The effect of fund size on private equity buyout fund performance analysis of historical data of primarily European and North American private equity buyout funds for vintages 1995 to 2015, retrieved from pitchbook disclosure of a self-conducted survey on the assessment of market beliefs about different fund sizes

Abstract

Historical analyses surrounding the size effect on private equity buyout fund performance have arrived at controversial conclusions in regard to both the certainty of significance and, given significance, the outperformance of one size group over another. The paper uses performance data of 1,914buyout funds spanning vintages 1995 to 2015, retrieved from Pitchbook, and summarizes a survey on investors’ beliefs, conducted in Autumn 2019.No significance for fund size in absolute dollar terms can be found. However, when size is classified in to quartiles and groups, ‘Small’ performs the best. This is robust for IRRs. Finally, investors tend to invest into smaller funds when the time horizon is longer, however, do not generally favor one specific size group.