Exhibit (c)(7) Project Atlas – Liquidity Mechanism Discussion November 2018Exhibit (c)(7) Project Atlas – Liquidity Mechanism Discussion November 2018
Summary Overview of Call with Berlin § Overall, Berlin remains flexible in how this structure is designed – their main challenge is (1) navigating an acknowledged desire by Oslo OCGH holders to have liquidity over time with (2) the need for Berlin to avoid being “overwhelmed” with liquidity requests § Berlin is open / willing to accommodate a perpetual private employee ownership (if so desired and it helps align interests) but this is not a necessary element of their proposal; on the other hand, Berlin has no stated objective of necessarily acquiring 100% either § Berlin had assumed it was Oslo’s intent that all OCGH holders would have the same liquidity options; this is not a requirement from their perspective – In fact, Berlin is willing to consider different liquidity mechanisms for different groups of OCGH holders (e.g., Founders / current management vs. future management) § Berlin would always provide a liquidity mechanism for OCGH holders that maintained ownership past this time horizon (i.e., not sold under this liquidity mechanism) 2Summary Overview of Call with Berlin § Overall, Berlin remains flexible in how this structure is designed – their main challenge is (1) navigating an acknowledged desire by Oslo OCGH holders to have liquidity over time with (2) the need for Berlin to avoid being “overwhelmed” with liquidity requests § Berlin is open / willing to accommodate a perpetual private employee ownership (if so desired and it helps align interests) but this is not a necessary element of their proposal; on the other hand, Berlin has no stated objective of necessarily acquiring 100% either § Berlin had assumed it was Oslo’s intent that all OCGH holders would have the same liquidity options; this is not a requirement from their perspective – In fact, Berlin is willing to consider different liquidity mechanisms for different groups of OCGH holders (e.g., Founders / current management vs. future management) § Berlin would always provide a liquidity mechanism for OCGH holders that maintained ownership past this time horizon (i.e., not sold under this liquidity mechanism) 2
“Straw Man” Transaction Overview and Timeline TRANSACTION CONSIDERATION BREAKDOWN Upfront Consideration (61% of Oslo Units) Upfront § Berlin acquires 61% of Oslo units Consideration 61% – Public units (45%) – Acorn units (6%) Liquidity Mechanism – OCGH units (10%) 29% § Upfront consideration is a mix of cash / Berlin stock TBD Public 45% § Remaining 39% units eligible for liquidity [at transaction multiples] – 25% of these units exchanged for Berlin shares (10% of total) Berlin OCGH Shares – True up / collar mechanism envisioned; lock-up to expire between Acorn 10% 10% Years 3 – 7 6% – 75% of these units are part of the liquidity mechanism (29% of total) Liquidity Mechanism (29% of Oslo Units) Transaction Closing Year 3+ Year 5+ Year 7+ Year 10 – 12 § 20% of units at closing § 50% of units at closing § 100% of units at closing § Any remaining pro-rated eligible for liquidity eligible for liquidity eligible for liquidity units § Berlin not required to acquire more than [20]% of units in any given year ‒ e.g. if 50% are delivered for liquidity in Year 5, Berlin to pro rate it (20/20/10) over § Berlin has option to Years 5, 6, and 7 terminate liquidity ‒ If maximum put in each year, it would take until Year 9 to receive 100% liquidity mechanism – with the exception of pro-rated (1) § Payable in any combination of cash, Berlin shares, or a three-year loan portion of units previously ‒ Could be 100% of any of the 3 options submitted for liquidity (under no scenario