Evolution of EBRD Private Equity Portfolio

Transcription

1 Evolution of EBRD Private Equity Portfolio Impact of the Financial Crisis: Part 2 January June

2 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 2

3 Context: H 2009 Please refer to the presentation Impact of the Financial Crisis: H 2009 on our website: 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: H On certain slides, full year 2008 is shown for reference. 3

4 Fundraising 4

5 Fundraising Vs Investments % % EUR Millions % 23% 34% 28% 24% 22% 27% 20% 42% 29% 14% 14% 14% 13% 11% 20% 26% 27% H Commitments raised by EBRD funds by Vintage Year EBRD commitment as a % of total fund capital Annual Investments 5

6 New commitments by Fund Type 100% 80% 2.54% 0.00% 1.19% 55.14% 3.05% 49.11% 4.66% 43.39% 24.34% 22.36% 60% 40% 91.80% 7.64% 15.79% 49.32% 63.26% 20% 0% 27.76% 43.67% 36.16% 26.33% 12.44% 14.38% 5.67% 2008 H H H H H Distressed / Special Situation Mezzanine Private Equity Other Venture Capital 6

7 Geographic origin of Investors USA Europe Other EBRD H % 50% 22% 26% % 57% 9% 23% % 46% 11% 30% % 50% 18% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% The proportion on Investment from the USA has declined over time. Note: based on EUR amount of commitments 7

8 Investors Type - Trends 100% 80% 17% 15% 6% 15% 15% 8% Fund of Funds Other 60% 40% 20% 0% 29% 53% 64% 9% 2% 18% 23% 1% 13% 9% 1% 3% June 2011 IFIs & Government Agencies Corporate Investor Banks & Insurance Pension Fund The proportion of IFIs in the Investor Base has increased substantially. 8

9 Portfolio Breakdown 9

10 Number of Investments and Exits No. of Transactions H H H H H Investments Exits Write Offs The number of investments has risen over the period whilst the number of exits and write offs has remained largely stable. 10

11 Investment Cost vs. Exit Proceeds EUR Millions H H H H H Investment Costs Exit Proceeds Exit Proceeds exceeded Investment Costs in only the most recent period. 11

12 Investment Profitability by Exit Type EUR Millions MBO Other Public Market Trade Sale Write Off 2008 H H H H H Profitability increased in H1 2011, predominantly via trade sales. Note: Investment profitability is the difference between exit proceeds and investment cost. Does not include partially realised. 12

13 Average Investment Cost EUR Millions H H H H H No. of Investments Number of investments Av. Investment Cost Max Investment Cost Average Investment Cost in H has fallen sharply because no transactions above 20m took place. By comparison, seven transactions with an Investment Cost above 20m took place in

14 New Investments by Fund Strategy (by Investment Cost) 100% 5.97% 19.57% 7.14% 3.03% 80% 29.85% 35.71% 39.39% 60% 2.99% 39.13% 1.79% 40% 20% 61.19% 41.30% 55.36% 57.58% 0% H Expansion Other Buyout Seed/Early Stage 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 14

15 New Investments by Country (by Investment Cost) Western CIS & Caucasus 2.31% Ro mania 11.65% Central A sia 1.68% Hungary 2.05% Baltics 11.58% Czech Republic & Slovakia 4.12% B ulgaria 13.82% Turkey 0.82% Russian Federation 20.07% Poland 23.49% Others 8.40% Others Albania, Bosnia & Herzegovina, Croatia, Macedonia, Kosovo, Serbia, Slovenia Western CIS & Caucasus Azerbaijan, Georgia, Moldova, Ukraine Central Asia Kazakhstan, Turkmenistan 2009 to H Western CIS & Caucasus 7.59% Central A sia 5.87% Hungary 1.02% Czech Republic & Slovakia 5.47% Romania 6.16% Bulgaria 0.32% Baltics 2.06% Poland 12.83% Turkey 7.00% Others 2.62% Russian Federation 49.07% The majority of Investments made in 2009-H were in Russia. 15

