EFTA02430662.pdf

To: Jeffrey Epsteinueevacation©gmail.com] From: David Stem Sent Thur 2/18/2010 10:25:29 AM if we set up our business in the right way (JEDS private office, co-owner with JPM of China- focused fund AG Capital) we can manage Chinese money too. To be discussed when we meet next. Sovereign wealth fund China Investment Corp will invest S1.5bn in private equity secondaries with three of the biggest specialists in buying second-hand fund interests, according to the Financial Times. Lexington Partners, Goldman Sachs and Pantheon Ventures have all agreed to manage custom accounts of $500m each, which will be kept separate from their main investor funds. As money is scarce, the ball has landed in the investors' court and this special arrangement is yet another sign of this. Carlyle founder David Rubenstein believes that large-scale potential limited partners have enough capital behind them to command even more power. He is quoted as saying, "The era of big public pension funds and sovereign wealth funds accepting the same terms as smaller investors is over." The secondary market offers investors the opportunity to exit what is an illiquid asset class. By selling their interests in private equity funds they can raise cash, instead of riding out extended lock-in periods of as long as ten years or more. Last year the secondary market was relatively quiet as sellers hung onto highly discounted assets, with buyers bidding below sellers' expectations. The bid-ask spread is said to be narrowing with the consensus that the market will pick up this year. CIC is a S200bn sovereign wealth fund formed in 2007. This message is confidential. It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake please let us know by reply and then delete it from your system; you should not copy the message or disclose its contents to anyone. Opinions, conclusions and other information in this message that do not relate to the official business of Asia Gateway Ltd. shall be understood as neither given nor endorsed by it. Asia Gateway Ltd. Michelin House 81 Fulham Road London SW3 6RD EFTA_R1_0 1500688 EFTA02430662 UK Tel: +44 (0)20 7838 6788 Fax: +44 (0)20 7838 6888 EFTA_R1_01500687 EFTA02430663