The Performance of Mostly Liquidated Buyout Funds, 2000-2007 Vintage Years

Abstract

We conduct a study dedicated principally to older leveraged buyout funds that have had the opportunity for multiple portfolio company liquidations, or have been fully liquidated. Examining 186 funds in the vintage years from 2000 to 2007 with complete cash flow data from the Preqin database, we find that 61% beat the S&P 500 plus 3% (a common benchmark), and 39% did not. We find that funds from the earlier vintage years had better performance relative to broad equity market benchmarks than the later years. The later vintage year funds have larger RVPIs than the early vintage year funds, most of which had been fully liquidated. In addition, we find that moderately-liquidated funds tend to have worse results than mostly-liquidated funds. Lastly, in examining a group of fund families with three or more funds, we find no strong evidence of consistency.

Keywords: private equity, performance, buyout funds