Thu, Dec 12, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Small to mid-market private equity deals outperform mega deals by 5% Pantheon finds

Friday, September 27, 2019

Bailey McCann, Opalesque New York:

New data from Pantheon suggests that private equity investors should look to the smaller end of the market in order to find high value returns. The study looks at buyout deals with vintages 2000-2012 and shows that small to medium buyouts outperformed large to mega buyouts by a Total Value to Paid In (TVPI) compounded annual growth rate (CAGR) of 5%.

"Five percent doesn't necessarily sound significant, but in a long-term portfolio it can add up," said Dr Andrea Carnelli, Vice President at Pantheon and one of the authors of the paper in an interview with Opalesque. According to Carnelli, there is more opportunity at the small end of the market. Those deals also tend to exhibit lower leverage rates and small businesses have greater room for improvement. Taken together, these factors can lead to outperformance over large or mega deals.

This study uses proprietary Pantheon data on buyout deals executed between 2000 and 2012 by GPs committed to by Pantheon across USA, Europe and Asia/ RoW; the vintage range is cut off at 2012 to ensure that the dataset includes deals that are mature enough to provide reliable data. All data is as of Q1 2019.

The figure below shows comparisons between vintages:

By looking at individual deals, Pantheon was able to draw more specific conclusions about outperformance based on company size tha......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. 50 South Capital & Preqin highlight emerging manager outperformance in a new report[more]

    Bailey McCann, Opalesque New York for New Managers: New data from Preqin and 50 South Capital, the investment arm of Northern Trust, shows that emerging managers are outperforming established managers by almost 4% a

  2. An academic wrecking ball aims at hedge funds[more]

    From Bloomberg: Quant investing, and indeed much of the hedge fund industry, is built on the power and freedom that come with the ability to sell short. When you short a security (borrow and then sell it, meaning you make money if the price falls and you then re-buy it), you can profit when markets

  3. PE/VC: Private equity buys $101bn of European businesses, 30 under 30 venture capital 2020: Meet the young investors backing tech's next big thing[more]

    Private equity buys $101bn of European businesses From Bloomberg: European equities' cheap valuations have turned the region into a honeypot for private-equity and arbitrage funds looking to reap double-digit returns. With the buyout firms enjoying a massive amount of dry powder, especial

  4. PE/VC: The truth about private equity fund size, US VC investment in female founders hits all-time high[more]

    The truth about private equity fund size From Institutional Investor: As the end of the year approaches, institutional investors in private markets are wrapping up work on the last few funds we need to invest in to hit our targeted annual commitment levels. You see, private equity

  5. Crypto: Almost 70 crypto hedge funds have closed this year as institutional investors shy away, Central bank talk of launching cryptocurrencies is all bluff, Thailand and Hong Kong in crypto collaboration with cross border token project, Crypto loans see solid growth, platforms attract community interest, A Bitcoiner in the Senate? Is Bakkt CEO in US govt. good or bad for crypto?, Bank of France to test digital currency in 2020[more]

    Almost 70 crypto hedge funds have closed this year as institutional investors shy away From The Block Crypto: Nearly 70 crypto-focused hedge funds that largely cater to institutional investors, such as pension funds and family offices, have closed this year. The number of new fund