annual investor meeting€¦ · performance review, portfolio highlights and realizations 11 highly...
TRANSCRIPT
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Annual Investor MeetingJune, 2019
Highly Confidential & Trade Secret
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AgendaSection I: xxx
Section II: xxx
Section III: xxx
Section VII: xxx
Section IV: xxx
Break
Section V: xxx
Section VI: xxx
Section VIII: xxx
Section IX: xxx
Highly Confidential & Trade Secret
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Section I:Welcoming Remarks and Year in Review
3
xxx
Designation
Highly Confidential & Trade Secret
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Key Statistics Since Inception4
Xxx/xxx
0.0x / 0.0%
PORTFOLIO TRANSACTIONS
UNDERLYING PORTFOLIO ASSETS BOUGHT / SOLD
REALIZED GROSS MOIC / IRR ACROSS ALL VEHICLES
$Xm / 0.0x EXIT & PARTIAL REALIZATION PROCEEDS / REALIZED MOIC
xxx
x DEDICATED INVESTMENT PROFESSIONALS
$xxxbn AUM ACROSS X FUNDS AND X CO-INVESTMENT VEHICLES
Highly Confidential & Trade Secret
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xxxxx
xxxxx
XXX XXX
xxxxx
XXX
xxxxx
XXX
xxxxx
XXX
xxxxx
XXX
xxxxx
XXX
xxxxx
XXX
5
Investment TeamInvestment Committee
Investment Team
xxxxx
XXX
XXX
xxxxx
XXX
XXX
Highly Confidential & Trade Secret
XXX XXX XXX XXX
XXX XXX XXX
XXX
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Largest($1bn+)
Tran
sact
ion
Siz
e
Smallest(<$100m)
6
XXXGP Competitive Landscape
Source:
▪ XXX
Consortium Participants
▪ XXX
XXX Core Opportunity Focus
▪ XXX
Mid-Tier
▪ XXX
Mega-Funds Considerations
XX
XX
XX
XX
X
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$xxx+ bn Addressable Market in PE Funds
$Xbnxxx Funds
Core XXX Target Market$XXbn, xx Funds
Mature & Performing≥$Xbn of NAV
$Xbn, XX Funds
Underperforming VintageX Funds
No SuccessorX Funds
Addressable Market Criteria
20xx and prior vintages, in North America and Europe
GP Manages >$Xm of NAV in Legacy Funds
$xbn
Mature & Performing<$Xbn of NAV
X Funds
Other Potential Sourcing OpportunitiesNot Included in Addressable Market Analysis
Hedge Fund Illiquid Pockets
Bank Holdings
Captive Spin-out
Highly Confidential & Trade Secret
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Highly Confidential & Trade Secret
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Transaction Volume
XXX Deals
GP-led Transaction
Volumes
2012 2013 2014 2015 2016 2017 2018F
Over [xx] Year Backlog of Opportunities
XXX Launched
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Key Statistics for 20xx
X
X / X
0.0x
$xm(2)
[0%]
[0.0x]
$Xm
X
# of New Platform Investments
# of Underlying Portfolio Assets / # Material Portfolio Assets
Wtd. Avg. Entry Multiple(1)
(EV / EBITDA)
Exit & Partial Realization Proceeds Across 6 Portfolio Companies
Fund X Returns
Fund X DPI
Capital Committed
# of Liquidity Events
New Platform Investments
20xx New Investment Activity
2018 Liquidity Events
Key Liquidity Events
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Highly Confidential & Trade Secret
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Deal Flow Analytics
Highly Confidential & Trade Secret
Total Opportunities: XX
Evaluated: XX
IC: XX
Closed: XX
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Section II:Performance Review, Portfolio Highlights and Realizations
11
Highly Confidential & Trade Secret
XXX
XXX
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By Transaction
12
Fund X Portfolio Overview
Uncommitted
Committed Follow-On
By Portfolio Company
X% CommittedX Transactions
Highly Confidential & Trade Secret
Other X Assets Invested Cost % of Fund II
CommitmentsX%
UncommittedX%
Committed Follow-OnX%
X% Invested
Across X Assets
Top X Assets Invested Cost % of
Fund II Commitments
X%
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Profit$Xm
13
Fund X Portfolio Company Performance Dispersion
Highly Confidential & Trade Secret
Profit$Xm
Realized Assets by Invested CostTotal Portfolio by Invested Cost
XX% ofPortfolio Valued Above Invested
Cost
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0
20
40
60
80
100
120
140
160
Jul-15 Jul-16 Jul-17 Jul-18
Tota
l Co
st (
US$
m)
Fund X
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
MOIC: 0.99x
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
0.0x / 0%
14
Performance by Funds
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Pease refer to the important Gross and Net performance disclaimer found on page 3.
