The Second Census of the Brazilian Private Equity and Venture Capital Industry

GVcepe
Private Equity and Venture Capital Research Center at FGV-EAESP Prof. Cludio V. Furtado
December 2010

Thanks to our Sponsors and Partners

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Project Sponsor

Strategic Partners

Institutional Sponsor

Comprehensive Research

80%
of the industry surveyed

180
PE&VC Managing Organizations

144
Surveyed

Industry Overview as of Dec.2009

Investors US$ 36.1 bn Committed Capital

144 PE&VC Firms

General Partners 258 Investment Vehicles 1,593 Professionals and Staff 502 Portfolio Companies Portfolio Companies From 2005 to 2009: 414 new investments 137 total exits 37 IPOs

Evolution of Committed Capital

Committed Capital in US$ bn
40 35 30 25 36

43%p.a.
CAGR 2005-2009

27

29

20 15
10 5 0

15%p.a.
CAGR 2007-2009 4 5 5 5 5 6 8

13

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
* Estimated. Includes PEVC companies missing the 1st Census Brazilian PE / VC published by GVcepe. ** Estimated. Includes PEVC companies that left the market. NOTE: Committed Capital excludes fully divested vehicles.

Expansion of the Asset Class

Committed Capital as % of GDP
3,0%
2,5% 2,0% 1,5% 1,0% 0.6% 0,5% 1.0% 0.8% 0.9% 0.9% 0.9% 1.0% 1.2%

2x
since 2004

2.3%
2.0% 1.8%

0,0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: BACEN, GVcepe

Committed Capital Breakdown

Committed Capital by Investment Vehicles Legal Structure in US$
Corporate ventures; 1% Direct Investment; 15%

Committed Capital by PE/VC Organization Category in US$

Other; 7%

Limited Partnership; 37%

Corporate Public Sector; 3% Ventures; 1% Financial Institutions; 17%

Holding; 4%

Independent Public Organizations; 8%

CVM; 26%

Independent Private Organizations; 71%

Committed Capital Breakdown

2008 (US$ MM)
Traditional Corporate Venture Infrastructure Real Estate Timber Total

Private
23,101 350 1,897 2,606 334 28,288

Gov.
696 696

Total
23,797 350 1,897 2,606 334 28,984

%
82% 1% 7% 9% 1% 100%

Dec. 08 (In US$ MM)

Fundraising (Vehicles in US$) Fundraising (Vehicles in R$) Losses (Vehicles in US$) Losses (Vehicles in R$) Exchange Rate Effect Dec. 09 (In US$ MM)

28,984
3,093 2,979 -1,531 -732 3,318 36,112

2009 (US$ MM)

Traditional Corporate Venture Infrastructure

Private
27,168 350 3,955

Gov.
935 -

Total
28,103 350 3,955

%
78% 1% 11%

Real Estate
Timber Total

2,734
970 35,177

935

2,734
970 36,112

8%
3% 100%

Fundraising 2009
Fundraising 2009 Fund At Cost Alocation Total %

Traditional - CVM - LP - H & DI Infrastructure - CVM - Others

1.763 446 1.317 1.469 1.224 245

1.465 784 682 -

740 540 200 -

3.968 446 2.641 882 1.469 1.224 245

65% 7% 43% 15% 24% 20% 4%

Timber
- CVM

632
632

3
-

635
632

10%
10%

- H & DI

0%

Total
%

3.865
64%

1.468
24%

740
12%

6.072
100%

100%

Investment and Fundraising

Investment x Fundraising (in US$ bn)
8 7.2

7
6 5 4 3 2
0.3% 0.5% 0.5% 0.2% 0.3% 0.2% 0.4% 0.2%

5.3

6.1 4.6
3.3 Fundraising Investing

2.8 2.3

3.1

n/a 2005

n/a 2006 2007 2008 2009

Diversified Fund Investor Base

Multilateral Institutions; Government Insurance 1% Companies; Banks; and Public 1% 4% Institutions;

