evolution of ebrd private equity portfolio · with an investment cost above €20m took place in...

1© EBRD 2012, all rights reserved

Impact of the Financial Crisis: Part 2

January 2009 - June 2011

Evolution of EBRD Private Equity Portfolio


EBRD in Private Equity

EBRD’s portfolio of funds: over 18 years of investing in the asset class

136 funds

91 fund managers*

EUR 3.0 billion in commitments (USD 3.6 billion) to funds with capital of EUR 14.8 billion (USD 18.7 billion)

1,166 underlying investments, up to 70% exited.

Largest PE Fund investment program dedicated to the region**

Note: EBRD tracked portfolio only to June 2011, excludes real estate funds

Note: The number of underlying investments exclude regional investments and investments in Greece

*Excludes donor funds ** Russia, CIS and CSE


Context: 2007-1H 2009

Please refer to the presentation ‘Impact of the Financial Crisis: 2007-1H 2009’ on our website: www.ebrd.com/pages/sector/equity/data

Fundraising declined significantly over this period (c.90%). The mix of investor type also changed significantly. The proportion

of IFIs and Governments increased from 19% to 62%. The Services and Telecoms (TIM) sectors have seen the majority of

new investments. The number of exits had declined across all regions. The following slides examine the performance of the portfolio in the

following period: 2009 – 1H 2011. On certain slides, full year 2008 is shown for reference.


Fundraising Fundraising


Fundraising Vs Investments

30%

23%

34%

59%

74%

28%24% 22%

27%

20%

42%

29%

14% 14% 14% 13% 11%

20%26% 27%

0

500

1000

1500

2000

2500

3000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

H1

2011

EUR

Mill

ions

Commitments raised by EBRD funds by Vintage Year Annual InvestmentsEBRD commitment as a % of total fund capital


New commitments by Fund Type

12.44% 14.38%

27.76%

15.79%91.80%

7.64%

43.39%

49.32%63.26%

0.00%

55.14%

24.34% 22.36%

36.16%

5.67%

26.33%43.67%

4.66%

49.11%

3.05%1.19%2.54%

0%

20%

40%

60%

80%

100%

2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011Distressed / Special Situation Mezzanine Private Equity Other Venture Capital


Geographic origin of Investors

Note: based on EUR amount of commitments

• The proportion on Investment from the USA has declined over time.

24%

13%

50%

46%

57%

50%

18%

11%

9%

22%

9%

30%

23%

26%2%

11%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008

2009

2010

H1 2011

USA Europe Other EBRD


Investors Type - Trends

• The proportion of IFIs in the Investor Base has increased substantially.

13%

18%

23%9%

9%

29% 53%

64%

15%

15%17%

6%15%

1% 3%

1%

2%

8%

0%

20%

40%

60%

80%

100%

1992-2008 2009 2010 - June 2011

Fund of Funds

Other

IFIs & GovernmentAgencies

Corporate Investor

Banks & Insurance

Pension Fund


Portfolio BreakdownPortfolio Breakdown


Number of Investments and Exits

• The number of investments has risen over the period whilst the number of exits and write offs has remained largely stable.

0

10

20

30

40

50

60

70

2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011

No.

of T

rans

actio

ns

Investments Exits Write Offs


Investment Cost vs. Exit Proceeds

• Exit Proceeds exceeded Investment Costs in only the most recent period.

0

100

200

300

400

500

600

700

800

900

1000

2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011

EUR

Mill

ions

Investment Costs Exit Proceeds


Investment Profitability by Exit Type

Note: Investment profitability is the difference between exit proceeds and investment cost. Does not include partially realised.

-100

-50

-

50

100

150

200

250

300

350

400

2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011

EUR

Mill

ions

MBO Other Public Market Trade Sale Write Off

• Profitability increased in H1 2011, predominantly via trade sales.


Average Investment Cost

• Average Investment Cost in H1 2011 has fallen sharply because notransactions above €20m took place. By comparison, seven transactions with an Investment Cost above €20m took place in 2010.

-

10

20

30

40

50

60

70

80

90

100

2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011

EU

R M

illio

ns

0

10

20

30

40

50

60

70

No.

of I

nves

tmen

ts

Number of investments Av. Investment Cost Max Investment Cost


New Investments by Fund Strategy (by Investment Cost)

• The % of new investments from Buyout Funds has stayed largely constant since 2009, but the % of new investments from Seed/Early stage Funds has declined

61.19%

41.30%55.36% 57.58%

39.39%

5.97%19.57%

2.99%1.79%

39.13%

35.71%29.85%

3.03%7.14%

0%

20%

40%

60%

80%

100%

2008 2009 2010 H1 2011Expansion Other Buyout Seed/Early Stage


New Investments by Country (by Investment Cost)

Others – Albania, Bosnia & Herzegovina, Croatia, Macedonia, Kosovo, Serbia, Slovenia

Western CIS & Caucasus – Azerbaijan, Georgia, Moldova, Ukraine

Central Asia – Kazakhstan, Turkmenistan

2007 - 2008

Russian Federation

20.07%

Others8.40%

Poland23.49%

Central Asia1.68%Hungary2.05%

Czech Republic & Slovakia

4.12% Bulgaria13.82%

Baltics11.58%

Turkey0.82%

Romania11.65%

Western CIS & Caucasus

2.31%

2009 to H1 2011

Russian Federation

49.07%

Baltics2.06%

Turkey7.00%

Romania6.16%


7.59%

Bulgaria0.32%


5.47%

Poland12.83%

Others2.62%

Hungary1.02%

Central Asia5.87%

• The majority of Investments made in 2009-H1 2011 were in Russia.


