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Private Equity Capital Briefing April 2018 Monthly insights and intelligence on PE trends Analyzing the exits PE firms get more programmatic in their sales processes

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Page 1: Private Equity Capital Briefing - ey.com · The Private Equity Capital Briefing has been designed to help you remain current on capital market trends. It captures key insights from

Private Equity Capital Briefing

April 2018

Monthly insights and intelligence on PE trends

Analyzing the exitsPE firms get more programmatic in their sales processes

Page 2: Private Equity Capital Briefing - ey.com · The Private Equity Capital Briefing has been designed to help you remain current on capital market trends. It captures key insights from

The Private Equity Capital Briefing has been designed to help you remain current on capital market trends. It captures key insights from subject-matter professionals across EY and distills this intelligence into a succinct and user-friendly publication.

Private Equity Capital Briefingprovides perspectives on both recent developments and the longer-term outlook for private equity (PE) fundraising, acquisitions and exits, as well as trends in global M&A, cross-border deal flows, IPOs and the debt and bond markets.

Please feel free to reach out to any of the subject-matter contacts listed on the back page of this document if you wish to discuss any of the topics covered.

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ContentsSection 1 Private equity: fundraising 4

Private equity: acquisitions 5

Private equity: exits 6

Section 2 Infrastructure 7

Section 3 Private credit 8

Section 4 M&A 9

Section 5 IPOs 11

Section 6 Loans 12

Section 7 Bonds 13

AppendicesAppendix A PE activity by geography 15

Appendix B M&A activity monthly flash 24

Appendix C M&A multiples and bid premium 25

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1.i. Private equity: fundraising

Executive summary

• Fundraising activity remained strong in Q1, though off the lofty levels of last year. PE firms closed funds valued at US$117b, down 33% from Q1 2017.

• Buyout funds continue to be heavily represented, accounting for nearly 40% of aggregate fundraising so far this year.

• Buyout firms now have US$637b in capital available for investment that is growing at a rate of 10.5% annually.

Current state

While down from last year, fundraising environment remains strong

• Fundraising activity remained strong in the first quarter of 2018, with 157 funds closing on US$117b in commitments. While this represented a 33% decline from the first quarter of 2017 (a record year for PE fundraising), it was roughly in line with the first quarter of 2016, when US$114b was raised. Buyout funds continue to be heavily represented in the totals, accounting for 39% of Q1 2018 fundraising, versus 30% over the same period last year.

• Buyout firms now have US$637b in capital available for investment. Dry powder is currently growing at a three-year compounded growth rate of 10.5%, significantly lower than the 36% rate at which dry powder grew between 2005-2007, when the industry experienced its fastest growth spurt.

Environment and horizon

Firms continue to seek stakes in PE GPs

• Magnetar Capital, based in Evanston, IL., joined the ranks of firms seeking to acquire minority stakes in PE GPs when it announced that it was raising US$1b for such investments. Similar vehicles have been raised by other firms, including Blackstone, Goldman Sachs’ Petershill, Carlyle’s AlpInvestPartners and Neuberger Berman Group’s Dyal Capital Partners.

• Blackstone co-founder Pete Peterson, one of the founders of the PE industry, died March 20 at the age of 91. Peterson co-founded Blackstone with Steven Schwarzman in 1985. In 2008, Peterson stepped back from Blackstone in order to focus on the Peter G. Peterson Foundation, which is active on a number of policy issues around US federal entitlements and budget deficits.

PE fundraising by quarter (US$b)Source: Preqin

Top funds raised so far this yearSource: Preqin

4 Private Equity Capital Briefing

Fund TypeValue

(US$b)

EQT VIII Buyout $13.2

BC European Cap X Buyout $8.5

Starwood Global Opportunity Fund XI Real estate $7.6

American Securities Partners VIII Buyout $7.0

Blackstone Real Estate Partners Asia II Real estate $7.0

Broad Street Real Estate Credit Partners III Real estate $4.2

Clearlake Capital Partners VSpecial situations $3.6

Equistone Partners Europe Fund VI Buyout $3.4

EnCap Flatrock Midstream Fund IVNatural resources $3.3

Partners Group Direct Infrastructure 2016 Infra $2.7

Buyout dry powder – three-year compounded growth rates Source: Preqin.

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Commitments Number of funds closed

-15%-10%

-5%0%5%

10%15%20%25%30%35%40%

Americas: Q1 2017 – US$110bQ1 2018– US$62b

EMEA: Q1 2017 – US$80bQ1 2018 – US$44b

Asia-Pacific: Q1 2017 – US$28bQ1 2018 – US$11b

PE fundraising by regionSource: Preqin

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1.ii. Private equity: acquisitions

Executive summary

• PE deal activity is up 60% by value versus a year ago. It was the most active first quarter for PE since 2007.

• Activity remains strong in both EMEA and the Americas, while Asia-Pacific has seen declines.

• PE firms expect to add to their headcount in the coming months, particularly for deal-related professionals, as they seek to deploy some US$640b in dry powder.

Current state

PE deal activity up 60% from Q1 2017

• PE firms announced 423 acquisitions valued at US$101b in the first quarter of 2018, up 60% by value from the same period a year ago, and up 10% by volume. It was the busiest first quarter for PE since 2007, when firms announced deals valued at US$192b.

• On a regional basis, PE firms saw strong activity in both the Americas and EMEA, while Asia-Pacific deals saw a modest decline from last year.

• In the Americas, PE firms announced deals valued at US$51b, up 68% from last year.

• In EMEA, firms announced deals valued at US$40b, up 97% from last year.

• In Asia-Pacific, firms announced deals valued at US$10b, down 18% from last year.

Environment and horizon

PE firms looking to add headcount

• A new report from Preqin and FPL Associates found that the industry expects to continue adding headcount, especially for deal-related professionals, as it seeks to deploy record levels of dry powder. The 2018 Preqin Private Capital Compensation and Employment Review found that 65% of firms surveyed expect to increase the size of their workforce over the near term. Nearly half expect their workforce to increase by more than 5%. By far, the function in the highest demand was deal professionals, with 72% of survey respondents stating it was their top priority.

• An analysis conducted by CEPRES published in Private Equity International challenged the view that first-time PE funds tend to be the riskiest and best-performing, instead finding that it’s a firm’s second fund that typically posts the highest gross returns and comes with the highest levels of risk. CEPRES’ analysis of 4.700 investments made between 2009 and 2016 showed that first–time funds returned an average of 26.1%, while second funds returned an average of 27.8% on a gross pooled IRR basis.