4%

Pension Funds; 22%

Private Companies; 5% Others; 5% FOFs; 6%

Mother organization of corporate venture; 18%

Investment Funds; 6%

Trusts and Endowments; 10%

Family offices; 9% Members of the PEVC Organization; 9%

SCREENING AND DEAL FLOW

Screening Process
Brazilian PE/VC Industry Deal Flow (2008 and 2009)
Proposals Proposals Received Analyzed
Spontaneous 1,363 804
59%

Due Diligence
23
2.9%

Investments Made
17
74% due diligence 1.2% total

Referrals

1,410

386
22%

24
6.2%

14
58% due diligence 1.0% total

Prospecting

1,122

491
44%

45
9.2%

19
42% due diligence 1.7% total

Total

3,895

1,681
43%

92
5.5%

50
54% due diligence 1.3% total

Deal Flow Sourcing

Prospecting
PE Own PE/VC Organization Incubators/Tech Parks Startup/BPlan Competitions Seed/VC Forum FINEP Business Rounds Competitors of Portfolio Companies Customers/Suppliers of Porfolio Companies Media News Others Total 39.0% 0.1% 1.5% VC 37.0% 5.0% 7.0% 5.8% 2.3% 2.7% 2.7% Own PE/VC Organization Incubators/Tech Parks Startup/BPlan Competitions Seed/VC Forum FINEP Business Rounds Competitors of Portfolio Companies Customers/Suppliers of Porfolio Companies Media News Others Total

Referrals
PE 39.0% 0.1% 1.5% VC 37.0% 5.0% 7.0% 5.8% 2.3% 2.7% 2.7%

5.6% 44.4% 100%

4.7% 33% 100%

5.6% 44.4% 100%

4.7% 33% 100%

INVESTMENTS AND PORTFOLIO COMPANIES

Investments by Stage and Type

Number of Investiments by Stage of Company Development in 2009 (Includes New Investments and Follow-ons) 4% 5% 15% 41% 3% 1% Private Equity Venture Capital Seed/Start-up Greenfield Mezanino PIPE 31%
Sample of 95 investments (100%)

Average Ticket by Stage of Company Development in 2009 (US$ MM)

Distressed

Stage Seed/Start-up Venture Capital Greenfield Mezanino Distressed Private Equity PIPE Total

Average Ticket 0,42 4,41 46,64 50,22 64,37 73,41 91,77 39,39

Sample of 77 investments (81%)

Number of Investments by Sectors of Economic Activity

2005 - 2008 (Includes New Investments and Follow-ons)
Civil Construction/Real State Other Industries IT and Electronics Energy and Oil Communication Agribusiness Retail Food and Beverages Pharmaceutical/Medical/Aesthetics Financial Services Transportation and Logistics Services Education Infrastructure Entertainment/Tourism Extractive Industries Biotechnology Other Services 18% 15% 14% 11% 9% 8% 5% 3% 3% 3% 3% 3% 2% 1% 1% 1% 1%
Sample of 394 investments (100%)

Number of Investments by Sectors of Economic Activity

2009 (Includes New Investments and Follow-ons)
IT and Electronics Energy and Oil Pharmaceutical/Medical/Aesthetics Agribusiness 8% Other Industries 7% Other Services 6% Transportation and Logistics Services 6% Biotechnology 5% Retail 4% Financial Services 4% Entertainment/Tourism 4% Civil Construction/Real State 4% Education 3% Extractive Industries 2% Food and Beverages 2% Infrastructure 1% Communication 1% 15% 15% 11%

Sample of 95 investments (100%)

Value of Investments by Sectors of Economic Activity

2005 - 2008 (Includes New Investments and Follow-ons)
Food and Beverages Civil Construction/Real State Retail Financial Services 13% 12% 11% 4% 4% 4% 3% 3% 3% 2% 24%

Energy and Oil

Communication Education Agribusiness Pharmaceutical/Medical/Aesthetics IT and Electronics Entertainment/Tourism Extractive Industries Infrastructure

