EFTA00796858.pdf

FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND OR DISTRIBUTION TO THE GENERAL PUBLIC. Sachs Asset Management Petershill Private Equity Seeding Alternative Investments & Manager Selection (AIMS) Group June 2018 This FundStrategy has not been launched yet. This presentation is delivered solely as reference material with respect to the Petershill Private Equity Seeding, an investment product that Goldman Sachs may offer in the future. The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an otter to buy any securities relating to any of the products referenced herein, notwithstanding that any such securities may be currently being offered to others. Any such offering will be made only in accordance with the terms and conditions set forth in the offering documents pertaining to such Fund. Prior to investing, investors are strongly urged to review carefully all of the offering documents. No person has been authorized to give any information or to make any representation, warranty, statement or assurance not contained in the offering documents. EFTA00796858  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND OR DISTRIBUTION TO THE GENERAL PUBLIC. (40111011M Certain Potential Risks of an Investment in Petershill Private flatlls Equity Seeding (the "Fund") Asset Management Recently Organized Fund; No Operating History - The Fund is a recently formed entity and has no independent operating history upon which prospective investors can evaluate its likely performance. Partial or Total Loss of Fund Capital — The Fund is intended for long-term investors who can accept the risks associated with investing in illiquid securities. There is no assurance that the Fund will achieve its investment or performance objectives, including, without limitation, locating suitable investment opportunities or fully investing its committed capital. Management Fee is Based on Total Committed Capital, Including Capital That is Not Called or Invested - The Management Fee for each Umited Partner (excluding the Affiliated Investors) will be a percentage of the Limited Partner's total amount of Committed Capital. There can be no assurance as to when capital will be invested or that all the Committed Capital will be called or invested by the Fund. As a result, each Limited Partner (excluding the Affiliated Investors) will pay a Management Fee based upon its total amount of Committed Capital even though this total amount may not be called or invested by the Fund. Public Listing of Seeding Funds' Interests — The General Partner may determine in the future to directly or indirectly list interests in the Fund or another entity that has an economic stake in the assets of the Fund and/or Onshore Fund or an Other Investment Vehicle (a Public Listing"). Any Public Listing may be made on a number of exchanges or other markets throughout the world. Due to legal. tax, regulatory and/or other considerations, certain Partners may be unable to participate in a Public Listing. Risks Relating to the Incentive Allocation — The Special Limited Partner will be entitled to an Incentive Allocation. This Incentive Allocation may be made and the Special Limited Partner may receive distributions from the Fund in respect thereof regardless of whether Umited Partners have previously received any distributions from the Fund. In addition, because the Incentive Allocation is made in respect of Profits Interests only, the Special Limited Partner may receive an Incentive Allocation even if the Fund's investments in Underlying Seed Funds (including potentially Underlying Seed Funds that generate the Profits Interest distributions and payments in respect of which such Incentive Allocation is made) experience adverse performance and Limited Partners have not earned positive returns on their investment in the Fund. Dependence on the Investment Advisor and the Seed Managers — The Investment Advisor will invest assets of the Fund through Seed Managers, and the Investment Advisor has the sole authority and responsibility for the selection of the Seed Managers. The success of the Fund depends upon. among other things. the ability of the Investment Advisor and the Seed Managers to develop and successfully implement investment strategies that achieve the Fund's investment objective, and upon the ability of the Seed Managers to develop and implement strategies that achieve their investment objectives. No assurance can be given that the Investment Advisor or any Seed Manager will be able to do so. Seed Managers' Activities May be Limited Due to, and Seed Managers May Limit, Investment by the Fund - To the extent that the Fund's investment (and/or any investments by other funds and clients managed or advised by the Investment Advisor or an affiliate) constitutes a significant percentage of an Underlying Seed Fund, and/or as a result of the Fund's receipt of a Profits Interest or other rights with respect to a Seed Manager, such Seed Manager's trading