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Are You Allocated to a Private Equity Firm Ranked in this Study?

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private equity performance

Since 2009, Professor Oliver Gottschalg of Paris-based HEC Business School, also known as école des Hautes Etudes Commerciales de Paris, has put out an annual ranking on top performing private equity firms. The 2014 HEC-DowJones Private Equity Performance Ranking illustrates private equity firms’ historic performance and expected “future competitiveness” based on a number of criteria. The rankings help denote which private equity investors generate top performance over a period of years.

Gottschalg’s in-depth methodology calculates the aggregate performance of a private equity firm based on a suite of measures which include: distribution to paid-in capital, total value to paid-in capital and a fund’s internal rate of return (IRR). Some of the statistically significant factors possessed by top-quartile private equity firms are firms that focus on fewer industries and not heavily diversified. Another factor are private equity firms that are great at timing the public markets (knowing when to buy and sell).

Gottschalg’s study assembles data on 329 private equity firms and 558 funds raised from 2001 to 2010, with an aggregate volume of US$ 1.014 trillion. DJX Dow Jones provided the database to conduct the study.

Making the top 10 includes, Texas-based buyout shop Vista Equity Partners at #1. Vista Equity Partners was founded by Robert Smith and Brian Sheth back in 2000. The former Goldman Sachs technology bankers have amassed a veteran team of private equity executives, allocating capital to investments like Misys, Lanyon, Tibco and Autotask. Vista Equity Fund III generated a net IRR of 29.8% as of June 2014. Vista Equity Partners came in second in 2013.

Coming in at #2 is Netherlands-based Waterland Private Equity Investments B.V. whose investment portfolio has notable firms such as Perrigo Company plc and FleetPro. The number #3 spot goes to Tom Gores’ Platinum Equity, LLC which was founded in 1995. Portfolio companies include: MegaPath, Ryerson, Quark, Terratest and Transworld Systems.

The listed score is a relative to the average aggregate performance score of all firms analyzed in the sample.

Top 15 – 2014 HEC-DowJones Private Equity Performance Ranking

Rank Private Equity Firm Performance Score
1 Vista Equity Partners 1.57
2 Waterland Private Equity Investments B.V. 1.36
3 Platinum Equity 1.08
4 Odyssey Investment Partners 1.07
5 Berkshire Partners 1.02
6 ABRY Partners LLC 0.97
7 Clayton Dubilier & Rice 0.97
8 Astorg Partners 0.94
9 Onex Partners 0.89
10 Sun Capital Partners Inc. 0.88
11 Baring Private Equity Asia 0.86
12 Varde Partners Inc. 0.85
13 Apollo Investment Corporation 0.84
14 BLUM Capital Partners 0.78
15 Ares Capital Corporation 0.76

To see the whole list and Gottschalg’s methodology, click here
Source: PERACS

Funds and Ownership, KKR Partners with Shinhan Financial

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South Korean financial giant Shinhan Financial Group Co., Ltd. reached a preliminary agreement with KKR & Co. to form a series of global buyout funds that could raise up to 5 trillion KRW. KKR and Shinhan signed a Memorandum of Understanding (MoU) in Seoul in early October. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norwegian Government Recommends SWF Remains at Central Bank

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There was speculation that Norway Government Pension Fund Global (GPFG) could be managed outside of Norges Bank. The Norwegian government shot down this idea and recommended Norway’s GPFG remain in Norges Bank. This recommendation came in the form of a white paper submitted to the Norwegian Parliament, Stortinget.

Norway’s Minister of Finance Siv Jensen, commented in a press release, “The Government proposes a new and modernised governance structure for Norges Bank. Moving forward, this new structure lays the foundations for the sound management of the central bank and of the GPFG.”

Some Central Bank Recommendations

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Invesco Buys OppenheimerFunds for $5.7 Billion

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Invesco Ltd. signed a deal to acquire OppenheimerFunds, Inc. from Massachusetts Mutual Life Insurance Company (MassMutual). In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake. This strategic transaction will bring Invesco’s total assets under management (AUM) to more than US$ 1.2 trillion. The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals. The transaction gives Invesco access to more third-party distribution platforms.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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