Funds with the best returns?
What are the best returning PE funds you know of? I know there's a ton of data out there from various public sources but curious what folks have experience with. I know Cortec's Fund V must've absolutely killed it because of Yeti and Veritas has a strong history of consistent top decile funds. What others come to mind?
Been a while since I was privy to the data but Vista and TB kill it (a few 30% and 40% net funds), and some of the KPS and Platinum funds were also 30-40% net. If venture counts, IIRC lowercase capital was something stupid, like close to 100x... at the fund level.
Whats the secret in KPS sauce? i love that they're operationally focused and not wedded to sexy industries (focus on manufacturing). Could definitely see myself wanting to work there in a couple years.
There's dozens of micro pre-seed funds that have returned 50-100x, just sub $50mm funds with like 8 LPs with zero desire to grow as it'd dilute strategy.
Clearlake and Genstar have both been on absolute tears in the past 5-7 years.
Not so sure about that on Clearlake…
Okay this is getting a bunch of MS now but this was posted over a year ago. Clearlake had raised a $14B fund after raising a $7B fund for their predecessor vehicle. The returns were actually quite good leading up to the fundraise. A lot has since changed. The debt for many of their portfolio companies are trading at very low levels, leverage is running insanely high, and their string of continuation vehicle exits isn’t going to persist.
There was a post here recently on this - AKKR was top of list, followed by some other similar names (Great Hill, TA, etc). The other usual suspects (H&F, Thoma, FP, etc) all placed highly as well.
Interesting how this list will change now that dumping money into tech isn’t a cheat code anymore
Bump
If you look at quartiles (which is what LPs do), 4% of top quartile funds in 2002-06 were tech or healthcare focused. For 2012-2016 vintages, half of the top quartile were tech/hc specialists.
As a rule, what worked in the public markets worked in the private markets. Growth oriented, asset light managers crushed it. The best performance (i.e. consistent 2.5-3x+ net TPVIs) came from large growth managers like Genstar, TA, Veritas, Francisco, etc. There are probably ~25+ firms that could be considered part of this group. Plenty of small cap/mid cap software investors make the list as well that don't get a lot of airtime on this website.
What didn't work? Value/special sits/turnarounds, with the exception of KPS, which is a machine and an anomaly among this cohort.
Will this strategy continue to work though? Just like in the public markets, will these growth managers be punished or not
It's anyone's guess. These are long duration asset classes where you're really trying to pick where exit markets will be 5-10+ years out. The potentially more interesting questions for LPs is how do you manage your overall buyout allocation. Does it make sense to instead do more private credit? With base rates in the 5% range and spreads where they are... you can get high single digits to low double digits doing senior lending.
CD&R has also been killing it -- just raised a $26B fund
They've like 3.5-4x'd the past 3 funds... pretty crazy growth from $9bn fund to $26bn in ~5 years...
Advent has also rapidly become a monster from what I can tell
Last fund was ~$25-26B with no hurdle iirc
Madison Industries, 3x net+
Alpine investors, 3x net consistently
Voluptatem dolor autem pariatur. Dolorum totam aut aut voluptas adipisci eaque sequi. Id nihil explicabo a nisi illum quos tenetur sint. Delectus sequi quas dignissimos dolore.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...