activities, including trading in certain securities. may be restricted due to certain regulatory restrictions applicable to Goldman Sachs (including relating to the aggregation of positions among different funds and accounts) and internal Goldman Sachs policies. Such restrictions may limit the opportunities or investment activities of the Seed Manager and, consequently, may adversely affect the performance of the Fund's investment with such Seed Manager. Investments with "Start-Up" Seed Managers — It is anticipated that the Fund will allocate assets primarily to "start-up" Seed Managers. which are likely to have limited or no independent track records and/or experience managing an investment advisory business, thereby making it more difficult for the Investment Advisor to evaluate the Seed Managers' and the Underlying Seed Funds' likely performance. Returns in Respect of Profits Interest Dependent on Seed Manager - Although the Investment Advisor will seek to obtain Profits Interests on behalf of the Fund. Seed Managers will be responsible for managing the Underlying Seed Funds and neither the Fund nor the Investment Advisor will have an active role in the day-to-day management of the Underlying Seed Funds. Use of Leverage by the Fund — The Fund may borrow money or use leverage for a variety of purposes, including acquiring new investments (including prior to the Fund's Initial Closing or Final Closing), leveraging existing investments to permit distributions or additional investments, facilitating the Fund's hedging activities, meeting capital calls of Underlying Seed Funds, and bridging fundings for investments in advance of capital calls. The leverage used by the Fund may take the form of indebtedness for borrowed money. which may expose the Fund to greater risks than if the Fund did not use leverage. Conflict of Interests —The Goldman Sachs Group, Inc. (including its affiliates) is a worldwide, full service, financial services institution engaged in a wide range of activities which may create perceived or actual conflicts of interest in relation to the Fund. Potential Loss from Currency Fluctuations - The Fund will receive capital contributions in U.S. dollars and expects to make distributions in U.S. dollars. However, the Fund may make investments, and receive proceeds in respect of certain investments, that are denominated in other currencies. Such non-U.S. dollar transactions have special risks. The Fund may be adversely affected by changes in currency rates (including as a result of the devaluation of another currency against the U.S. dollar) and in exchange control regulations and may incur transaction costs in connection with conversions between various currencies. Capitalized terms used herein are defined in the Fund's offering memorandum. An investment in the Fund will involve substantial risks and should be undertaken only be investors capable of evaluating the risks of the Fund and bearing the risks it represents. Investors should carefully review the "Risks and Potential Conflicts of Interest" section of the Fund's offering memorandum for a complete discussion of risks, a copy of which is available upon request. 2 EFTA00796859  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND:OR DISTRIBUTION TO THE GENERAL PUBLIC. Sjaltllnilll Petershill Private Equity Seeding will seek to take advantage of lards market dislocations by partnering with the next generation of Asset Management private equity managers 1 Private equity seeding has the potential to generate enhanced returns Private equity seeding may allow for multiple levers of enhanced return beyond a traditional Limited Partner (LP) investment, through revenue sharing opportunities and preferred strategic rights 2 Market dislocations may create seeding opportunities We believe the current dislocation of private equity talent has pushed ambitious investors to pursue entrepreneurial motivations, while increasing industry concentration has created a capital dislocation, impeding next generation managers from raising capital 3 First-time fund managers are not first-time investors The next generation of private equity firms have often been founded by experienced professionals who have typically outperformed more established firms in their first funds, though high dispersion requires skilled manager selection' 4 Experienced investors typically lack business development expertise and require active management We believe many first-time fund founders lack expertise in managing and growing a new business, and could benefit from AIMS' General Partner (GP) services via ongoing leadership and business development feedback AIMS has global investment experience across strategies 5 AIMS is among the largest and most experienced private equity investors globally, making use of extensive resources and sophisticated manager selection to make a broad range of investments across primaries, secondaries, and management stakes Source: AIMS as of March 2018 unless noted