would § Request for liquidity delivered within first 60 days; Berlin to satisfy request within 90 days be post Year 12) ‒ Provisions meant to provide time frame for Holders to decide and Berlin to respond ‒ Berlin seemed flexible on these points Source: Oslo Management Note: (1) Berlin shares valued at the [20]-day VWAP; three-year loan issued by Berlin’s acquisition priced at LIBOR + [200] bps( subject to a [2.5%] LIBOR floor) and rank ahead of any distributions to Berlin from Oslo 3“Straw Man” Transaction Overview and Timeline TRANSACTION CONSIDERATION BREAKDOWN Upfront Consideration (61% of Oslo Units) Upfront § Berlin acquires 61% of Oslo units Consideration 61% – Public units (45%) – Acorn units (6%) Liquidity Mechanism – OCGH units (10%) 29% § Upfront consideration is a mix of cash / Berlin stock TBD Public 45% § Remaining 39% units eligible for liquidity [at transaction multiples] – 25% of these units exchanged for Berlin shares (10% of total) Berlin OCGH Shares – True up / collar mechanism envisioned; lock-up to expire between Acorn 10% 10% Years 3 – 7 6% – 75% of these units are part of the liquidity mechanism (29% of total) Liquidity Mechanism (29% of Oslo Units) Transaction Closing Year 3+ Year 5+ Year 7+ Year 10 – 12 § 20% of units at closing § 50% of units at closing § 100% of units at closing § Any remaining pro-rated eligible for liquidity eligible for liquidity eligible for liquidity units § Berlin not required to acquire more than [20]% of units in any given year ‒ e.g. if 50% are delivered for liquidity in Year 5, Berlin to pro rate it (20/20/10) over § Berlin has option to Years 5, 6, and 7 terminate liquidity ‒ If maximum put in each year, it would take until Year 9 to receive 100% liquidity mechanism – with the exception of pro-rated (1) § Payable in any combination of cash, Berlin shares, or a three-year loan portion of units previously ‒ Could be 100% of any of the 3 options submitted for liquidity (under no scenario would § Request for liquidity delivered within first 60 days; Berlin to satisfy request within 90 days be post Year 12) ‒ Provisions meant to provide time frame for Holders to decide and Berlin to respond ‒ Berlin seemed flexible on these points Source: Oslo Management Note: (1) Berlin shares valued at the [20]-day VWAP; three-year loan issued by Berlin’s acquisition priced at LIBOR + [200] bps( subject to a [2.5%] LIBOR floor) and rank ahead of any distributions to Berlin from Oslo 3
Illustrative Liquidity Mechanism Valuation – Based on Upfront Transaction Multiples Implied Multiples Based on 3-Year Average Historical Financials Price $39.99 $51.00 $52.00 $53.00 $54.00 $55.00 Equity Valuation $6,293 $8,026 $8,183 $8,340 $8,498 $8,655 Less: Q3'18 Net Asset Value of Investments (1,639) (1,639) (1,639) (1,639) (1,639) (1,639) Value from Mgmt and Incentive Fees Earnings $4,654 $6,387 $6,544 $6,701 $6,859 $7,016 Implied Multiples on 3-Year Avg. Earnings Metric ($M) Fee-Related Earnings $274 11.3x 15.5x 15.9x 16.3x 16.6x 17.0x Performance Fee Earnings 277 5.6x 7.8x 7.9x 8.1x 8.3x 8.5x Implied Valuation Based on Management Projections Fee-Related Earnings Multiple 11.3x 15.5x 15.9x 16.3x 16.6x 17.0x (1) 5.6x 7.8x 7.9x 8.1x 8.3x 8.5x Performance Fee Earnings Multiple Based on 2018 - '20E 3Y Avg. Metrics Value from Mgmt and Incentive Fees Earnings $5,000 $6,862 $7,031 $7,200 $7,369 $7,538 Plus: Net Asset Value of Investments (2020E) 2,092 2,092 2,092 2,092 2,092 2,092 Equity Valuation $7,092 $8,954 $9,123 $9,292 $9,461 $9,630 Implied Value per Unit $44.13 $55.71 $56.76 $57.81 $58.86 $59.92 Premium to Current 10% 39% 42% 45% 47% 50% Source: Oslo Management Note: (1) Performance Fee Multiple assumes 50% discount to Fee-Related Earnings Multiple 4Illustrative