Indirect Private Equity Portfolio FAQ

1. What is an indirect private equity portfolio?

   An indirect private equity portfolio is comprised of individual investments in third-party private equity funds. It is a vehicle of convenience for investors to participate in a better-diversified pool of private equity investments.

2. Why invest in private equity?

   Private equity, as an asset class, has the potential to provide long-term returns superior to those of the public equity markets. In addition, private equity returns can offer the tax advantage of long-term capital gains.

3. What kind of returns can I expect?

   No one can predict future returns. However, according to Venture Economics, over the last 20 years, the top quartile private equity managers have returned net 20% per year as an asset class. Please note, manager selection is key. While there are more private equity funds and more capital in the asset class today than existed 20 years ago, it is possible to experience a premium over public market returns of 300 to 1,000 basis points.

4. What is Camden's approach?

   We seek to minimize risk by selecting experienced and proven private equity firms. At the same time, we strive for diversification through a multi-strategy approach by including venture capital, leveraged buyout and "special situation" opportunities in the same portfolio. Special situation funds may include mezzanine, subordinated debt, royalties, and distressed debt. Special situation funds usually have a current income component. These funds can offset the fees incurred early in the investment cycle, without providing a lot of current income.

5. How is an investment in private equity funded?

   An investor makes a commitment by signing a subscription document agreeing to invest a certain amount. The money is then called as needed to fund investments that the underlying funds are making. While the commitment is not funded all at once but over time, the majority of the money will be called during the investment period, which is 3 to 6 years.

6. How will you keep me updated on my investment?

   Camden provides detailed quarterly reports.

7. Do you have an example of prior investments?
   
   

   AEA Mezzanine Bay Partners Bears Stearns Merchant Banking Castle Harlan Partners Charterhouse Capital Partners FS Equity Partners Galen Partners Intersouth Partners

   Inverness Capital Partners Natural Gas Partners NGP Energy Technology Partners Riverside Partners Sanderling Venture Partners Silver Lake Partners Sterling Venture Partners TA Associates Welsh, Carson, Anderson & Stowe

   
   
   
8. How should I approach an investment in private equity?

   You should approach private equity through a multi-year investment program. Private equity is like other investments in that you can't time the market. Camden's multi-year program allows allocations across varied market cycles and manager availability. In addition, the program allows for diversification across time horizons, industry sectors, geography, and the various stages of investments.