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Preqin's Coverage of Private Equity Buyout Performance Data

by Gary Broughton

  • 11 Mar 2011
  • PE

Preqin currently holds information on 2488 private equity buyout funds with vintage year 1990-2010 and has performance data for 1180 of these funds. A closer examination of the coverage of Preqin’s Performance Analyst product reveals that as the buyout fund size increases, so does our coverage. For buyout funds between $2 and $5 billion in size, we hold performance data for 93% of these funds. For buyout funds larger than $5 billion, we cover 94% of funds we hold information on with performance data. Due to this high coverage of the larger buyout funds, we are able to gain insight into the performance of the larger buyout funds compared to the buyout industry as a whole.

Median performance benchmarks, while interesting, give the same weighting to the very smallest funds as the funds with total commitments of billions of dollars. By using a money-weighted benchmark, we can take into account fund size and therefore provide a more accurate portrayal of the buyout sector in its entirety. The money weighted IRR of buyout funds of vintages 2001-2004 are higher than the median IRR of the same vintage years, with weighted IRR of 30.6% for vintage 2001 compared to median IRR of 27.9%. This shows that the larger buyout funds are typically showing higher returns over these vintage years compared to the smaller funds. It is also interesting to note that for vintage 2006 buyout funds, the money weighted IRR currently stands at -3.7% compared to a the median IRR of -1.4% indicating that the larger buyout funds were more greatly affected by the financial crisis.

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