PE acquisition values and volumes by quarterSource: Dealogic

Percentage of PE firms that expect to add headcount by functionSource: 2018 Preqin Private Capital Compensation and Employment Review

5

Top deals so far this yearSource: Dealogic

Target Industry SponsorValue

(US$b)

Thomson Reuters Financial & Risk (F&R) Business Technology

Canada Pension Plan Investment Board (CPPIB); GIC Special Investments Pte Ltd.; Blackstone Group LP $17.5

Akzo Nobel NV (specialty chemicals business) Chemicals

GIC Special Investments Pte Ltd.; Carlyle Group LP $12.5

TDC A/S TelecomMacquarie Infrastructure & Real Assets Pty Ltd. $10.7

Gas Natural SDG SA Utilities CVC Capital Partners Ltd. $4.7

Blackhawk Network Holdings Inc. Technology Silver Lake Group LLC $3.3

Pure Industrial Real Estate Trust Real estate Blackstone Group LP $2.9

EnerVest Ltd (South Texas division) Oil and gas TPG Capital LP $2.8

Ply Gem Holdings Inc. ConstructionClayton, Dubilier & Rice LLC $2.3

Pro Mach Inc. MachineryLeonard Green & Partners LP $2.2

LifeScan Inc. Health care Platinum Equity LLC $2.1

Private Equity Capital Briefing

PE deal activity by value, Q1 2017 vs. Q1 2018Source: Dealogic

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Americas EMEA Asia-Pacific

Q1 2017 Q1 2018

Deal teams, 72%

Firm operations,

10%

Portfolio operations,

9%

Executive management, 3%

Fundrasing, 4%

Reporting and

marketing support, 2%

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1.iii. Private equity: exits

Executive summary

• PE exit activity declined in the first quarter, as firms continue to focus on deployment. Firms announced exit deals valued at US$57b, down 26% from Q1 2017.

• Declines in exit activity were evident in both M&A and IPOs.

• According to the 2018 EY Global Private Equity Divestment Study, firms are getting more programmatic in the exit planning. Sixty-one percent now determine the right time to sell 12 months before exiting, up from 35% in the 2017 study.

Current state

Exits continue to see declines as firms focus on deployment

• PE exit activity declined in the first quarter, as firms continue to focus on deployments and the PE exit supercycle, which peaked in 2014, continues to wind down. Firms announced 226 PE exits valued at US$57b, down 26% from the same period a year ago.

• Exits by M&A fell 28% to 49.6b, with declines evident across all major regions; activity by value was down 31% in the Americas, down 56% in Asia-Pac, and off 6% in EMEA.

• IPOs continued to struggle, with proceeds down 17% from the first quarter of 2017. The number of PE-backed deals declined 8%, from 26 deals in Q1 2017, to 24 deals in Q1 2018. March, however, was particular active for new deals — 11 IPOs launched, versus just 6 in February and 7 in January.

Environment and horizon

PE firms getting more programmatic and less opportunistic in selling assets

• PE firms are continuing to get more disciplined and programmatic in their sales processes. According to the 2018 EY Global Private Equity Divestment Study, almost two-thirds (61%) of PE executives now determine the right time to sell 12 months before the exit — up from 35% in the 2017 study. The percentage of PE funds relying on opportunistic buyers has fallen from 54% to 21%. PE funds are spending more time positioning the business for exit, with a sale strategy established well in advance.

• The study also noted the increasing role digital technologies are playing as a value driver that firms are realizing at exit, noting that:

• 94% of respondents reported creating pre-sale value through reporting and analytics.

• 73% reported creating pre-sale value through cybersecurity initiatives.

• 72% reported value creation through cloud computing initiatives.

• 69% created value through enterprise resource planning.

PE M&A exits by quarter (US$b)Source: Dealogic

Largest PE exit deals in Q1 2018Source: Dealogic

6

PE-backed IPOs by quarterSource: Dealogic

Private Equity Capital Briefing

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Commitments Number of funds closed

Target Industry Value (US$b) Sponsor Type

Santos Ltd. Oil and gas $13.2Hony Capital Management Ltd. M&A

ADT Inc.Professional services $10.5

Apollo Global Management LLC IPO

Blue Buffalo Pet Products Inc.

Food and beverage $8.0 Invus Group LLC M&A

Gates Industrial Corp. plc Machinery $5.5

Blackstone Group LP IPO

Beijing MobikeTechnology Co. Ltd. Technology $3.7

Warburg Pincus LLC;TPG Capital LP M&A

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Commitments Number of funds closed

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30%

40%

50%

60%

70%

One year pre-sale

Two years pre-sale

At purchase Opportunistic

2017 2018

When do you determine the right time to sell?Source: 2018 EY Global Private Equity Divestment Study

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2. Infrastructure

Executive summary

• After a record 2017, fundraising for the infrastructure space remains active, with US$16.5b raised by funds.

• PE firms have nearly US$160b in dry powder available for new deals.

• Deployment activity increased 25% from Q4 2017, to US$64.0b.

• Fund managers are looking to get increasingly active in the coming months, despite valuation concerns. A Preqin report found 41% of managers expect to deploy significantly more capital over the next 12 months.

Current state

• Infrastructure fundraising remained active in the first quarter of 2018 after a record year in 2017. Firms closed funds with commitments totaling US$16.5b in Q1 2018. While this was down 50% from the same period a year ago, it was up 65% from Q4. Q1 of last year was bolstered by the US$15.8b in commitments closed by Global Infrastructure Partners II.

• As a result of strong fundraising, infrastructure firms now have US$158b in dry powder available for new deals. Of this, 44% is focused on North America, 35% is focused on Europe, with the balance targeting opportunities in Asia-Pacific and other emerging markets.

• The pace of deployment increased in the first quarter to US$64.0b across 581 assets (the majority of these deals were of undisclosed size). This represented an increase of 25% from Q4 2017, and an increase of 9% from the same period a year ago. Roughly one-half of announced activity was centered in Europe.

Environment and horizon

• Infrastructure managers are ramping up to get increasingly active in regards to deployment in the coming months. A recent report from Preqin, the H1 2018 Infrastructure Fund Manager Outlook, found that 41% of managers surveyed expect to deploy significantly more capital over the next 12 months, and another 33% expect to deploy slightly more capital in the coming months. However, the report also noted that valuations remain a fundamental concern for managers – 59% listed it as their key challenge, ahead of regulation (36%) deal flow (33%) and pressure from LPs on fees (23%).

• In the US, the Trump administration moved to streamline the regulatory approval process for infrastructure projects. In early April, the administration issued the “One Federal Decision” memorandum of understanding by federal agencies, which outlined a goal of having one federal agency take the lead on the federal review and permitting process for major infrastructure initiatives. Currently, projects must navigate requirements and approvals from a number of separate agencies. Under the plan, agencies will co-develop a single impact statement for each project and sign a single record of decision. More than a dozen agencies, including the departments of Energy, Interior, Commerce, Transportation and Environment Protection have signed on to the agreement.

7

Private Equity Capital Briefing

Top infrastructure funds raised YTD 2018Source: Preqin

Infrastructure fundraising (US$b)Source: Preqin

FundCommitments (US$b) Type Sector focus

BlackRock Infrastructure Debt — Aggregated separate accounts 7.6 Debt Diversified

Macquarie Asia Infrastructure Fund II 3.3 Core Diversified

GCM Grosvenor Infrastructure — Separately managed account 3.2 Opportunistic Diversified

Partners Group Direct Infrastructure 2016 2.7 Core plus Diversified

Strategic Partners Real Assets II 1.8 Secondaries Diversified

Infrastructure dry powder by region (in US$b)Source: Preqin

Infrastructure deals by quarter (in US$b)Source: Preqin

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Commitments Number of funds closed

$0$10$20$30$40$50$60$70$80

North America Europe Asia-Pacific Rest of the world

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$0$2$4$6$8

$10$12$14$16$18$20

Deal value (US$b) Number of deals

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3. Private credit

Executive summary

• Fundraising for private credit funds declined in the first quarter to the lowest amount since Q3 2016. Firms closed funds valued at US$14.2b.

