Size Doesn’t Matter in PE Fund Performance Over the Long Term

Despite the dueling claims that smaller PE fund managers lack sophistication or sufficient scale, or that larger fund managers lack the nimbleness and operational focus and expertise necessary to improve portfolio companies, returns across different sizes of funds are relatively uniform in the long term. 10-year horizon IRRs (which use changes in NAV in addition to industry-wide net contributions over time as the cash flow inputs in an IRR calculation) for PE funds of any size bucket are between 10% and 11%...

Add-ons retain commanding share of US buyout activity

At 64% of all US buyout activity through the end of September, add-ons have never before constituted such a lofty proportion of private equity investing. Part of that is a statistical quirk—as the volume of buyouts has slid while investors by and large maintained the pace of adding on, their relative proportion was bound to increase. But as has been noted time and again over the past couple years as the add-on percentage of...

PE buyers still rooting for value in lower reaches of US middle market

The proliferation of private equity funds into all reaches of the US middle market has been well documented. Increased PE activity in the lower and core segments of the middle market is easy to see, particularly when assessing the median transaction size, which declined from a high in 2014 to $133.0 million last year and $128.6 million through the end of September. The slides aren’t dramatic, of course, but as can also be seen in the relatively more resilient proportions of PE dealmaking within the lower middle market...