That’s the ambitious question recently broached by Oliver Gottschalg, an associate professor of strategy and business policy at the HEC School of Management in Paris. Not the firm that has raised the most money or garnered the most headlines, but the one that has provided the best returns to limited partners over a 15-year period (which is, ultimately, how such firms are judged).
Gottschalg, in partnership with Private Equity News, looked at PE firm performance between 1996 and 2005 (anything since then, he correctly argued, is too young to be accurately assessed). To qualify, a firm had to have raised at least two funds during the period, with at least $500 million in committed capital (the multiple fund requirement was to guard against one-hit wonders). The firm also could not have raised a fund during that period for which performance data was unavailable.
Gottschalg’s universe ultimately included 63 firms that raised around $232 billion for 182 funds. Not a complete accounting — and we unfortunately don’t get the full list, so as to learn what firms were excluded — but a decent sampling.
What he found was that U.S.-based megafirms like Blackstone and KKR didn’t make the cut. Instead, the Top 10 was peppered with U.S.-based “large-market” firms and European megafirms.
The top dog (by a wide margin) was Los Angeles-based Leonard Green & Partners, which raised a $1.24 billion fund in 1999 and a $1.85 billion fund in 2003 (it later supersized with a $5.3 billion fund in 2006). It was followed by a quartet of European firms: Nordic Capital, Astorg Partners, Charterhouse Capital Partners and Gilde Buy Out Partners.
The back next five are: Linsalata Capital Partners, Berkshire Partners, CVC Capital Partners, AXA Private Equity and Brockway Moran & Partners.
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