• Activity was driven by a number of large funds in the mezzanine and special situations spaces.

• Credit funds have record amounts of dry powder to put to work; currently firms have US$244b in capital to deploy.

Current state

• Fundraising for private credit declined in the first quarter of the year after a strong 2017, which saw firms close funds valued at more than US$100b. Firms closed on US$14.2b in commitments in Q1 2018, down 43% from the same period a year ago, and less than half the amount raised in the fourth quarter of last year.

• Q1 2018 saw increased activity in the mezzanine and special situations spaces, which collectively accounted for 55% of aggregate fundraising, compared with just 22% in 2017. Direct lending, by contrast, saw a relative decline, accounting for just 36% of aggregate credit fundraising so far this year after representing more than half of the asset class commitments last year.

• On a regional basis, the Americas saw funds close with an aggregate value of US15.0b in the first quarter, while EMEA saw funds close with aggregate commitments of US$3.5b, down from US$8.9b in the first quarter of last year.

• As a result of strong fundraising, credit funds have record amounts of dry powder to put to work. Currently, funds have US$244b in capital to deploy, up 11% from the beginning of 2017. Of this, approximately two-thirds is focused on the US, 28% on Europe and the balance on Asia and the emerging markets.

Environment and horizon

• While fundraising figures are down from last year, momentum in the space remains strong. Funds that closed in the first quarter of 2018 spent an average of 12 months on the road, down from an average of 16 for funds that closed in 2017. It was the lowest average time spent fundraising since 2007-2008. Moreover, funds that have closed this year reached an average of 55% of their target within the first four months after launch. Currently, there are 88 funds at various stages of the fundraising process. In total, they are seeking more than US$44b from investors.

• Like other private classes, the influx of capital and competition has made deployment an increasing challenge. A recent Preqin survey found that valuations topped managers’ lists of concerns about the pace. Forty-nine percent cited valuations as a primary concern for the coming year, followed by deal flow (37%) and performance (30%). The same survey noted that 45% of managers believed it is more difficult to fund attractive opportunities today than it was a year ago.

8

Private Equity Capital Briefing

Top credit funds raised YTD 2018Source: Preqin

Private credit fundraising (US$b)Source: Preqin

FundCommitments (US$b) Type

Region focus

Clearlake Capital Partners V 3.6

Special Situations US

KKR Private Credit Opportunities Partners II 2.2 Mezzanine US

Guggenheim Private Debt Fund II 2.0

Direct Lending US

Alchemy Special Opportunities Fund IV 1.2

Distressed Debt Europe

Capzanine IV (Private Debt) 1.2

Direct Lending Europe

Credit fundraising by type, 2017 vs. Q1 2018 (as a percentage of total)Source: Preqin

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Commitments Number of funds closed

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2017 Q1 2018

Direct lending Distressed debt

Mezzanine Private debt fund of funds

Special situations

Americas: Q1 2017 – US$15.0bQ1 2018– US$10.7b

EMEA: Q1 2017 – US$8.9bQ1 2018 – US$3.5b

Asia-Pacific: Q1 2017 – US$800m

Q1 2018 – N/A

Private credit fundraising by regionSource: Preqin

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4. M&A

Executive summary

• Global M&A reached near-record value levels in 1Q18, with deals worth US$1.02t.

• Megadeals continued to grab headlines, with 18 deals — the highest number recorded in any quarter.

• Health care is undergoing consolidation driven by sector convergence.

• The outlook for 2018 remains bullish, as corporate dealmaking is expected to benefit from US tax reforms and steady economic growth. However, political and regulatory uncertainty is likely to remain a key concern.

• Shareholder activism is expected to spur M&A activity as investors focus on portfolio transformation.

Current state

• Global M&A had the strongest first quarter since 2000, recording 8,281 deals worth US$1.02t. This is only the second time in deal history that M&A value surpassed the US$1t mark during the first quarter.

• Notably the current month saw 2,450 deals valued at US$408b, the highest value ever seen in March. This was on the back of eight mega-deals (US$10 billion and above) accounting for half of the total deal value.

• Megadeals continue to be the highlight of the year so far, with 18 in total — the highest number of mega deals ever recorded in any quarter.

• Chinese outbound appetite was subdued in the first quarter, primarily on the back of ongoing political tensions and regulatory uncertainty in overseas markets. The quarter registered only 113 outbound deals worth US$13.1b — a decline of 50% and 84% in deal value compared with the similar period in 2017 and 2016 respectively. Even in terms of volume, the number was the lowest seen in any quarter over the past three years.

• Significant activity in health care highlights the growing trend of convergence driving consolidation in the sector. Cigna Corp’s offer to buy Express Scripts is the latest example of the trend, where insurers, drug distributors and retailers are combining to tackle high health care costs, become more vertically integrated and fend off potential competition from new rivals entering the fray, such as Amazon. Other key examples are CVS purchasing Aetna, Albertsons acquiring Rite Aid, and the mooted deal between Walmart and Humana.

Environment and horizon

• Global M&A started off strongly in 2018, particularly in terms of deal value. This trend may be extended with the support of a robust corporate earnings roundup, steady economic growth, optimism around US tax reforms and strong labor markets.

• PE-backed firms continue to be on the rise, providing a further boost to deal activity. PE bidders sit on abundant dry powder in a competitive dealmaking environment, valuations may be pushed higher as funds vie for top-class assets.

• Political and regulatory uncertainty is likely to remain a key concern. Issues such as a potential US-China trade war and the pace of interest rate hikes in major economies have been weighing on equity markets in 1Q18, but have yet to derail dealmaking. However, the regulation of dealmaking is expected to remain in the spotlight, in the wake of uncertainty about regulatory and antitrust policies.

• Shareholder activism is likely to propel M&A activity in 2018, as growth focus from investors is shifting from efficiency drives and organic investment-led growth to pursuing M&A. Companies that are under-scale, cash-strapped or struggling in consolidating industries are under intense pressure from activists, and there may be a greater number of deal outcomes being defined by shareholders.

• A key trend for M&A activity is the use of technology by companies to transform business models to adapt to changing market conditions and close the innovation gap. As new technologies power innovation, business models in almost every industry look starkly different from a just a few years ago. It is becoming an imperative for companies to continually review their business models and recycle their capital to invest in growth opportunities.

9

-

500

1,000

1,500

2,000

2,500

Americas Asia-Pacific EMEA

LTM value PTM value

Deal environment: by area (US$b)

Last 12 months (LTM) to March 2018 versus LTM to March 2017 (PTM)Source: Dealogic and EY analysis.

Deal environment: by target sector and target area (% share of global value)

LTM to March 2018Source: Dealogic and EY analysis; excludes real estate asset sales.

Note: because of rounding, percentages may not add up to total.

M&A analysis as at 1 April 2018.

Note: data is continually updated and therefore subject to change.

Figures have been rounded off to nearest decimal place.

