Private Equity News Review September 2004

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September 2004 Private Equity Monthly Roundup The AltAssets monthly news review provides the private equity industry with a roundup of the month’s most important stories from across the globe – essential reading for all those who need to keep up-to-date with the market’s key developments.

Contents

Page Europe French insurers bow to pressure and invest more in private equity, Irish Pension fund to invest 20 per cent of assets in private equity and real estate, Permira considers £5bn offer for Sainsbury's, Swiss Partners Group holds final close on dedicated secondaries fund…

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North America CalPERS faces disclosure lawsuit over private equity management fees, Coller Capital acquires $90m US private equity portfolio from Dresdner Bank, Bain Capital to buy Canadian telephone directory business, Tennenbaum Capital Partners closes $2bn fund…

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Asia & Australasia CSFB plans private equity push into Asia, Silicon Valley Bank opens offices in UK and India, Lone Star to close Beijing office, Newbridge trumps Woolworths bid for Australian liquor store chain…

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Funds:

Europe Benchmark closes second European fund on $375m, SVG raises E400m from fixed income markets for investment in private equity, UK Innisfree raises £360m for third infrastructure fund, Swiss Partners Group holds final close on dedicated secondaries fund…

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North America US InterWest Partners closes ninth venture fund on $600m, Ventures West closes Canada's largest ever venture capital fund, US Western Technology closes eleventh venture debt fund on $500m, US Longroad Asset Management closes debut special situations fund on $183m…

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Asia & Australasia Japanese Mizuho plans Y30bn private equity fund, ING launches listed private equity vehicle in Australia…

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Deals US Hellman & Friedman to bid for Gray Global, Blackstone close to buying UK cinema chain in £120m deal, European Duke Street completes £450m recapitalisation of three portfolio companies, Private equity owned Warner Music plans $5bn IPO…

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People:

Europe Michael Hewett joins Terra Firma as investor relations director, PPM Ventures announces that Neil MacDougall is to replace Jonathan Morgan as managing director, Paul Capital Partners hires Elaine Small as managing director of its secondaries operations in the UK and Ireland and Jonathan Diggines leaves Aberdeen Murray Johnstone after MBO falls through…

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North America New Enterprise Associates recruits medical device entrepreneur Joshua Makower as a venture partner, Morgenthaler Partners hires Al Stanley and Daniel Farrar from General Electric, Louis Roquet joins Canadian Desjardins Group as president and chief executive…

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Trends 3i enterprise barometer shows slight fall in European business confidence, European venture investment improves in second quarter, KKR founder warns of hedge fund invasion, Private equity exits up 15 per cent in 2003…

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September 2004

Western Europe & Israel

French insurers bow to pressure and invest more in private equity, Irish Pension fund to invest 20 per cent of assets in private equity and real estate, Permira considers £5bn offer for Sainsbury's, Swiss Partners Group holds final close on dedicated secondaries fund… Barclays looks to sell Hobbs fashion group in £100m deal Barclays Private Equity is looking to exit its investment in upmarket fashion retailer Hobbs. Indicative bids for the company are expected tomorrow and are likely to be in excess of £100m. Hobbs generated a gross profit of £21.9m for the first six months of this year, up from £14.6m in the same period in 2003. Potential offers are likely to come from private equity firms rather than strategic buyers. Barclays led the management buy-in of the company in December 2002 and currently holds an 80 per cent stake. Management owns 16 per cent and staff options account for the remaining share. AltAssets 6.9.04 Greenfield Capital Partners set to exit Dutch Telfort in E400m secondary buy-out Greenfield Capital Partners is set to exit its investment in Dutch cellphone operator Telfort. Five private equity buyers are said to be considering offers of around E400m for the company. Interested parties include US Providence Equity Partners and UK Cinven and Permira AltAssets 24.9.04 Private equity firms eye up Spanish travel business A number of private equity firms have emerged as possible bidders for Spanish travel company Amadeus. European Permira, Apax, BC Partners, Cinven, CVC Capital Partners and PAI are all considering offers for the world's largest reservations and ticketing firm. US buy-out houses Kohlberg Kravis & Roberts, Texas Pacific Group, Bain Capital and Carlyle are also expected to table bids. In addition, rival travel firm Worldspan Technologies is likely to emerge as a trade buyer. Amadeus' shares closed at E5.75 last week, giving the company a market capitalisation of around E3.3bn. Air France, which holds a 23.4 per cent stake in the company, has indicated that intends to remain in the stock. Iberia, which owns 18.3 per cent, and Lufthansa, which owns 5.1 per cent, are both considering their options. AltAssets 6.9.04 3i's Westminster Healthcare up for grabs Westminster Healthcare, 3i's UK nursing home operator, is being auctioned for around £450m. The company is expected to attract more than ten bids by today's deadline for first round offers, including a number from private equity firms. BUPA and Barchester are both understood to be interested in a strategic acquisition, as is Four Seasons, currently owned by Allianz Capital Partners, and Southern Cross, which was acquired by Blackstone for £162m last week. Private equity buyers to have expressed an interest in tabling an offer include Cinven, which lost out to Blackstone for Southern Cross, BC Partners, which is building a pan-European private hospital group, Doughty Hanson, Charterhouse and CVC Capital. AltAssets 21.9.04 Bridgepoint close to acquiring UK consumer finance firm First Credit European private equity firm Bridgepoint is close to completing the acquisition of First Credit, the consumer debt company, for up to £80m, according to the Financial Times. First Credit is currently owned by Gresham Private Equity and the company's management. First Credit buys debt from institutions at a discounted price and then seeks to collect the amount owed. AltAssets 6.9.04 Montagu announces £244m acquisition of UK Maplin Electronics Montagu Private Equity has agreed to buy UK Maplin Electronics for £244m. The company is currently owned by Graphite Capital and its management team. Maplin operates a chain of high street and out-of-town retail stores, a mail order catalogue and an internet business. The company sells electronic and computer components, equipment and accessories. Graphite Capital acquired a 67 per cent stake in Maplin in June 2001. The sale to Montagu provides the firm with a return of 9.6 times its initial investment and an internal rate of return in excess of 120 per cent. AltAssets 3.9.04 Permira and Cinven buy stakes in Vendex from KKR UK private equity firms Permira and Cinven have agreed to acquire a 44 per cent stake in Dutch retailer Royal Vendex from Kohlberg Kravis Roberts. Terms of the deal were not disclosed but the two firms are understood to have each invested $200m. In July this year, KKR led a consortium of private equity firms, including Dutch Alpinvest, to acquire 91 per cent of the company in the Netherlands' largest buy-out to date. But KKR has been keen to reduce its exposure to Vendex since its equity contribution was increased to over $1bn after Change Capital Partners, which had originally partnered with Alpinvest, dropped out of the deal. The sale to Permira and Cinven leaves KKR with a 45 per cent stake in Vendex, while Alpinvest holds nine per cent. Management owns the remaining two per cent. AltAssets 3.9.04

