The Most Consistent Names in Alternatives

If you want the best chance of top-quartile performance, turn to venture capital or buyout private equity funds.

The venture capital (VC) sector boasts the highest number of consistently outperforming fund managers, according to Preqin.

Nine groups recorded top-quartile performance for all their funds currently operating in the sector, the data firm said.

New York-based Pittsford Ventures’ six VC funds were all top quartile, Preqin found, while California’s Sequoia Capital had four top-quartile products. A further seven groups had a trio of top performers each.

Six buyout-focused managers also achieved 100% top quartile performance from their funds. These included London-based Inflexion and Austin, Texas-based Vista Equity Partners, which both had four out of four products in the top quartile.

Preqin collated performance data from buyout, VC, mezzanine, real estate, infrastructure, and natural resources funds. The lists included only active managers with at least three funds in similar strategies, and firms that had been raising cash from investors within the past six years.

Measuring performance on funds launched before 2013, Preqin found 19 firms currently running three products or more in a sector had achieved top quartile performance each time.

In private real estate, Carmel Partners, Centennial Holdings, and Embarcadero Capital Partners achieved this feat, while Latin America Enterprise Fund Managers was the only group to have all its funds in the top quartile in the natural resources sector.

In contrast, infrastructure groups found it the most difficult to produce consistent top returns. The best performing group was Harbert Management Corporation, with three of its four funds in the top 25%. However, its fourth product was bottom quartile, giving an average quartile ranking of 1.75. Only one other infrastructure investor—Energy Spectrum Capital—managed an average quartile ranking below 2.00, Preqin found.

The US dominated the most consistent firms, with 15 of the 19 members of the 100% group based in America. In total, US firms made up 42 of the 55 companies named in Preqin’s research.

Most Consistent Buyout Managers

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