otherwise. I Source: Preqin Private Equity and Venture Capital Spotlight. As of January 2018. Objectives stated do not provide any assurance as to 3 future results as there is no guarantee that the objectives will be met. EFTA00796860  FOR INTENDED RECIPIENT USE ONLY NOT FOR FURTHER USE AND:OR DISTRIBUTION TO THE GENERAL PUBLIC. Strategic seed investments have the potential to outperform LP investments based on multiple drivers of value Asset Management Multiple Potential Enhanced Return Levers of Seeding Strategies GP Monetization GP Revenue GP Monetization: Sharing Towards the end of First-Time Fund GP Revenue each underlying fund's Outperformance Sharing: life cycle, a sale of management fee and Strategic alignment carried interest stakes of interests, through will be initiated revenue sharing. preferred economics. Established Fund LP or other negotiated rights can offer additional value First-time Fund Proceeds from Sale of Petershill Share of Management Established Fund LP Outperformance Share of Management Private Equity Fee and Carry Fees and Carry Seeding LP Investment GP Investment AIMS seeks to negotiate revenue share economics, which are expected to be below 25% of the total income generated from management fees and carried interests of the GPs Once the firms have achieved maturity, AIMS will actively seek to provide liquidity for the GP interests by monetizing our revenue share stake via a strategic sale to an institutional buyer, or alongside existing GP stakes Source: AIMS. Preqin. as of March 2018 unless noted otherwise. This information is being shown for illustrative purposes only. Any actual returns will vary. 4 EFTA00796861  FOR INTENDED RECIPIENT USE ONLY NOT FOR FURTHER USE AND:OR DISTRIBUTION TO THE GENERAL PUBLIC. 2 Talent and capital dislocations among early stage private equity (jomman arhs managers are creating distinct investment opportunities Asset Management Talent Dislocation in Aging Private Equity Firmsl Experienced investors are increasingly driven by _1m entrepreneurial motivations to start their own enterprises t 90% to -c2 80% Often private equity firms lack a structured generational transition plan, which can cause frustration across senior off u. 70% 60% investment professionals ui 50% TI We have observed an increasing number of ambitious and 2 40% 30% 66% motivated founders invest a material amount of their .6 20% 47% personal net worth into the new firms, while typically owning •cr) 10% 18% limited legacy portfolio responsibilities 4 0% 2000 2010 2017 • 20+ years • 15 - 20 years • 10 - 15 years • Less than 10 years Capital Dislocation in First-Time Funds in 20172 As the private equity industry grows, increasing capital concentration impedes next generation managers from 100% raising capital 90% tn 80% The private equity industry has demonstrated consistent 70% growth over the past 10 years, yet remains a small >, 60% proportion of global financial assets a- 50% 94% 40% to 30% - Despite first-time funds representing a quarter of total fund launches in 2017, early stage managers have had difficulty 6: 20% raising capital due to limited track records, management 0 10% - inexperience, and underdeveloped firm infrastructures 0% No. of Funds Raised Aggregate Capital Raised ($bn) • Established Firms • First-Time Funds Source: AIMS. 'Initial target limns statistics do not include real estate managers. Our initial target firms represent 72 managers which we have identified for advanced discussions. Please refer to 5 page 5 for more information on the AIMS platform. As of December 2017. Data represents years since private equity firms were founded. 2Source:Preqin as of December 2017. EFTA00796862  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. 3 Active diligence is required to unleash next generation talent and Goldman Sachs take advantage of potential first-time fund outperformance Asset Management Median Net IRRs by Vintage Year1 Managers departing established firms to create their 25% - own enterprises typically outperform with their first —Net IRR (°/0) All Other Funds funds 20% —Net IRR (%) First Time Funds Next generation managers have historically outperformed established funds across most vintage years since 20002 Founders of early stage firms place increased emphasis z 100/ - on every deal in order to establish a strong early track record to help support future growth 5% 0% 7 I r I I 7 T @ i(r.N 0 ' QT(1) O D 4 (:)(° (§ Cl' 0 'CP @ P° \ ° N ele .(1) N IC* 4 3) I? CP r0 r i? r i? I? r i? r0 r i? r i 5) I? CP r0 r i? Vintage Year Global Sourcing and Manager Selection Experience2 Expansive sourcing and manager selection processes are crucial in identifying top quartile performers Global universe of private equity Our eight offices are complimented by Goldman Sachs' funds evaluated long-standing presence in over 30 countries, helping AIMS evaluate thousands of managers around the world Universe of target firms we have identified for discussions AIMS' rigorous manager selection process focuses on eight disaggregated, proprietary factors, including business Deep due-diligence conversations risk mitigation, achieved through our independent that led to fund commitments Management Assessment and Controls Committee 'Source: Preqin 2018 Global Private Equity & Venture Capital Report as of September 2017. 