6th International Venture Capital Forum: Private Equity Trends in Europe Overview

1. 6th International Venture Capital ForumAthens 14th -15th June 2005Private Equity in Europe -Fund Raising and Trends

2. Overview Europe – Venture Capital

3. Summary • Small uptake in fundraising albeit at a historically low level • Increase in investment activity • Distributions are still moderate and below 2003 level however significantly higher then 2002 • 2004 net value appreciation is positive for the first time in 3 years

4. 2004 VC fundraising Amount in EUR (m) Number • Amounts raised are remain at the low level of the mid 90s • However market saw a slight increase of funds coming to market Source: Venture Economics, CD analysis

5. VC Investment activity Number Amount in EUR (m) The investment activity has increased significantly in 2004 when compared to 2003 both in number of deals as well as amounts invested Source: Venture Economics, CD analysis

6. Distributions from VC funds While distributions are still weak they show a substantial increase from the lowest value of 2002 Source: Venture Economics, CD analysis

7. Valuations of Venture investments show first signs of recovery Amount in EUR Mio 2004 shows a positive net value appreciation for the first time after a 3 year decline Source: Venture Economics, CD analysis

8. Outlook • European VC is still struggling: • EU venture capitalists have not succeeded in building world-beating companies • Even during peak times the EU underperformed the US • IPOs are much harder to complete in Europe as a NASDAQ equivalent is missing • Fewer experienced entrepreneurs available • But….

9. The European VC market is maturing • During the recession the structure of the EU VC landscape has fundamentally changed with two-thirds of the players leaving the market and the committed and experienced players remaining • More venture capitalists available that have been through a cycle • The VC industry in EU has increasingly become Pan-European shaping a single market • Management teams are becoming more senior and better networked with founders launching their second or third business • IPO markets have been best since 2000 with 34 IPOs completed in 2004 up from 8 in 2003 • Scarcity of funds make good deals available at attractive prices for those with funds available Overall we believe there is potential in the EU venture capital market to achieve attractive returns going forward

10. Overview Europe – Buy-outs

11. Summary • Fund raising in 2004 has been weaker then 2003 • Investment activity has increased in number however amounts invested are less then in 2003 • 2004 has seen very strong realizations and exceeds 2003 by over 70% • Exits other than trade sales and IPOs are still the strongest source of realizations • Comparison of EU LBO performance with US performance has been strong historically but is lagging behind in recent years • There is no trend that either large cap or small cap is outperforming the other segment

12. 2004 has been a weak fund raising year Number Amount • Driven by few and mainly mid-cap funds in the market rather than by lack of demand • Likely to pick up in 2005 with many large cap funds coming back to market Source: Venture Economics, CD analysis

13. Deal Flow continues to improve with amounts invested still lagging Amount Number • The market sees the trend of increased investment activity in terms of number of deals to continue • However total amount of funds disbursed in 2004 is low indicating a large number of smaller deals Source: Venture Economics, CD analysis

14. Distributions from buyouts have been strong in 2004 • Distributions from Buyouts have been highest for the last 10 years Source: Venture Economics, CD analysis

15. Traditional exit routes are still weak 25.2% 7.6% 5.7% 10.2% * Sale to another VC, Repayment of Principal Loans, Sale to Financial Institutions, Sale to Management and Other Means 51.3% • High level of exits through trade sales, refinancing and other give rise to concern • IPO markets continued to recover slowly • Write-offs have stabilized Source: EVCA

16. European LBO returns in a comparison with the US • European returns have been strong throughout the 90s, however have been weaker in recent years • While 2003 and 2004 are too early to tell, 2002 is clearly lagging behind US returns Source: Venture Economics Data Q4, 2004, CD analysis

17. Returns of EU large cap vs. EU small cap Average IRR, cut-off small: < EUR 300Mio • No trend in either segment being able to outperform the other can be seen Source: Venture Economics Data Q4, 2004, CD analysis

18. Outlook into 2005 • While fundraising in 2004 was weak a strong pickup in 2005 is expected with a substantial number of large cap funds in the market • A further increase in investment activity is expected • High influx of capital available for large cap transactions is expected to result in pressure on prices and overleveraging companies • According to a Financial News survey Europe is expecting its first EUR 10bn deal in 2005 • Continuing low interest rates and availability of debt might result in an overheated market • Positive trends of 2004 are expected to continue in 2005