$21.59
$7.84
$20.06
$42.12
$23.84
$5.03
$8.14

9
Figure 8: Sample Chinese GPs currently in market
Chinese GPs collectively seeking $90.79 billion from investors
Fund Name Fund
Manager
Fund Strategy Target
Size
(CNYbn)
Region
Focus
Fund Sector
China Culture
Industrial
Investment
Fund I
China Culture
Industrial
Investment
Fund
Management
Venture Capital /
Growth Equity
20 Asia-
Pacific
Leisure
TMT
Other
CICC Qianhai
Development
Fund
China
International
Capital
Corporation
Venture Capital /
Growth Equity
20 Asia-
Pacific
TMT
Financial Services
Other
CSM Inner
Mongolia
Fund
China Science
& Merchants
Investment
(Fund)
Management
(CSMI)
Venture Capital /
Growth Equity
20 Asia-
Pacific
Diversified
Guangxi
Beibu Gulf
Industrial
Investment
Fund
Guangxi
Investment
Group
Venture Capital /
Growth Equity
20 Asia-
Pacific
Natural Resources
TMT
Other
Nanjing
Jianning Zijin
Private Equity
Fund
Zijin
Investment
Group
Venture Capital /
Growth Equity
20 Asia-
Pacific
Biotech / Life
Science
TMT
Energy / Oil & Gas
Clean Tech /
Renewable
Other

10
Figure 9: Sample Chinese LPs
Name Institution Type
National Council for
Social Security Fund of
China (NSSF)
Sovereign
Wealth Fund
China-Belgium Direct Equity Investment Fund,
Huayu Water Industrial Investment Fund I, IDG
Harmony Growth Fund, SAIF China Growth
RMB Fund II, Tianjin Chengbai Capital Fund
China Development
Bank (CDB)
Bank/ Financial
Services
Abax RMB Private Equity Fund, ASEAN China
Investment Fund, China-Portugal Cooperation
and Development Fund, Infinity Israel-China
Fund, Mandarin Capital Partners
China Investment
Corporation
Sovereign
Wealth Fund
3i Growth Capital Fund, Apax Europe VII,
Lexington Capital Partners VI, Triton Fund III,
RRJ Capital II
China Life
Insurance Company
Insurance
Company
Bohai Industrial Investment Fund I, Guochuang
Oriza Fund of Funds I (Guochuang Fofs VC),
CITIC Private Equity Fund III, Hony PE RMB
Fund II (Beijing Hony 2010 Private Equity
Investment Centre), Shanxi Energy Industry
Fund
Shanghai Venture Capital Fund of Funds
Manager
Cenova Venture Fund, Kaiwu Walden Capital,
TDF China Fund I, Yingzhi Fund, Zhangjiang
Sino-Century Investment Fund
Corporates account for 51 percent of the 255 Chinese LPs on PEI’s database. A
further 18% are either government-related organisations or sovereign wealth funds,
highlighting the role of state capital within China’s private equity scene.
Projections
Part of the increase in fundraising can be attributed to the re-opening
of China’s IPO market at the start of 2014, which is helping firms exit
their minority investment stakes. However, an uptick in valuations
will change the focus of private equity firms towards selling, as
CITIC Capital Partners’ Senior Managing Director Eric Xin told PEI
in December.
Like with most emerging economies, efforts are being made
in China to deregulate its state and insurance systems, which
should increase local LP participation within international private
equity funds. Chinese insurers can now allocate up to 30 percent –
up from 10 percent – to all forms of equity. Liquidity requirements on
the National Council for Social Security Fund of China have also been
reduced, enabling it to invest internationally.