2%
1%

Total value of US$ 6,3 Bn. Transportation and Logistics Services, Biotechnology e Other Services represent less than 1% each

Value of Investments by Sectors of Economic Activity

2009 (Includes New Investments and Follow-ons)
Energy and Oil Financial Services Entertainment/Tourism Extractive Industries Transportation and Logistics Services Education Agribusiness 54% 10% 9% 6% 5% 5%

3%
1% 1% 1% 1% 1% 1% 1% 1%
Sample of 95 investments (100%) with a total value of US$ 3,1 Bn. Communication e Biotechnology represent less than 1% each

Infrastructure
Other Services Pharmaceutical/Medical/Aesthetics Food and Beverages Retail Other Industries IT and Electronics Civil Construction/Real State

Portfolio Companies by sector of economic activity 2009

Sector
IT and Electronics Civil Construction Energy and Oil Diverse Industries Communications Retail Agribusiness Transportation and Logistics Services Food and Beverages Infrastructure Financial Services Pharmaceuticals, Medicals and Aesthetics Biotechnology Diverse Services Education Entertainment / Tourism Extractive Industries Total

No. of Companies
103 69 56 55 33 26 25 20 19 19 16 15 14 10 8 7 7 502

%
20,5% 13,7% 11,2% 11,0% 6,6% 5,2% 5,0% 4,0% 3,8% 3,8% 3,2% 3,0% 2,8% 2,0% 1,6% 1,4% 1,4% 100,0%

Accumulated %
20,5% 34,3% 45,4% 56,4% 62,9% 68,1% 73,1% 77,1% 80,9% 84,7% 87,8% 90,8% 93,6% 95,6% 97,2% 98,6% 100,0%

Note: the sample contains 502 companies with information about their sector of economic activity in 2009 .

Portfolio Companies by stage 2009

PE - Growth VC - Early Stage Start-up Seed PE - Later Stage PIPE VC - Later stage Mezanino Greenfield 7,6% 6,9% 6,2% 5,0% 2,1% 1,6% 0,2%
5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0%

36,5%

20,9%
13,1%

Distressed

0,0%

Note: the sample contains 502 companies, of which 436 companies reported information about the stage of the company in 2009 .

Portfolio Companies by geographic distribution

Estado Sudeste SP RJ MG ES Sul PR RS SC Nordeste PE CE BA Outros Centro-Oeste Norte TOTAL

2004 Nmero de Empresas

195 127 39 28 1 83 15 38 30 16 5 3 5 3 9 1 304

Porcentagem Vlida (total) 64,1% 41,8% 12,8% 9,2% 0,3% 27,3% 4,9% 12,5% 9,9% 5,3% 1,6% 1,0% 1,6% 1,0% 3,0% 0,3% 100,0%

2009 Nmero de Empresas

387 274 75 34 4 54 24 18 12 30 9 8 5 8 7 6 484

Porcentagem Vlida (total) 80,0% 56,6% 15,5% 7,0% 0,8% 11,2% 5,0% 3,7% 2,5% 6,2% 1,9% 1,7% 1,0% 1,7% 1,4% 1,2% 100,0%

Note: the sample contains 502 companies, of which 484 companies reported information about the state in which the investment occurred in 2009 .

EXITS

Exits by Sector
Divestments by sector of economic acivity (2005-2008 vs. 2009)
IT and Electronics Civil Construction Financial Services Energy and Oil Diverse Industries Diverse Services Education Food and Beverages Communications Extractive industries, Paper and Cellulose Transportation and Logistics Service Pharmaceuticals, Medical and Aesthetics Retail Biotechnology Infrastructure Entertainment/Tourism Agribusiness
0% 2009 27% 6% 10% 35%

4%
5% 2% 2% 3% 5% 5% 5% 5% 3% 1% 3% 3% 3% 3% 3% 4% 3% 4% 1% 1% 4% 5%

8%
8% 8% 22%

9%

10%

15%

20%

25%

30%

35%

40%

2005 a 2008

Note: the sample contains 180 divestments (113 total and 67 partial) for the period between 2005 2008 and 40 divestments (31 total and 10 partial) for 2009 with information about the sector of ecomic activity at the time of divestment.

