Fairview Capital 2013 SymposiumGuest Speaker: David Snow, CEO & Co-Founder, Privcap

“Private Equity – It’s Just Like Other Industries!”

About PrivcapSuccess in private-capital investing depends on two things:

People and Ideas. Privcap connects you with both.

Founded Sept 2011

Digital Thought-Leadership:• Video Programs – Interviews,

Panel Discussions• Magazines/Special Reports• Transcripts• 4 to 8 New Programs Per Week

Growing Audience: • 9,000 Visitors Per Month• GPs, LPs, Service Providers

Media Promoted Via:• Email Newsletter• LinkedIn/Twitter• YouTube• Search Results

US Magazine Feature:Stars – They’re Just

Like Us!

Readers can’t believe that stars do regular

things and are subject to banal human

frailties!

My Comments:Private Equity – It’s Just Like Other Industries!

Market veterans can’t believe the exceptional, singular private equity industry is evolving just like other maturing industries.

It is Being Disrupted by Innovation!

The Largest Players Are Becoming Ever More Dominant!

Its Participants Are Using the Internet More and More!Expensive, Luxury

Items Are Becoming More Affordable!

Largest 50 PE Firms5-Year Fundraising Totals

2007Top 13: $278bnNext 37: $273bnTop 13 raised $5bn more than next 37

2013Top 13: $305bnNext 37: $278bnTop 13 raised $27bn more than next 37

Source: PEI

The Biggest Get Bigger:

1982Motorola DynaTAC 8000X$3995

Products Once Affordable Only by the Rich Drop in Price

2013Samsung Galaxy S III$49.99

Private Equity Then Private Equity Today

$10 million minimum commitment KKR Income Opps Fund: $18 per share

2 and 20 1.25 and 20

Deal Fees 100% to GP Deal Fees 100% to LP

More and More Business Functions Take Place Over The Internet

Private Equity Stone Age Private Equity Today

Reporting done via snail-mail Online reporting

Portfolio Company Data Stored on Your Floppy Drive

Portfolio Data Stored in Cloud, Accessed by LPs

Physical Data Rooms Virtual Data Rooms

Fundraisers Fly Around World Having Meetings

Fundraisers Fly Around World Having Meetings. . .

Behold the Least Efficient Market in the World: Private Equity Fundraising

• Meetings, flights, meetings, flights, meetings, flights. . .

• Cumbersome due diligence process• Myriad data formats• Competing performance benchmarks• Blizzard of different LP requests• Two years to raise a fund, if ever• Getting to “no” takes months

Can the internet help?

“No One is Going to Use the Internet For Fundraising Because. . .”

• These are long-term, illiquid partnerships, not impulse-purchases

• This process is driven by personal relationships and face-to-face interaction

• Transactions of this magnitude won’t take place online

• Prestige-minded participants would be embarrassed to scout for deals online

• No one is going to list their private information on a website

Sounds like: “No One is Going to Use the Internet For Marriage Because. . .”

• These are long-term relationships not impulse purchases

• This process is driving by personal relationships and face-to-face interaction

• Marriages won’t take place online• Prestige-minded daters won’t be

caught scouting for mates online• No one is going to list their private

information on a website

What Can the LP-GP Market Learn From the Online Dating Market?

Online information doesn’t replace personal interaction – it improves early decision-making

More and better information up front leads to better dates

Don’t get on a plane or book a meeting unless you have spent time with quality information about

your potential capital partner

Disruptive Innovations in PE Driven By:

Transparency, Standards, Data Tools Will Vastly Change Market

“Portable Track Records” Means TalentCan Be Better Verified and Backed

New Forms of Capital Formation• Public Markets• Defined Benefit Market• Crowdsourcing• Co-Investment• Separate Accounts

New Liquidity Tools

Number-One Driver of Innovation in Private Equity:

PopularityBecause of its performance and promise, more and more

capital, more and more people, will want access to private investments. New technologies, regulations and business

practices will facilitate that participation.