Private Equity Fund Administration – Not a “Conveyor Belt” Process

1. Private Equity Fund Administration – Not a “Conveyor Belt” Process David Bailey MSI Augentius Fund Administration 1st November 2006

2. Introduction Revision (and test!!) from previous session Private Equity vs. The Rest Private Equity Fund Processes Questions

3. Settlement and Global Custody 5 years in Luxembourg as a fund administrator – Long Only Funds/Hedge Funds/Funds of Funds/Emerging Market Funds etc. Funds Product Manager with Management Group – Hedge Funds Ansbacher Fund Services in 2002 – closed down existing Administration business and created specialist Private Equity Fund Admin Business Completed MBO of Ansbacher Fund Services in August 2006 and re-named business Augentius Fund Administration Why me?

4. Specialist Private Equity Administrator – its all we do 1st Jan 2003- no clients, no name, no reputation 1st Nov 2006 - 20+ clients - 75+ funds - 120+ entities - €15bn committed under administration Offices in London and Guernsey; 40 staff increasing to 50. Augentius Fund Administration LLP

5. PE Fund Structure Germanadviser Advisers GermanExecutives Manager French adviser UK Co Guernsey Co UKExecutives FrenchExecutives KG Italian adviser General Partner ItalianExecutives General Partner(Scottish Limited Partnership) Investors Investors General Partner General Partner LP I - ERISA (English LP) LP 2 - Non ERISA (English LP)

6. PE Fund Structure - Simple Manager Investors General Partner Carried Interest Partnership Management Agreement Limited Partnership IHC IHC Portfolio Companies

7. PE vs The Rest

8. Initial Closings Rebalances Drawdowns/Investments Quarterly/Annual Accounts Distributions Private Equity Fund Processes

9. AML/KYC on LPs – either the administrator or the GP Side Letters/Special Arrangements The Closing Process Negotiations Revised LPA – most favoured nations • GP to consider/approve LPs and scale back? • Board Meeting to approve LPs • Initial Drawdown for Management Fees and Expenses and “Welcome” letter

10. New Investors Existing Investors – receive distribution of funds received from new investors to equalise The Rebalance (Equalisation) Process Carried out on subsequent fund closings to “true up” all investors as if they joined the fund on Day 1 Pay interest for “late arrival” Contribute share to investments made To equalise to Day 1 of the Fund Pay arrears of Management Fees Pay arrears of Expenses

11. Drawdowns/Investment 6. Funds remitted to settle transaction Read only access to bank account 4. Instructs administrator to pay away £xm to cover cost of investment 1. Instructs Administrator to generate drawn down for £x m 5. Banking instruction to remit funds to settle transaction 3. LP’s remit a total of £xm to fund bank account to cover drawdown 2. AFA issues drawdown notices to a total of £x m across LP’s, Calculated on a commitment basis

12. Full Fund accounts issued every three months - Balance Sheet - Profit and Loss - Cash Flow Statement In addition, individual Partner Statements - Capital Account - Income Account - Loan Accountto reflect each LPs individual share of partnership assets/liabilities/ income/expenses Other issues – Consolidation with Co-Invest schemes Quarterly/Annual Accounts There are no industry standards – everything thing is personalised to each client – their own look and feel

13. Distributions 7. Carry paid to vehicle 4. Proceeds received from sale of portfolio investment Read only access to bank account 3. Advice of amount due to each LP plus amount of carry 1. Advice of pending sale generating distribution to LP’s to AFA 5. Automated banking instructed issued re payments to be made to LP’s and carry payment 6. Funds remitted to individual LP bank accounts 2. Calculations of proceeds due to each LP and carry & advice of pending distribution

14. David BaileyManaging Partnert +44 20 7089 4733f +44 20 7089 4744 e david@augentius.comAugentius Fund Administration LLPTwo London BridgeLondon SE1 9RAUnited Kingdomwww.augentius.com