Exits by Stage
Divestments between 2005 and 2008 by stage of company development Greenfield Seed 2% 3% Start-up PIPE 5% 19% VC - Early Stage 27% VC - Later Stage 5% PE Growth 17% Divestments between 2005 and 2008 by stage of company development Distressed PIPE 5% Start-up 2% 2% Mezanino VC - Early 5% Stage 27%

Mezanino 3%

PE - Later Stage 23%

PE Growth 18%

PE - Later Stage 37%

Note: the sample contains 180 divestments(113 total and 67 Partial) from 2005 2008 and 41 divestments (31 Total and 10 Partial) in 2009 with information about the stage of the company development.

Exits by Mechanism
Divestments between 2005 and 2008 by exit mechanism Write-off 7% Buyback 18% Trade Sale 29% Divestments in 2009 by Exit Mechanism

IPO 11%

Write-off 10%

IPO 17%

Buyback 20%

Secondary Public Sale 3%

Secondary Private Sale 32%

Secondary Public Sale 10%

Trade Sale 28% Secondary Private Sale 15%

Note: the sample contains 151 divestments(107 total and 44 Partial) from 2005 2008 and 40 divestments (30Total and 10 Partial) in 2009 withinformation about the exit mechanism.

GOVERNANCE

Governance: Mgrs & Investors Life-time and Limitations for new vehicles
Possibility of atracting a new investment vehicle before closing the current vehicle Not Yes, at any time Yes, but only after the investment period of the vehicle Yes, but only after the vehicle has invested a certain percentage of its commited capital Total CVM 7 31 14 18 70 Holding 9 1 1 11 Investimento Direto 1 1 2 Limited Partnership 2 7 6 12 27 Outra 4 2 6 Total geral 9 52 22 33 116

Breakdown of investment vehicles, stratified by legal structure, according to the possibility of attracting a new investment vehicle before closing the current vehicle.

Life-time period of the vechicle

2004 Life-time period (year) 3 and 4 5 and 6 7 and 8 9 and 10 11 to 20 None Total No. of vehicles 9 24 33 7 24 97 % 9,3% 24,7% 34,0% 7,2% 24,7% 100,0% 2009 No. of vehicles 7 16 49 58 11 35 176 % 4,3% 9,7% 28,1% 34,1% 7,0% 21,1% 100,0%

Comparative distribution of the period of total investment vehicles.

Governance: Mgrs & Investors Term Sheet Condition

Restrictions set by contract with investors
Geographical area of investment Stage/Modality of investment Drop-off Associates and Associate-Managers of the PE/VC Organization's (GP) team Investment in assets, projects or companies abroad Investment in other asset classes Resources of this vehicle can't be invested in portfolio companies of another vehicle of this PE/VC Organization (GP) Admission of new Associates and Associate-Managers in the PE/VC Organization's (GP) team Investment (such as LPs) in other vehicles from the PE/VC Organization (GP) Investment in assets trade in the stock market Hedge Investment in companies using debt instruments Investment (such as LPs) in other vehicles of another PE/VC Organization (GP) Investment in operations of "Leveraged Buyout" Total 48 45 47 40 30 25 20 17 16 17 12 11 10 338 14.2% 13.3% 13.9% 11.8% 8.9% 7.4% 5.9% 5.0% 4.7% 5.0% 3.6% 3.3% 3.0% 100.0%

Breakdown of investment vehicles under the restrictions in contracts established between investors and managers. The sum does not represent the sample size, because the question allowed to tick more than one option.