Americas Asia-Pacific EMEA Total

Technology 6% 7% 3% 16%

Consumer products and retail 5% 3% 4% 11%

Power and utilities 3% 2% 3% 8%

Diversified industrial products 3% 2% 2% 8%

Oil and gas 5% 0% 2% 8%

Life sciences 5% 1% 2% 7%

Media and entertainment 5% 1% 2% 7%

Insurance 6% 1% 1% 7%

Automotive and transportation 1% 2% 3% 6%

Others 8% 6% 6% 21%

All sectors 47% 25% 28% 100%

Global deal value and volume (year to date (YTD) last five years)Source: Dealogic and EY analysis.

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2014 2015 2016 2017 2018

Value (US$b) (LHS) Volume* (RHS)

*Volume based on deals greater than US$100m.

Capital Briefing

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4.i. M&A: cross-border deal flow

Key cross-border M&A deal flow(LTM to March 2018)(Total = US$940b)

N America to:UK&I – $106b

W Europe – $45bLatin America – $23b

Japan to:N America – $33b

Greater China - $12bSE Asia - $7b

UK&I to:W Europe – $29bN America – $27b

SE Asia – $3bAfrica – $1b

L America to:N America – $3bMiddle East – $2b

Greater China andMongolia to:

W Europe - $27bN America – $18b

SE Asia – $17bW Europe to:

N America – $103bUK&I – $27b

L America - $11b

Cross-border M&A deal flow (LTM to March 2018)

(US$m)

Key

>$100b

>$50b

>$10b

Note: all figures are in US$.

# Acquiror refers to acquiror’s ultimate holding company.

$ Greater China and Mongolia includes mainland China, Hong Kong, Macau, Mongolia and Taiwan.

M&A analysis as at 1 April 2018.

Source: Dealogic. All Rights Reserved.

Note: data is continually updated and therefore subject to change.

Key >US$100b >US$50b >US$10b

Intra-area cross-border deals

Target Acquiror# Africa SE Asia (including Korea)

Greater China and Mongolia$

Russia, CIS and CSE

W Europe (excluding UK&I)

India Japan Latin America

Middle East

North America

Oceania UK&I Inboundtotal

% versus PTM

Africa 2,391 161 1,229 3 2,147 15 563 - 1,014 1,054 162 1,295 10,033 -61%

SE Asia (including Korea)

15 4,434 17,201 117 907 113 7,311 - 50 2,995 743 3,233 37,118 46%

Greater China andMongolia $

29 3,518 29,806 - 1,013 - 12,144 - 662 8,130 1,014 225 56,541 44%

Russia, CIS and CSE - 106 10,008 7,778 4,051 96 1,815 94 9 1,331 38 1,306 26,632 -43%

W Europe (excluding UK&I)

1,654 3,623 27,057 378 140,910 390 3,949 48 3,319 44,584 1,428 29,106 256,446 -23%

India 407 2,304 4,292 19 288 25 4,961 - 416 3,274 - 156 16,142 -34%

Japan - 232 2,521 - - 515 - - 6 6,636 31 - 9,941 138%

Latin America 309 330 9,391 - 10,582 - 270 4,777 391 22,713 44 675 49,481 -19%

Middle East 226 2,572 2,518 - 3,782 930 1,068 1,519 2,541 9,402 500 960 26,019 -47%

North America 983 5,492 18,023 - 102,995 493 33,393 2,654 9,337 58,736 5,184 27,319 264,607 -46%

Oceania 247 3,058 7,598 0 7,406 13 2,588 110 593 10,507 659 178 32,957 0%

UK&I 2,189 1,951 3,195 706 26,718 97 3,602 1,131 2,022 105,600 4,732 2,479 154,424 26%

Outbound total 8,450 27,780 132,839 9,000 300,798 2,688 71,664 10,334 20,358 274,962 14,537 66,932 940,341 -25%

% versus previous 12 months (PTM)

-41% -26% -30% -64% 6% -63% -29% -34% -41% -32% 26% -49% -25%

10 Capital Briefing

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0% 30% 60% 90% 120% 150% 180%

5. IPOs

Executive summary

• Global IPO activity saw mixed results in March 2018. While IPO activity registered a year on year (YOY) decrease of 29% in terms of number of deals, it increased 34% by proceeds.

• March 2018 recorded the megadeal of Siemens Healthineers AG (US$4.5b) – the largest German IPO since Innogy SE in October 2016.

• EMEA dominated global IPO activity by proceeds in March, for the first time since June 2017.

• While US IPO activity is expected be strong in 1H18, mainland China is unlikely to reach 2017 levels due to stricter supervision and a lower listing approval rate by the local regulator.

11

Top 10 IPOs by proceeds, March 2018Source: Dealogic.

Issuer name Issuerlocation

Sector Exchange Proceeds(US$m)

Siemens Healthineers AG Germany Life sciences Deutsche Boerse 4,521

iQIYI Inc. ChinaMedia and entertainment

NASDAQ 2,250

DWS Group GmbH & Co. KGaA

GermanyWealth and asset management

Deutsche Boerse 1,597

Fibra E - Grupo Aeroportuario de la Ciudad de Mexico

MexicoAutomotive and transportation

Mexican 1,474

Dropbox Inc. US Technology NASDAQ 869

ELKEM ASA Norway Mining and metals Oslo Bors 833

Bandhan Bank Ltd. IndiaBanking and capital markets

Bombay 686

Jiangsu Financial Leasing Co. Ltd.

China Other sectors Shanghai 636

Hindustan Aeronautics Ltd. IndiaAerospace and defense

Bombay 635

Bilibili Inc. ChinaMedia and entertainment

New York 483

IPO activity by sector and area (% share of global proceeds)

LTM to March 2018Source: Dealogic; regional classification on the basis of issuer nationality.

Note: because of rounding, percentages may not add up to total.

Americas Asia-Pacific EMEA Total

Technology 4% 7% 3% 14%

Real estate 3% 4% 5% 12%

Banking and capital markets 1% 5% 5% 11%

Life sciences 3% 3% 5% 10%

Automotive and transportation 2% 3% 3% 9%

Diversified industrial products 2% 4% 2% 8%

Consumer products and retail 2% 4% 3% 8%

Insurance 0% 5% 0% 5%

Power and utilities 1% 2% 2% 5%

Others 6% 7% 5% 19%

Total 23% 45% 32% 100%

IPO activity by area (YOY % change)(LTM to March 2018 versus LTM to March 2017)Source: Dealogic; regional classification on the basis of issuer nationality.

Value

Vo

lum

e

Americas(including US)

EMEA

Global

Asia-Pacific

Capital Briefing

US

Current state

• Global IPO activity continued its strong start to 2018, with 121 deals raising US$22.2b due to strong activity across certain regions in March 2018. While IPO activity registered a YOY decrease of 29% in terms of number of deals, it increased 34% by proceeds– the highest level for the month of March since 2008.

• Asia-Pacific continued to lead global IPO activity in terms of number of deals, with 78 raising US$8.2b, accounting for 65% of global deals. Compared with March 2017, the region registered a 39% decrease and 11% increase in terms of number of deals and proceeds respectively.

• EMEA IPO activity saw mixed results in March 2018 (31 deals raising US$11.0b). Proceeds saw a three-fold increase, while deal number was unchanged. This can be attributed to two megadeals in Germany– US$4.5b listing of Siemens HealthineersAG, the country’s largest IPO since Innogy SE in October 2016, and the listing of DWS Group GmbH & Co KGaA which raised US$1.6b.

