1. Survey of Australian Institutional Attitudes to Private Equity Investment with European (ex UK) Comparisons

2. The Objective  To gain an understanding of the main drivers for institutions to invest/ disinvest in private equity

3. Support and Authorship  Sponsored by Adveq, a Zurich based private equity fund of funds manager  Australian survey by John Evans, UNSW  European survey by Johan Ginyard,Stockholm School of Economics

4. The Data  Australia: large superannuation funds, with 40 respondents, $A120 billion of assets  Europe: pension funds, insurers, 106 respondents, $EUR 300 billion of assets (est)

5. Current Allocations: Australia

6. Current Allocations: Europe

7. Current Investment Medium: Australia

8. Current Investment Medium: Europe

9. Current Country Allocation: Australia

10. Current Country Allocation: Europe

11. Future Allocation  Australia: stable at around 4.5% of FUM  Europe: stable at around 3.4% of FUM

12. Future Investment Medium: Australia

13. Future Investment Medium: Europe

14. Future Country Allocation: Australia

15. Future Country Allocation: Europe

16. Future Allocation by Type of Investment: Australia

17. Future Allocation by Type of Investment: Europe

18. Investment Return Objectives  Australia: absolute return of 16.5%pa, relative return of 4.5%pa  Europe: absolute return of 12%pa, relative return of 4%pa

19. Investment Drivers: Australia

20. Investment Drivers: Europe

21. Managing the Investment  Australia: predominately trustee decision and management (with asset consultant)  Europe: In over two thirds of the Nordic institutions surveyed, the CIO (Chief Investment Officer) or a dedicated Private Equity Officer is responsible for the investment decision.

22. Single Pool & FoF Investment Criteria

23. PE Barriers: Australia

24. PE Barriers: Europe

25. Conclusions: why invest?  Return enhancement for the investor remains the dominant reason for investing  Diversification is also another important driver

26. Conclusions: Barriers to investing  Predominately illiquidity issues  Europeans also see management time involvement as a serious issue  Australians don’t like the fees

27. Conclusions: How to invest  Fund of Funds remains the dominant Australian investment medium, but Europeans prefer single pooled funds  A manager’s track record, ie performance, remains the main selection criteria

28. Conclusions: where to invest  Investors are holding private equity investments at around the 3%-5% levels  Own region remains the dominant target for investment, but with increasing interest in Asia  “Buyout” situations remain the most interesting type of investment

29. Issues  What are the implications for economic development of the investor attitudes?  What should governments do to change the attitude (assuming they want to)?  What results will investors actually get?