Post quarter end, in July 2018, Fund X distributed $X million of proceeds from the realizations of X and X. Inclusive of this distribution, the Fund has now returned X% of drawn capital.
Investment CostTotal Value
DPIGross Net (excl. Bridge)
MOIC IRR MOIC(1) IRR(1)
At June 30, 2018, in US$ m
Fund X XX XX XX XX XX XX XX
Fund X XX XX XX XX XX XX XX
Co-investments XX XX XX XX XX XX XX
Highly Confidential & Trade Secret
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Digital / Subscription Division Bookings
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
15
XXABC Case Study
XX Bookings
Core business transitioning to high growth digital products
EBITDA margins 0%+ in core digital segment with 0%+ renewal rates
Highly scalable platform with little inventory requirements and attractive cash flow dynamics
Strong macro tailwinds supporting continued transition to digital products
✓
✓
✓
✓
Attractive entry valuation of 0.0x EBITDA versus transaction comps at 0x+ EBITDA✓
Value Creation Considerations
Highly Confidential & Trade Secret
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Total Invested Cost EBITDA Growth Deleveraging Entry Discount / MultipleShift
Total Realized Value
16
(5)
# of Assets 0
Wtd. Avg. Hold Period(1)
0.0 years
Gross MoIC(2)
0.0x
Implied Gross IRR(2)(3)
0%
Realized & Substantially Realized Assets
(6)
ABC Value Creation
(4)
Highly Confidential & Trade Secret
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XXXXYZ Case Study
EBITDA growth driven by the XX business
Outsized value creation due to multiple expansion, entry of 0.0x relative to exit of 0.0x (a 0% increase)
Free cash flow used to fund growth initiatives and paydownsubordinated debt
XXX saw an opportunity to pre-empt broader auction by providing premium price for a clean and expedited transaction
✓
✓
✓
✓
Value Creation Considerations
XX announced the sale of XX (backed by recent XX acquisition) in
March 20xx for a headline price of $Xm
X announced that X and its X business would merge with X in May
20xx. X, will be the majority owner of the combined entity.
Invested Cost EBITDAGrowth
MultipleExpansion
Debt Paydown Transaction Costs Total Valueat Exit
$ in millions
Debt Invested
Equity Invested
Debt Proceeds
Equity Proceeds
MOIC
0.0x
0.0x
0.0x
Highly Confidential & Trade Secret
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Section III:Drivers of Value Creation
18
XX
XX
Highly Confidential & Trade Secret
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Entry Leverage (Net Debt / EBITDA) Entry Valuation (EV / EBITDA)
19
Consistently Acquiring Quality PE Assets
Low entry leverage makes portfolio resilient to economic downturn
Fund IIWtd. Avg.
