Download - LBPE Investor Presentation 13-Mar-2009
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Lehman Brothers Private Equity Partners
LBPE Investor Presentation
13 March 2009
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Table of Contents
I. Investment Manager Update
II. Financial Performance Update
III. Market Performance
IV. Financial Position & Corporate Developments
V. Value Proposition
_____________________________________________________________
Appendices
A. Additional Portfolio Information
B. Credit Facility Covenant Tests
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Investment Manager Update
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LBPE Investment Manager Update
A new, independent investment management company, Neuberger Berman Group, LLC, will be created comprising
businesses that manage approximately $150 billion of assets
LBPEs Investment Manager, NB Alternatives (formerly called the Private Fund Investments Group), is a part of this
transaction, and the investment team is intact
The Board of Directors expects this transaction to significantly benefit LBPE by providing the Investment Manager with
a strong platform from which to continue managing the Companys high quality private equity portfolio
LBPE will continue to be managed by the same experienced management team
LBPEs Investment Manager remains committed to the goal of creating long term value for our shareholders
Management will control Neuberger Berman with 51% ownership of common equity and majority control of the board
of directors
The management buyout of Neuberger Berman and the fixed income and alternativeasset management businesses of Lehman Brothers Investment Management Division isscheduled to close on 30 April 2009
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Private Equity Fund of Funds
Co-investments
Secondaries
Hedge Funds Fund of Funds
Alternative Investment Solutions
Capital Analytics
NB Alternatives
Overview of Neuberger Berman
Neuberger Berman
Equity
U.S. Equity
International/Global Equity
Quantitative
Fixed Income
Cash & Short Duration
Tax-exempt
Investment Grade
Non-Investment Grade
Specialty
Traditional Non-TraditionalHedge Funds
Equity
Fixed Income
Quantitative
Commodities
$150 billion in total assets under management
Debt-free capital structure
Approximately 1,600 employees globally (U.S., Europe and Asia)
Majority owned by senior management
Research-driven approach to portfolio management combined with industry leading, sophisticated risk management
Independent, global investment management firm
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Approximately $11 billion of commitments managed
Approximately 185 professionals
Over 20 years as private equity investor
Global presence with offices in U.S., Europe and Asia
Serving over 150 institutional investors
NB Alternatives Private Equity
NB Alternatives Private Equity
Premier private equity funds of funds
Competitive Advantages
Team
Track Record
Tactical Asset Allocation
Portfolio Construction
Access, Diligence and Selection
Secondaries and Co-investments
Reporting and Investor Services
Flagship and Custom Funds
Fund of Funds Secondary Investments Co-investments
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NB Alternatives Private Equity Team
Led by Fund of Funds Investment Committee with
over 200 years of collective private equity
experience
Experienced team of senior professionals with
diverse backgrounds
Investment management
Direct private equity investing Corporate finance
Venture-backed companies
Legal, tax and structuring
Investment Team~ 50 Professionals
Investor Services~ 135 Professionals
CPAs, accountants, analysts, computer programmers
and other professionals Extensive proprietary private equity systems and
database
Sophisticated investor servicing capabilities
Fund accounting and reporting
Consolidated performance analysis
Risk management services
Transaction management
Fund of Funds Secondary Investments Co-investments
Focused on three disciplines
Large, diverse and experienced team
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Financial Performance Update
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LBPE Financial Performance Update
Cash and available credit facility exceed unfunded private equity commitments by $52 million
Private equity investment level increased to 107% at 28 February 2009
Funded capital calls and co-investments of approximately $187 million in 2008 and $7 million in
YTD 2009
Received distributions of approximately $46 million in 2008 and $3 million in YTD 2009
