When it comes to performance, the private equity industry is still very “private,” with reliable performance data consistently illusive. Rankings of all kinds exist – best business school, best place to work – and there are even rankings of private equity firms based on fund size. But in terms of investment performance, the mass of private equity firms – particularly in the middle market – still only rarely are looked at objectively and ranked against their industry competition in a public way.
HEC, in cooperation with Dow Jones, has done so every year since 2009, by drawing upon a novel and proprietary methodology designed to generate one performance score that comprehensively assesses the aggregate performance of all funds managed by a single private equity firm. The annual HEC-Dow Jones Private Equity Performance Rankings (reported on by Financial News here) utilizes research and analysis performed by PERACS to identify the top 10 performers in private equity.
The 2016 HEC-DowJones Private Equity Performance Ranking lists the world’s top PE firms in terms of aggregate performance based on all buyout funds raised between 2003 and 2012. This ranking answers the question: “Which firm(s) generated the best performance for their investors over the past years?” The ranking draws on a comprehensive set of data on PE fund performance provided by Dow Jones and directly from PE firms. The ranking’s methodology aggregates performance across vintage years and considers relative and absolute returns. In total, PERACS analyzed performance data from 446 PE firms and the 791 funds raised between 2003 and 2012 with an aggregate equity volume of $1,115bn.
To read more about 1) how the evaluated PE firms were selected, 2) the data sources used and 3) how aggregate past performance was assessed, among other aspects of the research, see below.