1. 0 The Limited Partners Summit Europe Picking The Right Emerging Managers – At This Event! Panel discussion 18 May 2005

2. 1 Panel Participants Emerging Managers: Jarrett Collins, Managing Director, NeoCarta Ventures, Inc. Robert Wilhelm, Managing Partner, Solid Capital Partners Tom McConnell, General Partner, Vanguard Ventures Panel Chair: Armando D’Amico Managing Partner Acanthus Advisers LLP Panelists: Jens Bisgaard- Frantzen, Managing Partner, ATP Private Equity Partners Ivan Vercoutere, Managing Partner, LGT Capital Partners

3. 2 Panel format The LPs will discuss how they choose their emerging managers and how they work with them The emerging managers will have 3-5 minutes (max!) to introduce themselves to the group The panelists will then have 10 minutes for Q&A

4. 3 Setting the stage

5. 4 Investors are creating emerging manager programmes Several US institutions have sought to set up portfolios of next generation managers: California State Teachers’ Retirement System California State Teachers’ Retirement System Los Angeles County Employees Retirement Los Angeles County Employees Retirement New Mexico Public Employees New Mexico Public Employees New York City Retirement System New York City Retirement System New York State Teachers’ Retirement System New York State Teachers’ Retirement System University of Texas Investment Management Co. University of Texas Investment Management Co. State of Connecticut Retirement System State of Connecticut Retirement System …..and a number of leading European investors have similar programmes …..and a number of leading European investors have similar programmes

6. 5 Emerging managers in Europe Recent trends Source: Acanthus … over € 10 billion

7. 6 Emerging managers – what drives investors’ interest? Pros: Hungry, motivated, entrepreneurial Fresh blood, challenge status quo Differentiated strategy Diversification Establish early relationship with potential future dream teams Better LP alignment Potential for high Alpha Cons: Team risk Mixed track record Doubts over deal flow Internal processes not in place Market position not established Market may be crowded Higher risk, more DD work for LPs!

8. 7 Investors’ strategies vary widely with regard to emerging managers “we don’t do first time funds” “we do first time funds but not first time teams” “we do emerging managers but not in venture” “we are prepared to do Funds II, III, and IV…” “we like spin outs” “we seek proactively new teams to sponsor so as to get a portion of carry and of mgt co” “we look specifically for first time funds”

9. Steady supply of new managers US data Source: Franklin Park LLC, Venture Economics

10. Steady supply of new managers US data Source: Franklin Park LLC, Venture Economics

11. Return variability First Time Funds Non-First Time Funds Source: Venture Economics, Franklin Park LLC Analysis

12. 11 A sample of due diligence issues Potential conflicts of interest Economic arrangements (particularly when a sponsor is involved) Attribution analysis Why does the market/segment need this fund? Consistency of strategy with previous experience Is team fully formed to exploit the opportunity? Any skill sets missing and how will they be addressed? Why is team coming together: exciting opportunity or no other opportunity? More extensive reference checks

13. 12 Sponsored or “cornerstoned” funds A whole new set of issues: Comprehensive due diligence – two teams in one Understand the deal more fully – economics and governance issues Explicit v hidden influence How significant is the value being added?

14. 13 Questions for the panel 1.Define emerging managers 2.Why do you invest in emerging managers? 3.Is the supply of emerging managers increasing? Why? 4.Is there room for new managers? 5.How do you select emerging managers? Is your due diligence different? 6.How do you regard sponsored funds? 7.Do you take action to support their fund raising? 8.Are you more hands-on in your monitoring?

15. 14 Acanthus Advisers Firm profile Independent fund placement and corporate advisory firm focused on private equity, founded in 1998 Fund focus: €100-500m any stage; providing fundraising, investor relations and strategic advice Corporate advisory focus: private transactions; €10-150m EV Armando D’Amico – Managing Partner 20+ years’ experience in private equity, banking and strategy consulting Senior banker at EBRD - €700m fund of funds Special adviser to Euro Private Equity Partners (FOF) Ten years strategy consulting Europe/US (Bain & Co., Alliance, Telesis) M.Sc. Civil Engineering, INSEAD MBA