11
Evercore’s history within fund placement lies in the roots
of Neuberger Bergman following Evercore’s acquisition of
its fund placement arm. How has the business’s approach
to fund placement changed since the acquisition?
The approach has remained the same but in reality we were very
much at the inception of our business when we were at Neuberger.
We have a deliberately concentrated platform of high quality
managers, which enable us to provide these GPs with a level of
advice and execution which we believe stands out vs our peers.
Evercore was tipped by one LP contact of ours as one
of the ‘better’ placement agents. What are you doing to
distinguish yourselves from the other agents in the market?
The advisory side of our business is at the core of what we do. We
do an enormous amount of work on the front end with our GPs,
properly understanding how they’re perceived in the market. We use
this information to provide them with objective advice on how best
to position their fund and the appropriate fundraising strategy to
provide for superior execution and an expedited fundraising process.
We have a reputation as being a group that is not afraid to tell the GP
what the challenges of a raise may be and how to deal with them –
we’re very comfortable with that.
Approximately how many funds do you raise per annum?
Does this rate remain constant?
Somewhere between 8 and 12. It’s almost always in this
range, but generally the funds will be at different stages of the
fundraising process.
When selecting a fund manager to work with, which traits
are most important?
Obviously it varies significantly between first time and more
established funds, but in general it would be: quality and consistency
of track record, stability and depth of team, relevance of strategy in
current market and anything that differentiates the way that the group
prosecutes their strategy. There is also the softer issue of people and
culture – you end up spending a lot of time with the clients during the
life of a fundraise and if there isn’t a “fit” on both sides, it can make
the process much less enjoyable. We’ve been very fortunate in having
the opportunity to work with great GPs in this regard.
» RICHARD ANTHONY
Senior Managing Director,
Evercore – Private Funds Group
Adviser Interview

12
Adviser Interview
» In general the breadth
of strategies has increased
over the last few years. «
We hear a lot about the proverbial pendulum swinging
towards the LPs in respect to the LP-GP relationship, but
where does power really lie from your experiences?
Probably where it should be – i.e. finely balanced between the two.
In reality we find most GPs are willing to be very reasonable in the
pursuit of having high quality limited partners and equally I think
these same LPs recognise that it’s in their interests to make sure the
terms for GPs aren’t so onerous that it starts to become unattractive
for the fund manager.
A lot of our studies reflect how track record and
experience is important for GPs to attract commitments
from LPs, but how important is the track record of an LP
to the top tier managers?
I think it’s become more important in recent years particularly with
GPs who have suffered significant LP turnover. We will often be asked
about the LP’s approach to re-ups and whether they genuinely view
an investment in a fund as a “partnership”.
How would you describe the current fundraising
environment?
Robust. This has been largely driven by the substantial distributions
many LPs have been receiving. It’s had two effects 1) It obviously
means LPs have more capital to deploy and 2) It’s reminded LPs
once again of why they liked private equity as an asset class in the
first place.
With the current levels of dry powder within the industry,
do you foresee current fundraising levels to continue upwards?
I think that fundraising levels are already reasonably high and if they
remain at this level for some period of time it will continue to be a
healthy market.
Which strategies are attracting the most interest from
institutional investors?
In general the breadth of strategies has increased over the last few
years. In addition to traditional buyout funds we have seen a significant
increase in investor interest for alternative credit strategies as well as
for infrastructure and real assets. Energy of course remains a strong
theme, notwithstanding the obvious impact a lower oil price will have.

13
Adviser Interview
» The US market will, in my
mind, always be the largest
and most significant in
terms of the quantum of
capital we raise. «
Evercore Private Funds Group has recently expanded
operations in Asia. Which institution types do you foresee
most capital being raised from?
No major surprises here. The so called “Sovereign Wealth Funds”,
large pension funds, and to a lesser extent family offices.
What other types of institutions and geographical bases
do you foresee more capital being raised from?
Europe and the Middle East have been a particularly strong market
for us in the last year or so and I’m sure that will continue. However
the US will, in my mind, always be the largest and most significant in
terms of the quantum of capital we raise. In terms of institution type
I would suggest that across the board we’ve seen commitment sizes
increase due to larger amounts of capital available for deployment
and the more concentrated nature of many LP portfolios.
What is the market like for first time managers?
The market for a first time fund will always be a very challenging
one: the bottom line is that it will always be an easier decision for
an investor to choose the more established manager. That said,
we’ve had some very good experiences with first time managers
who have genuinely differentiated strategies or approaches. In these
cases providing the GP has the stamina and is willing to put a truly
dedicated effort into building a client base then a successful outcome
is certainly achievable.
» RICHARD ANTHONY
Senior Managing Director,
Evercore- Private Funds Group