Governance: Mgrs & Investors Term Sheet Condition

Decision models for investments and divestments approval
Blind pool Total control of investors Mixed Investment Committee with simple majority Mixed Investment Committee with qualified majority Mixed Investment Committee with unanimity Pledge fund N/A Other Total
2004 2009

No. of vehicles 27 7 23 17 13 6 4 0

% 28% 7% 24% 18% 13% 6% 4% 0%

No. of vehicles 19 1 32 38 13 8 1 16

% 15% 1% 25% 30% 10% 6% 1% 13%

97 100%

128 100%

Number of investment vehicles according to the adoption model of new investments. There are answers of 62 management firms with 128 vehicles.

Right of coinvestment in portfolio companies Yes, its a fully guaranteed right Yes, but only under certain conditions No. The investors are forbidden to directly coinvest in any of the porfolio companies Other Total

CVM

Holding

Direct Limited Others Investment Partnership

Total

35 24 17 13 89

5 5 2 12

2 2

11 9 6 26

4 1 5

44 36 16 15 111

This table was made based on the response of 111 vehicles.

Governance: Mgrs & Investors Fund Expenses

Costs and Expenses Operational expenses of the PE/VC Organization (GP) (eg, wages, rents, etc.). Costs of constitution, mergers, incorporatioms, divisions or vehicle's liquidation Costs incurred in the valuation and analysis of unrealized investments (eg, Due Diligence, etc.). Contract of third parties to provide legal, tax and accounting services and consulting specialist for valuation and analysis of investment opportunities Hiring of the Vehicle's Administrator Expenses with the audit of the Vehicles's financial statements Fees and commissions related to invesment operations and the vehicle's divestiments Fees, taxes or state contributions that are charged on the assets, rights and obligations of the Investment Vechicle Expenses with printing, mailing, publication of reports, forms, correspondences and communications to Investors (LPs) Specialized consulting to permanent support for the investment Vehicle (eg. Tecnology consultant, a biotechnology consultant etc.). Share of any losses not covered by insurance policies Number or (%) responses 94 30 36 39 43 31 20 35 47 26 20 22.1% 7.1% 8.5% 9.2% 10.1% 7.3% 4.7% 8.2% 11.1% 6.1% 4.7%

Others. Specify.
Total

4
425

0.9%
100.0%

Governance: Mgrs & Investors Managemente Fee Levels

Management Fee
2004
Taxa (porcentagem) No. of vehicles 25 3 2 7 30 21 2 7 97 Administrator is the same of the Manager - 2009 Manager - 2009 Committed Committed No. of Capital No. of % % % Capital (US$ vehicles (US$ vehicles millions) millions) 1 6% 1437 1% 5 14% 1149.43 0 0% 0 0% 3 8% 603.45 1 6% 287.36 14% 8 22% 614.14 5 31% 1212.83 61% 5 14% 400.86 8 50% 470.95 24% 13 36% 750.57 1 6% 6.9 0% 2 6% 57.47 0 0% 0% 0 0% 16 100% 1992,41 100% 36 100% 3575,92

% 26% 3% 2% 7% 31% 22% 2% 7% 100%

Committed Capital (US$ millions)

950 40 250 1380 1400 590 10 960 5580

% 21% 1% 5% 30% 30% 13% 0% 100%

% 32% 17% 17% 11% 21% 2% 0% 100%

Sem taxa 0 < x < 0,5 0,5 <= x < 1 1 <= x < 1,5 1,5 <= x < 2 2 <= x < 3 x >= 3 N/A Total

Interval distribution of management fees paid to the administrators of the investment vehicles. The rate was analyzed separately for administrators who act as manager, a sample of 16 vehicles, and for actors who are just managers, the sample of 36 vehicles.