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UK Innisfree raises £360m for third infrastructure fund UK infrastructure investment group Innisfree has closed its third fund on £260m. The fund will invest in public-to-private partnership and private finance initiative projects in the UK and continental Europe. Innisfree closed its first fund on £85m in 1996 and its second fund on £150m in 1999. Investors in the firm's previous funds include Henderson Private Capital, Hermes, Norwich Union and the Prudential. AltAssets 2.9.04 Five private equity firms make UK Saga shortlist Five private equity firms have made the short list for insurance, holiday and media group Saga. KKR, BC Partners and Charterhouse have all made the next round with independent bids, while Apax Partners and Cinven, and JP Morgan Partners and Hg Capital, have made joint offers in the auction. At least five other private equity firms also tabled an offer for Saga, which is expected to raise at least £1bn. But industry reports suggest that the successful bid will in fact be closer to £1.2bn. Despite the high level of interest, it remains less than certain that any of these private equity firms will go home with the prize. UBS, the investment bank responsible for the sale, has been mandated to run a dual track process, and a flotation remains a possibility. AltAssets 1.9.04 UK Inflexion opens Manchester office Inflexion Private Equity has announced the opening of an office in Manchester. The new office will be led by director Tim Smallbone. The Manchester office will be responsible for developing and growing Inflexion's Northern based private equity business focusing on buy-out and development capital transactions in companies with enterprise values of up to £30m. AltAssets 6.9.04 European venture investment improves in second quarter, research finds The total value of European venture capital activity increased significantly in the second quarter of 2004 with E967.3m invested. This represents the highest quarterly amount invested since 2002, according to research released by Ernst & Young and VentureOne. The number of completed financings fell 20 per cent on the second quarter of 2003 but rose ten per cent over the first quarter this year. In the UK venture capital activity fell slightly with 69 deals completed compared to 71 deals in the first quarter. But value increased from E239.4m to E317.6m, an increase of 33 per cent. The increase in European venture investment was driven in part by a significant increase in healthcare investing, particularly for biopharmaceutical and medical devices companies. AltAssets 8.9.04 Blackstone-led private equity consortium bids £1.5bn for UK drug group A private equity consortium led by Blackstone Group has tabled an offer of £1.5bn for UK drug group Warner Chilcott. Shares in the women's healthcare specialist surged 15 per cent to 747p as the company confirmed the bid. Blackstone declined to comment on the takeover approach but the firm is understood to be interested in Warner Chilcott's near-off-patent drug business. Blackstone failed in its attempt to buy a similar business from French pharmaceutical group Aventis earlier this year. Two other private equity firms are believed to be involved in the consortium but the identity of the participants has not yet been revealed. AltAssets 22.9.04 UK Alchemy Partners to sell Innspired pub chain UK private equity firm Alchemy Partners is looking to exit its investment in the Innspired pub chain. The deal is expected to generate in the region of £350m. Alchemy has considered a range of options for Innspired, including a flotation, accelerated initial public offering, trade sale and recapitalisation. Rival company Punch Taverns is considered a likely potential bidder. Ushers of Trowbridge, which later became Innspired, was taken private by Alchemy in a £108m deal in 1998. The firm also acquired a number of other pub groups including Alehouse Estates, in order to grow the Innspired brand. AltAssets 8.9.04 Silicon Valley Bank opens offices in UK and India Silicon Valley Bank has opened an international subsidiary in London. SVB Europe Advisors is primarily targeting UK-based high-growth technology companies with business services and access to customised debt financing. Silicon Valley Bank also announced the opening of SVB India Advisors in Bangalore. AltAssets 17.9.04 French insurers bow to pressure and invest more in private equity French insurers have bowed to government pressure by agreeing to invest an additional E6bn of life assurance savings in private equity over the next three years. The move is designed to narrow the gap in private equity funding between France, and the UK and US. The agreement will take the form of a letter to the finance minister, signed by the Fédération Francais des Sociétés d'Assurance, the private insurers' association, and the Groupement des Enterprises Mutuelles d'Assurances, the mutual insurers' body. The two organisations will commit their members to increasing investments in non-listed companies from E14bn to E20bn by 2007. AltAssets 7.9.04

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Former CSFB execs to launch new private equity firm A group of investment professionals that defected from DLJ Merchant Banking Partners, the private equity arm of Credit Suisse First Boston, have launched a new firm called Diamond Castle Holdings. The new firm is planning to raise a fund targeting between $1bn and $1.5bn. Diamond Castle Holdings is to be led by Lawrence Schloss who was previously head of DLJ Merchant Banking Partners. The executives told the Wall Street Journal that they left DLJ because of what they described as a 'disturbing lack of independence.' In particular, they cited conflicts of interest that arose between the private equity and investment banking divisions. AltAssets 22.9.04 European Duke Street completes £450m recapitalisation of three portfolio companies European buy-out firm Duke Street Capital has announced the £450m recapitalisation of three of its portfolio companies. Paragon Healthcare, Galaxie Hotel and Esporta have each completed refinancings to fund the next stage of their growth. Paragon Healthcare, which has been backed by Duke Street since September 2001, has secured £162m of funding from Dresdner Kleinwort Wasserstein's Debt Principal Finance & Securitisation group. Galaxie Hotels, which was acquired by Duke Street in 2003, has completed a £150m refinancing from the Structured and Asset Finance team at Calyon. And Esporta, which was acquired by Duke Street in 2002, has raised new debt facilities totalling £155m. AltAssets 13.9.04 Swiss Partners Group holds final close on dedicated secondaries fund Swiss Partners Group has announced the final closing of its dedicated secondaries fund with E400m of commitments. The fund will focus on secondary interests in European buy-out funds but will include some exposure to the US. Investors in the fund include MetLife, BP, New York Life and Canada Pension Plan Investment Board as well as a number of other UK and German banks, European pension funds and US insurance companies, retirement plans and state organisations. The fund has already completed 15 transactions valued at a total of E107m. AltAssets 13.9.04 3i enterprise barometer shows slight fall in European business confidence The latest quarterly European Enterprise Barometer Index, measuring private companies' confidence in business, political and economic climates, remains in positive territory despite showing a slight fall from the high of last quarter. After increasing in every survey over the past year, the index has fallen from +49 to +30 in the third quarter of the year, the same level as six months ago. The index in France is positive for the first time in three and a half years, showing a significant rise from -35 to +13. The index has decreased significantly, but is still positive, in both Germany and Spain. But the fall in Italy makes it the only negative country. The index is down marginally in the UK and up marginally in the Nordic countries, the most positive region surveyed. AltAssets 10.9.04 Danske Private Equity increases size of fund of funds after final close Danske Private Equity has increased the size of its second fund of funds to E550m following a E527m final close in the final quarter of last year. Danske PEP II now has the same level of commitments as the organisation’s first fund, but is still E50m short of an original E600m target. The fund of funds has already committed to Leonard Green Partners’ $1.85bn buy-out fund, Italian firm B&S Private Equity’s E550m IPEF IV, MPM Bioventures III, a $900m life sciences fund and Nordic Capital V, the E1.5bn pan-Nordic buy-out fund. PrivateEquityOnline 13.9.04 UK West Private Equity completes first exit with £162m sale of Southern Cross UK West Private Equity has completed its first exit with the £162m sale of Southern Cross Healthcare to the Blackstone Group. West Private Equity acquired Southern Cross, which operates 139 care homes in the UK, for £90m in August 2002. The healthcare services sector has attracted increasing interest from private equity players in recent months. The combination of strong demand for healthcare services as the population ages and the highly fragmented state of the sector is judged to provide strong consolidation opportunities. AltAssets 16.9.04 Permira considers £5bn offer for Sainsbury's Permira is reported to be considering an offer of over £5bn for the UK's third largest food retailer J Sainsbury. The private equity firm is currently in talks with other potential financial backers. Permira's offer is being led by managing partner Damon Buffini. Despite repeated denials that Sainsbury's is in take over talks there has been heavy trading in the company's shares this month as bid rumours continue to surround the business. AltAssets 27.9.04

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Private equity firms eye up PPR's Rexel stake Five groups of private equity firms are believed to be considering offers for PPR's 74 per cent stake in electrical retailer Rexel. The stake is worth in the region of E1.7bn. CVC Capital Partners is to team up with Cinven and Bain Capital in a bid to win the company. They will be competing against a rival consortium comprising Permira and Blackstone. PAI and BC Partners are also to join forces in an attempt to buy the company. Clayton Dubilier & Rice and Carlyle will each submit individual offers. AltAssets 27.9.04 CVC close to buying BASF's ink business Pan-European buy-out firm CVC Capital Partners is close to acquiring the printing ink business of German chemical group BASF. The deal is likely to be valued at between E600m and E700m. The printing inks business manufactures products for labelling and packaging and has annual sales of more than E3bn. CVC is also in talks to buy ANI, the former inks business of Dutch Akzo Nobel, which was spun off to management in 2002. The private equity firm plans to combine the two businesses. AltAssets 30.9.04 Irish Pension fund to invest 20 per cent of assets in private equity and real estate The E10.6bn Irish National Pensions Reserve Fund is to invest approximately 20 per cent of its assets under management in private equity and real estate. This will give the pension fund an allocation of around E2bn for the asset classes. The NPRF is planning to hire two new fund managers by the end of the year to assist with the shift in strategy, in addition to the recruitment of Ian Gleeson who joins the firm from F&C next month. AltAssets 27.9.04 Blackstone close to buying UK cinema chain in £120m deal US Blackstone Group is close to buying the UK cinema operator Cine-UK for around £120m. The move signals an acceleration in the shake-up of the UK cinema industry. Cine-UK also attracted interest from Terra Firma, Legal and General Ventures and Providence Equity. AltAssets 24.9.04 SVG raises E400m from fixed income markets for investment in private equity SVG Advisers, the private equity investment company formerly known as Schroder Ventures, has raised E400m in bonds and preferred equity in a rare example of a private equity fund raising capital in advance of an acquisition from fixed-income investors. The vehicle, to be called SVG Diamond, has raised the capital through an innovative collateralised fund obligation, comprising E260m of investment grade bonds and preferred equity shares representing commitments of E140m. SVG Diamond will initially purchase a secondary portfolio of interests in approximately 20 private equity funds and will make commitments to around 40 primary private equity funds, diversified by vintage year, geography and manager. The CFO will predominately be focused on buy-outs in Western Europe and the US and will have an over-commitment facility of 133 per cent, allowing a target investment capacity of E533m. AltAssets 29.9.04 Swedish AP1 seeks strategic partners for private equity Forsta AP-fonden, the First Swedish National Pension Fund, is seeking 'strategic partners' for around $400m in private equity. AP1 is looking to appoint one or more partners to provide advice on three mandates covering global investments, the US and Europe. The private equity mandates to be considered are separate accounts on a discretionary basis, but with AP1 having the ability to veto. Each mandate is expected to be in the range of $100m to $200m for the first year. AltAssets 28.9.04

