A THOROUGH UNDERSTANDING OF PRIVATE EQUITY

RETOUR SOMMAIRE

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2010

FISCAL AND OPERATIONAL ISSUES

R equirements There are key principles to be considered when disclosing information to investors 49 : • Transparency: The information on all relevant topics regarding the evolution of the fund should be communicated to investors in a transparent manner; • Relevance: The information provided should allow each investor to monitor its own in- vestment; • Consistency: The information provided to investors should be consistent over time. L evel of information The manager should provide investors with certain fund level information on a quarterly ba- sis, including a fund overview, a view of the current portfolio, realised or partially realised investments. In addition, fund performance such as IRR and return multiples should be presented net of any fees. Portfolio company performance, to the extent disclosed, should be presented on a gross basis.

Figure 39 displays examples of fund and portfolio reporting.

Figure 39: Illustration of fund summary and current portfolio summary reporting

2005

2004 8

FUND SUMMARY

2 09

€ million % Committed

capital € million % Committed capital

Total committed

1,000

100% 1,000 60% 402 40% 598

100%

Total drawdowns

600 400

40% 60%

Total remaining available for drawdown Potential drawdowns for next reporting period (recommendation)

100

10% 200

20%

Cumulative distributions Recallable distributions Fair value of portfolio

200

20% 135

14%

-

-

-

-

595

328

Total other assets and liabilities

(5)

(5)

Total net assets value

590

323

Contingent liabilities (including debt, guarantees, etc.)

-

-

Gross IRR

23.9% 19.9%

19.9% 16.6%

Net IRR

Multiple to investors Distributions to paid-in capital (DPI) Residual value to paid-in capital (RVPI) Total value to paid-in capital (TVPI) Paid-in capital to committed capital Total invested in portfolio companies Total additional committed to portfolio companies Total additional planned for follow on investments Total allocated to portfolio companies Source: EVCA guidelines, 2006 (reprint 2009)

0.33 x 0.98 x 1.32 x 0.60 x

0.34 x 0.80 x 1.14 x 0.40 x

580 118 100 798

58% 383 12% 79 10% 80 80% 542

38%

8% 8%

54%

page 66 | A thorough understanding of PE