LBO Fund Size Risk-Return Implications for Investors

Investors in Private Equity (PE) funds commonly think about portfolio construction in terms of factors like subclass (buyout vs. growth vs. venture), investment strategy (primary vs. secondary), and geography. While each is relevant in assessing a fund’s performance characteristics, Adams Street believes that investors should consider another factor as well: total size of the PE fund. In this paper we focus on fund size within the leveraged buyout (LBO) market.