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North America

CalPERS faces disclosure lawsuit over private equity management fees, Coller Capital acquires $90m US private equity portfolio from Dresdner Bank, Bain Capital to buy Canadian telephone directory business, Tennenbaum Capital Partners closes $2bn fund… US Hellman & Friedman to bid for Gray Global US private equity firm Hellman & Friedman is to submit an offer of between £600m and £700m for Gray Global, the world's second largest advertising firm. US private equity firms Providence Equity Partners and Blackstone are understood to have decided against tabling a bid. Further offers are expected from UK-based communications company WPP and its French rival Havas. But Quadrangle Group, a US private equity firm that was to back Havas' offer, has walked away from the deal. Havas must therefore find another partner by the deadline next week. AltAssets 6.9.04 CalSTRS invests $300m in big name funds California State Teachers' Retirement System (CalSTRS) has announced that it has made $300m of commitments to three private equity funds. The pension fund has invested $150m to a subordinated debt fund managed by Welsh, Carson, Anderson & Stowe, $100m to Oak Investment Partners XI, a $1.5bn later-stage venture fund that closed last month, and $50m to a distressed debt fund managed by Oaktree Capital Management. AltAssets 2.9.04 US-based CMEA Ventures closes $300m venture fund US-based CMEA Ventures has announced the final closing of its sixth venture fund with $300m for investment in high technology and life sciences companies. The fund was originally targeting $250m. CMEA Ventures VI will specifically focus on four investment sectors; semiconductors and high-performance electronics, enterprise productivity solutions and outsourcing services, efficient drug development and high-value pharmaceutical chemistry. New investors in CMEA Ventures VI include the Dow Employees Pension Plan, IMS Health, Ohio Public Employees Retirement System, Public Employees' Retirement Association of Colorado and State of Michigan Retirement Systems. Returning investors include ChevronTexaco and IBM. AltAssets 21.9.04 SEC bars former private equity executive The Securities and Exchange Commission has barred Charles Spadoni, a former executive at private equity firm Triumph Capital Group, from the securities industry. Spadoni was convicted of using bribes to win business from Connecticut's pension system in July last year. He accepted the ban without admitting or denying the SEC's findings. Spadoni was general counsel of Triumph Capital from 1997 to 2003. He still faces SEC civil charges of failing to disclose $2m of payments to friends and former Connecticut Treasurer Paul Silvester. The money was allegedly intended to reward Silvester for investing $200m with Triumph. AltAssets 2.9.04 Former CSFB execs to launch new private equity firm A group of investment professionals that defected from DLJ Merchant Banking Partners, the private equity arm of Credit Suisse First Boston, have launched a new firm called Diamond Castle Holdings. The new firm is planning to raise a fund targeting between $1bn and $1.5bn. Diamond Castle Holdings is to be led by Lawrence Schloss who was previously head of DLJ Merchant Banking Partners. The executives told the Wall Street Journal that they left DLJ because of what they described as a 'disturbing lack of independence.' In particular, they cited conflicts of interest that arose between the private equity and investment banking divisions. AltAssets 22.9.04 Bain Capital to buy Canadian telephone directory business Bain Capital has entered into exclusive negotiations to acquire Verizon Communications' Canadian telephone directory business in a deal valued at up to $1.5bn. Verizon acquired the SuperPages business from Canada's Telus Corporation for $810m three years ago. SuperPages publishes 118 directories in Alberta, British Columbia, Ontario and Quebec. Other bidders for the company include Yellow Pages Group, RH Donnelley Corporation, and Yell Group. US private equity firm Carlyle had also expressed an interest. AltAssets 1.9.04 US Quaker BioVentures closes inaugural fund with $280m US Quaker BioVentures has closed its debut fund with $280m under management. The fund, which was launched in early 2002, was $80m oversubscribed and is targeting life sciences companies in the Mid-Atlantic region. Quaker BioVentures will consider investment opportunities across the life sciences industry, from early-stage businesses to public companies. The firm is particularly interested in companies focused on biopharmaceuticals and medical devices. AltAssets 8.9.04

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CalPERS faces disclosure lawsuit over private equity management fees The California Public Employees' Retirement System, the biggest US pension fund with $166bn under management, is facing a lawsuit over its failure to disclose the management fees that it pays to private equity and hedge fund managers. The California First Amendment Coalition, an advocacy group for free speech and open government, filed the suit in a state court in San Francisco in order to force the information to be disclosed under a state public records law. But Mark Anson, chief investment officer of CalPERS, has responded to the claims by emphasising the pension fund's outstanding record of transparency in investment matters and specifically private equity investments. Anson also stressed that state law protects disclosure of information that is critical to protecting the organisation's ability to generate returns for the pension fund so that taxpayers won't have to pay higher contributions toward public employee pensions. On that basis, CalPERS maintains that private equity management fees represent a trade secret and are therefore exempt from disclosure. AltAssets 8.9.04 Bear Stearns joins forces with GlobeSecNine to invest in US homeland defence sector Bear Stearns has formed a strategic alliance with private investment firm, GlobeSecNine, to pursue private equity investment opportunities in the homeland defence and security sectors. Investments will be funded from the $1.5bn Bear Stearns Merchant Banking fund, of which $300m has been previously designated for investments in the sector. Bear Stearns announced a similar alliance with Giuliani Partners last year. AltAssets 14.9.04 US Quaker BioVentures closes inaugural fund with $280m US Quaker BioVentures has closed its debut fund with $280m under management. The fund, which was launched in early 2002, was $80m oversubscribed and is targeting life sciences companies in the Mid-Atlantic region. Quaker BioVentures will consider investment opportunities across the life sciences industry, from early-stage businesses to public companies. The firm is particularly interested in companies focused on biopharmaceuticals and medical devices. AltAssets 8.9.04 JP Morgan may spin off One Equity Partners JP Morgan Chase is expected to spin off Bank One Corporation's private equity business into an independent entity. JP Morgan acquired Bank One for about $58bn in July this year and has been integrating many of both banks' operations. But the Bank One private equity business, One Equity Partners, has a different investment and management style and operates from a different New York building. JP Morgan has already committed $700m to One Equity's $2bn fund. After that commitment is concluded, One Equity Partners may elect to raise a new independent investment vehicle and JP Morgan would invest in that fund. A future One Equity fund would seek to raise $2.5bn and JP Morgan is likely to invest about $500m. AltAssets 13.9.04 US Castanea Partners closes new fund on $207m US Castanea Partners has closed its latest fund with $207m of commitments. The fund will target small to mid-market investments in publishing and information, human resource and business services, consumer product and speciality retail sectors. In addition to a substantial commitment from the managing partners of Castanea, new investors include a small group of endowments and foundations, led by Princeton University and Yale University. Castanea Partners Fund II will make investments of approximately $10m to $20m in leveraged buy-outs, growth investments and turnaround situations. AltAssets 8.9.04 US InterWest Partners closes ninth venture fund on $600m US InterWest Partners has closed its ninth venture capital fund on $600m. The fund will invest in early-stage life sciences and information technology companies. InteWest invests an average of about $10m to $15m over the course of its involvement with a portfolio company. The firm has a particular focus on drug development, medical devices, healthcare services, healthcare information systems, networking and computing technologies. AltAssets 14.9.04 US Caltius closes executive fund and announces new hires Caltius Mezzanine has announced the closing of Caltius Partners Executive III. Investors include executives of Caltius' current and former portfolio companies. The fund was established in conjunction with Caltius Partners III that closed at $300m in June this year. As a result of the recent closing of Caltius III, the firm has recruited Christopher Hebble as principal and Rick Stuart as senior associate. Hebble joins the firm from Houlihan Lokey Howard & Zukin where he was vice president in the corporate finance department. Stuart joins from Caltius Private Equity Partners where he was an associate. AltAssets 9.9.04

