Equity Funds Strategy3 EBRD in Private Equity EBRD’s portfolio of funds: over 15 years of...

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


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


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


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


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


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


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



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



Overall 1.55x 15.9%

FR 2.00x 18.4%

PR 2.75x 26.7%

UR 0.99x -0.3%

19

Gross Snapshot: CIS



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



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%


2%

Primary & Energy

5%

Manufacturing9%

Consumer16%

Services16%

TIM30%

Pharma & Medical

5%


Construction4%


1%

Primary & Energy10%

Manufacturing7%

Consumer12%

Services16%

TIM38%

Pharma & Medical

5%


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.

Equity Funds Strategy3 EBRD in Private Equity EBRD’s portfolio of funds: over 15 years of...

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