Governance: Mgrs & Investors Management Fee Basis of Incidence

Basis of Management Fee

2004

2009 Administrator
No. of vehicles 8 1 14 15 1 2 17 0 7 25 90 % 12,3% 1,5% 21,5% 23,1% 1,5% 3,1% 26,2% 0,0% 10,8% 38,5% 100%

2009 - Manager
No. of vehicles 4 1 11 11 0 0 5 0 7 22 61 % 10,3% 2,6% 28,2% 28,2% 0,0% 0,0% 12,8% 0,0% 17,9% 56,4% 100%

No. of During Investment Period After Investment Period % vehicles Committed Capital Committed Capital 26 37,7% Committed Capital Integralized Capital 2 2,9% Committed Capital NAV or Equity Value 8 11,6% Committed Capital Cost of Investments 2 2,9% Integralized Capital Integralized Capital 9 13,0% Cost of Investments Cost of Investments 6 8,7% NAV or Equity Value NAV or Equity Value 12 17,4% Oramento de despesas Oramento de despesas 2 2,9% 2 2,9% Others 28 N/A 97 100% Total

This table illustrates the comparison between the bases of the management fee charged by the Management Organizations in 2009 and 2004.

Governance: Mgrs & Investors Hurdle Rate

2004 Index
Rate (%) No. of vehicles

2009
No. of vehicles

IGPM IPCA INPC US$ Other N/A Total

10 or + 6 < x < 10 6 or 10 or + 6 < x < 10 6 or 6 to 12 10 or + 6 < x < 10 6 or -

3 8 19 4 0 0 4 3 8 4 6 38 97

6 6 13 20 25 11 7 1 4 1 8 3 105

Number of vehicles of investment by Index and Rate. Increase in IPCA as Hurdle Rate index.

Governance: Mgrs & Investors Carried Interest &Timing

2004 2009
Administrator No. of vehicles 0 1 3 60 1 1 66 % 0.0% 1.5% 4.5% 90.9% 1.5% 1.5% 100% No. of vehicles 2 1 2 31 0 1 37 % 5.4% 2.7% 5.4% 83.8% 0.0% 2.7% 100% Manager No. of vehicles 2 1 10 53 0 3 69 % 2.9% 1.4% 14.5% 76.8% 0.0% 4.3% 100%

Performance Fee (%)

0<x<5 5 <= x < 10 10 <= x < 20 20 20 < x < 25 x >= 25 Total

Management Consultant No. of % vehicles 1 20.0% 2 40.0% 2 40.0% 0 0.0% 0 0.0% 0 0.0% 5 100%

Technical Consultant No. of % vehicles 1 33,3% 2 66,7% 0 0,0% 0 0,0% 0 0,0% 0 0,0% 3 100%

Number of investment vehicles by the collect ion of carried interest bye diferent actors. Tradicional model of 20% carried interest is the most used by administrators and managers.

Method of calculating the payment period of the performance fee

After the divestment period After the investment period Deal by Deal In the end of the vehicle ("Total Return") Others Total No. of vehicles 36 7 24 44 14 125 (%) 29% 6% 19% 35% 11% 100%

Distribuio de veculos de investimentos segundo o momento do clculo da taxa de performance. Os quatro apontaram outros no especificaram o momento desse clculo por isso no foi especificado na pesquisa.

Governance: Managers, Prospective and Current Portfolio Companies

Governance level perceived by the Manager is higher for Portfolio Companies than for all received and analyzed proposals. (In % of responses; sample = 82)

Portfolio Cos. after Investment

Portfolio Cos. before investment

Analysed Proposals

Very High High Indifferent Low Very Low

All Proposals

Source: GVcepe

0%

20%

40%

60%

80%

100%

Governance: Managers and Portfolio Companies The Value of Governance!

How much is the manager willing to pay for good governance practices?
Arithmetic Average (%)

Stage

Std. Deviation (%)

Minimum (%)

Maximum (%)

Total Venture Capital Private Equity Venture Capital and Private Equity N/A

13.12 17.33 13.00 11.00 13.17

9.17 11.35 10.28 7.46 6.18

0.00 0.00 0.00 0.00 5.00

32.00 32.00 30.00 20.00 20.00

Note: Eight respondents (16.33%) informed they would pay zero for Corporate Governance. (Sample = 49 Respondents)

Source: GVcepe

Governance: Managers and Portfolio Companies The Value of Governance!

