US Firms Occupy Top Positions in HEC Paris - Dow Jones Large Buyout Performance 2023 Ranking

• The top three firms are US based along with 85% of firms in the top 20 ranking
• Developed by Professor Oliver Gottschalg of HEC Paris, the latest ranking also shows the resilience of Software Buyout-focused GPs including Hg and Thoma Bravo

HEC Paris Business School and DowJones announce the release of the 2023 Large Buyout Performance Ranking, which reveals the stability of private equity firms in a high interest rate environment. The top three positions in the ranking remain unchanged from last year: TA Associates, Veritas Capital, and Francisco Partners are all U.S.-based. This highlights the dominance of funds centred in the United States, which is also the case of 85% of the firms within the top 20 ranking.

The ranking, which was compiled by HEC Paris strategy Professor Oliver Gottschalg and holder of the school’s Antin IP Chair on Private Equity and Infrastructure, evaluated the performance of 101 firms which raised total equity of over $1.6tr through 352 funds between 2010 and 2019. It answers the question: “Which firms generated the best performance for their investors over the past years?” and draws on performance information from all relevant buyout funds managed by a given PE Firm and aggregates their performance based on a novel and proprietary methodology into one overall performance score.

2023 Global Ranking: Top 20 Private Equity Firms in Large Buyout Performance

The stability of the top players in this year’s ranking shows the resilience of leading Private Equity firms despite recent turbulent times in the global economy. Interest rates have hit a 23-year high in the United States between 5.25% and 5.5%, while in the United Kingdom the Bank Rate has been held at 5.25%.

The ranking also shows the resilience of Software Buyout-focused GPs including Hg and Thoma Bravo, which have demonstrated an ability to navigate and to thrive within the sector. “Their success suggests that they can understand and capitalise on the opportunities presented by software-focused investments, contributing to their strong performance”, says Gottschalg. According to him, opportunities in this sector include the rise of artificial intelligence-based software and cloud computing, where most companies are now using cloud software to save and store their network.

Gottschalg also says that the ranking highlights the big number of different pathways leading to a Top 10 positioning.

He adds: “Waterland's explicit buy-and-build strategy positions it uniquely, emphasising the value of strategic acquisitions in building portfolio strength. On the other hand, CD&R distinguishes itself through a transformational buyout focus, particularly outside the software domain”.