Survey Shows CEOs Strongly Optimistic Regarding Prospects for Private Equity in Year Ahead

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According to a survey conducted by Notch Partners among 166 CEOs, all of which whom have experience leading businesses in excess of $100 million in revenues, 88% of respondents say they are optimistic about the future of private equity, and 57% strongly agree that the current economic environment will create numerous attractive buying options in the year ahead. Though generally positive in their outlook, CEOs were split on views concerning the impact of the current slowdown on private equity. 47% of respondents believe that the credit crisis will have a "significant, long-term effect on the structure of the private equity industry," while 48% view the credit crunch as a "temporary phenomenon" with limited long term impact. 43% of CEOs believe recent developments in the credit market are "good for" private equity.

CEOs we've talked to recently believe that the recent downturn will result in attractive acquisition opportunities in certain sectors. Council members understand the dynamics of value-creation in the private equity context, so we expected this research to reflect a degree of optimism.

Despite market challenges, CEOs responding to a national survey see strong prospects for the private equity industry in 2009.

According to the findings of research conducted by Notch Partners, 88% of CEOs say they are optimistic about the future of private equity, and 57% strongly agree that the current economic environment will create numerous attractive buying options in the year ahead.

The research was conducted from November 18th to December 10th among 166 members of The Notch Partners Private Equity CEO Council (NPPECC). The NPPECC is comprised of CEOs with experience leading businesses in excess of $100 million in revenues, with a stated interest in private equity. Notch Partners (http://www.notchpartners.com) is a human capital services firm that facilitates relationships between private equity firms and industry leading CEOs to propel private equity investment returns. The NPPECC was established to enable robust communications between private equity investors and the CEO community, in support of more productive investor/CEO partnerships.

Though generally positive in their outlook, CEOs were split on views concerning the impact of the current slowdown on private equity. 47% of respondents believe that the credit crisis will have a "significant, long-term effect on the structure of the private equity industry," while 48% view the credit crunch as a "temporary phenomenon" with limited long term impact. 43% of CEOs believe recent developments in the credit market are "good for" private equity.

Also, despite the current deal environment, CEOs are overwhelmingly attracted to private equity as a career option, according to the survey, with 92% of respondents agreeing that leading a private-equity backed company is a "very desirable career option," and 78% agreeing that leading a private equity-backed company is a better career option than leading a publicly-owned business.

Notch Partners Private Equity CEO Council member Jenny Ming, former CEO of Old Navy and currently an Operating Partner with Advent International, a leading private equity firm, was "not surprised" at the overall positive view of CEOs regarding recent events. "People are taking a breather right now, but some of us are eager to look at acquisition targets in early 2009," she said.

Ross Pillari, former Chairman & CEO of BP America, Inc. and a Notch Partners Private Equity CEO Council member, noted "the survey shows that private equity savvy CEOs view this downturn as creating buying opportunities. For firms seeking ambitious, forward-looking CEOs, the outlook for attracting high-quality talent is good."

Among other findings of the survey:
--    74% of respondents (strongly agree/agree) said the prospects for job satisfaction for a CEO going into a private equity-backed company today are excellent.
--    80% of respondents (strongly agree/agree) said the prospects for personal financial reward for a CEO going into a private equity-backed company today are excellent.
--    74% of respondents strongly agreed/agreed that private equity ownership is often beneficial for the health of a business in the long term, with only 4% disagreeing with the statement, and 21% of responding "neutral."

"With the significant decrease in auction deal flow and continued competitiveness around available assets, experienced private equity investors agree on the need to emphasize fundamental value-creation over financial engineering and auction tactics. Much of that value-creation will come from the CEOs who enter into strategic relationships with private equity investors," commented Mei-Mei Tuan, co-founder of Notch Partners.

"CEOs we've talked to recently believe that the recent downturn will result in attractive acquisition opportunities in certain sectors. Council members understand the dynamics of value-creation in the private equity context, so we expected this research to reflect a degree of optimism."

About Notch Partners:
Founded in 2002, Notch Partners serves private equity buyout clients by cultivating CEO relationships for Operating Partner programs and other deal-leadership roles. Notch Partners combines an understanding of the dynamics of private equity deals with access to top-tier CEOs from a wide variety of industries. Notch Partners' private equity clients utilize those executive relationships for increased access to proprietary deal flow, experience-based value-creation planning, portfolio company leadership, and executive-level due diligence. Notch Partners works with private equity oriented CEOs to help them understand the factors required for private equity backing and to develop deal concepts for partnering with Notch Partners' private equity clients.

About The Notch Partners Private Equity CEO Council
P&L Experience:
Greater than $5B:        8%
$1-$5B:            30%
$500M-$1B:            24%
$100M-$500M        38%

Private equity experience
Have served as a consultant, advisor or Operating Partner to a PE firm:    55%
Currently pursuing one or more transactions with a PE firm:        51%
Have served on a management team of a private equity-backed company:     51%
Have served on a board of a private equity-backed company:         41%

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