Exits by Country (by Investment Cost)

Others – Albania, Bosnia & Herzegovina, Croatia, Macedonia, Kosovo, Serbia, SloveniaWestern CIS & Caucasus – Azerbaijan, Georgia, Moldova, UkraineCentral Asia – Kazakhstan, Turkmenistan

2007 - 2008

Bulgaria4.44%


3.76%

Central Asia1.51%


2.71%

Romania6.41% Russian

Federation19.07%

Baltics6.33%

Others4.04%

Hungary15.11%

Poland36.63%

2009 to H1 2011

Others2.84%

Russian Federation

48.90%


4.35%

Central Asia1.74%

Hungary7.12%

Czech Republic & Slovakia10.74%

Bulgaria3.22%

Poland18.39%

Romania1.14% Baltics

1.56%

• The majority of Exits made in 2009-H1 2011 were in Russia.


New investments by Sector (by Investment Cost)2007 - 2008

Construction10.90%

Consumer2.88%

Manufacturing2.84%

Services23.18%

Primary & Energy4.19%

TIM31.60%

Wholesale & Retail8.24%

Agriculture & Forestry

1.31%

Pharma & Medical14.86%

2009 to H1 2011

Services42.12%

TIM21.07% Manufacturing

3.62%

Consumer4.76%

Pharma & Medical6.78%



5.60%Construction

2.90%Wholesale & Retail3.87%

• The majority of Investments made in 2009-H1 2011 were in the Services sector.


Exits by Sector (by Investment Cost)

2007 - 2008

Pharma & M edical6.63%


TIM29.25%

Services18.47%

M anufacturing5.58%

Consumer14.02%

Construction3.37%


0.44%Wholesale &

Retail19.91%

2009 to H1 2011

Pharma & M edical0.30%



0.64%

Construction3.04%

Consumer9.78%

Wholesale & Retail

24.94%

TIM16.99%

Services30.43%

M anufacturing7.81%

• The majority of Exits made in 2009-H1 2011 were in Wholesale & Retail and Services.


Returns DataReturns Data


Gross Snapshot: All Funds

Note: EBRD tracked portfolio only

To June 2011

4,001 4,760

736

2,9163,234

6,798

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Investment CostEUR 7,970m

Investment ValueEUR 14,473m

EUR

Mill

ions

Fully Realised (Including WO)

Partially Realised

Unrealised All 1.82x 18.8%

PR 3.96x 30.4%

UR 1.19x 5.9%

FR 2.10x 20.0%


Gross Snapshot – CSE and Russia/CIS

CSE: To June 2011

2,418 2,743

3871,047

2,241

4,389

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000



EUR

Mill

ions


Partially Realised

Unrealised All 1.62x 15.7%

PR 2.71x 21.7%

UR 1.13x 4.1%

FR 1.96x 18.0%

Russia/CIS: To June 2011

1,5832,017

349

1,869

993

2,409

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000



EU

R M

illio

ns


Partially Realised

UnrealisedAll 2.15x 23.8%

PR 5.36x 41.8%

UR 1.27x 8.96%

FR 2.43x 24.1%


Summary of Returns: 2008 – 1H 2011

1.73x

0.98x

2.8x

2.59x

TVPI

20.0%

-1.3%

31.7%

22.1%

IRR

2008

TVPI

2.10x

3.96x

1.19x

1.81x1.71x

1.24x

3.06x

2.14x

TVPI

1.59x

1.01x

2.60x

2.23x

TVPI

18.8%17.0%17.3%Overall

6.0%6.1%0.6%Unrealised

30.4%26.3%23.3%Partially Realised

20.0%20.1%20.5%Fully Realised

IRRIRRIRR

1H 201120102009


Evolution of Returns

Note: Number of Investees reflect unrealised investments including partially realised; EBRD tracked portfolio only.

80 Funds83 Funds

88 Funds 88 Funds 87 Funds

304Investees

331Investees

327 Investees

348 Investees

357Investees

17.3% 17.99%17.0%20.0%

18.8%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2008 2009 Jun-10 2010 Jun-11

EUR

Mill

ions

Carrying Value of Portfolio Number of active funds Gross IRR


General Information General Information


Methodology

This presentation focuses on the impact of the global financial crisis on private equity activity on the EBRD tracked portfolio only.

The time horizon spans from January 2009 through June 2011 (30 months). When full year 2008 figures are shown they are used as a reference point for the chart.

Where actual numbers are used for representation, EUR is the base currency.

Data based on EBRD tracked portfolio only, excluding property funds.


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)


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% offund 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 raised or are expected to raise a follow-on fund.


EBRD Region

• CSE Countries – Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, FYR Macedonia,Hungary, Latvia, Lithuania, Kosovo, Poland, Montenegro, Romania, Slovak Republic, Serbia, Slovenia, Turkey.

• CIS Countries – Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Russian Federation, Tajikistan, Turkmenistan, Uzbekistan, Ukraine and Mongolia.

Note: Czech Republic ceased to be a country of operation in 2007


Copyright 2012 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 the use of this information. Copyright 2012 European Bank for Reconstruction and Development. All rights

reserved.

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