EFTA01452586.pdf

28 January 2014 Brokers. Asset Managers & Exchanges Alternative Assot Manager Initiation Figures 20-22 shows the results of this valuation analysis. Figure 20 shows the absolute and relative forward P/Es (on next 12 months forecast EPS) historically over the last 12 months and last two years for the each of the Alts, as well as for the S&P 500 and the median traditional asset manager (15 largest publicly traded asset management stocks). It also shows the current P/E on 2014 ENI Consensus estimates. We then assign target premiums or discounts for each of the Alts vs. their relative P/Es over the last 12 months to derive our target relative P/Es (the last two columns of Figure 20). [Figure 20' DB Target Forward Relative PIE Derivation for the Alts Absolute PEon t1TM al PR vs. UP 500 Current Current Rel PiE Target Target Historical Avg Pia L714 Last 2 Yrs LTA Last 2 Yrs RE on •14 Re! PIE LTA Pre miCtscr ReI PiE AFO 9lx 744 62% 53% 106x 62% 62% 15% 77% wt 94x 884 64% 64% 10 44 66% 64% 25% 89% CG 10 24 NIA 70% WA 11 44 74% 70% 15% 85% KKR 88i 804 60% 58% 97x 64% 60% 20% 80% OAK 10 94 N/A 74% WA 123x 80% 74% 10% 84% Median AN Mgrs 9.4x 8.0x 84% 58% 10.6x 64% 20% 84% Median Asset Mgrs 16.4x 17.31 111% 125% 18.4x 107% 111% 58P 500 14.7x 13.9x 15.34 Median Alts vs. Asst Mgrs 4.9x 4.31 -47% 47% .38% 47% .23% Settee Theme", Au...reef Oettioln Sent Figure 21 converts these target relative P/Es into absolute P/Es and price targets. The valuation analysis in both tables show that we expect the Alts to trade at median P/E of 12-13x on 2015 DE, a year from now - which implies achieving a relative PE of -85% of the S&P 500, or said differently, a 15% discount to the S&P 500 PIE - vs. their current discount of 30% (i.e. the 69% value shown in Figure 20). Compared with the traditional asset managers, this implies improving the Alts' P/E discount to traditional managers to about 23%, given the traditional are currently trading at a 7% premium to the S&P 500 vs. our 26% forecast discount for the Alts. However, this implies a static relative PIE for the traditional asset managers, which may not be the case (though the asset managers had modest relative P/E contraction over the last two years. Figure 217 DB PiE..based Price Target Derivation for the Alts Alts Target Tweet PE 12-Month Forecast CE per unit Relative PE in 12 Mths Fair Value Current Fmk Yoko, Distribution Potential Alt Manager 2013E 2014E 2015E on 2015E on 2015E Estimate Price vs. Current Vivid ROI to PT APO $382 5322 $270 77% 11 54 $3101 $3220 .37% 95% 58% 9)( S140 $233 5291 89% 13 34 53859 $3113 240% 63% 302% CO $211 $284 $3.38 ea% 12 64 542 70 $3604 185% 62% 246% 10(14 $201 $199 $2.09 80% 11 94 $2490 $2456 14% 65% 78% OAK $570 $5 14 $540 84% 126x 567 94 55888 154% 64% 218% Median 84% 12.61 15.4% 6.4% 21.8% SSP500 &Seat $104 $110 $110 5125 RE(current SPX) 1631 150x 143x S8P500 CPS est $36 $42 $47 TOW Yew 2.0% 23% Current In 12 Mths SPX PE Target UP 500 PE 1 790 1.863 149 (On 2015E in 12rrOni) Seem ThortionAniwneatetery Stet Deutsche Bank Securities Inc. Page 21 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SONY-0109707 CONFIDENTIAL SDNY_GM_00255891 EFTA01452586