• IPO activity was steady on the US exchanges this month (15 deals raising US$4.8b). YOY, while the number of deals increased by 36%, proceeds declined by 18%.

Environment and horizon

• Global IPO outlook is positive for the coming months, driven by steady equity markets and a healthy pipeline across sectors and regions, underpinning strong investor confidence.

• We expect a few more active quarters for IPOs on the Hong Kong Stock exchanges, driven by a favorable economic backdrop and strong corporate earnings growth. The Hang Seng Index is back at record levels, investor appetite is solid, and reforms to HKEx’s listing requirements are expected to become effective as early as June 2018, which would result in an increased number of listings by technology and biotechnology companies.

• By contrast, IPO activity on mainland China exchanges is unlikely to reach 2017 levels due to stricter supervision and a lower listing approval rate by the local regulator. However, the China Securities Regulatory Commission (CSRC) is likely to provide more policy support to the listing of high-quality companies and industry giants. This may attract lead companies that are currently listed overseas to consider returning to the domestic market.

• Additionally, IPO activity in China and other APAC markets may be negatively impacted due to US trade barriers and the expectation of further US interest rate rises, which would increase pressure on capital outflows.

• The European IPO outlook remains positive, with a healthy pipeline of companies looking to take advantage of attractive stock market valuations. We expect a number of megadeals to come to the European public markets later this year, including the German, Swiss and Nordics capital markets. These include IPOs of carve-outs from conglomerates and by family businesses.

• With an improving macroeconomic and political environment, the Middle East should witness a surge in IPO activity. There is a strong pipeline of IPOs with government-owned assets being prepared for IPOs in Kuwait, Egypt, Saudi Arabia and the UAE.

• US IPO activity should be strong in the first half of the year as, despite an increase in volatility in February, the market has stabilized and there are signs of continued investor appetite for IPOs. Cross-border deals are also likely to contribute to the robust pipeline as a backlog of Chinese issuers target US listings. However, potential uncertainty surrounding mid-term elections in 4Q18 could result in compressed IPO windows in the second half of the year.

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6. Loans

Executive summary

Global investment-grade loans (US$b)Source: Thomson ONE.

Global high-yield loans (US$b)Source: Thomson ONE.

Top arrangers ranking, 2018 (US$b)Source: Thomson ONE.

Proceeds Issues

Bank of America Merrill Lynch 85.5 334

JP Morgan Chase & Company 70.7281

Citigroup Inc. 51.7182

Mizuho Financial Group 48.0258

Mitsubishi UFJ Financial Group 46.9374

All loans by region, 2018 (US$b)Source: Thomson ONE.

Market share (%) Proceeds Issues

Americas 60.8 595.7 923

EMEA 22.5 221.2 232

Asia-Pacific 16.6 163.6 853

12

• In 1Q18, total new-issue loan volume was US$210.7b in the US and Europe — the highest total compared with the previous three quarters. However, the 1Q18 total is still 15% lower than the total new issuance volume in the same period last year.

• The European leveraged loan market recorded strong growth in 2018, beating the YTD volume of 2017.

• Issuance in the US leveraged loan market gained momentum in 1Q18 thanks to strong March volumes — the highest monthly total since September 2017.

• Average institutional tranche sizes have increased in Europe as M&A-related financing has picked up, indicating that Europe’s more mature market can now absorb larger loans.

Capital Briefing

Current state

M&A boosts loan issuance volume in 1Q18

• In March, US$68.5b of loans were issued in the US and €7.3b in Europe. Overall, total global new-issue volume was US$77.4b in March, down 14% compared with the same period in 2017.

• In 1Q18, total new-issue loan volume was US$210.7b in the US and Europe, the highest total compared with the previous three quarters. However, the 1Q18 total is still 15% lower than the total new issuance volume in the same period last year.

• The European leveraged loan market recorded strong growth in 2018, beating the YTD volume of 2017. YTD issuance is US$43.4b, up 20% compared with the same period last year:

• An increase in new-issue volume in 1Q18 reflects growth in M&A-related financings and new money supply, as more than 60% of the volume came from new deals.

• YTD M&A-related financing in Europe accounted for 62% of total volume, followed by refinancing activity, which accounted for 31% of total volume.

• Issuance in the US leveraged loan market gained momentum in 1Q18 on the back of a strong March volume — the highest monthly total since September 2017:

• The increase in loan issuance activity in 1Q18 was primarily due to an increase in M&A activity.

• YTD M&A-related financing in the US accounted for 47% of total loan volume, followed by refinancing activity, which accounted for 43% of total volume.

Environment and horizon

Larger loans can be absorbed in the European market, and more repricing activity may be seen in the US market

• The average institutional tranche size has increased in Europe as M&A has picked up, indicating that Europe’s more mature market can now absorb larger loans.

• The Federal Reserve raised interest rates in March and indicated that it may raise them further. Issuers continue to tap the loan market with repricings in an effort to cut spreads amid a rising three-month LIBOR which has crossed the 2% mark.

Opportunities

More room is available for M&A-related financing

• There is still room available for more M&A-driven deals. Some large buyout financing deals are expected in the second quarter of 2018.

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Proceeds (LHS) Number of issues (RHS)

Global bond issuance by industry, 2018Source: Thomson ONE.

0 30 60 90 120 150 180

Financials

Energy and power

Industrials

High technology

Materials

Real estate

Consumer staples

Consumer products and services

Health care

Media and entertainment

Telecommunications

Retail

Government and agencies

Proceeds (US$b)

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Executive summary

Euro bond issuances (US$b)Source: Thomson ONE.

US bond issuances (US$b)Source: Thomson ONE.

Top 10 corporate bond issuers, 2018 (US$b)Source: Thomson ONE.

Global bond issuance by industry, 2018Source: Thomson ONE.

Issuer Nation Industry Proceeds

CVS Health Corporation US Retail 40.0

Anheuser Busch Inbev Worldwide Belgium Consumer staples 15.1

China Railway Corporation China Industrials 12.6

Sanofi SA France Health care 9.9

MPLX LP US Energy and power 5.5

Campbell Soup Co US Consumer staples 5.3

Tencent Holdings Ltd China High technology 5.0

Sempra Energy Inc US Energy and power 5.0

Celgene Corporation US Health care 4.5

Vonovia Finance BV Netherlands Real estate 3.8

7. Bonds

• Global high-yield activity recovered in March after a slowdown in February, showing an increase of 115%.

• YTD high-yield issuance was US$62.3b in the US and €19.6b in Europe, with total global issuance at US$86.3b, down 20% compared with the same period last year.

• Refinancing activity is still the primary driver of issuance in both the US and European high-yield markets.

• There was more balance between investors and issuers in 1Q18 in Europe, with investors winning higher yields and, in some instances, tighter covenant packages.

2 Capital Briefing

Current state

High-yield bond market had a slower start to the year

• Global high-yield activity recovered in March after a slowdown in February, showing an increase of 115%. However, March issuance volume was still 35% short compared with the same period last year.

• YTD high-yield issuance was US$62.3b in the US and €19.6b in Europe, with total global issuance at US$86.3b, down 20% compared with the total issuance in the same period last year.