2Source: AIMS. As of December 31. 2017. There is no guarantee that these objectives will be 6 met. GSAM leverages the resources of Goldman Sachs & Co. LLC subject to legal. internal and regulatory restrictions. Past performance does not guarantee future results, which may vary. EFTA00796863  FOR INTENDED RECIPIENT USE ONLY • NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. 4 Experienced investors are not necessarily experienced business developers and may require active partnership Asset Management We seek to drive value in early stage firms that lack experience in building businesses by providing developmental feedback and insights, utilizing our suite of GP services Capital Formation • New product launch • Distribution insights Global reach and expertise of Goldman Sachs in capital feedback raise • Client experience • Seed capital 0 Operations & Markets • Market teach-ins • Compliance procedures N o Institutional knowledge share to adapt infrastructure for growth • Operational policy support feedback • Cybersecurity best Technology & Risk practices • Risk reporting frameworks Experience of a leading asset manager in developing • Vendor management • Disaster recovery competitive systems insights • Technology management Human Resources • Compensation insights • Performance review best Consultation on talent sourcing and organizational best • Resource assessment practices practices • Coaching Leadership Development • Talent retention tools • Succession planning Guidance on development informed by our industry relationships and research • Non-compensation • Partnership structure awards Source: AIMS as of March 2018. For illustrative purposes only. GSAM leverages the resources of Goldman Sachs & Co. LLC subject to legal. internal and regulatory restrictions. 7 EFTA00796864  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. The breadth of our platform offers complementary skill sets that bring together what we believe are the necessary components of Asset Management a comprehensive seeding program AIMS has over 20 years of private equity investing experience, leveraging worldwide expertise across primaries, secondaries, and management stakes Global primaries platform • Global sourcing networks with rigorous investment and manager selection processes • $22 billion of primary capital committed since 1997 Extensive history of secondary investing • Underlying company valuation database and deal structuring capabilities Petershill • $26 billion of secondary capital committed since Private 1998 Equity Seeding' One of the longest track records in GP SECONDARIES investing • Established GP value creation offerings and strategic stake experience • Over 230 potential GP investments diligenced and 18 executed transactions since 2007 Source: AIMS as of December 2017 unless noted otherwise. 'This Fund/Strategy has not been launched yet. This presentation is delivered solely as reference material with respect to Petershill 8 Private Equity Seeding. an investment product that Goldman Sachs may offer in the future. Past performance does not guarantee future results, which may vary. EFTA00796865  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. We believe our broad capabilities provide the necessary skills to value and execute complex transactions Asset Management AIMS has developed well-established capabilities from years of private equity investing and deal structuring, positioning our team to effectively implement a seeding strategy • Evaluated over 8,600 primary funds since 1997, while onboarding over 550 funds onto our platform, Manager Sourcing and including over 300 commitments to sub-$1 billion funds globally Selection • Comprehensive manager selection process using eight proprietary factors to encourage disaggregated judgement Im • Experience structuring seed deals to provide risk-mitigating and broad, transparent contractual rights Structuring • Dedicated team with one of the longest track records in the industry, and over 20 years of deal structuring expertise S • • We believe we are a partner of choice for many emerging teams, as our GP services provide essential value-add benefits to help managers develop strategic and operational expertise GP Value Creation • Active investor in minority interests in alternative asset managers with over 1,000 GP stake conversations U • Our long-standing, global primaries platform has consistently focused on identifying new and emerging managers throughout our history • Our secondaries platform provides insights on underlying portfolio characteristics and heightens our structuring expertise, while our orientation towards spin-out transactions