Buyout funds managed by Platinum Equity and Monomoy Capital Partners produced some of the best returns in the private equity industry over the past decade, according to PitchBooks annual global private equity and venture capital fund benchmarking report.
The Platinum Equity Capital Partners III fund from 2012 posted an internal rate of return of 41.75 percent, the highest IRR among buyout funds larger than $1 billion that were originated between 2010 and 2013, the report shows. For 2008 to 2011 vintage buyout funds that raised less than $500 million, Monomoy Capital Partners II from 2011 was the top performer with a 63 percent IRR.
In private equity, 2009 remains the best year to have invested in the industrys funds, with the top quartile earning an average IRR of 19.6 percent and a median return 12.2 percent, according to PitchBook. Distributions across both private equity and venture capital have been on the rise since 2009, the data provider said, pointing to the record $416 billion that global private equity funds returned to investors in 2015.
The distributions have fueled strong fundraising for private equity firms over the past few years as limited partners were happy to recycle cash back into an asset class that had produced such strong returns, said PitchBook, which broke down performance across vintage years and fund types over the 10 years through June 30 2016.
Private equity funds, venture capital funds, debt funds, and funds-of-funds all earned between 9 and 10 percent on average, its annual benchmarking report shows.
Venture capital was the most volatile group. The category lost 0.9 percent in the last year, while producing an average IRR of nearly 15 percent over a three-year horizon. The 2011 vintage was particularly profitable crop of funds for investors, producing a median 17.6 percent IRR.
Foundry Group topped the below-$250 million category for vintage years between 2003 and 2007, with its 2007 venture capital fund producing an IRR of 44.26 percent. For venture capital funds with more than $500 million that originated between 2009 and 2012, Lightspeed Venture Partners and Canaan Partners were singled out by PitchBook as top performers. Lightspeed Venture Partners IX posted a 37.99 percent return while Canaan IX had an IRR of 37.95 percent, with both funds originating in 2012.