• High-yield activity declined in both the US and European markets in 1Q18. The US market is 24% behind 1Q17 volume, and the European market is 8% behind 1Q17 volume.

• Refinancing activity is still the primary driver of issuance in both the US and European high-yield markets. However, M&A-driven activity is rising in Europe:

• Refinancing activity accounted for 75% of total volume in the US and 52% in Europe in 1Q18. M&A-related financing accounted for 13% of total volume in the US and 32% in Europe in 1Q18.

• Clearing yields for B-rated bonds for the three months ending 30 March widened in the US to 7.09% from 6.57% at the end of December. Yields also widened in Europe to 5.45% from 5.31%.

• The high-grade market has lost its pace after a year of robust activity due to the rise in interest rates. High-grade volume decreased in March, with US$105.4b of issuance compared with US$127.3b in the same period last year. Also, YTD volume is still 16% behind the recorded 2017 volume.

Environment and horizon

More balance may be seen between investors and issuers in the European market

• There was more balance between investors and issuers in 1Q18 in Europe, with investors getting higher yields and, in some instances, tighter covenant packages. However, borrowers are still able to lock in financing at near-record low yields.

Opportunities

More opportunistic transactions are expected in the coming months

• More opportunistic transactions are expected in the coming months due to current dynamics; however, the pipeline for the second quarter is dominated by leveraged buyout financings, which would be a boost for sponsor-backed issuance.

0

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0

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240

320

400

Mar17

Apr17

May17

Jun17

Jul17

Aug17

Sep17

Oct17

Nov17

Dec17

Jan18

Feb18

Mar18

Proceeds (LHS) Number of issues (RHS)

0

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0

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Mar17

Apr17

May17

Jun17

Jul17

Aug17

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Oct17

Nov17

Dec17

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Feb18

Mar18

Proceeds (LHS) Number of issues (RHS)

0 20 40 60 80

Energy and power

Industrials

Retail

Real estate

Consumer staples

Health care

Materials

High technology

Consumer products and services

Telecommunications

Media and entertainment

Proceeds (US$b)

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Appendices

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Dry powder — buyout funds — by region (in US$b)

Global PE fundraising (in US$b)

Appendix AGlobal PE fundraising activity

Source: Preqin

Source: Preqin

Private Equity Capital Briefing12

0

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1,200

$0

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD2018

Commitments Number of funds closed

$0

$100

$200

$300

$400

$500

$600

$700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD2018

North America Europe Asia-Pacific Rest of the world

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Source: Dealogic

Global PE value and volume — quarterly trend (in US$b)

PE acquisitions by year (in US$b)

Appendix AGlobal PE acquisition activity

Source: Dealogic

Private Equity Capital Briefing13

0

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1,500

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$0

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD2018

Deal value Number of deals

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Americas PE acquisitions — the top deals with disclosed financial terms Q1 2018

Appendix AGlobal PE acquisition activity by region — Americas

Americas PE acquisitions (in US$b)

Source: Dealogic

Source: Dealogic

Announcement date

Completion date

Company SectorValue

(US$b)Acquiror

30-Jan-18Thomson Reuters Financial & Risk (F&R) Business Technology $17.5

Canada Pension Plan Investment Board (CPPIB);GIC Special Investments PteLtd.;Blackstone Group LP

16-Jan-18Blackhawk Network Holdings Inc. Technology $3.3 Silver Lake Group LLC

9-Jan-18Pure Industrial Real Estate Trust Real estate $2.9 Blackstone Group LP

20-Mar-18 EnerVest Ltd. Oil and gas $2.8 TPG Capital LP

31-Jan-18 Ply Gem Holdings Inc. Construction $2.3 Clayton, Dubilier & Rice LLC

29-Jan-18 7-Mar-18 Pro Mach Inc. Machinery $2.2Leonard Green & Partners LP

16-Mar-18 LifeScan Inc. Health care $2.1 Platinum Equity LLC

4-Jan-18 OneMain Holdings Inc. Finance $1.4Apollo Global Management LLC

9-Jan-18Amtrust Financial Services Inc. Insurance $1.4 Stone Point Capital LLC

15-Feb-18Wyndham Worldwide Corp.European vacation business Dining and lodging $1.3 Platinum Equity LLC

Private Equity Capital Briefing14

0

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$80

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Deal value Number of deals

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Appendix AGlobal PE acquisition activity by region — EMEA

EMEA PE acquisitions (in US$b)

Source: Dealogic

Source: Dealogic

EMEA PE acquisitions — the top deals with disclosed financial terms Q1 2018

Private Equity Capital Briefing15

0

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Announcement date

Completion date

Company SectorValue

(US$b)Acquiror

27-Mar-18Akzo Nobel NV (Specialty chemicals business) Chemicals $12.5

GIC Special Investments PteLtd.;Carlyle Group LP

12-Feb-18 TDC A/S Telecommunications $10.7Macquarie Infrastructure & Real Assets Pty Ltd.

22-Feb-18 Gas Natural SDG SA Utilities $4.7 CVC Capital Partners Ltd.

1-Mar-18 Laird plc Technology $1.6 Advent International Corp.

3-Apr-18 HES International BV Transportation $1.6Macquarie Infrastructure & Real Assets Pty Ltd.

23-Mar-18 23-Mar-18 Albea SA Forestry and paper $1.5 PAI Partners SAS

6-Feb-18 6-Feb-18 Sebia International SA Health care $1.5 CVC Capital Partners Ltd.

17-Mar-18 FCC Aqualia SA Utilities $1.3 IFM Investors Pty Ltd.

28-Feb-18 HSH Nordbank AG Finance $1.2Cerberus Capital Management LP

10-Jan-18 10-Jan-18Primewaterview Holdings Nigeria Ltd. Real estate $1.1 Milost Global Inc.

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Appendix AGlobal PE acquisition activity by region — Asia-Pacific

Asia-Pacific PE acquisitions (in US$b)

Source: Dealogic

Source: Dealogic

Asia-Pacific PE acquisitions — the top deals with disclosed financial terms Q1 2018

Private Equity Capital Briefing16

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Deal value Number of deals

Announcement date

Completion date

Company SectorValue

(US$b)Acquiror

1-Mar-18 1-Mar-18National Highways Authority of India (648km of highways) Transportation $1.5

Macquarie Infrastructure & Real Assets Pty Ltd.

24-Mar-18 29-Mar-18 Indiabulls Properties Pvt. Ltd. Construction $1.5 Blackstone Group LP

2-Jan-18 eHi Car Services Ltd. Transportation $1.4 MBK Partners Ltd.

26-Mar-18 iKang Healthcare Group Inc. Health care $1.2

Shanghai YunfengInvestment Management Co Ltd.

5-Jan-18Shopping Centres (20 retail malls in China) Real estate $1.1

Hopu Investment Management Co.

27-Jan-18 21-Feb-18I-MED Radiology Network Ltd. Health care $1.0 Permira Ltd.

5-Apr-18Accolade Wines Australia Ltd. Food and beverage $0.8 Carlyle Group LP

23-Jan-18 23-Jan-18Trimco International Holdings Ltd. Textile $0.5

Affinity Equity Partners (HK) Ltd.

