1. Since the time of the case Fund VI @ $1.5B in 2001
Fund $3.1B in 2006
Berkshire Partners

2. Oh, baby!
Is this a deal we want to bid on?

3. What happened? 8/2001 Completes $450M LBO
Plus deal costs of approximately $20M, equity of $152M
10/2003 IPO of Carter’s $19/share, over $400M cap
Plus $291M in debt outstanding
Proceeds to Berkshire of $94M
2004 Follow-on offerings at $26 and $33
Proceeds to Berkshire total $298M
2005 Follow-on offering at $63.60
Proceeds to Berkshire of $213M
2005 Follow-on offering at $68
Proceeds to Berkshire of $230M for an IRR of 64%, or 5.5X

4. How?
Revenue came in above the management forecast, with growth averaging 21% versus 15%
Margins came in below the management forecast, averaging 13% versus 16%
Importantly, multiples expanded, for these sorts of businesses in particular, from 6-7 up to 9-10 times EBITDA

5. Source: S&P, Leveraged Commentary & Data

6. Source: General Electric Annual Report, Note 6, December 31, 2008

7. Source: Yale Endowment Annual Report, June 30, 2008