How much does the manager believes he or she has already paid for good governance practices?
Arithmetic Average (%) Std. Deviation (%) Minimum (%) Maximum (%)

Stage

Median

Total PE/VC
Sample = 42 Respondents

16.17

20

9.39

0.00

30.00

Source: GVcepe

Governance: Mrgs & Port. COs

Shareholding Structure Categories
Shareholding Structure Limited Private Corporation Public Corporation 12 40 6 58 % 20,70% 69% 10,30% 100%

Financial Instruments Used in invested companies

Redeemable Common Stocks Common Stocks with Subscription Rights Golden Share Prefered Stocks Other Debt Instruments 5% 3% 2% 0% 31% 30%

Governance: Mrgs & Port. COs

CEOs that remain in the co after investing CEOs and Entrepreneur

31% 48%

52%

69% CEO is the entrepreneur CEO is not the entrepreneur

CEO remained

CEO left

D&O Insurance
Offers D&O Insurance? Beneficiaries
Other Executive Directors Board of Directors CEO 0 5 10 15 Number of Occurences

Yes No

48% 52%

Governance: Mrgs & Port. COs

Members Intern Extern Independent Members per category 95 57 30 (%) of Total 52,2% 31,3% 16,5% Medium Age 46,1 45,4 47,4

Extern
Background Professional Outside Director Professional Independent Conseil Portfolio Company's Former Director Angel Investor Family Office Representative Mezzanine Fund Representative Bondhokders Representative Financial Institution Representative Member of Another PE/VC Organization Member of your PE/VC Organization Co-Investor Representative Representative or Member of the Vehicle Other Total Quantity

Independent % Quantity % 6 11,8% 9 25,7% 5 9,8% 13 37,1% 4 7,8% 0 0,0% 0 0,0% 0 0,0% 0 0,0% 0 0,0% 4 7,8% 5 14,3% 0 0,0% 0 0,0% 0 0,0% 0 0,0% 0 0,0% 1 2,9% 17 33,3% 5 14,3% 7 13,7% 1 2,9% 6 11,8% 0 0,0% 2 3,9% 1 2,9% 51 100,0% 35 100,0%

Governance: Fd Mgrs & Port Cos BoD Composition

Key Person`s Characteristics (%) Key Person CEO/President Chief Financial Officer (or Adm) Commercial Director Industrial Director HR Director Director of Investor Relations IT Director Others Member of the Board? 62,2% 9,5% 15,0% 10,5% 3,0% 3,0% 0,0% 16,7% Shareholder? 75,0% 12,2% 23,1% 10,8% 3,1% 3,1% 3,0% 17,4%

Governance: Fd Mgrs & Port Cos BoD Composition

Most present key person in the listed committees and sub-committees
Committee or SubCommittee Strategic Research & Development Risk Nomination / Remuneration Human Resources Audit IT Legal Finance Marketing Acquisitions/New Businesses Industrial Operation 1 Managing Partner of the PE/VC Organization (GP) CEO / President CEO / President Board of Directors Members CEO / President Financial Director Financial Director External Consultants Financial Director CEO / President Board of Directors Members CEO / President CEO / President Board of Directors Members Board of Directors Members Board of Directors Members Board of Directors Members Board of Directors Members Commercial Director CEO / President Commercial Director Managing Partner of the PE/VC Organization (GP) 2 CEO / President 3 Financial Director

Governance: Fd Mgrs & Port Cos BoD Composition

Remuneration of members of the board Remuneration related to the performance 33,30% 33,30% 37,50%

Members are paid? Members All None Some Intern 17,40% 78,3 4,30% Extern 43,80% 50,00% 6,30% Independent 33,30% 66,70% 0,00%

Metrics used as a basis for evaluation the performance of key-persons

0% 20%40%60%80% Market Share

Performance Evaluation of key persons

EBIT or EBITDA Enterprise Value

Executive Board Directos CEO

Is there performance evaluation? Key persons Formal Informal No Members of the board 3,60% 14,30% 82,10% CEO 55,90% 14,70% 29,40% Executive board of directors 57,10% 14,30% 28,60%