$137 million outstanding under the 7-year $250 million credit facility
Portfolio Highlights
___________________________Note: As of 28 February 2009. Past performance is not indicative of future results.
($ in millions, except per share values) 28 February 2009
(Unaudited Monthly)
31 December 2008
(Current Estimate)
31 December 2007
(Audited)
Fund Investments $357.3 $359.0 $326.4
Direct Co-investments $88.0 $89.8 $94.2
Total Private Equity Investments $445.4 $448.7 $420.6Private Equity Investment Level 107% 104% 75%
Cash and Cash Equivalents $114.1 $139.2 $145.3
Credit Facility ($137.0) ($151.9) -
Net Other Assets (Liabilities), including Minority Interest ($5.0) ($6.1) ($3.5)
Net Asset Value $417.5 $429.9 $562.5
Net Asset Value per Share $8.13 $8.19 $10.37
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$10.4
$4.1
$10.2$8.3
$1.7$2.7
$1.1 $1.8
$2.7
$5.1
$18.8
$14.8
$5.9 $4.3
$1.0$1.8
$0.9
$1.3
$0.3
$1.5
$0.2 $0.7
$1.6$0.2
$0
$5
$10
$15
$20
$25
$30
Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09
($ in millions)
Buyout Special Situations Growth / Venture
Capital Deployment Since 30 June 2008
Capital Deployment Since 30 June 2008
Over half of the capital invested since the middle of 2008 was directed to specialsituations / distressed funds
Total
Drawdowns
Buyout $38.5
Special Situations $52.6
Growth / Venture $6.5
Total $97.6
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Fund Investments
through 31-Dec-2008
57%
Private Co-
investments through
31-Dec-2008
20%
Fund and Co-
investments through
30-Sept-2008
3%
Credit Related Funds
and Public Securities
as of 28-Feb-200920%
Since the end of 2008, LBPEs Investment Manager has actively solicited valuationupdates from underlying sponsors in order to provide the latest estimates of fair value
LBPEs Valuation Process
___________________________Note: As of 28 February 2009.
28-Feb-2009 Preliminary Valuations by Date of Information
When issued, LBPEs audited financial statements for 2008 will include the additional valuation information received
subsequent to the end of the year
The annual report and audited financial statements for the year ended 31 December 2008 will be issued in April 2009
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LBPE Performance
LBPEs net asset value per share has decreased by 22% in the fourteen months since theend of 2007
___________________________Note: As of 28 February 2009. Past performance is not indicative of future results.
$8.13$0.01$0.10
($1.43)
($1.06)($0.29)
$0.27
$0.16$10.37
$7.00
$7.50
$8.00
$8.50
$9.00
$9.50
$10.00
$10.50
$11.00
$11.50
$12.00
Net Asse tValue Per
Share 31
December
2007
PrivateEquity Net
Realized
Gains
(Losses)
NetUnrealized
Change in
Privately
Held PE
Investments
NetUnrealized
Change in
Credit
Related &
Public PE
Investments
Interest andDividends,
including
Mezzanine
ForeignExchange
Adjustments
OperatingExpenses &
Other
AccretiveShare
Repurchases
Net Asse tValue Per
Share 28
February
2009
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LBPE Portfolio Performance by Asset Class
___________________________
Note: As of 28 February 2009. Past performance is not indicative of future results. TVPI represents the total value to paid-in multiple. Lehman Crossroads Fund XVII is a fund of funds portfolio diversified acrossall four asset classes.
1.09x 1.09x
1.01x 1.03x
1.23x
0.74x
1.03x
0.69x
1.14x
0.94x
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
Large-cap
Buyout
Mid-cap
Buyout
Special
Situations
Growth /
Venture
Fund XVII
TVPI
31-Dec-07 Audited 28-Feb-09 Monthly
Performance by Asset Class Large-cap buyout:
Lower public market comparables, higher degrees of
leverage and weakening operating performance led
to reduced valuations at the end of 2008
Mid-cap buyout:
Valuations declined across much of the portfolio but
to a lesser degree than large-cap buyout
Lower valuations were offset by unrealized gains in
the value of certain mid-cap buyout co-investments
Special situations:
Unrealized losses principally related to mark-to-
market adjustments on debt securities purchased by
trading and restructuring funds
Growth equity / venture capital:
Positive returns were driven by strong operating
performance at two of the larger companies in the
portfolio
From 31 December 2007 through 28 February 2009, the total value to paid-in multiple ofLBPEs portfolio decreased from 1.09x to 0.83x in aggregate
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LBPE Special Situations Portfolio Performance
___________________________Note: As of 28 February 2009. Past performance is not indicative of future results. TVPI represents the total value to paid-in multiple.
1.00x1.05x
0.92x
1.00x
0.60x
0.85x
0.77x0.81x
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
Trading Restructuring Operational
Turnaround
Other (Fund
XVIII &
Mezzanine)
TVPI
31-Dec-07 Audited 28-Feb-2009 Monthly
Special Situations Performance by Strategy The special situations portfolio is in the early stages of
the J-curve with a majority of the capital deployed in
2008
It is not unusual for distressed portfolios to have initial
negative returns as managers build their investment
positions
If managers are making appropriate credit selections,
we would expect the distressed portfolios to appreciate
rapidly when markets begin to stabilize
By investing primarily in debt securities, the distressed
portfolios should provide downside protection
LBPEs special situations trading strategy portfolio was
negatively affected by the performance of the sole fund
utilizing material leverage at the fund level
From 31 December 2007 through 28 February 2009, the total value to paid-in multiple ofLBPEs special situations portfolio decreased from 1.01x to 0.69x
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The decline in valuations over the past fourteen months was spread across multiplevintages within the investment portfolio
LBPE Portfolio Performance by Vintage Year
___________________________
Note: As of 28 February 2009. Past performance is not indicative of future results. Lehman Crossroads Fund XVII is a fund of funds portfolio diversified principally across 2004, 2005 and 2006 vintages. LehmanCrossroads Fund XVIII is a fund of funds portfolio diversified principally across 2006, 2007 and 2008 vintages.
0.80x
1.49x
1.12x
1.34x 1.37x
1.02x 1.05x 1.04x 1.00x
1.23x
0.99x
0.59x
1.43x
0.66x
0.82x
1.14x
0.81x
0.86x
0.75x0.82x
0.94x
0.85x
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
1.6x
1.8x
2000 &
Earlier
2001 2002 2003 2004 2005 2006 2007 2008 Fund XVII Fund
XVIII
TVPI
31-Dec-07 Audited 28-Feb-09 Preliminary
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LBPE Co-investment Performance
___________________________
Note: As of 28 February 2009. Past performance is not indicative of future results. For co-investments that were transferred to LBPE in the IPO process, performance is calculated from the date of transfer basedon LBPEs purchase price.
From 31 December 2007 through 28 February 2009, the multiple on LBPEs co-investment portfolio decreased from 1.08x to 0.98x. To date, our mid-cap buyout co-investments (67% of the co-investment portfolio value) have performed relatively wellwith a 1.25x multiple
Multiple Range # Co-investments
28-Feb-2009
Fair Value ($mm)
Total Value to
Paid-in Capital % of Fair Value
< 0.5x 3 $3.7 0.24x 4.2%
0.5x - 1.0x 8 31.5 0.69x 35.8%
Held at Cost 2 1.0 1.00x 1.1%
1.0x - 2.0x 5 20.6 1.21x 23.3%
2.0x + 2 31.3 2.24x 35.6%
Total Co-investments 20 $88.0 0.98x 100.0%
Asset Class # Co-investments
28-Feb-2009
Fair Value ($mm)
Total Value to
Paid-in Capital % of Fair Value
Large-cap Buyout 5 $18.4 0.52x 20.8%Mid-cap Buyout 13 60.4 1.25x 68.6%
Other Co-investments 2 9.3 0.89x 10.6%
Total Co-investments 20 $88.0 0.98x 100.0%
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Market Performance
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LBPE Share Price and NAV per Share
LBPEs NAV per share was $8.13 at 28 February 2009
LTM Share Price Performance and Net Asset Value Per Share
___________________________Source: NYSE Euronext. Past performance is not indicative of future results.
$1.00
$2.00
$3.00$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
Price
0
200
400
Volume (000's)
Daily Trading Volume Net Asset Value per Share Price per Share
$8.13
$1.69(79.2%
Discount)
12-Mar-08 30-June-08 31-Dec-0830-Sept-08 12-Mar-09
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Private Equity Discount to NAV per Share
We believe that LBPE shares are significantly undervalued. After subtracting thebalance of our net cash, public equity securities and credit related fund investments atfair value, our shares are currently trading at an implied discount of 91% to the fair valueof our other privately-held investments
___________________________Note: Net cash balance equals cash and cash equivalents minus total liabilities.
Investors have the opportunity to benefit from both NAV appreciation and
reduction of the NAV discount
Net Asset Value per Share $8.13
Minus: Net Cash, Public Equity Securities and
Credit Related Fund Investments Per Share ($1.08)
Private Investments per Share $7.05
Closing Share Price (12-March-09) $1.69
Minus: Net Cash, Public Equity Securities and
Credit Related Fund Investments Per Share ($1.08)
Market Value of Private Investments per Share $0.61
Private Investments Premium (Discount) to Private Equity NAV (91.3%)
Summary of Net Asset Value Per Share 28 February 2009
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Financial Position & Corporate Developments
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LBPE Financial Position
As of 28 February 2009, LBPEs private equity exposure and capital position consisted of the following:
Total private equity exposure of $621.0 million, including unfunded private equity commitments of $175.6 million
Total capital resources of $227.5 million, including cash and cash equivalents plus the undrawn credit facility
Excess capital resources over unfunded commitments of $51.8 million
Over-commitment level of 49%
LBPE has over 100% of unfunded commitments backstopped by cash and the undrawncredit facility
___________________________Note: As of 28 February 2009.
($ in millions) 28 February 2009
Net Asset Value $417.5
Total Private Equity Investments $445.4
Private Equity Investment Level 107%
Unfunded Private Equity Commitments $175.6
Total Private Equity Exposure $621.0
Over-commitment Level 49%
Cash and Cash Equivalents $114.1
Undrawn Credit Facility $113.3
Total Capital Resources $227.5
Excess Capital Resources Over Unfunded Commitments $51.8
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LBPE Credit Facility
LBPE continues to have access to its favorable credit facility
LBPE has a revolving credit facility with The Bank of Scotland for up to $250 million with a term expiring in August
2014
Borrowings under the credit facility bear interest at LIBOR plus 1.35% per annum
The key financial covenant is a maximum debt to value ratio of 50%
As of 28 February 2009, LBPE has $137 million of debt outstanding under the credit facility
During February 2009, LBPE paid down $15 million of principal on the credit facility
LBPE has $114 million of cash and cash equivalents as of 28 February 2009
Approximately $89 million is held in a JPMorgan money market fund that participates in the U.S. Treasury's
