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1
Performance of Private Equity Funds in Performance of Private Equity Funds in Central and Eastern Europe Central and Eastern Europe
and the CISand the CIS
Data to 31 December 2009Data to 31 December 2009
2
Overview
3
EBRD in Private Equity
EBRD’s portfolio of funds: over 15 years of investing in the asset class
125 funds
81 fund managers
EUR 2.68 billion in commitments (USD 3.26 billion) to funds with capital of EUR 13.54 billion (USD 17.01 billion)
1,116 underlying investments, up to 70% exited.
Largest PE Fund investment program dedicated to the region*
Note: EBRD tracked portfolio only to end December 2009, excludes real estate funds * Russia, CIS and CSE
4
EBRD Commitments Over Time
VintageNote: CSE and CIS, excludes property funds Data up to December 2009
EUR
Mill
ions
No
of F
unds
0
50
100
150
200
250
300
350
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
2
4
6
8
10
12
14
16CSE Donor CSE Private Russia/CIS Donor
Russia/CIS Private Number of Funds
5
Fund Raising vs Investments – Total Portfolio
Note: EBRD tracked portfolio only to December 2009, CSE and CIS
EU
R M
illio
ns
Vintage
23%
34%
59%
74%
28%
20%
42%
29% 24%
11%
14%
14%14%
27%
22%
13%
24%
0
500
1,000
1,500
2,000
2,500
3,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8Commitments Raised by YearAnnual InvestmentsEBRD Commitments as % of total Commitments
6
PE Investment and Exit Activity – Total Portfolio
Note: EBRD tracked portfolio only to December 2009, CSE and CIS
Note: Excludes investments made by funds of funds
No
of In
vest
men
ts
46
62
88
109100
122
91
55
7667
31
57
101
59
23
28
35
1710 10
5545
4043
44
9885
1711
48
234
1222
12
1011 21
28
3 78
0
20
40
60
80
100
120
140
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Investments Exits (exc WO) WO
7
Investment Holding Period by Fund Vintage - Total Portfolio
Note: EBRD tracked portfolio only to December 2009
Note: Fully realised investments only, excludes written off investments
Ave
rage
Hol
ding
Per
iod
(Yea
rs)
Fund Vintage Year
1.0
4.1 3.3
2.2
6.05.2 5.3
4.8
4.6
5.0
1.72.0
6.0
2.7
5.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2006 2007
Average Holding Period (Years)
8
Fund Raising vs Investments – CSE
Note: EBRD tracked portfolio only to December 2009, CSE only
EU
R M
illio
ns
30%
18%
30%
67%
30%
20%
29%
15%9%
19%
7%
33%
15%
20%
21% 23%
26%
22%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8Commitments Raised by Year Annual Investments
EBRD Commitments as % of total Commitments
Vintage
9
PE Investment and Exit Activity - CSE
Note: EBRD tracked portfolio only to December 2009, CSE only
Note: Excludes investments made by funds of funds
No
of In
vest
men
ts
1522
35
52
32
58
50
4
24
59
40
18
4
14
26
138 6
36
91
61
30
29
7583
4037
20
68
14
34
73
38
10
2 0 1
11 1715
2 3 5
14
73
100
10
20
30
40
50
60
70
80
90
100
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Investments Exits WO
10
Investment Holding Period by Fund Vintage Portfolio Companies region: CSE
Note: EBRD tracked portfolio only to December 2009; CSE Only
Note: Fully realised investments only, excludes written off investments
Ave
rage
Hol
ding
Per
iod
(Yea
rs)
Fund Vintage Year
1.0
3.75.1
4.64.85.4
6.3
2.7
2.03.3
4.2
2.2
1.7
5.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2006 2007
Average Holding Period (Years)
11
Fund Raising vs Investments – CISE
UR
Mill
ions
27%
45%
32%
99%91%
85%
21%
91%
33%
10%
13%
25%
10%
31%
20%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.0
0.2
0.4
0.6
0.8
1.0
1.2Commitments Raised by Year
Annual Investments
EBRD Commitments as % of total Commitments
Vintage
Note: EBRD tracked portfolio only to December 2009, Russia/CIS only
Note: No fundraising activity in 2001 or 2003 in Russia/CIS
12
PE Investment and Exit Activity - CIS
Note: EBRD tracked portfolio only to December 2009, CIS only
Note: Excludes investments made by funds of funds
No
of In
vest
men
ts
Mul
tiple
1
5
18 17
23
7
19
522
74 4
2 1 0
16
36
27
88
1517
34
17
14
30
31
19
2
26
0
25
14
8
33
6
19
61
21
2
7
0 00.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Investments Exits WO
13
Investment Holding Period by Fund Vintage Portfolio Companies region: CIS
Ave
rage
Hol
ding
Per
iod
(Yea
rs)
Fund Vintage Year
2.6
4.73.2
4.5
4.7
6.0
1.52.9
5.15.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2004
Average Holding Period (Years)
Note: EBRD tracked portfolio only to December 2009; CIS Only
Note: 2001 Vintage includes CSE fund, with single investment in CIS region. No Russia/CIS funds raised in 2001 and 2003.
