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Scorecard: American Buyout Shops In Europe

First came word from the Wall Street Journal earlier this month that New York buyout shop Vestar Capital Partners is beating a complete retreat from its European operations.

And then yesterday the Financial Times reported that Fort Worth, Texas-based TPG Capital is rearranging its priorities in Europe, placing less emphasis on buyouts and more on non-performing loans and restructuring. (Sources confirmed the main thrust of both stories to me; Vestar Capital, which has had offices in Europe since 1999, has decided to focus laser-like on the United States, its primary market over its last several funds. The withdrawal has been several years in the making.)

You’d think buyout firms have had a hard time generating solid returns on their European investments. But, if so, that’s not always been the case, judging from the results of five European funds in the returns database of sister magazine Buyouts. Managed by The Carlyle Group, Kohlberg, Kravis Roberts & Co. and Hicks, Muse, Tate & Furst, the five, running from vintage years 1998 to 2005, have generated a median investment multiple of 2x and a median internal rate of return of 21.5 percent.

Perhaps tellingly, the worst performer to date is also the youngest—the 2005 KKR European Fund II, which is just slightly in the black according to backer Oregon Public Employees Retirement Fund. Click through below to see more details on the performance of this and the other four U.S.-sponsored European funds in our database. All data comes from the public pension funds referenced.

David M. Toll is editor-in-charge of Buyouts Magazine. Follow him on Twitter @davidmtoll. Follow @Buyouts.


[slide title=”No. 5 – KKR European Fund II LP”]

Vintage: 2005

IRR:  0.10%

Multiple: 1.00

Backer: Oregon Public Employees Retirement Fund

[slide title=”No. 4 – Carlyle Europe”]

Vintage: 1998

IRR:  17.10%

Multiple: 2.10

Backer: Connecticut Retirement Plans and Trust Funds

[slide title=”No. 3 – Hicks, Muse, Tate & Furst Europe Fund”]

Vintage: 1999

IRR:  21.50%

Multiple: 2.00

Backer: Oregon Public Employees Retirement Fund

[slide title=”No. 2 – Carlyle Europe Partners II LP”]

Vintage: 2003

IRR:  23.80%

Multiple: 1.70

Backer: CalPERS

[slide title=”No. 1 – KKR European Fund I LP”]

Vintage: 2001

IRR:  25.40%

Multiple: 2.50

Backer: CalPERS