The DealMarket Digest empowers members of DealMarket by providing up-to-date and high-quality content. Each week our in-house editor sifts through scores of industry and academic sources to find the most noteworthy news items, scoping trends and currents events in the global private equity sector. The links to the sources are provided, as well as an editorialized abstract that discusses the significance of the articles selected. It is a free service that embodies the values of the DealMarket platform: Professional, Accessible, Transparent, Simple, Efficient, Effective, and Global. click here to access our Digest Archive: https://www.dealmarket.com/news?accTriggerId=digest

1. DIGEST 73
SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 73
M&A Deals Increase in Size in EU
1 and NA in October
1 Apax Buys into Canada’s Garda
Early Stage VC Fundraising Upward
1 Trend Continues
• Preqin Data
3 Ups and Downs: VC-Backed Internet
Exits
3 The Art of Valuation in China’s PE
Market
• New Study from Deutsche Börse and CMS
Hasche Sigle
4 Advent Breaks Away From the Pack
in Fundraising
4 Quote of the Week: Nomura Fund Piggy-
backs on PE Trends
November 16, 2012

2. M&A DEALS INCREASE IN SIZE IN EU
AND NA IN OCTOBER
Image source: Zephyr
The value of North American M&A was up significantly in October (see graphic), as it was in Europe
too, reports Zephyr. Deals valued at USD 119.2 billion in North America took place and in Europe, the
total value of transactions was up over the previous two months to 54.2 billion.
APAX BUYS INTO CANADA’S GARDA
This week’s deal of the week looks to be the Apax-backed take-private of Garda for about USD 1.1
billion. The only other large buyouts in the news over the past seven days are the previously covered
Best Buy deal and the USD 1.9 billion Douglas bid by Advent, which has now reached its board seeking
approval, according to Reuters. Both are take-privates.
EARLY STAGE VC FUNDRAISING
UPWARD TREND CONTINUES
Preqin is reporting that fundraising to November this year is improving for VC early stage funds, with
58 funds coming to a final close, raising USD 10 billion. This is a distinct upward shift for VC compared
to last year’s total USD 8.7 billion, and 2010’s aggregate total of USD 7.1 billion.
1
www.DealMarket.com/digest

3. Preqin said that the largest fund to close so far in 2012 is Andreessen Horowitz Fund III at USD 1.5
billion. The largest fund currently in market is the EUR 300 million is Atomico Ventures’ third fund,
managed by a team of entrepreneurs turned investors targeting internet and tech ventures.
Just less than half of the 158 early stage VC funds in the market have had at least one interim close,
representing an aggregated total of USD 2.5 billion. The US remains home to most of the VC funds in
market, with 23% targeting opportunities in Europe, and the rest targeting Asia and Rest of World.
Image source: Correlation Ventures
We take it that the ability of some VCs to close new funds is based on improved returns, but that
information is not easily accessible for journalists. What we do get are clues and pointers to where
such datasets can be found. For example, a dataset released by Correlation Ventures to LifeSciVc
shows that indeed realized returns have been steadily improving over the past several years (see
graphic above). The top decile of VC financings is delivering 4X multiples, while the top 1% is actually
delivering 15X. No further details on what, who, or where the top 1% invest are located, except to say
that it was in the US market. Correlation Ventures is a new VC fund manager in California that primarily
co-invests with established lead VCs, and promises to make decisions within two weeks, according to
its website.
2
www.DealMarket.com/digest

4. UPS AND DOWNS: VC-BACKED
INTERNET EXITS
Up: Four months after its IPO, Kayak the travel website
operator has been acquired by Priceline in a deal. It is good
news for at least some of its VCs as they are able to sell their
shares that could not sold during the IPO.
Down: One of the largest VC-backed IPOs of the year was
Groupon but its performance since IPO has been dismaying.
This week its shares were down 90% since IPO, according to a
number of sources.
Image source: Kayak.com
THE ART OF VALUATION IN CHINA’S PE
MARKET
When it comes to investing in Chinese private companies, standard financial analysis and due diligence
practices cannot automatically be transferred, some adaptation is required, says the latest study by
Deutsche Börse and CMS Hasche Sigle on China’s private equity market. For example, there is often a
lack of data for making comparisons with publicly traded companies and sorting out tax issues remains
troublesome.
The report also said that price/earnings
multiple averages have decreased from
60x, in 2010, to 48x, in 2011, and 30x, by
the end of Q2 2012, but they are “relatively
high” by international standards.
This year the focus for investors shifted and
they are less focused on export-dependent
sectors and much more on tapping China's
growing domestic market in sectors like
consumer goods industry or the healthcare
market. Furthermore, with growth slowing
PE/VC investors have become more
cautious, particularly in valuing target
companies. There is also information about
IPOs and valuation from an auditor’s
perspective.
3 Image source: Deutsche Börse
www.DealMarket.com/digest

5. ADVENT BREAKS AWAY FROM THE PACK
IN FUNDRAISING
Advent International announced closing its latest buyout fund at EUR 8.5 billion with the plan to
continue its established strategy in developed markets of North America and Western Europe and
selectively on other global markets. Advent said it is the largest buyout fund closing since the fall of
Lehman, according data-provider Preqin. Deal Pipeline says it remains to be seen if Advent's new fund
will keep its position as the largest buyout fund since the “Great Recession” for long because Warburg
Pincus’ current fund is targeting USD 12 billion and Apollo just announced it is also raising a big one too.
The article also said that Blackstone raised a larger PE-related fund last month, but it was targeted at
real estate investments.
QUOTE OF THE WEEK:
NOMURA FUND PIGGY-BACKS ON PE TRENDS
“Research indicates that if we know
when buy-out managers invest and
divest in various companies, the value
can be captured by investing in similar
publicly traded securities…”
Image source: Stony Brook University AMS
Who said it: Matthew Peakman, head of funds derivatives trading at Nomura.
In Context: The above quote is from an article in the FT about a new index that Nomura has created
called PERI. Nomura’s press release about the new fund says that PERI is the “first daily investible index
which targets returns similar to those which may be achieved through a global broad-based investment
in private equity buyout funds”. The index is based on research that shows that a substantial portion of
PE returns can be attained through an investment in the “public market equivalents”, implying that PE
managers are as good at deriving returns from market momentum, as exploiting other skills such as
selecting targets and executing operational improvements, explains the FT. Nomura is in talks with
asset managers about launching exchange traded and mutual funds that would track the index.
Where we found it: FT
4
www.DealMarket.com/digest

6. The Dealmarket Digest empowers members of Dealmarket by providing
up-to-date and high-quality content. Each week our in-house editor sifts
through scores of industry and academic sources to find the most
noteworthy news items, scoping trends and currents events in the global
private equity sector. The links to the sources are provided, as well as an
editorialized abstract that discusses the significance of the articles
selected. It is a free service that embodies the values of the Dealmarket
platform delivers: Professional, Accessible, Transparent, Simple, Efficient,
Effective, and Global.
To receive the weekly digest by email register on www.dealmarket.com.
Editor: Valerie Thompson, Zurich
DealMarket
DealMarket launched in 2011 and is growing fast. Just one year after
launch, DealMarket counts more than 35,000 recurring users from 154
countries, and over 3,000 deals and service providers promoted or listed
on the platform.
DealMarket is an online platform enabling private equity buyers, sellers
and advisors to maximize opportunities around the world – a one-stop
shop for Private Equity professionals. Designed by Private Equity
professionals for Private Equity professionals, the platform is easy to use,
cost effective and secure, providing access, choice and control across the
investment cycle.
DealMarket’s offering includes
• DealMarketPLACE, an unfiltered view of the global deal and advice
marketplace, where searching is free and postings are the price of a
cappuccino a day (with no commission).
• DealMarketSTORE offers affordable access to industry-leading third-party
information and services on demand; and
• DealMarketOFFICE is a state-of-the-art deal flow management tool,
helping Private Equity investors to capture, store, manage and share
their deal flow more efficiently.
DealMarket was voted the “Best Global Private Equity Platform for 2012”
by Corporate Newswire.
www.DealMarket.com