PE Fund IRRs (Including Thoma Bravo's net IRR of 45% in 2008)
A lot of talk is thrown around about what are funds IRRs and people give rough ballparks. Well the best part of fundraising is that funds share their track records with potential suitors and if they are a government pension fund they are sometimes required to disclose different materials. So if you search for a fund and IRR site: .gov you can find some great track records.
Thanks to Rhode Island here are Thoma Bravo's and yea... they are a lot more than net IRR of 25% http://data.treasury.ri.gov/dataset/477888bc-8dd3-4555-b86b-d750e2cbe5b4/resource/8285dd68-f8ea-450f-a22c-dc81314be1cc/download/Presentation-to-Employees-Retirement-System-of-Rhode-Island-ERSRIvF-02.pdf
Also since Calper's is so large and in so many funds they are a great reference... even have their own IRR search engine of sorts https://www.calpers.ca.gov/page/investments/asset-classes/private-equity/pep-fund-performance
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Really interesting content, thanks for the share.
One thing I think everyone should keep in mind though is 1) how these investor presentations are framed to make returns look more attractive, and 2) the importance of MOM in addition to IRR. On 1) notice how the stat quoted on the first slide is “realized software performance” aka specifically related to exited investments. This makes recent performance more opaque. This leads to point 2. Notice how in the by fund breakout the MOM numbers are drastically different than 3.8x (even for older funds, not just the newer ones that have yet to hit their J curve). What is interesting is the relatively short hold periods their gross IRR implies compared to their MOM (the stat on the first slide implies a hold ~3.5 years). I know we all clamor over IRR, and to be fair, Thoma has year in and year out put money to work and continued to execute great investments, but profit dollars are imo what drives true value at the end of the day (read Howard Marks memo on this). Overall, they’re undoubtedly one of the best in the biz and their returns are nuts, just wanted to call out the importance of reading a little closer when looking at these metrics.
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