Private Equity Returns - Ranked
Looks like Accel KKR has the best returns interestingly enough over the past couple of years. List generally makes sense - looks like each one of the funds listed here has raised progressively larger funds over the past couple of years fairly successfully.
Analyst 2 in IB - Cov, shame nobody has responded. Maybe one of these topics will help:
More suggestions...
If those topics were completely useless, don't blame me, blame my programmers...
Bump. Curious why there aren’t enough talks about PE returns
Bump cuz ive been wondering this too
Because we've all seen the highlights. Not much more to say besides "wow X did Y, how impressive." Few from the top firms if any are going to elaborate on what the home runs were.
You may be able to use this data to look at absolute performance, but it's hard to really use information like this in order to evaluate a manager. You would probably want to look at some sort of attribution analysis that breaks down how much of the fund returns are coming from sales, how much from ebitda, multiple expansion, and debt reduction. A lot of managers have ridden the tech wave for example and made some killer returns for being in the right place at the right time. I'd be more impressed with managers who can consistently show returns coming from earnings and top-line growth vs. mostly benefitting from multiple expansion.
Fully agree - how would you categorize some of these GPs in your own view?
The ones that are most influenced by the Tech are in my view the Growth Equity funds (Accel-KKR, TA Associates, Vitruvian, etc.) and other Tech-focussed funds like ThomaBravo.
Appears to me that H&F, CD&R and Permira are probably among the most impressive adjusting for the factors referenced by you.
Why is multiple expansion not as desirable of a return? Have worked with AKKR as both a buyer and a seller and they’re very focused on optimizing for growth, improving efficiency, etc. let’s say they buy a business growing 20% at a 20% margin and sell it as a 30% grower with 30% margins - that’s not an industry tailwind improving the exit multiple, that’s called building a better business.
SaaS funds aren’t looking to pay out dividends or recap a business. Markets reward growth so they’re prioritizing that, but doesn’t mean it’s a less attractive investment thesis going forward
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I don't understand this "performance score" at all and don't think these rankings make any sense. For example, Francisco's returns are great but from what I can see in Preqin, their returns are pretty much the same, if not slightly worse, than Thoma's and yet they're ranked far above Thoma here. Genstar hasn't been nearly as good as either of them.
As others have said, there are also several different strategies going on in this list and so there's a little bit of an apples to oranges comparison going on.
Based only off of the performance of buyout funds raised in 2008 to 2017
Interesting to see none of the traditional American public MFs (ie BX / KKR / CG / APO) make the list. Would have expected APO to make it given the strength of the fund performance in 2007/8, but maybe that performance was on the credit side rather than equity investing.
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Is this realize or unrealized?
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