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Analysis of the Relationship between Predecessor and Successor Fund Quartiles for All Private Equity

by Hayley Wong

  • 23 Dec 2011
  • PE

Preqin’s Performance Analyst assigns quartile rankings to funds based on their vintage, fund type and regional focus. Using Performance Analyst, which currently holds performance data for over 5,690 private equity funds, data can be generated to analyze the relationship of the quartile rankings between predecessor and successor funds raised by the same fund manager.

The data reveals that 39% of fund managers that produce a top quartile fund go on to manage another top quartile successor fund, while just 12% go on to raise a successor fund in the bottom quartile. Fifty-five percent of managers that raise a second quartile fund go on to beat the median benchmark with their next fund, with 27% ranked as top quartile and 28% ranked as second quartile. Sixty-six percent of fund managers that manage a bottom quartile fund go on to have their next fund ranked in the third or fourth quartile.

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