Founded in 2007, Accretive Exit Capital Partners (AECP) is a co-investment and secondary direct private equity manager that focuses on the acquisition of direct equity stakes in the highest quality private equity assets through purchase or partnership with existing investors. AECP raised its first fund (AECP I) in June of 2008 with $125MM under management. Since then, AECP has generated a total of $215MM in liquidity transactions. The firm designs and delivers liquidity solutions through a collaborative effort with General Partnerships seeking liquidity and partial exit of underlying portfolio assets. The capital is used to provide partial exit/liquidity to the existing General Partnership and to Limited Partners, to improve working capital position and to reduce debt, typically to less than a 3X EBITDA multiple. AECP looks to achieve these liquidity goals while forging a strong relationship on an aligned interest basis.

The keys to a successful transaction with AECP are: 1. Establishing a strong aligned interest with a competent General Partner; 2. Identifying assets that meet AECP's investment parameters; 3. Devising a structured price matrix that is fair and meets expectations of the General Partners, their Limited Partners and AECP's investors.

Accretive Exit Capital Partners adheres to the following set of investment parameters in order to fund a transaction:

• Portfolio Assets from 2000-2005 vintage year funds
• Revenue of $100MM or greater and EBITDA of $10MM or greater
• Free Cash Flow to be a minimum of 5% of total revenue
• Less than 2.5X net debt to EBITDA ratio (post transaction)
• A 16 quarter positive trend of EBITDA growth
• Reasonable options/equity structure with company management
• Company must not be in a highly cyclical business sector
• At least 3 to 5 portfolio companies in transaction
• A diversified pool of assets within diversified sectors and industries

AECP aims to acquire stakes in a minimum of 3 portfolio companies per transaction that are growing, healthy, and non-cyclical in their historical financial performance. AECP may recalibrate one or two of the portfolio companies by applying a combination of primary and secondary equity in the transaction. For example, if a company meets all criteria but is over-weighted with debt, AECP may apply a portion of its capital to pare back the debt load, thus improving the debt/EBITDA ratio and impacting positively free cash flow in order to meet the investment criteria through debt service reduction.

Each transaction size varies but typically AECP looks to work on transactions between $100MM and $500MM. AECP finds that such transactions work best when there is a meaningful amount of liquidity to be generated for the benefit of both the General Partner and their Limited Partners.

The diligence process for the transaction is typically "lighter" than that of traditional M&A. The process begins with identifying the potential portfolio assets that make sense for both parties to engage in the process. AECP will request historical financials (5 years), all legal documents surrounding initial investments and follow-on investments into each company, any "tag and drag" rights that exist with additional investors, all banking/debt agreements pertaining to each portfolio company and a complete updated flash report directly from company management as close to the deal closing date as possible.

AECP and its staff review the diligence materials in short order (10-20 days). This includes an intensive effort and an earnest dialogue with the general partnership and, when necessary, company management. The seller and Accretive discuss and agree on general deal terms at the conclusion of the diligence period and move towards closing 30 to 45 days from a handshake agreement of general terms and valuations. Accretive is making an investment in the selling general partnership as much as it is investing in the underlying assets. Therefore, it is important that the diligence and negotiations between the two parties reflect and demonstrate an ability to work effectively together and establish trust and mutual respect. To date, AECP has been able to assess decisively and quickly as to whether or not there is strong potential for closing a deal quickly after the initial review of the assets. Thus, if AECP begins to engage in full diligence and can reach initial agreement on valuations with a seller, there is a very high likelihood of closing on a transaction. AECP currently has financial backing from a select group of large institutional Private Equity investors and Secondary firms globally.

Accretive Exit Capital was founded in 2007 by Edwin Wang who brings over 20 years of private equity and cross border investment experience, formerly with Credit Suisse and Lehman Brothers, Andrew Reilly, previously with Fondinvest Capital and a Board Member and Chair of the Alternative Investments Sub-Committee for the Rhode Island State Investment Commission, which has oversight of the $8b RI State Employees Pension System, And Theodore Tedeschi who brings over twenty years of legal, funding and M&A transaction experience to the firm. The management team at Accretive has over fifty years of combined private equity experience and draws on complementary skill sets to achieve the firm's goals of delivering the highest returns to its investors and to continue to originate, execute and monetize the highest quality secondary direct transactions in the mid-market buyout space.