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US Mellon withdraws from private equity Mellon Ventures, the private equity arm of Mellon Financial, has announced that it will not be making any new investments. But the firm, which has $1.3bn under management, will continue to support its 130 portfolio companies and more than 50 private equity funds in which it has invested. The company decided against making new investments as part of its annual strategic planning process, which concluded that the private equity business was not core to its existing operations. There are no plans to liquidate the fund. AltAssets 9.9.04 US Providence Equity closes latest fund on $4.25bn US Providence Equity has closed its latest fund on $4.25bn but the buy-out group is reported to have attracted investor support for almost double that sum. This news emerges as Providence comes close to signing its largest ever deal, the $4.8bn acquisition of US film studio group Metro-Goldwyn-Mayer. Providence is leading the deal with Sony, Texas Pacific Group and Credit Suisse First Boston. AltAssets 27.9.04 US Norwest Equity Partners closes new $800m fund US Norwest Equity Partners has closed its latest fund on $800m. Norwest Partners VIII will continue the firm's strategy of investing in growing and profitable middle-market companies. Norwest expects to invest in companies with enterprise values of between $50m and $250m within the manufacturing, distribution, healthcare services and consumer products industry sectors. AltAssets 9.9.04 US Palomar Ventures closes $225m fund III US Palomar Ventures, an early-stage information technology investment firm, has held a first and final close for its $225m fund III. The firm began fundraising in March this year. Palomar will invest between $2m and $6m in a wide range of technology related companies. Its current portfolio companies include Virtela Communications, Gluecode Software and Network Physics. VentureWire 14.9.04 US Founders Equity announces final closing of fund with $140m US Founders Equity has announced the final close of its Founder Equity SBIC I and affiliated funds with $140m of commitments. Investors in the fund include Colorado PERA, Citibank, HSBC, JPMorganChase, Washington Mutual and RWB. In addition the New York State Common Retirement Fund has committed $20m to a side-by-side affiliated fund specifically for investments in the State of New York. Founders will invest in small to middle-market companies in the business and marketing services, outsourcing and logistics, healthcare services, environmental services, security systems, oilfield services, consumer products and services, food and food services, franchising and niche manufacturing sectors. AltAssets 21.9.04 US Tennenbaum Capital Partners closes $2bn fund US Tennenbaum Capital Partners has closed its fourth fund, the Special Value Opportunities Fund, with $2bn of commitments. The fund will invest in long-term special situations opportunities in a range of industries in both the public and private sector, including bank debt, mezzanine securities and distressed bonds. Investors in the fund include corporate pension funds, insurance companies, private foundations and family offices. The fund will be co-managed by Babson Capital Management. Tennenbaum Capital Partners is a private investment firm and was founded in 1996. The firm currently manages more than $3.5bn across four funds. Tennenbaum focuses on middle-market investments in a variety of sectors with a particular emphasis on healthcare, energy and aerospace. AltAssets 15.9.04 Ventures West closes Canada's largest ever venture capital fund Ventures West has announced the final close of Canada's largest ever venture capital fund with C$250m. The fund will invest in early-stage technology companies in the biotechnology, communications, energy technology and information technology sectors. Investors in Ventures West 8 include British Columbia Investment Management Corporation, Business Development Bank of Canada, Caisse de Depot et Placement du Quebec, CPP Investment Board, Edgestone Capital Partners, OMERS, University of Toronto Asset Management, and Teachers' Private Capital. AltAssets 15.9.04 US Longroad Asset Management closes debut special situations fund on $183m US Longroad Asset Management has closed its first special situations fund with $183m in commitments. The fund will invest in middle-market companies with revenues of between $50m and $500m. Longroad is a private investment firm focused on acquiring controlling positions in discounted fixed income securities, bank debt and obligations of financially distressed companies and providing value throughout the restructuring process. AltAssets 15.9.04

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September 2004

North America - continued

US Forstmann Little to buy sports marketing company for $700m US private equity firm Forstmann Little is close to acquiring International Management Group (IMG), the global sports marketing group and talent agency, for around $700m. A deal would mark the end of a three-month auction for the company. Kohlberg Kravis Roberts and Bain Capital were among the other private equity firms competing for IMG. AltAssets 15.9.04 Private equity firms consider bids for Canadian Alcan A number of private equity firms including Blackstone and Kohlberg Kravis Roberts are believed to be considering bids of between $4bn and $5bn for the rolled products business of Canadian aluminium manufacturer Alcan. Other buy-out firms expected to bid include Apollo Advisors, Bain Capital, Madison Dearborn Partners, Ripplewood Holdings and Permira. Alcan's rolled products unit makes the metal for the beverage can, car parts, and foil industries and with annual revenues of $6.4bn is the biggest aluminium rolled products company in the world. Alcan announced that it was planning to spin off the unit in May this year in order to address regulatory concerns about the company's 2003 purchase of French aluminium maker Pechiney. AltAssets 16.9.04 Coller Capital acquires $90m US private equity portfolio from Dresdner Bank The institutional restructuring unit of Dresdner Bank has agreed to sell a $90m private equity portfolio to Coller Capital. The portfolio consists of 22 companies from a broad range of sectors based primarily in the US. Since the beginning of 2003, the institutional restructuring unit has reduced the non-strategic loan and private equity exposures of the bank from E35.5bn to E13.5bn. The bank's remaining exposure to private equity amounts to around E900m. AltAssets 17.9.04 US Western Technology closes eleventh venture debt fund on $500m US Western Technology Investment has announced the final close its eleventh venture debt fund with $500m of commitments. The firm now has over $1bn under management. The fund will continue the Western Technology's strategy of venture lending to start-up and emerging growth companies in the communications, life sciences, software and semiconductor industries. AltAssets 28.9.04 US Vestar Capital Partners to buy Dockers for $800m US Vestar Capital Partners has reportedly agreed to acquire Dockers, a casual clothing brand of Levi Strauss, for around $800m. The private equity firm has joined forces with Eric Rothfeld, a clothing industry veteran. Dockers sales generate annual revenues of around $1.4bn, but fell by 26 per cent in the second quarter of this year. AltAssets 28.9.04

10

September 2004

Asia & Australasia

CSFB plans private equity push into Asia, Silicon Valley Bank opens offices in UK and India, Lone Star to close Beijing office, Newbridge trumps Woolworths bid for Australian liquor store chain… Japanese Mizuho plans Y30bn private equity fund Two units of Mizuho Financial Group, Japan's biggest banking group, have announced that they are to set up a Y30bn private equity fund to cater for the growing demand for alternative investment opportunities among Japanese institutional investors. Mizuho Securities and DLIBJ Asset Management will officially establish the joint venture, Polaris Principal Finance, next week. The new firm is expected to launch the fund by the end of this year. The joint venture will be headed by Shuichi Takahashi, a former executive of Bank of Tokyo Mitsubishi. AltAssets 9.9.04 Lone Star to close Beijing office Lone Star, the US turnaround specialist, is to close its office in Beijing and reduce its activity in China due to a lack of viable investment opportunities. The private equity firm, which has recently closed a $5bn fund for investment in Asia and Europe, will still look for deals in China but no longer considers it one of its more important markets. AltAssets 30.9.04 Silicon Valley Bank opens offices in UK and India Silicon Valley Bank has opened an international subsidiary in London. SVB Europe Advisors is primarily targeting UK-based high-growth technology companies with business services and access to customised debt financing. Silicon Valley Bank also announced the opening of SVB India Advisors in Bangalore. AltAssets 17.9.04 ING launches listed private equity vehicle in Australia Global investment company ING Investment Management has launched Australia's first listed private equity fund of funds, ING Private Equity Access Ltd. ING PEAL opens to raise up to $120m from Australian and New Zealand investors. Capital will originally be invested in the Australian listed equities market, in a strategy structured to include a bias towards companies that pay higher levels of dividends and franking credits. The long-term allocation of ING PEAL will be about 90 per cent private equity and ten per cent listed securities and cash. The fund of funds will invest across a diversified range of established underlying private equity managers, with target returns of 20 per cent per annum over the long term. AltAssets 29.9.04 Newbridge trumps Woolworths bid for Australian liquor store chain Newbridge Capital, the Asian arm of US buy-out firm Texas Pacific, has made an offer of A$1.1bn for pub and liquor store chain Australian Leisure and Hospitality. The offer trumps a A$970m hostile bid by Woolworths. Woolworths has acquired around 15 per cent of ALH in market raids over the past few months. But the company declined to say whether it would be prepared to increase its bid of A$2.75 per share to top Newbridge's A$3.05 a share offer. AltAssets 29.9.04 CSFB plans private equity push into Asia Credit Suisse First Boston has pledged to step up investment in Asia with a push into private equity, high-yield debt and securitisation. In his first interview since he took over from John Mack in June, Brady Dougan said that Asia was 'the biggest opportunity' for the firm in the next 12 to 18 months. AltAssets 28.9.04