14
LP Insights
Key People Moves of 2014
It was announced that Chris Schelling would be joining the Texas Municipal
Retirement System in January as its first Director of private equity. He is currently the
deputy Chief Investment Officer and Director of absolute-return strategies for the
Kentucky Retirement Systems. LP Radar – December 2014
David Wilton stepped down as CIO of the International Finance Corporation (IFC)
in July. He oversaw the activity of IFC’s direct and fund investments into PE. Wilton
previously managed the World Bank Staff Retirement Plan and Trust’s investments into
private equity. On the record: IFC’s David Wilton – 3 September 2014
Volkert Doeksen announced in May that he would be stepping down as
Chairman and Managing Partner of Alpinvest Partners to take up the role of Vice
Chairman of Carlyle Solutions. He will remain as co-founder of Alpinvest. AlpInvest
became fully owned by Carlyle last year, when the firm acquired the remaining 40
percent interest after having bought a 60 percent stake in 2011. Alpinvest’s Doeksen
takes a step back – 27 May 2014
Jane Mendillo, former President and Chief Executive of the Harvard Management
Company (HMC), announced in May that she would step down from her position at the
endowment at the end of the year, after 21 years of service to the institution. HMC is one
of the most active university endowments investing into private equity, with a portfolio
value of $3.9 billion (12% of total investments). In September, it increased its target
allocation to 18% for the 2015 fiscal year. Mendillo Steps down at Harvard- 11 June 2014
All news taken from www.privateequityinternational.com

15
LP Insights
LP Radar
A showcase of some of our conversations with LPs last December
The Senior Investment Officer at Misland Capital told PEI that its strategy in the
New Year is to invest in global buyout and venture capital strategies. The
investment firm currently invests in secondary funds and direct investments, as
well as primary funds.
Development Bank of Japan revealed that it will favour Japanese buyout and
distressed funds in 2015, but other indirect strategies, directs, secondary directs
and co-investment opportunities will also be considered.
Korea Teachers Credit Union expressed that it is difficult to find good opportunities
in Korea and it will continue to look for alternative investments in overseas matured
markets, including North America, Western Europe and Australia.
Cathay Life Insurance revealed that it will continue to invest around $300 million
– with a bite size of $15 to 20 million – in private equity in 2015. It is seeking
opportunities in OECD matured markets – especially Europe and North America
– and has no intention to increase its allocation to emerging markets.
AustralianSuper told PEI that it will continue to consider investment
opportunities globally, including Middle East and Latin America, through
buyout or growth funds in 2015. It will not invest in debt or mezzanine funds.
Boston City Retirement System is looking to make its first private equity
investment into an Asia-focused vehicle through a fund of funds. It typically
commits between $10 and 20 million to funds. In addition, it will look to
increase its exposure to North American private equity. The retirement system
recently backed Lexington Capital Partners’ eighth secondaries fund.

16
Figure 10: Sample LP Commitments for 2014
LP Name Commitment
Size (m)
Fund Name Fund Manager
Alaska Permanent Fund $750 APFC/Apollo Private
Credit Separate
Account
Apollo Global
Management
Oregon Public Employees'
Retirement System
$700 TPG Partners VII TPG
Pennsylvania Public School
Employees' Retirement
System
$650 Park Square-PSERS
Credit Opportunities
Fund
Park Square Capital
Bayerische
Versorgungskammer (BVK)
€504 BVK Private Equity
2014 – Separate
Account
Pantheon Ventures
Washington State
Investment Board
$600 Hellman & Friedman
Capital Partners VIII
Hellman &
Friedman LLC
Alaska Permanent Fund $550 Dyal Capital
Partners III.
Neuberger Berman
Group
California Public Employees'
Retirement System
$500 Sankaty/CalPERS
Credit-focused –
Separate Account
Bain Capital
Florida State Board of
Administration (SBA)
$500 Inflexion Buyout
Fund IV
Inflexion Private
Equity
Canada Pension Plan
Investment Board
€350 Permira V Permira Advisers
Generali France €300 Generali Global Private
Corporate Credit
BNP Paribas
Investment Partners
LP Insights

