Top Quartile Fund of Funds

by Hayley Wong

  • 21 Oct 2011
  • PE

Preqin has performance data for 680 private equity funds of funds, and by using Performance Analyst’s Custom Benchmarks we can analyse the performance data for these vehicles that are in the top two quartiles.

Looking at the median net IRRs produced for private equity funds of funds in the top quartile for vintages 2000-2008, the highest median net IRRs are reported for vintages 2000-2003, where returns are between 12.0% and 14.0%. In contrast, funds of funds with vintages 2004-2007 report median net IRRs between 5.0% and 9.1%, whereas vintage 2006 funds of funds report the lowest median return of 5.0%. The most recent fund of funds vehicles, vintage 2008, report a median net IRR of 11.4%.

In this customised benchmark, funds of funds with earlier vintages, 2000-2004, have called up a median of 88.8% or more capital. The more mature vehicles of vintage 2000 have distributed a median of 109.3% back to investors, while vintage 2004 vehicles have returned a median of 42.9%. In this benchmark, vehicles of vintage 2005 and 2006 have distributed a median between 11.9% and 17.8% to its investors, while more recent vintages- 2007 and 2008- have distributed 9.1% and 4.9% respectively.

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