LBO returns: How the markets compare

Selecting the right Nordic leveraged buyout fund – which are among the best performing in Europe – can be tricky.

Fully-realised vehicles in Scandinavia generated a 2.95x total-value-to-paid-in multiple since 1991, beating all other regions, according to eFront’s Global Private Equity Performance Series. These funds also carried significant selection risks, with the greatest disparity between the best and worst performing 25 percent of vehicles.

Western European LBO funds had the least potential for massive under or over performance, with just a 0.2x difference between the top and bottom 5 percent of vehicles. The region still carried more frequent selection risk than the UK, France or southern Europe, due to a greater difference between the top and bottom performing quartiles.

The trendline below indicates that the UK and France delivered higher returns for the level of risk taken by investors, while the US underperformed.

“France provides a more conservative risk-return profile, while the UK is more aggressive,” the report noted. “Southern Europe delivered a negative pooled average return. Its fund managers were still in the learning curve and therefore did not differentiate strongly from each other at that time.”