11

September 2004

Funds: Europe & Israel

Benchmark closes second European fund on $375m, SVG raises E400m from fixed income markets for investment in private equity, UK Innisfree raises £360m for third infrastructure fund, Swiss Partners Group holds final close on dedicated secondaries fund… UK Innisfree raises £360m for third infrastructure fund UK infrastructure investment group Innisfree has closed its third fund on £260m. The fund will invest in public-to-private partnership and private finance initiative projects in the UK and continental Europe. Innisfree closed its first fund on £85m in 1996 and its second fund on £150m in 1999. Investors in the firm's previous funds include Henderson Private Capital, Hermes, Norwich Union and the Prudential. AltAssets 2.9.04 Benchmark closes second European fund on $375m Benchmark Capital has announced that it has raised a new European venture capital fund with $375m of commitments. Benchmark Europe II was oversubscribed and exceeded its target in a single close. Benchmark was founded in 1995 and manages more than $2.5bn for investment in technology companies. The firm's debut fund closed on $500m in 2000 and has made over 25 investments across a variety of markets and geographies. AltAssets 13.9.04 Swiss Partners Group holds final close on dedicated secondaries fund Swiss Partners Group has announced the final closing of its dedicated secondaries fund with E400m of commitments. The fund will focus on secondary interests in European buy-out funds but will include some exposure to the US. Investors in the fund include MetLife, BP, New York Life and Canada Pension Plan Investment Board as well as a number of other UK and German banks, European pension funds and US insurance companies, retirement plans and state organisations. The fund has already completed 15 transactions valued at a total of E107m. AltAssets 13.9.04 Former CSFB execs to launch new private equity firm A group of investment professionals that defected from DLJ Merchant Banking Partners, the private equity arm of Credit Suisse First Boston, have launched a new firm called Diamond Castle Holdings. The new firm is planning to raise a fund targeting between $1bn and $1.5bn. Diamond Castle Holdings is to be led by Lawrence Schloss who was previously head of DLJ Merchant Banking Partners. The executives told the Wall Street Journal that they left DLJ because of what they described as a 'disturbing lack of independence.' In particular, they cited conflicts of interest that arose between the private equity and investment banking divisions. AltAssets 22.9.04 SVG raises E400m from fixed income markets for investment in private equity SVG Advisers, the private equity investment company formerly known as Schroder Ventures, has raised E400m in bonds and preferred equity in a rare example of a private equity fund raising capital in advance of an acquisition from fixed-income investors. The vehicle, to be called SVG Diamond, has raised the capital through an innovative collateralised fund obligation, comprising E260m of investment grade bonds and preferred equity shares representing commitments of E140m. SVG Diamond will initially purchase a secondary portfolio of interests in approximately 20 private equity funds and will make commitments to around 40 primary private equity funds, diversified by vintage year, geography and manager. The CFO will predominately be focused on buy-outs in Western Europe and the US and will have an over-commitment facility of 133 per cent, allowing a target investment capacity of E533m. AltAssets 29.9.04

12

September 2004

Funds: North America US InterWest Partners closes ninth venture fund on $600m, Ventures West closes Canada's largest ever venture capital fund, US Western Technology closes eleventh venture debt fund on $500m, US Longroad Asset Management closes debut special situations fund on $183m… US Quaker BioVentures closes inaugural fund with $280m US Quaker BioVentures has closed its debut fund with $280m under management. The fund, which was launched in early 2002, was $80m oversubscribed and is targeting life sciences companies in the Mid-Atlantic region. Quaker BioVentures will consider investment opportunities across the life sciences industry, from early-stage businesses to public companies. The firm is particularly interested in companies focused on biopharmaceuticals and medical devices. AltAssets 8.9.04 Former CSFB execs to launch new private equity firm A group of investment professionals that defected from DLJ Merchant Banking Partners, the private equity arm of Credit Suisse First Boston, have launched a new firm called Diamond Castle Holdings. The new firm is planning to raise a fund targeting between $1bn and $1.5bn. Diamond Castle Holdings is to be led by Lawrence Schloss who was previously head of DLJ Merchant Banking Partners. The executives told the Wall Street Journal that they left DLJ because of what they described as a 'disturbing lack of independence.' In particular, they cited conflicts of interest that arose between the private equity and investment banking divisions. AltAssets 22.9.04 US Castanea Partners closes new fund on $207m US Castanea Partners has closed its latest fund with $207m of commitments. The fund will target small to mid-market investments in publishing and information, human resource and business services, consumer product and speciality retail sectors. In addition to a substantial commitment from the managing partners of Castanea, new investors include a small group of endowments and foundations, led by Princeton University and Yale University. Castanea Partners Fund II will make investments of approximately $10m to $20m in leveraged buy-outs, growth investments and turnaround situations. AltAssets 8.9.04 US InterWest Partners closes ninth venture fund on $600m US InterWest Partners has closed its ninth venture capital fund on $600m. The fund will invest in early-stage life sciences and information technology companies. InteWest invests an average of about $10m to $15m over the course of its involvement with a portfolio company. The firm has a particular focus on drug development, medical devices, healthcare services, healthcare information systems, networking and computing technologies. AltAssets 14.9.04 US Caltius closes executive fund and announces new hires Caltius Mezzanine has announced the closing of Caltius Partners Executive III. Investors include executives of Caltius' current and former portfolio companies. The fund was established in conjunction with Caltius Partners III that closed at $300m in June this year. As a result of the recent closing of Caltius III, the firm has recruited Christopher Hebble as principal and Rick Stuart as senior associate. Hebble joins the firm from Houlihan Lokey Howard & Zukin where he was vice president in the corporate finance department. Stuart joins from Caltius Private Equity Partners where he was an associate. AltAssets 9.9.04 US-based CMEA Ventures closes $300m venture fund US-based CMEA Ventures has announced the final closing of its sixth venture fund with $300m for investment in high technology and life sciences companies. The fund was originally targeting $250m. CMEA Ventures VI will specifically focus on four investment sectors; semiconductors and high-performance electronics, enterprise productivity solutions and outsourcing services, efficient drug development and high-value pharmaceutical chemistry. New investors in CMEA Ventures VI include the Dow Employees Pension Plan, IMS Health, Ohio Public Employees Retirement System, Public Employees' Retirement Association of Colorado and State of Michigan Retirement Systems. Returning investors include ChevronTexaco and IBM. AltAssets 21.9.04 US Norwest Equity Partners closes new $800m fund US Norwest Equity Partners has closed its latest fund on $800m. Norwest Partners VIII will continue the firm's strategy of investing in growing and profitable middle-market companies. Norwest expects to invest in companies with enterprise values of between $50m and $250m within the manufacturing, distribution, healthcare services and consumer products industry sectors. AltAssets 9.9.04

