EFTA01452588

28 January 2014 Brokers. Asset Managers & Exchanges Alternative Assot Manager Initiation We also attempted to value the Alts on a sum-of-the parts basis, which we do not think has been especially accurate in forecasting medium or long-term unit price performance for the Alts. Similar to our valuation analysis, there are a number of subjective inputs, combined with longer range valuation assessments that we think can obscure what the stocks will do over a 12- month horizon, the timeframe in which are ratings/price targets are based on. We show our sum-of-parts analysis in Figures 24-28. The analysis values the fee income stream at an asset manager PIE of 16.5x and the carried interest earnings potential (inclusive of dry powder) at a 2.0x MOIC (multiple on invested capital) over a 6-year horizon, and the balance sheets & accrued carry at 1.25x BV. We think this valuation is even more subjective than our PIE approach and can achieve vastly different results by altering the assumptions slightly. For example, our choice of a 2.0x MOIC over a 6-year horizon is conservative vs. past performance (though may be more accurate going forward). Our assumptions indicated the Alts are about fairly valued, with BX & OAK appearing the most overvalued and KKR the most undervalued, and we think this will be an active part of the intense valuation debate on this stock. ['Figure 24! DB Sum of the Parts Valuation Analysis for APO Fee-rsed Earnings &hence sheet value at 3013 Afteitat Fee-related Earnings (2014Q 5443 Rincipal rwestrierds 5425 Per ire SI 13 Accrued carry 51.254 Asettned Fwd RE 1654 Total BV 51.679 Value per unit 51862 Assigned IN map* 1.25x vow 52.099 Owed Merest earnings PM WM 3535 hvested captal • dry powder at 3013 54983 /Muffed 1.0C 20r Total SCPValue 532 49 Carry rate 20% Current pnce 532 20 Comp rate 40% SClovs current price 09% hvesirrent linen (yrs1 60 Value 56,598 YAO avg urns 2014 392.3 Pi/ 53.343 PV per Lest Same Onatteedm Figure 25: DB Sum of the Parts Valuation Analysis for BX Fee-related Bermes Aftertax Fee-related Earnings (2014E) per une 5815 50 71 Caned Merest earnings- hvested capital • dry powder at 3013 Assumed 1400 124.487 2A Assigned Fwd RE 165x Carry rate 20% Value per tril S11.73 Corrp rate 40% hvestrnent Horizon (yrs) 6,0 hcenthie Fee Earnings Value 514.938 hcentive Fees 5622 57.568 Comp accrual 40% FV per unit 5661 Retax hcentve Fees 5373 Minx hcentke Fees 52W Bat nee sheet value at 3013 Per une 9)24 Ftncipal ointments 52.598 Assigned Fwd RE 83x Accrued carry 52.769 Value per und Total BV 55367 Asscned By mute* 1 254 Taal SCPVehe Value 56.709 $2621 Oman price 531 13 Per urn SOP vs current price -158% San* dwaaM Ss* Deutsche Bank Securities Inc. Page 23 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL SDNY_GM_00255893 DB-SDNY-0 109709 EFTA01452588