Note: No investments exited by funds of 2005-2009 vintages
Note: Fully realised investments only, excludes written off investments
14
EBRD Net Portfolio
Note: CSE and CIS, excludes property funds, data to end 2009
EUR
Mill
ions
0
500
1,000
1,500
2,000
2,500
3,000
Funds Committed Paid In NAV + Returned
2008 2009
15
2009 PE Investment as a % of GDP1.02%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%Lu
xem
bour
g
Cze
ch R
epub
lic
Bul
garia
Finl
and
Sw
eden
Uni
ted
Kin
gdom
Slo
veni
a
Hun
gary
Mac
edon
ia
Den
mar
k
Rom
ania
Fran
ce
Sw
itzer
land
Net
herla
nds
Ger
man
y
Gre
ece
Italy
Spa
in
Pol
and
Aus
tria
Cro
atia
Bos
nia
& H
erze
govi
na
Ukr
aine
Bal
tics*
1.017%
* Baltics include: Estonia, Latvia, Lithuania
Source: EVCA/PEREP Analytics, RVCA and EBRD Estimates
16
Returns Data
17
Gross Snapshot: All Funds
Note: Excluding underlying investments of funds in which the EBRD sold on its interest.
Note: Excluding investments in equity funds.
EUR 3,746m EUR 3,817m
EUR 2,862m
EUR 6,396m
EUR 378mEUR 980m
0
2,000
4,000
6,000
8,000
10,000
12,000Fully Realised (Including WO)Partially RealisedUnrealised
Investments at CostEUR 6,986m
Total ValueEUR 11,193m
Overall 1.60x 17.5%
FR 2.24x 20.5%
PR 2.59x 23.3%
UR 1.02x 0.8%
18
Gross Snapshot: CSE
Note: Excluding underlying investments of funds in which the EBRD sold on its interest.
Note: Excluding investments in equity funds.
8,000
EUR 2,353m EUR 2,337m
EUR 4,242m
EUR 313mEUR 861m
EUR 2,123m
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000 Fully Realised (Including WO)
Partially RealisedUnrealised
Investments at CostEUR 4,789m
Total ValueEUR 7,440m
Overall 1.55x 15.9%
FR 2.00x 18.4%
PR 2.75x 26.7%
UR 0.99x -0.3%
19
Gross Snapshot: CIS
Note: Excluding underlying investments of funds in which the EBRD sold on its interest.
Note: Excluding investments in equity funds.
EUR 1,393m EUR 1,481m
EUR 738m
EUR 2,154m
EUR 66m
EUR 118m
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Fully Realised (Including WO)
Partially RealisedUnrealised
Investments at CostEUR 2,197m
Total ValueEUR 3,753m
Overall 1.71x 20.9%
FR 2.92x 24.8%
PR 1.80x 11.3%
UR 1.06x 2.6%
20
EBRD Gross Cash Flow from Funds
Note: CSE and CIS
Note: Cash movement between funds and the underlying portfolio companies
Annual Year
EUR
Mill
ions
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Annual Investments by funds (cash out)
Annual Proceeds to Funds (cash in)
21
EBRD Net Horizon Returns: All Funds
Returns as at December 31 2009
OneYear
ThreeYears
FiveYears
TenYears
SinceInception
USD EBRD Private Equity Portfolio* 6.4% 5.2% 25.0% 16.9% 12.3%
Cambridge Emerging Markets Venture Capital & Private Equity
Index**8.3% 3.5% 20.6% 15.0% N/A
EUR EBRD Private Equity Portfolio* 3.6% 2.4% 27.4% 11.8% 9.7%
EVCA, All Private Equity** 7.7% -3.9% 6.5% 5.2% 8.9%
Source: Cambridge Associates, EVCA/Thomson Reuters, Bloomberg and EBRD* EBRD tracked portfolio pooled end-to-end return, net of fees, expenses, donor grants and carried interest. Excludes property funds, and includes liquidated partnerships.
