Going back several quarters, larger PE funds have performed better than smaller funds, generally speaking. Funds of at least $1 billion outpaced smaller size buckets across the 1-, 3-, 5- and 10-year IRR horizons through 4Q 2013, which was also the case in the previous quarter. What’s interesting is that, despite the relative underperformance of smaller PE funds, LPs have begun to shift more toward middle-market and lower-middle-market funds over the last few quarters. 
Through 1H 2014, 37% of all fund closings this year have been for sub-$100 million funds, compared to just 25% in 2008. The outperformance of larger funds have made smaller vehicles look less competitive and less expensive than larger funds, particularly given the valuations at the upper end of the market.
Contact: Alex Lykken
alex.lykken@pitchbook.com
Latest news
LMM Credits Earned a 46.5 bps Spread Premium per Turn of Leverage in Q2'26
Lower middle-market lenders held their risk/return edge over larger deals in the second quarter.
Riding the Wave
Momentum, more often than conviction, drives the biggest deals. Source: PitchBook
Business of Private Credit: Playing to Your Strengths
“Show me a great credit, and I’ll show you a great sponsor behind it.”
For this series, we’ve focused on how core middle market lenders underwrite borrower. But before the lender ever sees the deal, a sponsor has already spent months, sometimes years, evaluating whether this was a company worth owning.