Geographic Spread

The majority of PIP’s geographical exposure is focused on the USA and Europe, reflecting the fact that these regions have the most developed private equity markets. PIP’s assets based in Asia and other regions provide access to faster-growing economies.

Stage Composition

PIP’s portfolio is well diversified across all the major stages of private equity. The majority of the Company’s buyout exposure is focused on mid- and small-cap funds, which have tended to utilise lower levels of leverage in their acquisition structures than the very largest funds. In addition, PIP has a significant exposure to venture and growth-focused funds, many of which were acquired through the secondary market.

Maturity

PIP’s portfolio is well diversified by fund vintage (referring to the year the fund made its first drawdown). Only 16% of the portfolio relates to large/mega buyouts from fund vintages 2005 to 2007, indicating that the Company has a relatively low exposure to the highest levels of leverage experienced during the peak of the buyout market.

Because PIP acquires many of its investments in the secondary market, it achieves further “backward diversification” and is able to acquire assets with good visibility of portfolio quality and prospects.

Sector Composition

The data in the chart above is based upon underlying company valuations at 31st December 2010, and accounts for approximately 90% of PIP’s overall portfolio value.

PIP’s portfolio is well diversified by the sectors in which the underlying companies operate. This sectoral diversification helps to minimise the effects of cyclical trends within particular industry segments. Relative to the FTSE All-Share and MSCI World indices, PIP is underweight in many of the segments that have been associated with high levels of volatility since the start of the financial crisis, such as Financials, Energy and Materials. This reflects the tendency of private equity managers to target sectors that are characteristically defensive or naturally high growth.