** Pooled end-to-end return, net of fees, expenses, and carried interest. “The "Since Inception" figure represents the net pooled IRR since inception for funds formed between 1980 and 2009.
22
EBRD Net Horizon Returns: Breakdown
Returns as at December 31 2009
OneYear
ThreeYears
FiveYears
TenYears
SinceInception
USD EBRD Private Equity Portfolio - All 6.4% 5.2% 25.0% 16.9% 12.3%
CSE 1.5% 8.6% 20.5% 14.6% 11.0%
Russia/CIS 16.7% 0.6% 32.3% 20.1% 13.7%
CSE/Survivors 3.0% 8.9% 20.1% 17.1% 14.0%
Russia/CIS Survivors 17.0% 0.4% 27.6% 22.3% 19.2%
EUR EBRD Private Equity Portfolio - All 3.6% 2.4% 27.4% 11.8% 9.7%
CSE -1.4% 5.8% 22.5% 10.1% 9.0%
Russia/CIS 14.1% -2.4% 35.0% 14.0% 10.6%
CSE/Survivors 0.0% 6.1% 21.9% 12.7% 12.1%
Russia/CIS Survivors 14.4% -2.5% 28.6% 16.3% 15.4%
23
Net Vintage Groups
Note: TVPI = Total Value to Paid In, DPI = Distributions to Paid InNote: CSE and CIS
Vintage Year
Mul
tiple
IRR
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1992 1993 1994 1995 1996 1997 1998 1999 20002001 2002 2003 2004 2005 20062007 2008 2009-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%TVPIDPIIRR
24
Trends
25
Investments by Country: Breakdown by Acquisition Cost to end 2009
*Others include: Albania, Bosnia, Croatia, Macedonia, Kosovo, Serbia and Slovenia** Western CIS and Caucasus include: Azerbaijan, Georgia, Moldova and Ukraine***Central Asia include: Kazakhstan, Kyrgyz Republic and TurkmenistanNote: since inception
Bulgaria6%
Poland26%
Slovak Republic2%*Others
5%
Hungary7%
Russian Federation25%
***Central Asia4%
Romania9%
Non-EBRD countries8%
Baltics5%
**Western CIS and Caucasus
3%
26
Investments by Country: Breakdown by Number of Investments (top 5)
EU
R M
illio
ns
81 79 74
252241
75
235236
85 84
0
50
100
150
200
250
300
Russian Federation Poland Czech Republic Romania Hungary
As of 2008 As of 2009
27
Exits by Country – to end 2009
*Others include: Albania, Bosnia, Croatia, Macedonia, Kosovo, Serbia and Slovenia** Western CIS and Caucasus include: Azerbaijan, Georgia, Moldova and Ukraine***Central Asia include: Kazakhstan, Kyrgyz Republic and TurkmenistanNote: Non-EBRD countries include Greece and Czech RepublicNote: since inception, fully realised investments only
By Investment Cost By Exit Proceeds
Bulgaria5%
Poland30%
Slovak Republic
5%*Others2%
Hungary11%
Russian Federation
21%
***Central Asia3%
Romania10%
Non-EBRD countries
7%
Baltics4%
**Western CIS and
Caucasus2%
Bulgaria6%Poland
23%
Slovak Republic
4%*Others2%
Hungary7%
Russian Federation
22%
***Central Asia8%
Romania14%
Non-EBRD countries
7%Baltics
3%**Western CIS and
Caucasus4%
28
Investments by Sector: Breakdown by Acquisition Cost to end 2009
Note: since inception, in EUR, CSE and CIS
Construction6%
Agriculture & Forestry
2%
Primary & Energy5%
Manufacturing6%
Consumer10%
Services23%
TIM32%
Pharma & Medical7%
Wholesale & Retail9%
29
Investments by Sector: Breakdown by Number of Investments (top 5)
EU
R M
illio
ns
246
224
165
127
106
262
231
169
127
109
0
50
100
150
200
250
300
TIM Services Consumer Manufacturing Wholesale & Retail
As of 2008 As of 2009
30
Exits by Sector – to end 2009
Note: since inception, in EUR, CSE and CIS. Fully realised investments only
By Investment Cost By Exit Proceeds
Manufacturing
TIM, 29.9%
Construction6%
Agriculture & Forestry
2%
Primary & Energy
5%
Manufacturing9%
Consumer16%
Services16%
TIM30%
Pharma & Medical
5%
Wholesale & Retail11%
Construction4%
Agriculture & Forestry
1%
Primary & Energy10%
Manufacturing7%
Consumer12%
Services16%
TIM38%
Pharma & Medical
5%
Wholesale & Retail7%
31
Investments by Stage Over TimeIn
vest
men
t Cos
t, E
UR
Mill
ions
Vintage Year
0
100
200
300
400
500
600
700
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Expansion Other
Sec. Purchase / Buyout Seed/Early Stage
32
Exits by Stage Over Time E
xit P
roce
eds,
EU
R M
illio
ns
Exit Year
0
100
200
300
400
500
600
700
800
900
1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Expansion Other
Sec. Purchase / Buyout Seed/Early Stage
Note: Fully realised investments only
33
Performance by Exit Type – to end 2009E
UR
Mill