Strategic Plan Annual budget

Governance: Fd Mgrs & Port Cos Managers Veto Power when Minority
Merger Acquisition Indebtedness Payment of bonuses to executives Investment budget

20

40

60

80

100

Positive adjustment in the Stock Options Earn - Out Stock purchase option Loss of control by the Replacement Key

0%

20%

40%

60%

Governance: Fd Mgrs & Port Cos BoD Composition

Others
Resolution of environmental contingencies Full redesign of the business model Supply Chain Resolution of tax, labor and / or social security

2 5 6 6 7 10 11 11 12

Marketing Strategy
Structure of Human Resources Financial Strategy Management Control

Governance: Fd Mgrs & Port Cos BoD Composition

Responsibles
PE/VC Organization (GP) Partner or Manager Responsible for the Deal 4,17% 12,50%

Main Reasons Frequency

Review of Goals Occurrences

Outro
"First 100 days" management task force composed by Invested Company's and PE/VC Organization (GP)`s members

31 % 69 %

29,17%

Need for involving all hierarchical levels

Yes No

Others

Competitive environment change

54,17%

32 invested companies
PE/VC Organization (GP) Partner or Manager not Responsible for the Deal

Need for proposing more challenging targets to the invested company

24 invested companies

21 invested companies

Governance: Fd Mgrs & Port Cos BoD Composition

Average time (hours/month) spent by the Managing Organization in portfolio companies in the monitoring activity 250 200 150 100 50
7 8 12 6 41 144 193
Venture Capital Private Equity

69 4239

80 5863

7 12 6
Total

Private Equity & Venture Capital Real State and Others

0
Participation on Participation in Members of the the Board of technical PE/VC Directors committees of Organization the Board of (GP) allocated to Directors the team of the invested company

Governance: Fd Mgrs & Port Cos BoD Composition

Managing Partner of the PE/VC Organization (GP) with Executive Board HR Director 15,79%

Marketing Director
IT Director Others Industrial Director New Business and Expansion Director Chief Controller Commercial Director

15,79%
18,42% 23,68% 26,32% 28,95% 31,58% 39,47%

Chief Administrative Officer / CFO

CEO / President

86,84%
97,37%

THE ROAD AHEAD

The Road Ahead

Making dreams...

The Road Ahead

... Come True!!!

The Road Ahead

The Road Ahead

PE/VC Portfolio Companies Geographic Distribution Incubators and Tech Parks

Source: Plonski (2009)

The Road Ahead

PE/VC Portfolio Companies Geographic Distribution Incubators and Tech Parks

Source: Plonski (2009) Source: Plonski (2009)

The Road Ahead

PE & VC PORTFOLIO COMPANIES IN 24/26 SECTORS

4/6
Programs in Strategic Areas
Complexo Health Industrial Industrial da Complex Sade Tecnologias de Communications Informao e and IT Comunicao

Nuclear Energy

Defense Industry

Nanotecnologia Nanotechnology

Biotecnologia Biotechnology

Programs to consolidate and expand leadership

Aerospace Complexo Aeronutico Industry
Petrleo, Oil, Natural gas and Gs natural e Petroqumica Petrochemicals

7/7
Pulp and Paper
Chicken and Beef

Bioetanol Bioethanol

Minerao Mining

Steel

Programs to strengthen competitiveness

Automotive Industry Capital goods Textile and Clothing Lumber and Furniture

13/13
Civil Construo Civil Construction Complexo de Services Servios

Higiene, Personal Care Perfumaria and Cosmetics e Cosmticos

Biodiesel Biodiesel

Shipbuilding

Leather and Footwear

Agroindstrias Agribusiness

Plastics

Education and OUTROS OTHERS

Source: GVcepe and ABDI - Productive Development Policy (PDP)

Brazil, the country of the future today!