13

September 2004

Funds: North America - continued US Tennenbaum Capital Partners closes $2bn fund US Tennenbaum Capital Partners has closed its fourth fund, the Special Value Opportunities Fund, with $2bn of commitments. The fund will invest in long-term special situations opportunities in a range of industries in both the public and private sector, including bank debt, mezzanine securities and distressed bonds. Investors in the fund include corporate pension funds, insurance companies, private foundations and family offices. The fund will be co-managed by Babson Capital Management. Tennenbaum Capital Partners is a private investment firm and was founded in 1996. The firm currently manages more than $3.5bn across four funds. Tennenbaum focuses on middle-market investments in a variety of sectors with a particular emphasis on healthcare, energy and aerospace. AltAssets 15.9.04 Ventures West closes Canada's largest ever venture capital fund Ventures West has announced the final close of Canada's largest ever venture capital fund with C$250m. The fund will invest in early-stage technology companies in the biotechnology, communications, energy technology and information technology sectors. Investors in Ventures West 8 include British Columbia Investment Management Corporation, Business Development Bank of Canada, Caisse de Depot et Placement du Quebec, CPP Investment Board, Edgestone Capital Partners, OMERS, University of Toronto Asset Management, and Teachers' Private Capital. AltAssets 15.9.04 US Longroad Asset Management closes debut special situations fund on $183m US Longroad Asset Management has closed its first special situations fund with $183m in commitments. The fund will invest in middle-market companies with revenues of between $50m and $500m. Longroad is a private investment firm focused on acquiring controlling positions in discounted fixed income securities, bank debt and obligations of financially distressed companies and providing value throughout the restructuring process. AltAssets 15.9.04 US Palomar Ventures closes $225m fund III US Palomar Ventures, an early-stage information technology investment firm, has held a first and final close for its $225m fund III. The firm began fundraising in March this year. Palomar will invest between $2m and $6m in a wide range of technology related companies. Its current portfolio companies include Virtela Communications, Gluecode Software and Network Physics. VentureWire 14.9.04 US Providence Equity closes latest fund on $4.25bn US Providence Equity has closed its latest fund on $4.25bn but the buy-out group is reported to have attracted investor support for almost double that sum. This news emerges as Providence comes close to signing its largest ever deal, the $4.8bn acquisition of US film studio group Metro-Goldwyn-Mayer. Providence is leading the deal with Sony, Texas Pacific Group and Credit Suisse First Boston. AltAssets 27.9.04 US Founders Equity announces final closing of fund with $140m US Founders Equity has announced the final close of its Founder Equity SBIC I and affiliated funds with $140m of commitments. Investors in the fund include Colorado PERA, Citibank, HSBC, JPMorganChase, Washington Mutual and RWB. In addition the New York State Common Retirement Fund has committed $20m to a side-by-side affiliated fund specifically for investments in the State of New York. Founders will invest in small to middle-market companies in the business and marketing services, outsourcing and logistics, healthcare services, environmental services, security systems, oilfield services, consumer products and services, food and food services, franchising and niche manufacturing sectors. AltAssets 21.9.04 US Western Technology closes eleventh venture debt fund on $500m US Western Technology Investment has announced the final close its eleventh venture debt fund with $500m of commitments. The firm now has over $1bn under management. The fund will continue the Western Technology's strategy of venture lending to start-up and emerging growth companies in the communications, life sciences, software and semiconductor industries. AltAssets 28.9.04

14

September 2004

Funds: Asia & Australasia

Japanese Mizuho plans Y30bn private equity fund, ING launches listed private equity vehicle in Australia… Japanese Mizuho plans Y30bn private equity fund Two units of Mizuho Financial Group, Japan's biggest banking group, have announced that they are to set up a Y30bn private equity fund to cater for the growing demand for alternative investment opportunities among Japanese institutional investors. Mizuho Securities and DLIBJ Asset Management will officially establish the joint venture, Polaris Principal Finance, next week. The new firm is expected to launch the fund by the end of this year. The joint venture will be headed by Shuichi Takahashi, a former executive of Bank of Tokyo Mitsubishi. AltAssets 9.9.04 ING launches listed private equity vehicle in Australia Global investment company ING Investment Management has launched Australia's first listed private equity fund of funds, ING Private Equity Access Ltd. ING PEAL opens to raise up to $120m from Australian and New Zealand investors. Capital will originally be invested in the Australian listed equities market, in a strategy structured to include a bias towards companies that pay higher levels of dividends and franking credits. The long-term allocation of ING PEAL will be about 90 per cent private equity and ten per cent listed securities and cash. The fund of funds will invest across a diversified range of established underlying private equity managers, with target returns of 20 per cent per annum over the long term. AltAssets 29.9.04

15

September 2004

Major transactions

US Hellman & Friedman to bid for Gray Global, Blackstone close to buying UK cinema chain in £120m deal, European Duke Street completes £450m recapitalisation of three portfolio companies, Private equity owned Warner Music plans $5bn IPO… DEALS Barclays looks to sell Hobbs fashion group in £100m deal Barclays Private Equity is looking to exit its investment in upmarket fashion retailer Hobbs. Indicative bids for the company are expected tomorrow and are likely to be in excess of £100m. Hobbs generated a gross profit of £21.9m for the first six months of this year, up from £14.6m in the same period in 2003. Potential offers are likely to come from private equity firms rather than strategic buyers. Barclays led the management buy-in of the company in December 2002 and currently holds an 80 per cent stake. Management owns 16 per cent and staff options account for the remaining share. AltAssets 6.9.04 Newbridge trumps Woolworths bid for Australian liquor store chain Newbridge Capital, the Asian arm of US buy-out firm Texas Pacific, has made an offer of A$1.1bn for pub and liquor store chain Australian Leisure and Hospitality. The offer trumps a A$970m hostile bid by Woolworths. Woolworths has acquired around 15 per cent of ALH in market raids over the past few months. But the company declined to say whether it would be prepared to increase its bid of A$2.75 per share to top Newbridge's A$3.05 a share offer. AltAssets 29.9.04 Private equity firms eye up Spanish travel business A number of private equity firms have emerged as possible bidders for Spanish travel company Amadeus. European Permira, Apax, BC Partners, Cinven, CVC Capital Partners and PAI are all considering offers for the world's largest reservations and ticketing firm. US buy-out houses Kohlberg Kravis & Roberts, Texas Pacific Group, Bain Capital and Carlyle are also expected to table bids. In addition, rival travel firm Worldspan Technologies is likely to emerge as a trade buyer. Amadeus' shares closed at E5.75 last week, giving the company a market capitalisation of around E3.3bn. Air France, which holds a 23.4 per cent stake in the company, has indicated that intends to remain in the stock. Iberia, which owns 18.3 per cent, and Lufthansa, which owns 5.1 per cent, are both considering their options. AltAssets 6.9.04 Private equity firms eye up PPR's Rexel stake Five groups of private equity firms are believed to be considering offers for PPR's 74 per cent stake in electrical retailer Rexel. The stake is worth in the region of E1.7bn. CVC Capital Partners is to team up with Cinven and Bain Capital in a bid to win the company. They will be competing against a rival consortium comprising Permira and Blackstone. PAI and BC Partners are also to join forces in an attempt to buy the company. Clayton Dubilier & Rice and Carlyle will each submit individual offers. AltAssets 27.9.04 US Forstmann Little to buy sports marketing company for $700m US private equity firm Forstmann Little is close to acquiring International Management Group (IMG), the global sports marketing group and talent agency, for around $700m. A deal would mark the end of a three-month auction for the company. Kohlberg Kravis Roberts and Bain Capital were among the other private equity firms competing for IMG. AltAssets 15.9.04 US Hellman & Friedman to bid for Gray Global US private equity firm Hellman & Friedman is to submit an offer of between £600m and £700m for Gray Global, the world's second largest advertising firm. US private equity firms Providence Equity Partners and Blackstone are understood to have decided against tabling a bid. Further offers are expected from UK-based communications company WPP and its French rival Havas. But Quadrangle Group, a US private equity firm that was to back Havas' offer, has walked away from the deal. Havas must therefore find another partner by the deadline next week. AltAssets 6.9.04 US Blackstone buys Vanguard Health Systems for $1.75bn US Blackstone Group has acquired a majority equity stake in Vanguard Healthcare from Morgan Stanley Capital Partners for around $1.75bn. The firm beat rival offers from Kohlberg Kravis Roberts and Thomas H.Lee Partners. Vanguard is based in Tennessee and operates 16 hospitals and related facilities in a number of states including Arizona, California and Texas. AltAssets 24.9.04