ions
Mul
tiple
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Write Off MBO Other Trade Sale Public Market0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0Investment Cost
Proceeds
Multiple
34
Gross Vintages & Money Multiples
Note: Including write-offs, CSE and CIS
0
200
400
600
800
1,000
1,200
1,400
1,600
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Vintage Year
EUR
Milli
ons
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Mul
tiple
Investment CostTotal Investment ValueTVPI AllTVPI FR
35
Funds % Stake in Portfolio Companies %
Of T
otal
Num
ber o
f Com
pani
es
37.60% 34.66%48.54% 43.44%
32.82%31.82%
39.75%41.25%
29.58% 33.52%
11.72% 15.31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CEE SEE Russia CIS
Up to 25% From 25% up to 50% Over 50%
36
Investor Data
37
Investor by Type – Trends
Note: CIS and CSE. Includes EBRD (in IFI/Govt), excludes Property Funds
100%
14.30% 15.70%
13.30%
29.37% 49.93%
16.44%
8.62%
3.14%
17.98%31.22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1992-2008 2009
Banks and InsuranceCorporate InvestorsFund of FundsIFI and GovtPension FundsOthers
38
Investor Type by Vintage Year
0
500
1,000
1,500
2,000
2,500
3,000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Vintage Year
EUR
Milli
ons
Banks and Insurance Corporate Investors Fund of Funds
IFI and Govt Others Pension Funds
39
Investors by Origin Over Time
0
500
1,000
1,500
2,000
2,500
3,000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Vintage Year
EU
R M
illio
ns
Europe Other USA EBRD
40
Funds Jurisdiction: Breakdown by Number of Funds in Portfolio
Note: EBRD tracked portfolio only, as of end 2009
% O
vera
ll N
o of
Fun
ds
16%
11%
10%
9% 9%
7%
4%
2% 2% 2%
21%
7%
0%
5%
10%
15%
20%
25%U
nite
dKi
ngdo
m
Del
awar
e
Jers
ey
Gue
rnse
y
EB
RD
CO
Os
Cay
man
Isla
nds
Net
herla
nds
Oth
er
Luxe
mbo
urg
Ber
mud
a
Cyp
rus
Ger
man
y
41
EBRD Database
Best available sample of PE performance in central and south east Europe (CSE), Russia and CIS
Tracks all “gross” investments made by a basket of EBRD invested funds as well as “net” returns to EBRD (“tracked portfolio”)
Measured in both EUR and USD*
Obligatory reporting by fund managers, analysed by EBRD– reflects comprehensive performance– No “survivor bias” resulting from only best fund managers reporting
* Bloomberg exchange rate used as of date of signing (commitments), transaction date (cash flows) or valuation date (NAV)
42
Definitions
EBRD Sponsored Funds – funds established at EBRD's initiative in countries where no private sector funding was available for private equity funds. These funds are supported with significant donor grants, and EBRD investment represents usually over 90% of fund capital.
Institutional Quality Funds (IQs) – identified based on criteria established by Cambridge Associates. These include the characteristics of the investors in the fund, fund size relative to peers, and availability of data.
Survivor Funds – funds managed by managers who have or are expected to raise a follow-on fund.
43
Region
• CSE Countries - Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, FYR Macedonia, Poland, Romania, Serbia, Montenegro*, Slovak Republic, Slovenia and Turkey
• CIS Countries – Armenia*, Azerbaijan, Belarus*, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Russia, Tajikistan*, Turkmenistan, Uzbekistan*, and Ukraine
* There are no fund sub-investments in these countries as of end December 2009
44
Copyright 2010 EBRD. All rights reserved
This material is for the recipient’s private information. No part of this document may be reproduced or transmitted in any form or by any means, including photocopying and recording, without the written permission of the Bank. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. While the information contained herein was compiled by the EBRD, we do not guarantee its accuracy or completeness. We accept no liability in relation to use of this information. Copyright 2010 European Bank for Reconstruction and
Development. All rights reserved.
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