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Action Item 3 – Selection of Private Equity Manager, UM

Action Item 3 – Selection of Private Equity Manager, UM. University of Missouri System Board of Curators June 16, 2011 FINANCE COMMITTEE. b. Overview - Private Equity Portfolio. Private Equity investment program began in 2004

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Action Item 3 – Selection of Private Equity Manager, UM

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  1. Action Item 3 – Selection of Private Equity Manager, UM University of Missouri System Board of Curators June 16, 2011 FINANCE COMMITTEE b

  2. Overview - Private Equity Portfolio • Private Equity investment program began in 2004 • Investments have been made incrementally in order to diversify the portfolio by type and year • Market conditions for private equity have improved significantly from 2008-2009 lows • Current allocations are approximately 3.5% in the Retirement Plan and 3.1% in the Endowment Fund, below our target of 5% in each portfolio • Commitments in the Retirement Fund and the Balanced Pool in aggregate amounts of approximately $60 million annually should result in reaching the 5% allocation by 2015 c

  3. J.F. LehmanDefense,Aerospace$10 MM Cerberus 4Distressed LBO$20 MM University of Missouri Private Equity Funds – 2011Retirement Fund and Endowment Fund Size of circle = Commitment Size Warburg Pincus XBroad(Includes International) $30 MM Crosslink VI Venture$30 MM Broad Vestar VI $15 MM Crosslink VVenture$20 MM Vestar V Buyouts(Includes International)$15 MM Newbury Equity Partners $20MM Mid Ocean IIIGrowth Buyouts(Includes International)$10 MM Welsh, Carson XIT and Healthcare$15 MM Industry Focus Thompson Street IIMid-Market Buyouts$5 MM Thompson Street IIIMid-Market Buyouts$15 MM Sheridan Production Partners $15 MM Quadrangle IIMedia$10 MM Vectis Healthcare$10 MM Vectis IIHealthcare$6.3 MM RivervestHealthcare $5 MM J.F. Lehman III $15 MM Welsh, Carson XIIT andHealthcare$15 MM Oakwood V Venture$5MM Narrow Early Late Growth Equity Buyouts Royalty Maturity of Company Prior YearCommitments Venture OPEN – FIN – 3d Current Year Commitments

  4. Recommended Firm – Private Equity Thompson Street Capital Partners (TSCP) • TSCP was founded in 2000 • Based in St. Louis, Missouri • UM is a current investor in TSCP Fund II, a $307 million fund which closed in 2006. • To date three investments have been fully or partially realized, generating cash distributions of over 50% of drawn capital to investors. • The fund has generated an estimated 17.1% IRR since inception (as of 3/31/2011). e

  5. Recommended Firm – Private Equity Thompson Street Capital Partners (TSCP) • $350 million target for TSCP Fund III • TSCP Fund III will continue to invest in lower middle market companies that focus on service, distributing or niche manufacturing • Recommended Commitments to TSCP Fund III • $10 million – Retirement Plan • $5 million – Endowment Fund f

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