further enhances our Experience understanding of next generation managers • Our management stakes platform positions AIMS as a leading GP stakes investor, enhances our structuring capabilities, and develops our partnership offerings, allowing our team to add value across all stages of a company's life cycle Source: AIMS as of December 2017 unless noted otherwise. There is no guarantee that these objectives will be met. Past performance does not guarantee future results, which may vary. 9 EFTA00796866  FOR INTENDED RECIPIENT USE ONLY • NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. A seasoned team of professionals with deep private equity experience, backed by a rigorous deal evaluation process Asset Management Private Equity Primaries Team GP Stakes Investment Team GP Services Team Amy Jupe Derek Kong Ali Raissi ! ! Lisa Spear Chaim Stern Julia Feldman Farzana Morbi Christian von Schimmelmann Heather von Zuben Aaron Brooks Suzanne Gauron Kate Orb Robert Hamilton Kelly Ryan Boucher Dayna Clark Michael Miele Doorvasha Ruhee Martin Rensing David Kraut Dan Agar Bhavika Vyas Zech Tcheyan Wesley Tellie 8 strategy-focused teams evaluate opportunities and market dynamics AIMS meets with more than 500 primary funds each year Active investor in minority interests in alternative asset managers with over 1000 GP stake conversations • Dedicated teams diligence managers using an evolving set of diligence factors • Each investment structured through a partnership between Seed Sourcing/Investment Team and Petershill Investment Team • Petershill Private Equity Seeding investment opportunities are reviewed and require approval by three independent committee approval processes AIMS Private Markets Primaries AIMS GP Strategies Investment Management Assessment and Investment Committee Committee Controls Committee ("MACC") 'Source: AIMS as of March 2018 unless noted otherwise. Team composition as of May 2018. 10 EFTA00796867  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND OR DISTRIBUTION TO THE GENERAL PUBLIC. Asset Management First-time funds are not first-time investors... We aim to deliver our platform and partnership to drive forward the next generation of private equity talent First•lime funds are defined as first funds in new firms within the Preqin private equity buyout universe. EFTA00796868  FOR INTENDED RECIPIENT USE ONLY - NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. Wan Summary of Proposed Key Terms Asset Management TARGET FUND SIZE $750 million FUND STRUCTURE Onshore (Delaware) and Offshore (Luxembourg) domiciled partnerships INVESTMENT PERIOD Four years with the option for a one-year extension' MINIMUM COMMITMENT $1 million Average annual fee of 0.69%2 MANAGEMENT FEE 1.25% of commitments following one-year holiday, with a 25% step down in prior year's fee beginning in year six3 PERFORMANCE FEE LP INTERESTS No performance fee REVENUE SHARE INTERESTS 20% performance fee Investment Period begins after the first close. 2Average annual management fee calculated assuming a 12-year fund life. Fund life is expected to be the longer of 12 years or the final investment liquidation. 3One-year holiday to start after first dose. Source: AIMS as of March 2018 unless noted otherwise. For illustrative purposes only. Investment terms are preliminary and are subject to change in accordance with the offering documents. The descriptions set forth above are a summary of certain proposed terms and are not intended to be complete. This should not be construed as providing any assurance or guarantee as to the actual terms of the proposed fund. Goldman Sachs has no obligation to offer such a fund. If such a product is offered, please carefully review the offering documents and any supplements thereto (copies of which will be available upon request) for a complete description of all information regarding the fund including the fund's structure. terms. and portfolio characteristics, prior to making an investment decision. The descriptions set forth above are a summary of certain terms and are not intended to be complete. 12 EFTA00796869  FOR INTENDED RECIPIENT USE ONLY NOT FOR FURTHER USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC. AIMS is an open-architecture, multi-asset class solutions provider Asset Management We are Investors Structuring investment outcomes and ALTERNATIVE INVESTMENTS & MANAGER SELECTION (AIMS) managing capital are core to what we do, and central to our clients' success PRIVATE MARKET STRATEGIES PUBLIC & PRIVATE MARKET STRATEGIES PUBLIC MARKET STRATEGIES We are Innovators Our proprietary approach to due diligence is subject to frequent revision based on REAL ASSETS PRIVATE CREDIT & ESG & IMPACT PUBLIC EQUITY HEDGE FUNDS EQUITY FIXED INCOME (IMPRINT) ongoing research OVER $9BN IN OVER $55814 IN OVER $60BN IN OVER S2.4BN IN OVER $75814 IN OVER $24BN IN COMMITTED COMMITTED COMMITTED ASSETS ASSETS ASSETS ASSETS ASSETS ASSETS We have a Global Network OVER 125 OVER 375 OVER 130 OVER 40