Global Private Equity Report

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GLOBAL PRIVATE EQUITY REPORT 2012

About Bain & Company’s Private Equity business
Bain & Company is the leading adviser to the private equity (PE) industry and its stakeholders. Most people in the industry recognize that Bain & Company and Bain Capital are separate companies, with no shared ownership or governance. However, in light of the heightened media attention we have received in this US election year, it may be worth setting the record straight: Bain & Company is not a private equity firm. Bain & Company maintains a global network of more than 400 experienced professionals serving PE clients. In the past decade, we estimate that Bain & Company has advised on half of all buyout transactions valued at more than $500 million globally. Bain’s work with PE spans fund types, including buyout, infrastructure, real estate, debt and hedge funds. We also work for many of the most prominent limited partners (LPs) to PE firms, including sovereign wealth funds, pension funds, financial institutions, endowments and family investment offices. We support our clients across a broad range of objectives: Deal generation: We help PE funds develop the right investment thesis and enhance deal flow, profiling industries, screening companies and devising a plan to approach targets. Due diligence: We help funds make better deal decisions by performing diligence, assessing performance improvement opportunities and providing a post-acquisition agenda. Immediate post-acquisition: We support the pursuit of rapid returns by developing a strategic blueprint for the acquired company, leading workshops that align management with strategic priorities and directing focused initiatives. Ongoing value addition: We help increase company value by supporting revenue enhancement and cost reduction and by refreshing strategy. Exit: We help ensure funds maximize returns by identifying the optimal exit strategy, preparing the selling documents and pre-qualifying buyers. Firm strategy and operations: We help PE firms develop their own strategy for continued excellence, focusing on asset-class and geographic diversification, sector specialization, fund-raising, organizational design and decision making, enlisting top talent and maximizing investment capabilities. LP and institutional investor strategy: We work with private equity LPs to develop best-in-class PE programs and with institutional investors to achieve optimal performance of their overall investment portfolio. Topics we address cover asset-class allocation, governance and risk management, organizational design and decision making, PE portfolio construction and fund manager selection. We also help LPs expand their participation in PE, including through co-investment and direct investing opportunities. Bain & Company, Inc. 131 Dartmouth Street Boston, Massachusetts 02116 USA Tel: +1 617 572 2000 www.bain.com

Global Private Equity Report 2012 | Bain & Company, Inc.

Contents
Searching for bedrock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .pg.iii 1. The PE market in 2011: What happened . . . . . . . . . . . . . . . . . . . . . . . . . pg. 1 Investments: Coping with climate change . . . . . . . . . . . . . . . . . . . . . . . . . pg. 2 – – – A false spring A late-summer frost Some warmth in emerging markets

Exits: The recovery stalls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 13 Fund-raising: The rebound falls flat . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 16 Returns: Facing a moment of truth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 21 – Unlocking the alchemy of alpha

Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 26 Buy-and-build: An investment theme for challenging times . . . . . . . . . . . . . pg. 27 2. What is happening now: Dynamics for 2012 and beyond. . . . . . . . . . . . . pg. 31 Investments: Rewinding the clock . . . . . . . . ....
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