Altamir - Registration Document 2016

FINANCIAL AND LEGAL INFORMATION

Business description

1.3 BUSINESS DESCRIPTION

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1.3.1 THE PRIVATE EQUITY BUSINESS

clear accountability between company executives and shareholders, combinedwith a precise roadmap and incentive measures directly linked to value creation; and the ability to access debt markets and to partially fund acquisitions through debt.

WHAT IS PRIVATE EQUITY?

Private equity consists of investing in unlisted private companies with the intent of developing them and/or improving their business performance. In the private equitymodel, a teamof professional fundmanagers takes a stake in private companies, usually with a specific investment thesis and a detailed value creation plan. In general, private equity investors are able to ensure that the interests of all stakeholders in a deal are aligned, thus ensuring that the companies they invest in aremanaged in the best interests of the Company’smanagement team, the limited partnerswho invest in the private equity funds, and the private equity fund managers themselves. The private equity ownership model can be applied to a wide range of company types, sizes, sectors and geographies. Private equity ownership plays a key role at many stages in a company’s history: a change in the scale of a business, a required change in ownership, a change in strategic direction, or a change in the structure andoperations of a business. The common factor is that all investee companies have unrealised potential. Private equity investment aims to unlock this potential through specific value creation plans. Private equity performance is generallymeasured and evaluated in terms of multiples of the amounts invested, and the internal rate of return (IRR). Given the structure of private equity ownership, this model presents a number of advantages that facilitate value creation and the realisation of capital gains over time: largeuniverseof target companies offeringmanyopportunities; time and resources to study and assess investment opportunities, and to analyse and value the target companies best-positioned to grow and capitalise on the secular trends within those industries, aswell as toanalyse the risks of potential investments and how best to mitigate them; committed, long-term ownership, that is not concerned with short-term performance targets, but focused on achieving broad and long-term value creation in line with an investment thesis and with precise value creation objectives; the ability to modify business plans or change management teams as required in order to achieve objectives; ADVANTAGES OF PRIVATE EQUITY

DISADVANTAGES OF PRIVATE EQUITY

The due diligence process in private equity can translate into high costs. Exploiting the vast and unregulated set of opportunities that private companies represent requires resources, infrastructure and expertise. The average private equity investment cycle leads a significant part of performance to be skewed towards the last years of the life of a fund. Accordingly, fund performancemust be assessed over the long term. Restricted access: investing in private companies is restricted to a small group of investors. The traditional way of investing in private equity is through a Limited Partnership or an FCPR. These vehicles are reserved for institutional investors, i.e. financial institutions and other large, sophisticated investors, able to commit substantial capital and to forego a return on their investment for a relatively long period of time. Limited partnerships and private equity funds require investors to commit a minimum amount, usually €10m or more, which is “locked up” for several years. They are commonly structured as ten-year vehicles, duringwhich time the investor has no access to the funds invested. Listedprivate equity (LPE) companies, such as Altamir, are public companies that invest in a portfolio of predominantly private enterprises. Shares of LPE companies are bought and sold on stock exchanges in the same way and alongside other public industrial and financial companies. Listed private equity provides the same underlying returns on investment as unlisted institutional private equity, but in away that stock market investors can access without minimum investment requirements or lock-up periods. Other benefits of LPE investing include exposure to multiple vintages, and capital being put to work immediately (rather than relying on “capital calls” when investments are identified, as is the case in traditional private equity). The shares of listed private equity companies are often priced at a discount to the underlying NAV (an advantage or a disadvantage depending on the perspective taken). LISTED PRIVATE EQUITY FUNDS: PROVIDING BROADER ACCESS TO THE ASSET CLASS

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REGISTRATION DOCUMENT 1 ALTAMIR 2016