12-Mar-18 12-Mar-18

Vietnam Technological & Commercial Joint Stock Bank – Techcombank Finance $0.4 Warburg Pincus LLC

21-Mar-18 Microlife Corp. Technology $0.3Morgan Stanley Private Equity Asia Ltd.

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Source: Dealogic

Global PE-backed IPOs — value and volume — quarterly trend (in US$b)

Appendix AGlobal PE exit activity

Global PE-backed exits by M&A — value and volume — quarterly trend (in US$b)

Source: Dealogic

Private Equity Capital Briefing17

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Source: Dealogic

Appendix AGlobal PE exit activity — Americas

Americas PE exits — top exits with disclosed values Q1 2018

Americas PE exits (in US$b)

Announcementor filing date

Completion orpriced date

Company SectorValue

(US$b)Sponsor Type

21-Dec-17 18-Jan-18 ADT Inc. Professional services $10.5 Apollo Global Management LLC IPO

23-Feb-18Blue Buffalo Pet Products Inc. Food and beverage $8.0 Invus Group LLC M&A

27-Dec-17 24-Jan-18Gates Industrial Corp. plc Machinery $5.5 Blackstone Group LP IPO

31-Jan-18 Ply Gem Holdings Inc. Construction $2.3 CI Capital Partners LLC M&A

14-Nov-17 18-Jan-18Americold Realty Trust Real estate $2.3

Goldman Sachs Capital Partners;Yucaipa Companies LLC IPO

29-Jan-18 7-Mar-18 Pro Mach Inc. Machinery $2.2 AEA Investors LP M&A

14-Feb-17 11-Jan-18Liberty Oilfield Services Inc. Oil and gas $2.0 Riverstone Holdings LLC IPO

28-Mar-18 Polycom Inc. Telecommunications $2.0 Siris Capital Group LLC M&A

10-Feb-17 1-Feb-18 FTS International Inc. Oil and gas $2.0 RRJ Capital IPO

12-Jan-18 7-Feb-18 Cactus Inc. Oil and gas $1.9 Cadent Energy Partners LLC IPO

21

Source: Dealogic

Private Equity Capital Briefing18

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Source: Dealogic

Appendix AGlobal PE exit activity — EMEA

EMEA PE exits — top exits with disclosed values Q1 2018

EMEA PE exits (in US$b)

Announcementor filing date

Completion orpriced date

Company SectorValue

(US$b)Sponsor Type

5-Feb-18Italo-Nuovo Trasporto Viaggiatori SpA Transportation $3.0 Peninsula Capital Advisors LLP M&A

26-Feb-18Interoute Communications Ltd Telecommunications $2.3

Crestview Partners LP;Aleph Capital Partners LLP M&A

26-Mar-18Scandlines Deutschland GmbH Transportation $2.1 3i Group plc M&A

3-Apr-18 HES International BV Transportation $1.6Carlyle Group LP;Riverstone Holdings LLC M&A

26-Feb-18 23-Mar-18 NIBC Holding NV Finance $1.6JC Flowers & Co LLC;aPriori Capital Partners LP IPO

23-Mar-18 23-Mar-18 Albea SA Forestry and paper $1.5 Sun Capital Partners Inc. M&A

6-Feb-18 6-Feb-18Sebia International SA (60%) Health care $1.5

Montagu Private Equity LLP;Astorg Partners SA M&A

2-Mar-18 2-Mar-18Groupe Eurotunnel SE (15.4856%) Transportation $1.3 Goldman Sachs Capital Partners M&A

16-Feb-18Imagina Media Audiovisual SL (53.5%)

Leisure and recreation $1.3 Torreal SA M&A

23-Mar-18 Eurogrid GmbH (20%) Utilities $1.2 IFM Investors Pty Ltd. M&A

22

Source: Dealogic

Private Equity Capital Briefing18

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Source: Dealogic

Appendix AGlobal PE exit activity — Asia-Pacific

Asia-Pacific PE exits — top exits with disclosed values Q1 2018

EMEA PE exits (in US$b)

23

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Private Equity Capital Briefing18

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Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Deal value Number of deals

Announcementor filing date

Completion orpriced date

Company SectorValue

(US$b)Sponsor Type

3-Apr-18 Santos Ltd. Oil and gas $13.2 Hony Capital Management Ltd. M&A

4-Apr-18Beijing MobikeTechnology Co. Ltd. Technology $3.7

Warburg Pincus LLC;TPG Capital LP M&A

14-Mar-18 14-Mar-18

Greater China Intermodal Investments LLC Transportation $1.4 Carlyle Group LP M&A

9-Aug-17 17-Feb-18Aster DM Healthcare Ltd. Health care $1.3

Olympus Capital Holdings Asia (Hong Kong) Ltd.;True North Managers LLP IPO

27-Jan-18 21-Feb-18I-MED Radiology Network Ltd. Health care $1.0 EQT Partners AB M&A

5-Apr-18Accolade Wines Australia Ltd. Food and beverage $0.8 CHAMP Private Equity Pty Ltd. M&A

9-Feb-18 9-Feb-18

Property Portfolio (The K Twin Towers in Seoul) Real estate $0.7 KKR & Co. LP M&A

8-Feb-18 8-Feb-18 Qingdao Haier Co. Ltd. Consumer products $0.6 KKR & Co. LP M&A

23-Jan-18 23-Jan-18Trimco International Holdings Ltd. Textile $0.5 Partners Group Holding AG M&A

18-Mar-18 18-Mar-18

Continental Warehousing Corp. (Nhava Sheva) Ltd. Transportation $0.4

Warburg Pincus LLC;Abraaj Capital Ltd. M&A

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Appendix BM&A activity monthly flash

Volume Value Volume Value

Calendar YTD

YTD % ∆ Calendar YTD

YTD % ∆ LTM LTM % ∆ LTM LTM % ∆

2018(to March 18)

vs. 2017(to March 17)

2018(to March 18)

vs. 2017(to March 17)

LTM(to March 18)

vs. PTM(to March 17)

LTM (to March 18)

vs. PTM(to March 17)