16

September 2004

Major transactions - continued

Bridgepoint close to acquiring UK consumer finance firm First Credit European private equity firm Bridgepoint is close to completing the acquisition of First Credit, the consumer debt company, for up to £80m, according to the Financial Times. First Credit is currently owned by Gresham Private Equity and the company's management. First Credit buys debt from institutions at a discounted price and then seeks to collect the amount owed. AltAssets 3.9.04 3i's Westminster Healthcare up for grabs Westminster Healthcare, 3i's UK nursing home operator, is being auctioned for around £450m. The company is expected to attract more than ten bids by today's deadline for first round offers, including a number from private equity firms. BUPA and Barchester are both understood to be interested in a strategic acquisition, as is Four Seasons, currently owned by Allianz Capital Partners, and Southern Cross, which was acquired by Blackstone for £162m last week. Private equity buyers to have expressed an interest in tabling an offer include Cinven, which lost out to Blackstone for Southern Cross, BC Partners, which is building a pan-European private hospital group, Doughty Hanson, Charterhouse and CVC Capital. AltAssets 21.9.04 Montagu announces £244m acquisition of UK Maplin Electronics Montagu Private Equity has agreed to buy UK Maplin Electronics for £244m. The company is currently owned by Graphite Capital and its management team. Maplin operates a chain of high street and out-of-town retail stores, a mail order catalogue and an internet business. The company sells electronic and computer components, equipment and accessories. Graphite Capital acquired a 67 per cent stake in Maplin in June 2001. The sale to Montagu provides the firm with a return of 9.6 times its initial investment and an internal rate of return in excess of 120 per cent. AltAssets 3.9.04 Permira considers £5bn offer for Sainsbury's Permira is reported to be considering an offer of over £5bn for the UK's third largest food retailer J Sainsbury. The private equity firm is currently in talks with other potential financial backers. Permira's offer is being led by managing partner Damon Buffini. Despite repeated denials that Sainsbury's is in take over talks there has been heavy trading in the company's shares this month as bid rumours continue to surround the business. AltAssets 27.9.04 Blackstone close to buying UK cinema chain in £120m deal US Blackstone Group is close to buying the UK cinema operator Cine-UK for around £120m. The move signals an acceleration in the shake-up of the UK cinema industry. Cine-UK also attracted interest from Terra Firma, Legal and General Ventures and Providence Equity. AltAssets 24.9.04 Permira and Cinven buy stakes in Vendex from KKR UK private equity firms Permira and Cinven have agreed to acquire a 44 per cent stake in Dutch retailer Royal Vendex from Kohlberg Kravis Roberts. Terms of the deal were not disclosed but the two firms are understood to have each invested $200m. In July this year, KKR led a consortium of private equity firms, including Dutch Alpinvest, to acquire 91 per cent of the company in the Netherlands' largest buy-out to date. But KKR has been keen to reduce its exposure to Vendex since its equity contribution was increased to over $1bn after Change Capital Partners, which had originally partnered with Alpinvest, dropped out of the deal. The sale to Permira and Cinven leaves KKR with a 45 per cent stake in Vendex, while Alpinvest holds nine per cent. Management owns the remaining two per cent. AltAssets 3.9.04 CVC close to buying BASF's ink business Pan-European buy-out firm CVC Capital Partners is close to acquiring the printing ink business of German chemical group BASF. The deal is likely to be valued at between E600m and E700m. The printing inks business manufactures products for labelling and packaging and has annual sales of more than E3bn. CVC is also in talks to buy ANI, the former inks business of Dutch Akzo Nobel, which was spun off to management in 2002. The private equity firm plans to combine the two businesses. AltAssets 30.9.04 US Vestar Capital Partners to buy Dockers for $800m US Vestar Capital Partners has reportedly agreed to acquire Dockers, a casual clothing brand of Levi Strauss, for around $800m. The private equity firm has joined forces with Eric Rothfeld, a clothing industry veteran. Dockers sales generate annual revenues of around $1.4bn, but fell by 26 per cent in the second quarter of this year. AltAssets 28.9.04

17

September 2004

Major transactions - continued

Bain Capital to buy Canadian telephone directory business Bain Capital has entered into exclusive negotiations to acquire Verizon Communications' Canadian telephone directory business in a deal valued at up to $1.5bn. Verizon acquired the SuperPages business from Canada's Telus Corporation for $810m three years ago. SuperPages publishes 118 directories in Alberta, British Columbia, Ontario and Quebec. Other bidders for the company include Yellow Pages Group, RH Donnelley Corporation, and Yell Group. US private equity firm Carlyle had also expressed an interest. AltAssets 1.9.04 Blackstone-led private equity consortium bids £1.5bn for UK drug group A private equity consortium led by Blackstone Group has tabled an offer of £1.5bn for UK drug group Warner Chilcott. Shares in the women's healthcare specialist surged 15 per cent to 747p as the company confirmed the bid. Blackstone declined to comment on the takeover approach but the firm is understood to be interested in Warner Chilcott's near-off-patent drug business. Blackstone failed in its attempt to buy a similar business from French pharmaceutical group Aventis earlier this year. Two other private equity firms are believed to be involved in the consortium but the identity of the participants has not yet been revealed. AltAssets 22.9.04 Five private equity firms make UK Saga shortlist Five private equity firms have made the short list for insurance, holiday and media group Saga. KKR, BC Partners and Charterhouse have all made the next round with independent bids, while Apax Partners and Cinven, and JP Morgan Partners and Hg Capital, have made joint offers in the auction. At least five other private equity firms also tabled an offer for Saga, which is expected to raise at least £1bn. But industry reports suggest that the successful bid will in fact be closer to £1.2bn. Despite the high level of interest, it remains less than certain that any of these private equity firms will go home with the prize. UBS, the investment bank responsible for the sale, has been mandated to run a dual track process, and a flotation remains a possibility. AltAssets 1.9.04 UK Alchemy Partners to sell Innspired pub chain UK private equity firm Alchemy Partners is looking to exit its investment in the Innspired pub chain. The deal is expected to generate in the region of £350m. Alchemy has considered a range of options for Innspired, including a flotation, accelerated initial public offering, trade sale and recapitalisation. Rival company Punch Taverns is considered a likely potential bidder. Ushers of Trowbridge, which later became Innspired, was taken private by Alchemy in a £108m deal in 1998. The firm also acquired a number of other pub groups including Alehouse Estates, in order to grow the Innspired brand. AltAssets 8.9.04 European Duke Street completes £450m recapitalisation of three portfolio companies European buy-out firm Duke Street Capital has announced the £450m recapitalisation of three of its portfolio companies. Paragon Healthcare, Galaxie Hotel and Esporta have each completed refinancings to fund the next stage of their growth. Paragon Healthcare, which has been backed by Duke Street since September 2001, has secured £162m of funding from Dresdner Kleinwort Wasserstein's Debt Principal Finance & Securitisation group. Galaxie Hotels, which was acquired by Duke Street in 2003, has completed a £150m refinancing from the Structured and Asset Finance team at Calyon. And Esporta, which was acquired by Duke Street in 2002, has raised new debt facilities totalling £155m. AltAssets 13.9.04 Private equity firms consider bids for Canadian Alcan A number of private equity firms including Blackstone and Kohlberg Kravis Roberts are believed to be considering bids of between $4bn and $5bn for the rolled products business of Canadian aluminium manufacturer Alcan. Other buy-out firms expected to bid include Apollo Advisors, Bain Capital, Madison Dearborn Partners, Ripplewood Holdings and Permira. Alcan's rolled products unit makes the metal for the beverage can, car parts, and foil industries and with annual revenues of $6.4bn is the biggest aluminium rolled products company in the world. Alcan announced that it was planning to spin off the unit in May this year in order to address regulatory concerns about the company's 2003 purchase of French aluminium maker Pechiney. AltAssets 16.9.04 EXITS Greenfield Capital Partners set to exit Dutch Telfort in E400m secondary buy-out Greenfield Capital Partners is set to exit its investment in Dutch cellphone operator Telfort. Five private equity buyers are said to be considering offers of around E400m for the company. Interested parties include US Providence Equity Partners and UK Cinven and Permira AltAssets 24.9.04

18

September 2004

Major transactions - continued

UK West Private Equity completes first exit with £162m sale of Southern Cross UK West Private Equity has completed its first exit with the £162m sale of Southern Cross Healthcare to the Blackstone Group. West Private Equity acquired Southern Cross, which operates 139 care homes in the UK, for £90m in August 2002. The healthcare services sector has attracted increasing interest from private equity players in recent months. The combination of strong demand for healthcare services as the population ages and the highly fragmented state of the sector is judged to provide strong consolidation opportunities. AltAssets 16.9.04 Private equity owned Warner Music plans $5bn IPO Warner Music, currently owned by Thomas H Lee Partners, Bain Capital and Providence Equity Partners, is considering a flotation valued at up to $5bn. The initial public offering could take place as early as next spring. EMI has twice tried to merge with Warner Music. It abandoned a deal four years ago in the face of regulatory opposition and abandoned an offer last year after being out-bid by the private equity consortium. AltAssets 23.9.04