Liquidity Mechanism Valuation – Based on Upfront Transaction Multiples Implied Multiples Based on 3-Year Average Historical Financials Price $39.99 $51.00 $52.00 $53.00 $54.00 $55.00 Equity Valuation $6,293 $8,026 $8,183 $8,340 $8,498 $8,655 Less: Q3'18 Net Asset Value of Investments (1,639) (1,639) (1,639) (1,639) (1,639) (1,639) Value from Mgmt and Incentive Fees Earnings $4,654 $6,387 $6,544 $6,701 $6,859 $7,016 Implied Multiples on 3-Year Avg. Earnings Metric ($M) Fee-Related Earnings $274 11.3x 15.5x 15.9x 16.3x 16.6x 17.0x Performance Fee Earnings 277 5.6x 7.8x 7.9x 8.1x 8.3x 8.5x Implied Valuation Based on Management Projections Fee-Related Earnings Multiple 11.3x 15.5x 15.9x 16.3x 16.6x 17.0x (1) 5.6x 7.8x 7.9x 8.1x 8.3x 8.5x Performance Fee Earnings Multiple Based on 2018 - '20E 3Y Avg. Metrics Value from Mgmt and Incentive Fees Earnings $5,000 $6,862 $7,031 $7,200 $7,369 $7,538 Plus: Net Asset Value of Investments (2020E) 2,092 2,092 2,092 2,092 2,092 2,092 Equity Valuation $7,092 $8,954 $9,123 $9,292 $9,461 $9,630 Implied Value per Unit $44.13 $55.71 $56.76 $57.81 $58.86 $59.92 Premium to Current 10% 39% 42% 45% 47% 50% Source: Oslo Management Note: (1) Performance Fee Multiple assumes 50% discount to Fee-Related Earnings Multiple 4
Next Steps and Outstanding Items § Determine liquidity needs for different groups of OCGH holders: Founders / current management vs. future management – Oslo / Berlin principal-level discussion § Berlin to propose “permanent” liquidity mechanism for OCGH units sold after 10 years § Oslo to provide reactions to other aspects of proposal – Overall structure: Upfront + Deferred – Time frame: 3-5-7 years – 20% limitation / year – Forms of consideration – Process for selling § “Current Equity Value” calculation: – Average of prior three years, no separate normalization of one-time items other than “strategy terminations” § Oslo to consider this time period – Berlin confirmed management fees from Dublin included in base management fee earnings § Oslo to consider what other adjustment may be warranted (e.g., shadow AUM) – Incentive fees likely on realized basis, excluding accrued § Oslo to consider accrued vs. realized over three year time horizon – With regards to multiples applied (D and E in formula): Berlin to make initial proposal, PWP suggested that transaction- implied multiples would be a logical starting point (acknowledged by Berlin) § Multiples likely to be on a pre-tax basis (being discussed) 5Next Steps and Outstanding Items § Determine liquidity needs for different groups of OCGH holders: Founders / current management vs. future management – Oslo / Berlin principal-level discussion § Berlin to propose “permanent” liquidity mechanism for OCGH units sold after 10 years § Oslo to provide reactions to other aspects of proposal – Overall structure: Upfront + Deferred – Time frame: 3-5-7 years – 20% limitation / year – Forms of consideration – Process for selling § “Current Equity Value” calculation: – Average of prior three years, no separate normalization of one-time items other than “strategy terminations” § Oslo to consider this time period – Berlin confirmed management fees from Dublin included in base management fee earnings § Oslo to consider what other adjustment may be warranted (e.g., shadow AUM) – Incentive fees likely on realized basis, excluding accrued § Oslo to consider accrued vs. realized over three year time horizon – With regards to multiples applied (D and E in formula): Berlin to make initial proposal, PWP suggested that transaction- implied multiples would be a logical starting point (acknowledged by Berlin) § Multiples likely to be on a pre-tax basis (being discussed) 5
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