Temporary Guarantee Program for Money Market Funds
Approximately $25 million is held in U.S. Treasury bills
Less than $0.4 million is held in brokerage accounts
___________________________Note: As of 28 February 2009.
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LBPE Name Change NB Private Equity Partners Limited
NB Private Equity Partners Limited will reflect the name of our Investment Manager, NB Alternatives Advisers LLC
NBPE has been selected as the new ticker symbol for the Company
Our shares will continue to trade under the ticker LBPE until the ticker symbol change becomes effective
We will issue a press release notifying the public when the name and ticker symbol changes are finalized and when
our shares will begin trading under NBPE
The new Web site address will be www.nbprivateequitypartners.com
The Companys name and ticker symbol changes are expected to be completed in approximately two weeks
We believe the name change will symbolize the break from Lehman Brothers and alleviate confusion regarding any
connection to Lehman Brothers
We are pleased to announce that the Board of Directors approved the selection of NBPrivate Equity Partners Limited as the new name of the Company
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New Web Site for NB Private Equity Partners
We expect to launch a new Web site at www.nbprivateequitypartners.com
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New Lock-up Agreement
A Lehman Brothers affiliate currently owns approximately 14.5 million shares of LBPE which were purchased in the
initial public offering in July 2007 and are subject to a lock-up agreement due to expire on 18 July 2010
Under the terms of the new agreement, these shares will continue to be locked-up until 18 July 2010
After the lock-up period expires, the Investment Manager agreed, for a period of 18 months, to use all reasonable
efforts to assist the Lehman Brothers in selling its shares in up to three marketed secondary transactions
LBPE believes that this agreement will assist in the orderly disposition of the shares held by the Lehman Brothers estate
On 13 March 2009, LBPE announced a new lock-up agreement with the Lehman Brothersestate
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LBPE Liquidity Enhancement Program
Since the inception of the program, LBPE has repurchased nearly 2.9 million shares, or 5.3% of the total issued Class
A ordinary shares
During the month of February, LBPE repurchased 458,312 shares at a weighted average repurchase price of $2.34
per share
Share repurchases through 28 February 2009 have been accretive to NAV per share by approximately $0.27
In January 2009, LBPE announced an amendment to the liquidity enhancement agreement that increased the
maximum number of shares which may be repurchased to 7.5% of the total Class A ordinary shares in issue
The amended agreement will be in force until 15 April 2009 subject to extension at the election of LBPE
LBPE initiated a liquidity enhancement program in July 2008
___________________________
Note: As of 28 February 2009.
Liquidity Enhancement Program Activity
Month # of Shares Repurchased
Weighted Average Repurchase
Price per Share
July 2008 56,349 $7.93
August 2008 164,617 $7.82
September 2008 174,458 $6.74
October 2008 216,493 $4.72
November 2008 218,956 $2.41
December 2008 881,264 $1.51
January 2009 723,829 $2.60
February 2009 458,312 $2.34
Total 2,894,278 $3.02
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Recent Corporate Actions
Maintained a conservative capital structure with $52 million of excess capital resources as of February
Initiated re-branding of the Company to NB Private Equity Partners Limited NBPE
Reached a new lock-up agreement with the Lehman Brothers estate
Extended the liquidity enhancement agreement to improve trading liquidity in the stock and make
accretive share repurchases at depressed prices
Delivered high quality investor reporting
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Value Proposition
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LBPE Value Proposition
Experienced Investment Manager with a strong long-term track record
High quality private equity portfolio
Top-tier managers with proven success
Robust allocation to special situations / distressed
High quality co-investment program with proprietary access
High quality and transparent reporting
Conservative capital structure
Cash and the available credit facility exceed unfunded private equity commitments by $52 million
$114 million of cash and cash equivalents and $113 million undrawn on our credit facility
We continue to believe that LBPE offers a compelling investment opportunity
___________________________
Note: As of 28 February 2009.
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Additional Portfolio Information
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LBPE Vintage Year Diversification
31% of LBPEs vintage year 2007 portfolio, and 90% of the 2008 portfolio, is dedicated tospecial situations / distressed investments
___________________________
Note: As of 28 February 2009. Certain figures may not total due to rounding.
