Analysis of the Performance of Buyout Vehicles with a Focus on Business Services – February 2013

by Hayley Wong

  • 26 Feb 2013
  • PE

Preqin's Performance Analyst currently holds performance data for over 1,450 buyout funds, and 493 of these funds include business services as a specific area of investment focus. Around this time last year Preqin analyzed the performance data for business services-buyout funds with vintages between 2000 and 2011. Conducting the same analysis one year later, and including vintage 2012 funds in the data set as well, the performance data for these types of vehicle paints a similar picture to last year in terms of the best performing vintages.

Examining the median net multiples and net IRRs within this dataset, vintage 2001 funds have the highest values for both metrics: a median net multiple of 1.96x and a median net IRR of 24.8%. Vintage 2006 funds are still yielding low median returns relative to other vintages, but the median net IRR of this vintage has nonetheless increased to 4.0% from the 2.6% seen in this analysis this time last year.

All vintages under consideration prior to 2005 have double digit median net IRRs and vintages 2007 and 2009 also currently show returns above 10%. Vintages 2010 onwards all have median multiples below 1.00, but it is important to bear in mind that the returns for the more recent vintages are likely to change over time as the funds continue to make investments and seek to add value.

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