nba559_2008_02_23_lecture_3

nba559_2008_02_23_lecture_3 - Lecture 3: What Just Happened...

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Unformatted text preview: Lecture 3: What Just Happened Jesse Reyes Managing Director Bear Stearns Private Funds Group NBA 559 What just happened? 3 US Private Equity Committed Capital (Excludes Real Estate Funds) 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1 9 7 9 1 9 8 1 1 9 8 3 1 9 8 5 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 1 2 3 2 5 2 7 Vintage Year Annual Committed Capital ($M) VC Buyout 4 US Private Equity Committed Capital (Excludes Real Estate Funds) 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1 9 7 9 1 9 8 1 1 9 8 3 1 9 8 5 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 1 2 3 2 5 2 7 Vintage Year Annual Committed Capital ($M) Buyout VC 5 Asset Class Under Siege? 5.5% 2.3% 2.3% 2.2% 2.6% 7.0% 9.7% 13.4% 20.7% 22.0% 25.2% 26.2% 23.7% 22.9% 30.0% 31.7% 35.7% 37.8% 40.6% 40.0% 39.5% 35.1% 32.5%32.6% 3.5% 3.3% 3.9% 4.1% 2.7% 4.7% 2.7% 32.1% 33.3% 0% 10% 20% 30% 40% 50% 1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07 2Q07 Equity as a Percent of Total Sources Rollover Equity Contributed Equity 5.7x 5.4x 4.7x 4.2x 4.1x 4.0x 4.6x 4.8x 5.3x 5.4x 6.3x 7.0x 0.0x 2.0x 4.0x 6.0x 8.0x 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07 2Q07 FLD/EBITDA SLD/EBITDA Other Sr Debt/EBITDA Sub Debt/EBITDA 10.6x 8.4x 8.1x 7.4x 6.9x 6.7x 6.3x 6.5x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 2000 2001 2002 2003 2004 2005 2006 2Q07 $42.0 $24.0 $41.0 $94.0 $137.0 $200.0 $320.0 $197.3 $0 $50 $100 $150 $200 $250 $300 $350 2000 2001 2002 2003 2004 2005 2006 2Q07 ($ in billions) Average LBO Equity Contributions 1 Average LBO Debt Multiples 2 US LBO Volume Since 2000 Average LBO Purchase Multiples 1 Equity includes common equity and preferred stock as well as holding company debt and seller note proceeds downstreamed to the operating company as common equity; Rollover Equity prior to 1996 is not available; There were too few deals in 1991 to form a meaningful sample. 2 Average Debt Multiples of Large Corporate LBO Loans (Defined as Issuers with EBITDA of more than $50M) EBITDA adjusted for prospective cost savings or synergies Source: Ernst & Young Private Equity/LBO Market Trends & Statistics 2007 Mid Year Review Source: Ernst & Young Private Equity/LBO Market Trends & Statistics 2007 Mid Year Review Source: Standard & Poor’s Leveraged Lending Review 2Q07 Source: Standard & Poor’s Leveraged Lending Review 2Q07 Buyout Environment 6 Asset Class Under Siege? $34.7 $73.3 $117.3 $247.8 $491.8 $399.7 $13.6 $101.1 $192.7 $129.9 $148.0 $132.5 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2Q07 ($ in billions) $42.8 $61.1 $42.5 $52.1 $60.2 $139.0 $155.4 $109.6 $175.9 $98.0 $123.8 $81.4 $13.4 $36.7 $107.0 $67.5 $139.8 $130.3 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 Y T D 2 6 Y T D 2 7 ($ in billions) $0.0 $0.3 $0.7 $4.0 $8.4 $12.8 $13.2$13....
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This note was uploaded on 04/14/2008 for the course NBA 5590 taught by Professor Bendaniel,david during the Spring '08 term at Cornell.

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nba559_2008_02_23_lecture_3 - Lecture 3: What Just Happened...

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