($ in millions) Vintage Year
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Europe
20%
Asia / Rest of
World
4%
North America
76%
LBPE Portfolio Diversification
Geography
Private Equity Asset Class
Industry
Diversification based on the fair value of private equity investments at 28 Feb. 2009:
1
Vintage Year
Buyout Funds50%
Buyout Co-
invest 19%
Secondary
Purchas es 2% Growth /
Venture 5%
Special Sit Co-
invest 2%
Special Sit
Funds 22%
2007
33%2008
11%
2000 &
Earlier
1%2009
0%
2004
2%2003
2%
2001
4%
2005
13%
20022%
2006
32%
Energy /
Utilities
23% Industrials
10%
Comm. /
Media
5%
Consumer /
Retail8%
Financial
Services
10%
Technology /
IT
8%
Healthcare
8%
Business
Services
6%
Transport.
2%
Diversified /Undisclosed /
Other
20%
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Europe
24%
Asia / Rest of
World
4%
North America
72%
LBPE Portfolio Diversification
Geography
Private Equity Asset Class
Industry
Diversification based on total private equity exposure at 28 February 2009:1
Vintage Year
Consumer /Retail
9%
Energy /
Utilities
21%
Business
Services
6%
Financial
Services
11%
Industrials
12%
Technology /
IT
8%Healthcare
8%Comm. /
Media
7%
Transport.
3%
Diversified /
Undisclosed /
Other15%
Buyout Funds
53%
Special S itFunds
21%
Special Sit Co-
invest
1%Growth /
Venture
8%
Secondary
Purchases
2%
Buyout Co-
invest
15%
2007
35%
2006
31%
2001
3%
2003
2% 2002
2%
2009
1%
2004
2%
2005
12%
2000 &
Earlier
1%
2008
11%
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Private Equity Investment Portfolio
The following is a list of our private equity investments as of 28 February 2009
Fund Investments Asset Class Fund Investments Asset Class
AIG Highstar Capital II Buyout Sankaty Credit Opportunities III Special Situations
American Capital Equity II Buyout Summit Partners Europe Private Equity Fund Growth Equity
Apollo Investment Fund V Buyout Sun Capital Partners V Special Situations
Aquiline Financial Services Fund Buyout Terra Firma Capital Partners III Buyout
ArcLight Energy Partners Fund IV Buyout Thomas H. Lee Equity Fund VI Buyout
Avista Capital Partners Buyout Trident IV Buyout
Bertram Growth Capital I Growth Equity Warburg Pincus Private Equity VIII Buyout
Carlyle Europe Partners II Buyout Wayzata Opportunities Fund II Special Situations
Centerbridge Credit Partners Special Situations Welsh, Carson, Anderson & Stowe X Buyout
Clayton, Dubilier & Rice Fund VII Buyout
Clessidra Capital Partners Buyout
Corsair III Financial Services Capital Partners Buyout Direct Co-investments Asset Class
CVI Global Value Fund Special Situations Avaya, Inc. Buyout
Doughty Hanson & Co IV Buyout Dresser Holdings, Inc. Buyout
First Reserve Fund XI Buyout Edgen Murray Corporation Buyout
Investitori Associati III Buyout Energy Future Holdings Corp. (f/k/a TXU Corp.) Buyout
J.C. Flowers II Buyout First Data Corporation Buyout
KKR 2006 Fund Buyout Firth Rixson, plc (Equity) Buyout
KKR Millennium Fund Buyout Firth Rixson, plc (Mezzanine) Special Situations
Lehman Crossroads Fund XVII Diversified Freescale Semiconductor, Inc. Buyout
Lehman Crossroads Fund XVIII Large-cap Buyout Buyout GazTransport & Technigaz S.A.S. Buyout
Lehman Crossroads Fund XVIII Mid-cap Buyout Buyout Group Ark Insurance Holdings Limited Buyout
Lehman Crossroads Fund XVIII Special Situations Special Situations Kyobo Life Insurance Co., Ltd. Buyout
Lehman Crossroads Fund XVIII Venture Capital Venture / Growth Linn Energy, LLC Buyout
Lightyear Fund II Buyout MaRI Holdings Limited Buyout
Madison Dearborn Capital Partners V Buyout Press Ganey Associates, Inc. Buyout
OCM Opportunities Fund VIIb Special Situations Sabre Holdings Corporation Buyout
OCM Principal Opportunities Fund IV Buyout Seventh Generation, Inc. Growth Equity
Platinum Equity Capital Partners II Special Situations TPF Genco Holdings, LLC Buyout
Prospect Harbor Credit Partners Special Situations Unin Radio Buyout
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Largest Underlying Investments
At 28 February 2009, the estimated fair value of our twenty largest portfolio company investmentswas approximately $132 million, representing 30% of total private equity investments. No singlecompany accounted for more than 5.0% of the total private equity portfolio. Listed below are thetwenty largest portfolio company investments in alphabetical order
Approximately $19 million of our private equity portfolio was comprised of companies with publicly-traded securities as of 28 February 2009, representing 4% of total private equity investments