S&P LCD(1)
Entry Metrics vs. S&P LCD(1)
(2)
(2)
(2)
Highly Confidential & Trade Secret
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Factor 4
Factor 2
Factor 3
Factor 1
20
A Differentiated Approach to Private Equity
Value Creation Pillars
1 2
3 4
Highly Confidential & Trade Secret
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Factor 4
Factor 2
Factor 3
Factor 1
21
Value Creation Pillars
1 2
3 4
Highly Confidential & Trade Secret
A Differentiated Approach to Private Equity
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Factor 4
Factor 2
Factor 3
Factor 1
22
Value Creation Pillars
1 2
3 4
Highly Confidential & Trade Secret
A Differentiated Approach to Private Equity
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Factor 4
Factor 2
Factor 3
Factor 1
23
Value Creation Pillars
1 2
3 4
Highly Confidential & Trade Secret
A Differentiated Approach to Private Equity
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Factor 4
Factor 2
Factor 3
Factor 1
24
Value Creation Pillars
1 2
3 4
Highly Confidential & Trade Secret
A Differentiated Approach to Private Equity
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Section IV:New Investments in 2018
25
XX
XX
XX
XX
Highly Confidential & Trade Secret
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Section IV.I:Transaction ABC
26
XX
XX
XX
XX
Highly Confidential & Trade Secret
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Acquired
in partnership with
XXX
for an enterprise value of
$[XX]m / 0.0x EBITDA
March 2018
27
Transaction Overview
High Growth AMC with a Differentiated Service Offering
Highly Cash Generative
Market Leader in a Consolidating Sector
Attractive Entry Valuation
Motivated Seller
Strong Mortgage Service Track Record in Management and Ownership Group
Highly Confidential & Trade Secret
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Market In Early Stages of Consolidation
Highly Confidential & Trade Secret
Pre-2009 2017
Column4 Column2
<0%
0%
Rapid Market Growth Post-Dodd Frank
Highly Fragmented Sector with Regional AMCs
Significant Benefits to Scale from “Network Effect”
Market Share Consolidating with Top National Players
Market Share(1)(2)
Total Market Size of $2.9bn
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Key Value Considerations
Highly Confidential & Trade Secret
2015A 2016A 2017A Aug-2018A LTM
XX Historic RevenueMarket Leading Service
Offering on Appraisal Turn Times and Quality
Rapidly Capturing Wallet-Share
>0% Free Cash Flow Conversion
Secured 7 Year Contract With Core Customer
Significant Right-Hand Tail on Exit Valuation
✓
✓
✓
✓
✓
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Section IV.II:Transaction XYZ
30
XX
XX
XX
XX
Highly Confidential & Trade Secret
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Acquired a X Company Portfolio
of equity Investments from
with $Xm of Equity Commitments
July 2018
31
Transaction Overview
Deal Catalyzed by Ongoing Fund Extension Negotiations
Low Entry Leverage
Carved Out Largest Asset
0% Discount to FMV at Entry
Diversified Portfolio of Assets
Remaining Portfolio Concentrated in High Growth Entities
Highly Confidential & Trade Secret
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Asset Overview
Note: Breakdown based on total gross investment cost
0% of Cost in Two Core Assets with High Growth
Identified Value Creation
ABC with Significant Influence and Direct Board Seats
Largest Shareholder in X, Y and Z
Diversified by Industry
Saleable Assets with Clear Path to Exit
Highly Confidential & Trade Secret
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Developed experienced
team of X investment
professionals
Committed $Xbnacross
X transactions
Total portfolio held at a gross MoIC / IRR of
[0.0x / 0%]
Realized $0mthrough
the exit of 0 portfolio
companies
What We Have Done
Generated
0.0x / 0%MoIC / IRR
on exited assets
Established as market leader in complex fund restructurings and liquidity solutions
Highly Confidential & Trade Secret
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
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Section V:Road Map
34
XX
XX
XX
XX
Highly Confidential & Trade Secret
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Next Twelve Months
Develop investment team
Close Fund X in early 20XXCapture accelerating market opportunity
Continue to Develop Strategy
Harvesting Fund X
Highly Confidential & Trade Secret