17
Perspectives, our annual assessment of LP sentiment towards
private equity, is an invaluable insight into the macro, internal,
and GP related issues that LPs are facing. Click here to access
the full report.
Figure11: Macro / structural issues that most concern investors
0
10
20
30
40
50
60
Numberofvotes
Please rank, in order of importance, the top three macro issues that are most likely
to impact private equity over the next 12 months. Please select three issues only.
Theim
pactof
enforcem
entactions
1st 2nd 3rd
Cheapdebtpushing
upprices
ThefateoftheEurozone
Taxorregulatory
challengesTheperform
anceof
PE-backedIPOs
Theslowdown
inChina
TheLBO
reﬁnancingwall
Negativepublicperceptions
ofprivateequity
Over-investm
entin
em
ergingm
arkets
Challengesposed
bythe
switchtoDCpensionplans
The extent to which cheap debt is pushing up prices is the most important macro
concern for LPs at the end of 2014, having been the third most important issue for
investors in 2013. Half of all surveyed LPs chose the issue as their principal concern.
While cheap debt has lifted valuations and thus enabled GPs and investors to
reap higher returns from their investments, LPs are clearly viewing cheap debt as a
threat towards their long term investments as the market has become expensive in
relative terms. George Anson, Managing Director of HarbourVest, points out that the
spending habits of bondholders who borrowed at current rates are threatened too, if
interest rates were to rise in the future.
PEI Perspectives 2014

18
PEI Perspectives 2014
Figure 12: GP related issues that most concern investors
Despite fundraising cooling off relative to 2013’s impressive levels, the market is
looking pretty crowded again in many regions – especially as there are relatively few
good deals going begging. As a result, LPs are desperately looking for managers with
an edge; groups with a strategy that’s clear and distinctive enough to give them a
competitive advantage.
0
10
20
30
40
50
60
70
Numberofvotes
1st 2nd 3rd
ClarityofstrategyTeam
stability/
retentionstrategy
Provenoperationalexpertise
LevelofGPcom
m
itm
ent
Com
petitivem
anagem
entfee
Qualityandquantity
ofGPcom
m
unication
AdherencetoESG
principles
Levelofcarriedinterest
Lengthof
investm
entperiod
Preferentialterm
s
forearlyinvestors
Preferentialterm
s
forlargerinvestors
Beyond track record, please rank, in order of importance,the top three most important
criteria to you when selecting a private equity fund manager. Please select three criteria only.

19
Platinum Level — Case Study
How can PEI’s Research and Analytics Team help through
its Platinum level service?
Sample client case study
Last month, we helped one investment bank understand the private equity fund
community’s role in financing film production and other media services. To do this,
we sent the firm a list of all closed ended funds investing in those sectors, including
equity size, investment strategy, and key contact details. The client intended to use
our data to establish new advisory relationships with these funds.
A sample of this data can be downloaded by clicking on this link.
PEI’s Research and Analytics team is made up of researchers and analysts in London,
New York and Hong Kong, working on a 24/5 cycle to perform bespoke research
requests for you. We track the investment appetite and contact details of over
10,000 LPs and GPs within our fundraising data platform, to help bring together
fund investors and managers with matching interests.
Platinum subscribers should email sasha.b@peimedia.com for more information on
the research services available.
Other questions to which we also provided a solution:
— “I will be targeting South Korean investors for our new fund. Can
you provide me with the names of all LPs which have an appetite for
private equity investments?”
— “How much capital was raised for debt related strategies in the last
quarter of 2014?”
— “Can you provide me with a list of contact details for investment
professionals within UK GPs?”
For more information on becoming a Platinum level
subscriber please contact:
Jack Griffiths in London on +44 (0) 20 7566 5468 or jack.g@peimedia.com
Ryan Ng in Hong Kong on +852 2153 3140 or ryan.n@peimedia.com
Andre Anderson in New York on +1 646 545 6296 or andre.a@peimedia.com

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PEI Annual Fundraising Review of 2014

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