___________________________** Indicates exposure to both equity and debt securities.
Note: As of 28 February 2009, our ten largest portfolio company investments totaled approximately $97 million in fair value, representing 22% of the total private equity portfolio.
Company Name Company Status Company Name Company Status
Affinion Group Holdings Inc Privately-Held Linn Energy, LLC Publicly-Traded
Avaya, Inc. Privately-Held Nielsen Company Privately-Held
California Highwind Power Privately-Held Nycomed Holdings A/S Privately-Held
Dresser Holdings, Inc. Privately-Held Power Holdings Inc. Privately-Held
Edgen Murray Corporation Privately-Held Sabre Holdings Corporation Privately-Held
Energy Future Holdings (f/k/a TXU Corp.) ** Privately-Held ServiceMaster Company Privately-Held
First Data Corporation ** Privately-Held Terra-Gen Power, LLC Privately-Held
Firth Rixson, plc ** Privately-Held TPF Genco Holdings, LLC Privately-Held
Group Ark Insurance Holdings Limited Privately-Held U.S. Foodservice Inc Privately-Held
HD Supply Company ** Privately-Held Unity Media Privately-Held
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Credit Facility Covenant Tests
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LBPE Credit Facility Covenants
The key financial covenant for LBPEs credit facility is a maximum debt to value ratio of50.0%
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Note: As of 28 February 2009.
Defined as Restricted Total Exposure divided by the aggregate of shareholders equity and the
total amount of the credit facility
Restricted Total Exposure is defined as the value of private equity investments (less any
restricted value) plus unfunded private equity commitments
If the total asset ratio is greater than 25.0% and the commitment ratio is greater than 130.0%, then
LBPE is restricted from making new private equity investments
At 28 February 2009, the commitment ratio was 92.4%
Defined as total debt and current liabilities divided by Secured Assets
Secured Assets are defined as the value of secured private equity investments plus cash and
cash equivalents
The secured asset ratio is not to exceed 80.0%
At 28 February 2009, the secured asset ratio was 35.7%
Defined as total debt and current liabilities divided by Restricted NAV
Restricted NAV is defined as the value of private equity investments (less any restricted
value) plus cash and cash equivalents
The total asset ratio is not to exceed 50.0%
At 28 February 2009, the total asset ratio was 26.0%
Secured Asset Ratio
Commitment Ratio
Total Asset Ratio(Debt to Value)
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Endnotes
1. The diversification analysis by asset class and investment type is based on the net asset value of underlying fund investments and co-investments
(including unfunded commitments on a total private equity exposure basis). The diversification analysis by vintage year, geography and industry
is based on the diversification of underlying portfolio company investments at fair value as estimated by the Investment Manager. The vintage
year diversification also includes an allocation of net cash flows and valuation adjustments made since financial statements were last received from
the investment sponsor. Determinations regarding asset class, geography and industry, as well as the allocation of unfunded commitments on a
total private equity exposure basis, also represent the Investment Managers estimates. Accordingly, the actual diversification of our investment
portfolio and the diversification of our investment portfolio on an ongoing basis may vary from the foregoing information.
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