EFTA01452585

28 January 2014 Brokers, Asset Managers & Exchanges Alternative Asset Manager Initiation Figures 18 and 19 compare our estimates vs. Consensus, with Figure 18 shown on an ENI per unit basis, and Figure 19 shown on a distribution per unit basis (comparable to dividend per share forecasts, as Consensus DE forecasts are not readily available with a sizeable population). The Figures show our estimates for ENI are generally below Consensus, while our distribution forecasts are generally above Consensus. This above-Consensus view on distributions forms our more optimistic view on the Alt space - to the extent we are correct, and we think upside surprises in distributable earnings over the coming quarters will be a positive catalyst for valuation improvement. [Figure IS: DB Forecasts for ENI per unit for the Alts vs. Consensus 400Y2013 2014 2016 Alts DB Cons. %diff DB Cons. %diff APO $0.82 $0.80 1.9% $2.50 53.04 -17.7% BX 30.84 5082 2.3% $3.09 $2.98 3.7% CG $0.93 $0.87 6.8% $2.70 33.17 -14.8% KKR $0.96 $0.89 8.4% 52.33 $2.52 -7.5% OAK 31.19 $1.15 3.6% $4.36 $4.80 -9.2% Median 3.6% -9.2% Sono Thomson Aaron &be O*.eselx Ban 'Figure 19: DB Forecasts for Distribution per unit for the Alts vs. Consensus 40CY2013 2014 Alts DB Cons. %diff C8 Cons. %diff APO $0.80 30.79 1.4% 33.06 $2.48 23.3% BX $0.47 50.45 3.7% $1.95 $1.78 9.3% CG $1.20 $1.17 2.8% $2.22 $2.03 9.3% KKR $0.39 30.39 -0.5% 31.58 $1.44 10.0% OAK $0.91 50.92 -0.8% $3.78 $3.75 0.9% Median 1.4% 9.3% Saga ?Mown Arian neewtm Sort Our valuation methodology While valuation methodologies using sum of the parts or DCF models can be intellectually rigorous, we think a more simplified PIE approach on distributable earnings (DE) will end up being a better indicator of the Ails' unit price performance over time. Our approach works in the following steps: • Observe each of the Alts forward P/E on Consensus (ENI) over the past 12 months and last two years and compare to the S&P 500 to derive a relative PIE; • Assess to what extent each Alts' relative PIE will improve or worsen (or stay the same) over the next 12 months vs. the prior I2-months, based on the variety of fundamental factors outlined in this report; Derive a target forward P/E for the S&P 500 12 months from now, which is 14.9x (based on DB equity strategy forecast for S&P 2015 EPS of $125 and S&P ending prices of 1850 yearend 2014 and 2000 yearend 2015. which implies 1863 12-months from this report); • Multiply our target relative PIE to derive a target absolute PIE; Apply this absolute P/E on our 2015 DE forecasts to derive where the units will trade on 1-year forward distributable earnings 12-months from now; hence where the units will trade on 2015 DE in Jan-2015. DB Cons. %diff $2.32 $3.08 -24.8% 53.24 $3.42 -5.4% $2.89 $3.41 -15.2% $2.33 $2.77 -15.8% $4.67 $4.83 -3.4% .15.2% 2016 DB Cons. %diff $2.56 $2.13 20.3% $2.46 $2.00 22.8% $2.70 $2.35 15.1% 51.76 $1.43 23.1% $3.98 $3.79 5.1% 20.3% Page 20 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0109706 CONFIDENTIAL SDNY_GM_00255890 EFTA01452585