New analysis shows private equity funds who use management consultants outperform their peers
July 20, 2017
Southern Oak Consulting in cooperation with PitchBook identified a statistical correlation between funds that use management consultants and above average financial performance.
Fort Worth, Texas: A new analysis performed by Southern Oak Consulting using data from the PitchBook database shows that US private equity funds that used management consultants for operational performance improvement outperformed the internal rate of return (IRR) of their peer groups by an average of 1.52%. Southern Oak Consulting examined 58 US-based PE firms and identified 179 individual funds that:
Had vintages between 2000 and 2016
Focused only on US-based investments
Had identifiable IRRs and peer group IRRs as determined by PitchBook
"PE fund managers are constantly evaluating ways to improve the performance and growth of the companies in their portfolios," according to Greg Saltsman, Principal at Southern Oak Consulting. "This data tends to validate an industry maxim that bringing in experienced operators as consultants does have a positive impact on a fund's return, even after taking into account the costs of engaging in those external services."
SOUTHERN OAK CONSULTING is a management consulting firm specializing in achieving higher returns for private equity investments, headquartered in Fort Worth, Texas. Learn more at SouthernOakConsulting.com