Waterland Private Equity Investments has been judged the best performing private equity fund in the world as the firm prepares to launch its seventh fund ahead of schedule.
The study, which is in its seventh year, was led by Oliver Gottschalg at French business school HEC alongside Dow Jones, assesses firms based on a series of metrics which aim to judge long-term performance.
Waterland came out on top after five years in the top three, beating out last year’s winner, San Franciscan technology investor Vista Equity Partners and buyout giant Clayton, Dubilier and Rice, which rose from its position of seventh in the 2015 study.
“The top 20 is a mixed bag. It’s not just brand names or niche players but a mix, which shows me there isn’t one magic in private equity that works. It’s interesting for LPs as it tells them they need to figure out which GPs are really good at what they do,” Gottschalg said.
In total, data from 446 firms and the 791 funds raised over a ten-year period between 2002 and 2012 was analysed by Gottschalg, professor of strategy and business policy at HEC Paris Business School. The basis for the assessment is the performance of each fund measured in terms of IRR, DPI (cash-only return multiple) and TVPI (a return multiple that considers accounting values of ongoing investments).
Frank Vlayen, Waterland’s chief executive, said that “disciplined execution of an intensive buy-and-build strategy, and an entrepreneurial approach focused on actively supporting companies in organic and external growth,” is behind the success of the firm. Vlayen said “a factor of 3x increase in value (on exit) of our investments is not uncommon.”
The European mid-market firm is currently investing its sixth fund, a €1.55 billion vehicle which closed in spring 2015, and Vlayen said the firm is “ahead of where we expected to be. We will probably exceed 75 percent invested in the course of this year, and its not unlikely that by the end of the year we will be looking to raise (a new fund).” Vlayen said the firms seventh fund will be “somewhat bigger” that its last effort.
The firm is also preparing to open a Manchester office as it looks to deploy a larger fund and support expansion of its portfolio companies into the UK.