digest 03

PE’s Outperformance Gap Narrows


May 7, 2015

Analysts at Bain & Company, the management consultancy, say that the wall of money flowing to private equity fund managers has had a “leveling effect” on returns. Top-quartile buyout funds once generated between USD2 and USD3 or more for each dollar of capital invested, significantly more than the best of the bottom-quartile funds whose ratio of returns per invested dollar hovered between 1-to-1 and 1.5-to-1. More recent vintages (2006 to 2010) see a distinct narrowing of the gap separating the top-quartile general GPs from bottom-quartile peers to less than 50 cents or USD 1.54 per dollar invested for the best 2010-vintage buyout funds vs. USD 1.10 per dollar invested for the laggards. (Image source: Bain & Company)

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