16 Exits by Country (by Investment Cost) Romania 6.41% Baltics Russian Western CIS & Caucasus 2.71% 6.33% Federation 19.07% Central A sia 1.74% Hungary 7.12% Western CIS & Caucasus 4.35% Ro mania 1.14% Baltics 1.56% 2009 to H Central Asia 1.51% Hungary 15.11% Czech Republic & Slovakia 3.76% Bulgaria 4.44% Poland 36.63% Others 4.04% Others Albania, Bosnia & Herzegovina, Croatia, Macedonia, Kosovo, Serbia, Slovenia Western CIS & Caucasus Azerbaijan, Georgia, Moldova, Ukraine Central Asia Kazakhstan, Turkmenistan Czech Republic & Slo vakia 10.74% Bulgaria 3.22% Poland 18.39% Others 2.84% The majority of Exits made in 2009-H were in Russia. Russian Federatio n 48.90% 16

17 New investments by Sector (by Investment Cost) Wholesale & Retail 8.24% Agriculture & Forestry 1.31% Construction 10.90% Consumer 2.88% Manufacturing 2.84% 2009 to H Wholesale & Retail 3.87% Agriculture & Forestry 5.60% Construction 2.90% Consumer 4.76% TIM 21.07% Manufacturing 3.62% TIM 31.60% Services 23.18% Primary & Energy 4.19% Pharma & Medical 14.86% Services 42.12% Pharma & Medical 6.78% Primary & Energy 9.28% The majority of Investments made in 2009-H were in the Services sector. 17

18 Exits by Sector (by Investment Cost) Wholesale & Retail 19.91% Agriculture & Forestry 0.44% Co nstructio n 3.37% Co nsumer 14.02% M anufacturing 5.58% 2009 to H Wholesale & Retail 24.94% Agriculture & Forestry 0.64% Co nstructio n 3.04% Co nsumer 9.78% M anufacturing 7.81% Pharma & M edical 0.30% Pharma & M edical 6.63% Primary & Energy 6.07% TIM 29.25% Services 18.47% Primary & Energy 2.34% TIM 16.99% Services 30.43% The majority of Exits made in 2009-H were in Wholesale & Retail and Services. 18

19 Returns Data 19

20 Gross Snapshot: All Funds 16,000 To June 2011 EUR Millions 14,000 12,000 10,000 8,000 6,000 4,000 Fully Realised (Including WO) Partially Realised Unrealised All 1.82x 18.8% FR 2.10x 20.0% 3, PR 3.96x 30.4% 6,798 2,916 2,000 4,001 UR 1.19x 5.9% 4,760 0 Note: EBRD tracked portfolio only Investment Cost EUR 7,970m Investment Value EUR 14,473m 20

21 Gross Snapshot CSE and Russia/CIS 9,000 CSE: To June ,000 Russia/CIS: To June ,000 7,000 6,000 Fully Realised (Including WO) Partially Realised Unrealised All 1.62x 15.7% 4,389 6,000 5,000 Fully Realised (Including WO) Partially Realised Unrealised All 2.15x 23.8% 2,409 EUR Millions 5,000 4,000 3,000 2,000 2, FR 1.96x 18.0% PR 2.71x 21.7% 1,047 EUR Millions 4,000 3,000 2, FR 2.43x 24.1% PR 5.36x 41.8% 1,869 1,000 UR 1.13x 4.1% 2,418 2,743 1,000 1,583 UR 1.27x 8.96% 2, Investment Cost EUR 5,045m Investment Value EUR 8,179m Investment Cost EUR 2,925m Investment Value EUR 6,294m 21

22 Summary of Returns: H H 2011 IRR TVPI IRR TVPI IRR TVPI IRR TVPI Fully Realised 22.1% 2.59x 20.5% 2.23x 20.1% 2.14x 20.0% 2.10x Partially Realised 31.7% 2.8x 23.3% 2.60x 26.3% 3.06x 30.4% 3.96x Unrealised -1.3% 0.98x 0.6% 1.01x 6.1% 1.24x 6.0% 1.19x Overall 20.0% 1.73x 17.3% 1.59x 17.0% 1.71x 18.8% 1.81x 22

23 Evolution of Returns Carrying Value of Portfolio Number of active funds Gross IRR EUR Millions 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, % 304 Investees 80 Funds 17.3% 331 Investees 83 Funds 17.99% 327 Investees 17.0% 348 Investees 88 Funds 88 Funds 18.8% 357 Investees 87 Funds Jun Jun-11 Note: Number of Investees reflect unrealised investments including partially realised; EBRD tracked portfolio only. 23

24 General Information 24

25 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. 25

26 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) 26

27 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% of fund 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. 27

28 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

29 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. 29