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Back to blog June 26, 2017 No Comments Author: Andy Jones

Smart, Contrarian Private Equity Firms

Data Study Private Equity

In studying our historical data of private equity portfolio company investments & exits, I found that the private equity community, as a group, tends to miss macro-economic trends, often buying at the peak and divesting at the bottom of market cycles. But select private equity firms got the timing quite right and some contrarian firms got it really right.

Below, I list the firms that nailed the timing of macro-economic events in their investment/exit strategies relative to the last major market cycle. See who made the list…

With 20/20 hindsight, we now know it would have been great to exit portfolio companies in 2007 at the peak and begin buying again in 2010. In 2008-2010, there was a lot of uncertainty in the market and in the economy overall, but a number of firms acted decisively with a contrarian investment thesis.

In the Summer of 2009, during the early part of the great recession, I was talking to a well-known private equity investor. I distinctly remember him saying that they (as a firm) were very confident in the acquisitions they were making (buying at what we now know was the low). This struck me as a contrarian move. Keep in mind, there was a lot of uncertainty in the market at that time and no indication that we were at the bottom yet. So, I made a mental note to follow up with the contrarian thesis after the dust settled. Now, 8 years later, the dust has fully settled and we can look back and know he was right.

What other firms were right in their timing?

For the recession and subsequent recovery, there were two ways to be well-timed; exiting in 2007 and buying again circa 2010.

48 Private Equity Firms That Looked Smart Exiting Investments In 2007 (with 5+ portfolio exits)

  1. American Capital
  2. CapMan
  3. General Atlantic
  4. GIMV
  5. Apax Partners
  6. TA Associates
  7. 3i
  8. Summit Partners
  9. Triginta Capital
  10. Omnes Capital
  11. Riverside Company, The
  12. Sequoia Capital
  13. ArcLight Capital Partners
  14. Actis
  15. Equistone Partners Europe
  16. Global Finance
  17. Norvestor Equity
  18. UOB Venture Management
  19. Advent International
  20. Cipio Partners
  21. Indigo Capital
  22. Lloyds Development Capital (LDC)
  23. Baird Capital
  24. CBPE Capital
  25. Alpha Group
  26. IK Investment Partners
  27. Merit Capital Partners
  28. Abry Partners
  29. Beecken Petty O’Keefe & Company
  30. ECI Partners
  31. EQT Partners
  32. Peterson Partners
  33. Arle
  34. Aboa Venture Management Oy
  35. ABN AMRO Participaties
  36. Maj Invest Private Equity
  37. Charterhouse Strategic Partners
  38. Linsalata Capital Partners
  39. Long Point Capital
  40. Norwest Equity Partners
  41. Volition Capital
  42. Clairvest Group
  43. Agribusiness Management Company
  44. Milestone Capital Partners
  45. PAI Partners
  46. Arcapita
  47. Steelpoint Capital Partners
  48. EnCap Investments

34 Private Equity Firms That Looked Smart Buying in 2010 (with 5+ portfolio acquisitions)

(NOTE: I excluded transactions in late 2009 thinking that valuation expectations may not have been fully impacted by that time.)

  1. American Capital
  2. The Riverside Company
  3. GIMV
  4. Apax Partners
  5. Equistone Partners Europe
  6. Abry Partners
  7. CapMan
  8. Lloyds Development Capital (LDC)
  9. 3i
  10. Global Environment Fund
  11. KODA Enterprises Group
  12. Advent International
  13. General Atlantic
  14. Omnes Capital
  15. Energy Investors Fund
  16. Berkshire Partners
  17. TA Associates
  18. Welsh, Carson, Anderson & Stowe
  19. Draper Esprit
  20. Granite Partners
  21. CDH Investments
  22. Canaan Partners
  23. Norwest Equity Partners
  24. Sequoia Capital
  25. Weston Presidio
  26. BC Partners
  27. Comvest Partners
  28. Kayne Anderson Capital Advisors
  29. Denham Capital
  30. Investcorp
  31. Essex Woodlands
  32. First Analysis
  33. M/C Partners
  34. Midinvest Management

15 Firms That Seemed Omniscient (in that they were on both lists above)

There are a few select firms that were smartly-timed on both sides… sellers at the high valuation multiples and buyers after valuations had retreated.

  1. 3i
  2. Abry Partners
  3. Advent International
  4. American Capital
  5. Apax Partners
  6. CapMan
  7. Equistone Partners Europe
  8. General Atlantic
  9. GIMV
  10. Lloyds Development Capital (LDC)
  11. Norwest Equity Partners
  12. Omnes Capital
  13. The Riverside Company
  14. Sequoia Capital
  15. TA Associates