Company news MJ Hudson-sponsored HEC-DowJones ranking crowns new PE performance leader
 
27 January 2021

MJ Hudson-sponsored HEC-DowJones ranking crowns new PE performance leader

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Now in its 11th year of publication, the annual HEC-DowJones Private Equity Performance Ranking lists the world’s top private equity firms in terms of aggregate performance, answering the question: “which firms performed best for their investors?”

LONDON, PARIS, NEW YORK: Francisco Partners has been named the top-performing firm in the 2020 HEC-DowJones Private Equity Performance Ranking. The San Francisco-headquartered tech specialist came top out of 529 private equity (“PE”) firms analysed, delivering an aggregate performance that was 2.40 standard deviations above the average1. Genstar Capital Partners, and Vitruvian Partners were ranked second and third, respectively. Thoma Bravo, which had held top spot for the previous three years remained in the top 10 performing funds in the sample, at sixth position.

The full listing and performance score for the top 20 ranked firms is below:

The ranking: top 20 out of 529 private equity firms

RankFirm Performance Score
1Francisco Partners2.40
2Genstar Capital Partners1.79
3Vitruvian Partners1.71
4Veritas Capital1.65
5Waterland Private Equity Investments1.57
6Thoma Bravo1.48
7Hg Capital1.48
8Leonard Green & Partners1.47
9Clayton, Dubilier & Rice1.29
10Quadrant Private Equity1.22
11General Atlantic1.10
12New Mountain Capital0.88
13Ares Management0.51
14Crestview Partners0.50
15Kohlberg & Company0.43
16Audax Group0.40
17Vista Equity Partners0.35
18Welsh, Carson, Anderson & Stowe0.33
19Astorg0.32
20Oak Hill Capital Partners0.27

The annual ranking, developed on the research of HEC Professor and MJ Hudson Fund Performance Analytics founder, Oliver Gottschalg, draws on an analysis pool of hundreds of qualifying private equity firms and this year assessed 977 funds, managed by 529 firms. These underlying funds raised an aggregate of $1.4 trillion, between 2009 and 2016.

The data used in the analysis is drawn from publicly and commercially available sources (e.g. Preqin), as well as the firms, themselves. A proprietary methodology calculates the aggregate performance of each firm, based on a number of different performance measures and is able to aggregate performance across vintage years and considering both relative and absolute returns.

Professor Gottschalg:

“While performance rankings have existed for many other areas (the “best business school”, the “best stock market analyst”), nothing worth that name exists in private equity. The PE industry is notorious for being opaque and access to any data is chronically difficult. The HEC-DowJones PE Rankings, sponsored by MJ Hudson want to change this perception, shedding light on the greatest outperformers and the most successful strategies over a decade.”

Matt Craig-Greene, Chief Marketing Officer of MJ Hudson and head of its IR & Marketing Solutions practice explained:

“Those investing in private equity funds are increasingly unlikely to accept a manager-calculated IRR as a fair measure of performance. And PE fund managers with genuine outperformance deserve a measure that can demonstrate their skill, accurately and impartially. MJ Hudson is delighted to sponsor the HEC-DowJones ranking and to count Prof. Gottschalg as a colleague. One of our key missions is to bring more transparency into private markets investing and we will continue to invest in initiatives, such as these, to achieve it.”

To read the full report which includes the top 10 firms since 2009, please click here.

For further information on the services that Professor Gottschalg’s team provides, please visit - fundpa.mjhudson.com.

1 A performance of 1.0 standard deviations above average would equate approximately to generating performance better than 85% of private equity managers. An achievement of 2.0 standard deviations above average represents an aggregate performance of twice that level.
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