Top Performing Buyout Funds

by Gary Broughton

  • 01 Apr 2011
  • PE

When considering which private equity funds are the top performers, it is appropriate to assess the funds within their strategy groups. This methodology of peer comparison is necessary, as investing in private equity carries varying levels of risk and return depending on the underlying fund strategy.

Analysis of private equity buyout funds with a vintage of 2008 or earlier that have invested at least 50% of their capital allows comparison of funds at appropriate stages of their investment lifecycle. Funds with a vintage of 2009 or more recent are still early in their fund lives and fund managers have had little time to add value to their investments and consequently meaningful IRRs cannot be generated. Using the IRR as the key measure of the fund’s performance, we are able to rank the funds meeting our selection criteria.

Of the 5200 private equity funds that Preqin holds performance data for, 1,251 are buyout funds. Using our methodology, we are able to determine that the best performing buyout fund is currently the 1996 vintage fund Imperial Capital Acquisition Fund II, which has generated the highest net IRR of 147.4%. The 2005 vintage Fundo de Educação para o Brasil is in second place, showing a net IRR of 116%.

It is worthy to note that the positions on our table of top performing funds could change, as the performance of funds with active investments varies over time.

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