Top-Performing Private Equity Firm? Try Leonard Green
What private equity firm is the fairest of them all? 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.