M&A activity by areas and regions

Global 8,281 -15% 1,015,660 48% 36,724 0% 3,461,941 -1%

Americas 3,126 -16% 591,966 50% 12,824 -6% 1,847,165 -12%

Canada 485 -10% 28,483 -54% 1,923 -24% 138,964 -36%

Latam North 72 -26% 4,578 -27% 330 -7% 32,015 17%

Latam South 120 -34% 19,015 4% 596 -14% 91,834 16%

US 2,668 -16% 559,634 68% 10,819 -2% 1,660,979 -13%

EMEA 2,972 -20% 378,795 43% 13,327 -1% 1,121,368 -10%

Africa 97 -47% 1,973 -82% 546 -8% 18,875 -62%

CIS 229 20% 11,758 134% 1,162 34% 33,185 -45%

CSE 211 0% 7,766 -24% 962 5% 26,808 -52%

GSA 645 -16% 117,925 104% 2,788 15% 281,392 -6%

Israel 88 4% 6,122 -64% 358 43% 19,875 -45%

Mediterranean 279 -42% 35,200 -37% 1,345 -10% 142,232 -7%

MENA 54 -27% 13,610 -3% 230 -15% 39,512 -48%

Nordics 392 -13% 24,947 182% 1,615 8% 152,832 132%

UK&I 723 -20% 136,599 115% 3,011 -18% 317,627 -5%

WEM 675 -21% 71,278 6% 3,120 -2% 245,388 -9%

Asia-Pacific 3,033 -12% 224,213 17% 14,333 3% 1,002,803 0%

ASEAN 288 -39% 17,259 39% 1,621 -13% 88,518 20%

Greater China 1,352 3% 125,406 10% 6,370 12% 620,055 6%

India 271 -28% 17,817 -33% 1,030 -11% 53,561 -27%

Japan 791 -12% 44,307 74% 3,380 5% 156,728 -6%

Korea 187 7% 14,039 65% 1,187 5% 73,871 28%

Oceania 284 -27% 20,511 47% 1,486 -10% 81,126 -10%

M&A activity by sectors

Aerospace and defense 87 6% 16,739 52% 395 10% 86,489 94%

Automotive and transportation 551 -18% 66,412 95% 2,478 -1% 252,673 28%

Banking and capital markets 438 -25% 51,079 -7% 2,102 -6% 218,428 -22%

Consumer products and retail 1,101 -20% 119,571 11% 5,199 -2% 517,534 27%

Diversified industrial products 1,094 -16% 119,402 119% 4,885 -1% 413,141 -17%

Government and public sector 160 -11% 7,588 306% 613 -2% 34,381 43%

Health care 260 -15% 8,146 -60% 1,039 -2% 44,496 -32%

Insurance 281 4% 131,444 490% 1,131 9% 328,061 148%

Life sciences 550 -14% 80,952 10% 2,465 2% 283,831 -22%

Media and entertainment 464 -28% 102,269 544% 2,232 -6% 270,245 23%

Mining and metals 339 -38% 22,021 -9% 1,802 -17% 92,387 -17%

Oil and gas 273 -28% 87,652 -33% 1,249 -17% 303,051 -42%

Other sectors 916 -24% 25,681 2% 3,900 -5% 110,987 -2%

Power and utilities 338 -14% 116,809 119% 1,560 6% 296,106 13%

Real estate 733 -22% 43,667 -16% 3,446 -1% 249,520 3%

Technology 2,645 -3% 171,379 75% 11,150 13% 620,569 0%

Telecommunications 147 -15% 33,795 7% 704 2% 161,209 -39%

Wealth and asset management 185 -22% 8,245 -51% 864 -13% 47,429 -15%

24

Regions’ M&A numbers represent a summation of domestic, inbound and outbound M&A activity involving the region. Sectors’ numbers represent involvement from either side, i.e., target or acquiror, except in the case of wealth and asset management, where only target-side involvement has been mapped.M&A analysis as at 1 April 2018. Source: Dealogic. All Rights Reserved. Note: data is continually updated and therefore subject to change.

Capital Briefing

2017 2018

J F M A M J J A S O N D J F M A M J J A S O N D

2016 2017 2018

J F M A M J J A S O N D J F M A M J J A S O N D J F M

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Appendix CM&A multiples and bid premium

Deal multiples greater than 30x and bid premium greater than 100% have been excluded from calculation of median.M&A analysis as at 1 April 2018. Source: Dealogic. All Rights Reserved. Note: data is continually updated and therefore subject to change.

25

Median deal multiple — EV / EBITDA

Global Americas Asia-Pacific EMEA

LTM(to Mar 18)

PTM(to Mar 17)

LTM(to Mar 18)

PTM(to Mar 17)

LTM(to Mar 18)

PTM(to Mar 17)

LTM(to Mar 18)

PTM(to Mar 17)

Aerospace and defense 7.6x 12.8x 14.3x 10.2x 6.0x 13.9x 12.3x 15.5x

Automotive and transportation 10.6x 9.2x 9.9x 8.6x 10.9x 9.7x 11.3x 9.5x

Consumer products and retail 9.8x 10.6x 10.0x 11.1x 10.1x 12.1x 8.8x 9.6x

Diversified industrial products 10.8x 9.3x 10.8x 10.0x 12.4x 10.9x 9.4x 8.1x

Financial services 11.1x 10.5x 13.6x 12.9x 9.4x 8.8x 8.1x 8.0x

Government and public sector 9.2x 8.6x 10.6x 8.2x 10.1x 8.2x 8.3x 9.4x

Health care 14.2x 13.4x 13.1x 11.5x 16.6x 19.3x 13.9x 10.2x

Life sciences 10.4x 9.5x 9.6x 11.1x 12.3x 10.4x 10.1x 9.2x

Media and entertainment 9.0x 8.2x 11.6x 8.3x 9.4x 8.3x 6.4x 6.9x

Mining and metals 9.3x 8.3x 10.7x 10.2x 12.6x 14.2x 6.0x 5.4x

Oil and gas 10.6x 9.9x 9.4x 12.6x 12.0x 9.0x 10.2x 9.0x

Other sectors 10.0x 10.5x 10.7x 11.3x 10.0x 16.9x 9.5 8.8x

Power and utilities 10.8x 12.2x 8.5x 7.7x 10.1x 15.1x 11.9x 13.0x

Real estate 9.5x 11.1x 10.3x 12.4x 8.0x 12.9x 8.5x 9.9x

Technology 11.5x 10.9x 11.6x 12.2x 11.8x 11.8x 10.8x 9.9x

Telecommunications 7.6x 8.2x 8.6x 8.9x 6.8x 9.2x 7.6x 8.2x

Total 10.6x 10.2x 11.1x 11.0x 11.0x 10.9x 9.3x 9.1x

Median bid premium to four-week stock price

Global Americas Asia-Pacific EMEA

LTM(to Mar 18)

PTM(to Mar 17)

LTM(to Mar 18)

PTM(to Mar 17)

LTM(to Mar 18)

PTM(to Mar 17)

LTM(to Mar 18)

PTM(to Mar 17)

Aerospace and defense 18% 35% 28% 50% 11% 30% - 29%

Automotive and transportation

18% 21% 22% 37% 18% 18% 12% 31%

Consumer products and retail 15% 16% 20% 27% 15% 14% 12% 14%

Diversified industrial products 22% 23% 28% 27% 22% 23% 10% 22%

Financial services 17% 21% 22% 30% 17% 13% 13% 14%

Government and public sector 16% 13% 14% - 20% 3% - 23%

Health care 22% 31% 38% 42% 13% 18% 18% 11%

Life sciences 19% 26% 16% 35% 20% 21% 19% 27%

Media and entertainment 24% 25% 28% 33% 25% 21% 15% 19%

Mining and metals 24% 18% 25% 17% 10% 18% 29% 19%

Oil and gas 19% 23% 20% 31% 16% 13% 29% 36%

Other sectors 20% 18% 20% 16% 15% 26% 22% 10%

Power and utilities 17% 25% 24% 25% 17% 35% 6% 28%

Real estate 17% 26% 14% 27% 24% 25% 12% 20%

Technology 22% 25% 28% 33% 18% 19% 17% 18%

Telecommunications 11% 12% 17% 39% 7% 10% 17% 6%

Total 20% 22% 23% 30% 18% 19% 15% 17%

Capital Briefing

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Notes

26 Private Equity Capital Briefing

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Notes

27 Private Equity Capital Briefing

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