19

September 2004

People: Western Europe & Israel

APPOINTMENTS German fund of funds manager CAM Private Equity has recruited three new professionals to its operations and investor relations teams. Jurgen Borchers has joined the firm from PricewaterhouseCoopers where he was involved in auditing and transaction services in Germany and the UK. At CAM he will be responsible for reporting and fund administration. CAM has also recruited Atila Kilinc of PricewaterhouseCoopers as an analyst in the operations division. Dr. Barbara Weber has joined CAM's investor relation's team. She previously worked as investor relations manager for venture capital firms Polytechnos Venture Partners in Munich and Sustainable Asset Management in Zurich. 3i has strengthened its board with the appointments of Sir Robert Smith and Peter Mihatsch. Smith is a private equity industry veteran and chairman of Weir Group, while Mihatsch is a former Mannesmann executive. UK mid-market private equity firm, Phoenix Equity Partners, has recruited Tim Dunn and Kathryn Purves to its investment team. Dunn joins Phoenix from US private equity firm Monitor Clipper Partners, and Purves joins from Deutsche Bank's fund of funds team. Former Morgan Stanley European partner, Gustavo Schwed, has joined Providence Equity Partners' London office as a managing director. Schwed will specialise in media and communications investments. Alistair Mackintosh has joined UK emerging markets private equity investor Actis as chief investment officer. He will oversee the development of Actis' investment strategy on a global basis and will chair the firm's investment committees. Michael Hewett has joined UK private equity firm Terra Firma as investor relations director. He will take up the newly created position in November. Hewett joins the firm from placement agent Atlantic-Pacific. He previously held a variety of investment banking and asset management roles at Morgan Stanley in London and Tokyo. PPM Ventures has announced that Neil MacDougall is to replace Jonathan Morgan as managing director. MacDougall has most recently been responsible for PPM's investment strategy in healthcare and chemicals. Sovereign Capital, the UK lower mid-market private equity firm, has announced that Philip Conboy is to join the firm as a director. Conboy joins the firm from Kleinwort Capital where he was a founding shareholder and director with a focus on support services and healthcare. UK Greenpark Capital has recruited Permira's Christophe Nicolas as an investment director. Nicolas spent three years at Permira where he specialised in transaction origination and execution in the media, leisure and business services sectors. Paul Capital Partners has recruited Elaine Small as managing director of its secondaries operations. She will be responsible for the sourcing and negotiations of transactions in the UK and Ireland. She will also be involved in the management of GP relationships as well as with communications with institutional investors throughout Europe. Finama Private Equity - Quartilium, the private equity fund of funds arm of French insurer Groupama, has recruited Yonel Génin as an investment manager dedicated to secondaries. DEPARTURES Jonathan Diggines, the head of Aberdeen Murray Johnstone Private Equity, has left the company this week after failing to agree a management buy-out. Hugh Little will now oversee the firm's entire £420m in capital under management. John Simpson, who was head of portfolio management at Aberdeen Murray Johnstone has also left the firm.

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September 2004

People: North America

Louis Roquet has joined Canadian Desjardins Group as president and chief operating officer of Desjardins Venture Capital. He was previously president and chief executive officer of the Société des Alcohols du Québec. William Mills has left his position as a partner at Advent International for a similar position at EGS Healthcare Capital Partners. Mills has made the move to invest more broadly in his speciality, medical devices. US Enterprise Partners Venture Capital has announced three new hires following the recruitment of Erik Nierenberg as a portfolio associate last week. The firm has now appointed Benjamin Myers as a principal responsible for providing business support to the firm's portfolio companies, Moya Gollaher as a principal responsible for marketing and business development initiatives, and Philip Choi as a portfolio associate. US-based New Enterprise Associates has recruited medical device entrepreneur Joshua Makower as a venture partner. Makower will focus on all major medical device markets with a particular emphasis on cardiology, neurology and orthopaedics. Bessemer Venture Partners, a venture capital firm investing in early-stage technology companies, has recruited Dinesh Vaswani as an entrepreneur in residence. He will specialise in identifying investment opportunities in US/India cross-border firms. US Core Capital Partners has recruited telecommunications veteran Tom Wheeler as a special partner. Wheeler recently retired as president and chief executive officer of the Cellular Telecommunications and Internet Association and will assist Core Capital in identifying and pursuing new technology investment opportunities. US Northern Trust Global Advisors, an investment management subsidiary of Northern Trust Corporation, has announced the appointment of Heidi Levin as vice president in the private equity group. US Venture Strategy Partners, an early-stage venture capital firm, has hired John Hamm as a general partner. He will focus on enterprise and consumer investment opportunities. US middle-market private equity firm Morgenthaler Partners has announced the recruitment of Al Stanley and Daniel Farrar. Both Stanley and Farrar join the firm from General Electric and will work in the firm's buy-out division.

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September 2004

Trends

3i enterprise barometer shows slight fall in European business confidence, European venture investment improves in second quarter, KKR founder warns of hedge fund invasion, Private equity exits up 15 per cent in 2003… European venture investment improves in second quarter, research finds The total value of European venture capital activity increased significantly in the second quarter of 2004 with E967.3m invested. This represents the highest quarterly amount invested since 2002, according to research released by Ernst & Young and VentureOne. The number of completed financings fell 20 per cent on the second quarter of 2003 but rose ten per cent over the first quarter this year. In the UK venture capital activity fell slightly with 69 deals completed compared to 71 deals in the first quarter. But value increased from E239.4m to E317.6m, an increase of 33 per cent. The increase in European venture investment was driven in part by a significant increase in healthcare investing, particularly for biopharmaceutical and medical devices companies. AltAssets 8.9.04 3i enterprise barometer shows slight fall in European business confidence The latest quarterly European Enterprise Barometer Index, measuring private companies' confidence in business, political and economic climates, remains in positive territory despite showing a slight fall from the high of last quarter. After increasing in every survey over the past year, the index has fallen from +49 to +30 in the third quarter of the year, the same level as six months ago. The index in France is positive for the first time in three and a half years, showing a significant rise from -35 to +13. The index has decreased significantly, but is still positive, in both Germany and Spain. But the fall in Italy makes it the only negative country. The index is down marginally in the UK and up marginally in the Nordic countries, the most positive region surveyed. AltAssets 10.9.04 KKR founder warns of hedge fund invasion Henry Kravis, co-founder of US buy-out house Kohlberg Kravis Roberts, has private equity firms that cash rich hedge funds are invading the world of leveraged buy-outs. Speaking at a recent conference in New York, he also suggested that hedge funds might not have the skills required to execute these transactions successfully. Hedge funds have long operated at the edges of the buy-out world, most often as short-term lenders in debt-backed buy-outs. But recently many have made forays into an area typically dominated by private equity firms. Hedge fund assets have swelled to an estimated $866bn to date in 2004, up from $167bn a decade ago. This dramatic increase is putting pressure on these funds to execute new strategies including buy-out transactions. If hedge funds put only ten per cent of their assets into buy-out strategies, it would more than double the amount of money going into private equity to $160bn. AltAssets 23.9.04 Private equity exits up 15 per cent in 2003, survey finds Private equity fund managers reported a 15 per cent increase in exits last year compared to 2002, according to a survey conducted by SCM Strategic Capital Management. The European funds in the sample demonstrated a particularly strong improvement with a 39 per cent increase in realisations. The total value of reported exits across all geographies increased by 41 per cent. Trade sales were the most popular form of exit in both 2002 and 2003, followed by recapitalisations, write-offs, IPOs and secondary buy-outs. But significantly, the share of write-offs declined from 28 per cent in 2002 to 21 per cent in 2003. The analysis of the realisations by financing stage showed that buy-out funds surveyed reported an increase in exits by number of almost 40 per cent in 2003 compared to the previous year. This was mostly driven by secondary buy-outs, which were up 200 per cent, and trade sales, which were up by 37 per cent. In contrast, venture capital funds reported a decline of exits by five per cent in 2003 on a year-to-year comparison. But venture capital firms did also report a decline in the proportion of write-offs by 25 per cent in the same period. The share of IPOs and trade sales rose by 18 per cent each. AltAssets 20.9.04