The private equity industry is well-known for opacity when it comes to delivering performance metrics and reliable data to the public. Thus, it can be difficult to compare and rank industry outperformers. Many of the available rankings for private equity are based on size alone, which has limited practicality. While a firm’s ability to raise big funds successfully is impressive, it does not necessarily demonstrate a firm’s ability to deliver returns in a consistent and repeatable manner.
HEC, in collaboration with Dow Jones, lifts the veil and sheds light on which fund managers have been true outperformers over the years. The annual HEC-Dow Jones Private Equity Performance Rankings utilizes research and analysis performed by PERACS to identify the top 30 performers in private equity. Financial News reports on the rankings here (subscription required).
The HEC-Dow Jones ranking lists the top 30 global private equity firms in terms of aggregate performance rates between 2001 and 2010. The ranking draws on a comprehensive set of data on PE fund performance provided by Dow Jones and directly from PE Firms and uses a unique methodology to calculate the aggregate performance of a PE firm based on difference performance measures for all the funds managed by this firm. The method is able to aggregate performance across vintage years and considers relative and absolute returns. In total, they analyzed performance data from 329 PE firms and the 558 funds raised between 2001 and 2010 with an aggregate equity volume of $1014bn.
Watch this video to learn more how firms are evaluated: