TY - JOUR T1 - An Analysis of Returns of Moderately Aged Buyout Funds with Low Residual Values JF - The Journal of Alternative Investments SP - 67 LP - 76 DO - 10.3905/jai.2017.19.4.067 VL - 19 IS - 4 AU - Jeffrey Hooke AU - Steven Hee AU - Ken Yook Y1 - 2017/03/31 UR - https://pm-research.com/content/19/4/67.abstract N2 - In this article, the authors conduct a study dedicated principally to moderately aged leveraged buyout funds that have had the opportunity for multiple portfolio company liquidations, or have been fully liquidated. Examining 186 funds in the vintage years from 2000 to 2007 with complete cash flow data from the Preqin database, they find that 61% of funds beat the S&P 500 Index plus 3% (a common benchmark), and 39% did not. Funds originated during the boom years (2005 to 2007) are less successful, with 41% beating the benchmark to date, and 59% falling short. Thus, they find that funds from the earlier vintage years have better performance, relative to broad equity market benchmarks, than those from later years. The later vintage year funds have larger RVPIs than the early vintage year funds, most of which had been fully liquidated. In addition, the authors find that larger funds tend to perform better than small funds, and moderately-liquidated funds tend to have worse results than mostly-liquidated funds. Lastly, in examining a group of fund families with three or more funds, they find no strong evidence of consistency.TOPICS: Private equity, performance measurement ER -